It Is Not A Done Deal

The Prosecution believes it has a slam dunk.

It claims the discrepancy between the CJ’s confirmed bank balances (excluding his dollar accounts and whatever else) and his SALNs (in 2010 the gap was P28 MM) is sufficient to convict him on Article 2. It is so convinced it is shortening its presentation on the other Articles.

I would not be so sure.

The Defense has still to formally present its side. It might go something like this:

In 2001 Basa-Guidote Enterprises, Inc (BGEI), a company supposedly owned by the CJ’s wife Cristina, received P34.7 MM as settlement from land expropriated by the City of Manila. Cristina’s family is disputing the ownership of the company. To protect the company’s cash from her relatives, Cristina parked the money with her husband. The funds were spread over various bank accounts to further fire-wall them. When the CJ was impeached on Dec. 12 2012, as trustee she withdrew the funds as these might be jeopardized by the trial.

Since he was holding the money “in trust for BGEI”, the CJ did not report it in his SALNs. The funds were “off-balance sheet” items that do not require disclosure. Banks do this when recording (or, more precisely, not recording) funds held in trust for clients.

The CJ allegedly borrowed P 11 MM from the “BGEI trust funds” in the early 2000’s to acquire some properties. He disclosed this liability in his SALNs, proof the BGEI money was separately accounted for. The BGEI loan was repaid over time. The profits from his real estate explains his increase in net worth and bank balances over the years.

The CJ did not report his wife’s shares in BGEI because this was still the subject of litigation.

The Prosecution argues the CJ undervalued his real estate properties. The Defense will claim this is just an accounting issue that does not amount to a high crime.

If the Defense can convince enough Senators of this story of sorts, Article 2 is not a foregone conclusion. Many of them, particularly the seven non-Administration lawyers in the group, will require a high standard of wrongdoing to convict. Lawyers will be lawyers.

 For the Prosecution to lock down its case, it must present incontrovertible evidence  the CJ’s true assets far, far exceed what he has reported. Specifically, it needs to prove the over $700,000 that it claims is in the CJ’s dollar accounts; but this is currently under the SC’s TRO.

The Prosecution still has seven other charges to go but right now it should not assume a done deal. It still needs further drop dead evidence and, most important,  public support. The latter is not evident.

Despite all the Prosecution’s revelations and P-Noy’s exhortations, the Filipino seems nonplussed.  Why is the public not openly engaged? Here are some possibilities:

One, the Defense has, as is its duty, done a good job of landmining the Prosecution.

Two, the Prosecution has not presented a consistent, simple and compelling message that people can relate to. It often gets lost in the trees. The President is actually better at telling the story.

Three, the trial is starting to bore the country.

Four, P-Noy is doing too good a job as President.

The average Filipino is not overly concerned whether the CJ gets impeached or not. Unlike Erap’s, this trial is not about the Presidency. It is just a spectacle that does not in his mind affect his daily life. His priorities are feeding his family and educating his kids. Even at his best, the Chief Justice has little to do with these. On the other hand, the President does and is seemingly doing well enough at it.

Ironically in a sense P-Noy is a reason people are not emotionally engaged with the impeachment. Whatever its outcome, the average man feels the President will take care of him.

Polls show the CJ is unpopular but unless evidence is presented that is so egregious, so in your face, the people will not take to the streets. This premise will be tested on Feb. 25 when a rally has been called to support the CJ’s impeachment.

Many ask what an acquittal will mean to the country. The good news is the nation is better off for the trial. Public officials will be more circumspect (if nothing else, on their SALNs).

The CJ could return to his post but this seems awkward; or he could resign. Whatever, he would be marginalized especially if Malacanang manages to get at least three Associate Judges to step down or move over, giving the Palace a SC majority.

The Palace will work to make the CJ a dead man walking.

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About Leo Alejandrino

The blog is principally a commentary on Philippine politics and economics.
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7 Responses to It Is Not A Done Deal

  1. As I see it, if the government is really sincere in fighting corruption, it should allow transparency in both local and foreign currency accounts of all government officials, from the president down to the lowest BIR government employee. Isn’t our country one of the biggest havens for money laundering and even drug dealing? So please let us not mistake the trees for the forest.

  2. mrENERGY says:

    MY SALN CRUSADE

    The current brouhaha over Article II of the CJ’s impeachment trial is a classic occasion which not only brings the SALN prominently into the public consciousness but likewise can either deliver it a mortal blow or show it as the people’s new champion. Its fate will depend on whether the SALN can be made to indubitably convict or exonerate the accused.

    I am neither for one or the other. My interest is in finding out how efficaciously the SALN Law can be implemented for the good of our country. I believe that this can only be done if the lawyers on both sides of the argument are taught how to use it properly and this task begins by interpreting and understanding the accounting entries behind its contents.

    I am afraid that based on the progress thus made, the SALN issue will soon be abandoned as it has gotten us nowhere. This kind of failure in the face of the huge amount of publicity which the SALN currently enjoys will leave it in disuse in the future. When this happens, the Filipino would have lost yet another effective tool for evicting scalawags from the government service.

    Have you ever wondered why the SALN Law has rarely been used to convict those who have illegally enriched themselves in spite of the blatant display of unexplainable lifestyles rampant from government officials in the Philippines?

    Please consider these three basic reasons:

    • It involves accounting which involves math and these are really not the favorite subjects of lawyers while in school nor in practice now.
    • Even the handful of exceptional CPA lawyers have shunned away from this specialization because of the mistaken notion that it, like slander, would be very difficult to prove.
    • It remains unclear in accounting and mathematical terms how the SALNs themselves can and should be used to assure a conviction or absolve the accused.

    Let me demystify the math and the accounting therefore and try to show how easy it would be to allow the SALNs to speak for itself. The prosecution should simply focus on the justification in the submitted changes in Networth from a year to year basis. After all from a legal standpoint, the only increases or decreases in this account must come from Tax Evidenced Transactions (TETs). Strictly speaking in fact, every entry on this account and even the beginning balance must be established on the basis of TETs.

    The defendant, who has already sworn under oath about his financial standing by virtue of filing his SALNs, should be asked to explain how his Networth has grown or declined based on all his transactions for each year. With his SALNs already submitted and offered as evidence in court, the burden of proof is on him to show that all these changes resulted from TETs.

    (As a financial expert, I will say with certainty that he would not be able to prove that the changes in question are all TETs. Otherwise it could only mean one of two things: his financial adviser, if he has one, is far more competent than me or that the defendant himself should be writing this paper instead of me.)

    When this is not indubitably enough to convict, a second line of questioning is to ask the defendant to justify increases in Assets without corresponding increases in Liabilities and/or decreases in Liabilities without corresponding decreases in Assets. For individual filers, these phenomena are accounting aberrations which cannot technically exist. This is quicksand territory where any explanation will only add more fodder for the first offensive.

    Again should the combined impact of the first and second offensives still be found insufficient for an incontrovertible conviction, the third offensive is to ask the defendant to justify the beginning balance in the very first SALN which he filed. Even this amount must legally be based on TETs, otherwise everyone can potentially set it up in anticipation of substituting illegally acquired wealth to be made possible upon his assumption into an office of trust and power.

    The supremacy of this method of prosecution is that the SALN as sworn documents speak for themselves and are the best evidences of what the filer has already attested to wittingly or unwittingly. That being the case, all the prosecution has to do is to present increases in Networth and ask that they be supported by TETs. Should any remain unsupported, the burden of proving that all these unsupported amounts were legally acquired is immediately on the defendant.

    Should the government win this highly publicized test case, the people will have yet another weapon against blatant corruption in both high and low places in the bureaucracy. In fact it can be made a cornerstone which can effectively stem the growing tide of plunder. From this case, everyone should know how easily one can be convicted by their own SALNs – a situation which nobody feared before.

    A special SALN Unit can be attached to the Office of the Ombudsman to pursue the flood of cases which is anticipated to arise from this new found friend and knowledge. This SALN Unit can be made as the processor and repository of all SALN submissions nationwide. It must strongly liaise with the BIR and COMELEC. It may be possible later on to make non-filing of SALNs as a disqualification for seeking public office or assuming a GOCC position.

  3. MamangUsisero says:

    If the money go-round would not pin CJ, hope that the prosecution would also point out that CJ did not disclose that his wife is working for a GOCC (Camp John Hay Development Corp.) in his SALN from 2002 to 2005. It was only in 2006 that he disclosed this fact. This is an undisputable fact.

    • MamangUsisero says:

      Should be Camp John Hay Management Corp., which is a subsidiary of BCDA while Camp John Hay Development Corp., is a private corporation that holds the concession to develop the former American military camp. I stand corrected.

  4. Manuel says:

    So the 34m pesos did not earn anything from 2001 to 2011? And why would the CJ or then justice borrow money from an entity whose ownership is in dispute? No delicadeza? Obviously not

  5. manuelbuencamino says:

    cristina parked the disputed money in her husband’s account…hmmm…and if he and wife suddenly died then the money would go to his estate…poor bgei relatives…but here’s the thing with SALNs…you are supposed to report what is in your accounts period. maybe you can add an explanatory note saying “the money is not really mine I’m safekeeping it for my wife who does not want her relatives to know where the disputed bgei funds are” … which brings me to why didn’t he open an “in trust for” account? that way he does not have to explain…but wait if the money belongs to her then it also belongs to him, conjugal, so he still has to declare it…and finally it really does not look good for a justice of the supreme court to be playing shell games with disputed funds…but of course if we go by joker arroyo’s standards then we should abolish the national penitentiary

    • Manuel says:

      Nothing looks good for this CJ. But if you saw what happened today he still doesn’t look good but from the way JPE is acting he’s “LOOOKING GOOOD”. Hard to imagine a scenario that if acquitted he quietly goes back to his post as CJ. Oh, excuse me, he never really left! The man has big cojones!!! He’s thick-skinned or is the term thin-skinned? I don’t remember. Well he’s KAPAL NG MUKHA. Di umanoy?

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