Impunity

President Duterte’s apparent sensitivity to the utterances of the Chief Justice draws from a more comprehensive concern over the extent of corruption in the judicial branch and the impunity with which this happens within the bounds of an independent branch of government.

When Duterte unveiled his list of public officers caught up in the drug trade, he named several judges. Respecting the independence of the judicial branch, the President asked those named to report to the Supreme Court.

In many instances, over the last two months, Duterte referred to the ease with which drug offenders get their way in the courts. He likewise railed against the rumored sale of TROs that is a major investor concern. He has yet to specifically mention the many instances of lower court decisions found defective if not completely outlandish.

To be fair, the Chief Justice is aware of the magnitude of the problem of corruption in the judicial branch. In one 2013 speech, Sereno urged lawyers to blow the whistle on “hoodlums in robes” and not simply speak of corrupt practices in “hushed tones.” She said the High Court was open to discussing measures that would encourage lawyers to testify against judges, including granting whistle-blowing lawyers administrative amnesty and immunity from criminal suits.

While the intent to stamp out judicial corruption may be there, the effective mechanisms have not been put in place. It has been three years since the Chief Justice made the exhortation to lawyers but not a single case has been filed – with the exception of the investigation the Court ordered recently of the judges named in the President’s drug list.

Recently, an individual involved in an estate dispute lodged a complaint at the SC by a party to that case against a Judge Francisco Mendiola. The complaint alleged the judge is guilty of manifest impartiality, bias and impropriety. It cited the findings of the Court of Appeals that found the Judge, in this case, acted with grave abuse of discretion. The complainant further claims the judge issued orders that are contrary to law and jurisprudence.

Earlier this year, Judge Mendiola glossed over the substantive issues presented by Cathay Pacific (CX) against a concessionaire the airline wanted to terminate. Mendiola issued an indefinite Writ of Preliminary Injunction that restrained CX indefinitely from dealing with third parties other than Paircargo, the company that filed the case. CX found the manner Mendiola handled this case to be irregular, including the surprisingly low injunction bond required of the petitioner.

The same Pasay RTC judge once issued a preliminary injunction against GMA-7, preventing the television station from airing a segment of its “Imbestigador” public affairs program. The program was about an entrapment operation against a Pasay City prosecutor who was extorting money.

Cases like these exasperate President Duterte, who must feel that extortionists in the judiciary are beyond the reach of his anti-corruption campaign.

Plundered

After many months, Bangladesh has yet to inform the rest of the world who really was responsible for the theft of $101 million dollars from a state-owned bank. The larger portion of that money found its way to the Philippines. Alert Sri Lankan authorities intercepted the rest of the money.

The US banks, through which the stolen money transited, saw no irregularity in the fund transfers. Therefore, the money was presumed “clean” as it was transferred to a Philippine bank.

Bangladesh’s ambassador to Manila is pressing our government for the quick return of whatever was recovered from here. He should first tell us who was responsible for the heist through a system that required seven handprints before any money could be moved.

This incident caused embarrassment both in Dhaka and in Manila. We should not return the funds until Dhaka fully establishes that a crime was indeed committed and identify those responsible for it. On our end, the Filipino bank that received what appeared to be “clean” funds coming from US intermediary banks has been fined heavily.

The mystery of the electronic bank heist may never be solved.

According to an article published in the New York Times, the six state-owned commercial banks (SOCBs) in Bangladesh are so badly governed they are regularly plundered by corrupt powerbrokers. These SOCBs account for about a fourth of all bank assets in Bangladesh. The government in Dhaka has been largely complacent about the quality of governance of these banks even if several scams have been documented.

For instance, notes Joseph Allichin who contributed the article, the SOCBs in Bangladesh all have what bankers describe as “extremely high” rates of non-performing loans. Bangladesh’s SOCBs carry 11 percent non-performing loans compared to only fourpercent in other banking systems.

The case of Sonali Bank, the largest SOCB in the country, is illustrative. This particular bank has a non-performing loan rate of 37 percent in late 2014. If that happened here, the bank would have been taken over by the monetary authorities.

Between 2010 and 2012, one branch of Sonali Bank gave out $454 million in loans. Fully $344 million of that went to a textile business called Hallmark. It was discovered that the borrower connived with the branch manager to issue fraudulent letters of credit to fictitious companies.

Even after that scam was discovered, Sonali Bank continued to operate. The reason this could happen at all is that the SOCBs are regularly recapitalized by the government. The plundering is nearly tolerated.