- The Washington Times - Friday, May 13, 2005

The imperial-looking eagle came down from Riggs Bank branches as Washington’s oldest bank, sullied by a money-laundering scandal, was absorbed in a purchase by a much larger bank from out of town.

Signs with the more modern, abstract PNC Bank logo replaced the Riggs eagle as the $643 million acquisition of “the bank of presidents” took effect yesterday.

At the branch at Indiana Avenue and Seventh Street NW, the imposing old stone building with Gothic flourishes still bore a blue Riggs banner above the entrance yesterday morning. Old-fashioned bronze plaques on the sides of the door said “Riggs” and “Interest Paid on Savings Deposits.”

“It’s going to be a little bit of a pain,” Ksenia Luchaninova, a manager at nearby “701,” said of the changeover’s effect on the restaurant’s account at the bank. “But not too bad.”

There were only a few customers in the spacious branch lobby. Coffee and boxed doughnuts beckoned on a table. PNC Financial Services Group Inc., now the 19th-largest bank in the country after the purchase of Riggs National Corp., is offering free access to automated teller machines nationwide and expanded branch banking hours to lure new customers.

The Pittsburgh company, which has about 775 branches in six states, plans to add 30 new branches over the next three years in the District of Columbia, Maryland and Virginia, where Riggs has had a total of 51.

The focus is on garden-variety retail banking, in a Washington market that analysts describe as lucrative, crowded and competitive. Already shuttered and sold are Riggs’ hallmark embassy and international businesses, which got the bank into trouble.

A few blocks from the Indiana Avenue branch, at the federal courthouse, Riggs pleaded guilty in January to a felony charge of failing to report suspicious transactions involving foreigners — including former Chilean dictator Augusto Pinochet and members of his family.

Riggs also agreed to pay a $16 million fine, said to be the largest criminal penalty of that type ever imposed on a bank the size of Riggs, a midsize institution with some $6.4 billion in assets. It came atop a record $25 million civil fine levied by a Treasury Department agency a year ago.

U.S. District Judge Ricardo Urbina, noting Riggs’ 169-year-old history as a prestigious Washington institution, said at a March hearing that it now stands “as a greedy corporate henchman of dictators and their corrupt regimes.”

A federal prosecutor has said that new charges will be brought soon against individuals involved in the Riggs affair, based largely on information obtained through the bank’s cooperation in the ongoing criminal investigation.

Observers were stunned last year by revelations of how dictators’ and diplomats’ business was handled at the highest levels at the bank, which had enjoyed a genteel image and storied history.

Twenty-one presidential families kept accounts there, going back to Abraham Lincoln. The bank, founded in 1836, helped finance the Mexican-American War, construction of the Washington Monument and the purchase of Alaska from Russia.

And it developed an elite franchise of business with the capital’s diplomatic community.

Former chief executive Joe Allbritton, who acquired Riggs in 1981 in a hostile takeover, built up the embassy and international clientele — jetting around the world in pursuit of business more likely to be glamorous than profitable.

The drama that unfolded around Riggs had elements of intrigue worthy of surprising even those who had become inured to scandal following the series of corporate fiascos of recent years.

A suitcase stuffed with millions of dollars in cash being hauled by a bank officer into the stately Embassy Row branch near Dupont Circle. Dummy offshore companies potentially set up by bank managers for Gen. Pinochet, whose name was found to have been altered on some of his accounts to deceive international prosecutors. Payments of $445,800 from a big U.S. oil company into the account of a 14-year-old relative of the president of Equatorial Guinea, earmarked for renting office space.

The oil-rich but poor West African country became Riggs’ biggest customer with some $700 million in accounts.

The disclosures raised concern about government efforts to detect and block the use of U.S. banks for bankrolling terrorist activity. The FBI, banking regulators and a Senate committee have investigated large cash transactions in Riggs accounts, controlled by Saudi diplomats in Washington, for links to terrorism financing.

Other government investigations have proliferated. Among them: a federal grand jury probe of the Equatorial Guinea accounts and an inquiry by the Securities and Exchange Commission into payments by five big U.S. oil companies — Amerada Hess Corp., Chevron Corp., Devon Energy Corp., Exxon Mobil Corp. and Marathon Oil Corp. — to officials of that country.

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