Batuhan: Gravely offended-A A +A
Saturday, October 5, 2013
CRIME has become a sophisticated art.
By this, I mean activities attributed to people with less than legitimate intentions have become harder and harder to spot and control.
We have all heard of The Prohibition period in the US, right?
Back then, it was illegal to manufacture and sell alcoholic drinks in America. The state, in all its wisdom, decided that it was not a good thing for its citizens to stay inebriated, and thus prohibited the trade in intoxicating substances.
Of course, this created a vacuum that needed to be filled, and thus was born the “moonshine” industry. These were illegal distilleries that were disguised as innocuous haystacks, in farms all across America. Prohibiting alcohol did not automatically eradicate the need for the product, so organized crime took over in supplying it.
From the Prohibition era, to the time of the Mafia dons, the nefarious ways by which the proceeds of crime were funneled became more elaborate. Organized crime needed a way to legalize and legitimize the proceeds of its illegal activities, in a way that authorities would not be so quick to pounce on their bounty. So the scheme of “money laundering” was born.
As the name suggested, criminals bought into the business of washing and ironing clothes, with their ill-gotten money. They would buy these kinds of shops all over the country, and since these places operated on a purely cash basis, soon enough their dirty money became “laundered” with proceeds from a real and legitimate businesses.
The “money laundering” name stuck, but many other cash-operated businesses like gas stations, convenience stores and the like, also fell victim to the investors in crime.
Corporate malfeasance became even more intricate as time went by. Notice, for example, how the scammers in companies like Enron and Worldcom were able to disguise their trail of shady dealings.
Enron disguised these dealings in the form of off-balance sheet companies called partnerships, which it set up in unregulated jurisdictions. It was here where Enron hid its “bad assets” so that its balance sheet remained pristine. And so until an obscure accountant blew the whistle on its illegal activities, Enron and the conniving executives were laughing all the way to the bank with investors’ money.
This trend of sophistication is what threw me off when I heard of the scams allegedly perpetrated by Janet Napoles, in salting away billions of pesos in “pork barrel” funds. The scams she perpetrated were so startling, even insulting in their simplicity, even a high school—nay, even an elementary school kid could do it.
Totally absent was the attempt to hide any evidence of wrongdoing by disguising the trail of funds, like the moonshine distillers of old did by hiding them in “smokestacks.” No attempt was made—like the money launderers—to buy up legitimate businesses, so that the illegally obtained funds could be eased into the financial system, and rendered clean. There were not even half-funded projects, or watered-down schemes, which still had legitimate expenditure items, but only scaled down so the rest could go to the pockets of the masterminds.
Ms. Napoles’ projects were all non-existent, “ghost” projects, as they are often called.
Which is why I am gravely offended.
As a taxpayer, I am not tolerant of anyone stealing even a cent of my hard-earned money. But as a financial professional who has trained in uncovering elaborate and complicated financial shenanigans, I am even more insulted that she did not even have the wherewithal to construct elaborate and sophisticated schemes, if nothing else, but for our intellectual entertainment.
Published in the Sun.Star Cebu newspaper on October 05, 2013.