ROME (AP) _ A dashing banker with a taste for Alfa Romeos. Rumored military shipments to the Middle East. A secret plan to provide billions of dollars to Iraq through Italy's biggest bank - with no record on the books.

It could be the stuff of a Robert Ludlum potboiler. But since U.S. authorities descended on an Italian bank in Atlanta last August, the elements have instead emerged at the center of a mystery involving Italy, Iraq and a U.S. government agency.

Officials say the Banca Nazionale del Lavoro branch in Atlanta's Peachtree Center secretly approved $3 billion in loans to Iraq in 1988-89, in the form of letters of credit for U.S. and European firms for exports to Iraq.

Iraq insists it was unaware the loans were secret. It says the money was for grain and machinery and other civilian uses, like making cars.

But several companies that reportedly received secret BNL credits were implicated in past Middle East arms scandals. Other firms used BNL credits to sell Iraq machines with possible military applications, although they say the sales were legal.

The case has become Italy's biggest banking scandal since the 1982 collapse of Banco Ambrosiano, Italy's largest private bank, which made huge loans to Latin American dummy companies.

It has prompted an investigation by Rome magistrates into possible illegal arms sales and bribes, and probes by the FBI and U.S. attorney in Atlanta into whether fraud was involved. So far, no one has been charged.

The U.S. Department of Agriculture also is investigating whether its Commodity Credit Corporation was duped in the affair.

Meanwhile, directors of the government-owned BNL have been forced to resign and Italian opposition parties have demanded an inquiry.

''We want credible answers from the government to the questions of traffic of arms, the role of the secret service, the violation of international embargoes regarding Iraq,'' declared a leftist opposition deputy, Franco Bassanini.

''In this case there are disquieting signs and suspicions.''

So far, the affair has raised many puzzling questions. Why were the huge loans to Iraq made? How could they slip unnoticed past U.S. and Italian regulators? Who in the bank or the various governments knew what was going on?

At the center of the scandal is the Atlanta branch manager, 40-year-old Christopher Drogoul. A blond, athletically built French-American with a penchant for well-cut suits and Alfa Romeo sports cars, Drogoul was considered an intelligent, aggressive banker.

BNL says Drogoul was supposed to stick to a credit limit of $500,000 per customer and it thought he did.

But Drogoul manipulated the books and hid the Iraqi credits in secret files, some in his red-brick home in suburban Decatur, U.S. and Italian authorities say.

The banker and his lawyer have refused comment.

BNL has fired the former manager and suspended nine other managers of the 19-member Atlanta staff. On Oct. 12, the bank sued in U.S. federal court charging Drogoul and Paul Von Wedel, a suspended vice president of the Atlanta office, with providing unauthorized credits that cost the bank millions of dollars in losses. Their lawyer denied the bank was harmed.

Guido Carli, minister of Italy's Treasury, which owns 74 percent of BNL, has charged the bank's directors missed the Atlanta arrangements through lax inspection.

But many people doubt that the $3 billion operation could have escaped the notice of the home office.

''It's too odd,'' said a European banker in London, speaking on condition of anonymity. ''Commissions were coming in. Why? The bank (branch) hadn't been inspected for such a long time. Why?''

BNL's former U.S. director, Luigi Sardelli, told the Italian weekly Europeo that when he was appointed in 1987, the BNL branches hadn't been inspected in two years.

He alerted the bank's directors of serious problems in Atlanta; the warning was ignored, Sardelli said.

Suspicions of connivance by top bank officials have led to speculation that Italian politicians were involved - a natural leap of faith in a country in which 80 percent of the banks are government-owned and most bank directors are political appointees.

Former BNL executives have fed the fire by implying international skulduggery.

''There's something that escapes us; something that has to do with international politics, not of a banking nature,'' the bank's ousted chairman, Nerio Nesi, told the Italian weekly L'Espresso.

Aside from escaping detection at bank headquarters, the Atlanta operation also passed unnoticed during inspections by the Georgia Banking and Finance Department and the U.S. Federal Reserve, which did not realize BNL was financing the Iraqi credits through loans from other banks. In Italy, the central Bank of Italy picked up no trace of the secret loans.

''There were two sets of books. The set we had looked fine,'' said Bob Moler, a spokesman for the Georgia department, which had primary responsibility for regulating the bank.

Like the Banco Ambrosiano case, the BNL affair underlines bank regulators' difficulties in controlling transactions in an increasingly international market. The problem worries Italian officials who, among other things, fear the Mafia will easily launder its money when the 12-nation European Community becomes a unified market in 1992.

Unlike Banco Ambrosiano, BNL will not collapse, authorities emphasize. State companies have issued loans to increase the bank's capital, and the Bank of Italy would intervene if BNL ran into trouble.

Iraq has promised to make good on the credits, although analysts have raised fears about payment because Iraq's economy was crippled by its war with Iran.

BNL isn't the only institution that could get stuck if Iraq doesn't repay. The U.S. Commodity Credit Corporation, which promotes American farm exports, has guaranteed about $700 million of the BNL credits granted in 1988-89.

''Sure, we're concerned about what we have learned has happened in the bank in Atlanta,'' said Don Street of the agency's operations division. ''But that has not changed our looking at Iraq's ability to pay back.''

Nonetheless, the Department of Agriculture is examining all its BNL operations.

End adv for Sunday Oct. 22