The $1,000,000 Misunderstanding

In 41 years as a roving loan officer for the First National Bank of Boston, Serge Semenenko doctored many an ailing corporation back to health with heavy doses of credit. Rarely, if ever, did the bank lose money on his risky loans. Thus, when Semenenko, 63, retired last month as vice chairman and head of First National's "special industries" division, the Brahmins he had worked for made appropriate farewells. The bank and its directors, said Chairman Roger Damon, "look forward to a continuing relationship."

Last week it looked as though Damon's vale had held a double meaning: there was an unsolved matter of $ 1,000,000 and who it belonged to. Semenenko was out of touch on a yacht cruising the Mediterranean, but from Boston came word that he had agreed to turn over to the bank a $1,000,000 fee due him over a ten-year period for "special services" to Moviemaker Jack L. Warner. One such service: arranging the sale last year of Warner's stock in Warner Bros. Pictures Inc. to Seven Arts Productions Ltd., which Semenenko made possible with a $19.5 million loan to Seven Arts from a syndicate of First National and four other lenders.

A successful banker, Semenenko is also a controversial one. He has been criticized in the industry and in Washington for investing in such firms as Curtis Publishing Co. personally while doctoring them professionally. He has also been castigated for borrowing from charitable foundations to finance personal investments. Ethics aside, there was presumably nothing illegal about such transactions, nor in the $1,000,000 fee. But when First National opened an investigation, Semenenko promptly agreed to turn the fee over to the bank because, said an associate, "it had become an issue and because he has the bank's best interests at heart." First National, which still might not get its money if Semenenko were to tear up his contract with Warner, nevertheless seemed satisfied. President Richard Hill said that the investigation "found nothing to violate bank policies, and the matter is closed."

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