EDITORIAL - Back to the gray list?

Did the anti-money laundering police drop the ball?

Monetary authorities are hoping that the global dirty money watchdog will not think so, even as they acknowledge the risk of the Philippines being returned to the gray list of countries under close monitoring by the Paris-based Financial Action Task Force.

Inclusion in the FATF gray list makes financial transactions with the Philippines more difficult because of additional checks for dirty money. Among those most affected are the business community and the remittances of overseas Filipino workers.

Bangko Sentral ng Pilipinas Governor Eli Remolona Jr., who chairs the Anti-Money Laundering Council, admitted that the country risks being returned to the FATF gray list due to perceptions that the massive corruption in public works projects slipped past the AMLC.

Investigations showed that huge amounts of kickbacks from flood control projects were spent on casinos by several of the public works engineers who have since been sacked and now face criminal charges. Weakness in regulating casino junkets, among other factors, kept the country in the FATF gray list for a long time.

The AMLC has frozen the assets of the engineers along with other former officials of the Department of Public Works and Highways as well as private contractors led by couple Curlee and Sarah Discaya.

But there are perceptions that such moves were reactive, and that the AMLC could have been pro-active in addressing the corruption in flood control, which is interlinked with corruption in the budgeting process and the political system in general.

This failure may call for new measures to give more teeth to the AMLC, which may include amending the Anti-Money Laundering Act.

In the meantime, the government can do more to show its commitment to addressing the corruption and institutionalized theft of public funds that continue to be uncovered in the flood control and budgeting mess.

The commitment appears to be flagging, bogged down in the political realities that allowed the corruption to reach hideous proportions. The Bangko Sentral itself has been hit by a scandal that remains unresolved, involving ghost employees on the payroll of two Monetary Board members.

Following the resignation of Anita Linda Aquino and J. Bruce Tolentino from the Monetary Board, the issue has died without further accountability. Employees at the bottom of the government totem pole have been sent to prison over less serious offenses. But authorities look the other way when it comes to the highest paid officials in government.

Such selective treatment of lawbreakers was among the factors that brought the country to its current mess, and a renewed risk of increased monitoring for dirty money.