- The Washington Times - Wednesday, June 16, 2004


Lawmakers criticized federal regulators and Saudi Arabia yesterday for their roles in the Riggs Bank affair as the government balanced foreign diplomats’ right to U.S. bank services with the need to block financing of terrorism.

The Office of the Comptroller of the Currency, a Treasury Department agency, again came under bipartisan assault at a House hearing over its handling of District-based Riggs.

The agency fined Riggs $25 million last month for reputed violations of laws to prevent money laundering in its hand- ling of millions of dollars in the foreign-held accounts. The FBI and Treasury regulators have investigated transactions in Riggs accounts controlled by Saudi diplomats — which included cash withdrawals of as much as $1 million each — for possible connections to terrorism financing.

Yesterday, Rep. Sue W. Kelly, New York Republican, called on the Treasury Department to consider recommendations outlined in a Council on Foreign Relations report, which include a consolidation of government efforts to combat terrorism financing.

New powers for another Treasury agency, the Financial Crimes Enforcement Network, “could provide greater certainty to our hopes that the era of freewheeling, unregulated Saudi cash infusions to Islamic militants in our own country are over,” said Mrs. Kelly, who heads the Financial Services oversight panel holding the hearing.

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