Phl business sector can minimize corruption

Frankly Speaking
By Frank Wenceslao

My recent open letter to Vice President Binay unexpectedly became viral, thanks to PhilStar columnist Dick Pascual for running it and the DZMM radio-TV interview by GB Baja that must’ve been picked up by the social media. As unexpectedly many Filipinos at home and overseas especially in the United States reacted to Binay’s alleged corrupt practices and Pamusa got more than double the reactions we usually received.

Wherever they may be whether in the Middle East, Europe, North America and our Asian neighbors, our fellow Filipinos are interested to know what’s happening in the homeland that my colleagues and I plan to conduct a survey of their preferences for President in the 2016 elections. However, I got advice that Pamusa should first show the effectiveness of the new tools, weapons and prosecutorial discretion in the latest international cooperation agreements against corruption (ICAACs) such as the UNCAC, OECD and G20 agreements including the recent G20 Summit in Australia of fighting graft and corruption to at least to minimize it if the scourge can’t be stopped to help our preferred candidate to win.

Although we need the government, Secretary de Lima’s reluctance and her lacking a sense of urgency – imagine attending an overseas conference for journalists when she’s most needed at home in winding up the many pending high-profile cases in the short time left of President Aquino’s term – compel my colleagues and I to rely on the local business sector to show that the ICAACs, PHL-USA Mutual Legal Assistance Treaty, which makes corrupt practices in the Philippines actionable and punishable in the U.S., and the stringent Presidential Proclamation No. 7750 issued by President George W. Bush in 2004 “To Suspend Entry As Immigrants or Nonimmigrants of Persons Engaged In or Benefiting From Corruption” can without the government make a big dent on graft and corruption or at least abate the damage to the country.

PP7750 basically says the U.S. can suspend entry into the country “of certain persons who have committed, participated in, or are beneficiaries of corruption in the performance of public functions where that corruption has serious adverse effects on international activity.” We believe PP7750 will sow greater fear to government officials and colluding private businessmen to be involved in corruption.

Jocjoc Bolante set a precedent when he defied s Senate subpoena and the Senate President asked the U.S. Embassy to cancel his multiple-entry U.S. visa and he couldn’t get out of the terminal upon arrival in LAX. He was asked to return home on the first available flight but he decided, however, to apply for asylum as his life was in danger from the people he implicated in the P728-million fertilizer scam, one of whom is Sen. Lito Lapid now charged with him in court for the scam.

Meanwhile, the importance of overseas Filipinos’ votes in 2016 can hardly be overemphasized. U.S. supporters of the Aquino-Roxas ticket in 2010 focused on convincing two million Filipino Americans and their descendants of which 200,000 are in California to apply for dual citizenship and vote in the elections. We tried to convince one million FilAms but probably reached only half of them to ask their parents, siblings, other relatives and friends at home they did favors in the past to vote for Aquino and Roxas.

Our math was if 500,000 FilAms convinced at least two voters at home for Noy-Mar which could be more in a large Filipino family, the ticket would’ve had a U.S. base of 1,000,000 voters. This probably happened to add one million votes for Aquino and made his victory irreversible because of the 5M-vote margin over Joseph Estrada while Manny Villar expected to make Aquino run for his money was a poor third, yet spent more than any other presidential candidate Pamusa’s study shows.

If local business leaders and their organizations agree to cooperate with Pamusa proposal below, we would have better preparation and chances to elect in 2016 our mutually preferred presidential candidate. According to the U.S. Census, Philippine-born FilAms and descendants born in USA could reach 4 million across the USA. If 1,000,000 of them in California and other states can be convinced to apply for dual citizenship and vote in 2016 for our mutually preferred candidate who agrees to present an anticorruption plank Pamusa recommends, he/she would have a big advantage over another to win a significant share of the votes of 4-million FilAms and of the millions of their kin at home plus the votes of other overseas Filipinos elsewhere Pamusa can reach which could spell the difference between our candidate’s victory and defeat.

Whether we like it or not, graft and corruption will still be the main issues in the 2016 elections. The unabated corruption at home is a continuing source of shame for overseas Filipinos and the candidate with relatively good record, administrative experience and moral compass backed up by Pamusa’s latest anticorruption tools under the ICAACs such as the UNCAC, OECD and G20 agreements as well the said PHL-USA Treaty and PP7750 will have an edge difficult for opponents to overcome, more so when between today and election day we can show examples of the successful application of these anticorruption legal bases our cooperation can bring about.

There would also be favorable and unnoticeable developments in the business sector when big and small businessmen change their ways of doing business and avoid corrupting the bureaucracy to enhance their profits because PP7750 will be a “sword of Damocles” that will drop on businessmen who can’t correct their practices and be barred entry to the U.S. which to many government officials is the end of public service and to businessmen the end of their business.

The explosive reactions Pamusa receives necessitate a change of strategy to depend more on business leaders and their organizations’ cooperation. We are drawing up a plan of a cooperative framework to be submitted to them for consideration because of much evidence that while corruption has been unabated in government, private companies are the main enablers to be reaping the biggest gains from stifling the country’s capacity to create jobs needed by its rapidly increasing population.

A Filipino PhD in economics told me that from his perspective the Philippine economy is constrained by business interests in the belief that at this stage of its development the country’s growth rate is just right because any acceleration will adversely impact their own growth prospects.

He cited Henry Sy’s operation and capital formation from suffocating procurement and labor policies by cutting his buying prices to rock-bottom and forcing cottage and small business (CSB) suppliers to accept them because their existence depends on order-to-order. By deferring payment to them they’re forced to discount fully SM’s 90-day postdated checks with Banco de Oro at 9% discount even if this is done on the same day the goods are delivered further cutting the CSB’s revenue and giving them no room to grow. Their existence is practically on a day-to-day basis and without proper cost accounting their products are sold below cost until their working capital runs out and they resort to loan sharks.

Sy also pegs to 5-month employment rank-and-file personnel throwing away their experiences in order not to pay for the benefits mandated by the Labor Code especially for sales personnel denied the chance of being rehired, thus unemployed for months with the economy losing their purchasing power and business expansion opportunities. On top of this, Sy diverts most of the capital derived from the sweat and tears of poor workers in labor-intensive merchandising to property development at home and overseas that create less number of jobs even only to replace those lost in merchandising causing anemic economic growth at home. Who says Sy loves our country?

There are many Henry Sys in the Philippines who have grown corporate assets and net worth on the backs of poor Filipinos. This is why big local businessmen won’t agree to ease up the entry of foreign investors by repealing archaic government laws and their implementing rules dating back to the country’s import-substitution regime, leveling the playing field and giving more than lip service to the rule of law. They are against stringent enforcement of anticorruption laws that adversely impact their political connection which enables them to grow corporate assets and net worth beyond the realm of statistical probability, thus ill-gotten as defined by the U.S. Department of Justice of coming from “a process or series of actions through which income of illegal origin is concealed, disguised, or made to appear legitimate (main objective); and to evade detection, seizure and taxation.”

An upside of my open letter is a FilAm and his team of forensic accountants who do projects of forensic audit for Deloitte & Touche that he could gather a team to spend their vacation at home and do forensic audit of Binay’s alleged ill-gotten wealth or Sy’s SM Group of Companies and come up with evidence that Binay’s and Sy’s assets and net worth are largely ill-gotten subject to forfeiture to the state. He says the incredible speed of Sy to grow his net worth if in the U.S. can be traced to cooking accounting books to evade or cut tax payments by hiding income in the transfer pricing of goods and services from one Sy’s company to another that led to Enron’s collapse.

We agreed though that rocking the boat is not Pamusa’s mission. We agree that Pamusa meanwhile should set up examples like reopening Sen. Lito Lapid’s wife’s case in Las Vegas where the investigation of her bulk currency smuggling did not touch on the money brought into the U.S. to enable the family to acquire two upscale houses, each of which is worth more than $1 million, and other properties. In fact, the value of one house was proven when Mrs. Lapid was arrested and had to put up a $500,000 bail bond for her temporary liberty for which one house with appraised value of twice the bond’s amount was accepted as security.

Here is the cooperation Pamusa proposes. Pamusa can sue the SM Group of Companies by digging up evidence of probably violating the U.S. Foreign Corrupt Practices Act (FCPA) such as bringing the proceeds of corruption or illegal profits derived from bribery to evade or reduce tax payments, then the illegal profits are used in doing business in the U.S. We wish to defer though such legal actions against the biggest Philippine corporations and their CEOs, COOs or CFOs among the richest Filipinos ranked by Forbes Magazine while business leaders and their organizations with Pamusa will lobby Congress to enact an amnesty law on ill-gotten wealth from the proceeds of corruption or inexplicable sources. Pamusa research has come up with settlement patterns that work satisfactorily in South America which we can replicate for the Philippines for big businessmen wanting to negotiate settlement of ill-gotten assets.

Pamusa believes that Congress should be able to enact an amnesty law in three (3) years while the corporations and businessmen who can be targets of the ICAACs primarily the UN Convention Against Corruption (UNCAC), OECD and G20 agreements, the above PHL-USA Treaty, and PP7750 undertake internal reforms to stop or at least minimize the graft and corruption they cause in the government. Our strategy therefore is to attack graft and corruption on two fronts.

These are to continue watching over corruption cases, both defendants and the courts trying them and safeguarding that the accused under investigation by the DOJ-Ombudsman be brought to court when finally warranted. Pamusa will help hasten the conclusion of corruption cases and, if needed, file simultaneous U.S. actions motu proprio against the Arroyos, Lapids, Pinedas and others implicated in the Mt. Pinatubo Rehabilitation anomalies; Sen. Lapid with Jocjoc Bolante for the fertilizer scam; plunder cases vs. GMA; forfeiture of ill-gotten wealth and tax evasion cases vs. the Marcoses and Romuldezes; ex-CJ Renato Corona; illegal DBP loan and graft case vs. Roberto Ongpin; pork barrel scam cases vs. Janet Napoles with members of Congress and their aides including other government officials implicated.

Pamusa will defer action against private corporations and their CEOs, COOs and CFOs while waiting for the amnesty law if they contribute to a fund organization to sustain the anticorruption actions at home and/or in the U.S. against abovementioned individuals to recover the public assets they have absconded. Hence, the essence of our proposal is to ask the big corporations for this contribution and support efforts against corruption in the Philippines, thus institutionalizing a “sword of Damocles” to hang over the heads of government officials and personnel to minimize graft and corruption while waiting for the amnesty law knowing full well that big and successful businessmen will not corrupt the bureaucracy if their businesses can be profitable without it.

The fund manager may devise a system by which big corporations contributing to the fund will be entitled to deferred legal action that Pamusa thus far can do for at least three (3) years from Jan. 1, 2015 when during this period Congress should be able to enact an amnesty law for ill-gotten assets and they decide to avail of it to erase any possibility of being charged of violating anticorruption laws.