Greed and its consequences

If this were not tragic, I would probably recommend putting up a huge marker that reads “The Land of Greed and Broken Dreams” below any welcome sign in Pagadian City. But the tragedy in that city where I spent my childhood years continues to unfold every day ever since Aman Futures Inc. closed shop, its owners nowhere to be found.

I heard about this Ponzi scheme over dinner here in Cebu and it became even more personal when I heard that any member of the Bersales family intending to invest in the company would be turned down. The reason being that some time in May this year, a cousin of mine who was a councilor in that city had summoned the manager of the company to a hearing at the City Council chambers to explain what the company was all about. Already at the time, indeed, suspicions were rife that something was amiss: no financial broker or any bank for that matter will give you an 80-percent return on your money within a week!

After the dressing-down by my cousin the councilor, the manager of Amman Futures, Inc., a certain Fernando Luna, allegedly broke down and left the council in a huff. On hindsight, that may have saved many of my relatives in Pagadian from the confusion, the nervous breakdown, the misery and the suicidal attempts that have since occurred when it became clear that this was truly a Ponzi scheme. That is, if they did not pool their money with others not related to us by kinship.

For those in Pagadian and elsewhere (and this may be too late for some to know now), a Ponzi scheme is simple: you invite investors to your company by promising them windfalls many times more than what banks give and in so short a time. How is it done? It’s simple: You use the money brought in by later investors to pay those who invested earlier. The catch: the later ones are always left with the bag empty. The scheme is named after Charles Ponzi, an Italian immigrant who swindled so many people in the United States that his name stuck.

Ponzi was not the first one, of course. For greed knows no limit. In fact, wasn’t it only a few years ago when the US stock market crashed? And did it not expose the Ponzi scheme of Bernard Madoff, the non-executive chairman of the US NASDAQ stock market?

While I do not blame the 10,000 or so residents of Pagadian for having been duped to the tune of P12 billion, one must also realize that schemes like this take two to tango. And get-rich-quick schemes like this tend to hypnotize a populace when they suddenly see their neighbors driving brand new Toyota Fortuners because someone gave them so much return on their investment the week before.

What surprises me, in fact, is how so much money could come out of so small a city like Pagadian! I am told that this is how it began: The owner of Aman, a certain Manuel Amalilio, would reportedly fly in on a chartered private plane made to look like it was his, if only to impress those at the airport. And then word got around. Soon everyone wanted in on the money. After all, the owner flies his own plane; ergo, this must be a very good investment. It began accordingly with simple fish vendors at the local market, the best people to start a scheme like this because they are people you trust, for they have been selling something you eat everyday.

The more important question to ask now would have to be this: what happened to the city leaders of Pagadian and why this scheme was allowed to continue. In yesterday’s issue of the Philippine Daily Inquirer, a photograph was shown of a huge tarpaulin announcement of the mayor there extending a business permit to Aman.

If local politicians in the city are tainted by this tragedy, as the report alleges, then this will surely cause their downfall. For I am sure that the Aman Tragedy, if one may call it that, is going to be the number one issue come May when the residents of Pagadian will go to the polls.

Fortunately, Pagadian is resilient. Its coastal communities were devastated by an earthquake and tsunami on Aug. 17, 1976, killing about 17,000 residents. But the city and her people persevered. This Ponzi scheme is not going to bring such a people down.

It is time to pick up the pieces and rebuild, but please, let us all learn from this experience by heart. Greed indeed has its consequences.