When I first wrote about COACECSS, the credit Union being promoted at the Tuesday meetings it was only to be informational. I am not an investigative reporter, I am not a reporter. I did want people in the English speaking community to be aware of a potential problem with something being sold to them every Tuesday. As this has unfolded several parallel events have emerged. I read and reach my own conclusions, I am providing you a series of links and quotes so you too can read and reach your own conclusions.
My awareness of this Menage began when I mentioned an article in the Capital Financiero, a Spanish language financial publication in Panama. An unofficial translation of the notice goes like this:
“The Independent Institute Cooparativo (IPACOOP) on the authority of its board of directors, decided to take temporary management of the Cooperative Savings and Credit Fund Employees Social Security, R. L. (Coacecss).
This decision was made after a special audit carried out Coacess, which showed a repeated failure to Law 17 of 1997.
Marta was also appointed as intervener Moon Veliz temporary cooperative while the correction of deficiencies found, trying to keep attention to partners and the general public.
The resolution JD/11/2012, by authorizing the intervention, indicated that the audit carried out “details an alarming deterioration of financial and administrative organization through this cooperative and that such circumstances pose a serious risk to the investments by the cooperative and therefore the money from partners and third parties. ”
James Sturge, Chairman of the Board of Directors of Coacecss, upon receiving the notification, announced his willingness to work addressing all recommendations made by the institution, said in a statement IPACOOP.
The IPACOOP reiterated its commitment to protect the funds of the cooperative and to ensure adherence to cooperative principles, values and laws that govern it.”
Manuel Luna
Capital , LINK
The response to my post and Ning thread was interesting, most on it on Boquete Ning, LINK.
This comment posted by Jim Thompson is the counter argument to the the quote highlighted by me above.
“Here is a bit of information to correct some errors or add info to this website:
- This is an “Administrative Intervention” and as such by definition, in no way involved the immediate financial health or solvency of the Credit Union
- The credit union will continue to honor all interest payments in both certificates of deposit and Money Market savings accounts,
- The credit union has the solvency to pay all principal amounts of certificates of deposit when matured and if requested.
And most importantly, clients funds are not in jeopardy. Never were. Never will be. Credit Unions are wonderful organizations to deal with. The people are exceptional and I am most happy to be involved with this particular Credit Union. ” Link
Jim appears to have a more direct conduit into the credit Union finances than the government auditors who said.
“details an alarming deterioration of financial and administrative organization through this cooperative and that such circumstances pose a serious risk to the investments by the cooperative and therefore the money from partners and third parties. “
Jim also wrote this in a response on BoqueteGuide.
“With all of the misinformation being circulated by some irresponsible websites and blogs, it has been a confusing week for everyone involved. As usual, the credit union people are wonderful to work with, and helpful in every way. Members and non-members of Credit Unions in Panama are so fortunate to have an organization like IPACOOP looking after their interests.”
Look under comments for July 6, 2012 at 3:44 pm for the full context.
Jim provided his email address as jim@offshorecdnetwork.com , what is OffShore CD Network. Their webpage is http://www.offshorecdnetwork.com/ . In an article on that site, Tammy Gulbronson states, Jim Thompson is the exclusive representative of Offshore CD Networks in Boquete Panama and she assists him.
Thanks to a reader of Boquete Ning, I discovered a bit more about OffShore CD Network, the marketing side of this Menage de Trois.
I have never met Gilbert R. J. Straub so I cannot be sure he is the same person, but Google has a lot to say about the name.
Here are some links to follow if you wonder.
http://commdocs.house.gov/committees/bank/hba61331.000/hba61331_0f.htm
http://www.thepanamanews.com/pn/v_14/issue_21/opinion_01.html
http://www.offshorealert.com/WorkArea/threadeddisc/print_thread.aspx?id=60&g=posts&t=36876
http://openjurist.org/593/f2d/166/international-controls-corp-v-l-vesco-international-controls-corp
http://www.mail-archive.com/ctrl@listserv.aol.com/msg30225.html
The third entity in the Menage is Pronto Cash, a prepaid Mastercard.
COACECSS Credit Union Appoints Exclusive MasterCard Issuer | Financiera Pronto Cash Principal Issuer |
News Journal: Friday February 24, 2012
Pronto Cash MasterCard is Prime MasterCard Issuer for COACECSS |
Financiera Pronto Cash S.A has been appointed as exclusive issuer of MasterCard for COACECSS Credit Union which is one of the most successful financial groups in the Republic of Panama. Financiera Pronto Cash has been issuing MasterCard for members of COACECSS and has designed a special Gold MasterCard for over 20,000 individuals at COACECSS.
MasterCard International with Financiera Pronto Cash have been rapidly expanding in Latin America with many and innovative presentations and MasterCard also was a sponsor for the Panama Jazz Festival which was recently held and was a tremendous success.
Check the www.pronto-cash.com web site for daily promotions from MasterCard and Financiera Pronto Cash in the Republic of Panama.
According to Don Winner,
Pronto Cash, the financier that issues a “financial card” that operates similar to a debit card, allegedly violated Article 7 of Law 81 of 31 December 2009, according to a senior official of the Ministry of Commerce and Industry. This law protects the rights of users of credit cards and other cards of funding. Article 7 states “the issuer is obliged to inform the Unit of Financial Analysis of such operations, in accordance with Law 42 of 2000, and its regulations. The banks established in Panama have the authorization derived from the banking system that is applicable and they will continue with the material in this chapter that which in respect establishes that regimen.”
This past week Don Winner published this about Pronto Cash.
“The international credit card firm cancelled the issuer license held by the financial company Pronto Cash, after the Attorney General’s Office opened an investigation for the alleged illegal taking of deposits. On 12 April 2012, the Ministry of Commerce and Industry revoked Pronto Cash’s license to operate as a financial company and imposed a fine of $10,000 dollars, after learning the news the company had a product on the market that worked as a debit card without a banking license. MasterCard told Panama America that Pronto Cash is no longer authorized to issue products with their brand. “With this, now one can no longer use the cards that had been issued by this entity, nor will they be permitted to issue new cards,” said Angélica Gutiérrez David, the spokeswoman for MasterCard’s Latin America region.”
There is much more about Pronto Cash at this LINK
I have compiled information from pubic sources and consolidated it into a post so you can dig further if you wish. Association with OffShore CD Network and Pronto Cash does not imply any issues with COACECESS.
The words of IPACOOP the agency that took control of COACECSS, makes me think that the government intends to clean up the problems in the credit union. Perhaps the auditors had some information regarding this tryst of three and decided it was in the best interest of the Credit Union to intervene now rather than later; I am only speculating.
“The Independent Institute Cooparativo (IPACOOP) on the authority of its board of directors, decided to take temporary management of the Cooperative Savings and Credit Fund Employees Social Security, R. L. (Coacecss).”
It is my belief that because COACECSS is the Credit union for Social Security employees in Panama it will survive. I am not knowledgeable enough about the laws in Panama to know who might bear the pain of any losses in reorganization. If I had any money invested I would certainly be asking that and other questions.
Gee whiz, who to believe? Government auditors who found a financial institution’s finances so precarious that they had to take it over…..or someone who is SELLING the company’s products? Hmmmmmmm……..
From La Prensa – Translated to English
COACECSS challenges the Director of IPACOOP
A legal battle is forthcoming, now that the Board of Directors for the Instituto Panameno Autonomo Cooperative (IPACOOP) decided to temporarily intervene the Cooperativa de Ahorro Y Credito de los Empleados de la Caja de Seguro Social (COACECSS)—an action qualified by the manager of the latter as “ illegal, authoritarian and vengeful”. Last Thursday, in response to the measure, the directors of the credit union [cooperative] interposed an appeal for reconsideration before the director of IPACOOP, Ana Giselle Rosas de Vallarino.
The intervention measure was based upon the following elements: financial and administrative deterioration, loan services to third parties under conditions more favorable than offered to its own members, and non-compliance with 2 of the 9 standards regarding money laundering.
The manager of COACECSS, Ernesto Vaughn, said that in the presented appeal, they have responses to each one of these accusations, including reports regarding the entity’s finances, and added that they are willing to fight the charges and take the case to the Supreme Court. (Corte Suprema de la Justicia).
This will be the second occasion where Vaughn takes Rosas de Vallarino before the highest court of justice in the country. He already did so at the beginning of 2010 when the cooperative was fined $5,000 for a supposed noncompliance of 4 of the 9 standards regarding money laundering. On that occasion, it was argued that the measure was illegal and violated due process for having impeded the right to a defense.
Vaughn pointed out that the director of IPACOOP hasn’t forgiven the fact that she was taken before the Supreme Court and the citations she issued weren’t addressed.
The measure levied against COACECSS also puts the brakes on the projected issuance of bonds for $30 million that were to be carried out in the local market, — an operation that wasn’t well looked upon by IPACOOP. This had to do with the issuance of corporate bonds for 30 million dollars, in three tracts, with 10 year terms, that offered an interest rate of 7.5%. This capital would be used to increase the loan portfolio. Vaughn surmises the intervention of the cooperative was premeditated, taking into account that the minister of Economy and Finance, Frank de Lima, who has never attended a Board of Directors meeting, did so on that occasion.
COACECSS has been in existence for 45 years, has bank deposits of $30 million, has assets of $ 123 million and has 15, 0000 members according to the institution’s numbers.
The resolution JD/11/2012 issued this last June 28th, signed by Rosas de Vallarino and Minister Frank de Lima, named Maria Luna Veliz as the comptroller.
According to Rosas de Vallarino, a management audit was executed that encompassed various aspects and, with consideration to guaranteeing the cooperative’s resources, they proceeded with intervention. But the civil servant clarified that the decision had nothing to do with the business Pronto Cash Financial and its possible relation with the cooperative — understanding that investigations regarding that case fell upon the Ministry of Commerce and Industry.
With respect to that situation, the COACECSS directors detailed that the relationship was “tangential” and we opened the doors, but they only signed up 24 cards, and of the 83 workers only 33 accepted plan coverage through the Pronto Cash card and all of them are now shut down.
The executive director of the Consejo National de Cooperatives (CONALCOOP), Alexander de Gracia, said that the cooperative sector has let the administrations of IPACOOP and the cooperative [COACECSS] correct the issues that were found, so that the intervention can be lifted as soon as possible.
De Gracia clarified that COACECSS is not broke, bankrupt or insolvent, nor does it face a financial crisis. Instead the situation is internal, and if the cooperatives “are autonomous in our management” then IPACOOP has the ability to investigate, and whoever feels affected can refer to the corresponding legal documentation. In the three years of the current administration, this is the first time that such an intervention has been declared for a cooperative.
Manuel Luna
Jim in the first Capital article
“James Sturge, Chairman of the Board of Directors of Coacecss, upon receiving the notification, announced his willingness to work addressing all recommendations made by the institution, said in a statement IPACOOP.
The IPACOOP reiterated its commitment to protect the funds of the cooperative and to ensure adherence to cooperative principles, values and laws that govern it.”
Now they are going to court to stop the intervention. Does this not make a normal objective observer wonder what changed?
Thanks for asking Lee. By the way, the translated article I sent was from Monday July 9th from the Capital Financiero, not La Prensa. My apologies if there was any confusion.
Yes, the President of the board of Directors of COACECSS was said to have made a statement to IPACOOP when the incident first came to light around June 28th. This statement from IPACOOP said “James Sturge, Chairman of the Board of Directors of COACECSS, upon receiving the notification, announced his willingness to work, addressing all recommendations made by the institution.”, said in an IPACOOP statement. He didn’t directly make the statement to the Capital Financiero, but I believe that he had no other choice, but to be in agreement.
The article I sent, depicts a very accurate picture at what is going on there. I went to Panama City last week and listened to all sides, the facts, the stories, the speculations, and I was able to make some determinations. I was very happy with what I saw and came away with extreme optimism. This is something that is going to work. If any of you know Ernesto Vaughan, the General Manager of COACECSS, he is writing a book on Credit Unions, using his over 40 years personal experience. I can’t wait to get this book. I am certain that this will be an interesting chapter.
The article I sent from Capital Financiero, was obviously an interview done with Ernesto Vaughan. It was printed Monday July 9th more than a week later. His board of directors has always supported him. They may have their day in court one day over this issue, or maybe not. Members and non-members of the Co-op would prefer a little less drama with their banking. We hope that the recommendations from IPACOOP will be complete in a few weeks, and that they will be accepted and implemented, and things will get back to normal. Thanks again for asking………..
so now I found the right place to put my comment.Your use of the phrase “Menage a trois:to title this article reeks of pornographic inuendos. I beleive you owe someone an apology.
I am glad to see you understand the post clearly.
I am confused, but interested in this matter. I am retiring in Texas with little money and mostly social security. I was in Costa Rica for 3 months and heard a great deal about this area in Panama. I am interested in retiring here. Who are you Lee? You seem informed about the area and many matters in the area. Anyone who has information to help a woman to move (rent) in the Boguete area, please send info. As always, cost of living will be my major problem. I thank all of you for paving the road.
Maggie