February 2012


By Perry Diaz

Recently, Supreme Court Chief Justice Renato Corona’s defense lawyers at his Senate impeachment trial called on the House prosecutors not to associate Corona to former president Gloria Macapagal Arroyo. Well, isn’t that like asking them to disregard that “chief justice” Corona was a creation of Gloria? In fact, “chief justice” Corona’s “birth” was induced during a period that the Constitution banned such births.

Read More …

Telltale Signs
By Rodel Rodis

If Senator Miriam Santiago had been the defense lawyer of Al Capone in his tax evasion trial in 1931, she may have argued for the exclusion of all evidence of unexplained wealth as she warned her Philippine Senate colleagues this week that exposing the dollar bank accounts of Chief Justice Renato Corona in the Senate Impeachment Trial would have a “devastating effect” on the Philippine economy and “would drive away the capital market for our country.”

Al Capone’s lawyers employed similar apocalyptic hyperbole when they exhorted a Chicago jury to “stand as a bulwark against an oppressive government that was using the tax law as a means to stow Al Capone away.” One Capone defense lawyer implored the all-male jury: “You, gentlemen, are the last barrier between the defendant and the encroachment and perversion of the government and the law in this case.”

Unfortunately for Capone, he faced a judge who was not at all like the Philippine Supreme Court justices who issued a Temporary Restraining Order (TRO) preventing the disclosure of the dollar accounts of their Chief Justice to comply, they said, with the strict disclosure rules of the Foreign Currency Deposit Act of the Philippines (Republic Act No. 6426) on dollar accounts.

The problem with their argument, as Justice Antonio Carpio explained in his dissent, is that RA 6426 was specifically intended to protect foreign depositors and not Filipinos. If Ferdinand Marcos had deposited his hundreds of millions of US dollars in foreign currency accounts with local banks – instead of in Swiss banks – under RA 6426, “he would have gotten away with his loot under this ruling of the majority,” Justice Carpio wrote.

US government prosecutors faced a more difficult task in accumulating evidence of tax evasion against Capone because he had no bank deposits in his name unlike CJ Corona who kept his funds in his own name in the Bank of the Philippine Islands (BPI) and in the Philippine Savings Bank (PSBank). In two of his peso accounts in the PSB, Corona had P12 million pesos while a BPI Branch Manager stated under oath that Corona had a 2010 end of the year balance of 12 million pesos in his BPI account.

In the PSBank, Corona owned 10 accounts – 5 in peso accounts and 5 in dollar accounts, one of which had an initial deposit of $700,000. Before the PSBank could disclose the amounts of the four other dollar accounts of CJ Corona, it sought and obtained a TRO.

In investigating Capone, the Internal Revenue Service (IRS) noted that Capone failed to pay taxes on any of his earnings from bootlegging, prostitution, embezzlement, gambling, and other illegal activities. Capone scoffed at the IRS investigation and said: “The government can’t collect legal taxes from illegal money.”

But Capone was wrong. The US Supreme Court, in the 1927 case of United States v. Sullivan had ruled that the Fifth Amendment’s privilege against self-incrimination did not protect Manley Sullivan, a bootlegger convicted of failing to file a tax return showing the profits from his illegal businesses.

The forensic accounting method used by the IRS to nail Capone was called the “net-worth method” where IRS investigators examine a combination of the subject’s assets and liabilities in relation to all sources of income. If a taxpayer’s net worth, taking into account assets offset by liabilities, increased during a taxation year, the receipt of money or property to cause that increase would be considered taxable sources, the failure to pay taxes would constitute the crime of tax evasion.

The IRS also employed an “expenditures method” where expenses are matched against reported income. If there is a gap that cannot be explained, that may indicate unreported income.

House prosecutors had presented evidence that CJ Corona owned 26 pieces of real property including a Bellagio penthouse condominium that he purchased for P14 million pesos, about P12 million below its market value.

CJ Corona declared under oath in his 2010 Statement of Assets, Liabilities and Net Worth (SALN) that his cash assets amounted to just P3.5 million pesos. According to the tax records of Corona, as disclosed at the senate trial, in 2010, he paid only P176,577.32 pesos in taxes based on a gross income of P657, 755.57. In 2009, he only paid P155,556.20 in taxes on a gross income of P621, 528.62.

How did Corona purchase 26 pieces of real property and deposit P31 million pesos in peso accounts and $700,000 in dollar accounts on an annual salary of P657,755?

In building the tax evasion case against Capone, the IRS had to examine department store, jewelry store, car dealership, and hotel records for evidence of Capone’s expenditures, uncovering purchases of high-end furniture, custom-made shirts, diamond-studded belt buckles, gold-plated dinner service, hotel suites, and a Lincoln limousine.

The federal trial of Al Capone began on October 5, 1931 at the federal courthouse in downtown Chicago with the prosecution presenting evidence that Capone owned gambling halls and derived substantial profits from those businesses. Other prosecution witnesses presented evidence of Capone’s lavish lifestyle. A clerk at Chicago’s Metropole Hotel testified that Capone rented the hotel’s most expensive suites and hosted expensive parties paying cash “in hundred dollar bills, sometimes five hundred dollar bills.”

Capone’s lawyers presented their case in one day claiming that Capone was a “horse-racing addict” who had lost as much money as he earned, neglecting to point out that gambling losses are only deductible against gambling winnings so Capone would still have been required to pay taxes on his income, even if the sources were undeclared.

In his summation, US Attorney George Johnson said, “This is a case that future generations will remember….They will remember it because it will establish whether a man can so conduct his affairs such that he is above the government and above the law.”

On October 18, 1931, a Chicago jury deliberated for eight hours before returning a verdict of “guilty” on the charge of tax evasion. Capone was sentenced to 11 years in the federal penitentiary, most of which he spent in Alcatraz.

The Philippine Supreme Court majority, in supporting their CJ to prevent the disclosure of his dollar accounts, has basically declared that Corona “can conduct his affairs such that he is above the government and above the law.”


Source: Journal Online

We don’t know whether to laugh or cry.

It’s not only more fun in the Philippines.

It’s also safer to keep your funds secret here than in Switzerland. Got that?

Yes, especially if it’s tainted cash.

So step right in, folks. We welcome mob money, narco-cash, jueteng proceeds, and other dividends of criminal activities.

Read More …

By Perry Diaz

At a press conference at Club Filipino on February 12, 2012, Corona’s defense lawyers accused Malacañang of trying to influence senator-judges to vote for the opening of Chief Justice Corona's dollar account at the impeachment trial. Photo credit: Ralph Joel

Has it occurred to you that when a person tries to convince others, more doubts are raised about that person’s sincerity or honesty?  Such is the situation that Supreme Court Chief Justice Renato Corona has gotten himself into.  It’s likened to a person who falls into a quicksand; the more he tries to get out of it, the faster he sinks.  But if that person remained immobile he’d still sink nevertheless.  The lesson here is: Don’t go near a quicksand.

Read More …

No Limitation 
By Ted Laguatan 

“Siguradong limpak limpak na dolyar ang tinatago nitong si Corona!” (“For sure, Corona is hiding tons of dollars.”)

Anthony, a care home owner in the San Francisco Bay Area, home to hundreds of thousands of Filipinos – was reacting to the Temporary Restraining Order (TRO) issued by the Philippine Supreme Court against the subpoena issued by the Senate Impeachment Court on the dollar accounts of Corona.

Read More …

By Val G. Abelgas 

By deciding to respect the temporary restraining order issued by the Supreme Court against disclosing the foreign currency deposits of Chief Justice Renato Corona, the Senate averted what could have been a constitutional crisis that can bring irreparable damage to the nation and its democratic institutions.

The Supreme Court was not expected to stand still if the Senate chose to ignore its position as a co-equal branch of government or its constitutionally mandated authority as the final arbiter of laws. The Senate made the right move, choosing “government stability over constitutional crisis,” as Sen. Miriam Defensor Santiago puts it.

Read More …


‘Presiding Officer Enrile and Senator-Judge Defensor-Santiago cavalierly dismissed the Nixon case as one that applies only as a precedent In the US.’

OUR piece on the sanctity of the impeachment court and how it is beyond the pale of judicial authority merited the following comment from a lawyer who said his name is not as important as this thoughts on the subject:


An impeachment proceeding is a remedy for offenses against the people and entirely results from removal of impeachable officers from their positions for violating the mandate that public office is a public trust. In fact, in his separate opinion in Francisco Jr. vs. House of Representatives, 415 SCRA 44 (2003), involving the impeachment proceedings against then Chief Justice Hilario Davide Jr., then Associate Justice Renato Corona wrote in his own words:

“Incorporated in the 1987 Constitution are devices meant to prevent abuse by the three branches of government. One Is the House of Representatives’ exclusive power of impeachment for the removal of impeachable officers from their positions for violating the mandate that public office is a public trust.

Read More …


‘We need a Court that can rise above their friendships and clients, rise above their biases and make sacrifices for the blind Lady Justice and the Country.’

HOW much has chicanery must be uncovered about a sitting Chief Justice before he is proven to be unfit for his lofty perch? Why doesn’t impeached Chief Justice Renato Corona want to open his dollar accounts? What is he hiding? He keeps saying that – in due time – he will reveal anything,

When will that be? When he retires in 2017?

On his deathbed? Pagputi ng uwak?

Read More …

By William M. Esposo
The Philippine Star

The Supreme Court (SC) created its own nightmare when it issued that TRO (Temporary Restraining Order) that prevents indefinitely the opening of Chief Justice (CJ) Renato Corona’s dollar bank accounts with PSBank (Philippine Savings Bank). Had the Senate politely refused to obey the TRO — the SC merely demonstrated how toothless it is to enforce its own orders. The Senate impeachment court could opt though to act with diplomacy by asking the Solicitor General to appeal to the SC to reconsider its TRO.

Widely regarded as a desperate move based on a very bad script, the defense panel of the impeachment trial hurled wild accusations during a press conference last Sunday evening. Judging from the media questions, apparently the defense panel failed to sell their line, which was clearly intended to influence the Senate’s Monday caucus on the TRO. Many Senators felt insulted instead.

It’s the Executive Branch of government, under President Noynoy Aquino (P-Noy), that has the capability to enforce. As Commander in Chief, P-Noy commands both the military and the police forces. An alignment of the Executive and Legislative branches of government against the SC places the CJ and Associate Justices at a great disadvantage. The CJ and Associate Justices are not elected by the people but appointed by representatives of the people. With no real political base, unlike P-Noy and all the nationally elected Senators and District Representatives, the SC is easily isolated.

It isn’t surprising that there were two members of the clergy who immediately came to the aid of the SC after the TRO was announced. They were Fr. (Tito) Joaquin Bernas, SJ and Fr. Ranhilio Aquino of the San Beda Law School. The two of them were merely being consistent with their continued defense of the Gloria Macapagal Arroyo – CJ Renato Corona embattled interests. Their being consulted by media despite their track records reinforced the perception of some quarters that certain media harbor a point of view that they want to promote even before the facts are gathered.

As Philippine laws have been patterned after American laws, it would be good to refer to the celebrated case of Federal District Judge Walter Nixon versus the United States, which is a similar legal conflict to that of our SC and Senate Impeachment Court now.

From the United States Supreme Court Media, we secured the following facts of the case: “Walter Nixon, a Federal District Judge, was convicted of a felony, making false statements to a grand jury. The House of Representatives voted three articles of impeachment; impeachment in the Senate followed. In accordance with Senate Rule XI, a Senate committee heard the evidence and reported its findings. The full Senate convicted Nixon and sought to remove him from office. Nixon challenged Senate Rule XI in Federal Court on the ground that the rule violated the impeachment clause of the Constitution, which declares, “the Senate shall have the sole Power to try all Impeachments.” The lower courts deemed the issue non-justiciable and declined to intervene in the dispute.”

By a unanimous 9 – 0 decision, the US Supreme Court ruled in favor of the United States. In a nutshell, the decision stood on Legal provision: Article 1, Section 3, Paragraph 6.

It stated: “A unanimous Court held that the question of whether or not the Senate rule violated the US Constitution was non-justiciable since the Impeachment clause expressly granted that the “Senate shall have sole Power to try any impeachments.” The clause laid out specific regulations that were to be followed and as long as those guidelines were observed the courts would not rule upon the validity of other Senate procedures regarding impeachments. Chief Justice William Rehnquist observed that while the Supreme Court was the “ultimate interpreter of the Constitution,” a matter would be deemed non-justiciable when there was “a constitutional commitment of the issue to a coordinate political department.”

What weakens the SC position in this issue is that it appears to be protecting its Chief Justice and has overlooked three exemptions in the past when the SC allowed the opening of foreign currency accounts. The SC should utilize the face saving mechanism of revoking its highly controversial TRO upon appeal by the Solicitor General.

The SC cannot realistically expect the Senate to yield its sole and exclusive mandate to try impeachment cases. That’s asking too much from a country that had already felt defiled by the midnight appointment of the CJ — a wrong declared as legal by more or less the same Associate Justices who voted to issue the TRO. This is reversing the mandate of a president by 15 million voters to pave DAANG MATUWID (Straight Path) and eradicate our culture of corruption.

When push comes to shove, the SC will find just how fragile its non-political character is. In case the SC Justices are not well grounded on what the masses are thinking when it comes to this impeachment trial — they should realize that they’re up against a highly trusted president in an issue the masses have long complained about, the double standard of justice in our country.

* * *

Chair Wrecker e-mail and website: macesposo@yahoo.com and www.chairwrecker.com

By Tony Meloto

Davos 2012 was a contrast of many worlds that the World Economic Forum was valiantly trying to bridge.

I was there hoping to be an active contributor on behalf of the poor but I ended up mostly as a spectator to superpowers who were groping for clues on how to keep poverty out of their door.

As the newcomer to the forum, it was wise to simply listen and learn from the successes and failures of those who developed ahead of us. I was there with a clear agenda: to promote the best interest of the poor and help address poverty wherever they exist.

Understandably, it was a Eurocentric event. From Merkel to Lagarde to Cameron, many were trying to sort out the debt mess -over borrowing, overspending, lack of growth, rising unemployment – and finding ways to respond to the immediate threat of a currency collapse. Those of us from the East were quiet as European experts were battling with Americans but we were eager listeners nevertheless since we are all enmeshed in this mess. Besides lasting solutions to the problems of the West perhaps could also be found in our expanding markets. As part of the WEF family we are all in this together, “committed to improving the state of the world.”


From my observation, not many were ready yet to listen to the poor. Conversations were mostly top down, when what was needed in the gloomy mood of debt woes and recession blues were more hopeful voices from the ground. This was the ironic spectacle in Davos – rich countries are depressed, while hope is rising in the Third World where many no longer want to stay at the bottom after languishing there for generations. The brain often forgets that the heart is more intelligent, passionate and resilient. And those at rock bottom have hearts that can change their lot when the moment is right.

For Asia, the moment is right.

While entitlement is often the comfort zone of those who have lost the power of imagination, aspiration is the driver of innovation, invention and creation and there’s plenty of it in the rising poor and the restless young who are now connected to a much bigger world of dreams and possibilities via social media and mobile phones.

The vital role of the social entrepreneur in society is to be a hope-builder.


Old capital traditionally sees the young simply as market, not definers and navigators of their more complex future. But game-changers are mostly young. Those who brightened Davos were the tech pioneers who were like rock stars to many admirers though they conducted themselves rather ordinarily. Unconsciously, I was a fan too, of the power of their genius and the possibilities of their innovation to create new paths to goodness. I guess at 62 I still wanted to move like Jagger – who was there – never wanting to lose the energy that renews life and makes it meaningful. The older I get the more I want to work with the young who teach me how to dare.

I spent most of my off sessions with the Young Global Shapers who warmed my heart with their hot ideas and can-do spirit in the cold and snow of the Swiss Alps. I was particularly energized by the brilliance of the Philippine team of social innovators – Bam Aquino, Mayor Carmela Alvarez, Anna Oposa and Lynn Pinugu – who gave credence to the recent forecasts that the Philippines will be the 16th biggest( by HSBC, or conservatively at 17th by Goldman Sachs) global economy by 2050.

I enjoyed the session of Bill Gates with Mexico’s President Calderon but it would be exciting in the future to see him moderate the most innovative young global shapers from each continent to guide them about business growing a heart early.

They will listen to those who made huge money and gave it away for the sake of a better humanity like Gates and Buffet.


They must invest more in social entrepreneurs in scaling and sustaining good works as a baseline for sound business practices.

Davos is still the world’s best platform for convergence and conversation among a multitude of vested interests. What I felt it needed was more transcendence and audacity on the part of those with the biggest global stakes. Perhaps it is still early in the game for the North to see the South as partners in creating equitable market sustainability and a better humanity, but there’s no other or better way. Of course the desire to do good is there and growing; there were many corporate leaders present who believe that helping people out of poverty is good for the heart, the pocket and the planet. Shared value creation was core in most sessions.

Nestle boss and old friend Nandu Nankashore was there – in a passing conversation we agreed to check the possibility of working together to make the Philippines a net exporter of coffee by 2020 since it grows the best beans in Asia, and the nearly 100 million local market prefers coffee over tea and we appreciate it grown in our country to benefit our farmers and producers.

Philips Electronics Benelux CEO Drs Harry Hendriks wants the Asian Country Heads of his company at the Bangkok WEF in May to have their ears on the ground and listen more to social entrepreneurs who will shape the mood of the market in the coming decade. It is inevitable that the new generation of consumers will demand more ethical products and profit that will create a more caring environment.

I was unable to reach Shell CEO Peter Voser, to personally thank him for 6 years of productive partnership in creating sustainable communities for
victims of calamities and conflicts in our vulnerable areas and for their support In helping us build the first of 24 GK Village Universities for social innovations in the Philippines.

Visionary leaders invest in our dream to end poverty for 5 million families in our country by 2024, not just see our cause as another CSR project.

Its simply about giving the best to the least as an act of shared humanity and wise business sense.

In a constellation of big stars, Muhammad Yunus shone brightest among social entrepreneurs because he succeeded in his big idea for small people with massive replicability and financial sustainability. In the two conversations I had with him, he was peacefully listening.
Great men know how to listen.


It was difficult to keep my mind from wandering as German Chancellor Angela Merkel was talking about tough times in Europe at the opening session on January 25. My spirit was with my President, Benigno S. Aquino III, who was building hope in Mindanao with our Gawad Kalinga volunteers – concretely, 10,000 homes for 50,000 flood victims – using start -up funds in the biggest single CSR in the country from the local food conglomerate, San Miguel Corporation.

It was a contrast in irony.

I was cold in plush Davos, listening to a global power talk about depression, while my President at home was hot in the sun with the poor showing them the face of hope after a tragedy. I guess my President’s energy was buoyed by the recent survey in the Philippines that 95% of the population had hope for 2012 and 83% approved of his effort to rid our institutions of corruption, including the Supreme Court.

Our government now strongly supports social entrepreneurs because they are a credible and effective bridge to the poor to help them become un-poor. In our upside-down view of development, bottom of the pyramid wealth creation is the best economic platform for enlightened capitalism where no one is left behind. This is true people power in the Philippines. This is our path to progress.


There’s also “incredible India,” “truly Asia Malaysia,” and many others. “Its more fun in the Philippines” now saving the seas and serving the poor in this open season for social tourism.

These travel slogans not only reflect self-promotion but a regional aspiration to build nations. Solidarity and harmony can be achieved with shared aspirations without a superpower mentality.

Today, I’m home in Manila with my little cappuccinos (the Daddy of three of my seven grandchildren is from England who built his social enterprise in the Philippines), happy to see them healthy and safe. Tomorrow, I will be with the Daddies of their playmates to build the irrigation system of their farm village which is now home to former flood victims and rebels.

Davos is about them.