The Lucio Tan Story

FRANKLY SPEAKING
By Frank Wenceslao


Imelda Marcos reportedly would testify as another witness of the Presidential Commission on Good Government (PCGG) to recover the late President's 60% equity in each of Lucio Tan's companies. Ferdinand "Bongbong" Marcos, Jr. previously testified his father told him and his sister, Imee, to familiarize themselves with the operations and management of the companies because they own them.

Lucio Tan's unknown story is he rose to be one of the richest Filipinos according to Forbes because of Marcos' propensity to partner with Chinese Filipino businessmen including the late Ralph Nubla who's probably the most faithful. Marcos' support for Tan might've included multiple duplication and use of internal revenue stamp on tobacco products that enabled Tan to expand Fortune Tobacco Corp. into Asia Brewery and several other big corporations which probably won't happen had Marcos foreseen San Miguel Corporation would one day be run by Danding Cojuangco.

It's common knowledge in the business community that Marcos' help was essential condition to put up large-scale and capital intensive project that needed government financing and tax incentives. It's likewise known the dictator demanded minimum 60% equity in the proponent company whose head had practically no risk but contribute to Imelda's charities or send gifts on her birthday.

Many behest projects were abandoned after a PNB or DBP loan was granted and the borrower like CDCP's Rudy Cuenca ran laughing all the way to deposit the loan proceeds in a foreign bank. To Tan's and other Chinese Filipinos' credit they implemented and managed well their projects to success. The reason according to some coffeeshop wags was after Dewey Dee got millions of pesos of unsecured loans and ran away Marcos warned that anyone who'd do the same should be prepared for every member of his family to be terminated.

Tan's companies couldn't have been exempted from giving 60% equity to FM in every Marcos-supported company. The best thing Tan should do since he still enjoys influence with the powers that be is to negotiate conversion of Marcos equity into non-voting government-owned preferred stock with guaranteed earnings. The longer Tan fights PCGG there's a danger he would lose all and probably go to jail for corporate corruption under US laws enforcing the UNCAC.

Paper trails when examined by the US Securities and Exchange Commission's inventory system would show that Tan couldn't have legally and statistically raised the funds for the expansions and acquisitions of his family-owned or controlled corporations (FOCCs) to date. This goes for Henry Sy, John Gokongwei and others.

The only explanation is the funds came from the proceeds of corruption defined by FBI as 'income of illegal origin, concealed, disguised, or made to appear legitimate (which is the main objective); and to evade detection, prosecution, seizure, and taxation' and therefore actionable under US laws that pulled the rug under the feet of America's CEOs and foreign officials, e.g. former Ukrainian PM Pavel Lazarenko, now in US jail.

Under post-Marcos administrations Tan has added the Philippine Airlines (PAL) whose profits are siphoned off by his FOCCs. Tan's restaurant has sole catering rights for PAL passengers while another Tan's FOCC leases or purchases planes then leases them to PAL at exorbitant prices.

Tan also acquired the Philippine National Bank which with its merger with Allied Banking Corporation, a product of the Marcos-Tan partnership, would have combined resources making the resulting entity one of the biggest banks in the country.

The corporate corruption perpetrated by Tan and his ilk would make imprisoned American CEOs die of envy such as Worldcom's Bernard Ebbers, Tyco's Dennis Kozlowski, Adelphia's John Rigas, Enron's Jeff Skilling, etc. because their Philippine counterparts have been untouchable to date.

But not for long, thanks to the UNCAC and US laws enforcing it. Pamusa has written Tan and others to step up and negotiate settlement which would be submitted for US court approval; afterwards the records will be sealed from the public and can't be used for future legal action.

Of course, there should be accurate accounting of illicit assets for settlement and which portion would be retained by an offender. This is probably very difficult to accept for Tan and others having enjoyed the powers and perks given them by the media and business community.

They should be assured, though, that US court approved settlements took cognizance of asset-growth that wouldn't have been possible without, say, Tan's business acumen and management skills. These variables can be quantified and credited to Tan and Pamusa would be fair in this regard.

On Pamusa's part we ask for still negotiable amount granted to a whistleblower under US law to enable us to bring to justice the nefariously corrupt such as smugglers, drug traffickers, jueteng lords, gun-for-hire syndicates and organized criminals that can't be defeated as long as they see public and corporate corruption going on everyday and can bribe their way out of dirty policemen and law enforcers.

Tan and his ilk have to hurry up. The reaction from President Arroyo's staff for our proposed reforms to be the centerpiece of her exit strategy is encouraging. It'd give Pamusa access to government evidence on corruption cases on which we can base legal actions in the US pursuant to President Bush's International Initiative to Combat Kleptocracy enforcing the UN Convention Against Corruption (UNCAC) with US laws, particularly in reference to this passage, to wit:

"A critical element in our fight against grand corruption is our effort to deny kleptocrats access to fruits of their corruption. The United States has a wide range of mechanisms to prevent, detect, and prosecute grand corruption, and trace and recover the proceeds of such corruption. We employ the full range of our authorities and tools in a comprehensive, strategic way to target assets misappropriated by current and former senior foreign government or political officials, their close associates and immediate family members, or other politically exposed persons (PEPs) ."

PCGG lamentably has barely touched the surface of the estimated $10 to $15 billion Marcos' and cronies' ill-gotten wealth which surely includes equities in companies the dictator favored. Much has been added to said ill-gotten wealth with billions of dollars more stolen by current and former government officials, their close associates and immediate family members, or private individuals and businessmen that colluded with them during the post-Marcos administrations.

Worse, conspiracies between high-level public officials and businessmen led to outright larceny of government assets including foreign aid and loan funds. The proceeds of corruption have expanded businesses, raised equity to acquire control of publicly-traded corporations, and increased investment overseas by which concerned businessmen have acquired tremendous economic and political powers that suit US prosecution under racketeering statute (RICO) which is often used now against corporate corruption.

Send to fcwenceslao@hotmail.com any information about corruption.

This article is also posted at www.PerryScope.org -- "The globe in perryscope!"