Robert L. Allbritton resigned as chief executive and chairman of Riggs National Corp. yesterday, ending 24 years of direct Allbritton control of the Washington banking company.
Allbritton, in a statement issued by his public relations firm, said he resigned because the substantial legal impediments to Riggs's pending merger with PNC Financial Services Group Inc. had been removed and the remaining work at the company can best "be handled by accountants and legal counsel."
Robert Allbritton in a photo taken last June. His father, Joe Allbritton, acquired Riggs Bank in 1981.
(Katherine Frey - For The Washington Post)
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Riggs National Corp.
For a quick overview of Riggs Bank's legal problems, the status of various investigations and more, check out a Riggs primer compiled by washingtonpost.com.
Riggs itself had no official statement last night on his resignation. The directors of Riggs were undecided on how to respond publicly to the resignation. After a brief conference call at 4 p.m., they decided to leave the matter unaddressed for now, according to a director and two others familiar with the matter who spoke on the condition of anonymity because the discussion was supposed to be confidential.
Allbritton is the 35-year-old son and only child of Joe L. Allbritton, who gained control of the company and its Riggs Bank subsidiary in 1981. Though the family still controls nearly 40 percent of the outstanding stock, no family members will remain on the board or in the executive suite. Joe, who was chief executive until 2001, and his wife, Barbara, announced last April they would resign as directors as a money-laundering scandal engulfed the company.
In stepping down from Riggs, Robert Allbritton cited a desire to devote time to Allbritton Communications Co., his family-owned chain of television stations, where he is chief executive.
His decision to leave comes as several independent directors at Riggs have been conducting a review of his and his father's personal use of a former company jet. The Department of Justice is also conducting an inquiry into the use of corporate assets at Riggs.
Paul Clark, a spokesman for the Allbritton family, said the inquiries into the father's and son's use of the plane and a company-provided apartment played no role in Robert Allbritton's decision to resign.
Robert became chief executive and chairman after his father retired in 2001. Current and former associates at the bank said he was a likable if aloof executive who spent much of his time at Allbritton Communications, which has offices adjacent to Riggs's downtown Washington headquarters.
Much of the day-to-day management of Riggs was left to Lawrence I. Hebert, a longtime Allbritton family lieutenant who is chief executive of Riggs Bank, the company's main subsidiary.
Under Robert, Riggs began investing significantly in improving the bank's inefficient back-office systems and focusing on growing the Washington area retail banking network.
But those efforts did not improve Riggs's financial performance, perennially poor compared with its peers, and the institution began to run into trouble in the middle of 2003, when regulators cited Riggs for its lack of anti-money-laundering controls. By the spring and summer of last year, the problem had mushroomed into a full-blown Washington scandal, complete with congressional investigations and Capitol Hill hearings.
Evidence of a divergence of interests between the Allbrittons and the company they controlled and ran for 24 years has been growing in recent months. The Office of the Comptroller of the Currency, along with several independent directors, has expressed annoyance at Robert Allbritton's absence from the company's affairs, given he was the chief executive, according to sources familiar with the directors' thinking but who spoke only on the condition of anonymity.
Hebert, not Allbritton, appeared as the senior executive in U.S. District Court last month when Riggs Bank entered a felony guilty plea for failing to prevent possible money laundering by former Chilean dictator Augusto Pinochet and officials of the West African oil state of Equatorial Guinea. Riggs paid a $16 million fine in that action, on top of an earlier $25 million regulatory fine.
The family has also hired its own public relations team, separate from the bank's: Robert Allbritton issued a statement yesterday through PR firm Hill & Knowlton Inc. announcing his resignation.
"The time left before the PNC merger will be characterized by generally routine transactions that will be capably handled by accountants and legal counsel," he said in his three-paragraph statement. "As I leave to return to Allbritton Communications I am pleased that Riggs Bank has made significant strides in building its local client base, as well as modernizing its risk management control systems."
Robert L. Sloan, the president of Sibley Memorial Hospital and a longtime Riggs director, wrote a letter to Allbritton yesterday afternoon accepting his resignation and thanking Allbritton for his service, according to several sources familiar with the matter who spoke only on the condition of anonymity. But these sources said the company's outside lawyers advised the board, after the letter was written and sent to Allbritton, that the Sloan letter should not be the board's official response to his resignation, sparking a board debate about what the company should say that remained unresolved last night.