The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Riggs banking scandal:
The bank of presidents ... and torturers and thieves

Mar 7, 2005

On January 27, Riggs Bank, the local Washington D.C. "bank of presidents," pled guilty to "failing to file a suspicious activity report" to banking commissioners. Riggs agreed to pay a 16 million dollar fine, which comes less than one year after Riggs paid a 25 million dollar fine over money laundering charges.

Joe Allbritton, the former chairman of Riggs and its largest stockholder, made the bank famous for "international business development activities," as a reporter for the Wall Street Journal put it.

And what were those "international business development activities"? Among these were ties between Riggs and Augusto Pinochet. Pinochet had come to power in 1973 after a coup which overthrew Chile's president, Salvador Allende. While the CIA was responsible for Allende's overthrow, Pinochet was the one in charge during years of torture, imprisonment and murder of thousands of Chileans – and apparently he made out like a bandit. He deposited perhaps 100 million dollars of Chilean money in Riggs Bank, some under fictitious account names changed by Riggs to cover Pinochet's theft.

Riggs Bank also handled enormous sums for Prince Bandar bin Sultan, described as a Washington "diplomat" for rulers of Saudi Arabia. Bandar speaks openly of his CIA connections, and of supplying money on behalf of the U.S. government. He gave money to the Contras, for example, the Nicaraguan thugs who fought the Sandinista regime. The Sandinistas had booted out a U.S.-backed dictator there. Bandar bin Sultan also said he paid millions in the 1980s to the Afghanistan insurgents fighting the Soviet Union, one of whom was Osama bin Laden.

Riggs also had connections to the dictator who rules Equatorial Guinea. After Mobil discovered oil off its coast in the early 1990s, its ruler suddenly had 700 million dollars to bank with Riggs. The suitcases full of money appearing at Riggs didn't do anything for the income level of anyone in Equatorial Guinea. The country remains one of the world's poorest nations with a per person income of $400 per year and half its children under five reported as malnourished.

Allbritton specialized in finding money from sources covered in blood and graft, sources closely tied to the U.S. government or some of its biggest corporations.

So while Riggs got a slap on the wrist, it continues on as before. A short time ago, the Pittsburgh banking firm PNC found Riggs attractive enough to propose to buy it for more than 600 million dollars. PNC may back out of the deal, but Riggs admits there are other banks interested in buying it. Allbritton was forced to step down after the investigations began, but he and his family stand to gain one hundred million dollars when Riggs is sold.

Riggs is still a "good buy" for another bank and a real winner for the Allbritton family. It shows he did what was asked of him.