I was surprised to see NationsBank chairman Hugh McColl sitting next to Bill Clinton at the Arkansas-Duke basketball final. Based on what the President has done for him lately, I would have expected to see Hugh sitting on his lap.

Remember, McColl started out on the Bush team, was lured to the Perot camp for a while, and ended up with the eventual winner. McColl might switch teams at halftime, but he'll always hang on to his old uniforms just in case.

He is now solidly, definitely, and unequivocably in Clinton's corner -- for the long haul, through thick and thin, assuming, of course, that Comptroller Eugene Ludwig manages to steer the interstate branching bills through Congress for Bill's signature.

They say NationsBank's 2,000 branches in nine states may have something to do with McColl's willingness to spend that recent evening with the President, even if he was a Razorback fan on Mr. McColl's home turf.

Advocates of interstate banking, like Mr. McColl, say they would save millions of dollars through enactment of the proposal. If NationsBank could cut its annual costs as much as $5,000 a branch, that would be $10 million.

In days gone by, political quid pro quos were usually paid off with stuffed ballot boxes. Laws were passed to stop that sort of chicanery. Now it is done with money and political action committees.

It seems reasonable that the folks at Hugh's banks would respond favorably to a suggestion that they come up with a sum equal to their first year's savings to fuel the reelection bid of the man who made the savings possible.

Now, extend those potential savings numbers to the branch networks of Citicorp, Bank of America, Banc One Corp., Wells Fargo, Chase Manhattan, Mellon, and the rest, and there is no doubt about it: With McColl passing the hat, those fat cats could sure fatten Bill Clinton's PAC.

I must say here that it is entirely possible there is no quid pro quo between the potential beneficiaries and the administration supporting their windfall. Maybe it was just the product of Comptroller's Ludwig's status as the most powerful bank regulator with daily access to the White House. But that is highly improbable.

Mr. Ludwig is involved in another caper that might be even more unseemly than the interstate gambit.

The word went out to big bank trust departments that, if the comptroller were to authorize new fees for national banks under Regulation 9, the banks may be able to disregard states' limitations on common trust fund fees and charges.

The message seemed to be "What's good for trust departments is good for trust clients."

Last Line of Defense

But the fiduciary protections embodied in state laws are about the only line of protection standing between unscrupulous operators in the trust field and the widows, orphans, and other vulnerable parties they serve.

The 50 million members of the Consumer Federation of America, including the American Association of Retired Persons, and 5,400 banks in 25 states are on record in opposition to destroying the protections in existing state fiduciary clauses.

Comptroller Ludwig's action would be unconscionable and would do nothing to improve the low opinion Americans already have of their government.

The result of this regulatory manipulation would be to create an unavoidable conflict of interest. Trust department officers would have the choice of investing common trust funds under their control in proprietary funds that would generate fees and charges over and above normal management costs, or investing in funds outside their own departments, which may be better investments but would not generate the same fees and charges.

It is not difficult to predict what they would decide -- if they valued their jobs.

What would happen to the "trust" these businesses are based on? The word "fiduciary" would no longer apply, as common trust funds were placed to benefit the department rather than the client.

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