Riggs Bank and two members of the bank's controlling Allbritton family yesterday agreed to pay $9 million to victims of former Chilean dictator Augusto Pinochet for the bank's role in concealing and spiriting Pinochet's money out of Britain in 1999.

In return for the payment to a foundation established for victims of Pinochet's repressive 17-year rule and their survivors, a Spanish court agreed to dismiss criminal charges against current and former directors and officers of the bank, including the Allbrittons. Riggs will pay $8 million.

Joe L. Allbritton, who was chief executive of the bank until 2001, and his son Robert, who is chief executive of its holding company, will pay $1 million as part of the settlement with Spanish officials. The agreement marks the first time the Allbrittons have been held personally accountable for Riggs's long-standing money-laundering compliance problems, which have resulted in the bank pleading guilty to a felony last month, paying more than $41 million in civil and criminal fines and agreeing to be acquired by PNC Financial Services Group Inc. of Pittsburgh.

It also was the first time any institution or person other than the Chilean government has been forced to pay recompense to Pinochet's victims, according to lawyers involved in the case.

"The court's order speaks for itself," said Riggs spokesman Mark N. Hendrix. "We note the $8 million settlement payment to be paid by Riggs under the order is covered by a previously established litigation reserve. This puts the matter behind the institution."

Riggs and the Allbrittons thought they had a strong defense against the allegations but wanted to resolve the Spanish court action because they wanted to avoid a lengthy court case and because PNC wanted the litigation wrapped up before the final sale, said sources familiar with the reasoning behind the settlement who spoke only on the condition that they not be named because of the bank's continuing legal problems.

"We're pleased to be able to help the bank bring an end to this misdirected litigation," said Paul Clark, a spokesman for the Allbritton family.

The settlement arises out of a Spanish criminal action against Pinochet first brought in 1997 by Madrid prosecutor Baltasar Garzon. Under Spanish law, anyone in the world can be tried for genocide, torture or other human rights abuses against Spanish citizens.

When Pinochet was in London in 1998 for a medical procedure, Garzon began extradition proceedings, and a Spanish court issued a ruling ordering financial institutions around the world to freeze the former general's assets. A Senate investigative committee in July detailed efforts by Riggs officers to have $1.6 million of Pinochet's money secretly transferred from Riggs's London branch to Riggs Bank in Washington. Riggs also put Pinochet's money into accounts held under aliases and took other measures to hide the identity of his accounts and money transfers.

Pinochet was declared unfit for trial by Britain's home secretary and allowed to return to Chile in 2000.

In September, Juan Garces and other lawyers representing Pinochet's alleged victims petitioned a Spanish court to add Riggs's directors and officers to Garzon's action against Pinochet. In Spain, private citizens can initiate a criminal proceeding. Riggs was not named in the complaint, because in Spain corporations cannot be tried under criminal law, according to lawyers involved in the case.

Garces named the Allbrittons as well as fellow Riggs director Steven B. Pfeiffer and the former manager of Pinochet's accounts at Riggs, Carol Thompson, as defendants. The charges against all the individuals were dropped yesterday after a Spanish court accepted the $9 million settlement.

Samuel J. Buffone, a D.C. lawyer representing Pinochet's victims who worked with Garces in the Riggs settlement, said Riggs was culpable for helping Pinochet hide about $8 million -- roughly the total amount of funds Pinochet had at Riggs -- from the 1998 Spanish order freezing the former dictator's assets.

"There has never been any allegation that Riggs was culpable for the underlying human rights abuses of the Pinochet government," Buffone said. "But Riggs's recent plea agreement lays out in significant detail what Riggs did in assisting Pinochet in the concealment of his assets. They may hide behind their legal interpretation that they weren't properly served with the [freeze] order. But they were on notice. They chose not to honor it."

Buffone represents the families of two of Pinochet's victims: former Chilean ambassador Orlando Letelier and his assistant, Ronni Moffitt. Letelier and Moffitt were murdered by Chilean intelligence agents in a 1976 car bombing in the District.

Pinochet came to power in a swift and bloody 1973 coup that ousted democratically elected president Salvador Allende. Human rights organizations claim 3,000 people were murdered, tortured or "disappeared" during his rule.

The $9 million, after deducting $1 million mostly for legal expenses, will be given to the Salvador Allende Foundation, which was founded by Garces, a former assistant to Allende, to compensate victims of Pinochet's crimes.

Pinochet has been indicted for murder in Chile and is under investigation for tax evasion with respect his accounts at Riggs.

Separately yesterday, PNC disclosed that certain Riggs executives and directors could receive up to $15.4 million in payments when the merger is completed later this spring, including severance payments and the cashing out of executive stock options.

Robert L. Allbritton would receive a severance payment of $850,000 if he leaves the company after the sale. Riggs Bank chief executive Lawrence I. Hebert, a longtime Allbritton family lieutenant, would receive $995,000, and executive vice president Henry D. Morneult would receive $630,000.

Riggs directors and employees, mostly senior executives, would receive a total of $733,138 for cashing out unvested stock options. In addition, executives would receive a total of $2.9 million in unvested deferred and performance shares that were previously awarded.

© 2005 The Washington Post Company