Aquino can break up businessmen-lawyers conspiracy

Frankly Speaking
By Frank Wenceslao

This is a paraphrase, President Aquino reportedly found out it isn’t enough to be clean at the top because government corruption has seeped into every level of Philippine society. One sector where corrupt practices are deleteriously impacting national development, thus the nation’s wellbeing is the conspiracy of the country’s big businessmen and top law firms (the “conspiracy”).

This is a follow-up of my preceding column “Chinese-Filipino businessmen commit worse corruption” that Aquino should break up the conspiracy if he’d any chance to turn around the deteriorating Philippine economy in the two years he’s left to avert another Marcos-type economic and socio-political crises or his presidency be worse than GMA’s. In addition to agreeing to Charter-change, which is now imperative if the Philippines were not to lag further behind our fast industrializing Asian neighbors, Aquino should ask Congress for the immediate enactment of the National Commission Against Corruption (NCAC) which can be merged with the Office of the Ombudsman (OMB) and a combined constitutional body when the Charter-change materializes in lieu of the Department of Emergency Preparedness and Recovery (DEPR) Pamusa has proposed earlier.

The NCAC should be better empowered than the present OMB, as follows: (1) It shall encourage and facilitate out-of-court settlement of graft and corruption cases and the return to the state of public assets misappropriated or illegally acquired for personal benefits and aggrandizement of current and former public officials from Marcos era to date, their immediate family members and close associates or the private businessmen and individuals that colluded with them that have likewise illegally enrich themselves from the proceeds of graft and corrupt practices; and (2) Its Investigation and Prosecution Division (IPD) shall be in charge of investigating, tracing, freezing, seizure and prosecuting any Filipino citizen, national or juridical person with unexplained or unlawfully acquired property and illicit gains that through forensic study and audit are found to have been possible through behest government loans and fraudulent security valuation with consolidated net worth of Fifty Million Pesos (P50,000,000.00) and more to be beyond the realm of statistical probability of the borrower’s capacity to legitimately earn the price at the time the property was acquired or which may have come 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.”

The NCAC shall be staffed with a core group of lawyers, CPAs or lawyers-CPAs and may retain consultants of foreign law offices and accountancy firms whenever necessary whose cost is chargeable to the respondent in case he loses a given case of graft and corruption. Until their merger is finalized by constitutional amendment the OMB and NCAC shall closely and jointly conduct investigation of financial crimes and corrupt practices and shall share the evidence that becomes available to the DOJ’s Prosecution Service; DOF, BIR and BOC; and all law enforcement agencies shall provide relevant information or evidence to help the investigation, prosecution, trial and conviction of a given accused for violating laws such as but are not limited to forfeiture to the state of unlawfully acquired property (RA 1379), anti-graft law (RA 3019), anti-plunder law (RA 7080), anti-money laundering law (RA 9160), fraud and other crimes punishable under the Revised Penal Code such as fraud, tax evasion, etc. which are also punishable crimes under U.S. and other UNCAC signatory nations being of similar category and definition for which the UNCAC and other international cooperation agreements against corruption (ICAACs) can be invoked and thus be eligible for foreign countries’ prosecutorial assistance.

According to lawyers with business concerns, the conspiracy is mainly caused by Sec. 1, Art. VIII of the Constitution which reads in part: “Judicial power includes the duty x x x x x x x x to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.” – which should be deleted in a Charter-change. It’s opened the floodgates for court suits in the enforcement and implementation of the decisions of the executive departments and its agencies particularly with regards to public biddings and awards of contracts for the government procurement of goods and services. In the end, the delay caused by a court’s TRO leads to a project’s funding falling short of budgetary funding and foreign aid, renders it anachronistic in this Age of Information Technology, and in many cases the preparatory work such as feasibility study, engineering design, construction plans and the cost spent for these just go to waste because a bidder thought his influential lawyer can block the award and get it for himself.

With the NCAC’s creation, PCGG naturally should be abolished with its current and former chairmen, commission members and other top officials investigated for complicity in the corrupt practices the agency allegedly got involved in and perpetrated. Hopefully, the NCAC will likewise break up the businessmen-lawyers conspiracy that has subverted the rule of law and basic fairness of the Philippine justice system.

This conspiracy between business companies and law firms has enabled their tentacles, according to a Filipino scholar, to reach the highest level of the justice system and determine at what price a SC justice can be bought to render a favorable decision and sway the other justices in the division because of the Court’s “tayo-tayo” system. The SOP is simple. Law firms know court fixers who can access a division member whether of the CA, Sandiganbayan or SC and convince the other members to the former’s reading of the law no matter how twisted it’s especially on “Three Kings’ Day” which is referencing the original Three Kings and they be delivered as they did at the end of the Christmas season. My friend, a retired SC justice now deceased, assured me there were case laws the Court held sacrosanct such the CA’s decisions on questions of fact, which as a matter of tradition are almost always upheld or not given due course on appeal by the SC.

I was personally involved in at least two cases that reached the SC on appeal. One is my libel case against columnist Art Borjal and Max Soliven, may they rest in peace where surely they have no air-conditioning, and the other was a case of sexual harassment and other offenses against women filed by a lady friend vs. a brother of John Gokongwei. Both cases were won in the RTC and CA but both were reversed by the SC. That’s why my justice-friend suggested to our lawyers to request for reconsideration and en banc hearing convinced the whole Court would uphold the abovementioned tradition. The requests for reconsideration were denied by the respective divisions and ruled with finality their original decisions.

The RTC found Borjal and Soliven liable for libel and ordered them to pay me P750,000 jointly affirmed by the CA. When my fellow 365 Club members at the Intercon Hotel heard the news, they were unanimous the two Ilocano-defendants would rather be shot than pay me the amount; hence, I should be prepared for their next moves fair or foul. I thought to have made my point and was prepared whether to be paid or not. Josue Bellosillo wrote the decision setting aside the lower courts’ decisions because the columnists allegedly swore to destroy his reputation which won’t make him acceptable in the private sector since he’s nearing retirement. How a SC justice feared newspaper columnists who didn’t have good reputation either is incredible.

As to the sexual harassment case, Gokongwei at first let his in-house lawyers represent his brother who lost at the RTC and CA. An offer of settlement was made and the lady-complainant asked for an amount that elicited an arrogant comment from one of the defense lawyers, which if I remembered correctly went like this: We might as well appeal to the SC because with half of the amount the lady was asking, we could have the decision reversed. For the appeal, Gokongwei retained the law office of Romulo Mabanta Bueventura Sayoc & De los Angeles.

In what’s usually fixed in assigning a case, it’s raffled to the SC division where Dante Tinga, who I consider unfit to be called justice, was a member. I told the lady-complainant she’d lose in the SC because Tinga’s late wife, Marichu, was a longtime associate if not a partner in the Romulo law office which was probably the main reason the law office was chosen. Hence, Tinga was reachable by the Romulo law office as my sources confirmed and as expected the RTC and CA decisions were reversed.

Lo and behold: The SC didn’t only set aside the lower court’s decisions but went further that if there was anybody to be blamed, it’s the complainant because she was flirtatious according to the witnesses for the defense and financially motivated in filing the complaint, which the lower courts didn’t dignify with a single paragraph in their decisions. Yet that was a basis of the SC’s decision and the unkindest cut of all probably to cover up the corruption in its midst.

Ombudsman Conchita Carpio-Morales penned the decision. Whether or not she succumbed to the “tayo-tayo” system and Tinga’s importuning of the coming “Three Kings” bearing gifts is something she must live with. Maybe President Aquino should ask Carpio-Morales when and at how much did her husband and she acquire their U.S. real estate property and whether it’s been declared in their statement of assets, liabilities and net worth (SALN) since acquisition.

For Morales’ information, the SC decision practically destroyed the complainant’s life because she couldn’t find new employment. The media coverage of the case against Gokongwei’s brother spawned fear among employers that the complainant was a trouble-maker. Now, just over 50, the lady-complainant, a graduate of St. Theresa’s College and U.P. with MBA credits in La Salle was actually pirated from an advertising agency by Gokongwei’s brother and made vice president of Digitel which was sold to PLDT not long afterwards. The rumor was Gokongwei got some heat from Digitel’s American stockholders because the way the sexual harassment case was handled.

The complainant became impoverished and fully dependent on her children for existence. The last time I saw her, she asked me if the “praise-releases” about Ombudsman Carpio-Morales’ integrity are anywhere near the truth. I recall my justice-friend who was flabbergasted when he read Carpio-Morales’ decision and bitterly commented, “How could she allow herself to be remembered with such outrageous decision?”

Gokongwei and the other big Chinese Filipino businessmen as a matter of habit may still play the same dangerous game they used to do when they’re just starting. That’s why the growth of their businesses has attracted a Filipino scholar who is now at a concluding part of his study that may finally show Gokongwei, Henry Sy and the others in Forbes Magazine’s list of richest Filipinos couldn’t have acquired their wealth without the Philippines’ corrupt business environment. He’s advanced an opinion the 100 richest Filipinos may have resorted to the business practices that led to the collapse of corporate America’s big corporations such as Enron, Worldcom, etc. such as cooking their books and resorting to accounting gimmicks that also brought down the world’s biggest accounting firm, Arthur Andersen.

Recently, cooking the books and accounting gimmicks may also prove the undoing of one of the biggest U.S. law firms, Dewey & LeBoeuf LLC, whose former leaders have been criminally and civilly charged in New York in which they are accused of accounting gimmicks and fraud to cheat banks and investors in a failed attempt to keep their prestigious law firm alive. Dewey & LeBoeuf once had as many as 1,400 lawyers, before going bankrupt in May 2012. This collapse of one of the largest U.S. law firms is costing thousands of jobs and hundreds of millions of dollars of estimated losses for banks, lenders and investors not to count clients’ losses on their million-dollar cases the firm is litigating. The 106-count indictment from Manhattan District Attorney Cyrus Vance Jr. charges former Dewey & LeBoeuf chairman Steven Davis, 60, DiCarmine, 57, and Sanders, 55, with several dozen felonies each, including grand larceny, securities fraud and falsifying business records.

Big local law firms are equally in danger how long their happy days would continue if Aquino cut their umbilical cords to their big clients. Romulo et al.; ACCRA law; the FIRM founded by Justice Tony Carpio; Paquito Ochoa’s newly emerging MOST; etc. won’t last long with the same number of lawyers and big offices they have now when they can no longer win cases and are subjected to closer supervision with regards to ethical issues on their relationships with clients on one hand and the powers-that-be on the other.

Speaking of special treatment of Janet Napoles that some Senators are reportedly criticizing the DOJ, she actually needs protection because she can be easily silenced by people implicated in her pork barrel scams. Yet, nobody has noticed Roberto Ongpin’s special treatment of being able to go abroad and come home which faced with graft charges tantamount to violation of the Anti-Plunder Law (RA 7080) of illegally borrowing and misappropriating P660-million DBP loan that could include Anti-Money Laundering Law (RA 9160) and RA 1379 which his illegally acquired property will be subject to forfeiture to the state. Pamusa may petition, moreover, he’s being barred entry into the United States pursuant to Presidential Proclamation No. 7750 and probable violation of the U.S. Foreign Corrupt Practices Act (FCPA) for acquiring U.S. property with illegal funds and proceeds for corruption. Charged serious crimes, why is Ongpin not in the Hold-order list of the DOJ?

When we come to think about the incredible growth of their businesses, big Chinese Filipino businessmen should heed Manila’s late Mayor Arsenio Lacson that one living in a house made of tin can shouldn’t throw can openers around. For instance, Gokongwei shouldn’t have used his clout against the poor lady-complainant above when he knew his brother wasn’t a model of fidelity. Gokongwei started as remnants importer when having a Central Bank import license and importing goods at a premium needed by a local manufacturer was the guaranteed means to multiply returns on capital several times over. To the credit of Gokongwei and his hardworking siblings, they moved to Manila and put up a corn starch plant, Universal Corn Products, Inc. (now Universal Robina Corporation), which ballooned into what the JG Summit Group of Companies is known and admired in the business community.

Henry Sy had his start with his shoe store in Carriedo in front of the Quiapo Church and took off with his expansions and acquisitions when he acquired the lease over the government lot and made it the site of SM City North EDSA that put him on track to build his chain of malls. Whether he or his SM Corporation has acquired the lot, from whom and at what price are questions the Aquino administration should look deeply into.

These big Chinese-Filipino businessmen are vulnerable to legal sanctions because in the course of doing their business like big international banks such as HSBC, Standard Chartered Bank, Union Bank of Switzerland (UBS), JPMorgan Chase, etc. and multinationals like Siemens AG, Daimler AG (maker of Mercedes Benz), Alcatel, etc. crossed the line and had to pay billions of dollars of fines to the U.S. and their home countries to settle probable indictment for violating the U.S. Foreign Corrupt Practices Act which punishes a foreign individual or corporation that may have used illegal money earnings or the proceeds from corruption in acquiring U.S. property and related laws against money laundering, fraud, conspiracy, etc.

Or, those involved in corruption will be barred entry to the U.S. pursuant to yet little-known Presidential Proclamation No. 7750 issued Jan. 2004 to give teeth to the UNCAC and the U.S. National Strategy to Internationalize Efforts Against Kleptocracy.