Riggs Directors on 2 Boards Share Personal Ties to Allbritton
Monday, January 17, 2005
Being on the board of Riggs Bank or its holding company, Riggs National Corp., was a diverting sideline for some of Washington's old-line business figures. According to accounts of past directors and various executives with knowledge of the meetings during the 1990s, board meetings were undemanding and often amusing affairs, frequently over lunch.
The one person who made them amusing was Joe L. Allbritton, the bank's largest shareholder, who dominated nearly all aspects of the company for more than 20 years until his resignation from the board in 2004. Board meetings would be held around a 30-foot polished wood table in the main board room of Riggs's granite-hewed Corcoran Branch, across the street from the U.S. Treasury.
"One thing [Joe Allbritton] prided himself always in was his relation with foreign embassies and foreign governments," Calvin Cafritz, chairman of the Morris & Gwendolyn Cafritz Foundation, who was on the Riggs board in the 1990s, told the Style section of The Washington Post last year. "That was business he fostered himself. He flew all around the world in the Gulfstream, meeting with heads of state. He would tell people at the [board] meetings about meeting with such and such a leader in such and such a country."
But Allbritton's amusing stories about world leaders have taken on an entirely different dimension in recent months. And the people who have sat around that board table, including current and past directors, have much more to worry about than what's on the lunch menu.
In addition to Cafritz, other well-known past directors include Floretta Dukes McKenzie, former superintendent of the D.C. Public Schools, and John M. Fahey, president and chief executive of the National Geographic Society.
None of the past or current directors agreed to speak on the record for this story.
Of the current 10 members of the Riggs corporate board, seven are considered independent in the sense that they are neither major shareholders nor executives. Yet six of those seven have personal or business ties to Allbritton or Riggs, according to Securities and Exchange Commission documents and sources with knowledge of the directors' relationships with the Allbritton family. Business ties between directors and the banks they oversee are unusual in the industry. The corporate board is responsible for overall direction of the company, including corporate governance
Jack Valenti, former president and chief executive of the Motion Picture Association of America and one of Washington's best-known lobbyists, has known Allbritton for more than five decades and been a Riggs director since soon after Allbritton bought control of the company. Valenti was involved in one of Allbritton's early Texas savings-and-loan deals in 1950s Houston. The two men, now in their eighties, met as teenagers at their Houston high school and have remained close friends. Valenti "has not allowed his relationship with Mr. Allbritton to influence his duties as a director of Riggs," he said through a spokesman.
Steven B. Pfeiffer, a partner in the law firm Fulbright & Jaworski LLP, has long done legal work for Riggs and other Allbritton family interests, including Allbritton Communications Co., the family's chain of television stations. He met Joe Allbritton in 1983, when Pfeiffer ran Fulbright & Jaworski's London office. He is now chairman of the District-based law firm's executive committee, its highest post.
Pfeiffer was also involved in the creation of Riggs's now-closed international business -- the focus of the bank's money-laundering troubles -- and chairman of the Riggs executive committee. Last year he earned more than $110,000 for his work on the board and for serving as chairman and managing director of Riggs Bank Europe, according to Riggs's most recent proxy statement.
Pfeiffer did not return repeated telephone calls seeking a comment. Julie A. Tassi, a Fulbright & Jaworski spokeswoman, said in a statement that "Fulbright and Mr. Pfeiffer have at all times adhered to the highest standards of ethical conduct. In his role as a director of . . . the holding company of Riggs' bank . . . Mr. Pfeiffer has acted independently and has fulfilled his duties to Riggs National Corp. and its shareholders at all times."
Eddie N. Williams, the recently retired chief executive of the Joint Center for Political and Economic Studies, has been on Riggs's board since 1993. The center, an advocacy and research group on issues affecting minorities, has received $311,000 from Riggs over 25 years, according to disclosures by the center. Last year, the center received $2.3 million in contributions, much of it from corporations.