EDITORIAL - Money laundering tool

With the shutdown of all Philippine offshore gaming operator firms and their state-run version, the internet gaming licensees, the Commission on Elections has welcomed the end of “POGO politics” – the financing of election campaigns using POGO money. Alice Guo, who has become the face of POGOs despite her denial of involvement in offshore gaming, is suspected to have used POGO money to finance her successful bid for mayor of Bamban, Tarlac.

In the use of dirty money to finance election campaigns, the country should not stop at POGOs. Because of the weakness of campaign finance rules, proceeds from a wide range of criminal activities have financed bids for elective office. Dirty money is laundered through election campaigns and has allowed criminals to enter politics, including notorious jueteng lords, smugglers, drug dealers and other organized crime ringleaders such as the Parojinogs of Ozamiz City. This is apart from dirty money earned through corruption, which has propelled crooks to high office and funded the creation of political dynasties.

Election campaigns have become among the biggest and most efficient tools for money laundering in this country. Yet Congress has consistently resisted every proposal to legislate campaign finance reforms. The public can only speculate on the reason for this resistance. With lawmakers unwilling to act on such proposals, it may need pressure from international dirty money watchdog Financial Action Task Force to prevent the use of election campaigns for money laundering. The country is still struggling to get out of the FATF’s dirty money gray list because of slow action notably on money laundering through casino junkets.

There are rules setting caps on campaign spending, and requirements for all candidates – both winners and losers – to submit to the Comelec their list of campaign donors, contributions and expenditures. Comelec officials, however, have admitted difficulty in verifying the accuracy of such statements.

A well-crafted law can promote transparency in campaign finance and help improve enforcement of the rules. The Comelec is among those pushing for campaign finance reforms, but such efforts have hit a wall in every Congress. To compel reforms, the FATF can be alerted to this major roadblock in anti-money laundering efforts in the Philippines.