Posted on 06/16/2004 5:28:42 PM PDT by blam
U.S. Regulators, Saudis Slammed for Riggs
Thursday June 17, 2004 12:16 AM
By MARCY GORDON
AP Business Writer
WASHINGTON (AP) - Lawmakers on Wednesday criticized federal regulators and Saudi Arabia for their roles in the Riggs Bank affair as the government tried to balance diplomats' right to U.S. banking services with the need to block terrorism financing.
The Office of the Comptroller of the Currency, a Treasury Department agency, came under renewed criticism at a House subcommittee hearing over its handling of the Riggs situation.
The comptroller, John Hawke, has accepted blame for failed oversight by his office that allowed deficiencies in monitoring suspicious transactions in foreign-held accounts to continue at the Washington bank for seven years.
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.
New powers for a different Treasury agency ``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 Rep. Sue Kelly, R-N.Y.
Kelly, who heads the House Financial Services oversight subcommittee, said the Treasury should consider combining government efforts to combat terrorism financing, as recommended in a report this week by the Council on Foreign Relations.
Deputy Treasury Secretary Samuel Bodman, who testified before the subcommittee, indicated opposition to a realignment of powers among the enforcement divisions within Treasury.
Riggs reportedly has asked more than 100 embassy clients, including the Saudis, to find other banking arrangements by mid-July. Some countries are said to be having such difficulty finding a new bank that the State Department has asked the banking regulators to intervene.
In a statement released Wednesday and reiterated by Bodman, the Treasury said its long-standing policy is that ``persons residing or working in the United States should have access to U.S. banking services.''
At the same time, the statement said, it is also Treasury policy for U.S. banks to comply with laws to prevent money laundering and financing of terrorism.
``These two policies are not in conflict,'' it said. ``Financial institutions can provide appropriate banking services to the embassies and interests sections of foreign governments and their staffs in a manner that fulfills the needs of those foreign governments'' while adhering to anti-money-laundering laws.
The government fined Riggs a record $25 million last month for alleged violations of laws to prevent money laundering in its handling of millions of dollars in the foreign-held accounts. Riggs did not admit to or deny wrongdoing in agreeing to the civil fine.
When Clinton was "President," Alan G. Spoon, Chief Operating Officer of the Washington Post, was on the board.
James W. Symington was also on the board; may still be. He's also with the Open World Government Leadership Center. He was a Congressman, Democrat from Missouri (St. Louis area), back in the 1970's.
Eddie N. Williams was also on the board. He was a "veep" for the Public TV station, WETA.
All that is old news.
Several interesting tidbits from the Riggs Bank web site.
"While on an economic development mission to Bosnia and Croatia, Paul Cushman III, head of the International Division, dies in a plane crash with U.S. Commerce Secretary Ronald Brown."
Also, Riggs bank has twice been awarded big contracts to modernize the Treasury department's cash handling.
Also, Riggs boasts of the large number of U.S. presidents who have banked with them over the years.
I suspect that it would be interesting to follow up on those contracts with the Treasury Department, since the problem seems to have been that Treasury neglected to supervise them properly.
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