Riggs Bank

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Riggs National Corporation
Traded as NASDAQ: RIGS
Industry Finance and insurance
Fate Acquired
Successor PNC Bank
Founded 1836; 181 years ago (1836) as an unnamed brokerage
Founder William Wilson Corcoran
Defunct May 13, 2005; 12 years ago (2005-05-13)[1]
Headquarters Washington, D.C., United States
Key people

Joe Allbritton, Former CEO & Chairman

William Wilson Corcoran
Products Financial Services
Number of employees

Riggs Bank was a Washington, D.C.-based commercial bank with branches located in the surrounding metropolitan area and offices around the world. For most of its history, it was the largest bank in the U.S. capital. Riggs had been controlled by the Allbritton family since the 1980s, but they lost control after corporate scandals and management problems. On May 13, 2005, the bank merged with PNC Financial Services.[1]


Former Riggs National Bank headquarters, located on Pennsylvania Avenue in Washington, D.C. The rightmost section is the American Security and Trust Company Building.

The earliest incarnation of Riggs Bank was formed in 1836 when William Wilson Corcoran opened a small brokerage house. In 1840, Corcoran and George Washington Riggs, the son of a neighbor, formed "Corcoran & Riggs", which offered checking and depositing services. The bank got a major boost in 1844, when the U.S. government assigned Corcoran & Riggs to be the only federal depository in Washington. Corcoran & Riggs financed Samuel Morse's invention of the telegraph in 1845, one of several notable backings in its history. The bank also lent $16 million to the U.S. government to pay for the Mexican-American War in 1847 and in 1868, provided $7.2 million in gold towards the purchase of Alaska. Other notable financing included the Robert Peary’s first expedition to the North Pole and the expansion of the Capitol Building in the 1860s.[2]

In 1854 Corcoran retired and George Washington Riggs re-assumed leadership, resulting in the bank changing its name to "Riggs & Co."[3] After accepting a government charter, "Riggs National Bank" was born in 1896. By 1900, Riggs was twice as large as any other bank in the capital. In 1909, Riggs' president formally presented to the U.S. Congress a plan for economic relief. Many financial reforms were implemented as a result of this plan, including the establishment of the Federal Reserve in 1913.

Throughout the early 20th century, the bank continued to flourish. During World War I, Riggs National Bank participated in a Liberty bond drive. After the war in the 1920s, the bank established a new savings deposit system as a result of the large deposit boom during the previous decade. Throughout the Great Depression, Riggs Director, Robert V. Fleming, also acted as adviser to President Franklin D. Roosevelt. While all of these things were occurring, the bank was also strategically expanding its clientele by opening branches in different areas of Washington, D.C.[3]

Beginning in the early 20th century, the bank embarked on a successful project to become known as the bank of embassies and diplomats, and by 1950 most embassies in Washington were customers. Many branches thereafter opened within embassies in Washington D.C. and London.

In 1986, looking to expand its presence in the suburbs of Northern Virginia, Riggs bought the Guaranty Bank and Trust Company of Fairfax, Virginia, for $37.8 million and renamed it Riggs National Bank of Virginia.[4][5]

Through its history Riggs Bank served many notable personalities. Twenty-three U.S. Presidents or their families banked at Riggs, including Martin Van Buren, John Tyler, Abraham Lincoln, Ulysses S. Grant, Dwight D. Eisenhower, and Richard Nixon.[6] Accounts were also held by Senators Henry Clay, John C. Calhoun and Daniel Webster, Confederate president Jefferson Davis, American Red Cross founder Clara Barton, suffragist Susan B. Anthony, and generals William Tecumseh Sherman and Douglas MacArthur.

The bank traded on its history with an advertising campaign that proclaimed Riggs as "The Most Important Bank in The Most Important City in The World." [7]


Saudi money transfers[edit]

In the mid-1970s members of the Saudi royal family set up covert accounts at the Riggs Bank in Washington amounting to tens of millions of dollars; this money was used by the so-called "Safari Club" to run intelligence operations at a time when American intelligence was paralyzed by investigations in the aftermath of Watergate.[8]

A Saudi named Omar al-Bayoumi housed and opened bank accounts for two of the 9/11 hijackers. About two weeks after the assistance began, al-Bayoumi's wife began receiving monthly payments totaling tens of thousands of dollars from Princess Haifa bint Faisal, the wife of Saudi ambassador Bandar bin Sultan, through a Riggs bank account.[9] Upon discovery of these transactions, the FBI began investigating the bank for possible money-laundering and terrorist financing. Although the FBI and later the 9/11 Commission ultimately stated that the money was not intentionally being routed to fund terrorists, investigators were surprised to see how lax the safeguards at Riggs Bank were. Several Saudi accounts were discovered to have financial improprieties, including a lack of required background checks and a consistent failure to alert regulators to large transactions, in violation of federal banking laws.

Many of these transactions involved Prince Bandar personally, often transferring over $1 million at a time. According to British investigations on the Al Yamamah deal Bandar would have received over $1.5 billion in bribery from BAE Systems, laundered through the Riggs Bank.[10]

Pinochet's frozen funds[edit]

Augusto Pinochet, the former dictator of Chile, had been widely accused since 1973 of corruption, illegal arms sales, and torture. In 1994, Riggs officials invited Pinochet to open an account at Riggs Bank. Pinochet was arrested in 1998 in Britain for possible extradition to Spain, and his accounts were ordered frozen by court orders. A recent U.S. Senate report has revealed that Riggs executives helped Pinochet disguise millions of dollars. By using shell companies and hiding accounts from federal regulators, Riggs illegally allowed Pinochet to retain access to much of his fortune.[11]

The Senate report also indicated that regulators were negligent in holding the bank accountable. Although Pinochet's accounts at Riggs had been reported in U.S. and British newspapers, and although these accounts were largely unreported to regulators, those same regulators never made a serious effort to investigate. The bank examiner from the Office of the Comptroller of the Currency tasked with investigating Riggs in 2002, R. Ashley Lee, was later given an executive position at Riggs. In 2004, Lee was placed on paid leave by the bank pending a Justice Department investigation on whether he violated government ethics rules.[12]

The disclosure of the Riggs accounts reignited the case against General Pinochet, and a ruling that he was not mentally competent to stand trial was overturned when it was proven that the general himself had orchestrated some of the huge transactions. In 2004, he was ordered to stand trial for crimes against humanity, and additional claims of mental and physical incompetence have been overruled. Pinochet died, however, in December 2006 before being judged. However, in September 2007, Pinochet's widow and five children were indicted by a Chilean court on charges including embezzlement.[13]

Equatorial Guinean funds[edit]

In July 2004, the US Senate published an investigation into Riggs Bank, into which most of Equatorial Guinea's oil revenues were paid until recently. This showed that accounts based at the embassy to the United States of Equatorial Guinea were allowed to make large withdrawals without properly notifying federal authorities. At least $35 million were siphoned off by long-time dictator of Equatorial Guinea, Teodoro Obiang Nguema Mbasogo, his family and senior officials of his regime. Simon Kareri, the Riggs employee in charge of the Equatorial Guinea and other accounts, stands accused of money-laundering in separate charges. As the account manager, it is alleged that he established a fake holding company in his wife's name, and diverted funds into this account.

In the Senate Permanent Subcommittee on Investigations hearing in July 2004, Kareri, under advisement from legal counsel, refused to answer any questions of the panel by invoking his 5th Amendment Rights.

In that hearing, the President of Riggs Bank was asked why the bank would willingly enter into a business arrangement with the dictator of Equatorial Guinea, a man who willingly exercises his hold over his people with demonstrations of murder and torture on state-run television. In a copy of correspondence to President Mbasogo, the letter, "thanked the president for his establishment of several bank accounts, and encouraged a working relationship to help establish and secure the stable reign of his country..."[14]


Former Riggs Bank building, now the Courtyard by Marriott Washington Convention Center Hotel

Riggs Bank was fined $25 million in May 2004 by the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network for violations of money-laundering laws. A long running Justice Department investigation was wrapped up quickly in February 2005 with Riggs pleading guilty and paying a $16 million fine for violations of the U.S. Bank Secrecy Act after a Wall Street Journal article reported December 31, 2004, that Riggs had extensive ties to the CIA, including that several bank officials held security clearances. Also in February 2005, the bank and Albritton family agreed to pay $9 million to Pinochet victims for concealing and illegally facilitating movement of Pinochet money out of Britain.[15] No similar payment has been made with regard to Equatorial Guinea, as reported in this weekly Anti-Money Laundering Report from the Fair Finance Watch The abuses at Riggs led Congress to consider forming a single agency with greater authority to enforce money laundering and currency control laws. Daniel E. Stipano, deputy chief counsel for the Office of the Comptroller of the Currency, said, "What happened with Riggs is unacceptable. It cannot be repeated."[16]

Riggs admitted criminal liability for failing to prevent money laundering.[17] Members of the Albritton family resigned from the bank board. The operation was acquired by PNC, which phased out the scandal-plagued embassy business. On February 10, 2005, PNC Financial Services agreed to acquire Riggs.[18] The merger was completed on May 13, 2005,[1] and the Riggs name was retired and all Riggs branches became PNC Bank branches three days later.[19]


  1. ^ a b c O'Hara, Terence (May 14, 2005). "For Riggs Customers, An Uneven Transaction". Washington Post. 
  2. ^ "The PNC Riggs Collection: Riggs Bank and the DC Community". George Washington University. Retrieved 13 December 2014. 
  3. ^ a b Inventory of the PNC-Riggs Bank Records, 1809-2004, Special Collections Research Center, Estelle and Melvin Gelman Library, The George Washington University
  4. ^ "Riggs National to Buy Virginia Banking Firm". The Wall Street Journal. 1986-06-12. p. 1. (Subscription required (help)).  Alternate Link via ProQuest.}}
  5. ^ Walsh, Sharon Warren (1986-06-12). "Riggs to Buy Guaranty B&T In Fairfax". The Washington Post. p. E1. (Subscription required (help)).  Alternate Link via ProQuest.
  6. ^ "The PNC Riggs Collection: Presidential Accounts". George Washington University. Retrieved 13 December 2014. 
  7. ^ "Case Studies: Riggs National Bank". Siddall Communications. Retrieved 13 December 2014. 
  8. ^ Trento, Joseph J. (2005). Prelude to Terror: Edwin P. Wilson and the Legacy of America's Private Intelligence Network. Carroll and Graf. pp. 102–03. ISBN 9780786714643. 
  9. ^ "The Saudi Money Trail". MSNBC. December 2, 2002. Archived from the original on 2003-02-06. 
  10. ^ Leigh, David & Evans, Rob (2007-06-07). "BAE accused of secretly paying £1bn to Saudi prince". The Guardian. ISSN 0261-3077. Retrieved 2017-08-15. 
  11. ^ O'Hara, Terence (November 19, 2004). "Riggs Uncovers Deep Ties to Pinochet". Washington Post. 
  12. ^ Day, Kathleen & O'Hara, Terence (September 11, 2004). "Riggs Bank Suspends 2nd Senior Executive". Washington Post. p. E01. 
  13. ^ "Pinochet family arrested in Chile". BBC News. October 4, 2007. Retrieved 13 December 2014. 
  14. ^ Birrell, Ian (17 August 2009). "Big men, bankers and the stench of corruption". The Independent. Retrieved 13 December 2014. 
  15. ^ O'Hara, Terence (February 26, 2005). "Allbrittons, Riggs to Pay Victims Of Pinochet". The Washington Post. 
  16. ^ O'Brien, Timothy (July 19, 2004). "At Riggs Bank, a Tangled Path Led to Scandal". The New York Times. 
  17. ^ O'Hara, Terence (January 28, 2005). "Riggs Bank Agrees to Guilty Plea And Fine". The Washington Post. 
  18. ^ "PNC Reaches Revised Deal to Buy Riggs Bank". New York Times. February 10, 2005. 
  19. ^ Gordon, Marcy (May 16, 2005). "Riggs eagle comes down at branches as bank is absorbed in merger with PNC". Deseret News. 

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