The Bangko Sentral and AMLC must join fighting corruption

Frankly Speaking
By Frank Wenceslao

AMLC-logo.2For some time now I’ve been unable to reach Bangko Sentral Gov. Amando Tetangco, Jr. My emails aren’t accepted by its web-manager. A retired BSP official and Pamusa supporter told me that Tetangco has passive attitude and unwilling to get involved in the administration’s fight against corruption and controversies even if the BSP has a vital role in their resolution.

I’ve invited therefore the attention of Finance Secretary Purisima and hopefully President Aquino that unless the BSP and the Anti-Money Laundering Council get involved and track who actually received the large sums of money released by the Dept. of Budget and Management (DBM) for the Priority Development Assistance Fund (PDAF) and owned the amounts and deposited in their bank accounts, the members of Congress and other officials implicated and probably guilty of illegally pocketing hundreds of millions of pesos might walk.

No one is convicted in the Philippine justice system based merely on the evidence and testimonies of Janet Lim-Napoles and the whistleblowers they were given the money in cash. Napoles will be the first to create reasonable doubt because any defense lawyer and the best must be expected to attack her credibility how she could convince an old veteran of many deals like Sen. Juan Ponce Enrile, for instance, to entrust to her hundreds of millions of pesos and implement his projects covered by PDAF when she has had no track record of doing or supervising a single project’s feasibility study, engineering design, planning, environmental impact assessment and management of infrastructure construction which are vital elements for a project to succeed.

Lawyers and non-lawyers like me will have teachable moments watching Napoles and the whistleblowers cross-examined by defense counsels. It’d also show the clumsiness and inexperience of Sec. Leila de Lima and the DOJ prosecutors prepping witnesses for filing the cases in court.

The senators, congressmen and DBM officials implicated in the scams by Napoles and her agents are perhaps in better positions than the agency heads supposed to implement the projects such as Allan Javellana, former president of National Agribusiness Corp. (Nabcor); Gondolina Amata, president, National Livelihood Development Cooperation (NLDC); Antonio Ortiz, former director general of the Training and Research Center (TRC); Dennis Cunanan, former deputy director general and now director general of TRC; and Salvador Salacup, former president, ZNAC Rubber Estate Corporation and now assistant agriculture secretary. Like the members they are mostly facing violation of the anti-plunder law. They could include Jocelyn Piorato (Agricultura para sa Magbubukid Foundation), Nemesio Pablo (Agri and Economic Program for Farmers Foundation), Mylene Encarnacion (Countrywide Agri and Rural Economic and Development Foundation), Evelyn de Leon (Philippine Social Development Foundation) and Ronald John Lim (Ginintuang Alay sa Magsasaka Foundation).

More agency officials and employees are likely liable of plunder or at least misappropriation of public funds, bribery, graft or conspiracy, such as Victor Cacal and Romulo Revelo, Ma. Ninez Guanizo, Julie Johnson, and Rhodora Mendoza, all of Nabcor; Alexis Sevidal, Sofia Cruz and Chila Jalandoni of NLDC; and Francisco Jover and Marivic Jover of TRC.

The biggest question being asked though by the most objective minds is how could three senators allegedly got the release of over P580 Million from PDAF, namely: Enrile P172,834,500; Bong Revilla, P224,512,500; and Jinggoy Estrada, P183,793,750 that represented 40% and their cut from the proceeds of ghost projects while four senators—Estrada again, Ferdinand “Bongbong” Marcos Jr., Revilla again and Vicente Sotto III—got a total of P370 million from the Disbursement Acceleration Program (DAP) during the impeachment and trial of dismissed CJ Renato Corona in 2012.

The DAP funds, which were on top of the P200 million for each senator’s PDAF also ended up in dubious NGOs controlled by Napoles who would most likely be the most guilty as ES Paquito Ochoa if the DOJ or OMB investigators dare to do forensic audit of the billings and payments received by his law firm MOST (Marcos Ochoa Serapio Tan) for legal services to Napoles, her shell companies and dubious NGOs. Hopefully, President Aquino will finally be convinced that Ochoa as has been alleged by many is as corrupt as Marcos’ most corrupt crony.

The second if not an equally biggest question is how the movement of such large sums of money evaded the BSP’s Supervision and Examination Sector (SES) that enforces and monitors compliance to banking laws to promote a sound and healthy banking system and the Anti-Money Laundering Law which has been amended by RA 10167 to strengthen the original anti-money laundering law (RA 9160 enacted by international agreement to prevent money laundering and terrorism financing.

The members of Congress can go on “the offense as the best defense” by summoning Tetangco, the BSP’s Supervision and Examination Sector and AMLC officials to answer many questions why the BSP and AMLC haven’t noticed the movement of huge sums of money that included foreign exchange outflow reportedly going on from various anomalies and scams since 2001 when Gloria M. Arroyo became President who appointed Tetangco as BSP governor. Thus, could his “utang na loob” to GMA made Tetangco look the other way when the BSP approved letters of credit for hundreds of millions of U.S. dollars to pay for rigged and overpriced government contracts allegedly masterminded by Mike Arroyo, his children and close associates? Obviously, the profits and overprice from the contracts remained in the U.S. and safe havens of illegal money abroad.

But, of course, crime doesn’t pay. The BSP and AMLC surely have records of the outflow of illegal monies to foreign destinations from 2001 to the present which coincides with Tetangco’s term at the BSP’s helm. The Financial Action Task Force (FATF), an independent inter‐governmental body develops and promotes policies to protect the global financial system against money laundering and terrorist financing. Recommendations issued by the FATF define criminal justice and regulatory measures that should be implemented to counter this problem. These Recommendations also include international cooperation and preventive measures to be taken by financial institutions and others such as casinos, real estate dealers, lawyers and accountants. The FATF Recommendations are recognized as the global anti‐money laundering (AML) and counter‐terrorist financing (CFT) standard.

The FATF relies on the U.S. Treasury Dept.’s FinCEN defined below and other countries’ financial watchdogs such as Switzerland’s FINMA, Germany’s BAFIN, etc. in implementing AML and CFT standard. They can exchange information on financial crimes and illegal money movements. If asked by the Philippine government, FinCEN is obliged to open up its records on suspected accounts and probable AML violations needed of matching with the forensic audit of the BSP’s and AMLC’s records on the illegal inflow and outflow of large sums of money coincident with the disbursements of PDAF, DAP and Malampaya fund.

In conclusion, therefore, unless the DOJ and OMB get the cooperation of the BSP and AMLC in tracking movements of unusually large sums of money during the time material to suspected criminal acts (recall that the AMLC’s records enabled Ombudsman Carpio-Morales to nail ex-CJ Corona’s ill-gotten assets at home and abroad) the guilty parties in the Napolist or Lacsonlist or Luylist won’t opt for settlement or plea bargain, say, returning the funds they absconded out of PDAF, DAP and Malmpaya fund.

Another option is to risk trial and imprisonment at home and the enormous legal cost and fines for violating the U.S. Foreign Corrupt Practices Act (FCPA) and related financial crimes that Pamusa assisted by the FBI and USDOJ can bring against them.

Alongside this retribution of those involved in the Napoles’ scams and other criminal enterprises is a need for BSP’s and AMLC’s house-cleaning and let the chips fall where they may. The BSP’s Examination and Supervision Sector especially has gained notoriety of violating monetary and banking laws. If another country’s central bank were tainted with such controversy there will naturally be demand for the resignation of its head.

Whether Tetangco has the principles to accept responsibility for the mess the BSP is now in and resign for the serious failure of supervising and enforcing banking laws is something that remains to be seen.

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