WASHINGTON -- The Justice Department filed a $140 million civil suit last week against a loan officer and 10 former directors of the failed National Bank of Washington.

The suit, filed on behalf of the Federal Deposit Insurance Corp., alleges that the bankers were negligent and breached their fiduciary duty.

Dependants include a number of prominent Washingtonians, including Luther H. Hodges, chairman and chief executive; Robert B. Washington, an attorney and former chairman of the Democratic National Committee; and Thomas H. Boggs Jr., a well known lobbyist and partner with the law firm of Patton, Boggs & Blow.

The suit is the culmination of a yearlong investigation into NBW, which had $1.6 billion in assets when it failed in 1990.

Directors are accused of approving loans to their boardroom colleagues that subsequently were not repaid.

In one instance, the suit alleges, NBW directors also approved a $10 million line of credit to Finley, Kumble, Wagner, Heine, Underberg, Manley, Meyerson & Casey in summer 1987 - several months before it failed.

Mr. Washington was a partner in the giant New York law firm, but he did not vote on the loan.

Mr. Hodges is accused of using a blind trust to borrow millions of dollars in bank funds at below-market rates. The suit alleges that he also received loans indirectly from the bank through a "special fund" set up by a friend and bank customer, E. Craig Wall Jr., who operated limited partnership companies.

Allegations Cover Four Years

On at least 11 occasions from 1984 to 1988, one of Mr. Wall's companies borrowed money from NBW and directed that the money be wired to the special fund, the Justice Department alleged. Mr. Hodges, or a trust in his name, withdrew $2.9 million from the fund, the suit claims.

"Critical sequences and times of events are fudged by the government to make Hodges look like he did something wrong. He didn't," said Bernhardt Wruble, Mr. Hodges' lawyer.

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