The Philippines can Really be Great Again

COMMENTARY

By Frank Wenceslao

My email below and GlobalBalita.com column “P-Noy: Admit and correct your falling public’s confidence” attracted a number of readers to comment, one whom was an old Marcos confidante living in the U.S. who on condition of anonymity would send me additional government losses if the PCGG were abolished without effective replacement. A lawyer Marcos didn’t want to join the government my informant continued to serve the former president in his own law practice. He claims to have summarized memos of Marcos’ deals with Henry Sy, Lucio Tan, John Gokongwei, Emilio Yap and others the late Ralph Nubla asked Marcos to help.

Before proceeding, however, let me point out the readers almost unanimously hope President Aquino would seriously address graft and corruption, or at least reduce it to manageable level, jumpstart economic recovery and improve business environment to enhance sustainable national development. They asked the President to focus on Finance Secretary Purisima’s announced policy last August that a person or officers of a corporation with tax liabilities of PhP50 million and more may be charged of plunder. US-Pinoys clamor for the creation of an anticorruption task force composed of transferees such as DOJ investigators and prosecutors; DOF-BIR-BOC customs and tax examiners; and volunteers from PCGG, BSP, AMLC, NBI, etc. in lieu of the truth commission under the President’s direct supervision or a Presidential Assistant on the Task Force Against Graft and Corruption.

To minimize the number of government personnel and expenses, the task force should be able to solicit foreign assistance, such as through a MOA between DOJ or PCGG and Pamusa, to pay for foreign private services, e.g. accountancy firms to do forensic audit, asset-search firms (detectives), or law offices to sue civilly alongside criminal actions current and former government officials, their immediate family members and close associates, or private businessmen and individuals that colluded with them and have grown corporate assets and personal net worth beyond the realm of statistical probability, such as Sy’s, Tan’s and Gokongwei’s group of companies to $5, $2.1 and $1.5 billion, respectively, making them the 1st, 2nd and 3rd richest Filipinos in 2010 according to Forbes Magazine.

Similarly, Purisima should do forensic audit how Kokoy Romualdez amassed his net worth of $111 million the same year as well as the rest of Forbes’ 40 richest Filipinos. Unless the President showed determined efforts against graft and corruption, his administration would be no better than GMA’s whose 9-year presidency only created a big hole for her, her immediate family members and close associates, or private businessmen and individuals that colluded with them to escape retribution while reducing into inutility the Office of the Ombudsman as an anti-graft institution.

My said informant pointed out that Sy should be on top of my list. He recalled a Malacañang tsismis before EDSA 1 that Imee Marcos convinced her father to approve the lease of the GSIS property to Sy where SM City EDSA was built. My informant guessed Sy must’ve guaranteed Imee 60% equity in the owning company, Marcos’ condition for government favors granted to such a project.Undoubtedly, SM City EDSA became Sy’s cash register ringing in money 24/7 that enabled him to accelerate his mall building program and expand his family’s other investments locally and overseas.

My informant wants Sy to answer PCGG this basic question: Has SM Investment Corporation continued the lease contract and its rental on the GSIS property, or was SMIC able to buy it from whom, when and at what price?

My informant also singled out Gokongwei because of the reported sale of Digitel to PLDT for P69.2 billion ($1.6 billion). He presumed Digitel is one of the companies spun off by Universal Robina Corporation (URC), Gokongwei’s former flagship. My informant pointed out Marcos was often disgusted with Gokongwei. For one, Gokongwei was demanding and didn’t care if he corrupted the judiciary or the whole government to get his way, which Marcos didn’t like. With regards to court cases Marcos wanted to be convinced the facts support Gokongwei to send a trusted aide such as my informant to talk to the judge or justices that Marcos was following up the litigation.

Little did the world know except trusted aides that the disgraced president was playing Marlon Brando as “Godfather” to his cronies and favored businessmen!

In fact, I was employed by a German firm when Gokongwei did us a ruthless and dirty trick to go around the ban for new flour mills because of the existing mills’ excess capacity. The ban was the brainchild of the Philippine Flour Millers Association’s executive director, Joe Aspiras, before he became Marcos’ press secretary. But Gokongwei devised a plan to circumvent the ban and built his new flour mill.

A Swiss flour mill firm and ours were asked to submit proposals for what was at first a corn grits mill. We were made to believe Gokongwei wanted a modern mill for corn grits, the Cebuanos’ staple. The corn mill was almost a carbon copy of a flour mill that my German associates suspected it’s really the latter. Gokongwei finally admitted it’s really a flour mill he wanted and asked us to swear to its secrecy. In the end, Gokongwei succeeded to push through the flour mill by defrauding the Philippine Government, such as DBP for foreign financing, BOI incentives for corn grits mill not granted to a flour mill, and the prohibitive rates of customs duties and taxes for flour milling machinery and appurtenances whose importation was banned.

The flour mill was imported by Universal Corn Products whose modest operation making corn starch, which in and itself was technical smuggling. UCP suddenly catapulted to the level of San Miguel Corporation among the country’s top food manufacturer and eventually renamed Universal Robina Corporation able to extract every edible part of wheat grain for URC food products (junk foods) analogous to “lugaw” profit-wise because the ingredient is mostly poor flour quality given away by other flour millers to unpaid mill floor sweepers. The good quality flour goes to Pizza Hut and other captive flour market multiplying URC’s profits and enabling its exponential growth for Gokongwei to expand into banking (PCIB and Far East Bank), property development and retail merchandising (Robinson Land), telecommunications (Digitel and Sun Cellular), airline (Cebu Pacific), petrochemical, etc. Under his holding and flagship company, JG Summit, Gokongwei engaged in securities trading and overseas investments in China, Southeast Asia and USA.

At the same time, Gokongwei was able to be philanthropic by donating PhP200 million each to De La Salle and Ateneo de Manila Universities, tax-free. It’s probable the taxes on the donation had been doubly evaded by Gokongwei and others like Sy, Tan, etc. who’ve grown corporate assets and personal net worth (ala Mafia according to USDOJ definition) from income of illegal origin, hidden, concealed, disguised, or made to appear legitimate (main objective) and to evade detection, prosecution, seizure, and taxation. This is money laundering and tax evasion the Anti-Money Laundering Council (AMLA) and the BIR should look far back and deeply into.

IN CONCLUSION, THEREFORE, forensic audit of these “big fishes” could lead to their own collapse like Enron Corporation scandal whose bankruptcy included the dissolution of Arthur Andersen, one of the five largest audit firms and accountancy partnerships in the world.  In addition to being the largest bankruptcy in American history at that time, Enron was attributed as the biggest audit failure. The fault, according to government regulators, was with Jeffrey Skilling, former CEO, whose staff of executives, through the use of accounting loopholes, special purpose entities, and poor financial reporting, were able to hide billions in debt from failed deals and projects while collecting compensation for success and bonuses. Chief Financial Officer Andrew Fastow and other executives not only misled Enron’s board of directors and audit committee on high-risk accounting practices, but also pressured Andersen to ignore the issues until Enron’s collapse became irreversible.

President Aquino, Secretaries Ochoa, Purisima and De Lima and the new PCGG management have a unique opportunity to make the administration the greatest of all time.  It’s now in their hands to stop graft and corruption as an organized crime untouchable by law at the best corporate headquarters in the nation, so at the end of the day only small fixers at the BIR, BOC, LTO, DPWH, etc. would survive P-Noy’s War on Graft and Corruption.

Pamusa will naturally claim the BIR’s reward equal to 10% of the taxes evaded by Sy, Tan, Gokongwei and others whose liabilities have been exposed by our research and investigation. The 10% of the taxes due when paid even under compromise settlement would enable us to free the government from expenditures of stopping graft and corruption in the years ahead except among the really criminaly inclined which no-nonsense law enforcement can take care of.

Please think about it, I’m sure Filipinos at home and overseas hope for our nation’s rebirth under this administration before we who are in our 70s and above say our final good-bye to our country that can really be great again.

Francisco Wenceslao
President
Philippine Anticorruption Movement USA, Inc.
Phones: 562-864-7737 & Cell 562-547-4357