Ex-dictator had millions in U.S. bank

The Miami Herald
Thu, July 15, 2004

Ex-dictator had millions in U.S. bank

BY ANDRES OPPENHEIMER AND JUAN O. TAMAYO

Former Chilean dictator Gen. Augusto Pinochet -- a man charged with widespread human rights abuses but never tied to major corruption scandals -- had up to $8 million in a U.S. bank, according to a U.S. Senate report released Wednesday.

A 119-page report by the Senate Subcommittee on Investigations said Pinochet opened at least six accounts and several certificates of deposit at the Washington-based Riggs Bank while he was under house arrest in London and his assets were subject to court proceedings.

The Senate inquiry, which looked into whether Riggs had violated U.S. laws that prohibit banks from accepting ''dirty'' money from foreign government officials, found that ``Riggs opened multiple accounts and accepted millions of dollars in deposits from Mr. Pinochet with no serious inquiry into questions regarding the source of his wealth.''

The bank also ''helped him set up offshore shell corporations and open accounts in the names of those corporations to disguise his control of the accounts,'' the report added. The total amount of Pinochet's funds at the bank ranged from $4 million to $8 million, it said.

CONFUSING FACTS?

Pinochet was not immediately available for comment, but Gen. Guillermo Garín, a friend who often acts as a family spokesman, said similar past reports of Pinochet bank accounts have been dismissed.

''I have no knowledge of this at all, but in the past there were rumors of this type and they were always denied because there was nothing to them,'' Garín said in a phone interview from Santiago.

''It could be that they are confusing things . . . because in the past the [Chilean] army operated with the Riggs Bank in Washington, in its institutional role,'' Garín added. ``I was always aware that we had accounts there, with the knowledge of everyone and the approval [of several government financial agencies] for such things as logistical operations.''

The Senate investigators -- who in 1999 launched a similar inquiry into Citibank's deposits of Raúl Salinas, the brother of former Mexican President Carlos Salinas de Gortari -- said they reviewed more than 100 boxes containing hundreds of thousands of pages of documents from Riggs Bank. Many of those documents were obtained through subpoenas.

Pinochet, who took power in a 1973 coup that set a trend of military governments in the region, served as president until 1990 and became a senator for life afterward.

Though accused of massive human rights violations in the wake of the coup, his Chilean supporters boasted that he was never linked to major corruption scandals.

The Senate inquiry said that Pinochet was a Riggs customer for at least eight years starting in 1994, and that Riggs Senior Vice President for Latin America Carol Thompson met with him twice a year, in addition to phone calls.

LITTLE INVESTIGATING

Despite U.S. ''Know Your Customer'' rules requiring banks to conduct extensive investigations before accepting money from foreign government officials to make sure that it is not tainted by drug trafficking or corruption, ''senior Riggs officials actively sought the Pinochet accounts'' and did little to check the source of his funds, the report said.

In 1996 and '98, Riggs helped Pinochet set up two offshore shell corporations in the Bahamas, Ashburton Co. Ltd. and Althorp Investment Co., the report said. Neither company had employees nor physical offices, but Riggs nevertheless allowed Pinochet to deposit his money in the companies' names.

In a 1998 ''client profile'' demanded by U.S. regulators, Riggs never identified Pinochet as Ashburton's beneficial owner, stating that the owner's name was ''kept in vault.'' The profile said the customer behind Ashburton was a client with an estimated annual income of up to $200,000, and an estimated personal net worth of $50 million to $100 million, it said.

The Senate report said that in late December 2000 or early January 2001, after the British newspaper The Observer reported Pinochet had more than $1 million in Riggs, the bank altered the names on a personal Pinochet account, changing ''Augusto Pinochet Ugarte and Lucia Hiriart de Pinochet'' to ``L.Hiriart and/or A. Ugarte.''

'By changing the official account names in this manner, Riggs ensured that any manual or electronic search for the name `Pinochet' would not identify any accounts at the bank,'' the Senate report said. ``In fact, Riggs appeared to take affirmative steps to hide the Pinochet relationship from bank examiners.''