Pacific Magazine > Daily News

Independent Counsel Defends Bank Probe To President

By David Miho in Koror
Friday: August 08, 2008

The independent counsel looking into the 2006 collapse of Palau’s locally-owned bank has defended progress of his investigation while being grilled by President Tommy Remengesau during a press conference broadcast live by radio and television.

Lewis Harley attended Remengesau’s weekly press conference at the president’s invitation on Wednesday. Remengesau used the broadcast forum to grill Harley, suggesting he wasn’t making fast enough progress on determining what led to the failure of Palau Savings Bank.

During his press conference, Remengesau stressed many times that he wanted to know why the bank failed, what is the status of prosecutions, and what will be done to recover funds. They are the basis for the independent counsel’s probe.

Harley responded that the cause of the bank’s failure was the lack of liquidity leading to the insolvency with mismanagement and illegal activities by bank managers and executives including members of its board of directors.

He also mentioned the criminal charges filed against members of Palau’s Civil Service Pension Fund and that delay in trial date was due to the lack of legal counsel by these defendants who have appealed for court attorneys due to financial destitution.

Regarding depositor fund recovery, Harley reported filing for Palau’s first international asset freeze on assets of those under criminal indictment including bank president Timothy Taunton, who fled to New Zealand.

Remengesau also used his press conference to verbally tussle with Senator Joshua Koshiba, who is running for president. Koshiba was also at the televised press conference, which this week served as Palau’s version of reality television.