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Criminal charges filed by Central Bank still haunt Yasay

Paterno R. Esmaquel II
Criminal charges filed by Central Bank still haunt Yasay
The Commission on Appointments (CA) is set to grill Foreign Secretary Perfecto Yasay Jr over 4 criminal charges pending before the Department of Justice (DOJ)

MANILA, Philippines – Before a perjury case can even be filed against him for allegedly lying about his citizenship, Foreign Secretary Perfecto Yasay Jr is already facing criminal charges filed by the Bangko Sentral ng Pilipinas (BSP) in 2011.

The Philippines’ top diplomat, a former bank director, is the subject of 4 criminal charges lodged by the BSP in April 2011 “for falsification, grant of illegal loans, and major violations of banking laws.”

Justice Undersecretary Erickson Balmes confirmed to Rappler that the criminal charges against Yasay remain pending with the Department of Justice (DOJ) as of Tuesday, February 28, or nearly 6 years after the BSP filed these.

Balmes said that “beyond that, we cannot say anything else.”

The Commission on Appointments (CA) is set to grill Yasay about these charges when they resume his confirmation hearing on a yet unconfirmed date.

Senator Panfilo Lacson, chairman of the CA foreign affairs committee, said the commission was unable to tackle Yasay’s DOJ cases in their previous hearing, as they focused on Yasay’s citizenship as well as his views on the West Philippine Sea (South China Sea). 

But I’m sure ‘yung mga congressmen, at saka ‘yung iba, ita-tackle ‘yan sa next hearing,” Lacson told Rappler on Tuesday. (But I’m sure that the congressmen and the others will tackle that in the next hearing.)

Rappler sought Yasay for comment via email and text message, but the foreign secretary, who is overseas, has not responded to our questions as of posting time. We will update this story if and when he replies to our queries.

‘Unsafe, hazardous’ banking practices

The BSP filed the charges against him and 9 other Banco Filipino officials on April 4, 2011. Yasay was then director of Banco Filipino,

The BSP said Yasay and the other Banco Filipino officials “repeatedly violated several laws” on account of the following:

  • “Willful refusal to stop the conduct of unsafe, hazardous, and unsound banking practices”
  • “Falsification and issuance of false statements to hide the true financial condition of the bank”
  • “Willful refusal to file audited financial statements”
  • “Willful refusal to report DOSRI (directors, officers, stockholders, and other related interest) loans”
  • “Twenty-six counts of willful refusal to comply with numerous banking laws and BSP directives”

The BSP pointed out that Banco Filipino “engaged in hazardous lending and lax collection policies and practices.”

Years after the BSP filed these charges against him, Yasay is said to be a candidate, too, for BSP governor. 

The New Central Bank Act of 1993 said the post of BSP governor also requires CA confirmation, but a BSP press statement in 2001 said otherwise

Scrutinizing integrity

In this confirmation process, the CA is expected to scrutinize appointees like Yasay for criminal and administrative cases.

The Rules of the CA as of September 2007, in fact, require appointees to submit a “statement, under oath, whether the nominee or appointee has any pending criminal or administrative case against him.”

Lacson said having criminal or administrative cases does not necessarily stop the CA from confirming an appointed official. 

He recalled having confirmed members of the Armed Forces of the Philippines who had pending cases that were “in relation to military operations.” This, as opposed to those rejected by the CA for their graft and corruption cases.

The bottom line, Lacson said, is that every appointee should convince the CA members about his or her integrity.

The CA, after all, is tasked to examine the “integrity, competence, and fitness” of presidential appointees.

Lacson said in a mix of English and Filipino, “If you don’t have integrity, how can you be fit to hold public office?”

In a phone interview with Rappler on October 11, 2016, former Philippine ambassador to the US Jose Cuisia Jr said of Yasay’s pending charges before the DOJ: “Frankly, that’s very embarrassing if a secretary of foreign affairs has pending cases.”

Cuisia explained: “Anywhere he goes, he is the representative of the President. And if he has some pending cases, no matter, even if he has not been charged, would that not be quite embarrassing for the country?”

‘Economic sabotage’

Yasay is not new to controversy.

In 2000, he was accused of “economic sabotage” by then president Joseph Estrada after he, as chairman of the Securities and Exchange Commission (SEC), suspended trading at the Philippine Stock Exchange (PSE). 

Yasay issued this order after PSE personnel resigned over a stock manipulation controversy, better known as the BW scandal.

Before this, in the US, Yasay had also been the subject of a case filed by lawyer Armando E. Barrion against him before the Supreme Court of the State of New York, County of New York, in August 1995.

In a pile of two-decade-old documents sent by a concerned citizen to the Rappler office in February, Barrion complained to the court about Yasay and his law partner, Jose de Castro.

Barrion said that Yasay and De Castro “failed and unlawfully refused to remit to the appropriate governmental agency the amount deducted and withheld” from his wages, amounting to up to $7,800 for the whole year of 1989.

Yasay and De Castro, on the other hand, denied “each and every allegation” in at least 15 paragraphs of Barrion’s complaint, including the portion quoted above.

As of Tuesday, the Supreme Court of the State of New York on its website listed the status of the case as “disposed.”

The court notes a “stipulation of discontinuance” in April 1997. In this stipulation, the lawyers of the accuser and the accused agreed that the case be “discontinued, without costs to either party as against the other.”

Years after the case, another issue often raised against Yasay is his “delinquent” status as a lawyer in New York, according to records from the New York State Unified Court System. 

Face of the country

The concerned citizen who sent the case documents to Rappler said these factors show that Yasay “should not be confirmed for any position in government.” 

“He would be an embarrassment to the Philippines if due diligence was ever conducted by a foreign government,” the informant said. 

For Lacson, this is what the CA is looking for in a DFA chief: “He should be able to represent the country with dignity, and should not be tainted. Because he will be facing heads of state of other countries, right?” 

“He is the face of the Philippines.” –

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Paterno R. Esmaquel II

Paterno R. Esmaquel II, news editor of Rappler, specializes in covering religion and foreign affairs. He finished MA Journalism in Ateneo and MSc Asian Studies (Religions in Plural Societies) at RSIS, Singapore. For story ideas or feedback, email