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The Daily Tribune - Breach in AMLA likely in Ombudsman disclosure

In The News
16 May 2012

By Chito Lozada and Benjamin B. Pulta | The Daily Tribune

The-Daily-TribuneOmbudsman Conchita Carpio Morales may be liable for disclosing the contents of the Anti-Money Laundering Council (AMLC) alleged “transactional” reports on the supposed bank accounts of impeached Chief Justice Renato Corona without a complaint first being filed by the AMLC with the Ombudsman.

Morales had testified before the Senate impeachment court yesterday that which she had obtained was a confidential report personally delivered to her by AMLC executive director Vicente Aquino while confirming to chief defense lawyer Serafin Cuevas that she did not inquire into the veracity of the report.

Sen. Ferdinand Marcos Jr. also questioned Morales how she was able to get the report of the AMLC without a court order.

”I think we should ask the Ombudsman if this is the new policy? Is this a new doctrine that in fact on the basis of the complaint that the Ombudsman can already gain the information from the AMLC and publicize that information?” Marcos asked.

Based on the Anti-Money Laundering Act (AMLA) of 2001, the AMLC, if it finds probable cause to charge any person with a money laundering offense under AMLA, it should cause a complaint to be filed with the Department of Justice (DoJ) or, in cases, involving public officers or employees, the Office of the Ombudsman, which then conducts the preliminary investigation of the case.

Morales did not mention any complaint being filed by the AMLC while there were reports that Aquino himself had denied providing the Ombudsman with the report.

According to the AMLA, when reporting covered or suspicious transactions to the AMLC, covered institutions and their officers and employees are not deemed to have violated the Bank Deposit Secrecy Laws (RA 1405 and 6426), and other similar laws. “However, they are strictly prohibited from disclosing such transactions to any person in any manner or by any means. Violation of confidentiality makes them criminally liable,” a provision of the law indicated.

During her testimony, Morales detailed the transactions made in 82 bank accounts supposedly owned by Corona and the information for which, she said, came from the AMLC.

The law indicated that breach of confidentiality carries a penalty of three to eight years imprisonment and a fine of not less than P500,000 but not more than P1 million. “In case the prohibited information is reported by media, the responsible reporter, writer, president, publisher, manager, and editor-in-chief are held criminally liable,” the AMLA provided.

Morales in her testimonies the past two days of the impeachment trial said Corona owns $10 million in bank deposits based on a report of the Anti-Money Laundering Council which he did not declare in his statement of assets, liabilities and net worth (SALn).

Morales in yesterday’s trial continued her testimony before the Senate impeachment court on the alleged dollar accounts of Corona despite admitting upon questioning that her office had taken undue interest in the case against the embattled Corona despite thousands of other pending cases in her office.

Morales,71, is a blood relative of senior Associate Justice Antonio Carpio,63, who is reportedly being eyed as among the Palace’s choice for chief justice in case if the position is vacated.

A defiant Corona speaking to media men denied reports that he plans to step down and vowed that his “fight will continue.”

At numerous points during the proceedings, a number of senators expressed misgivings about whether the Office of the Ombudsman obtained the supposed information against Corona fairly.

“The testimony of the Ombudsman proves once and for all that the Administration has put out all the stops to discredit its perceived political enemies at the expense of institutional independence and integrity.”Defense counsel Rico Paolo R. Quicho said.

“We deplore how independent agencies and bodies such as the Ombudsman, the AMLC, the Commission on Audit, Bangko Sentral ng Pilipinas, have been used to score political and media brownie points. Is this the kind of good governance that is promised in 2010, where institutional integrity is destroyed and independence handcuffed?

The defense pointed out that Section 11 of the Anti-Money Laundering Act (AMLA)allows the council to inquire into or examine any particular deposit with any banking institution only upon order of any competent court.

Also, if and when the Council applies with a competent court for an inquiry order, the court must first give prior notice to the account owner about a planned inquiry or examination pursuant to the ruling of the Supreme Court. This, too, has been ignored because the Ombudsman says so.”

Republic Act 6426, or the Foreign Currency Deposit Act, likewise states that “except upon the written permission of the depositor, in no instance shall foreign currency deposits be examined, inquired, or looked into by any person, government official, bureau or office whether judicial or administrative or legislative, or any other entity whether public or private.”

AMLC Executive Director Vicente Aquino earlier denied investigating the so-called Corona accounts.

Morales, a hostile witness of the defense panel, claimed Corona had 82 dollar accounts in five banks with a “transactional balance” of at least $10 million, from 2003 to 2011.

Morales, at the start of the hearing, said the information on Corona’s foreign currency deposits came from the AMLC which furnished her a 17-page report on 705 bank transactions and a four-page summary of the report.

“I first sought information from agencies and then I referred the complaints to the Anti-Money Laundering Council because I thought that the charges included…these matters were within the jurisdiction of the AMLC,” she told lead defense counsel Serafin Cuevas during direct examination, noting she also formed a panel of investigators.

Morales in her direct examination said she got hold of the AMLC report after requesting assistance from the agency for complaints filed before her office mainly the charges filed against Corona of former Akbayan Rep. Risa Hontiveros-Baraquel who was lined up among the witnesses of the defense.

Morales said she constituted a panel of investigators and wrote the AMLC to seek assistance for the determination of the truth of the charges.

After getting an initial report from the special investigating panel, it was then decided that she would write the Chief Justice inquiring on the questioned bank accounts.

Morales, in the letter, gave Corona 72 hours to explain how he acquired peso and dollar accounts in different banks that were “grossly disproportionate” to his salary.

Corona’s lawyers said the Chief Justice did not heed the letter because his lawyers asserted that he was not under the jurisdiction of the Ombudsman as an impeachable officer.

Morales told Cuevas that the inquiries were made “for purposes of factual investigation or case build-up.”

Morales, however, admitted in her testimony that she did not inform Corona in her letter that the details of his supposed bank accounts came from the AMLC.

Cuevas confronted Morales why she did not identify the source of the report when she wrote Corona, so that he could have replied intelligently “to defend himself.”

“I thought it was not necessary,” Morales retorted.

Morales said that the investigation on Corona was borne out of a waiver in the statement of assets, liabilities and networth (SALn) which stated that the Ombudsman “or a duly authorized representative” is authorized to obtain and secure information based on the SALn.

”The SALn of Chief Justice Corona has waiver which authorizes the Ombudsman to check all the records of the government if it is accurate as reported in the SALn,” Drilon told members of the Senate media before yesterday’s regular session.

Drilon said the waiver is specifically granted to the Ombudsman to inquire into the records of government agencies, including the Anti-Money Laundering Council (AMLC) which gave the report to Ombudsman Conchita Carpio-Morales.

”All of us, if somebody filed a case against us, the Ombudsman has responsibility to check the SALn and this waiver does not need a court order,” Drilon said.

Based on the AMLC report, Morales testified before the Senate impeachment court on Monday that Corona allegedly owned 82 dollar accounts in five banks and “fresh deposits” of more than $12 million.

Drilon said the Ombudsman has the right to reveal to the public the dollar accounts of the Chief Justice because “she was called upon to testify by the defense.”