MANILA - Luzon Development Bank, which holds several accounts by embattled Commission on Elections Chairman Andres Bautista, said Wednesday that it has complied with the Anti Money Laundering Act (AMLA) and reported suspicious bank transactions.
It also confirmed that under the law, the Comelec chief is considered a "politically exposed person" or PEP. Under the law, a PEP is defined as an individual entrusted with prominent public position with substantial authority over policy operations or use of government -owned resources.
During a Senate hearing into Bautista possible violation of AMLA, LDB branch banking head Gerardo Auson, Jr. said the bank has submitted suspicious transaction reports (STRs) "in the past."
But asked whether the STRs were made recently, Auson said: "Based on our review, may mga naire-report po na suspicious, pero at this point, hindi po pwedeng i-divulge po."
Bautista wife, Patricia, earlier accused the poll chief of keeping P1 billion in undeclared assets, allegedly including 35 accounts at the Luzon Development Bank (LDB) with a balance of P329 million.
The Comelec chairman has denied misdeclaring his wealth, but admitted to having joint investments with his family and several accounts at LDB.
For his part, an official of the Anti-Money Laundering Council said
the opening of multiple bank accounts "is not a circumstance for filing of suspicious transactions."
Senator Grace Poe however said Bautista's move to manage his family's investments and open accounts at a relatively small bank were "suspicious."
"Doon pa lang kaduda-duda na, para sa akin, sa tingin ko. Kasi akalain mo, kahit ubod ng yaman ng isang tao, hawak niya ang pera ng kanyang pamilya, siya pa naman ang nasa gobyerno, siya pa ang pinagkatiwalaan, ilagagay niya sa isang bangko na katulad ninyo (LDB) na hindi naman ganoon kalaki," she said.
"Hindi naman niya kami mabibintang na mag-iisip kami na mayroong hindi nararapat dito at hindi naaayon."
LDB president David Sarmiento Jr., for his part, said the bank adhered to banking standards when it came to Bautista's accounts.
Poe said that minimum compliance to the AMLC "doesn't necessarily mean that they've done everything they could to prevent money laundering if ever or a violation of their rules."
Founded in 1961, LDB - originally named Laguna Development Bank - was the first bank in San Pedro, Laguna and Tanauan, Batangas. Sarmiento said the bank's corporate's name was later changed to Luzon Development Bank. It now has 40 branches and 55 ATMs.
Senator Vicente Sotto III, meanwhile, tried to clarify if the bank categorized Bautista as a "politically exposed person" (PEP).
Mr. Chairman Francis Lim, external counsel for LDB, refused to answer the question in light of the bank secrecy law and AMLC provisions.
Senator Poe scolded Lim for being evasive, stressing that it is obvious that as a public official, the poll chief is a PEP.
"It will be harmless for you to just say that under normal circumstances, of course, he's a PEP. He works in the government and he has a high position. Bakit pati 'yun ay masyado niyong iniiwasan sagutin? Siyempre kaunting good will naman. Kailangan pa ba ng executive session para sagutin ang ganyang klaseng tanong," she said.
Lim later said: "Under the law, he is."
Under the Anti-Money Laundering Act, PEPs may be a current or former senior official or a relative or close associate of any such individual. They are considered as a high risk in the financial regulatory environment.
Those doing business with PEPs are required to apply enhanced due diligence, especially in private banking transactions.
Institutions that ignored the requirements on due diligence and "know your customer" procedures have faced heavy fines.