Pamusa’s Case vs. Lucio Tan

This column’s readers know the Philippine Anticorruption Movement USA, Inc. (Pamusa) is authorized by the USDOJ to participate in fighting corruption and kleptocracy in support of the enforcement of UNCAC by U.S. laws which has been reinforced by the recent G20 London Summit ending bank secrecy for tax evasion investigation.

Pamusa’s lawyers have gathered sufficient evidence to charge Filipino big fishes starting with Lucio Tan in the United States for corruption, mail or wire fraud, money laundering and racketeering (violation of RICO). Moreover, Tan’s and family members’ U.S. businesses have put themselves under U.S. jurisdiction for violation of the U.S. Foreign Corrupt Practices Act (FCPA) and Anti-Trust Laws. For instance, a Tan-owned company and Boeing have conspired in the procurement and leasing of planes including spare parts and support services for Philippine Airlines at questionable transfer pricing that make Tan and family members probably guilty for violating the FCPA and detrimental to American stockholders of PAL’s holding company, Baguio Gold Holdings Corporation.

Pamusa has submitted its evidence to the FBI to investigate Tan. Gloria Macapagal Arroyo could add the government evidence in various cases against Tan which he has danced around for too long. GMA may also prove the seriousness of her anti-graft and corruption program, thus save her presidency from infamy and enshrine a legacy of reforms for our people to perhaps pardon her alleged malfeasances.

We’re also hoping the Moral Force Movement (MFM) would use this case as a launching pad for its mission to combat widespread corruption which is the primary cause of poverty and its debilitating effects. MFM may reinforce Pamusa’s evidence against Tan and build on the credibility of targeting one of the country’s biggest fishes. Tan’s case would reverberate across the nation to warn all involved in graft and corruption to cease and desist in their nefarious activities or be subjected to international condemnation.

Tan and other big fishes have gotten used to being untouchable under Philippine laws. They overlook that the USDOJ has laid the basis for criminal action and forfeiture of assets acquired 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, prosecution, seizure, and taxation.”

By inventorying from dates of organization Tan’s group of companies starting with Fortune Tobacco’s annual reports, income tax declarations, and their personal statements of assets, liabilities and net worth would show the growth of each company’s assets vis-à-vis Tan’s personal net worth of $1.4 billion as of 2008 according to Forbes has been statistically improbable unless the companies resorted to massive tax evasion, bureaucratic corruption and be almost free from competition because of government favors from Marcos and succeeding administrations.

Tan’s and his group of companies’ alleged massive tax evasion was brought to light under President Ramos. Sufficient evidence of corruption and other crimes punishable under U.S. laws can be adduced by the FBI and conclude that much of the companies’ income came from illegal origin. Tan, the companies’ boards of directors and executive officers have evidently engaged in corruption by paying, or promising to pay, bribes, or by giving other undue advantages to public officials and their accomplices which they cannot deny when questioned by the FBI or be guilty of perjury.

In fairness to Tan, however, he took advantage of the country’s corrupt environment as others have similarly done. He can’t be punished to the exclusion of those equally guilty such as Danding Cojuangco, Henry Sy, Roberto Ongpin and others. They should emulate the Union Bank of Switzerland and Siemens AG and negotiate with the FBI Los Angeles office and USDOJ before they’re charged in court.

They may return to RP government Marcos’ ill-gotten wealth and accruals kept by them including ill-gotten gains from corruption during succeeding administrations. These can be reasonably accounted for and perhaps converted into preferred shares of their companies so they continue management control while freeing themselves, their heirs and successors from criminal and civil liabilities.

It’s a fact that when amicable settlement is approved by a U.S. court, the records are shielded from the public and can’t be used for any other legal action. It’s impossible to convict someone for graft and corruption or plunder in the Philippines after the evidence is sealed by a U.S. court.

Tan’s incredible story started with the family-owned Fortune Tobacco. To his credit, Tan was chosen by Marcos to be one of his cronies granted government favors that led to his building a business empire including Asia Brewery (which would not have been possible had Marcos known San Miguel Corp. would one day be under Danding Cojuangco), Allied Banking Corporation, Foremost Farms, Eton Properties, Himmel Industries, Tanduay Distillers and other subsidiaries.

Tan can’t deny he and other cronies were required by Marcos to cede 60% of the equity of each company granted favors such as unlimited dollars for imported needs, PNB and DBP loans, no bureaucratic meddling that allowed Fortune Tobacco to allegedly print multiple same-numbered revenue stamps to minimize tax on cigarettes, etc.

Tan added PAL and Philippine National Bank obviously from the income of the earlier companies. By monopolizing inter-company businesses with Tan-owned firms such as exclusive caterer for PAL passengers, conduit in purchasing and leasing planes including parts and services for PAL, banking transactions confined to PNB, its foreign subsidiaries and Oceanic Bank in which Allied Bank has significant stake, Tan with the board of directors and executive officers of the companies involved have crossed the line of U.S. legal business practices.

Tan’s net worth of $1.4 billion makes him the second richest Filipino with likely investments in China which may have exposed him to the latter’s anticorruption laws which can be pursued by USDOJ that could lead to far worse retribution.

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