‘Money laundering’ involves not just ‘terrorist’ funds but drug syndicate cash

According to an article yesterday in Hong Kong’s premier English-language daily, the South China Morning Post, the "bible" of English-speaking businessmen and the ex-pat community, the Philippines "is reputed to be second only to the Russian financial system in the amount of money laundered."

The source of the story, by Louis Beckerling, can only be the Financial Action Task Force (FATF), a monitoring group representing 29 member-countries, which placed the Philippines on a "blacklist" more than a year ago, along with 15 other countries – including Indonesia and Russia. Those are strong words.

The indication is that much of the money allegedly being laundered through various banks and financial institutions must be from drug profits, since FATF is headed by Hong Kong representative Clara Lo Ku Ka-lee, the Special Autonomous Region’s (SAR’s) Commissioner for Narcotics. The Task Force launched a closed-door summit in Hong Kong yesterday "for the first time since it adopted a plan to combat terrorist financing following the September 11 attacks on the United States," the article noted.

"Charged initially with combatting the laundering of mainly drug money," the Post said, "the organization has taken on the role of introducing measures aimed at choking off finance to groups defined as terrorists."

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The irony, of course, of the Hong Kong representative, Ms. Lo Ku Kia-lee, the SAR’s Narcotics Commissioner chairing the FATF, is that much of the multibillion-peso shabu-making, smuggling, and distribution network in the Philippines is being run by mainland Chinese gangsters, in connivance with local partners with obvious clout in our political establishment and the police. If we’re not yet a "narco-state", unless we crack down on the drug lords and their bank money-laundering fences, we’ll be headed in that direction.

Our big headache then is not just the laundering of "terrorist" funds through our financial system (through, for instance, the various "charities" set up by Osama bin Laden’s brother-in-law Khalifa) but the even more massive flow of drug funds.

The latest item of raw information is that the drug syndicates have branched out into another lucrative racket – kidnapping. Move over, you thugs from the Abu Sayyaf, is the message. The Triads are in town, too, trying to carve out a narco-empire, not an Islamic state.

I guess it was a good idea for President Macapagal-Arroyo to ask British Prime Tony Blair for the help of Scotland Yard. (Yet those supersleuths were never be able to catch Jack the Ripper.) The experts from the New Scotland Yard in London may, indeed, be able to train some of our cops and NBI agents in detective techniques, but even the Brits won’t be able to teach our cops and other lawmen to cope with the powerful political and police padrinos of the drug racketeers.

Incidentally, what happened to the case of Mayor Ronnie Mitra of Panukulan town, Quezon Province, who was supposed to have been caught last October 13 escorting a 503-kilo shipment of shabu worth billions of pesos – being ferried, of all things, in a government ambulance? Has this case "disappeared" into the limbo of forgotten business? Isn’t it a heinous crime?

Susmariosep. We’re fighting a war on many fronts – not just in Basilan. Or are we fighting?

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By the way, the South China Morning Post report was headlined "Manila Bid to Attend Laundering Debate Rejected," thus contributing to our overseas notoriety. Oh well, we’ve always had a bad press in Hong Kong, so it’s no surprise.

The story averred that "Philippine lobbyists have been barred by a money-laundering watchdog from a debate on their attempt to have the Philippines removed from the Financial Action Task Force (FATF) blacklist."

Mentioned as having been there – but he’s back – was Senator Francis "Kiko" Pangilinan, chairman of the committee that helped draft the anti-money-laundering law passed by Congress in September last year. Pangilinan told the Post that he had asked "if we could sit in as observers when the plenary (of the summit) debated our submission. I believed it would be a matter of basic fairness."

He was told, however, that only members could attend.

There’s a sort of Mexican-stand-off here. FATF officials are saying that the Philippines can’t be removed from the black-list since our Anti-Money Laundering Law, they allege, is not tough enough. Our officials, on the other hand, won’t amend the law until and unless, on implementation, it demonstrates inadequacies warranting amendments to the law.

Actually, a delegation led by Securities and Exchange Commission Chairman Lilia R. Bautista managed to meet with FATF’s Asia Pacific review group, but there has been no feedback yet on what resulted.

Let’s face it. We’ll be on that blacklist for sometime to come. Perhaps it’s a bum rap. Money laundering is going on even in the West’s most "prestigious" banking circles. Recently, three ranking officials of France’s Société Générale were suspended on allegations that money-laundering was going on through that Paris institution.

In the October 13, 2001, issue of The Economist, there was even a pungent piece on money-laundering entitled, "Le Mains Sales" (Dirty Hands). The article averred: "Arnaud Montebourg, a crusading French Socialist politician whose interests include President Chirac’s financial affairs, does not mince words. Switzerland’s attempt to fight money-laundering, he said earlier this year, is nothing but a facade. Swiss bankers were appalled. Now it is the turn of the British to feel the lash of Mr. Montebourg’s tongue. The City of London, Gibraltar, the Isle of Man and Jersey, he writes in a report published this week, are sanctuaries for dirty money, including, possibly, that of Osama bin Laden."

The newsmagazine conceded in the article that "until very recently, many of Mr. Montebourg’s criticisms were justified. For years, banks, accountants and lawyers in Britain did nothing about trying to spot the criminals among their clients. Asking awkward questions of wealthy new prospects is, after all, bad for business."

"In March, the Financial Services Authority (FSA) said it found that 23 British banks happily handled the money of the late Nigerian dictator, General Sani Abacha. Fifteen had ‘significant control weaknesses’ in their anti-laundering rules, said the FSA. After the attacks on the World Trade Centre, the National Criminal Intelligence Service put the boot hard into the financial services industry: two-thirds of banks in Britain, it said, made no suspicious-transaction reports at all. Lawyers and accountants are even worse."

This is quoted verbatim from The Economist.

Since December, Britain’s FSA has taken on new powers, including the ability to inspect as a matter of routine how seriously banks are enforcing their anti-laundering rules.

A new Proceeds of Crime bill is being pushed to give the police the right to monitor any bank account they think may be linked to terrorists. "Suspicious-transaction" reporting requirements for banks are being tightened.

You see? The very countries which snootily branded us as virtual Number Two on the shit list don’t come to the bar with clean hands, either.

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As for the Americans, after the ENRON scandal, the biggest bankruptcy in history, now being investigated by no less than 11 US Congressional committees, it’s coming to light that the seventh largest company in the US not only "cooked its books" (deceiving scores of thousands of stockholders and wiping out the pension plans and investments of thousands of its own employees), but its auditors, Arthur Andersen, not merely connived in this flimflammery but destroyed records, disks and documents pertinent to the investigations. Yet, many of its top executives selfishly bailed out before the former $800 billion company collapsed of the weight of its inequities. How could Ken Lay, the Enron Chairman and CEO, have been permitted to resign last week?

As the scandal deepens, a former Vice Chairman of Enron, Clifford Baxter, was found dead in his Mercedes Benz in a Houston (Texas) suburb last Friday with a single gunshot wound in his head. The police ruled it suicide.

Baxter was one of the 29 Enron executives named in an insider trading suit filed by Amalgamated Bank in December which claimed he sold 577,436 shares for $35.2 million between October 1998 and November 2001.

You can’t trust the top executives of one of the biggest US corporations. You can’t trust the auditors and accountants of one of the five biggest and most "admired" auditing and accounting giants, Andersen, any more it seems. Subpoenaed to testify in Congress, the firm’s partner involved, Dave Duncan, stonily pleaded the Fifth and refused to testify.

The erosion of ethics and moral values in this materialistic world of ours is truly frightening, isn’t it? It’s time, I respectfully submit, we returned to the basics. But who am I to preach? Let’s call on our bishops and clerics, who’re better versed, to stop playing politics and concentrate on reiterating the Ten Commandments and the true Kingdom of God, which is of the spirit. No wonder Jesus underscored that "My kingdom is not of this world." Apparently, the kingdoms of this world belong to Mammon.

The ENRON executives ran afoul of the 11th Commandment: "Thou shalt not get caught."

The question is: Will they be punished?

When the Englishman, Charles Derbyshire, translated our hero Dr. Jose Rizal’s two revolutionary novels into English from their original Spanish, he chose to alter the title of the second one, El Filibusterismo. He called it, instead, The Reign of Greed.

How pertinent is that phrase to our troubled times!

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It gets worse. A startling indication of how the drug menace is affecting America’s young (we should begin worrying more seriously about our own) is the report that just before US President George W. Bush delivered his much-applauded "State of the Nation" Address before a joint session of Congress, his own niece, Noelle Bush, was arrested trying to use a forged medical prescription to buy a prohibited drug from a "Walgren’s" drugstore in Florida.

This was a profound embarrassment to her father, the President’s younger brother, Jeb Bush, particularly since Jeb is the Governor of Florida. It was Jeb, in fact, who delivered the 14 electoral votes from his state, the most pivotal it turned out in the Presidential contest, to his brother George.

Noelle’s mother, Florida’s First Lady, Columba has begged the media and the public to permit the anguished family to deal with the "problem" privately, but how can this be when she’s the daughter of a very public man? The case of Noelle, sadly, illustrates how drug addiction can torment the best families, including the high and the mighty. The tragedy is compounded, when it is considered that Jeb Bush is an earnest and hardworking Governor who makes sure, even on "golf days" that he tees off early, so he can return to put in a full day’s work at the office.

Even the usually tart-tongued Vanity Fair magazine, in a piece about him which appeared last July, narrated: "Jeb, who keeps a Bible by his computer mouse pad, appears to be someone of genuine spirituality and compassion, for whom religion is more than a Sunday morning photo op. He embraced Catholicism in 1995 when, by his own admission, his first bid for governor nearly destroyed his marriage and family. The following year, while G.O.P. fat cats cavorted in San Diego during the Republican National Convention, he quietly set off for Tijuana, where he spent an afternoon being shown abject poverty by one of Mother Teresa’s priests."

His critics, on the other hand, the magazine pointed out, say that older brother "Dubya" (George) comes across as more likeable and "less condescending." Jeb finds himself saddled, Vanity Fair writer David Margolick says, "with labels never attached to his brother and father – such words as arrogant, stubborn, cocksure, self-righteous."

I guess that there’s in most everyone a bit of Dr. Jeckyll and Mr. Hyde. Incidentally, the Spanish-speaking Jeb gets along well with all ethnic groups. His virtue, it appears, is that there’s not a racist bone in his body. But "stories abound of retribution meted out to anyone who displeases Jeb." (The average Pinoy politician would shrug and comment: "So what’s new?")

Margolick writes that when he was a student he was somewhat "wild" (perhaps, for poor Noelle it’s the genes?) and a kind of a "bully." There was "something slightly snarly and spoiled about him," a former classmate at Andovar recalls.

"His life changed dramatically in senior year when, along with his 11 classmates, he spent three months in an exchange program in central Mexico, living with a local family, helping build a school, drinking lots of beer and tequila, flirting and then some with Mexican women. . . But the wild times came to an abrupt end one Sunday night when he met Columba Gallo, a tiny – five feet tall – 16-year-old girl whose sister has already began dating one of Jeb’s classmates.

" ‘I was sitting in the backseat when he looked into the car and said "Oh, I am falling in love with her,’ Columba later recalled. Jeb returned to Andover a changed man, more serious about growing up and getting out."

When the two married in a chapel at the University of Texas in February, 1974, he was 21 and she 20. Incidentally, when they had first met, Columba didn’t even speak English.

Perhaps Andrew Lloyd Webber was right when he entitled one of his most popular songs, Love Changes Everything. In these sometimes disappointing times, that’s a thought to cling to.

I hope and pray that love will save Noelle and see the Bush family through their hour of agony.