Current Central Bank governor Hector Valdez Albizu wrote memorandum No. 11307, dated 30 March 1999, that has come back to haunt him. In that note he informed then President Leonel Fernandez that the Banco Intercontinental (Baninter) was in an “excellent” position. Valdez was referring to the process by which the difficulties of the Banco del Comercio were taken care of when the Central Bank authorized the Banco Intercontinental to take over the Banco Comercio. The CB governor told the President back then that the 31 December 1998 end of fiscal year report showed that 40% of the authorized capital had been paid, a marked improvement over 1997, and above industry averages at that time. Valdez was also generous as he assessed the credit risks facing Baninter. He said that “Nonetheless, (referring to the risks) it is necessary to point out that this situation (the risks) does not represent any great inconvenience, since the potential risks are duly covered by the corresponding provisions required by the Superintendent of Banks. This situation can be solved by a restructuring and revision of each and every one of those assets, with the idea of obtaining a better (credit) rating.”
This description of the bank is in sharp contrast to that given by the Central Bank in 2003, and defended by the bank’s lawyers, that since 1989, the executives of Baninter and allegedly orchestrated the fraud through double bookkeeping, and that this has escaped detection by the monetary authorities. According to the Listin Diario (the newspaper that was returned to the Baez family related to the Baninter collapsed administration), this is especially noteworthy since the majority of the assets and transactions of the bank came from the Banco del Comercio that had been cleaned up by the Central Bank and then handed over to the Banco Intercontinental by Valdez Albizu in 1997. Until the acquisition of the Banco del Comercio, the Baninter had no off-shore accounts, which the current Superintendent of Banks, Rafael Camilo recently admitted were poorly supervised.