The laundromat

It seems we get matters such as justice, restitution and reforms done quicker when foreign governments or international organizations are involved.

I can’t imagine, for example, former Commission on Elections chairman Andres Bautista and three top executives of Smartmatic facing money laundering and bribery charges in the Philippines; politicians would get in the way.

Unlike in our country where laws are mere suggestions and justice is malleable, other states such as the US are serious about enforcing their laws against money laundering, bribery and other graft-related offenses.

Former military comptroller Carlos Garcia was doomed after two of his sons were apprehended for bulk cash smuggling in San Francisco, with his clueless wife even arguing that there was more where the money came from because of her husband’s military job.

Our politicians were forced to pass the necessary laws and implement executive actions to deter money laundering only under pressure from the international dirty money watchdog Financial Action Task Force (FATF).

The reform process was long drawn out, with corruption among the last to be included in the covered offenses, and seemed as painful to the money launderers in government as having their abscessed tooth pulled out without anesthesia. Twenty-four years since we were placed on the FATF blacklist as a money laundering haven, here we are, a year past the deadline for implementing reforms to get out of the FATF gray list of “jurisdictions under increased monitoring.”

Advocates of good government should invite the FATF to look into one of the biggest dirty money laundromats in the Philippines: campaign finance.

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Election campaign funding is among the best sources of unexplained wealth in our country, and one of the best conduits for laundering dirty money and buying political influence in case the recipient candidate wins.

Corrupt deals in this country often spring from support, in cash or kind, given to election campaigns. Every effort to promote transparency in campaign finance has been resisted by lawmakers as strenuously as they have resisted any effort to regulate dynasty building or ease bank secrecy laws.

The laughable existing rules on reporting campaign contributions and expenditures, plus the inability of the Commission on Elections to verify such declarations have allowed plunderers, notorious jueteng lords, organized crime ring leaders and other lowlifes to use their dirty money to enter politics.

Only pressure from an international body – with corresponding painful sanctions that are certain to be enforced in case of non-compliance – can compel reforms.

The FATF should make transparency in campaign finance among the requirements for getting its seal of approval. This problem is not unique to the Philippines; worldwide, crooks including drug dealers and human traffickers have laundered dirty money through election campaigns.

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In 2003, Manila congressman Mark Jimenez was sentenced to 27 months in prison by a US district court for tax evasion and conspiracy to defraud the US as well as illegally contributing millions of dollars to the campaign of president Bill Clinton.

Jimenez, who was also ordered to pay the US government $1.2 million in damages, spent two years at the Allenwood Federal Correctional Institution in Pennsylvania. He had accused Hernando Perez, the first justice secretary of president Gloria Macapagal-Arroyo, of extorting $2 million from him in 2001 in exchange for his not testifying against former president Joseph Estrada. The Arroyo administration extradited Jimenez, also known as Mario Crespo, to the US a day after Christmas in 2002.

In contrast, the extortion case filed against Nani Perez and businessman Ernest Escaler was dismissed by the Sandiganbayan in November 2008 due to the “inordinate delay” in their prosecution by the Office of the Ombudsman, although the Supreme Court rejected last year the dismissal of the forfeiture case against the two in connection with the same case.

“Inordinate delay” in prosecution has become an increasingly common reason for the dismissal of graft cases mostly involving politicians in the Philippines.

There was no inordinate delay when the US Federal District Court in Hawaii tried a class suit filed in 1986 on behalf of about 10,000 martial law human rights victims against the Marcoses. The court handed down a guilty verdict in 1992; the ruling became final in 1997.

In 2017, the Philippines’ Court of Appeals rejected a petition from the victims to compel the Marcoses to pay the damages awarded by the Hawaii court.

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Still on the Marcoses, the Swiss were happy to return to the Philippine government way back in 1999 some $570 million officially and legally established to be ill-gotten and stashed by Ferdinand and Imelda Marcos in Swiss banks.

Swiss officials told me that it was the first time that their country had returned despots’ loot to the rightful owners; they were tired of Switzerland’s reputation as a haven for dictators’ dirty money.

As the years wore on, the Swiss were frustrated by the lack of follow-up on the part of the Philippines to hold the bank depositors accountable for the ill-gotten wealth. Why, we even voted the estate’s administrator to the presidency.

We have institutional weakness to thank for this. And we’re seeing this weakness again in the probe of the drug killings as a possible crime against humanity. The International Criminal Court, assisted by the Interpol, might yet achieve something that even to this day seems impossible under our domestic circumstances.

For that matter, advocates of good government should begin tapping the legally binding United Nations Convention Against Corruption, to which the Philippines is among the 190 parties. Adopted by the UN General Assembly in October 2003, the convention has been in force since December 2005.

The convention can be used against crooks in the Philippine government with ill-gotten wealth parked overseas. There’s a strong buzz, for example, about a ranking official with questionable wealth issues who has been making regular trips to Switzerland.

Philippine rules may be designed to protect influential thieves and other criminals. But there are international instruments that can be used to send the message to Filipino offenders that they can run, but they can’t always hide.