Pacific Magazine > Daily News

Failed Bank President Wants To Testify, Senator Says

By David Miho in Koror
Tuesday: August 05, 2008

Palau Senator Joshua Koshiba says the president of the failed Pacific Savings Bank, Tim Taunton, who fled to New Zealand, is willing to be interviewed by investigators looking into the largest bank failure in Palau history.

Koshiba, who is a presidential candidate, told Pacific Magazine that he has spoken to Raymond Souza, Taunton’s Guam-based attorney. According to Koshiba, Souza says Taunton has agreed to meet with Lewis Harley, the independent counsel who is investigating the bank’s collapse. Taunton was the bank’s president when it failed in 2006.

Harley declined to comment on Koshiba’s statement, but did confirm that he has met with Souza. Taunton, who faces criminal and civil charges in the case, fled to New Zealand after the bank collapsed.

In a related matter, former Palau Assistant attorney general Lori Zucco was seen entering the offices of the Independent Counsel this morning. Zucco is the “outside lawyer” selected by Palau President Tommy Remengesau “assess how the investigation has been faring and to set the right direction for the probe.”

Remengesau has not yet extended Harley’s contract, which expires at midnight on August 14.

Koshiba said he has doubts about Zucco’s ability to serve in her current capacity. Koshiba said he doubted Zucco had the appropriate background in forensic accounting, bank fraud cases or investigations of international money laundering besides having served on the attorney general’s staff.

“Setting direction for the probe” (by Zucco) is totally outrageous for the independent counsel. That’s why he must be independent and beyond political influence,” Koshiba said. “Doesn’t anybody remember Watergate and the Clinton impeachment cases and the role of independent counsels? Those ethical investigators would rather resign than be told what to do by the president or attorney general of the United States.

“I place Harley on that level of ethics and honesty,” Koshiba added.

Harley yesterday said that he was asked and will attend Remengesau’s weekly news conference tomorrow morning but did not know Zucco was the “outside lawyer” that Remengesau had selected.

Remengesau has given every indication that he will renew Harley’s contract despite Zucco’s late role.