PLANK DECEMBER 14, 2012
Politico’s fawning obituary of banker and media magnate Joseph Allbritton was predictable, given that his son Robert is the newspaper’s publisher. According to the obit, Allbritton senior was “genial and easygoing,” “often gave charitable gifts anonymously to avoid publicity,” and had “an uncommon gift for making numbers come alive in his imagination.”
Barely noted was Allbritton’s scandalous role in the destruction of Riggs Bank, his most famous property. Allbritton became the chairman and chief executive officer of Riggs after acquiring a controlling interest in the bank in 1982. He stepped down from the bank’s board in 2001, but kept a seat on the board of its parent company, the Riggs National Corporation, until 2004. One year later, PNC took over Riggs National Corporation. “The PNC sale brought Allbritton a large financial sum but the loss of the historic Riggs name … remained a source of regret for Allbritton,” the Politico obit said in its only paragraph about the scandal.
Almost entirely glossed over, except for a single sentence, is the sordid narrative that led to the PNC takeover. In 2004, the U.S. Senate released a report, prompted by a story I wrote in the Los Angeles Times, saying Riggs had “turned a blind eye” to evidence that the bank was “handling the proceeds of foreign corruption.” The Treasury Department hit the bank with a $25 million penalty. The next year, Riggs paid a $16 million criminal fine over related charges that it had failed to report suspicious transactions with foreign account holders. The judge who imposed the fine described Riggs as "a greedy corporate henchman of dictators and their corrupt regimes." With its reputation in tatters, the bank was a ripe target for PNC.
The Senate reported that Riggs conducted business with clients from several countries “with high risks of money laundering and foreign corruption.” Among those was Chile’s long-time dictator, Augusto Pinochet. According to the report, Riggs opened multiple accounts for the dictator and his family, used aliases and offshore shell corporations to disguise his ownership, and “accepted millions of dollars in deposits from him with no serious inquiry into the source of his wealth.”
All this was done “with the knowledge and support of the Bank’s leadership,” including Allbritton, who, along with other senior bank officials, would periodically jet down to Santiago for meetings with the dictator. “As a horse enthusiast, your fine young calvary officers, their horses and the superb performance they put on was excellent,” Allbritton wrote the dictator after a 1996 visit that included a reception at a military academy. “We attach great importance to our relationship with you and the Chilean Military and look forward to expanding our cooperation in the future.”
The letter thanked Pinochet for “the superb cufflinks you presented to me” and invited him to visit “my wife Barby and me at our house in Middleburg, Virginia where we raise our thoroughbred race horses.” (Allbritton’s wife was also a longtime Riggs board member.)
Allbritton wrote again following a 1997 trip to Santiago to express his gratitude for “our thriving personal friendship, which you have demonstrated through your gracious hospitality and stalwart support of Riggs.” He thanked Pinochet for having “rid Chile from the threat of totalitarian government” – Pinochet, at that point, had held power for 24 years after leading a coup against a democratically elected government – and said the entire Western world owed him “a tremendous debt of gratitude.”
In 1998, Pinochet was forced from power and arrested during a visit to London under an international arrest warrant issued by Spanish Judge Baltasar Garzon. Even after a Spanish court order directed a worldwide freeze of Pinochet’s assets, Riggs “deliberately assisted him in the concealment and movement of his funds,” the Senate found. Riggs also hid Pinochet’s accounts from U.S. bank regulators and only closed them in 2004, shortly before its collapse.
Under Allbritton, Riggs also conducted business with the dictator of Equatorial Guinea, Teodoro Obiang Nguema Mbasago, who took power in a 1979 coup and to this day runs a regime notorious for corruption and human rights abuses. Obiang’s relationship with Riggs began in 1995, just as American oil companies found huge offshore reserves in Equatorial Guinea. By 2003, Obiang’s regime had become the bank’s single largest customer, with about $700 million in 60 different personal and state accounts.
Riggs accepted cash deposits for the accounts of up to $1 million at a time, in 20-pound bundles of shrink-wrapped bills. The bank also helped Obiang buy two Washington area mansions worth about $4 million combined, and issued a debit card to his wife with a $10,000 daily limit to facilitate her D.C. shopping sprees.
Allbritton was fully briefed on the bank’s accounts with Obiang, and opposed shutting them down until the bitter end. There is no record of him personally corresponding with Obiang as he did with Pinochet, however Robert Allbritton, who took over as Riggs CEO in 2001, put his name on a flattering letter to the dictator following a lunch with him in May of that year. The letter offered to help Obiang bolster his “reputation for prudent leadership'' and said Riggs had “formed a committee of the most senior officers…that will meet regularly to discuss our relationship with Equatorial Guinea and how best we can serve you.”
Allbritton Jr. rebounded smartly from the Riggs disaster. Though resigning from Riggs after its sale to PNC, he remained as chairman and CEO of Allbritton Communications Co., the privately held media company that now owns eight television stations as well as Politico. Last year TNR put him on its list of “Washington’s Most Powerful, Least Famous People.”
Other Albritton obituaries gave the Riggs scandal more prominence than Politico but -- as is always the case with obituaries about powerful people – tended to focus on the positive. The Washington Post’s obit was tougher than most, though it noted, “The furor over the Riggs scandal died down quickly, leaving Mr. Allbritton’s reputation largely intact among Washington’s elite.”
The story included a particularly revealing quote from Chuck Conconi, formerly a writer with Washingtonian magazine and now vice chairman at Qorvis, the PR and lobbying giant. “After that [Riggs] story broke, it just sort of disappeared,” he said. “From everyone I talked to, it wasn’t a matter of conversation. I think, in the end, a lot of us have warm feelings about Joe Allbritton.”