Forfeiture of illegally obtained wealth (part 3 of 3)

Ma. Merceditas N. Gutierrez, Ombudsman

In this issue, we conclude the installments on understanding forfeiture of illegally-obtained wealth.

In the defense against forfeiture, the Bank Deposits Secrecy Law (RA 1405, eff. 1955) and the Foreign Currency Deposit Act (RA 6426, eff. 1974) often also play a prominent role.  The BDSL provides that, unless ordered by a competent court in certain exceptional cases that include bribery or dereliction of duty, no examination into bank deposits in the Philippines may be made by any government official or body, and no bank employee shall disclose information on said deposits, unless permitted in writing by the depositor himself.  The FCDA, on the other hand, prohibits any examination by any government official, except upon written authority from the depositor. It further declares the deposits as exempt from attachment, garnishment or other process by any court or body. Both laws declare the deposits as absolutely confidential in nature.

In PNB vs Gangayco (1965), the Supreme Court made a breakthrough ruling that said that Sec. 8 of the then recent Anti-Graft law (RA 3019), which provided that “bank deposits xxx shall likewise be taken into consideration in the enforcement of this section, notwithstanding any provision of the law to the contrary” effectively amended the bank secrecy law by introducing another exception to the general prohibition established in said law against unauthorized inquiries.  The Court said that investigations into hidden wealth are similar to cases of bribery and dereliction of duty where inquiry into bank deposits is by law permitted, and therefore the policy as to the first should be no different from the policy as to the second.

As to foreign currency deposits, a 1987 Department of Justice Opinion stated that RA 6426, similarly with RA 1045, “should not prevail over the authority of the Presidential Commission on Good Government to track down and recover ill-gotten wealth xxx because these statutory constraints should not be allowed to frustrate the PCGG’s mission as clearly mandated by law.”   In Estrada vs Desierto (2004) the Supreme Court ruled that the Court of Appeals had not abused its discretion when that court dismissed a certiorari petition filed by the former president, after the BIR placed – wrongly, Estrada contended – his foreign currency deposits in a local bank under constructive distraint.  This high court decision and the DOJ opinion should be remembered in determining whether or not the next inquiry into bank deposits, in local or foreign currency, held by respondents in an on-going investigation into unlawfully acquired wealth, is legally proper.

In part 1 of this 3-part series, I said forfeiture of illegally acquired property or wealth is made on the theory that the same in reality belongs to the State or that it is property stolen from the people. But that is only conventional wisdom. I personally believe it is more in keeping with the truth that because public office is created to promote the people’s welfare, any wealth created for oneself, which is a misuse of that office, is held in trust by the public officer for the people.  Indeed this is how forfeiture proceedings should be viewed – as legal remedies that make possible the return or surrender of property held in trust for the people. The forfeiture of illegally-gotten wealth is different from the other forfeitures or seizures attached to various laws, such as forfeiture of smuggled goods in customs cases, seizure of drug money and of, say, a vehicle used in the commission of a crime.  In these cases, the properties are seized because they are contraband, or because they are fruits of the crime or tools that facilitated the commission of crime.

A country like ours cannot afford to condone illegally obtained wealth, which serves only to concentrate wealth to a few people, exacerbating an already existing structural weakness in our national life.  We need rather to be concerned with the equitable distribution of wealth.  And in a way we can achieve this by using forfeited illegally acquired wealth to fund public, social and environmental services, as well as infrastructures needed by our people.  These services include continual road-building and street improvements, the provision of health and sanitation facilities especially in poorer barangays, the construction of modern and energy-efficient public buildings, the maintenance of public markets, the proper equipping of our police and military forces, the computerization of government transactions, and reforms in our electoral process.

Illegally acquired wealth also indicates that corruption thrives, that kind of corruption that over the decades has consigned our country from a well-respected nation in Asia to a nation akin to the likes of a man who could have been successful but has missed too many opportunities in the past and who is now left with too few options for a better life.  We must fight corruption in all its guises and manifestations, of which illegally obtained property and wealth is one, and motivate those who are in the forefront of this difficult fight, such as Ombudsman investigators and prosecutors.

Only then could we really get back, like the wealth held in trust for us, what is truly ours – our dignity – rebuild everything within us that has long been neglected or is already broken, so that we can stand once more on our own feet, proud in our ability and resolve to create a bright future for our country. ¡

Original published on the August 21-22, 2009 issue of Business Mirror.

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