2 Ex-Officers of Bank Deny Link to BCCI : * Scandal: Clark Clifford and Robert Altman say they were unaware Bank of Credit & Commerce controlled First American Bankshares.

Former Defense Secretary Clark Clifford and law partner Robert Altman said Thursday they had not known that the Washington bank they headed was secretly owned for almost 10 years by the now scandal-plagued Bank of Credit & Commerce International.

Presenting what Clifford called “our side of the story” to the Senate Foreign Relations subcommittee on terrorism, narcotics and international operations, the two contradicted allegations made Tuesday by a former executive of BCCI that they had to have known that BCCI secretly controlled First American Bankshares.

The testimony--largely repeating statements that they had made last month to the House Banking, Finance and Urban Affairs Committee--came as part of the subcommittee’s investigation of BCCI, the Luxembourg-based bank whose top executives were accused last summer by a New York grand jury of fraud and theft of more than $30 million from depositors.

Clifford and Altman resigned their positions with First American in August after state and federal investigations began. Neither has been charged with wrongdoing. However, if it is determined that they knew about BCCI’s involvement, they could be charged with lying to the Federal Reserve, which would not have approved the takeover because BCCI was considered poorly regulated.

The U.S. government has centered its investigation on allegations that Clifford, 84, a longtime adviser to Democratic presidents, and Altman, his 44-year-old protege, acted as go-betweens to allow BCCI to take over First American, a holding company with banks in several states.

“Have we been deceived? If the allegations of fraud are true, then we were grossly deceived,” Clifford said. “There really were two banks--an outer bank that we dealt with and an inside bank that was unknown. We never saw it. We never sensed it.”

Clifford, who served as chief counsel to Aga Hasan Abedi, the Pakistani head of BCCI, and BCCI’s U.S. operations at the same time that he worked for First American, also insisted that First American remained untouched by any of the alleged money laundering, loan frauds or other illegal activities of which BCCI has been accused.

“To state it simply,” he said, “our consciences are clear. We have not violated any law. We have not been guilty of any impropriety.”

Both also denied allegations that First American was treated by BCCI as a subsidiary, its operations directed by BCCI from London.

In daylong testimony, Clifford also described as “legal and proper” a $33-million deal in which he used a 100% loan from BCCI to buy stock in the bank he headed. Clifford turned a $2.75-million profit when he sold the stock two years later, in 1988. Altman netted $1.35 million.

Separately, a federal judge in New York appointed a monitor to oversee extensive business operations in the United States of alleged BCCI front man Ghaith Pharaon. The ruling also requires him to contribute $43 million into an escrow fund.

The Federal Reserve Board and the Justice Department in September sued Pharaon, seeking to fine him $37 million and to prevent him from selling his U.S. assets--estimated at at least $226 million in 1990--to repay about $288 million in BCCI loans. They charged that Pharaon acted as a secret front man for BCCI in the 1985 acquisition of Independence Bank of Encino.