At Riggs Bank, a Tangled Path Led to Scandal (Herald Tribune)
The Senate's Permanent Subcommittee on Investigations has concluded that Riggs executives and bank regulators failed to monitor suspicious financial transactions involving hundreds of millions of dollars. The scrutiny of the bank involves accounts it held for Gen. Augusto Pinochet, the former Chilean dictator, and for the Saudi Arabian Embassy. Moreover, regulators never considered fining Riggs in 2002 or referring the Pinochet accounts to law enforcement officials, according to Senate records and testimony. The comptroller's lead Riggs examiner at the time, R. Ashley Lee, took an executive position at Riggs later that year. In May, regulators fined Riggs $25 million for failing to adequately monitor suspicious activities, the largest such penalty ever imposed on an American bank. According to federal investigators and the Senate report, that service mirrored what the bank provided General Pinochet: massive, no-questions-asked transfers of cash into offshore shell corporations that Riggs created.