Political Tidbits is the prestigious column of Belinda Olivares-Cunanan that ran for 25 continuous years in the op-ed page of the Philippine Daily Inquirer, the newspaper that she helped put up with its multi-awarded founder, the legendary Eugenia Duran-Apostol, in December 1985, just two months before the EDSA Revolution.

Friday, May 18, 2012

Senators and other government personnel worried about OMB Morales’ arbitrary and twisted interpretation of laws to suit her bossman P-Noy's agenda vs.CJ Corona. But OMB's 'bombshell' is now exploding in her face. Lawyers' groups should challenge her actuations before SC. Readers react.

The senators and for that matter, all those in government have every reason to fear the moves of Ombudsman (OMB) Conchita Carpio Morales against Chief Justice Corona, for it shows how willing she is to twist the interpretation of laws to suit the persecution agenda of President Noynoy vs. Corona. For as Sen. Bongbong Marcos put it, if this grand conspiracy of government forces, led by the OMB, against the highest magistrate of the land could happen, who is safe from their designs? 

 Now that CJ's trial is winding down and the voting of the senator-judges is forthcoming, various lawyers’ groups who value our democratic institutions should challenge the constitutionality of Morales’ recent actuations before the Supreme Court.

To be sure, the nation wants real honest-to-goodness cleansing of corruption in government. But Morales’ moves against Corona have been too arbitrary and vindictive---most notably in her wrong interpretation of the waiver clause in the SALN that allows her---so she claims---to pry open anyone’s foreign account without a court order or written consent from the depositor. This violates the absolute secrecy guaranteed by the Foreign Currency Deposit Act (FCDA) and makes it an utterly useless law. 


The business community, however, should be just as worried, or even more so, about the whimsical and distorted application of this absolute secrecy guarantee of the FDCA, as it will have a chilling effect on the banking system that benefits from it.   

Speaking of the business community, there’s a report that some business leaders allied with P-Noy would call for CJ’s resignation on Monday, in view of the OMB’s "explosive revelations” at the Senate this week---and to counter the CJ’s testimony on Tuesday.  But these business leaders should first listen to CPA-lawyer Estrella Martinez, who denounced in the Inquirer today the OMB’s 17-page “evidence” supposedly delivered to her by  Anti-Money Laundering Council (AMLC) executive-director Vicente Aquino.

Ms. Martinez, who had served in the BIR for 32 years, denounced OMB’s “evidence” from AMLC as “just a sheet of paper with no probative value which you can pick up in the garbage can.” The feisty retiree stressed that OMB’s “evidence” is something which no one in the banking community would treat seriously, as it wasn’t even signed or validated---in other words, it's just raw, unverified and perhaps even finagled and tampered intelligence data.


Last Monday, at the resumption of the Senate trial, OMB Morales caught the defense off-guard as she made her power-point presentation on the CJ’s alleged 82 multi-million $ accounts, laced with characteristic arrogance. but it was a presentation meant to confuse rather than explain---with swirling arrows about huge deposits and withdrawals all added up together to make eye-popping $ accounts in five banks---sans evidence.  But by Tuesday defense lead counsel Serafin Cuevas had seized the ground and got OMB to make a few damaging admissions.  

First, she admitted that to this date she has no personal knowledge of those 82 accounts, basing her claims solely on the 17-page unsigned and unverified AMLC report. Asked during re-direct by Cuevas whether she was able to ascertain which of those accounts still exists, Morales categorically answered, "No, your Honor." 

When asked further by Justice Cuevas whether she can “confirm if the contents of said (AMLC) report are accurate,” OMB admitted that "it is beyond my competence.” She also said she had no actual participation in the gathering of information by AMLC and neither did she have any talk nor discussion on this subject with any AMLC official. Morales also claimed she could not verify the report's veracity because she could not go to the banks (perhaps knowing that the banks would realize that she had no court order or written consent from the account holder, as the law requires).

After the hearing lead defense counsel Cuevas happily  told reporters, “We practically threw out all of OMB Carpio Morales’ allegations.”


A reader reacted to OMB’s claim that she failed to verify the truth of the information from AMLC: “It’s impossible for a retired SC justice and Ombudsman to declare such a thing.” The reader felt it’s not that she’s incompetent, but that she could not discuss the list with AMLC because it gave her UNSIGNED papers. He stressed that both OMB and AMLC would be guilty of violation of the bank secrecy law if AMLC signed the papers and she discussed them with Vicente Aquino. 

Continued the reader: “Can the banks be compelled to categorically substantiate the unsigned accusations against CJ?  He answers his own query: “Yes, definitely, they are part of the conspiracy. If it turns out that there are no such CJ accounts, or if the banks refuse to answer, then Corona wins.” He opined that “At present I do not believe CJ has such huge accounts. He is not stupid either.”


Now that foreign currency deposit units (FCDU) have taken center stage, let’s take a look at these. FCDUs were set up to attract dollar deposits to our shores, with the big accounts belonging to wealthy Filipinos and foreign citizens and corporations. Some foreign corporations deposit abroad profits earned outside of USA, to avoid taxes in that country. 

FCDU accounts have developed into quick short-term loans among big foreign corporations, since these are easy to implement and profitable.  Foreign firms may need very short-term loans but they do not want to borrow from banks and incur a lot of paperwork. These loans are done very quickly.

People with large FCDU accounts - even legitimately sourced - and who do not want to be known, do not engage in frequent deposits and withdrawals, as these would trigger s ignals for AMLA. Thus, it would seem ridiculous for Corona to do so, as Morales has alleged. 

 First, if banks would substantiate the accounts and Corona admits ownership, then he has to validate the legitimacy of his dollars’ sources.  But if he denies ownership, the banks would have to prove beyond reasonable doubt that CJ owns it. If the banks cannot, they could be charged with fraud, along with OMB Morales. In fact her Senate "bombshell" is now exploding in her face.

It’s a Catch-22 situation for AMLC, Morales and the banks.


Here’s opinion from another reader:  

 “82 US$ accounts under one name and in different banks in different places? That's ridiculous and lacks logic. Why would CJ burden himself with monitoring those 82 accounts aside from his peso account? Even the richest people in the world do not maintain such numerous accounts even if they have a battery of accountants. The mafiosis, the druglords, and high-profile criminals do not maintain these many accounts in different banks in different places under one name.

“But granting, arguendo that CJ Corona indeed is into something illegal, he wouldn’t be opening 82 accounts containing huge sums of money under one name, as he knows full well there's an existing law that could forfeit that money once discovered. Siyempre gagamit siya ng ibang name or dummy, as in the Jose Pidal case.  We must remember that Corona is not just an ordinary lawyer---he's the Chief Justice. Naturalmente alam niya ang mga pasikot-sikot sa mga ganyang transactions.

“Corona is not that stupid. His accusers are insulting our intelligence.”


What about OMB Morales? Wasn’t she dumb for swallowing the unsigned and unverified $ account list from AMLC hook line and sinker?  You bet, says former BIR official Estrella Martinez. 

What about the COA team led by Heidi Mendoza that OMB consulted all last weekend about the AMLC's unverified list. It's obvious that the COA team had willfully contributed to the obfuscation of data in Morales' power-point presentation.  

A commentator opines that the COA team is a disgrace to the accounting profession.

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