Archive for September 17th, 2004
Federal investigators from the DoJ to the US Attorney for DC have been gradually piecing together the picture of Riggs Bank’s money laundering for the likes of Augustus Pinochet and the Saudi Embassy. Last month that investigation got a big boost with the discovery of a box containing tape recordings of Riggs board meetings.
Federal regulators and prosecutors are listening to tape recordings of more than 150 Riggs Bank board meetings as they investigate what role top executives, including former chairman Joe L. Allbritton, played in more than a decade of violations of anti-money-laundering laws at the company, according to five sources familiar with the tapes.
Despite earlier requests from regulators and Senate investigators for documents related to the violations, the bank did not discover the more than 125 tapes until recently, the sources said. The tapes are of board meetings at the bank and its holding company beginning at least as far back as 1989 and ending some time last year, according to the sources, who spoke on condition that their names not be used because of ongoing civil and criminal investigations.
On the tapes, Allbritton, who left Riggs’s holding company board in May but remains its largest shareholder, makes what one source said were “derisive” remarks about federal bank regulators who were pushing the bank to correct years-long violations of money-laundering laws. Neither transcripts nor copies of the tapes were made available.
Under Allbritton, Riggs Bank was up to its eyeballs in laundering millions and millions of dollars in money stolen by Pinochet from Chile’s Treasury, and millions more in bribes to Equatorial Guinea’s president, Teodoro Obiang Nguema, from major US oil companies. Even worse, they helped the Saudis hide millions more that might have gone to fund terrorist organizations in the Middle East.
After the terrorist attacks of Sept. 11, 2001, bank regulators and the FBI began a detailed probe of Riggs Bank’s long-standing relationship with officials at the Saudi Embassy. That evolved into multiple federal investigations, including one by the Justice Department, of the bank’s relationship with other foreign customers, including inquiries into deposits by major U.S. oil companies into accounts controlled by Equatorial Guinea’s president, Teodoro Obiang Nguema.
In May bank regulators at the Treasury Department fined Riggs $25 million for violations of the Bank Secrecy Act, which has been in effect since the 1970s but was strengthened in the fall of 2001 to bolster efforts to interrupt financing of terrorist operations.
Earlier this summer, the Senate subcommittee held a hearing on Riggs that publicized for the first time what investigators called evidence that the bank helped Pinochet hide millions of dollars from international prosecutors over the past decade. Prosecutors in Spain and Chile have sought information about that money as possible restitution for families of thousands of victims Pinochet is alleged to have tortured and killed while president of Chile.
The Bush Admin’s lax attitude toward the enforcement of banking regulations apparently gave Riggs the idea that they could ignore them with impunity–after all, there were $$tens of millions$$ in fees on the line. But to their credit it must be said that for one of the few times in the last four years, the BA didn’t interfere with or attempt to quash an investigation into Saudi finances (Pinochet they don’t care about one way or the other).
The tapes make this case that rare instance when collusion to break the law can be proved to have come from the very top levels of a major corporation–scapegoats don’t cut it when you’ve got the BoD on tape, and therefore on the record, approving illegal actions by the CEO. Eventually, the tapes–or at least transcripts of them–will be released, and personally, I can’t wait.