‘Biggest what of the century’?
“BIGGEST JOKE of the century,” according to a recent banner headline in this newspaper for an article on the Supreme Court’s decision that Marcos’ ally Eduardo Cojuangco’s purchase of 20 percent of San Miguel Corp. shares in 1983 was legal and therefore wasn’t ill-gotten wealth.
The phrase was really an uncalled-for hyperbole made by senior associate justice Conchita Carpio-Morales in her dissenting opinion: “The argument that Cojuangco was not a subordinate or close associate of the Marcoses is the biggest joke to hit the century.”
Justice Carpio-Morales may have thought she was being clever in using that phrase. However, she in effect portrayed her nine Supreme Court colleagues, who voted for Cojuangco’s position, as gullible fools. Quite unfairly, as none of her colleagues in the Court argued that Cojuangco was not Marcos’ close associate. Not even the tycoon in fact, as he publicly had said that he was proud that he was at Marcos’ side to the dictator’s very end. What he had been denying is that his purchase of San Miguel shares violated Philippine laws.
Read the Supreme Court’s 25,000-word decision (available at its website), and rather than the biggest joke, it points out the biggest government boo-boo of the century.
Rewind to the 1980s. Other than Marcos wealth, one of the biggest cases the late President Corazon Aquino’s Presidential Commission on Good Government vowed to pursue was the alleged ill-gotten wealth of her cousin Eduardo Cojuangco, the overlord of the coconut industry during Marcos’ time.
Cojuangco owes the Ayalas big-time for acquiring the country’s biggest industrial firm. A squabble at that time broke out between cousins Jaime Zobel de Ayala and Enrique Zobel, who jointly led Ayala Corp., which had the controlling shares in San Miguel. Jaime backed Andres Soriano’s management of the firm, even if his shares were miniscule compared to Ayala Corp.’s. For some reason, Enrique hated Soriano’s guts, and wanted to take over, even publicly accusing him of mismanaging the company.
The clan’s matriarch Mercedes Zobel McMicking got mad over her nephews’ bickering and ordered them to get Ayala Corp. out of San Miguel altogether. Ever the clever businessmen looking for the best deal though, they offered the shares to Cojuangco, sold them as a controlling block, and therefore at a high premium over its market value, thus generating a windfall for the clan.
And this was the clever Cojuangco. To raise the money to purchase the shares, he was “widely believed” to have contracted loans from the United Coconut Planters Bank (UCPB), the capital of which were generated from a Marcos-imposed coconut levy. Cojuangco was then president of UCPB, now Senate President Juan Ponce Enrile, its chairman.
However, the PCGG’s lawyers in the nearly two decades that the case ran failed to submit to the Sandiganbayan and to the Supreme Court bank documents to show that Cojuangco indeed took out loans from UCPB to fund his San Miguel purchase. It was an inexplicable omission, as the PCGG had taken full control of the bank during Aquino’s revolutionary government.
“The Republic adduced no evidence on the significant particulars of the supposed loan, like the amount, the actual borrower, the approving official, etc.,” the Court decision said. The Court even noted that the PCGG counsels were reminded several times in the pre-trial stages by the Sandiganbayan to produce the documents and the witnesses to show that Cojuangco borrowed the funds from UCPB. They never did. It was as if you were accused of defaulting on a loan, but the bank can’t even produce the documents that you borrowed from it.
In his dissenting opinion, Associate Justice Arturo Brion was in fact so mad at the PCGG lawyers’ incompetence that he recommended a full-blown investigation and their prosecution: “The government lost because of the acts of its counsel that amounted to no less than giving the claim away through omission, inaction or precipitate and ill-considered action that, at the very least, should be considered gross negligence of counsel in handling the government’s case.”
The shares Cojuangco bought from the Ayala Corp. was worth $49 million in 1983. They are now worth more than $2 billion, or P90 billion.
It’s the biggest case of a government’s incompetence. The Republic lost P90 billion because the Aquino-era PCGG and its lawyers were so stupid or so incompetent. Or did they, as a conspiracy-theorist friend tells me, deliberately lose the case for the presidential cousin, who reciprocated by running for president in 1992, dividing the Marcos loyalist forces and effectively foiling Imelda Marcos’ bid for the presidency at that time?
The case was primarily prepared and pursued by the PCGG during President Cory’s term, and it was headed by elders of unquestioned integrity, consecutively: Jovito Salonga, Ramon Diaz, Mateo Amando Caparas and David Castro.
That P90 billion certainly dwarfs the P900 million involved in the plunder charge against former President Estrada (for which he was convicted), the P300 million in the case against Maj. Gen. Carlos Garcia, and even the P530 million in that ridiculous case—obviously in aid of senatorial ambitions—recently filed by a Cory-era official against former President Gloria Arroyo involving funds for OFWs’ health insurance.
With Congress’ penchant for investigating alleged plunder cases, shouldn’t they investigate this biggest government blunder of the century?
It’s also a cautionary tale. Integrity and a crusading attitude can take things only up to a point. Competence and intelligence are as important. Or are the integrity and crusading spirit mere put-ons? Somehow, this reminds me of a more contemporary situation.
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