PCGG loses P220-M case

‘Perfect witness’ for rebuttal not presented

By Volt Contreras
Last updated 01:50am (Mla time) 07/07/2007

MANILA, Philippines—In a fresh blow to the government’s efforts to recover ill-gotten wealth, the Sandiganbayan has junked its 10-year-old bid to recover some P220 million in suspected Marcos deposits at the Security Bank and Trust Co. by upholding the bank’s claim that “spurious’’ papers merely made it appear that it held the money.


The P220 million represented the last tranche that SBTC was supposed to remit to the Presidential Commission on Good Government (PCGG) under an agreement reached in 1987 or a year after the late dictator Ferdinand Marcos was ousted by People Power, according to case records.


In its ruling, the Sandiganbayan wondered why the PCGG did not present one of its own officials who had earlier led an audit examination of the bank’s records and who could have been “the perfect witness’’ to punch holes in SBTC’s defense.


The court said it ’’cannot help but wonder’’ why the PCGG did not call to the stand the leader of the audit team, Romulo Bernardino, or ’’any other witnesses for that matter … to rebut the testimonies and the judicial affidavits of (SBTC’s) witnesses.’’


’’Plaintiff is aware all along that it was Bernardino who knew the entire background about the spurious transactions or telexes. Having headed the two audit examinations of SBTC, he could have been the perfect witness to disprove the claims of defendant’s witnesses,’’ the court noted.


The court further surmised that Bernardino’s testimony may have been “willfully suppressed by the plaintiff.”


“The plaintiff had all the opportunity to present him on rebuttal but opted not to do so,” the court added.


‘Forged signatures’


The PCCG-led audit team had found the P220 million to be fictitious since the transactions were made through “spurious telexes’’ containing “forged signatures.’’


The bank cited these “fictitious transactions’’ which were uncovered by the PCGG-led audit team to insist that it “never actually received the amount.’’


The latest ruling by the antigraft court’s Fifth Division dealt another blow to the PCGG, the agency tasked with recovering the ill-gotten wealth of the Marcoses and their cronies.


Early this month, the PCGG lost a graft case filed against former officials of the Development Bank of the Philippines in connection with a nearly P192-million loan that the DBP extended to a company of the late Marcos crony Roberto S. Benedicto for a soybean processing project.


Marcos deposits


In the 1987 agreement, the antigraft court noted that the SBTC “acknowledged’’ that it was then holding deposits of the Marcoses and their cronies totaling around P981.4 million. The bank agreed to return the whole amount to the PCGG in seven, bi-annual installments.


But in 1997, the PCGG sued the SBTC at the Sandiganbayan after the bank began holding back the release of the remaining balance of P220 million.


The antigraft court finally reached a judgment in the 1997 civil case by convening a special division of five justices, who then voted 3-2 in favor of dismissing the PCGG’s complaint for lack of merit. The ruling was promulgated on May 29.


3-2 ruling


Those who voted for the dismissal were Associate Justices Roland Jurado (who penned the decision), Teresita Diaz Baldoz, and Samuel Martirez. Associate Justices Ma. Cristina Cortez Estrada and Norberto Geraldez dissented.


During the trial, the bank argued that documents pointing to the existence of the P220 million as of 1986 turned out to be consisting of “spurious telexes’’ containing “forged signatures’’ and other features which did not comply with the bank’s standard practices.


The SBTC was citing the findings of the second of two consecutive audit examinations conducted on the bank, which were both led by a PCGG representative.


Bogus transactions


The supposedly bogus transactions mainly involved multimillion dollar remittances to the SBTC from different foreign banks, namely Morgan Guaranty-New York, Wells Fargo-San Francisco, Bankers Trust-NY and Bank of Nova Scotia-NY.


The court recalled in the ruling: “Being fictitious, the audit team recommended that the amount of USS11.06 million or P220.05 million be deducted from the SBTC’s principal obligation (to the PCGG).’’


The bank’s defense was largely hinged on the testimony given by accountant Rowena Gallardo, then a financial analyst of the Credit Information Bureau Inc.


Gallardo was a member of the PCGG-led auditing team.


Among other defense witnesses, Gallardo explained to the court that the P220 million ’’should not form part’’ of the total amount SBTC owed to the PCGG under the 1987 agreement.


’’We find that the defense witnesses are credible and have delivered credible testimonies on the matter of spurious transactions,’’ the court said.


The plaintiff PCGG, it said, failed to ’’overthrow the evidence created against it’’ pertaining to the spurious transactions.


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