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How the dollar accounts were ‘opened’

(Editor’s Note: This is a weekly review of the impeachment trial. It aims to help the public appreciate the legal issues and enable them to be engaged more meaningfully in this historic process.)

The law says the dollar accounts are “absolutely confidential,” and yet this week they were laid bare before the Senate. How this was done was a stroke of either genius or lawyerly cunning, depending on where you stand.

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The prosecution was stumped by the all-encompassing language of the Foreign Currency Deposits Act: dollar accounts are absolutely confidential.

The prosecution earlier tried to pry the information out of the Philippine Savings Bank president. The defense objected, and Senate President Juan Ponce Enrile upheld them. The Supreme Court confirmed that by issuing a temporary restraining order (TRO). And the Senate, voting 13 to 10, agreed to respect that TRO. Unless the high court lifted the TRO, the only way to reopen the issue was from outside.

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During the long Easter break, civil society leaders filed several complaints before Ombudsman Conchita Carpio Morales, a retired Supreme Court justice, against Chief Justice Renato Corona for allegedly amassing ill-gotten wealth and for not declaring them in his statement of assets, liabilities and net worth (SALN). The complainants did not mention any dollar amount.

The Ombudsman, acting on her constitutional antigraft powers, referred the complaints to the Anti-Money Laundering Council (AMLC), whose charter likewise punishes “breach of confidentiality.” Banks are required to report to the AMLC all “covered transactions” (above P500,000 in one day) or “suspicious transactions” (bearing the earmarks of illegality), but they are “prohibited from communicating [this] directly or indirectly, in any manner or by any means, to any person.” One can parse the language here, and limit the confidentiality to the banks and not to the AMLC itself.

Cat is out of the bag

The AMLC then sent the Ombudsman its 17-page report showing $12 million dollars held in 82 bank accounts allegedly owned by the Chief Justice. The Ombudsman then turned to another antigraft constitutional body, the Commission on Audit, to make sense of the highly technical AMLC report. Finally, the Ombudsman asked the Chief Justice to render an explanation.

But even at that point, the Ombudsman’s investigation was completely separate from the impeachment proceedings. The two processes converged only after the defense itself called on the Ombudsman and the civil society complainants to testify before the Senate, as a precondition for the testimony of the Chief Justice himself.

When the Ombudsman testified before the Senate, defense lead counsel Serafin Cuevas cited the confidentiality of bank documents.  Morales said she wasn’t citing bank documents but rather the AMLC report. Moreover, every SALN contains a waiver clause where the filer authorizes the Ombudsman to countercheck the SALN with government agencies. She didn’t even offer the AMLC report in evidence; she merely waived it repeatedly in the air, and the senators themselves asked for copies. The cat was out of the bag.

If Cuevas was limited to evidentiary objections, it was left to the senators to raise policy objections. They asked: Can the AMLC release its report without a court order? Didn’t the AMLC refuse to give bank documents to the Senate earlier precisely because of that rule? Doesn’t the law require a specific waiver of confidentiality of bank deposits, not the generic waiver in the SALN? Does that SALN waiver override the Bill of Rights guarantee against warrantless searches?

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Was this all scripted in a grand conspiracy? Is this the first time that the Ombudsman has referred a complaint to the AMLC for investigation? Might not the Ombudsman be unleashed to target the enemies of those in power? (No, Morales replied: “I will not jeopardize my [‘spotless’] 40 years in government service.”)

Bad testimony

If the Ombudsman’s testimony was the prosecution’s highest moment, civil society’s Harvey Keh’s was the lowest.

The Senate President ordered him to show cause why he shouldn’t be declared in contempt for knowingly sending the Senate unverified papers from phantom sources.

Sen. Ferdinand Marcos Jr. noted the strange ways confidential documents get to the Senate: the nameless “small lady” who handed bank statements to congressman-prosecutor Reynaldo Umali; the unmarked envelope left at Quezon City Rep. Jorge Banal Jr.’s gate; and now, the envelope dropped into Keh’s mailbox inside an apartment compound.

Sen. Miriam Defensor-Santiago went into a fit over the “Mr. and Mrs. Anonymous” who finagle secret papers into the Senate record, noting the irony that Keh, a good governance champion, would undermine governmental institutions for short-term objectives.

Keh hit rock-bottom with his niggardly, piecemeal disclosure of the truth under questioning by Sen. Jinggoy Estrada. Asked whether he contacted journalists for publicity, he began with a flat denial, then after a few questions furnished one name, and later yet another. The irony is that he was testifying against Corona for trifling with the truth.

Corona’s counternarrative

The strongest response to the Morales testimony was Inquirer columnist Rigoberto Tiglao’s column entitled “Colossal deception on Corona’s accounts,” which I summarize below (and my apologies in advance if my summary is inadequate).

He said that the $12 million is the total of all transactions, of funds that came in and out of Corona’s various accounts, such that P100,000, if withdrawn and then redeposited, would show a “transaction balance” of P200,000. This was the “conceptual sleight of hand” that was used to arrive at the colossal $12 million.

What we’re looking for rather is the “account balance,” the remaining sum after all the transactions have been totaled; that is the “asset” for purposes of the SALN, which Tiglao places at $687,433.

Moreover, he explains that if Corona made short-term money market placements, he would have shopped around for the best rates among competing banks. Thus the 82 bank accounts over nine years. Finally, Tiglao suggests that the dollar figures translate to some P35 million, roughly equivalent to the money paid by the government of the City of Manila to Basa-Guidote Enterprises Inc., the corporation of the family of Corona’s wife.

Patchwork of legal cover

The defense called for the Ombudsman to testify because they were confident that there was no proper legal way to prove the dollar accounts because these were confidential. They had not expected the calibrated, evidentiary sequence that would detour via the AMLC, which would in turn produce a summary of the accounts and release it, in ways not exactly kosher, to the Ombudsman, who then divulged them to the Senate. Just in case, shady documents from ghost informants were sent to the Senate, under the glare of TV cameras for good measure.

The defense can similarly justify the dollar accounts through plausible explanations that legally explain away the problem but substantively leaves us still wondering why, even if Tiglao’s numbers are correct, Corona left them out of his SALN, and how a government official amassed such wealth.

What the defense effectively lost the past week was the option to raise the technical objection on confidentiality. That is no longer a realistic option. Sure, we can consider Morales’ PowerPoint show as merely indicative of Corona’s dollar wealth, but Corona is now on the defensive and the only way out is to testify on the dollar accounts himself. That was the cleverest twist of all: They can’t force the evidence out of Corona, so they made him want to produce it himself.

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TAGS: Anti-Money Laundering Council, chief justice renato corona, corona impeachment, Foreign Currency Deposits Act, Harvey Keh, Ombudsman Conchita Carpio-Morales, Rigoberto Tiglao
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