R. Ashley LeeR. Ashley Lee, as the top US Federal bank examiner in charge of supervising Riggs Bank, at the time Washington D.C.’s largest and most illustrious, essentially helped former Chilean dictator Augusto Pinochet conceal his wealth and evade efforts to freeze his assets as Lee kept details about the bank’s relationship with Pinochet out of its case file.
Lee also recommended that the bank not be punished for failing to take steps to prevent money laundering, just a few months before he retired from the government position at the Office of the Comptroller of the Currency and joined Riggs as a senior executive.
Jonathan Bush, President George W. Bush’s uncle, was also an executive at Riggs. The investment firm that he had founded in 1970, J. Bush & Co., which specialized in offering discreet banking services to foreign embassies in Washington, was bought by Riggs in 1997. Bush was appointed to run Riggs Investment Management Co. in 2000.
While Bush was an executive at Riggs, Saudi Arabian Princess Haifa Al-Faisal left a money trail of tens of thousands of dollars from her Riggs bank account to the families of two Saudi students who subsidized two Saudi terrorists involved in the Sept. 11 attacks.
Despite its illustrious background, Riggs Bank had a history of dubious money dealings. It maintained the accounts of the Russian bosses of CIA spy Aldrich Ames and owned a stake in the company that moved funds for Russian oil billionaire Mikhail Khordokovsky.
In May 2004, Riggs was fined $25 million for the "willful, systemic" violation of anti-money-laundering laws in its dealings with the embassies of Equatorial Guinea and Saudi Arabia.
In 2005 it was fined $16 million by a Federal judge for violating the Bank Secrecy Act by hiding transfers of millions of dollars in accounts controlled by Pinochet and top officials of Equatorial Guinea, once the bank’s largest customers. The judge called Riggs "a greedy corporate henchman for dictators and their corrupt regimes."
Riggs Bank courted business from the late Pinochet and helped him hide millions of dollars in assets from international prosecutors while he was under house arrest in Britain, according to a report by Senate investigators.
The bank accepted more than $10 million in deposits from him between 1994 and 2002, but used offshore and other accounts that were misleadingly named to obscure Riggs’ connection to the dictator.
Senior bank officials were part of an effort to win Pinochet's business and were familiar with the activities in his accounts, the former dictator's legal status and efforts to seize his assets around the world, the Senate report says.
Lee denied that he prevented information about Riggs's relationship with Pinochet from being included in bank examination reports.
But based on interviews with others, the Senate report concludes that the top federal bank examiner at Riggs might have become "too close" to the bank to be an effective watchdog during his four years overseeing the bank, from 1998 to 2002, when Riggs was repeatedly failing to take steps required by laws designed to prevent money laundering.
According to the report, Lee recommended to his superiors at the OCC that it not take action against Riggs in 2001, despite three successive examinations that detailed deficiencies in Riggs's adherence to rules designed to detect money laundering.
Lee said that Riggs officers had promised to remedy the problems, but the report concludes that he did little to ensure that corrective actions were carried out.
In 2002, a month before Lee was approached by Riggs about a job, he "specifically instructed" other bank examiners not to include the Pinochet findings in the OCC's electronic database. Lee told the investigators that the examiners under him may have been "confused" about his instruction to ensure the privacy of the Pinochet matter. The examiners disputed that, saying Lee's instructions were "clear," the report says.
Riggs Bank was bought by PNC in 2004 for $779 million. PNC shed all of Riggs international and ambassadorial business and focused on retail banking. In July 2005 Webster Bank bought J. Bush & Co.