WASHINGTON -- Former Maryland Sen. Charles McC. Mathias Jr. played a central role in pressing for the resignation of the two top executives of First American Bankshares, the D.C.-based banking company owned by scandal-ridden Bank of Credit and Commerce International, according to an executive involved in handling the crisis for First American.
Former Defense Secretary and Democratic Party luminary Clark M. Clifford and his law partner, Robert A. Altman, resigned as chairman and president, respectively, of First American last week.
As early as June, Mr. Mathias, a director of First American since 1987, was urging the two men to consider stepping down to protect the bank from the scandal engulfing BCCI, according to the executive.
Eventually, it took the added pressure of the Federal Reserve Board and Sheik Zayed bin Sultan al-Nahyan of Abu Dhabi, the majority stockholder in BCCI, to persuade them to leave, according to the well-placed official.
The sheik, who reportedly holds 77 percent of BCCI stock, threatened to call an extraordinary meeting of shareholders to elect new directors of Credit and Commerce American Holdings, the top holding company through which BCCI allegedly gained illicit control of First American. Mr. Clifford and Mr. Altman were on the CCAH board.
Mr. Clifford's and Mr. Altman's grip on power at the bank had already been severely shaken by the revelation in May that both had borrowed millions in 1986 and 1987 from BCCI to invest in First American's holding company, said the source.
The two top executives were the only major figures at First American with any high-profile connection to BCCI, and they rapidly emerged as the Washington focus of the scandal.
They have consistently denied any knowledge of its alleged purchase of a controlling interest in First American through Middle Eastern front men who invested in CCAH for BCCI.
As the global BCCI scandal broke, Mr. Mathias was asked by the Federal Reserve to head the effort to protect the Washington-based bank from the fallout of being connected to the scandal's alleged perpetrators.
First American was also under pressure from the Senate subcommittee on international operations, a grand jury and Manhattan District Attorney Robert Morgenthau, who issued indictments earlier this month against BCCI and its main officers, to produce documents and records.
But Mr. Clifford and Mr. Altman, advised by their lawyers, were giving priority to their own efforts to cope with the allegations against them, the First American source said, and the bank was accused of being reluctant to provide evidence to the regulatory authorities.
It was also becoming clear that the publicity they were attracting could undermine First American, which was in good financial order but suffering -- like other banks -- from the real estate recession.
Mr. Mathias asked the Federal Reserve for its dossier on BCCI's connection with First American, the official said. While in London, in June, he also called on the Bank of England, which led the legal crackdown on BCCI. Earlier, on March 4, the Fed had given BCCI 60 days to sell its controlling interest in First American, exercised through CCAH.
Former Federal Reserve Chairman Paul A. Volcker was asked to act as trustee for the sale of the bank to new owners. According to one official privy to the proposal, Mr. Volcker was "reluctant."
On Tuesday, Nicholas deB. Katzenbach, a former Johnson administration attorney general, agreed to act as chairman of First American following Mr. Clifford's departure. Mr. Mathias was among those who selected him.
Mr. Mathias refused to discuss his role in the drama.