Did bank report him as ‘politically exposed person’?
WHAT bolsters the allegations of Comelec Chairman Andres Bautista’s wife Patricia that her husband had about P1.2 billion in unexplained wealth is this:
About 98 percent, or P329 million, of Bautista’s P336 million money documented in his bank passbooks that his wife found, was in a small Laguna-based thrift bank named Luzon Development Bank (Luzon Bank). It is such a small bank that its net income in 2014 was just P6 million, or just two percent of Bautista’s supposed deposits there.(The rest of his alleged P1.2 billion wealth were in land and condominium units, including one in San Francisco in the US.)
Bautista told reporters that most of his savings are in the Luzon Bank because he knows the owners, the Limcaoco family. In fact, one of the Limcaoco brothers, Rene (“Timmy”) K. Limcaoco, a director of the bank, was not only Bautista’s classmate at the Ateneo but his groomsman at his wedding to Patricia.
Rene and his family were allegedly big supporters of the Liberal Party and its presidential candidate in 2016, Mar Roxas. It was Roxas who got him the post of undersecretary for planning and infrastructure projects of the Department of Transportation and Communications in 2011, and he stayed at the post until the Aquino government ended.
While Luzon Bank‘s owners may indeed have been his friends, it establishes Bautista’s links with the Liberal Party, which the justice department should probe.
Bautista is taking us for fools to claim that friendship with the owners was the reason why he put nearly all of his money, P329 million, in a small thrift bank, and not even in special deposits that would have generated larger interest rates than those in the market.
The more believable explanation would be to skirt the provisions of the Anti-Money Laundering Act (AMLA) regarding the so-called “politically exposed persons” (PEPs), mainly officials in government, including state corporations, which would most definitely include Bautista since he has been Comelec head, and before that chairman of the Presidential Commission on Good Government.
The AMLA prescribes strict rules in accepting deposits of such PEPs since, following the global Financial Action Task Force’s guidelines, the law is intended not only to be a check on organized crime, especially drug syndicates, and terrorism, but as a disincentive to corruption.
The AMLA has very stringent and tedious requirements for banks accepting deposits by PEPs such as disclosure of the source of the funds, approval by the banks’ directors, and regular reporting of PEP transactions to the Anti-Money Laundering Council (AMLC). The Bangko Sentral ng Pilipinas has also issued a long, detailed Circular No. 706 specifying how banks should strictly report to it such PEP accounts.
The PEP requirements are in fact so strict that a congressional committee in 2015 complained about them and tried to amend AMLA. In one hearing, Rep. Rodolfo Fariñas complained that when he tried to make a P450,000 deposit at Citibank, it required of him so many documents that he felt that he “was treated as a criminal perpetrator.” A friend who had been a director of the Taipei Economic and Cultural Office, our de facto embassy in Taiwan but officially a private corporation, was classified as a PEP years after he left the job, and was rejected as a client by the big banks here.
If you had a huge amount of money not generated from your salary as a government official, would you even dare to deposit it in a bank that would impose those PEP requirements? Certainly not. You would go to a bank whose owners you know, and who may agree not to comply with the AMLA and BSP regulations. Ideal would be a bank small enough that it could fall below the BSP’s radar for suspicious transactions — like Luzon Bank.
I found it striking that at his press conference, Bautista scoffed that if his wife could prove he has deposits at the Hong Kong and Shanghai Bank, it is hers. But he didn’t’ mention at all if this could also be done in the case of his deposits at Luzon Bank.
In her affidavit, Bautista’s wife said that her husband’s Luzon Bank passbooks show 35 different accounts totaling P329 million.
Bautista claimed in his press release that many of these documents “were embellished, doctored, or fabricated”.
That’s an incredible allegation. Lawyers of course are immoral people, and twist facts for their clients. But they treat documents as sacred objects, as it’s ingrained in their training that they could be disbarred for doing so. For his wife Patricia’s main lawyer, Lorna Kapunan, this is just one of her many high-profile cases, and I don’t think she’d risk her lucrative career by tampering with documents, especially bank documents whose authenticity could easily be verified.
The bank is mandated by law and BSP circulars to require Bautista, a PEP, to submit so many documents, including proof of where this money came from, and to report his transaction to the AMLC and the central bank.
Luzon Bank would save all of us a lot of time and effort, prove its owners’ friend, Bautista, innocent, and salvage the Comelec’s image by issuing an affidavit that Bautista had no such accounts with it, and if he did, it had complied with AMLA and BSP regulations on PEP deposits. But if Bautista has those deposits with Luzon Bank and it didn’t report these to authorities, the bank may very well go under with him.
If Luzon Bank did have those deposits, was the BSP sleeping on its job of requiring it to submit its PEP report on Bautista? What’s the use of the AMLA if its council and the BSP can’t enforce it?
Facebook: Rigoberto Tiglao