WASHINGTON — A federal grand jury and a Senate subcommittee are investigating the relationship between a prominent Washington bank and a tiny, oil-rich West African state.
Investigators are scrutinizing hundreds of millions of dollars in accounts held at Riggs Bank by the government of Equatorial Guinea and its ruler, Brig. Gen. Teodoro Obiang Nguema Mbasogo. Sources familiar with the probes said investigators were trying to determine whether any deposits into Obiang's personal accounts were the fruits of corruption and whether funds from a state account were diverted to the president or his family members.
The Times first reported on Riggs' relationship with Equatorial Guinea last year, which prompted the bank to conduct an internal investigation. Riggs subsequently dismissed Simon Kareri, a senior executive overseeing the Equatorial Guinea accounts.
In February, Riggs ordered Equatorial Guinea's government to withdraw all of its assets from the bank. U.S. government and banking sources said Equatorial Guinea has had difficulty finding another U.S. bank to take its money, and most, if not all, of its deposits are still held at Riggs.
"Riggs' security procedures detected questionable activities on the part of Simon Kareri," said Mark Hendrix, a bank spokesman. "Riggs turned the matter over to U.S. criminal authorities. Riggs is cooperating with authorities and, in light of the investigations, views it as inappropriate to comment further on these matters."
Investigators also are examining accounts held at Riggs by the Saudi Arabian government and Saudi officials.
The Treasury Department requires American financial institutions to closely monitor deposits from "senior foreign political leaders, their families and close associates." They are required to report any suspicious transactions to banking regulators.
Riggs, which holds $6.4 billion in assets, signed a consent order in July with the Office of the Comptroller of the Currency, or OCC, that called for it to tighten its compliance with federal banking rules. The company recently said that regulators might fine it for not meeting the terms of the agreement.
Kareri could not be reached for comment. His attorney, Jonathan Shapiro, did not return phone calls. Shapiro, a high-profile attorney based in Virginia, previously represented convicted sniper John Allen Muhammad.
