Reading through the 113-page report on Riggs Bank prepared by Senate investigators, I kept thinking of the comic refrain from Sgt. Schultz, the prisoner-of-war camp guard in the 1960s TV comedy "Hogan's Heroes."

"I see noth-ing," Schultz would exclaim as he shielded his eyes from the shenanigans in front of him.

That pretty much describes the attitude of Riggs executives who conspired with former Chilean dictator Augusto Pinochet to circumvent court orders meant to deny him access to the millions of dollars he'd stolen during his murderous regime.

It applies to Riggs officers and directors who cozied up shamelessly to an African kleptocrat who was among the bank's biggest customers rather than inquire why he would be depositing $3 million in cash stuffed in a suitcase or need to wire millions of dollars to blind accounts in Luxembourg and Cyprus.

It applies to executives at ExxonMobil, Amerada Hess and Marathon Oil whose payments of oil royalties for the desperately poor nation of Equatorial Guinea were deposited into accounts controlled by the president and his extended family.

And it applies to directors of Riggs and its holding company -- including pillars of the community like Hollywood lobbyist Jack Valenti; Allied Capital chief executive William Walton; Heather Foley, the wife of the former House speaker; Fulbright & Jaworski partner Steven Pfeiffer; and George Washington University President Stephen Trachtenberg -- who not only ignored regulators' early warnings of lax procedures, but in some cases even resisted efforts to close out the Pinochet and Equatorial Guinea accounts.

Sad to say, it also applies to all the Sgt. Schultzes at the Comptroller of the Currency and the Federal Reserve, who seem to have a problem telling the difference between regulatory compliance and promises of regulatory compliance -- and who cracked down on Riggs only after money-laundering details began to leak out in the press.

One of my favorite sections of the report lays out how bank officials helped Pinochet set up a phony offshore front company to open accounts at Riggs. When asked by bank examiners about the beneficial owner of the company, bank officials described him as a former public official from Chile who came from a wealthy family of diplomats and vintners.

And then there are the nice little details of how accommodating Riggs could be for its best clients. Like the time the account manager traveled all the way to Chile to personally deliver to Pinochet eight sequentially numbered cashier's checks, each for $50,000. Or when the first lady of Equatorial Guinea needed the daily limit on her credit card raised to $10,000 a day -- no problem.

This is more than a tale of otherwise well-meaning people guilty, at worst, of turning a blind eye to activity that some might have thought suspicious.

In the case of the federal examiner who goes on to take a lucrative job at a bank he protected from sanctions year after year, or the oil company executive who never pays bribes but does pay millions of dollars to buy land and lease property from presidents, cabinet ministers and their relatives, you have wonderful examples of the kind of "cute" behavior that is no less corrupt for being strictly legal.

And in several instances, the Senate sleuths were able to identify instances in which bank officials not only knew they were violating the law, but went to great lengths to hide their actions.

If there is a hero in this story it is Lois Trojan, a career bank examiner with a fondness for Rabbi Hillel. After years of pointing out Riggs's deficiencies, she wrote a plea to superiors last March urging them to get tough with the bank.

"How many times will we conduct an exam and find some new significant problem before we decide to complete an exhaustive review once and for all? I wonder (at the risk of paraphrasing and butchering a perfectly good quote) if not Riggs, who, and if not now, when?"

It would be another year before the regulators moved to impose fines and pressed for resignations of officers and directors.

Steven Pearlstein can be reached at