Pagcor disconnect in ‘laundry’ issue

There is a glaring disconnect with what the head of the Philippine Amusement Gaming Corp (Pagcor) is saying now in the ongoing money-laundering hearings at the Senate. Pagcor Chairman and Chief Executive Officer Cristino M. Naguiat Jr. has been quoted as saying it was not true that money in the casinos could easily be traced, as he cited the return of over $4 million by junket operator Kim Wong to the Bangko Sentral ng Pilipinas (BSP). 

The subtext of Naguiat’s assertion is that Pagcor was able to trace the money trail of that $81-million portion that went to the casinos . Beating his breast, Naguiat was reported to have said: “As you can see, it is only the casino that was able to produce the money, was able to pinpoint people, because we are able to monitor everything. The others are under the bank secrecy land and the Amla (Anti-Money Laundering Act).”

Now if, as Naguiat claims, money laundering is a non-issue at the casinos, how come the Financial Action Task Force wants the casinos included in the country’s battle to be removed from the so-called “gray” list where remittances to and out of the Philippines are strictly looked into to prevent the laundry of “dirty money.”

Also, if one were to pore over the transcript of the deliberations by the bicameral committee of Congress when the amendments to the Amla were being resolved three years ago, there were assertions there that it was Pagcor, then as now, headed by Naguiat that sought to remove the inclusion of the casinos in the Amla.

It was Pagcor that wanted the casino inclusion taken out, a provision that was present in the proposed law that the Senate passed but which was not included in the version of the House of Representatives. And, thus, in the deliberations on the amendments, and with limited time, the bicam agreed to drop the casino inclusion.

Perhaps, Pagcor then had a point and that was that the country may lose revenues that could be had from the casinos should these be included. In the deliberations though, former Anti-Money Laundering Council (AMLC) Chairman Vicente Aquino, who was invited by the bicam committee to be a resource person, said that in other jurisdictions (countries), casinos were similarly included in their money-laundering law and yet their casinos were still flourishing.

What Aquino was saying was that the casinos have to be included since this is needed to really restrict the laundering of money. But Pagcor did not want the casinos included and this fact became obvious only in the latter part of the deliberations when the House contingent said Pagcor did not want the casinos included.

Perhaps, Naguiat had a point as what he breastbeats all about the return of the over $4 million because Pagcor was able to trace the money and thus “coaxed” Kim Wong to bring back the cash. In this instance, Naguiat and Pagcor are the heroes in the cinematic rendition of the missing Bangladesh dollars.

But are they? I think it would be wise for Naguiat to ask the FATF about the non-inclusion of the casinos since, after all, in the case of the Philippine casinos, the money that goes into the baccarat tables are traceable. That is what Naguiat wants all of us to believe.

Will the FATF believe this assertion of Naguiat, or will the FATF tell Naguiat to tell that to the Marines.

As Sen. Teofisto Guingona Jr. said during the deliberations, there is really a need to include the casinos in the coverage of Amla or at least to have a provision in the law that madates the raising of an alert or a red flag to the Anti-Money Laundering Council or AMLC whenever there is even just the slightest suspicion that money entering the casinos is dirty. The closer the law hews to what the FATF wants, the better for the Philippines, Guingona said, to indicate that the Philippines is moving for transparency in casino transactions.

But Guingona’s arguments fell on deaf ears in that bicam deliberation of February 5, 2013, as Pagcor insisted that the casinos should not be included in the coverage of the Amla. And so it came to pass that Bangladesh saw its reserves down by $81 million and Naguiat was able to track down over $4 million of it, which was then later returned to the BSP.

But lately, Naguiat has been singing a different tune. After thumping his breast over the recovery of part of the $81-million Bangladeshi money, he is suddenly saying he is now open to the inclusion of the casinos in the anti-money laundering law. There is, again, a disconnect here. If, as Naguiat asserts, Pagcor is so adept at its money tracing that it could pinpoint where the money went, then why should he insist, now, that the casinos be included?

Haha!