The directors of the National Bank of Washington lent $325,000 to a Maryland horse racing firm last summer, knowing that the firm's top officers had been indicted on 13 counts of fraud and racketeering, according to bank records.

Bank official defend the transaction as an attempt to shore up an earlier $4.5 million loan to the firm, Laurel Harness Racing Assocition Inc., which then owned and operated the Laurel Raceway on Rte. 1 north of Washington.

The $4.5 million loan was itself one that "hindsight tells us we shouldn't have made," said bank President Dale L. Jernberg, who made his first public comments about the loan in an interview Friday.

As it turned out, the $325,000 cash advance to the racing corporation in June 1979, not only violated a bank policy against making loans to people of "questionable integrity," but also failed to prevent a default one month later on the $4.5 million loan.

NBW, Washington's oldest and third-largest bank, formally foreclosed on the race track earlier this year and is now selling it to a new owner at a price that Jernberg acknowledged will mean a loss for the bank.

The sale concludes the tangled, two-year history of the Laurel Raceway loan, which bank insiders cite as an illustration of growing interference by the bank's majority stockholder, the United Mine Workers of America, in the daily operations of the bank. The mine workers bought into the bank in 1949 and today own about 75 percent of it stock.

The $4.5 million loan was opposed from the outset by the bank's credit analysts and loan officers. Also, the loan was proposed and approved at a time of pervasive press reports that the track's principal owners were under investigation by the FBI, whose inquiry led to the indictments.

Still, the loan moved through the bank with the help of union representatives on the bank's executive committee, which passes on all loans, and from politically influential, associates of the race track's owners. These included Maurice Wyatt, a one-time key aide of former Maryland governor Marvin Mandel.

When it appeared to the bank that the loan might collapse at the beginning of the racing season last year, Jernberg said, the bank faced a dilemma over whether to continue to support the track owners -- even though they had been indicted several months earlier by a federal grand jury.

The harness track owners needed $325,000 to fill the cash registers at the betting windows for the season's opening weeks.

NBW officials said they feared that unless they advanced the cash, the 1979 racing season might not get under way and the track would fail to generate income. This would force the bank into costly foreclosure proceedings against the owners to try to recoup the $4.5 million bank investment.

The bank's decision: lend another $325,000 to help get the racing season started. In the process, the bank violated its own internal policy, stated in a memo the month before, that it would not make "loans parties whose integrity or honesty is questionalbe."

"There comes a time in many loan transactions when you have a loan in desperate straits and you make a judgment to try to carry through or stop and let the whole thing go down," said Jernberg, who was named NBW president in December 1978, at the best of them UMW president Arnold Miller and then UMW vice president Sam Church. Church is now UMW president.

Jernberg said that at the time the $4.5 million loan was made, bank officials recognized that an additional short-term operating loan might be needed. "Under those circumstances, even though the policy was issued in the meantime, we would have done it, and, more importantly, we would have done it to protect our collateral," he said.

The $325,000 advance got the racing season started. But by late July 1979, the $4.5 million loan had fallen into default anyway.

The officers and principal stockholders in the race track were three New Jersey real estate investors: Joseph E. Shamy, his wife Greta R. Shamy, and her father, Daniel J. Rizk. The three were indicted in March 1979 by a federl grand jury in Baltimore on charges that they illegally diverted about $700,000 in track funds to themselves.

Joseph Shamy was convicted on seven counts of the indictment last December. The other two are still awaiting trial. Both Shamy and his wife declined to comment.

The $325,000 loan was actually a footnote to the $4.5 million loan, which had its origins in contacts between the bank and Shamy that were initiated by Wyatt, who until mid-1978 was in charge of making state political appointments for Mandel and later acting governor Blair Lee iii.

Sources said that Wyatt set up an initial meeting with the help of two members of the NBW board of directors: the late Joseph B. Danzansky, then chairman of Giant Food Inc. and Willie Runyon, a politically influential ambulance company executive from Baltimore whose appointment to the bank board was sponsored by Church.

Runyon said in an interview that he did not assist Wyatt or Shamy in obtaining the loan. "I don't know [Shamy]," he said, "and Wyatt and I don't ever talk. We haven't been friendly in quite a while."

Sources inside the bank said, however, that Runyon expressed what one termed "a daily and continuing interest" in the loan. One director said that Runyon gave the impression during executive committee meetings that he was representing the mine workers' position as majority stockholder, sometimes in competition with former UMW legal adviser Ronald G. Nathan.

Nathan was appointed general counsel to the bank in 1977, and also sat on the executive committee.

"Everybody got the impression that Nathan and Runyon represented the majority stockholder," said one director. "During meetings, Runyon would say, 'I talked to Sam (Church) about this yesterday and he said so and so. . .'"

Runyon denied that he held himself out as the union's representative at bank meetings.

Jernberg acknowledged that Wyatt and Mandel did take him and Church to dinner. But the dinner was two months after the $4.5 million Laurel loan was made, and the former governor expressed no interest in the loan.

Jernberg said the loans discussed at that October 1978 dinner were for two potential and unrelated borrowers recommended -- unsuccessfully -- by Mandel.

As soon as the Shamys first requested the multimillion-dollar loan in the summer of 1978, several of the bank's loan officers strongly opposed it as an unwarranted credit risk. The officils were concerned that the race track's income and real estate did not represent enough assets to secure the loan.

Moreover, Jernberg said, the bank had never made a loan to horse racing interests. "This is not the normal kind of loan we would make," he said.

The loan officers' concerns were overriden, however, first by Jernberg and later by the bank's executive comittee, which approved the loan in August 1978. Sources said that Jernberg failed to relay negative staff reports on the loan to the committee, leaving the directors with only favorable reports on the loan proposal.

Jernberg would not comment on the specifics on his role in shepherding the loan through the bank.

Jernberg also would not elaborate on the advisability of making the loan, though sources said he, too, at times expressed serious doubts about its chances of success.

"He wasn't in favor of the loan anymore than I was," said one bank official. "The attitude was,if we have to make the loan, let's make it as good as possible."

A number of senior loan officers, citing the pressure applied on this and other loans, have resigned from the bank over the past two years.

The crucial tests of Shamy's ability to repay the $4.5 million loan did not come until the racing season that began 10 months after the loan was made. By June 1979, the track needed $325,000 to fill its cash registers and open the betting windows.

According to confidential minutes of the June 6, 1979, executive committee meeting at the bank, senior vice president William R. Johnson supported the $325,000 advance. But Johnson also told the assembled directors that "the principal shareholders. . . in Laurel racing have been indicted. . . ta trial date is not expected for many months.

Johnson said that bank officials had consulted with members of the Maryland Racing Commission and ". . .of course, they are in full support of maintaining the (racing) meet this year for the purpose of receiving the revenue," according to the minutes.

In looking back on the sequence of events that led to the Laurel loan, Jernberg said Friday that bank executives were unaware that their prospective customers were under investigation by the FBI.

He said the bank generally backs away from doing business with anyone who is the target of a criminal investigation.

However, at the time that the bank studied and approved the Laurel loan application, The Washington Post and The Baltimore Sun had reported in more than a dozen news articles that the Shamys were under federal scrutiny in connection with their running of the race track.

"We didn't have any knowledge of any FBI investigation at the time the loan was made" Jernberg said. "You say there were reportsd in the press? We had no indication of that," he said.

Other banks approached by the Shamys apparently scrutinized news reports more closely. Mrs. Shamy, testifying as a defense witness in her husband's trial last year, said that major banks in Maryland, New Jersey and New York rejected the racing association's application for long-term financing in the spring of 1978, partly because "there had been a great deal of publicity about the FBI investigating Laurel Raceway in the newspapers."

Knowledge of the FBI investigation became inescapable for NBW officials when, on the day after $4.5 million loan was settled, NBW Assistant Vice President Donald A. McCormack Jr. was served with a subpoena to turn over the records of the loan transaction.

Jernberg also said in the interview that at the time original $4.5 million loan was made, "We heard a rumor that commissions were being paid" to unidentified individuals associated with obtainint the loan.

Such commissions, also called loan fees, are not illegal under most circumstances. However, said Jernberg, "We don't like to get business that way . . . I have an aversion to this sort of thing because it means that something is wrong with the loan."

Jernberg said he questioned Wyatt about the fees. "He (Wyatt) put it in writing and included a statement of Mr. and Mrs. Shamy that absolutely no fees or commissions had been paid," said Jernberg.

Wyatt acknowledged that he had received "normal legal fees for representing the purchasers," said Jernberg, who did not inquire further and placed Wyatt's statement in the bank's loan file.

A source close to Shamy said that near the time the loan was disbursed in September 1978, Shamy said he had given $250,000 in "loan fees" to Wyatt for distribution to unidentified individuals.

Such fees, if paid to an employe or director of the bank, would be illegal, Jernberg said. There is no known evidence that such a payment was made.

Wyatt could not be reached for comment.

Currently, federal prosecutors, federal bank examiners and a special internal bank inquiry are investigating Nbw loan practices over the past two years.

Last month, The Post reported that the bank's top officers had alleged in a confidential report to bank examiners that one of Nbw's directors, Bruce D. Lyons, and his business partner falsified an application form last year to obtain $1 million in insider loans from the bank. Lyons and his business partner have been unavailable for comment.

Bank officials had also discovered that Nathan, the bank's general counsel, was also a partner in the venture that benefited from the $1 million in loans.

One objective of the investigations is to determine whether Nathan was a partner in the venture at the time the executive committee, on which he sits, approved the loan.

Nathan has been unavailable for comment.Jernberg would not say whether Nathan is still acting as general counsel of the bank.

The bank has hired the law firm of Gibson, Dunn & Crutcher to conduct its internal investigation, which is expected to take several months.