The chairman and chief executive officer of embattled Riggs Bank’s parent company unexpectedly resigned yesterday, relinquishing his position and board seat in a move that strips the bank’s biggest shareholder of any direct representation on the board and of executive control of the bank.
The surprise announcement by Robert Allbritton, whose family is the biggest shareholder of the bank, came a few days after he and his family agreed to pay $1 million into a new $9 million fund for victims of former Chilean dictator Augusto Pinochet, who is said to have hidden money in Riggs with the help of bank officials. The old-line Washington bank is paying the remaining $8 million.
Riggs pleaded guilty in January to a criminal felony charge of failing to report suspicious transactions to authorities and has agreed to pay $41 million in civil and criminal fines to the U.S. government.
Mr. Allbritton, 37, assumed control of the bank from his father, Joe Allbritton, several years ago. The Allbritton family, a powerful local dynasty, collectively owns nearly 43 percent of the bank’s stock.
Asked whether pressure from federal bank regulators or PNC had figured into his decision to resign, a spokesman for Mr. Allbritton from outside Riggs, Sean Kevelighan, replied: “It was his own decision.”
Pittsburgh-based PNC Financial Services Group Inc. is buying the parent, Riggs National Corp. — stripped of the embassy and international business that got the bank into trouble — for some $643 million in cash and stock. The two parties, which have had a rocky road to a merger and sharp disputes over the buying price, hope to complete the deal by the end of this month.
“With the PNC merger only a few weeks away after the successful renegotiation of the terms of the agreement, and with the recent settlement of legal matters important to the merger, it is an appropriate time for me to resign all my positions with Riggs Bank and its parent company,” Mr. Allbritton said in a brief statement issued late yesterday.
“The time left before the PNC merger will be characterized by generally routine transactions that will be capably handled by accountants and legal counsel,” he said.
Mr. Allbritton said he would return to Allbritton Communications, which owns WJLA-TV (Channel 7), the local ABC affiliate, and News Channel 8.
Spokesmen for Riggs Bank didn’t immediately return a telephone call seeking comment. PNC spokesmen couldn’t immediately be reached.
PNC agreed last week to pay nearly $4 million to settle a class-action lawsuit by Riggs Bank shareholders, brought against current and former members of the bank’s board, charging that Riggs stock plunged because of the actions of board members. The suit accused the board of having a role in money laundering at Riggs in the year before a merger proposal by PNC.