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The Bank of Trade and Commerce in untruth

(Article published in the Dec 17, 2002 issue of TODAY, Business Section)

This week saw the two honorables stepping up their efforts to respectively prove the other’s honor not worthy of respect. For their efforts, all they achieved was to show that, for the two of them who had each purportedly taken their allegations to the relevant investigative and judicial authorities and accordingly should have them shut up, media exposure and faulty logic, not fact and truth, are the order of the day.

Newspaper accounts are not clear on whether Justice Secretary-on leave Hernando Perez told the Foreign Correspondents Association of the Philippines (FOCAP) that there is no such bank as the Trade and Commerce Bank in Uruguay or that Rep. Mark Jimenez has no account in that bank. The evident argument he is making is that, in either case, if the origin is fictitious, then the alleged destination is likewise fictitious. Hence, the good justice secretary argues, the claim of Rep. Jimenez that he remitted $2 million to Coutts Account No. HO 13706 is also fictitious.

The good congressman, on the other hand, quickly responded by rhetorically asking how the $ 2 million could have arrived in Hong Kong if it had not been remitted by him from his account. The reasoning seems to be that because the fact of receipt by Coutts Account No. HO 13706 is a fact (presumably because Ernest Escaler by expressing willingness to tell all about the transaction if Congressman Jimenez were to authorize him in writing), then his bank account from which the money came cannot be fictitious. He wants the focus public concern to be not on the whence of the funds but on the wither.










 

That Mark Jimenez was less than candid with where he remitted his alleged bribe money from does not necessarily mean that he was just as less than truthful about his claim of extortion. And that he did make a remittance from some account of his, whether from the Trade and Commerce Bank or whatever, does not mean the funds were in fact extorted by the justice secretary and found their way to him.

I did some internet research –even before Secretary Perez suggested it for the fun of it to his FOCAP audience – and made some verifications from my foreign contacts, and it seems, the both of them are not telling us what they know, or at least, should have known by now about Trade and Commerce Bank.

The Trade and Commerce Bank is not a fictitious bank. According to FindOffshore.com, it is a bank located at the Cayman Islands with its head office having the address of PO Box 852, BWI George Town, Grand Cayman, Cayman Islands. This information, particularly the post office box number, tallies, to some extent, with the data provided by Congressman Villlarama in his privilege speech on November 12.

Preston Randall, technical manager of eCayman.com.ky, gives a slightly different information. The addresss he gave was "Box 31210 SMB, 1st Floor Grand Pavilion Suite 14, Cayman Islands, BWI." Randall even provides the telephone and fax numbers as, respectively, 345-946-9323 and 345-946-9324.

It purports to do private banking and investment banking business. It has the capability of remitting funds throughout the world because it has a SWIFT number, namely, TCEB KY K1. Thus, it is not far fetched that the Congressman’s money did go, if at all it did, through this route.

But didn’t Congressman Jimenez say, at one time, that his bank was in Uruguay? A check on the listing of banks in Uruguay will not yield the name of Trade and Commerce Bank. In that respect, Secretary Perez is correct, the Congressman’s bank is not banking in Uruguay. That is because what Trade and Commerce Bank has in Uruguay is not banking operation, as we know it, but instead, its only back office function. "Back office function" is a term used by bankers to describe the electronic and mechanical processing of the accounting and reporting tasks demanded by their "front office" activities, such as deposit taking or dealing face to face with clients. Having a back office in a place different from where the front office is not unusual. Many foreign companies, even some of those in the Philippines, do that.

If the Uruguay office of the Trade and Commerce bank is only a back office, how can Rep. Jimenez bank with it in Uruguay? I am speculating here, but, it is possible that he coursed his transaction through a bank in Uruguay known as Banco Montevideo.

Banco Montevideo is one of the largest private banks in Uruguay. It was incorporated in 1941and has changed hands several times since then. In 1993, the Velox Group assumed responsibility for the management of the bank and during 1997 owned 99.4 percent of its total shares. It was named by Global Finance in 2001 as "Bank of the Year in Uruguay".

Now the plot thickens. The Velox Group runs supermarkets in South America. Since 1998, with the Dutch-based retailer Royal Ahold, it runs the Disco supermarket chain in Argentina and the Santa Isabel chain in Chile, Peru, Paraguay and Ecuador. But it also well-entrenched in financial services. Among its holdings are, aside from Banco Montevideo, a certain bank in the Cayman Islands, known as, viola!, the Trade and Commerce Bank.

Of course, we are not strangers to the phenomenon of dealing face to face with one institution but in fact on paper transacting with another. Many of the depositors and investors in Urban Bank and Urbancorp Investment Corp., after the two institutions, were closed claimed that they had all along thought and were made to believe that their money was deposited or at least being managed by the bank. It was only later on, they alleged, that their money was with the investment house. This was obviously by design since the previous executives of Urban Bank, who are presently facing criminal charges not only for their management of other people’s money but also, recently, for bribery, admitted to operating the two corporations as one.

But even before Urban Bank, there was the famous Westmont Bank and Wincorp, while under the control and management of the Espiritus. In the specific case of the Davao investors, the claimants maintain that all their dealings were with the Westmont Bank branches in Davao City since Wincorp had and still has no branch in their city. But they were provided papers showing Wincorp, evidencing their placements.

Why all this silence about the good congressman’s bank in Uruguay? Again, I am speculating, but, perhaps that is because, at present, some personalities in the Velox Group are not nice to be associated with. Recent newspaper accounts coming out of South America say that banking magnate Jose Peirero was arrested in Uruguay on bank fraud charges. His brother, as of the time of the report, is still at large. They are owners of Banco Montevideo.

They are accused of conducting a fraudulent multi-million operation which threatens the credibility of the financial system of Uruguay. Depositors from Uruguay, Brazil, and Argentina filed the case against the Peiranos claiming that they were not informed that the money they deposited in Uruguay were transferred to another Velox affiliate, namely - hang in there - the Trade and Commerce Bank in Cayman Islands! Cases against them are also pending in other South American countries.

It seems that the "back office" in Uruguay is not even in the name of Trade and Commerce Bank but is under a "Latinur, S.A.," an entity not under the supervision of the now very furious monetary authority of Uruguay, the Banco Central de Uruguay. Its offices, for such an operation, consists of 27 square meters (for Office 003) and of 32 square meters (for office 004). But was renting Office 101 of Building 7 which as 221 square meters. Who says, you need a bid office to conduct a substantial business?

Anyway, the Trade and Commerce Bank in Cayman Islands was put into under liquidation by order of the Court of Grand Cayman. Banco Montevideo was seized and closed by the government of Uruguay. It is not too late to go around, as my Ateneo batchmate Rep. Willie Villarama suggested to the authorities, and ask the governments of Cayman Islands and Uruguay, not to mention Hong Kong and Singapore, for the information that could lead to the trail of this curious money. Cayman Islands has good anti-money laundering legislation. It was in the FATF list of uncooperative countries in 2000 but left in 2001. The Cayman Islands Monetary Authority is at P.O. Box 10052 APO, Elizabethan Square, 80e Shedden Road, Grand Cayman, Cayman Islands, BWI and the managing director is Cindy Scotland.

Cayman Islands has confidentiality laws, like its Banks and Trust Companies Law (1995 revision) as amended, and the Confidential Relationships (Preservation) Law (1995 revision). However, it is anxious to protect its image of being a clean off-shore center, and aside from passing the laws acceptable to the FATF on money laundering, entered into a Mutual Legal Assistance Treaty with the United States sometime as early as in 1986.

I am not too sure this present government of ours has the resources or the will to ferret out the facts in this sordid Perez-Jimenez affair. But if the protagonists want to be at all honest with the public, then they should on their own give to the public what they know, without any of the mental reservation they both exhibit now.

As for me, I have better things to do than listen to your public posturings. My arnis instructor, Master Romy Santos, tells me I should not rest content with the silver medal I won as second placer in the "golden boys" division (those over 50) of the Narra Phil tournament held last Sunday. After all, there were only two of us who actually dueled to exhaustion beneath the hot roofs of the University of Asia and the Pacific Basketball court. The others who registered under our category had the good sense to back out. So, he suggests I regularly practice swinging my baston and whacking with all my might. Not a difficult thing to do. All I need is to visualize the faces of Perez and/or Jimenez under the iron masks and, wham!, my strength is as the strength of ten.

   

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