Unfinished story,

designated officer- in- charge by Bangko Sentral Governor Gabriel C. Singson, who was out of the country, Mr. Miranda went on record to confirm the existence of the scam and the marathon probe already being conducted by the central bank to audit the T- bill trail Bancap left behind.

Days later, Mr. Singson officially denied responsibility over secondary market player Bancap, and pointed a finger on the Securities and Exchange Commission (SEC). In a Senate hearing held May 23, 1994, SEC Commissioner Rosario N. Lopez also denied responsibility over firms like Bancap despite having already signed a cease- and- desist order on its operations on May 20. The order was reportedly served only eight days after the scam first hit the headlines.

Both the Bangko Sentral and the SEC ordered an investigation on the scam and even conducted a joint audit in May. For a probe to come out successfully, it would need the cooperation of banks. If the banks refuse, the Bangko Sentral should pry open their books. Nothing happened.

Mr. Singson, a lawyer-turnedmonetary chief, even frustrated efforts of state prosecutors toward a thorough investigation by invoking the Secrecy Law ( Republic Act No. 1405) that prevents the central bank from inquiring into bank deposits and investments in government securities, even in cases of fraud or irregularity — a move that favored the culprit more than the victims of the scam.

Still, for a government body admitting it was hamstrung by the Secrecy Law, the Bangko Sentral was surprisingly quick to assess the damage: a day after the suicide broke out in the papers, P559 million, then two days later, P938 million. These, however, were merely the sum of the claims of the two banks which it considered “victims” of the scam.

The powers of the newly resuscitated central monetary authority were reduced to its two much-touted tools: “emergency assistance” and “moral suasion.” Nothing can prevent another similar scam from happening because the highest monetary policy-making body of the land is a toothless tiger.

The Bangko Sentral attempted to exercise “moral suasion” over the six financial institutions involved by inviting them to verify claims against each other and, as Mr. Singson said, “to avoid costly lawsuits.” Accounting firm SyCip, Gorres and Velayo (SGV) supervised the entire verification process.

The process proved to be a dud, although it was not that the institutions had high hopes it will be successful. A president of one of the six institutions anticipated this early on and sent a proxy instead. He said the tedious exercise only allowed the Bangko Sentral to sue for time “until the heat from the scam fizzles out.”

The smoke may have cleared out, but for the victims, the scars are there. One year after, what remains is a bitter memory of the scam and a pile of lawsuits.

Except for Bancommerce, which settled amicably all claims against it by BA Savings and Capital One and is now in the process of reconciling claims with PNBRepublic, the other bilateral talks collapsed. Eight cases, both civil and criminal, are now pending in the courts.

PlantersBank is facing a court battle waged separately by claimants IITC and Bancommerce. In another much- complicated transaction, PlantersBank sued for an injunction order against the Bangko Sentral and the Rizal Commercial and Banking Corp., claiming ownership over P70 million in central bank bills in roundabout transactions which involved Bancommerce, All Asia Capital and Trust Corp., and Capital One. Due to the injunction, efforts of these institutions to redeem the CB bills with the Bangko Sentral ended up for naught.

IITC’s case is also one for the record. Aside from suing PlantersBank, from which it bought the T-bills, IITC pulled a surprise when it also sued Capital One, to which it sold the T-bills. Were it not for the case, Capital One would have been free of any litigation, having been at the receiving end of any of the Bancap-related transactions. In its complaint filed before the Makati Regional Trial Court, IITC contended both institutions “conspired and concocted the foregoing fraudulent scheme to evade their respective obligations.”

The group of Peter Garrucho, currently chairman of Capital One and former Executive Secretary of the Ramos administration and tourism secretary of the Aquino administration, got the services of Estelito Mendoza as defense counsel. Mr. Mendoza was formerly solicitor general during the Marcos administration and handles several cases of Marcos cronies, including those of taipan Lucio Tan and tycoon Eduardo “Danding” Cojuangco.

Another legal bout linked a second government bank, fueling suspicions on the possible involvement of state agencies and government- owned and - controlled corporations mandated by law to deal only with government financial institutions. Bancommerce and IITC filed separate claims against Al-Amanah Islamic Investment Bank of the Philippines (formerly Amanah Bank), a subsidiary of the Development Bank of the Philippines.

At this point, it is not yet certain if the list ends with Al-Amanah Bank. “At the end of the day,” said Bancommerce executive vice-president Raul de Mesa, “all the victims would have to come out in the open.”

But that may take awhile. Said former Solicitor General Francisco Chavez, who acts as defense counsel for former Bancap trader Victoria Magalona- Escalambre on an estafa case lodged by the government: “If they are banks, they will be afraid to scare off their investors and suffer a bank run. Also, they would not want to magnify their stupidity. I bet you, many were victimized but chose to suffer in silence.”

Worse, those who ended up as “accidental beneficiaries” have more reason to keep quiet. “Other institutions which were not part of the six may have received late deliveries of T-bills which were not theirs,” said a top official of one of the six institutions. Since T-bills are bearer’s instruments like currencies, those in possession can automatically claim ownership.

“What if one of Bancap’s messengers suddenly appeared at your doorstep and insisted on delivering P100 million worth of these bearer’s instruments to you? Will you not take it, knowing that Bancap no longer exists?” asked another bank official. “Up to the end, greed prevailed.”

Sadly, it is the victims who are now running after another like headless chickens. And curiously, apart from the estafa case lodged against Bancap officers by the government, not one single financial institution is running after Bancap in the courts.