Goodfellas of the Philippines

Remember the movie Goodfellas (1990) starring Robert de Niro, Ray Llota, Joe Pesci. It was a true mobster story about three mafia gangsters. In one segment of the movie, restaurant owner Sonny tries to collect 7,000 dollars of unpaid bills from Tommie, a dangerous, disruptive and volatile criminal, who gets so angry that he breaks a glass bottle on Sonny’s forehead. In the next scene, a scared Sonny complains to Paulie, the local Mafia boss overlord. Although unaware of how to run a restaurant, Paulie promises to offer protection by becoming a partner. “Sonny is now committed and beholden to Paulie. Now Sonny’s got Paulie as a partner. Any problems, he goes to Paulie. Trouble with a bill, he can go to Paulie. Trouble with the cops, deliveries, Tommy, he can call Paulie. But now the guy's got to come up with Paulie's money every week. No matter what. Business bad? F--k you, pay me. Oh, you had a fire? F--k you, pay me. The place got hit by lightning, huh? F--k you, pay me. Also, Paulie could do anything. Especially run up bills on the joint's credit. And why not? Nobody's gonna pay for it anyway. And as soon as the deliveries are made in the front door, you move the stuff out the back and sell it at a discount. You take a two hundred dollar case of booze and you sell it for a hundred. It doesn't matter. It's all profit. And then finally, when there's nothing left, when you can't borrow another buck from the bank or buy another case of booze, you bust the joint out. You light a match.” And the restaurant is set on fire by Paulie’s hoodlums and burns down.

Sounds familiar? You bet it does. If we go by LAV’s June 12 comment in Ricky Carandang’s blog and KBP Cebu Chairman Leo Lastimosa's statement, they both say that Speaker Nograles, Butch Pichay, and other powerful people were partners of Celso de los Angeles. Here is a possible scenario: Celso runs to Prospero Nograles and company when BSP in 2003, according to Celso, starts harassing and extorting from him (remember his accusation against ex-BSP Deputy Governor Alberto Reyes and his brother, Efren Reyes). In the next scene, a scared Celso complains to Noggie, who probably gets the go-signal from his big boss. Although unaware of how to run banks, Noggie and company promises to offer protection by becoming partners. Celso is now committed and beholden to Noggie and company. Now Celso has got Noggie as a partner. Any problem, he goes to Noggie and his boss. Trouble with PDIC? Big boss says back off to Ricardo Tan, PDIC president who initiated a PDIC investigation in 2005. Tan doesn’t back off, and he gets replaced by another (who dies while holding office). Trouble with BSP? Big boss says back off and BSP backs off (according to Alberto Reyes, BSP had started its investigation of legacy banks as early as 2003 but takes five years to act on its findings). But now Celso’s got to pay his new partners. Noggie is now more powerful: not only is his brother-in-law working for the BSP, but his younger brother is PDIC president. Business bad because of financial crisis? F--k you, pay me. Launder money for them, pay their campaign expenses using legacy funds, use legacy offices and staff for their election campaigns, etc. Create so many fictitious loans using bloated collateral to siphon off money deposited by trusting and unsuspecting depositors. Come up with ghost applicants for motorcycle loans and receive hundreds of motorcycles. Print out so many CTDs assigned to the new partner’s dummies. It doesn’t matter. It’s all profit. And then finally, when there's nothing left, when you can't borrow another buck from the bank or get more legitimate deposits, you bust the banks out. Declare bank holidays. Is this a true story, too?

That one possible scenario. Here in another possible rundown: Celso himself gets tired of the payouts to and extortions from his new partners, and he himself gives up and closes all his business in one go. Celso is an AIM MBA graduate- he knows the value of banks. He would let go of his other businesses like the preneed, real estate, and credit card companies but given a choice, keep the banks. Only if he was cornered and desperate would he give up his banks, all 13 of them. He must have said, “What the f—ck!” and without giving notice to his partners, closed the whole shebang. And that explains how Noggie ended up holding P18 million of investments and CTDs (unfunded?).