Bank deposits as evidence of corruption

Whenever corruption in public office is litigated, the secrecy of bank deposits inevitably pops up.

Corona impeachment. A specific example is the impeachment of Chief Justice Renato C. Corona (now deceased) who allegedly amassed ill-gotten wealth of $10 million deposited in his bank, which was not disclosed in his statement of assets, liabilities and net worth (SALN).

The Supreme Court, in PSBank vs Senate (Nov. 20, 2012), issued a temporary restraining order (TRO) on Feb. 9, 2012, barring — until further orders — the Senate, sitting as an impeachment court, from requiring the Philippine Savings Bank (PSBank) and/or its representatives to disclose information on Corona’s alleged foreign currency deposit.

In the end, however, the opening of his alleged account proved to be unnecessary. The Senate ousted him on May 29, 2012, without waiting for the Court’s further orders and final decision.

Among the crucial pieces of evidence used in ousting him was his answer to a question of then Sen. Alan Peter Cayetano admitting he had $2.4 million, not $10 million, in the bank which was not included in his SALN.

For having become academic, the petition to stop the disclosure of his foreign currency deposit was dismissed by the Court on Nov. 20, 2012.

Dollar deposits. Under our Bank Secrecy Law (Republic Act No. 1405), “All deposits of whatever nature … are … absolutely confidential and may not be examined, inquired or looked into… except (1) when the examination is … specifically authorized by the Monetary Board … or (2) when the examination is made by an independent auditor hired by the bank to conduct its regular audit … or (3) upon written permission of the depositor, or (4) in cases of impeachment, or (5) upon order of a competent court … or (6) in cases where the money deposited or invested is the subject matter of the litigation.”

Clearly, this law allows, as an exception, the disclosure of deposits “in cases of impeachment.” However, as earlier stated, PSBank secured a TRO barring the disclosure of Corona’s dollar deposits, on the claim that—under another law, RA 6426—foreign currency deposits cannot be looked into, except in only one instance: “upon the written permission of the depositor.”

Despite this single statutory exception, the Court — even without the depositor’s written permission — has allowed in at least two cases (Salvacion vs Central Bank, Aug. 21, 1997, and China Banking vs Court of Appeals, Dec. 18, 2006) the examination of foreign currency deposits “to prevent the perpetuation of an injustice.”

Worldwide trend. Historically, Swiss banks have been the most secretive, such that corrupt dictators, drug lords, crime syndicates and tax evaders have turned to them to hide and protect their loot.

However, the Philippines has the honor of breaching for the first time the thick protective walls of Swiss banks when it convinced Swiss authorities in 1986 and thereafter to open and return to the Filipino people, under certain conditions, ill-gotten deposits of Ferdinand Marcos which were hidden under pseudonyms or dubious foundations.

With this breach came the antimoney laundering movement. Banks worldwide have been required to “Know Your Customers” (or KYC) intimately and to make sure their deposits come from “clean” sources.

They were made to report (1) all “covered transactions” involving $10,000 (P500,000) or more, and (2) “suspicious transactions” even if the amount is less. The scrutiny is especially enhanced for so-called “politically exposed persons” (or PEPs), those who are holding or have held public positions entrusted with “substantial authority over policy operations or the use or allocation of government-owned resources.”

Even more revealing is the international trend to lift bank secrecy completely. It is said that the Philippines is only one of two countries (the other being Lebanon) that still stringently protect illegitimate bank deposits.

Pending in our Congress are several bills to pierce the veil that shrouds the evidence and proceeds of criminal activities while still protecting legitimate wealth from the prying eyes of kidnappers, swindlers and other malefactors.

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