The Elephant In The Room

 It is, at times, like the theater of the absurd.

In January, the Prosecution asked to investigate the CJ’s dollar accounts. The Supreme Court issued a TRO quashing the inquiry. The Senate agreed to abide by the TRO. It also restricted the scope of Article 2 (on the CJ’s SALN), thereby limiting questions into what was the Prosecution’s strongest case. The accusers were in trouble.

In April Corona publicly vowed to fully disclose his dollar accounts but nothing ever came out of it.

In early May, the Ombudsman asked the CJ to explain $10 million in dollar deposits she had unearthed. Corona disowned the claim, accusing Carpio-Morales of being a tool of Malacanang or of smoking dope or something to that effect. His lawyers claimed Morales had no jurisdiction over their client.

In fact Corona said he would testify if the Ombudsman would first take the stand. Quicker than one can say Anti-Money Laundering Council (AMLC), Sen. Enrile subpoenaed Morales. The Prosecution could not believe its luck.

In a performance that brought down the house, Morales proceeded to recount a tale of shock and awe, a PowerPoint presentation describing a money trail of over 400 transactions covering 82 dollar accounts allegedly owned and operated by the CJ over 8 years. This is an average of 50 entries a year or about one transaction a week, sometimes with various deposits and withdrawals in a single day. If true, one wonders how the man had time to do anything but shuffle funds around. What is going on?

Corona publicly labeled Morales’ testimony a “lantern of lies” and, in private, perhaps more. This is an interesting choice of mixed methapors, a bunch of lies that will enlighten the truth?

Calling Carpio-Morales a liar is uncool. She has become the nation’s darling. Questioning her integrity is like asking whether Jessica Sanchez can sing. Perhaps the CJ was upset.

Corona claims to clarify it all this week. He can’t wait to hit Morales’ testimony out of the park and he might just succeed. The ALMC/COA report which  formed the basis of the Ombudsman’s testimony is so full of holes I can drive my SUV right through it.

Essentially, the report fails to distinguish between fund balances and fund flows: I may have 1,000 bank transactions of P 10 each but this does not mean I have P 10,000 in my account (1,000x P 10). I may still only have P 10 in the bank.

The report says the CJ had P242 MM and $12 MM (P 420 MM) in ‘bank transactions” over 8 years which puts his unexplained wealth at over P 600 MM. If this is the claim, then the AMLC/COA were  indeed smoking dope. What we need, sirs, are the balances, not the cumulative flows.

Under the law, it appears the AMLC is only authorized to look at  the CJ’s bank transactions, not his balances. The COA has tried to establish the latter by netting out credits and debits but this is impossible without knowing the beginning balances. The COA’s estimate of the CJ’s net worth is therefore coincidental at best, misleading at worse, and inconclusive by any measure. The Ombudsman could well lose credibility which would not be good for this and future cases.

People ask why the CJ wanted the Ombudsman to testify? This is the reason: After reading the AMLC/COA report, he saw its flaws. He also knew Morales would simply mouth it, allowing him to discredit her. No wonder the defense team is strutting around.

By taking the witness stand, the CJ is putting himself at risk on other fronts- his involvement with BGEI , the details of his dollar accounts- but he is so foaming at the mouth to bury the Ombudsman, he believes it is worth it. Let us see.

What can we make of all this?

These are all sideshows. The CJ’s dollar accounts are the elephant in the room, the subject everybody wants to talk about  -the Prosecution, the Ombudsman and, if we believe him, the CJ himself- yet all so inconclusively. Even after the Corona’s testimony, it is uncertain we will know any more about the man’s true net worth.

In fact the truth is one subpoena away. The information on the man’s finances is  sitting with the banks that hold and have held the Coronas’ accounts. So, since everybody agrees to own up, why not a blanket subpoena be issued to all banks to produce the CJ’s records over the last 10 years and get an independent forensic accountant to write it up? This will dispense with the baloney, comedy, over-dramatization, and incompetence that has too often characterized the impeachment proceedings.

Is that so difficult?


About Leo Alejandrino

The blog is principally a commentary on Philippine politics and economics.
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6 Responses to The Elephant In The Room

  1. Marirose Cacho says:

    I will send this post to someone who “may” be able to help. I hope;-) Excellent post

  2. Leah Sanchez says:

    Without all the hocus focus and all those hand trickery technicalities.. Even a one cell amoeba can discern that CJ is the “Master Houdini” of thieves!!!

  3. caliphman says:

    I have to completely disagree with your thesis that the Ombudsman’s methodology and conclusion are flawed. Your illustration of how the $12 million balance was arrived at is very easy to grasp but unfortunately it misrepresents what Morales with the help of Mendoza, a CPA and government audit head, presented. As Morales testified, they were careful to avoid double counting and include only fresh deposits. There is no space or time here to show the calculations involved just like we did back in our grade three math quizzes. But just consider this, there were a total $28 million inflows and $30 million inflows. Based on your rendition of their methodology, they would have come up with a balance of $58 million and not $10 million, right? Menfoza may be clueless about banking but she should know more about her debit o

    • caliphman says:

      …..or credits, at least more than most bankers,journalists,lawyers and perhaps even chief justices.
      I am also curious as to why you assume CJ knew or had read ahead of time what the OMB was going to base her testimony on. Their report had not been released or publicized yet and by all accounts,her testimony came as a surprise to Cuevas et al.

      • caliphman says:

        I meant to type $28 million inglows snd $30 milliom outflows above. Sorry for the atrocious typing. I am hoping the iphone 5 will come with a keyboard.

  4. Cubano says:

    Here is a simple analysis of this inflow and outflow. If the inflow (deposit) is $28M and the outflow (withdrawal) is $30, it is clear that there was at least $2M beginning balance.

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