The Anti-Money Laundering Law (AMLC), amended in 2003, was enacted mainly to prevent organized crime and global terrorists from using the banking system. President Aquino however has debased it, turning it into his deadly weapon against his enemies.
In 2011, under orders from Finance Secretary Cesar Purisima, Development Bank of the Philippines chair Jose Nuñez accused the bank’s seven directors appointed by former President Gloria Arroyo, former bank president Rey David and 24 bank officials of conspiring to extend P660 million of “behest loans” to tycoon Roberto Ongpin, whom he alleged was former First Gentleman Miguel Arroyo’s “crony.”
The DBP officials involved in the loan’s processing were pressured to testify against David and Ongpin, so they wouldn’t be included in the case. They all refused, with one, Benjamin Pepin, tragically falling into depression that he committed suicide. Nuñez filed administrative and criminal charges in the Ombudsman against the 25 DBP officials, Ongpin and his two executives in August 2011.
The allegations were so clumsily fabricated. The loans were paid in December 2009, many months before they were due, generating a P1.4-billion windfall for DBP. Nuñez lied when Ongpin applied for the loan, and concealed the voluminous loan-processing documents to falsely portray that it was rushed. He alleged that Ongpin’s firm Philweb wasn’t publicly listed, therefore it couldn’t be used as collateral. But even just a Google search shows that it is the first publicly-listed (2000) Internet firm, valued at P1.2 billion, nearly double the loan.
The case clearly couldn’t stand up in the courts that Ombudsman Conchita Morales decided Nov. 21 to invoke her authority as both prosecutor and judge on government administrative cases. She declared that the loan was an illegal “behest loan”—despite all the patent falsehoods in the complaint. On this basis, she ordered 13 of the accused DBP officials dismissed from government service with their retirement benefits forfeited. The charges against 12 were dismissed, nine of whom were cleared because they had already left the DBP. An outrageous decision was that severe penalties were imposed on two former board directors who had distinguished academic careers at the University of the Philippines, on the mind-boggling grounds that being UP professors, they are still public officers and are therefore within the Ombudsman’s jurisdiction.
But the Ombudsman has no jurisdiction over private citizens, like David and Ongpin—Nuñez and Mr. Aquino’s real targets. (A politician was shaking down P1 billion from Ongpin to end the attack against him, a report claimed. Ongpin denied any knowledge of this.)
Enter the AMLC. Suddenly, without even asking the accused to give their side, it asked the Court of Appeals to freeze, as it did on Dec. 6, the bank accounts of Ongpin and David, as well as of the 25 DBP board members and officials—on the grounds that the accounts became “suspicious” because of the DBP complaint.
Bangko Sentral ng Pilipinas Governor Amando Tetangco, who by law heads the AMLC, was—coincidentally or intentionally—out of the country at that time. It was Deputy Governor Nestor Espenilla who asked the Court to freeze the accounts. Yet it was Espenilla who testified in the Senate hearings that a BSP investigation of the Ongpin loans showed nothing wrong.
Even as no criminal charges were filed in court against them, the AMLC in effect put them in the same blacklist—globally shared—where suspected Aman Futures swindlers and the 200 suspected terrorists in the United Nations’ al-Qaida and Taliban “sanctions” roster are.
Tetangco defended Espenilla’s move, claiming that the AMLC “filed the case based on its own investigation, supported by available evidence.” What evidence? In the Dec. 18 hearing, the AMLC submitted nothing, said nothing except that it needed more time “to study the accounts.” Tetangco washed his hands: “The case is now in the Court’s hands and the respondents have all the legal remedies to protect their interests.”
That’s a cruel statement, coming from the BSP governor who knows that you become a financial pariah once your bank accounts are frozen. Several of those whose accounts were frozen don’t even have P500,000 in their savings, have fallen into debt for their families’ upkeep, and were even forced to forgo the holiday celebrations. Former DBP official Armando Samia—a respected veteran banker—begged the Court on Dec. 18 to release P140,000 from his accounts so he could pay for his cancer treatment. It hasn’t.
In a recent letter to senators, Ongpin said that “several billions of pesos” of his listed companies’ values “have vanished into thin air since like anywhere else, freezing one’s accounts is regarded also by the Philippine investing public as a most serious matter.” Three foreign investors he was organizing for a $1-billion project in the country backed out when his bank accounts were frozen.
This isn’t the first time Mr. Aquino has politicized the AMLC, and used it as his last resort, deadly hit man—which seriously degrades the integrity of the BSP, the guardian of the country’s banking system. When the impeachment case against Renato Corona was collapsing, AMLC executive director Vicente Aquino gave the Ombudsman his confidential bank records, which Morales then cleverly misrepresented to falsely but spectacularly claim that Corona had $10 million in his accounts. That sealed Corona’s fate.
“If (President) Aquino gets away with this,” a veteran banker noted, “he can have the flimsiest of charges filed against you, and then the AMLC moves in to freeze your bank accounts. You’re dead. Not even Marcos could do that.”