Terrorist Stocks?

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Business In The Beltway
Terrorist Stocks?
Matthew Swibel, 08.25.04, 11:05 AM ET

WASHINGTON - The biggest public pension funds in the U.S., having wrestled with everything from apartheid to tobacco to corporate governance, have a new issue to worry over: Should they invest in companies that do business in countries that support terrorism or with companies that facilitate terrorist activities?

This isn't just academic. Washington, D.C.-based Riggs National ( nasdaq RIGS) , for example, recently paid a $25 million civil money-laundering penalty for its failure over at least the last two years to monitor suspect financial transfers through Saudi and Equatorial Guinean accounts at its Riggs Bank.

Riggs executives might face even harsher sanctions depending on the course of a U.S.

Justice Department-led investigation of accounts connected to former Chilean dictator Augusto Pinochet. What if the Pinochet accounts were involved with abetting terrorist activities? Pinochet was indicted in 1998 on an international warrant for torture, genocide and terrorism.

Riggs is set to be acquired by PNC Financial Services (nyse: PNC - news - people ), but this issue isn't going away for the banks. Earlier this summer in hearings, Banking Committee chairman Sen. Richard C. Shelby (R-Ala.) said: "There is very deep concern here in the Congress about the effectiveness of the war on terrorist financing."
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http://www.forbes.com/personalfinance/strategies/2004/08/25/cz_ms_0825beltway.html