The Office of the Comptroller of the Currency has asked the Justice Department to review whether a former federal bank examiner of Riggs Bank broke ethics laws after he left government and went to work at the bank.
R. Ashley Lee was the top federal bank examiner in charge of supervising Riggs. When he retired, he took a job as executive vice president at Riggs. The comptroller's office, in a July 20 letter, asked federal prosecutors whether Lee violated laws that prohibit federal employees from dealing with their former agencies on matters they worked on while in government.
The Office of the Comptroller of the Currency (OCC), a Treasury unit that regulates federally chartered banks, sent the referral to the fraud and public corruption section of the U.S. attorney's office in the District last week, following revelations at a Senate hearing days earlier of alleged misconduct by former examiner Lee and of other issues at Riggs.
A Senate report said Riggs employees helped former Chilean dictator Augusto Pinochet hide millions of dollars.
The report asserted that, about a month before accepting a job with Riggs, Lee had kept details about Riggs's relationship with Pinochet out of the Riggs case file. Two other bank examiners have said Lee instructed them to keep the material out of the files, but Lee testified that he didn't remember giving such an instruction. Leaders of the Senate's permanent subcommittee on investigations have said they will ask the Justice Department to determine whether anyone lied under oath about what happened.
The Senate hearing was part of a series of ongoing investigations by Congress, regulators and the Justice Department into long-standing violations of anti-money-laundering laws by Riggs officials, particularly in its once-prestigious embassy banking division.
The report also found that Riggs allowed its biggest customer, Equatorial Guinea, and that country's dictator, Teodoro Obiang Nguema, to siphon oil revenue into his personal accounts. Federal regulators also have said that Riggs failed to report hundreds of suspicious transactions in more than 150 accounts held by officials of Saudi Arabia.
Yesterday, in a related matter, Comptroller of the Currency John D. Hawke Jr. agreed to give Treasury's inspector general full access to papers and other material related to Lee and his employment in government and at Riggs, Treasury officials said.
The Treasury's inspector general began a probe last month into why the comptroller's office allowed serious violations to persist for years at Riggs. Lee's actions as chief federal examiner of the bank and later as a bank official are part of the investigation.
The OCC initially had argued the Treasury's inspector general did not have jurisdiction to probe Lee's conduct after he left government and therefore questioned whether it was proper to supply some of the material requested, according to congressional and Treasury sources who agreed to speak only on the condition of anonymity. Alerted to the dispute, two members of Congress with jurisdiction over bank regulators -- Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) and Rep. Sue W. Kelly (R-N.Y.) -- sent letters to Treasury in recent days stressing the importance of the comptroller cooperating fully with document requests.
On Tuesday, Hawke said in an interview that his agency was "not contesting the scope" of the inspector general's probe and that the only issue between the two Treasury units was whether original documents or copies would be provided. Yesterday, Hawke said his office had raised jurisdiction questions.
Rich Delmar, counsel to the inspector general's office and spokesman for acting Inspector General Dennis S. Schindel, said an agreement was reached yesterday. "The Treasury Office of Inspector General is satisfied that our differences have been resolved with the Office of the Comptroller of the Currency regarding access to information and jurisdiction to conduct investigations of current and former employees," he said.
Treasury spokesman Robert S. Nichols said, "It is the department's understanding that the OCC is cooperating with our IG on this matter."
In May, Riggs was fined $25 million for its repeated violations, and two weeks ago, under pressure from regulators, the bank agreed to be acquired by PNC Financial Services Group Inc. of Pittsburgh.