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The real Jerry Leal

(Article published in the Mar 14,2012 issue of Manila Standard Today)  

With no less than the Chief Justice Renato C. Corona stating, during his media blitz last week, that he  closed on the day he was impeached his three deposit accounts, amounting to about Php 37.7 million,  with the Philippine Savings Bank (PSB) because he had lost his trust in  PSB, the bank’s reputation is in shambles.  His neighbours had told him, said the Chief Justice,  that his accounts were being talked about by the bank’s branch personnel.  Like Humpty Dumpty after his great fall, neither by all of the Ty’s horses and all of the Ty’s men, by PSB President Pascual Garcia headed, could PSB’s reputation be put together again.

Serves PSB right, in my view. Previous to the Chief Justice’s expression of distrust, Pascual Garcia, in an irresponsible, if not malicious, effort to deflect public attention away from his failed brand of bank management, huffed and puffed and sought to bring the bank regulators down.  Unfortunately for him and the Tys, who are Garcia’s bosses, the Anti-Money Laundering Council (AMLC) and the Bangko Sentral ng Piipinas (BSP) were made of bricks, of solid rock in fact.   With his ego badly bruised and his personal standing in the gentele community of bankers in tatters, Pascual Garcia was forced to eat a humble pie.

The man Pascual Garcia tried to falsely implicate in his own fiasco was Jerry L. Leal. But instead of going down, Leal emerged in shining armour with the inner strength of one who does his job, and does it well.  Riding his stead of solid training and experience in banking examination and anti-money laundering, he confidently faced Pascual Garcia, his real adversary, at the hearing of the Senate Committee on Banks, headed by Sen. Sergio Osmeña III, last February 27, 2012.  He showed that his designation as an “Anti-Money Laundering Specialist” suits him to a “T”;  Jerry Leal was not the man Pascual Garcia falsely pictured him to be.
 










     

Currently the Acting Manager of the Anti-Money Laundering Specialist Group of the Supervision and Examination of the BSP (not the AMLC, as Pascual Garcia clue-lessly described him as belonging to, during the 20 February 2012 hearing of the Corona impeachment trial), Leal has logged 14 years of service with our central money authority, the BSP, more than half of which were devoted to anti-money laundering (AML) related assignments. 

He is an old hand in the art and science of money laundering examination: he was a pioneering examiner in the examination of the banks’ custody business (the first ever Pilot examination was conducted in 2004, with HSBC as the examined bank) as well as of their private banking and remittance enterprises (which was done with RCBC’s pilot examination in 2005).   He worked as an AMLC financial investigator for 17 months, from September 2007 to February 2009. 

Because of his specialization, on him fell the tasks of preparing the standardized work program and examination procedures of the banks’ custody, private banking and remittance businesses.  That is no mean feat since these business lines of banks are all considered “high risk”, i.e. susceptible to abuse by the bad intentioned and liable to cause prejudice and irreparable damage to banks and their customers.

Leal, of course, was not born to the job; he had to learn the ropes over many years, in a long list of  training sessions  many of which were conducted by foreign trainors.  In 2005, he attended the Regulator’s Course on Anti-Money Laundering Examination conducted by the United States Treasury.  It was also the US Treasury that run the Financial Investigation Training he took in October 2006.  A month earlier, he was at the Australian Reports & Analysis Center for the Anti-Money Laundering Workshop.  The following year, he participated in the seminar on Transnational Crime Investigation under Taiwan’s Ministry of Justice Investigation Bureau.

At home he was not idle. He attended in October 2007 the Workshop on Terrorist Financing held by the National Defense College.  And for most Saturdays of the school year 2006-07, he was at the AIM campus,  attending the One-year Course on Trust and Investment Management of the Trust Institute Foundation of the Philippines.

All that knowledge and experience needed to be shared, and share Leal did.  In line with his job as the on-site trainer of new examiners of BSP’s anti-money laundering specialist group under the Supervision and Examination Sector (SES), he prepared the Money Service Businesses Examination Manual, drafted the SES memorandum on issues and concerns relative to Private Banking/Wealth Management Operations in the Philippines; he had a hand in the revision of the AMLC Transaction Codes and he was in various other major AML-related assignments, too tedious to name.

During the regular BSP examination of PSB in 2010, Leal as was his job according to the relevant manual, randomly selected 112 sample accounts, in order to determine whether the bank followed the regulations relating to the Know-Your-Customer requirement.  All the documents and screenshots provided to him by PSB for that purpose were duly receipted.  Of those 112 random samples, 3, as noticed by Leal were not properly tagged as “PEP” (for “politically exposed person”). 

But not one of those sampled 112 accounts belonged to the Chief Justice.  So, how did Leal know that Corona had an account with PSB?  By sheer happenstance.

Towards the end of the examination, Grace de la Cruz, who was of PSB’s compliance office, casually mentioned to Leal, who, as was his job, was then looking into the deposit generation efforts of the bank, that PSB had an ongoing raffle program amongst its depositors. Rather casually, Grace de la Cruz volunteered the information (perhaps with the good intention of raising her bank in the esteem of BSP) that the Chief Justice had won in that raffle. 

 As if on instinct born of experience, Leal looked for Corona’s name in the list provided by PSB of its “PEP” accounts.  For some unknown reason, PSB’s PEP list which rightfully included the accounts even of lower ranking government officials, did not contain Corona’s name.  Accordingly, in the Advance Findings, a paper which is routinely discussed by the examination team with the officials of the bank during exit conferences, Leal made the recommendation that PSB “improve its tagging and enhance due diligence of PEPs and/or high risk clients to strengthen its AML compliance.” 

At the exit conference, PSB, despite notice of such recommendation, remained unable to show that it had improved its tagging procedure of its PEPs; hence, in the finalized 2010 Report on Examination by the BSP, PSB was directed to “ensure that the policy on the identification and tagging of Politically Exposed Persons (PEPs) is consistently applied and accounts are tagged appropriately...”

 Since the 112 sample accounts evoked into by Leal did not involve any of Corona’s and since the proper tagging of PEPs were, by regulation, to be done electronically, there was no need for Leal to see, nor for PSB to provide, the Chief Justice’s signature cards or account opening form. In truth, none of Corona’s signature cards and opening form, ever get into the hands of Jerry Leal. 

Any leak of those documents if at all there was one, did not come from Jerry Leal.  At least in this respect, Chief Justice Corona was correct about PSB.

     

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