Senate sets probe on $100-M casino laundering

MANILA, Philippines -The Congressional Oversight Committee on the Anti-Money Laundering Act (AMLA) is set to conduct an inquiry next Tuesday into the reported $100 million that suspiciously went through the country’s financial system, including local casinos.

Sen. Sergio Osmeña III, chairman of the Senate committee on banks, financial institutions and currencies and a member of the oversight committee, said that he is particularly interested to find out the source of the funds that entered the country through a remittance company called Philremit.

The oversight committee chaired by Sen. Teofisto Guingona III has invited officials of the Anti-Money Laundering Council and representatives of Philremit and two or three banks that were involved in the transactions to find out what exactly took place.

Osmeña said that he would also like to know if the banks used for the fund transfers were able to fulfill the reportorial requirements under the AMLA whenever amounts in the transactions breached the threshold.

As far as the casinos are concerned, Osmeña lamented that they could not be compelled to report any suspicious transaction since they are not covered by the AMLA.

This was the result of the compromise agreement reached between the Senate and the House of Representatives in 2013 when they approved the last amendments to the AMLA.

The Senate wanted to include casinos among the list of covered institutions that have to report suspicious transactions to the AMLC, something that the Financial Action Task Force (FATF) has been pushing for as the global policy-making body when it comes to anti-money laundering activities.

However, the House, with the support of the Philippine Amusement and Gaming Corp. (Pagcor), insisted on removing casinos from coverage of the law.

At the time, it was argued that big casino operators were about to set up shop in the Philippines and it would be detrimental to their operations as well as the tourism and revenue potential for the country if the government would be looking into the activities of its gaming clients.

Osmeña said that he expects the FATF to start calling the attention of the Philippine government on this transaction in the next two to three months and would once again push for the inclusion of casinos and some other institutions in the coverage of the AMLA.

This time around, Osmeña said that he expects it would be easier for Congress to approve this amendment of the AMLA because the casinos have been in operation for some time and a potentially problematic transaction for the country has emerged. 

When the last amendments to the AMLA and the law to crack down on terrorist financing were approved in 2013, the FATF decided to spare the Philippines from being included in its list of non-compliant countries.

Osmeña said that the casinos should definitely be included in the coverage of the AMLA because one of the easiest ways to launder money is through them.

Meanwhile, senatorial bet and overseas Filipino worker (OFW) advocate Susan Ople yesterday expressed support for the proposed inclusion of casinos in anti-money laundering monitoring for the protection of Filipino workers abroad.

Ople said as proposed by the Securities and Exchange Commission (SEC), the AMLA should be amended so as to prevent possible blacklisting of the Philippines.

The SEC made the proposal in response to the international FATF threat to blacklist the Philippines for failing to curb money laundering.

According to the SEC, the Philippines may be demoted and included in the “gray” list of the FATF due to local legal constraints on the monitoring of casinos, which are tightly regulated in other countries.

Ople said the current controversy arising from a $100-million international money laundering scam through casinos in the Philippines and the country’s blacklisting might affect operations of locally owned remittance branches overseas.

She further noted that any move of the FATF to blacklist the Philippines due to failure to curb money laundering would affect OFWs.

“Millions of OFWs will again bear the brunt of any sanctions imposed by FATF in terms of higher remittance cost and stringent requirements in sending money back home,” she said.

Last year, there were reports that casino operators and some senators had lobbied for exclusion of casinos from the list of institutions covered by the AMLA.

AMLA was amended four times last year to expand the list of predicate crimes and institutions covered by the law. This was after the FATF threatened to put the Philippines in its ‘black list’ of countries being used as money laundering havens.

Cagayan casino

Presidential Legislative Liason Officer Manuel Mamba blamed the Commission on Audit (COA) for its alleged failure to monitor the trail of proceeds collected by the Cagayan Economic Zone Authority (CEZA) from the operation of casinos in the province.

Mamba said unlike other casinos in the country, the First Cagayan Leisure and Resort Corp. (FCLRC) has no obligation to remit its proceeds to Pagcor, which should have been under the watchful eyes of COA.

Mamba’s statement came following an exposé of The STAR columnist Jarius Bondoc on the alleged spurious release by FCLRC of close to P1 billion to the Philippine Sports Commission (PSC) that was collected by dismissed Philippine National Police chief Alan Purisima.

“There was never transparency in its operation since its inception. COA should have records of it but I doubt if they ever audited the books or operation of the same. I hope media could help elucidate what we Cagayanos never had the chance to know about CEZA and its operation. God only knows,” said Mamba, a candidate for Cagayan governor of the administration Liberal Party (LP).

There were reports that PSC chairman Ricardo Garcia denied knowledge of Purisima’s collection of funds for the sports agency.

“FCLRC, owned by Congressman Albee Benitez (of Negros Occidental), is the sole franchisee of gaming in CEZA given during the administration of Gloria Macapagal-Arroyo. Pagcor at that point had nothing to do with the FCLRC,” Mamba added.

The CEZA appointed FCLRC as its master licensor of Internet gaming and authorized it to undertake and pursue the development and operations of amusement and gaming facilities in the freeport.

However, CEZA spokesperson Joyce Jayme said the alleged disbursement of funds to Purisima by the FCLRC is an issue outside of operations related to the freeport.

She said Benitez had divested his interest with the FCLRC as soon as he assumed his post in the House of Representatives.

“The issue is best dealt directly by the company directly involved,” Jayme said.

FLCRC officials were not available for comment.  – With Mayen Jaymalin, Raymund Katindig