May 4, 2016

#BangkoSerye: Impeachment after Sampalan sa BPI Julia Vargas? (Part 2 of 4)

In #BangkoSerye: Impeachment after Sampalan sa BPI Julia Vargas? (Part 1 of 4), TP detailed Duterte legal counsel Atty. Sal Panelo’s and Sen. Antonio Trillanes’ respective versions of what transpired during their 2-hour meeting with bank personnel at BPI Julia Vargas. TP ended that article with a promise of an analysis in Part 2.

That’s what TP will do.

Before that, however, let TP share the details of invaluable exchange between Panelo and Trillanes after their meeting.

Panelo and Trillanes Clash

There was an exchange between Panelo and Trillanes (mostly Trillanes) on the radio show Punto-por-Punto. Relevant details of the conversation-slash-fight are as follows:
  1. Trillanes demands not just 2014 but from 2006 to 2015, as Trillanes alleges 1.7 billion was deposited in that branch.
  2. Trillanes insists SPA is not waiver.
  3. Trillanes concedes SPA asked BPI to certify any combination of deposits does not exceed P211 million.
  4. Trillanes wants entire transaction history.
  5. Trillanes insists it’s joint, needs Sara’s waiver.
  6. Trillanes accuses Panelo of lying, threatens to have Panelo disbarred.
  7. Trillanes insisted that Duterte, not Panelo, should have been there.
  8. Trillanes said he never heard bank say there was no P211 million, Panelo then explains something about Trillanes being late for the meeting but he was cut off by Trillanes.
  9. Panelo said account accountholder is “Rodrigo Duterte OR Rodrigo Duterte and Sara Duterte”, so the elder Duterte has full authority over the account.
  10. Panelo clarifies in Taglish, “A waiver means you surrender protections accorded by the [Bank Secrecy] law. The moment you authorize someone to reveal your deposits, you’re already waiving your legal protections. You cannot sue the bank anymore for breaching confidentiality.”
  11. Panelo said Duterte also signed an official BPI waiver form that reads:
I hereby authorize the bank to disclose whatever information relative to my deposit account by virtue of the certification issued upon my request. I hereby waive my right under the Bank Secrecy Law and other applicable laws and I hereby further release the bank, its directors, its officers, its employees, and its agents from whatever liability may arise from such disclosure. (SGD Rodrigo Roa Duterte)

Moving forward, we will be citing the points listed in this section as [R1], the second [R2], and so on.

Now, let’s analyze.

Existence of a pre-April waiver (or the lack of it)

The March 2015 Pilipinas Debates waiver that Duterte signed was addressed to the Central Bank. It was later found that it does not apply to his accounts in local banks [ABSCBN]. That is, in as far as the BPI Julia Vargas issue is concered, that March waiver is inadmissible.

Moreover, upon TP’s review of The New Central Bank Act [RA 7653], it appears that the Central Bank’s powers to investigate covers only issues concerned with the integrity of the Philippine Peso [Section 50], or of bank personnel [Section 37].

Obviously, P1.4 billion in alleged ill-gotten wealth, while being a large sum of money, has little to do with the integrity of the peso, and Duterte is not and was never a bank employee. That is, per RA 7653 and without consideration to other applicable laws, the March waiver is useless.

Note that TP used the phrase “without consideration to other applicable laws” to imply that there may me other laws that grant BSP the power to tackle Duterte-type cases. However, let’s just assume that the March waiver is useless.

In short, let’s give Trillanes a headstart (partida).

SALN, Ombudsman, and the AMLC

But then, Duterte has been, and is still, a public official for the past 20 or so years. His first known SALNs was filed in 1997 [PCIJ] and he has presumably filed SALNs ever since.

Now, part of every SALN form reads [CSC]:

I hereby authorize the Ombudsman… to obtain and secure from all appropriate government agencies… such documents that may show my assets, liabilities, net worth, business interests and financial connections.

The reader may argue that this is an authorization for the Ombudsman to pry only on records kept by government agencies.

That is correct. By its lonesome self, the SALN waiver does not allow the Ombudsman to start calling banks and asking for information, as that would violate the Bank Secrecy Laws.

There are at the least three bank secrecy laws.

  • RA 1405 is the generic bank secrecy law.
  • RA 6426 covers foreign currency-denominated bank accounts, and
  • RA 8791 is not really focused on bank secrecy, but it slightly tackles bank secrecy issues too.

Yes, it appears that per SALN waiver, the Ombudsman is toothless in as far as the “pagbukalkal” of bank accounts.

But there’s a catch: the Anti-money Laundering Council (AMLC) is a government agency.


Per RA 9194’s Implementing Rules and Regulations, it has all the power to bypass all Bank Secrecy Laws [Rule 9.3.c., RA 9194 IRR] for “covered” and “suspicious” transactions. The same document defines “covered” transactions as those in excess of P500,000 in one banking day (Rule 3.b).

AMLC requires and receives covered transaction reports from banks (Rule7.2), who report such transactions within five to ten working days from date of occurrence (Rule 9.3). Banks are exempted from bank secrecy laws when reporting such transactions (Rule 9.3.c).

To cut the long story short, the Ombudsman can simply ask the AMLC for bank records, as the AMLC has near-real time records of all covered transactions to begin with.

Moreover, even without the Ombudsman’s prodding, AMLC is already tasked to investigate covered transactions anyway (Rules 5.2 and 7.2(5)).

Trillanes’ Accusations

When Trillanes first blew the whistle on April 27, his allegation was Duterte’s under-declaration of P211 million in his 2014 SALN [Inquirer]. Two days later, Trillanes upgraded the accusation to P2.4 billion across 17 accounts, with 1.7 billion in BPI Julia Vargas [Inquirer]. Trillanes claimed he received the information on April 21st, hence the delayed announcement [T12].

Trillanes’ insistence on Duterte’s issuance of bank waiver became the focal point of the entire fracas.

Now, this is where TP got confused because of two things:

  1. Each alleged transaction exceeds P500,000 and is thus considered “ covered transactions”.
  2. All transactions happened before 01 January 2016, meaning Duterte’s SALN waiver applies to them.

In short, Trillanes could've just gone to the Ombudsman, gave her the lead, and let her pull up AMLC records to her hearts’ content.

Considering that the Ombudsman is pretty good at indicting Liberal Party opponents (e.g. Binay), and considering that the amount concerned is comparable to the Makati Parking Building Scandal [Rappler], Morales can consider a potential case so easy to handle.

Trillanes would have saved himself from all of this trouble if he did just that, but he didn't.

The Most Glaring Contradiction

For TP, airing the issue publicly on April 27th is understandable as each candidate is desperate to bring Duterte’s stellar survey rankings down. However, what TP doesn’t understand is Trillanes’s reluctance to call Conchita, as the massively popular Ombudsman can lend credence to Trillanes’ claims.

Trillanes may think that the ombudsman is optional, but her word is something that Trillanes badly needs. As you may very well recall, his reputation has gone down the drain after the 2012 China Backdoor Talks Scandal [ABSCBN].

Nevertheless, taking Trillanes’ thirst for publicity out of the picture and assuming the authenticity of Trillanes’ claims, the fact remains that the Ombudsman-AMLC should have seen these transactions even before Trillanes “discovered” them.

TP has discussed the next issue in a previous article [TP:Scenario 5], but he still decided to insert a quick run-down in this article.

Why did the Ombudsman-AMLC fail to sue Duterte? There are four possibilities.

  1. AMLC never received BPI reports, or
  2. AMLC received BPI reports and found nothing wrong, or
  3. Someone silenced the Ombudsman and/or AMLC, or
  4. The records are fake, so there’s nothing for BPI to report.

The first is unlikely because the dollar-billionaire Ayalas, who own BPI, will probably find P1.4 b over six years (P233 m annually) as more of a joke than anything else.

A measly P1.4 billion cannot justify risking the reputation of 165-year-old company [BPI] with over P1.2 trillion in resources [BPI] and for banks, reputation is everything.  For BPI, P1.4 billion is a drop in the bucket.

The second is also unlikely because the amounts are grossly and obviously disproportional to Duterte’s capabilities. Anybody with eyesight knows that it’s well beyond Duterte’s means. Those amounts would’ve raised so many AMLC red flags, AMLC would run out of red flags to raise.

The third won’t fly either. Roxas and Duterte’s rift started in early Q4 2015 with the cancer rumors [CNN] and it peaked in mid-December 2015 via the Wharton word war [TP:Wharton]. There’s no way Roxas can let this golden opportunity pass by.

Striking out the first three possibilities, it is logically necessary to conclude that (4) is true.

That is, the records are fake.

It’s not as exciting as everybody hopes, but logic dictates it.

The Thirst for Blood

TP thinks he's fairly smart and fairly shrewd, but after reading so much about the presidential candidates in the past several months, he believes Duterte is leagues smarter and leagues shrewder.

Then TP remembered what a young King Arthur in the 1963 children's film Sword in the Stone said:

Just because you can't understand something, it... it doesn't mean it's wrong!

TP believes that he has sufficiently demonstrated the improbability, if not the impossiblity, of Trillanes claims.

At this point, it's safe to say that Duterte can't be impeached simply because there will be no valid evidence.

But of course, the issue will not die down because Trillanes incessantly yaps like a hyena, leading many people, TP included at the onset, to demand answers. To make matters worse, the mayor has flip-flopped on his statement several times, much to the annoyance of the public, and much to the delight of his opponents.

Now, it’s time for TP to put himself in Duterte’s shoes. That is, TP will play Duterte’s game.

To be continued in #BangkoSerye: Impeachment after Sampalan sa BPI Julia Vargas? (Part 3 of 4).

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