Imelda, Danding and Joe De Venecia: Oh what a mess
To say that the PCGG is in a mess -- and worse, mostly a mess of its own making -- is an understatement. But at the outset I must say that this post is not an argument for the abolition of the PCGG. Who will gain with its abolition? The usual suspects. Instead, this is simply a list of what I think can still be done and undone and who should be doing what to whom. If that sounds as obscene as the geriatric criminal Imelda dancing with the PCGG commissioner at what must have been his coming-out party, let's leave it at that and move on to my list of 3 things to be done/undone.
1. Slap the Marcos family with damage suits, money-laundering investigations and tax evasion cases -- and then slap them some more with hold-departure orders. The Marcoses are so greedy they won't settle for the ill-gotten wealth they have managed to keep. They now want to get back ill-gotten wealth taken away from then that has since become someone else's ill-gotten wealth. The Marcoses are re-claiming valuable real estate previously surrendered by their self-confessed crony J.Y. Campos to the PCGG. Their lawyer, Robert Sison (who at one time was ordered investigated by the Supreme Court for privately meeting with the judge handling Imelda's 'dollar smuggling' cases in Manila -- scroll down that article for the story) has filed a motion at the Sandiganbayan claiming the P18 Billion Payanig sa Pasig lot for his clients.
(That property has its own sordid story of old corruption colliding with new corruption -- this Newsbreak story sheds some light, but may not be as neutral and incisive as the magazine's editors are capable of being). How to counter this post-Marcos show of greed by the Marcoses? Claimants 1081, one of the main organizations of Marcos victims, has made its own claim to the property -- which is logical, since the Marcoses owe the victims $2 Billion in damages for the killing, torture, disappearances and abuses they inflicted on at least 10,000 Filipinos.
(Disclosure: after leaving the PCGG, I gave some pro bono advice to Claimants 1081 and that includes this option of running after the Marcoses right in the Philippines -- at the scene of the crime. I'm afraid that the American alien tort claims act (ATCA) court cases filed by the victims' US lawyers -- which did serve a powerful and symbolic purpose when they were filed -- have ran their course. The U.S. Supreme Court has agreed to hear a Philippine government petition to turn over another $35 Million in Marcos funds (the Arelma account) frozen in a Hawaii court -- which the victims also claim. But what is the PCGG doing about the still pending HR victims compensation bill in Congress? Deafening silence. It seems the PCGG Chairman is too beholden to Bert Gonzalez -- who opposes the bill just so he can make his patrons in the AFP happy -- and would rather just mumble his usual blather about nothing in particular.
(I expect that the US Supreme Court will come up with a narrow ruling on the Marcos funds case; while the amicus brief of the US Justice Department in the PCGG's favor might help bring the focus on the sovereign immunity question, the Court might not want to go that far. It could simply rule that since the main dispute involves parties and events that took place in another State, it might be more practical to see whether it can be settled there. This need not involve sovereignty, but expediency -- will the liability of the Marcoses to the victims be finally paid if the money were turned over to the Philippines? Or will the Hawaii judgment be left unenforced because that foreign government has effectively prevented accountability from being exacted? This is why legislating the Marcos victims compensation bill was and is of strategic importance-- it is the best argument for why ill-gotten Marcos funds should be returned to the Philippines. Sadly, neither Sabio or Gonzales, let alone their superior in Malacanang, have any sense of what the implications are for their witlessness. As it is, they are inviting the US Supreme Court to rule and say: Philip Alston is right, the Philippine government has no political will to deal with impunity for human rights violations, whether committed in the past or in the present.)
Aside from filing a claim over the Pasig lot, the victims (and the PCGG, really, but who has hope left that they would lift a finger?) might want to ask the Anti-Money Laundering Council (AMLC) to round up the usual suspect-banks to check how the Marcoses are financing their own ill-gotten-wealth recovery efforts. A news account 2 years ago (here's an old link that may not last) reported how "four bank bills and a savings account in the name of former First Lady Imelda Marcos were transferred to a private person without government knowledge and despite a standing injunction issued by the PCGG and the Central Bank..." Indeed. Better yet, aside from recovering PLDT shares and cash dividends against Tony Boy Cojuangco (long story, but that case wasn't 'won' by the Sabio-led commission; in fact, much of the credit should go to this man's efforts to recover what he claimed was his share in PLDT; he persisted when the PCGG itself was wavering, particularly under the Estrada administration. He lost his claim, but the evidence he gathered against Marcos -- helped the government's case significantly), there is enough reason to go after the payment -- in cash, contained in boxes - that Cojuangco is said to have paid to Imelda for her to go away and leave the PLDT case alone, after the PCGG (and it was my idea, I must admit) asked the Sandiganbayan to summon Imelda as a hostile witness, on the basis of her court-filed claim of ownership of PLDT shares. Where did the cash go? One source claimed it was paid in a city in China, then transferred to Philippine bank through an Imelda associate. Her lawyer (PECABAR's Eleazar Reyes) is said to have cashed in on it, too. The Yorac-led PCGG pressed the BIR to investigate the taxes due on these payments -- but the BIR did nothing more than accept the usual suspects' denials.
2. So, is Joe de Venecia a Marcos victim, a Marcos crony or an Arroyo-crony-turned victim? Who cares? The company he once led and which borrowed heavily from government financial institutions during the Marcos dictatorship owes the government around $700 Million that they may have already recovered from their insurance brokers through a U.S. court case. De Venecia's spokesman distracts us with the lament that JDV was in fact a Marcos victim and that Landoil still has a pending unpaid claim before the UN compensation commission that deals with companies claiming to have lost their assets during the first US-Iraq/Kuwait war. I'm not sure that's true -- this report from the UNCC actually says that Landoil's claim was rejected in 2002. More importantly, the case that Landoil filed against its insurers and insurance brokers had led to a settlement from which Landoil received money.
The 1990 New York court ruling in Landoil versus Alexander notes that the "disputes that arose between Landoil and (its) various underwriters...over the coverage of certain losses ...were settled following arbitration proceedings in London...(and) Landoil then instituted (the NY case) to recover the balance..." So far, JDV and company paid the government only P13 Million as the government's 45% share from the London arbitration proceedings. What happened to the Alexander case? It may have been settled by Landoil. JDV and his Landoil nominee, Ambrosio Collado, have not said anything about that case, where the government stands to get a 45% share of whatever Landoil collects on its $700 Million claim.
But here's the other thing about Civil Case 20 -- the PCGG's case versus Landoil and JDV: the Supreme Court has not only said that this can be revived should the compromise agreement be breached (and not giving the government its 45% share from any settlement with Alexander would be a breach), the Court has also said that the Marcoses are not part of the settlement at all. Yep. Imelda continues to be a defendant. So here's what JDV should do if he wants to make us believe in that puppy-dog-faced claim that he was a Marcos victim, too: testify against Imelda. Now. In Civil Case 20 still pending before the Sandiganbayan. By that, De Venecia can put Sabio to shame. He can make Gloria think twice about JDV's willingness to tell all against erstwhile allies. And then we make Imelda squirm with Gloria. O di ba?
3. It's not over with Danding. ...and I'm referring to the Sandiganbayan ruling declaring the 27% stock ownership in San Miguel as ill-gotten wealth while maintaining Danding's then 20% share as being "legitimate."
The litigation gamble was this: the PCGG can win the 27% share easily -- Danding had changed tack in the middle of the litigation and claimed he was not interested in that portion of the SMC shares (Why not? Another long story but suffice it to say that, with President Arroyo's backing and what Haydee Yorac thought was Mar Roxas' unseemly sponsorship of Cojuangco's agenda in the entry of Kirin Brewery into San Miguel in 2003, Cojuangco won his strategic victory long before the Sandiganbayan ruled on "his" 20 % SMC shares. I will get back to that some time.) By winning the 27% first, the PCGG's control over San Miguel would be assured (and it was for the first few months of the Yorac-led PCGG) until of course your own President betrays you and gives it to the government's adversary anyway.
On the other hand, the government's claim over the 20% was in danger of being compromised by the combined whispering of Dante Ang, Bert Gonzales (again!), Bishop Capalla and a host of Cojuangco beneficiaries in and out of the Arroyos' circle.
(Note my emphasis on the Arroyos. The husband not only hung around at Wack-Wack with Abalos and those other suspects in some other scam -- Danding's factotum Ramon Ang was another frequent flyer, whispering this and that and so getting all kinds of political and economic favors for his patron. Example: how can you continue to have a UCPB board occupied by Danding's lawyer, Danding's accountant, Danding's very own paid coconut farmer reps, and other Danding moles? The Arroyo husband is not to be outdone: he once proposed naming his, ahem, golfing partner Vivian Locsin to be UCPB Board Chair.)
Malacanang even had the audacity of proposing a Cojuangco ally -- Ernesto Maceda, the hyprocritical Mr. Expose himself-- as a PCGG nominee in San Miguel's board. The Filipino coconut farmer has no shortage of people willing to betray them in Malacanang. So what the then OSG and PCGG officials decided to do was to reduce the case involving the 20% SMC shares to a pure question of law. And it is this: if Eduardo Cojuangco was chairman of UCPB and the coco levy trust fund in 1983, and knew that control over San Miguel could be acquired by the coco levy trust fund by simply buying the 51% of SMC being offered by its largest stockholders, what's wrong if he instead bought only 31% in behalf of the coconut farmers who gave to the levy and instead bought the remaining 20% for himself? What's wrong?
First, the bank and corporation chairman has what lawyers call a "fiduciary duty" to the corporation. Our corporation law punishes disloyalty (scroll down to Section 34)! Our law says that when a board director -- like Danding at UCPB -- acquires for himself a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, he must account to the latter for all such profits by refunding the same...
Second and worse, guess where Danding got the approximately P400 Million needed to pay for the 20% SMC shares in 1983? Or: "is UCPB my piggy bank?" He borrowed from the bank he chaired. Not only that: the funds came from the coco levy trust fund -- which could have acquired all of the controlling stock in San Miguel at that time. Even in 1983, under Marcos, the prohibition against DOSRI loans -- lending to a bank's own directors and officers, was in effect. Of course, Marcos made it easier by exempting the coco levy fund from the rule, which made it eligible to borrow what it needed from UCPB to buy the 31% shares in SMC. But Danding? No. But in a UCPB board that included Juan Ponce-Enrile and counseled by the Edgardo Angara-led ACCRA, who would object to anything? Marcos even went overboard by issuing a decree -- just for The Boss -- that described the coco levy funds in UCPB as "not be considered or construed, under any law or regulation, special and/or fiduciary funds and do not form part of the general funds of the national government." In other words, if it is neither a trust fund subject to the fiduciary requirements of corporation law nor public funds subject to government audit, who gets to spend them as they like it?
And so it was that, decades later the Supreme Court in 2001 had to say that the coco levy funds are prima facie public in character. Now that is Danding's problem with the Sandiganbayan ruling on his 20%: if those funds are prima facie public, what does that make of the assets that were acquired by borrowing from the fund itself? Note that Danding has not denied before the court Sandiganbayan that he did not borrow funds from UCPB or from the coco levy itself (this we easily extracted from one Estelito Mendoza, whose only claim to fame as a lawyer is that he and Marcos simply made up laws to support Mendoza's defense of the dictatorship). And even if Danding argues that he borrowed from UCPB's depositors -- and not from the levy -- he runs up against those arguments on loyalty and trust above, both of which, by the way, create criminal liability? So while our friends over at the Philippine Onion are seriously concerned that we are losing our coconuts, it's not over until it's over.
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1. Slap the Marcos family with damage suits, money-laundering investigations and tax evasion cases -- and then slap them some more with hold-departure orders. The Marcoses are so greedy they won't settle for the ill-gotten wealth they have managed to keep. They now want to get back ill-gotten wealth taken away from then that has since become someone else's ill-gotten wealth. The Marcoses are re-claiming valuable real estate previously surrendered by their self-confessed crony J.Y. Campos to the PCGG. Their lawyer, Robert Sison (who at one time was ordered investigated by the Supreme Court for privately meeting with the judge handling Imelda's 'dollar smuggling' cases in Manila -- scroll down that article for the story) has filed a motion at the Sandiganbayan claiming the P18 Billion Payanig sa Pasig lot for his clients.
(That property has its own sordid story of old corruption colliding with new corruption -- this Newsbreak story sheds some light, but may not be as neutral and incisive as the magazine's editors are capable of being). How to counter this post-Marcos show of greed by the Marcoses? Claimants 1081, one of the main organizations of Marcos victims, has made its own claim to the property -- which is logical, since the Marcoses owe the victims $2 Billion in damages for the killing, torture, disappearances and abuses they inflicted on at least 10,000 Filipinos.
(Disclosure: after leaving the PCGG, I gave some pro bono advice to Claimants 1081 and that includes this option of running after the Marcoses right in the Philippines -- at the scene of the crime. I'm afraid that the American alien tort claims act (ATCA) court cases filed by the victims' US lawyers -- which did serve a powerful and symbolic purpose when they were filed -- have ran their course. The U.S. Supreme Court has agreed to hear a Philippine government petition to turn over another $35 Million in Marcos funds (the Arelma account) frozen in a Hawaii court -- which the victims also claim. But what is the PCGG doing about the still pending HR victims compensation bill in Congress? Deafening silence. It seems the PCGG Chairman is too beholden to Bert Gonzalez -- who opposes the bill just so he can make his patrons in the AFP happy -- and would rather just mumble his usual blather about nothing in particular.
(I expect that the US Supreme Court will come up with a narrow ruling on the Marcos funds case; while the amicus brief of the US Justice Department in the PCGG's favor might help bring the focus on the sovereign immunity question, the Court might not want to go that far. It could simply rule that since the main dispute involves parties and events that took place in another State, it might be more practical to see whether it can be settled there. This need not involve sovereignty, but expediency -- will the liability of the Marcoses to the victims be finally paid if the money were turned over to the Philippines? Or will the Hawaii judgment be left unenforced because that foreign government has effectively prevented accountability from being exacted? This is why legislating the Marcos victims compensation bill was and is of strategic importance-- it is the best argument for why ill-gotten Marcos funds should be returned to the Philippines. Sadly, neither Sabio or Gonzales, let alone their superior in Malacanang, have any sense of what the implications are for their witlessness. As it is, they are inviting the US Supreme Court to rule and say: Philip Alston is right, the Philippine government has no political will to deal with impunity for human rights violations, whether committed in the past or in the present.)
Aside from filing a claim over the Pasig lot, the victims (and the PCGG, really, but who has hope left that they would lift a finger?) might want to ask the Anti-Money Laundering Council (AMLC) to round up the usual suspect-banks to check how the Marcoses are financing their own ill-gotten-wealth recovery efforts. A news account 2 years ago (here's an old link that may not last) reported how "four bank bills and a savings account in the name of former First Lady Imelda Marcos were transferred to a private person without government knowledge and despite a standing injunction issued by the PCGG and the Central Bank..." Indeed. Better yet, aside from recovering PLDT shares and cash dividends against Tony Boy Cojuangco (long story, but that case wasn't 'won' by the Sabio-led commission; in fact, much of the credit should go to this man's efforts to recover what he claimed was his share in PLDT; he persisted when the PCGG itself was wavering, particularly under the Estrada administration. He lost his claim, but the evidence he gathered against Marcos -- helped the government's case significantly), there is enough reason to go after the payment -- in cash, contained in boxes - that Cojuangco is said to have paid to Imelda for her to go away and leave the PLDT case alone, after the PCGG (and it was my idea, I must admit) asked the Sandiganbayan to summon Imelda as a hostile witness, on the basis of her court-filed claim of ownership of PLDT shares. Where did the cash go? One source claimed it was paid in a city in China, then transferred to Philippine bank through an Imelda associate. Her lawyer (PECABAR's Eleazar Reyes) is said to have cashed in on it, too. The Yorac-led PCGG pressed the BIR to investigate the taxes due on these payments -- but the BIR did nothing more than accept the usual suspects' denials.
2. So, is Joe de Venecia a Marcos victim, a Marcos crony or an Arroyo-crony-turned victim? Who cares? The company he once led and which borrowed heavily from government financial institutions during the Marcos dictatorship owes the government around $700 Million that they may have already recovered from their insurance brokers through a U.S. court case. De Venecia's spokesman distracts us with the lament that JDV was in fact a Marcos victim and that Landoil still has a pending unpaid claim before the UN compensation commission that deals with companies claiming to have lost their assets during the first US-Iraq/Kuwait war. I'm not sure that's true -- this report from the UNCC actually says that Landoil's claim was rejected in 2002. More importantly, the case that Landoil filed against its insurers and insurance brokers had led to a settlement from which Landoil received money.
The 1990 New York court ruling in Landoil versus Alexander notes that the "disputes that arose between Landoil and (its) various underwriters...over the coverage of certain losses ...were settled following arbitration proceedings in London...(and) Landoil then instituted (the NY case) to recover the balance..." So far, JDV and company paid the government only P13 Million as the government's 45% share from the London arbitration proceedings. What happened to the Alexander case? It may have been settled by Landoil. JDV and his Landoil nominee, Ambrosio Collado, have not said anything about that case, where the government stands to get a 45% share of whatever Landoil collects on its $700 Million claim.
But here's the other thing about Civil Case 20 -- the PCGG's case versus Landoil and JDV: the Supreme Court has not only said that this can be revived should the compromise agreement be breached (and not giving the government its 45% share from any settlement with Alexander would be a breach), the Court has also said that the Marcoses are not part of the settlement at all. Yep. Imelda continues to be a defendant. So here's what JDV should do if he wants to make us believe in that puppy-dog-faced claim that he was a Marcos victim, too: testify against Imelda. Now. In Civil Case 20 still pending before the Sandiganbayan. By that, De Venecia can put Sabio to shame. He can make Gloria think twice about JDV's willingness to tell all against erstwhile allies. And then we make Imelda squirm with Gloria. O di ba?
3. It's not over with Danding. ...and I'm referring to the Sandiganbayan ruling declaring the 27% stock ownership in San Miguel as ill-gotten wealth while maintaining Danding's then 20% share as being "legitimate."
The litigation gamble was this: the PCGG can win the 27% share easily -- Danding had changed tack in the middle of the litigation and claimed he was not interested in that portion of the SMC shares (Why not? Another long story but suffice it to say that, with President Arroyo's backing and what Haydee Yorac thought was Mar Roxas' unseemly sponsorship of Cojuangco's agenda in the entry of Kirin Brewery into San Miguel in 2003, Cojuangco won his strategic victory long before the Sandiganbayan ruled on "his" 20 % SMC shares. I will get back to that some time.) By winning the 27% first, the PCGG's control over San Miguel would be assured (and it was for the first few months of the Yorac-led PCGG) until of course your own President betrays you and gives it to the government's adversary anyway.
On the other hand, the government's claim over the 20% was in danger of being compromised by the combined whispering of Dante Ang, Bert Gonzales (again!), Bishop Capalla and a host of Cojuangco beneficiaries in and out of the Arroyos' circle.
(Note my emphasis on the Arroyos. The husband not only hung around at Wack-Wack with Abalos and those other suspects in some other scam -- Danding's factotum Ramon Ang was another frequent flyer, whispering this and that and so getting all kinds of political and economic favors for his patron. Example: how can you continue to have a UCPB board occupied by Danding's lawyer, Danding's accountant, Danding's very own paid coconut farmer reps, and other Danding moles? The Arroyo husband is not to be outdone: he once proposed naming his, ahem, golfing partner Vivian Locsin to be UCPB Board Chair.)
Malacanang even had the audacity of proposing a Cojuangco ally -- Ernesto Maceda, the hyprocritical Mr. Expose himself-- as a PCGG nominee in San Miguel's board. The Filipino coconut farmer has no shortage of people willing to betray them in Malacanang. So what the then OSG and PCGG officials decided to do was to reduce the case involving the 20% SMC shares to a pure question of law. And it is this: if Eduardo Cojuangco was chairman of UCPB and the coco levy trust fund in 1983, and knew that control over San Miguel could be acquired by the coco levy trust fund by simply buying the 51% of SMC being offered by its largest stockholders, what's wrong if he instead bought only 31% in behalf of the coconut farmers who gave to the levy and instead bought the remaining 20% for himself? What's wrong?
First, the bank and corporation chairman has what lawyers call a "fiduciary duty" to the corporation. Our corporation law punishes disloyalty (scroll down to Section 34)! Our law says that when a board director -- like Danding at UCPB -- acquires for himself a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, he must account to the latter for all such profits by refunding the same...
Second and worse, guess where Danding got the approximately P400 Million needed to pay for the 20% SMC shares in 1983? Or: "is UCPB my piggy bank?" He borrowed from the bank he chaired. Not only that: the funds came from the coco levy trust fund -- which could have acquired all of the controlling stock in San Miguel at that time. Even in 1983, under Marcos, the prohibition against DOSRI loans -- lending to a bank's own directors and officers, was in effect. Of course, Marcos made it easier by exempting the coco levy fund from the rule, which made it eligible to borrow what it needed from UCPB to buy the 31% shares in SMC. But Danding? No. But in a UCPB board that included Juan Ponce-Enrile and counseled by the Edgardo Angara-led ACCRA, who would object to anything? Marcos even went overboard by issuing a decree -- just for The Boss -- that described the coco levy funds in UCPB as "not be considered or construed, under any law or regulation, special and/or fiduciary funds and do not form part of the general funds of the national government." In other words, if it is neither a trust fund subject to the fiduciary requirements of corporation law nor public funds subject to government audit, who gets to spend them as they like it?
And so it was that, decades later the Supreme Court in 2001 had to say that the coco levy funds are prima facie public in character. Now that is Danding's problem with the Sandiganbayan ruling on his 20%: if those funds are prima facie public, what does that make of the assets that were acquired by borrowing from the fund itself? Note that Danding has not denied before the court Sandiganbayan that he did not borrow funds from UCPB or from the coco levy itself (this we easily extracted from one Estelito Mendoza, whose only claim to fame as a lawyer is that he and Marcos simply made up laws to support Mendoza's defense of the dictatorship). And even if Danding argues that he borrowed from UCPB's depositors -- and not from the levy -- he runs up against those arguments on loyalty and trust above, both of which, by the way, create criminal liability? So while our friends over at the Philippine Onion are seriously concerned that we are losing our coconuts, it's not over until it's over.
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posted by Ruben Carranza at 2:32 PM
