Legacy owner shows up at House, is sent home

MANILA, Philippines - The owner of the failed Legacy Group of rural banks and pre-need companies, Celso de los Angeles, showed up yesterday for a scheduled House committee hearing, only to be sent away by the panel’s chair who made an eleventh-hour decision to tackle instead his own proposed bill.

Manila Rep. Jaime Lopez’s decision to send De los Angeles home angered his colleagues in the House committee on banks.

De los Angeles has been implicated in yet another controversy – the sale of mortgages for the housing units of 52,000 families who are about to lose their dwellings.

The alleged sale took place when he was head of the National Home Mortgage Finance Corp. (NHMFC) in 2004.

Albay Rep. Edcel Lagman said it was their agreement last Monday, when the committee delved into the closure of the Legacy banks, that they would continue grilling De los Angeles yesterday.

“I rushed here from another meeting only to find out that Mayor De los Angeles has been sent home. That was not our understanding on Monday,” he told Lopez.

The Legacy founder-owner is mayor of Sto. Domingo, Albay. The town is part of Lagman’s district.

Lopez said he decided that the hearing focus on his bill proposing the creation of the Philippine Pre-need Insurance Corp. (PPIC).

He informed Lagman that he would schedule another hearing on Legacy next week.

Lagman complained that the House inquiry into De los Angeles and his companies appears to be losing steam.

“We are not able to sustain it. Now there will be a one-week delay before we can get to question him again. We should have taken advantage of his presence and continued grilling him here today simultaneously with our discussion on the PPIC bill,” he said.

He called Lopez’s attention to newspaper editorials and comments that congressmen seemed to be rushing to bury the “carcass” of the Legacy mess.

Representatives Carlos Padilla of Nueva Vizcaya and Elpidio Barzaga Jr. of Cavite said they were disappointed with the committee’s decision to spare De los Angeles from taking the hot seat yesterday.

Padilla, the first congressman to arrive at the hearing room, said he expected the hearing to be a continuation of last Monday’s inquiry.

He said he went to another committee hearing when he learned of Lopez’s decision on De los Angeles.

Last Monday, Padilla asked Lopez whether the inquiry would cover both Legacy’s banks and pre-need companies.

The committee chairman replied that they would first delve into the failure of the rural banks and tackle the closure of the pre-need companies later in the day.

“If we cannot cover both today, we will continue the hearing on Wednesday,” he said.

Another congressman, who asked not to be named, warned the Lopez committee against being perceived as “soft on, or worse, covering up for De los Angeles.”

“They should remember that the Speaker has been dragged into this mess,” he said.

He was referring to claims by former Philippine Deposit Insurance Corp. president Ricardo Tan that Speaker Prospero Nograles, as majority leader in 2005, asked him to go slow on De los Angeles and his Legacy Group.

The PDIC was already investigating the precarious condition of Legacy’s rural banks at the time.

Nograles denied intervening for De los Angeles and said he himself was a victim of Legacy and that he was still trying to collect millions from the group.

The Legacy owner acknowledged in a Senate inquiry that he still owes the Speaker P10 million.

Brewing controversy

Rep. Luzviminda Ilagan of the party-list group Akbayan said De los Angeles appears to be involved in another controversy – the sale of mortgages for the housing units of 52,000 families that are about to lose their dwellings.

She said during the Legacy owner’s time as head of the National Home Mortgage Finance Corp. (NHMFC) in 2004, the agency sold P13.45-billion worth of housing mortgages to Balikatan Housing Finance Inc.     

She said Balikatan turned around and sold the same mortgages to Philippine Savings Bank, which is now trying to foreclose the housing units.

In last Monday’s hearing, Ilagan asked De los Angeles about the transaction.

But De los Angeles claimed the sale was made before his appointment as NHMFC head. “I just implemented it,” he said. 

Hold order

Immigration Commissioner Marcelino Libanan has issued a hold departure order against De los Angeles and 11 others in connection with the Legacy investigation.

Placed in the hold order list aside from De los Angeles were Virgilio Odejar, Marcos Ong, Zacarias Carticiano, Teodoroa Comple, Jose Girlo Caramat, Roy Hilario, William Escalante, Romarico Tanedo, Ernest Jurado Sr., Joey Corpuz and Emilio Aguinaldo IV.

Libanan said that the issuance of the hold departure order was in compliance with the directive of Justice Secretary Raul Gonzalez.

The order, Libanan said, “is in relation to the investigation of the Bangko Sentral ng Pilipinas on at least 14 banks and other companies affiliated with the Legacy Group,” Libanan said.

Senator puzzled

Senate President Juan Ponce Enrile wondered why authorities couldn’t seem to have De los Angeles jailed despite the many complaints of fraud against him.

Enrile likened De los Angeles to alleged investment scam artist Bernard Madoff, who was charged for defrauding American investors of $50-billion through pyramiding or a Ponzi scheme.

Senators grilled officials from the Securities and Exchange Commission for their failure to detect and stop De los Angeles’ dubious business early enough.

Sen. Manuel Roxas II said De los Angeles must be enjoying some protection to be able to have escaped scrutiny from authorities.

De los Angeles’ assets – an estate in Cebu, four luxury cars worth P8 million and a yacht, M/V Legacy – have remained intact instead of frozen. De los Angeles said he had sold his other house in Ayala Alabang in Muntinlupa and his assets were valued at P100 million.

Roxas also asked the PDIC to ensure that only legitimate depositors of the 13 failed Legacy rural banks would be paid deposit insurance claims.

“It is important that authentic depositors be paid their lost money. Since public funds will be used to pay the claims, the PDIC must ensure only the legitimate depositors are paid,” he said.

“In exchange for the public funds that would come from our taxes, it is important that justice be meted against those who committed these crimes,” he stressed.

The PDIC announced earlier it would start paying insurance claims by Legacy depositors before Saturday. It had asked the BSP for a P14-billion loan instead of using its own Deposit Insurance Fund because of the huge amount involved.

“PDIC has asked BSP for a P14-billion loan, which in reality comes from our taxes. It would be prudent for the PDIC if it makes sure that the deposit insurance claims it pays won’t go to fraudulent claimants,” Roxas said.

Roxas noted that even BSP Deputy Governor Nestor Espenilla publicly admitted that the Monetary Board has yet to determine the extent of the fraudulent banking practices of De los Angeles and his officers.

SC vows help

The Supreme Court will give “utmost attention” to an administrative complaint being readied by opposition Rep. Rufus Rodriguez against three Court of Appeals justices and a Manila judge for their alleged move to prevent the BSP from closing the Legacy Group’s 12 ailing rural banks last year.

“That is the prerogative of Congressman Rodriguez. We appreciate the move of Congressman Rodriguez to conform to the judicial system. Rest assured that this will be given utmost attention,” SC spokesman Jose Midas Marquez said.

Facing administrative charges are CA Justices Apolinario Bruzelas Jr., Bienvenido Reyes and Mariflor Punzalan-Castillo, and Manila Regional Trial Court Judge Nina Antonio Valenzuela.

Rodriguez earlier said the justices and the Manila judge violated the New Central Bank Act when they stopped the BSP from closing the troubled banks.

Rodriguez said it was Valenzuela who issued a temporary restraining order on the BSP in May 2008 upon the petition of the Legacy Group.

The three justices, who are members of the appellate court’s 8th division, later upheld the TRO, he said.

Last December, the SC reversed the lower court’s TRO, enabling the BSP to finally close Legacy’s rural banks. – With Aurea Calica, Evelyn Macairan, Edu Punay