Set up in 2001 during President Gloria Arroyo’s term, it is only under President Benigno Aquino that the Anti Money Laundering Council (AMLC) along with its secretariat has been debased into a political weapon. The council has also failed to justify its raison d’être as proven by the fact that we have become the preferred site for a quick money laundering operations, the world’s dirty-money haven, as the Agence France-Presse put it.
Unfortunately, Aquino’s ineptness seems to have rubbed off on the AMLC Chairman Amando Tetangco, first appointed as governor of the Bangko Sentral ng Pilipinas by Arroyo in 2005, and reappointed by the incumbent President.
It is high time that Tetangco, who seems to see himself as some financial pope above the fray that the press and even the Senate can talk only to his subordinates, together with the AMLC executive secretary Julia Abad, accepted responsibility for the agency’s debasement and uselessness. They should resign, to show to the world that they are made of high moral fiber as the Bangladesh Bank governor did, to accept accountability for the hacking of the central bank’s accounts.
A huge $81 million — the biggest ever such heist according to the Guinness Book of Records — was stolen from a poor country’s central bank and vanished through the Philippine’s financial system. And no head will roll for this international shame?
Indeed, anyone responsible for the AMLC should resign in shame, as the body has come infamous not for its success in confiscating the ill-gotten wealth of global and local drug lords, terrorists, and jueteng lords, but for three and only three things:
(1) Its collaboration with Aquino to remove former Chief Justice Renato Corona by leaking and then outrightly disclosing his peso and dollar bank accounts;
(2) Its apparent collaboration with Aquino in the demolition job against presidential candidate Jejomar Binay, with a reporter of the Philippine Daily Inquirer having in her possession a confidential AMLC report, and recently;
(3) Its failure to detect and stop the transfer of $81 million in stolen money from the Bangladesh central bank in New York to a Philippine bank, and to the hackers’ accomplices here.
First, when all of the impeachment charges against Chief Justice Corona had appeared to be baseless, AMLC appeared to enter the fray and help Aquino. The amounts in the bank accounts of Corona and his wife were leaked to a newspaper columnist and in a blog, and to Liberal Party stalwart Jorge Banal, who hilariously claimed he found it at his gate. An Aquino fanatic, the Ateneo School of Government’s Harvey Keh tried to make Corona’s bank accounts part of the trial’s records by delivering data on these – to Enrile’s office. The former Martial Law administrator proved to have a better moral compass than Keh by refusing to even open the envelope containing it.
When those tactics didn’t work, Ombudsman Conchita Carpio-Morales asked the AMLC Executive Director Vicente Aquino to provide her with data on Corona’s dollar accounts. Aquino obeyed her without question, even if there is a specific law categorically banning these from being disclosed for any purpose, except upon written approval by the holder of the bank account.
We don’t even know if Aquino asked, as he is required to, the three members of the AMLC for authority to do so. What I know is that when I tried to get in touch with Tetangco to ask why he had allowed such wanton violation of the law, I was told that he was out of town, and that a deputy BSP governor represented him in the AMLC.
Worse, as I have written several times, Morales distorted the AMLC’s data in such a way that she added up all transactions – i.e., a $100 deposit and a $100 withdrawal was counted as Corona’s having a $200 balances. She then screamed to the world that the Chief Justice was hiding $10 million in his secret dollar accounts (the reality was that it was less than $1 million.)
AMLC raised a lynch mob
That was nothing more but a black-propaganda stunt intended to raise such a furor that a lynch mob was unstoppable, and the Senate – except for three with integrity and wisdom – kicked the Chief Justice out of the Court, the first time ever this occurred in our history.
Did the AMLC undertake an investigation into such serious breach of bank confidentially? Did the AMLC bother to correct Morales’ distortion of the report given her? It didn’t, which bolsters my view that from the start, the AMLC was part of the conspiracy to attack the Supreme Court.
Second, last year and then just last week, Philippine Daily Inquirer used as banner stories the articles filed by the same reporter (Nancy Carvajal) who cited a single document, the “AMLC report,” to allege that vice presidential candidate Binay had “billions” of pesos in his bank accounts and used several people as dummies. That it was a hatchet job was obvious in that Carvajal merely repeated the same article she wrote last year, she herself admitting that she was citing the same document. However, the AMLC after that had reported to the Court that after its investigations, it found only P1.7 million in Binay’s account.
This is so outrageous, really. The AMLC’s reports on individual bank holdings are probably the most secret kind of documents in the country since these are the only such documents that a law (the AML Law of 2001, as amended) severely penalizes a person for disclosing such information. In fact, the law even specifically lists who would be made responsible for “malicious reporting… relative to money laundering:”
“In the case of a breach of confidentiality that is published or reported by media, the responsible reporter, writer, president, publisher, manager and editor-in-chief shall be liable under this Act. (Sec. 9d).” Prescribed penalties involve imprisonment from six months to four years.In fact, not even those who are the subject of AMLC investigations are given copies of its reports.
And what does the AMLC do with such blatant use of AMLC data, which really could have been tampered with as nobody else except the Inquirer reporter (apart from the Court) has access to?
It doesn’t even warn the Inquirer that its article citing an AMLC report is illegal. It doesn’t even investigate the breach in confidentiality.
Worse, the AMLC revealed its political partisanship when it issued a press statement that didn’t say it will investigate the breach in confidentiality but instead taunted Binay “The AMLC will continue to discharge its legal mandate without fear or favor.”
$81 million entered, vanished
And third, the AMLC has been embarrassingly caught napping as $81 million in stolen money entered the country, put in dormant accounts, and withdrawn to equally dubious accounts.
Do you know, dear reader, that the AMLC’s is authorized to investigate a transaction amounting to just P500,000, with its computer systems designed to alert its staff to such amount of transactions? Yet $81 million entered a single bank—in a single branch, in a single day—equivalent to P4 billion, deposited to dormant accounts, and then withdrawn, yet the AMLC didn’t notice it. I don’t think even P1 billion had ever entered a bank’s branch ever.
It had to take a person-to-person call from the Bangladesh Bank governor to BSP Gov. Tetangco, the AMLC chairman, to alert him that such a huge stolen amount was entering the Philippine banking system.
Yet the AMLC started to work on the Bangladesh Bank governor’s alert on Feb. 3, according to its executive director, Julia Abad in her testimony in the Senate. It issued the freeze order a week later on Feb. 11. The criminals obviously had the time to withdraw the proceeds, and these have vanished into thin air.
Contrast that to Sri Lanka’s successful interception of the $21 million from the same heist that entered its banking system. Sri Lanka has more efficient regulatory bodies than ours? Aargh.
Tetangco made two flimsy excuses why his AMLC had been inept in stopping the $81 million from vanishing.
One is that the loophole in the anti-money laundering law is that casinos are not included in the categories of institutions under the central bank’s mandate. This is a very lame excuse, as it was quite obvious in this heist that half of the $81 million was transferred not to the criminal’s casino accounts but to their personal accounts. Some P20 million was even withdrawn in cash.
Second, Tetangco says that our bank secrecy laws are too strict. “Once money enters a deposit account, you can’t see it anymore,” he said in a TV interview. This is our AMLC chairman? Then how could a columnist, a congressman, the Ombudsman get the bank balances and even details of the transactions of the Chief Justice? How could one reporter have an AMLC confidential report making allegations about the Vice President’s bank accounts?
Tetangco may have been an excellent central bank governor, but he thinks it is beyond him since he is the Philippine version of Alan Greenspan, to run what is really an anti-crime unit which the AMLC is, so that he has delegated almost all the work there to subordinates who may not have the moral fiber that he has. If he can’t supervise the AMLC, and the law requires him to chair it, he should accept the reality and resign as BSP governor, and let somebody who can really supervise that crucial anti-crime agency, one who would insulate it from politics.
Or maybe the law should be amended so that the council is led full-time by somebody who would be on the same rank as the three incumbent members of the AMLC, the heads of the BSP, the SEC and the Insurance Commission. How could such sensitive post as the AMLC chairman be a part-time job? The likelihood is for him to delegate all of his work eventually to really unqualified people.
Because of the AMLC’s incompetence, we’ve received another blow to our image. The talk outside is that Filipinos hacked the computers of the Bangladesh central bank, and squirrelled away the money through their banks in Manila. But the Sri Lankans in their case caught the thieves. Filipinos stealing from the Bangladeshi? How shameful is that?
I had been wondering why the senators investigating the issue are treating the AMLC with kid gloves, that they didn’t even require its head to testify in such an important hearing, and didn’t even grill its executive secretary over to ask her the body moved so slowly, which gave time for the thieves to vanish with their loot. A Senate staffer offered a reason: “They’re terrified that the AMLC might get back at them, and peek into their bank accounts.”