THE AMERICAS: By Edward Alden in Washington
Financial Times; Jul 15, 2004

Riggs Bank, the US lender that serves most foreign embassies and missions in the nation´s capital, failed to inform bank regulators that it was handling accounts worth tens of millions of dollars for Augusto Pinochet, the former Chilean dictator, and for top officials in the African dictatorship of Equatorial Guinea, according to a report to be released today by Senate investigators.

The report says that Riggs maintained large accounts for Mr Pinochet long after a Spanish court in 1998 asked that such accounts be frozen. In the case of Equatorial Guinea, the oil-rich African nation that has been accused of corruption and human rights violations by the US State Department, Riggs handled deposits and loans worth nearly $700m (&euro568m, £377m). Equatorial Guinea was Riggs´ largest single customer until the accounts were closed in the past several months.

The report says that senior officials at the bank, including Joe Allbritton, the former Riggs chairman who headed the family-controlled bank for two decades, were aware of the accounts.

Senator Carl Levin, the top Democrat on the Senate permanent subcommittee on investigations, which carried out the 16-month inquiry, said the findings ”are a sordid story of a bank with a distinguished name which blatantly ignored its obligations under anti-money laundering laws”.
Riggs agreed in May to pay a record $25m in civil penalties for what US banking regulators said were numerous, wilful violations of laws requiring banks to report suspicious or high-risk transactions. The penalties were levied in connection with the Equatorial Guinea accounts and separate accounts held by the Saudi embassy.

Riggs did not return calls yesterday, but senior bank officials, including Lawrence Hebert, chief executive, are due to testify before the Senate subcommittee today.
The Senate investigation provides a more detailed picture of how the bank maintained such accounts without alerting US regulators.
The inquiry also raises questions about payments from several large oil companies, including ExxonMobil and Marathon, to private accounts controlled by the leaders of Equatorial Guinea. Officials from those companies are set to testify before the Senate today.

Riggs in 1995 first opened accounts for Equatorial Guinea, which has been run by President Teodoro Obiang Nguema for the past 25 years. Of more than 60 accounts, some were used to deposit large revenues from the country´s oil sales, while others were held personally for the president.

Investigators found that between 2000 and 2002, more than $11.5m in cash arrived in suitcases and was deposited in an account controlled by Mr Mbasago through an offshore corporation established in the Bahamas, with Riggs´ help. The bank did not report those transactions accurately to US regulators.

In other cases, large wire transfers totalling nearly $35m were sent from Equatorial Guinea´s oil account at Riggs to unknown companies in bank secrecy havens.
The report also says that Riggs maintained accounts worth $4m-$8m for Mr Pinochet from 1994-2002. Riggs helped him to set up offshore shell companies to disguise his control of the accounts.

In October 1998, a Spanish court issued an international arrest warrant for Mr Pinochet alleging murder, torture and genocide, and demanded a freeze on all his accounts. But the investigation found that Riggs took steps to help Mr Pinochet conceal his funds in the bank.


Fuente: Financial Times

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