| Previous accounts have described the bank's close relationship with Pinochet and what
appear to be attempts to hide his assets from federal prosecutors. But the bank's own
investigation, according to sources familiar with its findings, turned up detailed
information about the lengths the bank went to accommodate the former dictator, whom bank
officials referred to by code names including "Red Fox" and "APU." The
sources agreed to speak only on the condition that they not be identified since the
investigation is continuing. In the late 1990s, Pinochet was under house arrest in
London after being indicted in Spain in 1998 on charges of crimes against humanity. The
Chilean Air Force mission there contacted Robert Roane, who headed Riggs's London office,
asking if the bank's corporate jet could fly nonstop from London to Chile and whether it
could be available if Pinochet were released, according to the investigation. Roane passed
the request on to a Riggs executive in Washington; Pinochet did not use the jet.
Although the investigation turned up no evidence that Joe L. Allbritton, Riggs's
largest stockholder and its chief executive until 2001, participated in any suspicious
activity involving Pinochet accounts, numerous bank officials told investigators that they
thought Pinochet was a favored client and a friend of Allbritton.
Sources close to the Allbritton family, speaking on their behalf but only on condition
of anonymity, said Allbritton met Pinochet twice and the two men were not friends.
The investigation so far has resulted in the firing of at least three Riggs employees,
including a lawyer in the bank's general counsel office, according to sources. Evidence
obtained through the investigation has been given to the FBI, the Secret Service, the
Department of Justice, bank regulators, and the Bureau of Immigration and Customs
Enforcement, the sources said.
The Pinochet account was closely managed by Carol Thompson, who ran the Latin American
embassy and international private client business for Riggs. Thompson was also involved in
the Argentine transaction, in which Riggs helped Argentine naval officers transfer $3.8
million in cash from an account to Riggs safety deposit boxes. The Argentine government
feared that private investors in the country's defaulted bonds would seek a court order
freezing government funds in the United States.
Two representatives from the naval mission withdrew $3.8 million from the navy's
account at Riggs, stuffed the cash into two large paper bags, and deposited it in five
boxes at the Riggs Dupont Circle branch on April 28, 2003.
Investigators reviewed an e-mail in which Thompson said that she had asked a Riggs
lawyer for advice about the transaction and that no objections had been raised. Former
Riggs National Corp. president Timothy C. Coughlin found out about it at a lunch with
Thompson and the Argentine admiral the same day the transaction took place. He abruptly
left the lunch, went back to the bank, and ordered the transaction reversed.
Thompson quit Riggs in 2003 and until recently was an employee of Wachovia Bank. She
could not be reached for comment. A spokeswoman for Wachovia said Thompson was no longer
employed there.
Among the investigation's other findings:
• Riggs paid $5,000 into a Pinochet family foundation in 1997, shortly after
senior bank executives visited Pinochet in Chile to solicit his business.
• Some Riggs internal bank documents relating to Pinochet are missing from the
bank's files.
• Pinochet and his family had more accounts than previously disclosed, including
10 accounts at Riggs's Miami bank and several opened by Chilean military officers
described by bank executives as "fronts" for the dictator.
Riggs closed out its remaining Pinochet accounts in 2002 under pressure from the Office
of the Comptroller of the Currency (OCC), but the bank was never cited for laundering any
money for the general. This year, the bank was fined $25 million for failing to report
suspicious transactions in Washington accounts held by the government of Equatorial Guinea
and by Saudi Arabian diplomats.
The OCC has also asked other banks that held Pinochet-related accounts, including Bank
of America and Citibank, for information, sources said.
Riggs in May began reconstructing its 19-year relationship with Pinochet in response to
an investigation by the Senate permanent subcommittee on investigations. The subcommittee
published what it called a case study on money laundering and foreign corruption,
describing Riggs's relationships with Pinochet and the dictator of Equatorial Guinea.
The subsequent bank investigation found that Riggs's suspicious dealings with Pinochet
were much deeper than was previously known by anyone except a small number of former
private client managers in Riggs's shuttered international banking unit in Miami. It
involved most members of Pinochet's family, including a son, and other members of Chilean
military elite who were courted by Riggs senior bank management, including Allbritton,
according to sources.
Pinochet's commonly known full name is Augusto Pinochet Ugarte, but he requested that
Riggs personnel refer to him as José.
The first record found by investigators is of an account opened at the Miami subsidiary
in 1985 under the name Jose Ramon Ugarte. Eventually, Pinochet would control, directly and
indirectly, as much as $12 million at Riggs and its various subsidiaries. In all, the
Riggs Miami operation had 10 accounts that were used as "conduits" for money
going to Pinochet or his personal assistant.
The first suspicious transactions involving the Miami accounts that the investigation
found occurred as early as 1990, when a Riggs account in the name Daniel Lopez issued a
$410,000 check to a Riggs account that belonged to Augusto Pinochet and his wife, Lucia
Hiriart.
In all, more than $1.3 million from the Lopez account was deposited into Pinochet's
accounts at Riggs. When Riggs internal investigators withdrew the customer identity folder
on Lopez from a Miami storage facility in August, the folder contained only two return
U.S. Postal Service receipts for an address in Santiago, Chile. Investigators had expected
to find documents revealing the identity of Daniel Lopez. Although some cursory
documentation about Lopez's identity -- he was listed as "businessman" -- was
discovered in September at a Riggs office in Washington, the bank was not able to
positively identify Lopez until two weeks ago, when Pinochet's son Marco Antonio sent an
e-mail to Riggs investigator B. J. Moravek confirming that Lopez was an alias of his
father.
Thompson, Allbritton and Coughlin made numerous trips to Chile, meeting with Pinochet
on several occasions and with a wide variety of Chilean government and military officials
in the 1990s and as late as the spring of 2002.
Allbritton was periodically informed by Thompson about the status of Pinochet's
accounts, and he was aware of them at least since the mid-1990s, according to sources
close to the investigation. When the OCC forced Riggs to close Pinochet's accounts in
2002, Allbritton was so upset that he asked bank officers to prepare materials so he could
make a personal call to then-Comptroller of the Currency John D. Hawke Jr. to complain,
according to sources close to the bank's investigation. Apparently, Allbritton thought
better of it.
"He didn't call," Hawke said yesterday from his office at Arnold &
Porter, where he now practices banking law. "If he had, I would not have discussed
the issue."
Allbritton could not be reached for comment. His spokesman, Paul Clark, said Allbritton
wanted to register displeasure that a bank examiner could decide what kind of clients a
bank had, not that Riggs had to surrender Pinochet in particular.
Mark N. Hendrix, a Riggs spokesman, said, "Riggs is committed to
full compliance with laws and is attempting to cooperate fully with all ongoing
investigations." |