It had all the trappings of a goodwill business venture.In the spring of 1979, Ronald G. Nathan, a general counsel to the National Bank of Washington, had just introduced painting contractor Roland C. Vaughn to the president of the bank.

Vaughn's small firm, Anigroeg Services Inc., had already received more than $100,000 from the bank in loans guaranteed by the Small Business Administration. But Nathan told the bank president, Dale L. Jernberg, that the bank should be doing more business with Vaughn, who at the time was seeking a $50,000 loan.

Jernberg discussed the request briefly with Andrew Gibson Jr., the bank loan officer who specialized in small business accounts. Gibson said that there had been trouble with repayment of Vaughn's earlier loans, and expressed doubts about another. Jernberg told Gibson to do what he could for Vaughn. Gibson would say later that he interpreted Jernberg's remarks as meaning that he would make the loan. The loan was made.

By April, Nathan was acting as registered agent for Anigroeg while still operating as general counsel and director of NBW. Within months after the loan was made, Vaughn's business seriously foundered and the bank was forced to take a total loss on the $50,000 loan.

Internal bank investigators later determined that after Vaughn received his loan from the bank, he paid a $10,000 fee to Nathan. Nathan said the fee was owed for other legal services.