Former Riggs Manager Keeps Mum Before Senate Panel
By Terence O'Hara and Kathleen Day
Washington Post Staff Writers
Thursday, July 15, 2004; 6:15 PM
A former Riggs Bank manager today refused to answer questions from a Senate panel investigating his handling of hundreds of millions of dollars in suspicious transactions for a West African dictator, invoking his Fifth Amendment rights over such matters as why he personally lugged a 60-pound suitcase stuffed with $3 million in plastic-wrapped cash to Riggs's Dupont Circle branch.
The Senate probe is the latest in a series of investigations into Riggs's once-prestigious embassy banking division, now tarnished with revelations that it helped former Chilean dictator Augusto Pinochet hide millions and appeared to have allowed its biggest customer, the country of Equatorial Guinea and its president, Teodoro Obiang, to siphon oil revenue into his personal accounts. Although Obiang and his wife made cash deposits of nearly $13 million over a three-year period into their Riggs account, the bank never filed a single suspicious activity report.
The Senate Permanent Subcommittee on Investigations called four Riggs executives to testify today, after releasing the results of its year-long probe into the bank. Simon Kareri, who managed Riggs's West African business until he was fired in January, was the only executive to assert his rights against self-incrimination.
Sen. Carl Levin (D-Mich.), the ranking minority member whose staff conducted the investigation, leaned over and removed his glasses as he pointedly asked another Riggs executive, bank president Lawrence Hebert, how he could live with himself after helping Obiang, whose government has been accused by international watchdog organizations of corruption and human rights abuses.
"How do you write that stuff to a guy who's as abominable as this guy? And knowing that he's abominable? How do you live with yourself? I have to ask that," Levin said referring to a letter sent to Obiang after he attended a luncheon at the bank.
The letter and the luncheon amounted to a routine overture to a customer who had "a significant amount of money in the bank," Hebert said in defending his actions. "I wanted to see this person," he said.
The Senate Government Affairs Committee, of which the investigations subcommittee is a part, is conducting a separate review of Riggs's dealings with the embassy of Saudi Arabia. In May, Riggs was fined $25 million for repeated violations of laws designed to prevent money laundering in its dealings with the embassies of Saudi Arabia and Equatorial Guinea. Since then the bank has retained investment bankers to explore a sale of the company.
The probe into Riggs reflects broader concerns in the Congress and elsewhere that systems designed to detect suspicious financial transactions may not be adequate for a job that now includes preventing financing for terrorism.
Today's hearings also included lengthy questioning of the federal bank examiner who was in charge of overseeing Riggs. Upon retirement R. Ashley Lee was hired by the bank as an executive vice president.
Levin pressed Lee on his actions as the "examiner-in-charge" monitoring Riggs from 1998 to 2002 for the Treasury Department's Office of the Comptroller of the Currency.
Lee contradicted sworn affidavits from two former Riggs examiners under his supervision who told the committee that Lee instructed them to exclude documents detailing Riggs's relationship with Pinochet from his federal agency's database. Lee today denied ever giving the instruction.
"I don't remember instructing any one to do this," Lee said.
© 2004 The Washington Post Company