Money laundering in co-op bank transactions?

As an advocate of cooperatives, I was aghast to read that a military-based co-op manages the investment of Janet Lim Napoles who reportedly placed P510 million in the Air Materiel Wing Savings and Loan Association Inc. or AMWSLAI.
I belong to a small sized co-operative which is constantly worried by concerns related to the share capital of members.  Because our outfit offers only 5 percent per annum on fixed deposits, the same rate that commercial banks extend to depositors, we don’t normally attract huge investments from members and associate members.
However, co-operators view their share capital in the collective sense.  When pooled with resources of other members, it can be a tool for livelihood projects and social endeavours. That is why upon hearing that AMWSLAI is Napoles’ choice investment planner, I told myself the chasm between the rich and the poor exists also in the co-op sector.
Archived news from the Internet dating back to 2004 says AMWSLAI was established in 1956 and “has become the largest non-stock savings and loan association in the country with over P16 billion in financial resources, 30,000 members and 44 branches nationwide.” Based on the report, the military-based co-op bank earned some P2.2 billion in profits in 2004.
Presently, AMWSLAI is headed by Rolando L. Nolasco who is also at the helm of the Confederation of Non-Stock Savings and Loan Associations (CONSLA) a grouping of some 71 thrift banks all over the country.  Thrift banks are run by a cooperative structure and because they cater to simple credit and loans that do not require collateral, these institutions help members bridge their financial needs or start up livelihood projects.  In that context, thrift banks help the state carry out a social mandate to uplift the lives of the poor.
When Napoles invested P510 million in AMWSLAI in 2009, the thrift bank was already one of top S&Ls in the country. In fact, as head of the S&L federation in March this year, Nolasco proudly noted before the CONSLA convention, the savings and loan sector was very stable and adequately capitalized at P92 billion.  Moreover, the industry continued to remain highly profitable, earning some P6 billion in 2012.
If AMWSLAI made P2.2 billion in profits seven years ago, it stands to reason that the co-op of PAF men generated more than one third of the P6 billion earnings accumulated by the federation. AMWSLAI is attractive to people looking for financial placements that are not only tax free but high yielding.  The thrift bank offers 13 percent per annum interest tax free. I will not be surprised if co-ops of all shapes and sizes have placements in AMWSLAI.
The pork barrel, agri-pork and agrarian-pork scandals are very gripping because the whistle-blower practically walks us through the dark alleys and catwalks of the P10 billion fund scam.
The recent expose points to AMWSLAI as the funnel of JLN profits totalling more than half a billion pesos. Luy indicated that money skimmed by Napoles from state funds generated hundreds of millions of pesos.
Let us assume Napoles deposited P500 million from 2009 to 2011, at 13-percent interest the money earned P65 million in one year or a mind-boggling P195 million in 3 years.
If Napoles really made a killing in the coal mining business in Indonesia, how come there are no documents to show the trading business really existed?
The other day, I heard retired general Hermogenes Esperon on television saying that seven months after he joined JLN Corporation in 2009, he resigned because there was no business activity at all. He did not say it outright but I guess he felt a sense of dread that his name appears on the incorporation papers of a business that has no business activity on the surface.
One of the many articles published by the news website Rappler, pointed to a property in an upscale Los Angeles county said to be owned by JLN’s daughter Jeane Napoles, the listed owner of a unit at the Ritz Carlton.  The property apartment valued at P80 million was reportedly bought in cash in 2009.
I’m glad that Ombudsman Conchita Carpio Morales has ordered the creation of a special panel to look into the seven NGOs for allegedly misusing P200 million in funds under the Comprehensive Agrarian Reform Program or Carp in 2007 and 2008.  The NGOs are said to be part of the JLN network.
And what about the workings of AMWSLAI vis-à-vis the Napoles deposit accounts as enumerated by the whistle-blower? Should the Bangko Sentral Ng Pilipinas which has jurisdiction over the thrift banks look into the transactions and ascertain if these do not partake of money laundering? Banks are obliged to report to the BSP if huge amounts are deposited because it could be “dirty money,” or money from criminal activities. Did AMWSLAI abide by the State’s regulations?
The Department of Finance which regulates the cooperative sector through the Cooperative Development Authority CDA is clearly obliged to look into the workings of the military-based cooperative.