The federal government recently indicted Riggs Bank for failing to have adequate regulations in place to combat money laundering. As a result of the scandal, Riggs Bank, which was recently purchased by PNC Bank,?received national scrutiny and scorn. Such a scandal would normally have nothing to do with the GW community. In this case, however, two high-ranking University officials are associated with the company, pulling the University into the scandal’s wake.
President Stephen Joel Trachtenberg currently sits on the Board of Trustees at Riggs, while the bank’s CEO, Robert Allbritton, is a member of GW’s board. Furthermore, GW currently patronizes Riggs Bank for a variety of services, including lending and general banking. As a result, GW and Riggs are closely associated.
While Trachtenberg should be encouraged and allowed to pursue private ventures, he should not do so if his associations reflect poorly on GW. In this case, the president should make an effort to distance himself – and GW – from the mismanagement, if not misconduct, at Riggs. Refusing to comment on the situation does not adequately do so.
It is equally important that the GW Board of Trustees not consist of individuals in charge of corporations that have been accused of substantial misconduct or mismanagement as to ensure proper University stewardship. The administration needs to seriously consider the extent to which it wishes to continue its close relationship with Riggs Bank, starting with Allbritton’s postion on the board.
Riggs Bank is not an ill-intentioned corporation. However, they have been fined for failing to prevent its institution from being used as a conduit for money laundering. Regardless of whether or not there was misconduct or simply mismanagement, it is necessary to distance GW from any entity in such a position.