Buencamino is a fellow of Action for Economic Reforms. This piece was published in the February 18,  2009 edition of the Business Mirror, page A6.

“For much too long, these rogue bankers have been able to fend off sanctions by BSP by resorting to undue interventions in the courts of law and not least, under the protection of powerful and well-entrenched politicians.”  – FSGO statement (Former Senior Government Officials)

Dear Speaker Nograles,

Are you a partner in the Legacy group?

If you are, then you are part of that Ponzi scheme. How could you not have known there was something fishy about the business?

Rep. Raul Daza said, “I myself was offered by one of these banks high interest rates and a brand new Toyota Camry, provided that I deposited a huge amount and split it into several accounts of not more than P250,000 each so I would be covered by the deposit insurance law. I found the offer too good to be true.”

If you are not a partner of De los Angeles, then you must be one of those who were inveigled by his “double your money” scheme.  I should feel sorry for you, maybe.

PDIC (Philippine Deposit Insurance Corporation) covers depositors not accounts. That means even if you divide P18M into 72 P250,000.00  accounts, you will only get P250K. However, you can recover about P3M if you spread your P18M over a dozen different Legacy banks.

But, if you did that, then you deliberately used the deposit insurance law to gamble in a dubious double your money scheme. Isn’t that having it both ways on the public ticket?

You can collect more than the P250K guarantee per depositor by opening dozens of “in trust for” (ITF) accounts or fictitious name accounts ala Jose Pidal.

I asked a friend from the Rural Bankers Association if the PDIC can catch fakes and ITFs.

He said,  “Catching fictitious-name accounts is easy because a depositor must pick up his check in person.”

“That presumes a depositor cannot disguise himself or PDIC won’t hire blind cashiers,” I retorted.

“What about ITF accounts?”

He replied, “Imagine tens of thousands of dummies picking up P250K checks.”

The Legacy banks have over a hundred thousand depositors with accounts of not more than P250K.

It’s been bandied about that some of your Batasan colleagues also deposited millions with the Legacy banks.

Did they use ITFs and/or Pidal-type accounts? If they did then they defrauded PDIC, right?

Is that why the congressional investigation is focused on the shortcomings of the BSP and the SEC instead of how many dummy accounts PDIC has uncovered so far?

The BSP wants to investigate all Legacy deposits not only because they want to nail De los Angeles but also, I suspect, because PDIC is borrowing billions for its guarantee fund.

Don’t you think the BSP has a right to know whether or not PDIC will in fact pay out all that money to legitimate depositors?

Unfortunately, PDIC says the Bank Secrecy Law prohibits them from opening the books.

That may be true. But it’s also true that your brother is the president of PDIC.  It doesn’t look good for him not to go the extra mile to find some way to involve the BSP in all this.

You have a lot to explain, Mr. Speaker.

Your brother’s predecessor at PDIC, Ricardo Tan, alleged you asked him to go easy on Legacy. The House Committee on banks and financial institutions tried to pass a bill to legalize ponzi schemes for a period of two years. (See my column, “An Angel with Coin, ” 3 September 2008.) You sponsored a bill doubling insurance guarantee for rural banks. Your brother is rushing to pay depositors.

Those things don’t look good in the context of millions you invested with De los Angeles, don’t you agree?
We have a right to know all about your P18 or P20 Million with De los Angeles. We pay your salary. You are our servant.

Did you use the money to buy shares in one or more of his rural banks or did you simply loan it to him? Was the loan with or without collateral?

Did you deposit your millions in “double your money” accounts with one bank or in different banks?
Please don’t say “Ano ako gago?”

Just show us the accounts in your name and we will do the math. Bare it all, Mr. Speaker.

Hugs and kisses,
Manuel Buencamino