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Records Show Liberal Use Of Riggs Jet

Ex-CEO's Guests Took Trips on Company Tab

By Terence O'Hara
Washington Post Staff Writer
Thursday, February 17, 2005; Page A01

If you want to help friends in high places, a Gulfstream jet at the ready is a handy thing.

Joe L. Allbritton made a top-of-the-line Gulfstream V available, gratis, to two former presidents, network news personalities, a senator, the prime minister of New Zealand and two former first ladies.

_____Graphic_____
VIP Fliers A sampling of the politicians, media personalities and other associates of Joe L. Allbritton who were provided use of Riggs Bank's Gulfstream V.
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Riggs National Corp.
_____Background_____
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.
_____Related Coverage_____
Riggs, PNC Reach New Merger Agreement (The Washington Post, Feb 11, 2005)
Buying Riggs Has Its Draws, Drawbacks (The Washington Post, Feb 9, 2005)
Riggs Files Suit Against PNC Over Collapse Of Merger Talks (The Washington Post, Feb 8, 2005)
Special Report: Riggs Bank

But the trips weren't paid for by Allbritton -- they were paid for by Riggs Bank, according to sources familiar with the bank's policies and operations.

And, despite bank policy that allowed only employees and directors to use the plane for personal reasons, Allbritton's guests flew often unaccompanied by either, according to records of the plane's use obtained by The Washington Post.

Riggs shareholders paid for three trips taken by former president George H.W. Bush and two trips taken by former president Jimmy Carter. Riggs flew Claudia Taylor "Lady Bird" Johnson and some friends from Austin to the Bahamas in 1999. The Gulfstream hosted Nancy Reagan and her guests on a trip from California to New York. No Riggs directors or employees were on board of any of these flights, according to those records.

Sen. Ted Stevens (R-Alaska) and his wife, however, accompanied the Allbrittons on the plane in July 2003. Courtney Schikora Boone, Stevens's spokeswoman, said that the senator was going to California on official business and that Allbritton offered Stevens a ride. Boone said Stevens's office faxed a request for a bill for an amount equal to first-class airfare for the same flight, in accordance with Senate ethics rules, to Allbritton's personal secretary, Virginia White, on July 23, 2003.

But the bill wasn't paid until Tuesday, a day after a reporter called Boone to inquire about the flight. Boone attributed the late payment to an oversight by a staff member.

"I know it looks one way, but it really was an oversight," Boone said, adding that no one from Riggs or Allbritton's office ever followed up to make sure the bill was paid.

On other occasions, Riggs Bank paid for ABC News correspondents Barbara Walters and Diane Sawyer to be flown from New York to Washington to be Allbritton's guests at the annual Alfalfa Dinner. NBC News correspondent Andrea Mitchell was invited to join Allbritton and his wife on a flight from New York to Washington in December 2002.

Mitchell said Barbara B. Allbritton approached her "at the last minute" in the airport in New York while Mitchell was waiting for the Delta shuttle to Washington.

"Barbara said, 'We're flying back to D.C., would you like to go with us?' " recalled Mitchell, whose husband, Alan Greenspan, is chairman of the Federal Reserve, which regulates Riggs's holding company. She said she knows the Allbrittons socially. "I thought it was their personal airplane. Only later when this whole thing came up did I learn that it was a corporate aircraft. I'm usually very careful about those things."

She described the Allbrittons' offer as "sociable and neighborly."

Walters and Sawyer, through an ABC News spokesman, declined to comment. Several sources confirmed that their trips on the Riggs jet were part of Allbritton's invitation to the Alfalfa Club dinner, an exclusive annual gathering in Washington of journalists, politicians and business executives.

Sean Kevelighan, a spokesman for the Allbritton family, said, "A number of the cases being cited here were for valid client, promotional or other business use." He also said the family's use of the jet complied with the bank's written policy. "Personal use of the plane was governed by corporate policy as well as IRS and federal regulations," Kevelighan said. "All personal use was in full compliance with those."

These flights as well as hundreds of other personal trips by Allbritton, his family and their friends are the subject of an inquiry by the Justice Department and bank regulators into the misuse of company assets by Allbritton, said sources familiar with the probes who spoke on the condition of anonymity because of the ongoing investigations. In addition, a group of independent directors at Riggs has begun its own inquiry. The Allbritton family controls about 40 percent of the stock of Riggs National Corp.

Expensive Rides

Several sources familiar with planes conservatively estimate that Riggs's two corporate jets -- a Gulfstream III until 1998, when Riggs upgraded to a $40 million Gulfstream V -- cost shareholders more than $100 million until the Gulfstream V was sold last year. Yet the vast majority of what the company was paying for was not bank business, according to flight logs and sources familiar with the flights. Most of the times the jet landed outside Washington, it was in vacation spots, cities where Allbritton has homes or where he conducted his thoroughbred horse business, or destinations for a select group of friends and acquaintances, records show.

The records, which cover 20 years, were obtained from sources with knowledge of how the plane was used. They include actual flight logs and descriptions of flights, their purposes and who was on board. The authenticity of the records was confirmed by officials at the company.

It costs on average about $12,000 an hour to operate a Gulfstream V in flight, according to data from Conklin & de Decker Aviation. One round trip to San Diego, about 10 hours of flight time, would cost Riggs more than $100,000. A round trip to Houston would cost more than $50,000; even a half-hour trip to New York costs about $10,000. Allbritton took numerous such personal trips each year.

Allbritton was required to report the costs of his personal use of the jet -- including the flights he offered to others -- on his tax returns. The amount Allbritton was required to report was based on Internal Revenue Service guidelines, not actual costs. Because of how the bank applied IRS rules, that reported cost never amounted to more than $50,000 in any year he was chief executive, according to sources familiar with how the bank accounted for the plane.

"Independent members of the boards are presently conducting a thorough review of the use of aircraft previously owned by Riggs," said company spokesman Mark N. Hendrix. "This is consistent with the company's ongoing cooperation with federal regulators."

Hendrix declined to comment further on the matter. Sources familiar with the independent directors' review said they have yet to determine whether the Allbrittons' personal use of the jets violated company policy, which states that officers and directors of the company may use it without reimbursing the bank for the cost.

In his 20-year tenure as chief executive, which ended in 2001, Allbritton repeatedly justified the plane to shareholders and employees as necessary to Riggs business. Allbritton and other bank officials often called it a "flying branch."

"We get more uninterrupted time on that plane than we do anyplace else," Allbritton said in an interview in 1992, the same year he fought down a shareholder proposal calling on Riggs to sell its jet. "We're not lazing around up there. We're meeting and planning and discussing business." He added, "This is not just a folly."

Presidents and Weddings

Yet records indicate Joe Allbritton designated most of his trips on the Gulfstream as non-business. For instance, of 31 total trips (many with multiple stops) taken on Riggs's Gulfstream in 2003, the Allbrittons classified 22 of them as purely personal, including two wedding-related trips taken by Joe's son and current Riggs chief executive Robert L. Allbritton, his wife and their friends.

Flight records show that the cities most often visited were Houston, where Allbritton maintains his primary residence, Aspen, Colo., and San Diego, close to his home in nearby La Jolla.

While bank policy allowed for personal use only by Riggs employees and directors, Allbritton made the plane available multiple times to his friends, politicians, and his horse trainers and personal doctors even when he was not on board, records show.

Carter spokeswoman Deanna Congileo said his flights on Riggs's Gulfstream were to transport the former president to two speeches, one in January 2000 and another in July 2002, at the National Geographic Society. Allbritton was a longtime trustee of the society until 1999, and National Geographic chief executive John M. Fahey Jr. is a former Riggs director. Betty Hudson, senior vice president of communications for the National Geographic Society, said the society requested use of the Riggs plane for Carter in both instances.

"My understanding is that Joe [Allbritton] offered to help," Hudson said.

Jean Becker, chief of staff to Bush, said the former president regularly makes use of about a dozen planes owned by individuals or companies that have offered the flights as gifts. In Riggs's case, someone from Bush's office would call Allbritton to request the plane. She characterized Bush and Allbritton as personal friends.

"We try hard not to use and abuse it," Becker said of Bush's use of privately owned aircraft.

Riggs's jet flew Bush in November 2000 to Washington from Houston to attend the 200th anniversary of the White House, Becker said. Two subsequent trips on the plane from Houston to Washington, in December of 2002 and 2003, were to transport the former president and his wife to Washington to join his son and other family members for the Christmas holiday at Camp David, she said.

Personal use of the plane by the Allbrittons ended in April, the same month Joe and Barbara Allbritton announced their resignations from the company's board. The plane was finally sold late last year at a $7.1 million loss to shareholders. Sources familiar with the sale said one of the reasons for the loss was that its seating was limited by a large kitchen, installed by the bank in 1998 on Allbritton's orders, for an extra $1.2 million.

Riggs pleaded guilty in January to failing to prevent possible money laundering by former Chilean dictator Augusto Pinochet and officials of Equatorial Guinea. It is scheduled to be sold to Pittsburgh's PNC Financial Services Group Inc. on May 31. Bank regulators began investigating executive compensation practices and possible misuse of bank assets, including the plane, last year, and the Department of Justice recently joined that investigation, according to sources who spoke only on the condition they not be named because the inquiry is still in its early stages.


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