IT REALLY IS indeed diff’rent strokes for diff’rent folks as Philippine Center for Investigative Journalism Executive Director Malou Mangahas aptly wrote in her April 5 article, “Repentant, reticent, rude,” on how local Philippine officials reacted to a PCIJ report identifying them as owners of offshore bank accounts.
Unlike most of the public officials here who have also been outed for having offshore accounts in the tax havens of the Caribbean Isles, Mongolia’s deputy speaker in parliament simply admitted, showed remorse, and announced he was considering resigning from office.
“I shouldn’t have opened that account,” Bayartsogt Sangajav, deputy speaker of Mongolia’s parliament was quoted in an article by Emily Menkes and Marina Walker Guevara for the International Consortium of Investigative Journalists (ICIJ).
Bayartsogt is one of at least a dozen or so public officials who have been outed by the global investigative reporting project led by the ICIJ based in Washington DC. For the past 15 months, some 86 investigative journalists from 46 countries had been vetting and validating some 260 gigabytes of data which include at least 2.5 million files and more than 2 million electronic communiques.
“I don’t worry about my reputation. I worry about my family. I probably should consider resigning from my position,” Bayartsogt said when ICIJ confronted him about his offshore holdings.
“Bayartsogt, who says his Swiss account at one point contained more than $1 million, became his country’s finance minister in September 2008, a position he held until a cabinet reshuffle in August 2012,” the ICIJ article reads in part.
Bayartsogt had attended “international meetings and served as governor of the Asian Development Bank and the European Bank of Reconstruction, pushing the case for his poor nation to receive foreign development assistance and investment.”
The ICIJ article also reported that the deputy speaker was also “at the forefront of encouraging foreign mining and other companies to move into Mongolia.”
The investigative reporting project looked at 122,000 offshore companies or trusts, about 12,000 intermediaries (agents or “introducers”), and some 130,000 records of the people and agents who run, own, benefit from or hide behind offshore companies. Instead of just uploading the raw documents online, ICIJ decided to partner with journalists and media agencies – including the Philippine Center for Investigative Journalism – to check out and verify the data. The project has been touted as the one of the biggest cross-border investigative partnerships in journalism history and one of the biggest financial leaks in history.
Here in the Philippines, pubic officials who have been outed for having offshore companies and trusts in the British Virgin Islands (BVI) include Ilocos governor Maria Imelda “Imee” Marcos-Manotoc, Senator Manny B. Villar, Jr and senatorial wannabee Joseph Victor G. Ejercito. Marcos had ignored the PCIJ’s inquiries, while Villar had acknowledged the account, claiming it was only a shell account with $1 inside. For his part, Ejercito in turn was evasive, and implied that the PCIJ was being used to derail his senatorial bid.
International experts say that for low-income countries such as Mongolia and the Philippines, funds that are hidden in tax havens affect the economic growth of the host countries of the wealthy elite who have opted to invest in offshore account and trusts because the “vital financial resources are stashed abroad rather than used to build up domestic infrastructure and productive capacity.”
The advocacy group, Tax Justice Network, claims that the total amount of funds hidden in tax havens comprise a third of the world’s wealth. Tax Justice Network is a non-government organization and is a staunch advocate against tax havens. James Henry of Tax Justice Network has estimated that the “stock of flight capital out of the Philippines reached $97 billion as of 2010.” This amount is more than the country’s external debt of only $60 billion that year as estimated by the Bangko Sentral ng Pilipinas (BSP).
According to former undersecretary of the Department of Finance Milwida Guevara, “the intention is to hide the transactions or hide their income so they made use of tax havens or places where there are no rules on transparency.”
“It’s hypocritical that they are sponsoring legislation that calls for faithful compliance with laws. At the same time, they are themselves trying to get away with it,” Guevara, who is also one of the founders of the Movement for Good Governance, said.