So I'm reading two things today, a story in the business section of the New York Times about Riggs bank and a story in Clamor entitled "The Making of a Mule."
The article in the Times that I read was by Eric Dash and entitled "Riggs Pleads Guilty in Money-Laundering Case."
But to make sure we're all on the same page, I'm going to note this Associated Press story (no author credited) entitled "Riggs Bank Accepts $16 Million Fine."
Riggs Bank has pleaded guilty to failing to report suspicious transactions in the accounts of foreigners, including former Chilean dictator Augusto Pinochet, and agreed to pay a $16 million fine.
In its aggressive courtship of foreign political figures to win their banking business, the old-line Washington bank failed to exercise oversight and aided their illegitimate use of the bank, federal prosecutors said Thursday.
It would be the largest criminal penalty ever imposed on a bank of Riggs' size, according to prosecutors, and comes atop a record $25 million civil fine levied on the bank by a Treasury Department agency last May.
. . .
The Justice Department has been investigating the bank executives' handling of some foreigners' accounts, including those held by Pinochet, Saudi diplomats and officials of Teodoro Obiang's regime in Equatorial Guinea.
The poor West African country, which has been cited by the State Department for human rights abuses, corruption and diversion of oil revenues to government officials, became Riggs's biggest single customer with nearly $700 million in accounts and certificates of deposit.
"Despite numerous warnings from regulators, Riggs courted customers who were a high risk for money laundering and helped them shield their financial transactions from scrutiny,'' Kenneth Wainstein, the U.S. attorney for the District of Columbia, said at a news conference.
"This long-term and systemic misconduct was more than simply blind neglect; it was a criminal breach of the banking laws that protect our financial system from exploitation by terrorists, narcotics dealers and other criminals,'' he said.
Now for Eric Dash's article:
"This is not a 'cost of doing business' fine," said Mark Hulkower, a lawyer for Riggs. He added that the penalty was significantly more than the bank's profits from the accounts.
Riggs had been under scrutiny since at least last spring, when investigations revealed that lax practices and poor oversight allowed money laundering and possibly terrorist financing through some Saudi Arabian and Equatorial Guinean accounts.
As part of yesterday's agreement, Riggs "accepted responsibility for its actions" in helping General Pinochet set up two offshore companies to hide assets and allowing him to deposit more than $10 million in accounts, sometimes under assumed names between 1994 and 2002. The bank also admitted to opening 30 accounts, with balances and loans totaling $700 million by 2003, for government officials of the African nation of Equatorial Guinea.
"This long-term and systemic misconduct was more than simply blind neglect," United States Attorney Kenneth L. Wainstein said in a statement. "It was a criminal breach of the banking laws that protect our financial system."
Okay, now let's focus on Clamor's story (the story is available in the print edition of the magazine, it's not available online).
In "The Making of a Mule: Debunking the Myths Surrounding Women Traffickers in America,"
Kristen Kidder details the experience of Priscilla Arciniega from Queens. A guy she knew gifted her with a trip to South America. It was a nice trip, she recounts, until it was time to leave. She was threatened with a gun: "He said that he knew where I lived, that he knew where my family lived. If I didn't do it [smuggle heroin], he would kill me and them to."
A single mother (to a six-year-old child), Arciniega felt she had no alternatives. She smuggled it in and got stopped in customs at JFK:
Priscilla confessed immediately. "I was so afraid that one of the bags would start leaking in my stomach and kill me." She was arrested and eventually sentenced to thirty months in jail.
Had Arciniegar been carrying more than 3.75 ounces of heroin, she would have been looking at a much longer stay. (To read about Priscilla Arciniegar, please pick up a copy of Clamor.)
Arciniegar attempted to bring heroin into the country and she's doing time for it despite the circumstances. Riggs Bank is a bank, a professional business. One that knows the law. No one's claiming anyone at Riggs had a gun held to them. No one's claiming anyone at Riggs had their family threatened.
"This is not a cost of doing business fine," their lawyer assures us in the Times article. This is coming down hard on Riggs? Coming down hard on a bank that had "numerous warnings" according to the prosecution? Warnings they elected to ignore. The prosecution tells reporters that this "was a criminal breach of the banking laws that protect our financial system." And they'd had "numerous warnings." The penalty fine, Riggs' lawyer assures us, is more than they made on the accounts.
That's reassuring? That makes it okay?
Riggs has assets worth "about 6.4 billion" and they've committed "a criminal breach" after "numerous warnings" and they're 'punishment' is a fine of sixteen million dollars? They've "accepted responsibility." How so?
Let's remember what the prosecutor said, "This long-term and systemic misconduct was more than simply blind neglect; it was a criminal breach of the banking laws that protect our financial system from exploitation by terrorists, narcotics dealers and other criminals." That seems pretty big. One might even say huge. Priscilla Arciniega is busted for drug smuggling. According to the prosecutor, weren't Riggs' actions the very actions that allow "narcotics dealers" to exist? So Arciniega is still serving time. And Riggs will pay 16 million dollars (for this plea agreement) when they are worth over a hundred times that amount.
That's an interesting concept of justice. Arciniega was "sentenced to thirty months in prison,"
as Kristen Kidder notes. But no one goes to prison for the actions of Riggs Bank. Riggs Bank is historically known as "the bank of presidents." Ariniega doesn't have a historical reputation.
Is that the difference?
One person's actions brought 3.75 ounces of heroin into this country and she's serving thirty months in prison. According to the prosecution in the Riggs Bank case, Riggs' actions were "long-term and systemic misconduct . . . more than simply blind neglect; it was a criminal breach of the banking laws that protect our financial system from exploitation by terrorists, narcotics dealers and other criminals."
Is anyone else feeling like someone trying to break into a car got pinched but the chop-shop that keeps them in business is getting off with a pass?
[Note, title of the post has been corrected. I mispelled "Clamor" as "Clamour." As I did back in November.]
