Covering the Bangladesh Bank Heist: Missed Opportunity

 

NEARLY THREE months have passed since the Bangladesh government lost millions of dollars in what seemed to be an elaborate bank heist orchestrated by hackers in February. While foreign banks took steps to stop orders for payment and transfer, the amount of $81 million still slipped through to accounts in Philippine banks, remittance services and the gaming tables of a casino.

The news about the cyber heist broke out in the local media on February 29. The Senate Blue Ribbon Committee held its first hearing on the theft in March 15. At press time, the Senate held a total of six hearings on the case, with hearings following on March 17 and 29 and on April 5, 12 and 19.

Following the Scheme

CMFR monitored reports on the issue from the three Manila broadsheets Manila Bulletin, Philippine Daily Inquirer and The Philippine Star, as well as the primetime news programs 24 Oras (GMA-7), Aksyon (TV5), and TV Patrol (ABS-CBN 2) from March 11 to April 15.

During the monitor period, both the print and broadcast media reported roughly the same topics about the money laundering scheme. Allegedly involved were Maia Deguito, who was the manager of the RCBC branch on Jupiter Street in Makati City where five accounts were set up to receive the stolen funds; Lorenzo Tan, RCBC president and chief executive officer (who would eventually go on leave on March 23 to focus on clearing his name); William So Go, a businessman whose name was on the account which consolidated the funds (who vehemently denied his involvement, claiming fraudulent use of his name); Salud Bautista and her husband Michael “Concon” Bautista, executives of Philrem, which also served as a channel for the money transfers;  and Kam Sin Wong or Kim Wong, a businessman engaged in the operation of casino junket tours.

Media reports relied on Senate hearings for information revealed during the inquiry conducted by the Senate Blue Ribbon Committee.  The Senate also conducted one executive session on March 17. During public sessions, key responses of central figures in the controversy such as Deguito, Salud and Concon Bautista of Philrem and Kim Wong, were contradictory as these engaged in finger-pointing, resulting in conflicting statements.

Missed Opportunity

Media established the narrative of the participation of legitimate institutions, the banks, remittance agencies and gaming industry in the scheme of receiving and forwarding $81 million stolen from the accounts of the government of Bangladesh in the US Federal Reserve Bank of New York.  Money passed through these agencies in a process called money-laundering.

The Anti-Money Laundering Act (AMLA) and the Anti-Money Laundering Council (AMLC) were frequently mentioned in media reports on the bank heist, but only in passing. Reports did not go into money-laundering as a crime and how it is accomplished. Nor did media discussed substantially the legislation and the agency created to check, prevent as well as file cases against money-laundering suspects.

The media focused on trying to establish the “facts” of the case — mostly, the obvious “who” were the actors in the process, “what” were the sums involved and “where” these sums were held and “where” these were forwarded.  But relying only on the hearings, the reports were reduced to quoting those invited to the hearings to speak. In the course of the Senate investigation, these statements came up with contradictory claims.

Although Senate investigations are supposed to shed light on culpability, these do not establish guilt in the same manner as a judicial court.  Still, what is revealed during these investigations can be used in a court trial later. Senate hearings are held “in aid of legislation” so the hearings focused on the responsibilities of the AMLA, but the media cast this aspect of the controversy to the sidelines.

Given the nature of the case, providing an explanation of the functions, purposes and justifications for AMLA, AMLC, and the Bank Secrecy Law, which was also mentioned alongside the two, would have gone a long way in helping the public understand not only their  relevance to the issue but also the impact of the two laws on the country’s banking system and the country itself.

Unfortunately, there was a lack of material from the media that tried to explain the functions of the AMLC and the purpose and impact of the AMLA and the Bank Secrecy Law in relation to the issue. AMLC Secretariat executive director Julia Bacay-Abad discussed the AMLC and its mandate and its functions in her lecture about the AMLA in a March 22 press conference, but the media did not pick up anything from her presentation which would have helped provide the public a better grasp of the institution as well as that of the law.

Very few reports within the monitor period included an explanation for the AMLA, the AMLC or the Bank Secrecy Law, although there were some that tried to provide a little bit more information.

An article by the Bulletin in its Business Agenda section provided a definition for the term “money laundering,” but it also gave an overview of what the AMLC is for and what it does. It also cited laws that the AMLC is tasked to implement in accordance with its mandate. (“What is money laundering?”, Bulletin, March 21, 2016)

The Inquirer, for its part, published a short piece about the Bank Secrecy Law. The article appeared alongside the continuation of the newspaper’s banner story in the News section about the turnover of $4.63 million to the AMLC by Kim Wong.

Also worth noting is an opinion piece by retired Chief Justice Artemio Panganiban published in the Inquirer on April 24, a week after the set monitor period. His piece tackled money laundering in detail, providing not only a definition but also explaining the processes and medium in which money can be laundered. (“Money Laundering 101,”Inquirer, April 24, 2016)

Philippine media also left without coverage through news reports or commentary the international links or participation of foreigners in the heist. After all, there could not have been $81 million passing through the country’s financial systems without the stealth of the sum from US Federal Reserve Bank of New York.