Riggs Bank was a Washington, D.C.-based commercial bank with branches located in the surrounding metropolitan area and offices around the world. For most of its history, it was the largest bank in the nation's capital. Riggs had been controlled by
the Albritton family since the 1980s, but they lost control after various corporate scandals and management problems. On May 16, 2005, the bank merged with
PNC Financial Services.
...
In 1909, Riggs' president formally presented to the U.S. Congress a plan for economic relief. Many financial reforms were implemented as a result of this plan,
including the establishment of the Federal Reserve in 1913.
...
Beginning in the early 20th century, the bank embarked on a successful project to become known as the bank of embassies and diplomats, and by 1950 most embassies in Washington were customers. Many branches thereafter opened within embassies in Washington D.C. and London.
The bank traded on its history with an advertising campaign that proclaimed Riggs as "The Most Important Bank in The Most Important City in The World." [5]
...
Scandals
Saudi money transfers
In the mid-1970s members of the Saudi royal family set up covert accounts at the Riggs Bank in Washington amounting to tens of millions of dollars; this money was used by
the so-called "Safari Club" to run intelligence operations at a time when American intelligence was paralyzed by investigations in the aftermath of Watergate.[6]
A Saudi named Omar al-Bayoumi housed and opened bank accounts for two of the 9/11 hijackers. About two weeks after the assistance began, al-Bayoumi's wife began receiving monthly payments totaling tens of thousands of dollars from Princess Haifa bint Faisal, the wife of Saudi ambassador and Bush family confidant,
Prince Bandar bin Sultan, through a Riggs bank account. [1]
(Jonathan Bush, uncle of President George W. Bush, was an executive at Riggs Bank during this period.)
Upon discovery of these transactions, the FBI began investigating the bank for possible money-laundering and terrorist financing. Although the FBI and later the 9/11 Commission ultimately stated that the money was
not intentionally being routed to fund terrorists, investigators were surprised to see how lax the safeguards at Riggs Bank were. Several Saudi accounts were discovered to have financial improprieties, including a lack of required background checks and a consistent failure to alert regulators to large transactions, in violation of federal banking laws.
Many of these transactions involved Prince Bandar personally, often transferring over $1 million at a time. According to British investigations on the Al Yamamah deal, reported by The Guardian, Bandar would have received over $ 1.5 billion in bribery from
BAE Systems, laundered through the Riggs Bank.
Pinochet's frozen funds
Augusto Pinochet, the former dictator of Chile, had been widely accused since 1973 of corruption, illegal arms sales, and torture. In 1994, Riggs officials invited Pinochet to open an account at Riggs Bank. Pinochet was arrested in 1998 in Britain for possible extradition to Spain, and his accounts were ordered frozen by court orders. A recent U.S. Senate report has revealed that Riggs executives helped Pinochet disguise millions of dollars. By using shell companies and hiding accounts from federal regulators, Riggs illegally allowed Pinochet to retain access to much of his fortune.[7]
The Senate report also indicated that regulators were negligent in holding the bank accountable. Although Pinochet's accounts at Riggs had been reported in U.S. and British newspapers, and although these accounts were largely unreported to regulators, those same regulators never made a serious effort to investigate. T
he bank examiner from the Office of the Comptroller of the Currency tasked with investigating Riggs in 2002, R. Ashley Lee, was later given an executive position at Riggs. In 2004, Lee was placed on paid leave by the bank pending a Justice Department investigation on whether he violated government ethics rules.[8]
The disclosure of the Riggs accounts reignited the case against General Pinochet, and a ruling that he was not mentally competent to stand trial was overturned when it was proven that the general himself had orchestrated some of the huge transactions. In 2004, he was ordered to stand trial for crimes against humanity, and additional claims of mental and physical incompetence have been overruled. Pinochet died, however, in December 2006 before being judged. However, in September 2007, Pinochet's widow and five children were indicted by a Chilean court on charges including embezzlement.[9]
Equatorial Guinean funds
This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (December 2011)
In July 2004, the US Senate published an investigation into Riggs Bank, into which most of Equatorial Guinea's oil revenues were paid until recently. This showed that accounts based at the embassy to the United States of Equatorial Guinea were allowed to make large withdrawals without properly notifying federal authorities. At least $35 million were siphoned off by long-time dictator of Equatorial Guinea, Teodoro Obiang Nguema Mbasogo, his family and senior officials of his regime. Simon Kareri, the Riggs employee in charge of the Equatorial Guinea and other accounts, stands accused of money-laundering in separate charges. As the account manager, it is alleged that he established a fake holding company in his wife's name, and diverted funds into this account.
In the Senate Permanent Subcommittee on Investigations hearing in July 2004, Kareri, under advisement from legal counsel, refused to answer any questions of the panel by invoking his 5th Amendment Rights.
In that hearing, the President of Riggs Bank was asked why the bank would willingly enter into a business arrangement with the dictator of Equatorial Guinea, a man who willingly exercises his hold over his people with demonstrations of murder and torture on state-run television. In a copy of correspondence to President Mbasogo, the letter, "thanked the president for his establishment of several bank accounts, and encouraged a working relationship to help establish and secure the stable reign of his country..."[10]
...
Repercussions
Riggs Bank was fined $25 millionin May 2004 by the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network for violations of money-laundering laws.
A long running Justice Department investigation was wrapped up quickly in February 2005 with Riggs pleading guilty and paying a $16 million fine for violations of the U.S. Bank Secrecy Act after a Wall Street Journal article reported December 31, 2004, that Riggs had extensive ties to the CIA, including that several bank officials held security clearances.
Also in February 2005, the bank and Albritton family agreed to pay $9 million to Pinochet victims for concealing and illegally facilitating movement of Pinochet money out of Britain.[11] No similar payment has been made with regard to Equatorial Guinea, as reported in this weekly Anti-Money Laundering Report from the Fair Finance Watch The abuses at Riggs led Congress to consider forming a single agency with greater authority to enforce money laundering and currency control laws. Daniel E. Stipano, deputy chief counsel for the Office of the Comptroller of the Currency, said, "What happened with Riggs is unacceptable. It cannot be repeated."[12]
Riggs and its executives denied any wrongdoing, although some executives may now face criminal trials. Members of the Albritton family resigned from the bank board. The operation was acquired by PNC, which phased out the scandal-plagued embassy business. On February 10, 2005 PNC Financial Services agreed to acquire Riggs, and on May 16, 2005, the Riggs name was retired and all Riggs branches became PNC Bank branches.
Riggs Bank - Wikipedia, the free encyclopedia < click
6. Joseph J. Trento, Prelude to Terror: Edwin P. Wilson and the Legacy of America's Private Intelligence Network (Carroll and Graf, 2005), 102-03.
Trento - Prelude to Terror (2005) - Synopsis < click
