Legal Woes Cut Into Bottom Line at Riggs

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Embassy Banking Proves Costly

By Terence O'Hara
Washington Post Staff Writer
Wednesday, November 10, 2004; Page E01

Riggs National Corp. said yesterday that it lost $10 million in the third quarter, largely the result of $13 million in fees for a small army of lawyers and consultants to help it navigate a growing list of criminal, regulatory and civil matters related to its past dealings with former Chilean dictator Augusto Pinochet, the government of Equatorial Guinea and Saudi Arabian diplomats.

The company also disclosed that a Spanish judge, who has been seeking to prosecute Pinochet and extract reparations for the torture and death of Spanish citizens under his rule, has added Joe L. Allbritton, former chairman and chief executive of Riggs, to the complaint as well as his son, Robert, who replaced his father at chairman and chief executive in 2001.

Also named are Riggs board member Steven B. Pfeiffer, managing partner with Fulbright & Jaworski and one of the architects of Riggs's international business, and Carol Thompson, a former account manager at Riggs who handled Pinochet's accounts. A Senate subcommittee in July said Riggs had handled a balance of between $4 million and $8 million for Pinochet over an eight-year period ending in 2002.

According to Riggs's disclosure statement filed with the Securities and Exchange Commission yesterday, Judge Baltasar Garzon is seeking damages from the Riggs executives and directors for allegedly concealing Pinochet's assets. Garzon indicted Pinochet in 1996 for crimes against humanity, including genocide, torture and terrorism, and has been trying to seize his assets and bring him to trial ever since. In the fullest accounting yet of the legal entanglements that could complicate its pending merger with PNC Financial Services Group, Riggs also acknowledged that it is the subject of a criminal investigation by the U.S. Attorney's Office for the District of Columbia and the Department of Justice. Riggs said Justice subpoenaed information about Riggs Bank's dealings with Pinochet, the government of Equatorial Guinea and its overall compliance with money-laundering laws.

more
http://www.washingtonpost.com/wp-dyn/articles/A38165-2004Nov9.html

[TaleWgnDg]

1. Golly, I sure hope that GWBush's "tort reform" is pushed through

congress immediately so that individuals will be prohibited from suing such business entities as these!! hot dog! Why should people who've been injured be able to sue those who injured them?

While GWBush and his cohorts in congress are at it, why not lessen the criminal sanctions against these corporations too? hey.

Laissez faire . . . what a great crusade, huh?


edited to correct typo

[seemslikeadream]

2. Riggs National subject of investigation

Riggs National subject of investigation

November 9, 2004

WASHINGTON -- Riggs National Corp., the parent of Riggs Bank, disclosed Tuesday that both the U.S. Attorney's Office for the District of Columbia and the Department of Justice are conducting an investigation into the bank holding company.

Based on a subpoena issued in the matter, Riggs said it believes the probe involves accounts at the bank associated with former Chilean dictator Augusto Pinochet, accounts associated with Equatorial Guinea, compliance with the Bank Secrecy Act and anti-money laundering rules, as well as "actions of various former and current employees of the company."

Also Tuesday, Riggs said it lost $10 million in the third quarter as its costs for legal and other investigative efforts increased. The Washington-based bank said it spent $20.3 million related to the probes in the quarter. Riggs earned $139,000 in the same period last year.

In a quarterly filing with the Securities and Exchange Commission, Riggs said it has been attempting to cooperate with the investigation, and has provided documents and materials in connection with the probe.

Among other scrutiny involving the Washington-based company, investigators have disclosed that Riggs helped Pinochet hide millions of dollars in assets from international prosecutors and U.S. regulators.
more
http://www.boston.com/business/articles/2004/11/09/rigg...