(By Ron Taylor and Margot Hornblower)

Federal and Fairfax County police investigators are seeking to talk to business and personal associates of builder William F. Banks following a pre-dawn blast that ripped through his $200,000 McLean home yesterday.

Moments before the explosion, in which no one was injured, a phone call was received by Banks' brother, Robert, who lives in Bethesda. He said the anonymous caller told him: "There is a bomb in your brother's house", and then hung up. It was 5:15 a.m., Banks said yesterday.

Robert Banks called his brother's house at 753 Chain Bridge Rd., where the telephone rang but was not answered. Police said the explosion occurred at 5:17

a.m.

The blast, described by police as being caused by a paraffin explosive device. occurred under a corner of the second floor bedroom where Banks and his wife were sleeping.

A spokesman for the U.S. Alcohol, Tobacco and Firearms Bureau said there is "no doubt about it being a bomb. To do as much damage as it did, it looks like it might be a dynamite bomb," said W. H. McConnell of the bureau.

It could be heard as far away as Cleveland Park in Northwest Washington. and it sheared away most of the northern face of the two-story, century-old refurbished farmhouse, shattered the building's windows and tossed debris nearly 100 yards from the house.

The direction of the blast-outward and away from the house instead of into the bulk of the structure-may have saved the lives of the Banks family, said police and U.S. Treasury agents at the scene.

Agents from the Treasury Department's alcohol, firearms and tobacco division scoured the debris for evidence while county police investigators and FBI agents collected the names of Banks' personal and business associates. Banks is president of the prominent Banks and Lee, Inc. building firm.

Banks said yesterday that he could not single out who may have planted a bomb or why. But police investigators said yesterday they have singled out three names from the several given them by the family, and suspect either a personal vendetta or reprisal over a disputed business arrangement.

Robert Banks said a threat was made on his brother's life and that an attempt was made to firebomb his home at the beginning of October, and police said that incident was being re-examined in the wake of the Thanksgiving Day explosion. The federal agents were brought into the investigation because one agent said, "of possible federal violations." He noted that "the crimes we're interested in include interstate transportation of explosives and extortion." A spokesman for the FBI in Alexandria said, "There is an allegation of extortion and the matter is under investigation."

Neither Banks nor his brother would elaborate on the threats but Robert Banks said that they stemmed from "normal disagreements. I don't know if they (the threats) are anything different from what happens in other businesses." Robert Banks said that after he received the telephoned tip that a bomb was planted he got out of bed to look for his brother's telephone number and dialed. "I tried to reach my brother but I didn't get an answer. It was ringing on my end but I don't know whether his phone was out of order or not," he said.

He then called Montgomery and Fairfax police, he said. His home in Bethesda later was searched for a bomb but police found nothing.

He said that the family's business, of which he is vice president, was founded by their father, William S. Banks, 37 years ago. The firm's activities have included apartment and home construction throughout the area. The firm is now working on Oak Crest Towers in Prince George's County and built The Hamlets apartments in Alexandria.

Robert Banks added that he and his brother ruled out the possibility of a link between the explosion and a disgruntled former employee. "We have no suspicions of that. We just don't have any reason to think that," he said.

He said that he reached his brother after the family evacuated the house and had been taken in by the home of George McCay next door.

McCay and his wife, Evelyn, were asleep on the enclosed sun porch of their home at the time of the blast. McCay said he did not hear the explosion but Mrs. McCay said that when the blast occurred she slipped her shoes on, grabbed a flashlight, and went looking for the Banks family.

The explosion shattered three of the windows in the McCay house and caused the door locks to buckle.

The blast ripped out the first frame of the well-appointed old farmhouse.

It occurred near a first floor utility room located directly under the bedroom where William and Linda Banks were sleeping.

The force of the blast collapsed the floor of the bedroom closet, and on the front of the house what was left of the plate glass windows yawned out toward the underbrush that faces the house.

The children were asleep at the time in a bedroom on the southwest corner of the three-bedroom house. They were separated from their parents by another bedroom, a playroom and the staircase that the family eventually used to leave the second floor of the house.

The driveway leading from Chain Bridge Road to the garage on the property was littered with shards of glass and splinters.

Pieces of wood, ranging in size from slender slats to ragged chunks from the roof, landed on the McCay's driveway, front lawn and property 150 yards away. From outside the house, the handsome refurbishing job on the interior could be seen. Banks said the house is valued at $200,000.

The rolling backyard of the Banks home overlooks the George Washington Parkway. Their neighborhood residents include Sen. Edward Kennedy (D-Mass.) and Washington Redskins head coach George Allen.

Police said the blast was believed to be the first of its kind to occur in Fairfax.

EXHIBIT No. 3

[Referred to on p. 42]

INVESTIGATIVE GUIDELINES, TITLE XI, ORGANIZED CRIME CONTROL ACT OF 1970REGULATION OF EXPLOSIVES

1. General

Title XI of the captioned law amends Title 18, United States Code, by adding a new chapter 40 with section numbers 841 through 848 governing the importation, manufacture, distribution and storage of explosive materials and creating certain Federal offenses pertaining to the unlawful use of explosives. Administration of explosives regulation is vested in the Secretary of the Treasury as is investigative jurisdiction over the unlawful acts proscribed in section 842. Under authority contained in section 846 the Federal Bureau of Investigation (FBI) and the Bureau of Alcohol, Tobacco and Firearms (ATF) have concurrent investigative jurisdiction as to the remainder of chapter 40, i.e., the unlawful acts proscribed in subsection (d), (c), (f), (g), (h) and (i) of section 844. Although not specified in chapter 40, the Postal Inspection Service shall have jurisdiction to investigate all incidents involving explosive or incendiary devices sent through the mails or directed against U.S. Postal Service property.

Title XI greatly broadens Federal authority pertaining to explosives-connected offenses. At the same time, Congress has expressly disclaimed any intent to occupy the field to the exclusion of state law on the same subject matter. To effect both Congressional purposes and to prevent unnecessary duplication of effort it is essential that the limited Federal investigative resources be carefully allocated, particularly in cases in which both the ATF and the FBI have jurisdiction.

2. Federal Bureau of Investigation (FBI) Jurisdiction in General

(a) Effect on prior jurisdiction. This agreement applies only to those incidents as to which the FBI had no investigative jurisdiction prior to the enactment of the captioned law and to incidents previously subject to FBI investigation by reason of chapter 65, Title 18, United States Code (malicious mischief). Investigative procedures in other types of incidents (e.g., train wrecking, damaging aircraft and motor vehicles, racketeering) shall remain unchanged.

(b) Primary jurdisdiction.-Subject to the provision hereof, the FBI will exercise primary jurisdiction over all alleged violations of section 844 which are directed at foreign diplomatic facilities or at activities, such as transportation and tourist offices, operating under the aegis of a foreign government although not in a diplomatic status, over all alleged violations of subsections 844 (d) through (i) which are perpetrated by terrorist/revolutionary groups or individuals and all other violations of subsection 844 (e) through (g) which are not directed at Treasury Department or Postal Service building or functions. (c) Type of investigation to be conducted

(1) Offenses perpetrated by terrorist/revolutionary groups or individuals.—The FBI will immediately initiate a full investigation of all alleged violations of section 844 which appear at the outset to have been perpetrated by terrorist/ revolutionary groups or individuals as defined in advance by the Internal Security Division of the Department of Justice. If ATF or the Postal Inspection Service has properly initiated investigations and information is subsequently developed indicating apparent involvement of terrorist/revolutionary groups or individuals, responsibility shall be relinquished to the FBI unless a determination is made by the Department of Justice that a transfer of responsibilities will unduly impair further investigative efforts.

(2) Alleged offenses against Colleges and Universities.-The FBI will immediately initiate a full investigation of any alleged violation of section 844 which involves the use or attempted use of explosive (as distinguished from incendiary) materials against the facilities of a college or university. Investigation of alleged violations involving use or attempted use of incendiary materials will be limited initially to the development of background information as prescribed in paragraph 6 below.

(3) Alleged offenses directed against foreign diplomatic facilities and related activities. The FBI will immediately initiate a full investigation of all alleged violations of section 844 which are directed at foreign diplomatic facilities and reHated activities as described in paragraph 2(b) above.

(4) All other alleged violations of subsection 844(f)—offenses involving use of explosives against United States property or federally financed organizations, and (g)-offenses involving possession of explosives in buildings owned, leased, used, etc., by the United States-The FBI will immediately initiate a full investigation of all violations of subsection 844(g) over which it has primary jurisdiction hereunder, and those violations of 844(f) which are directed at federal property (e.g., a military facility) or a federal function (e.g, a Selective Service or ROTC facility). In other violations of 844 (f) the FBI will develop and disseminate background information as indicated in paragraph 6 below.

3. Bureau of Alcohol, Tobacco and Firearms (ATF) Jurisdiction in General (a) Violations ancillary to firearms laws violations or violation of section 842.-The Bureau of Alcohol, Tobacco and Firearms (ATF) of the Department of the Treasury will exercise investigative jurisdiction over violations of section 844 which are ancillary to its primary jurisdiction over the federal firearms laws or over section 842 of Title XI.

(b) Violations of subsection 844(d)—interstate transportation of explosives with unlawful intent and subsection 844(i)—offenses against property used in or affecting commerce.-Subject to paragraph 2b, above, the ATF will exercise primary investigative jurisdiction over violations of subsections 844 (d) and (i) and will conduct a full investigation thereof unless notified by the Criminal Division that pursuant to paragraph 2(c) (1), above, the Department of Justice has requested FBI investigation in a particular matter.

(c) Violations directed at Treasury Department property or functions.— The ATF shall have primary jurisdiction to investigate all violations of section 844 which are directed at Treasury Department property or functions and will conduct a full investigation of such violations.

4. Postal Inspection Service Jurisdiction

The Postal Inspection Service shall have primary jurisdiction to investigate all violations of section 844 which are directed at U.S. Postal Service property or functions.

5. Special considerations

(a) Bomb Threats, false information (section 844(e)).-The ATF and the Postal Inspection Service shall have jurisdiction over violations of section 844 (e) against Treasury Department or Postal Service property or functions. respectively. The FBI shall have jurisdiction over all other violations of section 844 (e). Upon receipt of information alleging or suggesting a violation of subsection 844 (e), the investigative agency concerned will review available information to determine whether the identity of the offender is known or can be readily ascer tained and, if not, whether the evidence suggests a pattern or plan of such offenses by a particular offender or against a particular victim. If such a pattern appears or if the offender is identified, all available information will be disseminated as indicated in paragraph 6 below.

(b) Use/carrying explosive in commission of a felony (section 844(h)).— Violations of 844 (h) should be handled as an adjunct of the felony from which they arise and should be discussed with the appropriate United States Attorney or Division of the Department handling prosecution of the underlying felony offense. The agency having jurisdiction over the underlying felony will have investigative jurisdiction over the 844 (h) violation (e.g., bank robbery is under FBI jurisdiction).

(c) Violations of 26 U.S.C. 5861 (destructive devices).—In incidents involving alleged violations of 18 U.S.C. 844 (which may also involve a violation of 26 U.S.C. 5861), ATF shall not exercise its primary jurisdiction under 26 U.S.C. 5861 involving destructive devices, but the incident shall be treated in accordance with the provisions of these guidelines. This is in no way a relinquishment by ATF of its investigative jurisdiction under Title II of the Gun Control Act of 1968.