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Riggs Replaces Its Chief Legal Officer

By Terence O'Hara
Washington Post Staff Writer
Saturday, December 4, 2004; Page E01

Riggs Bank has replaced Joseph M. Cahill as its chief legal officer, part of an ongoing fallout within the company from a recent internal investigation into Riggs's failures to abide by federal laws designed to prevent money laundering.

The Washington bank hired Robert L. Klivans, a former deputy general counsel for FleetBoston Financial Corp., as its new general counsel. Cahill, according to Riggs spokesman Mark Hendrix, remains in Riggs's legal department.

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Pinochet and the Law

"This is another step toward strengthening our management structure consistent with similar steps we've taken in the recent past," Hendrix said.

Klivans and Cahill could not be reached for comment.

Cahill is the most recent Riggs executive to be demoted, fired or put on leave since a money-laundering scandal surfaced involving former Chilean dictator Augusto Pinochet and the West African country of Equatorial Guinea.

Earlier this year, Riggs fired the manager of Equatorial Guinea's accounts. At least two additional firings have occurred in the bank's international banking department, according to sources familiar with the investigation who spoke only on the condition that they not be named because of ongoing investigations into the company.

A lawyer in Cahill's department, Lawrence Raz, also was let go last month, the sources said.

Raz, reached at his home, declined to comment other than to say that his termination was not connected to the bank's money-laundering compliance problems. His lawyer, John Clifford, said Raz was not fired for cause and is not the target of any investigation. "He has not been involved in any unethical misconduct at all," he said.

An internal investigation by Riggs found that the bank had been banking for Pinochet under "front" accounts as far back as 1985 and had uncovered a number of suspicious transactions involving Pinochet, his family and other associates over a 20-year period. The results of the investigation were critical of the legal guidance provided in connection with Riggs's relationship with Pinochet and a suspicious withdrawal of $3.8 million in cash by the Argentine naval mission in Washington in April 2003, according to sources familiar with the investigation.

Riggs was fined $25 million by bank regulators in May for failing to comply with anti-money laundering laws. The Justice Department is currently investigating the bank's relationship with Pinochet and Equatorial Guinea.

Riggs executive vice president Robert C. Roane recently resigned after being put on paid leave. The bank's chief risk management officer, R. Ashley Lee, was put on leave in July.

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