Joker Arroyo Like CJ Corona Also Flip-Flops!

The prosecution was again at its worst performance yesterday – asking lengthy questions when those questions could have been phrased more  directly and simply.  Lots of hot-air and rhetoric could have been avoided had only the prosecutor have the good sense of reading his rules on evidence before coming to court.

When the witness PSBANK  President  Pascual Garcia said that certain bank accounts did not exist in a particular year, the next question should be:

Did that account exist thereafter? It requires a yes or no answer.  If yes, the next question should be,  what year was that?  How much was the balance for that year?  Bingo, you are done. It was a shame that Senator Enrile had to lecture the prosecutor on basic direct examination repertoire.

The prosecutor would love to beat around the bush and make a lengthy manifestation by reading the materials brought by the witness instead of the witness putting those data on the records.   It wears out  Senator Enrile’s patience and earned a smirking remark from Serafin Cuevas who said that the prosecution was revolutionizing the rules on evidence.

I missed my trial days.

But let us go to the brass tacks.

Witness testified that account number ending in 1957 had a balance of P5 million in 2007, but zero balance in 2008 and 2009.  Corona listed his cash assets in 2007 at P3.5 million, or a difference of P1.5 million between what was declared in the SALN and his actual cash asset.

Account ending in 1593 has a balance of  P8.5 million in 2009, but Corona’s SALN for that year listed a cash asset of P3.5 million, the same cash liquidity he has in 2007,  or a difference of  P5 million between what was declared for that year and his actual cash asset in the bank.

Account ending in 1681 has a cash balance of P7.1 million and account ending in 1593 has a cash balance of P12.58 million in 2010 or a total of P19.68 million, but Corona’s SALN for that year listed his cash asset at P4.5 million or a difference of P15.18 million between what was declared in the SALN and the actual cash he had with the PSBANK.

There were at least 2 or 3 bank accounts which were closed and had a zero balance.  The witness cannot say how much were the opening balance of these accounts because the subpoena did not include those records to be brought to the Senate.  He could not even say whether both the closed or active accounts are checking accounts, time deposits or savings accounts.  Can you believe that?  A bank president came to the Senate only with the number of the accounts and their ending balance – and he did not have the good sense of looking into his files at the bank what kind of deposits are these?  If you say that he is a liar, many will agree with you.

Anyway, here is a clincher. Corona has at least 4 dollar accounts with the PSBANK which the witness refused to bring to the Senate because of the bank secrecy law.  He made himself the authority on what to disclose and what not.  He said he was asking guidance from the Supreme Court by asking it to rule on the subpoena of the Senate.  He was directed to bring those records and in absence of a TRO from the Supreme Court, he should have brought the records to the Senate.  He ate his words and almost choke and he was barely audible and did not speak with convincing authority.  He looks like more a bank janitor than  a bank President.

But since those foreign accounts are still active, the money in those accounts were also not declared by CJ Corona because his ten year SALNs papers did not show any cash in foreign currencies.

Now let us go to  RA 1405, which prohibits undue disclosure of bank accounts.  This prohibition is not absolute.  In a situation where the account is subject to a pending investigation because of charges of graft and corruption against the depositor, such act must give way to the primordial right of the State to prosecute.  In the case of CJ Corona, he cannot invoke the law before the impeachment court because it is one situation where said act does not apply.

The objective of the bank secrecy law is to observe utmost confidentially of bank records to encourage the “public” to deposit their money in the banks to build up huge cash reserves that the bank can lend out to the public rather than the public  hoarding  their money somewhere else.  But such law was never intended to shield the deposits of government officials charged with ill-gotten wealth.  In this limited sense, the bank secrecy deposit act does not apply to CJ Corona, because it was designed to encourage the public to put in their money in the bank and not for government officials receiving paychecks from the government to deposit their salaries with the bank.  The spirit of the law protecting the public also argues against the position of CJ Corona because he does not belong to the public which the law seeks to protect, he was a public servant supposed to serve the public.

The concern of Senator Arroyo that reckless disclosure of bank deposits specially those foreign currency deposits can trigger a bank run and capital flight is not supported by any empirical data.   Bank runs are triggered by mismanagement of banks and not because the bank allowed the disclosure of bank records for legitimate inquiry of the State.  There never was a bank run on Equitable-PCI Bank when its officer, Clarissa Ocampo turned over the Velarde account to the Senate in 2000 instead of stonewalling the impeachment court by  hiding behind the “secrecy deposit act.”

Ironically, Senator Arroyo who was a zealot proponent for disclosure of bank deposits of  Erap in 2000 took a 180 degrees turn around to oppose the Senate in forcing PSBANK to disclose the account of CJ Corona.  Arroyo was worried of the repercussions of public disclosure of bank accounts.

The Equitable-PCI-Bank depositors saw that brave and gallant act on the part of the bank in 2000 in cooperating with the impeachment court and they rallied behind the bank  to prevent a bank stampede.

Joker Arroyo was wrong also when he said that strict observance of bank secrecy deposit act would encourage people to deposit their money in the banks.  Increase in deposits was in large measure due to a robust economy  and not because of the “bank secrecy act.”

“However, deposits contracted even during the full enforcement of the Law with negative growth rates recorded for demand deposits in 1957, 1964 and 1966; and time deposits in 1956, 1964, 1968 and 1969. This implied that existence of Law shielding deposit records from examination of bank examiners was not enough reason for depositors to maintain their deposits in banks. Deposits in banks increase when there is economic growth, expansion of banking infrastructure, lower inflation rates, higher interest rates and higher deposit insurance coverage.”

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