Gatchalian confident of clearing name in graft, malversation case over bank deal

Senator Sherwin Gatchalian is confident that he and his family will eventually be cleared from the graft and malversation charges in connection with the Local Water Utilities Administration’s (LWUA) allegedly anomalous acquisition of a thrift bank they own.

Following the deferment of his arraigment at the Sandiganbayan’s Fourth Division, Gatchalian said facing criminal charges was a “humbling experience” considering that he had never been involved in anomalies throughout his stint as mayor and congressman and mayor of Valenzuela City.

“Fifteen years [ako] sa Valenzuela and nilalabanan namin ang corruption. Hindi ako nakasuhan in any corruption [controversies] sa Valenzuela and now for P2,500, nakasuhan tayo. Pero confident ako na malalampasan natin ito,” he said.

The P2,500 that Gatchalian was referring to was the worth of the 14 shares of stock of Express Savings Bank Inc. (ESBI) he owned and sold to LWUA in June 2009 for P179.63 per share or a total of P2,514.82.

The senator, his parents Dee Hua Gatchalian and William Gatchalian, and brothers Kenneth and Weslie are facing three counts of violation of Section 3(e) of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act, three counts of Malversation of Public Funds as defined under Article 217 of the Revised Penal Code, and violation of Republic Act 8791 or General Banking Law of 2000 and the Manual of Regulation for Banks from the alleged anomalous acquisition by LWUA under then- chairman Prospero Pichay of Express Savings Bank Inc. (ESBI) in the amount of P80.003 million in 2009.

The ESBI is a local thrift bank based in Laguna jointly owned by the Forum Pacific Inc. (FPI) and the Gatchalian family’s WELLEX Group Inc. (WGI).

Based on the Ombudsman's investigation, the LWUA Board led by Pichay passed a resolution on Mar. 24, 2009 approving the acquisition of ESBI without the requisite regulatory approvals from the Monetary Board (MB) of the Bangko Sentral ng Pilipinas, Department of Finance (DOF) and the Office of the President (OP).

The Ombudsman also said that the acquisition was made despite a legal opinion rendered by the Office of the Government Corporate Counsel, which stated that the deal must be subjected to a review by DOF and approved by the OP in accordance with banking laws and regulations.

Gatchalian had argued that he should not have been included in the cases as there was supposedly no evidence on record that he conspired with the other co-accused, that he malversed public funds or he received unwarranted advantage from the deal.

The Sandiganbayan has reset the arraignment of Gatchalian and his 25 co-accused in the case to October 5 until it resolves the motions pending before it.

Despite his ongoing case, Gatchalian assured that he will be able to do his job as a senator.

“Tatapusin na lang natin itong kaso. We will face the Sandiganbayan. Tuluy-tuloy pa rin ang trabaho natin because we have a sworn mandate to the Filipino people,” he said.

Pichay: We followed BSP' advice

In a separate interview, Pichay, now a congressman of Surigao del Sur, dismissed the charges against him as an indication of political persecution.

“It seems I’m the favorite of the Ombudsman. Even if we know there’s really no case, they’re filing cases left and right. Obviously it’s politically motivated. It’s political persecution,” he said.

He said the allegations against him are baseless because he only followed the Bangko Sentral ng Pilipinas’ advice for the LWUA to acquire a private bank so it could accept deposits since there was a moratorium for the creation of banks at that time.

“LWUA is a lending institution and ang pautang ng LWUA is around P18 billion pero hindi nakakatanggap ng deposit ‘yun. So we’ll be able to serve millions of Filipinos, kailangan natin ng isang financial institution where we can accept deposits,” Pichay said.

“But when we asked the Central Bank through the Office of the President that we create a bank, Central Bank said there was a moratorium on creating banks. However, you can acquire. So we’re just following the advice of the Central Bank and acquired not a government institution but a private bank,” he explained.

Pichay maintained that LWUA’s acquisition of ESBI was a sound business decision. As proof, he said the bank was already making an aggregate profit of P60 million before it was closed down.

"If they did not close the bank, around the second and a half year, it would have made around P100 million. And that was the total investment we put in the bank. So it was a very sound business decision," he said. —ALG, GMA News