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GMA’s firewall is crumbling

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It should’ve been clear to all that the Aquino administration’s ability to prosecute for graft and corruption Gloria Macapagal Arroyo, her family members and close associates, or the private businessmen and individuals that colluded with them is hampered by a “firewall” she put in place in her last days in office.

The biggest firewall is in her Supreme Court appointees and House of Representatives seat now about to crumble brick by brick starting with the court’s decision voting 7-5 to give go-signal to the impeachment of Ombudsman Merceditas Gutierrez. With two justices partially concurring with the majority and one abstaining, the court threw out Gutierrez’s petition seeking to declare unconstitutional the impeachment proceedings against her in the House.

Midas Marquez, the court’s spokesperson, said that the court dismissing en banc the petition of the Ombudsman effectively allows the House justice committee to proceed with the impeachment. Marquez added the ruling was proof of the justices’ independence from any individual or political group; hence, it’s not what many say an Arroyo court.

Written by Senior Associate Justice Conchita Carpio-Morales, the ruling was issued exactly five months after the tribunal barred the justice committee from hearing two impeachment complaints against Gutierrez. Those who dissented all GMA-appointed were Chief Justice Renato Corona and Associate Justices Teresita Leonardo-de Castro, Arturo Brion, Diosdado Peralta and Lucas Bersamin who GMA and supporters may cling to as a firewall when GMA herself or family members inevitably face charges of amassing ill-gotten wealth.

Meanwhile, someone should advise Rep. Mikey Arroyo to be careful with what he’s wishing for. He’s reported of challenging Sen. Antonio Trillanes IV and the rest of the Senate to broaden their inquiry into purported corruption in the military to see if the trail would lead to the former Commander in Chief. This is a challenge the Senate can’t ignore.

But rather than do the investigation itself, the Senate should refer the matter to the DOJ already investigating graft and corruption charges against GMA that should include her husband, Atty. Jose Miguel Arroyo, immediate relatives Reps. Mikey, Dato and Ignacio Arroyo and close relatives. Sen. Trillanes may add himself as a complainant with additional charges, more or less, to wit:

1. For violating Bangko Sentral rules and the Anti-Money Laundering Law in the transfer of foreign exchange overseas manifestly out of proportion of their legitimate income used for real estate, foreign securities and other property acquisitions overseas and foreign bank accounts.

2. For perjury and falsification of statement of assets, liabilities and net worth (SALN) and tax evasion that can be probed by the BIR joint action pursuant to RA 10021 allowing the BIR to exchange tax information with foreign countries’ tax authorities of with which the Philippines has tax treaties, e.g. the Internal Revenue Service (IRS) of the United States. Moreover, an accounting firm such as SGV & Co. may probably do forensic audit whose cost is chargeable to the person concerned to probe that the growth of assets and net worth is beyond the realm of statistical probability; hence, could’ve come only from the proceeds of corruption.

3. For forfeiture pursuant to RA 1379 in favor of the State of real estate, securities, precious metals and other assets including monies in local and foreign bank deposits manifestly out of proportion of their legitimate income which can be probed by forensic audit.

I wish to believe what Secretary Leila de Lima reportedly is considering as extensive investigation into military corruption that would go beyond the testimonies of the whistle-blowers, retired Col. George Rabusa and former government auditor Heidi Mendoza would include finally appointing Pamusa the DOJ’s and/or PCGG’s attorney-in-fact.

Let me reiterate with unmistakable clarity that Pamusa is a U.S. anticorruption entity and can ask as in fact it’s authorized by the USDOJ to ask the cooperation of the FBI and other federal agencies including their foreign counterparts to help the search and recovery of illicit assets with which the Arroyos and other Filippinos can be charged for committing serious U.S. crimes on American soil, among others: wire fraud, money laundering, racketeering, foreign corrupt practices and conspiracy.

It should be emphasized the U.S. has precedents of transnational enforcement of its laws such as when U.S. troops arrested Panama’s former President Manuel Ortega in 1989 to stand trial for drug trafficking and money laundering. This power is reinforced meantime by the following international cooperation agreements to fight corruption, to wit:

a. The 1997 OECD Anti-Bribery Convention makes it a crime in the country of a business proponent to promise, offer, or give bribe to an official of another country’s government, the object of business transaction, e.g. Chinese ZTE officials and their reported bribery to Filipino officials for the ZTE-NBN contract.

b. The 2002 OECD Agreement of Exchange of Information on Tax Matters empowers contracting parties to provide assistance through exchange of information that’s foreseeably relevant to the administration and enforcement of the domestic laws of the contracting parties. Such information shall include information that’s foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters.

c. The 2005 UN Convention Against Corruption (UNCAC) particularly these excerpts from its international cooperation provisions: “Countries agreed to cooperate with one another in every aspect of the fight against corruption, including prevention, investigation, and the prosecution of offenders. Countries are bound by the Convention to render specific forms of mutual legal assistance in gathering and transferring evidence for use in court, to extradite offenders. Countries are also required to undertake measures which will support the tracing, freezing, seizure and confiscation of the proceeds of corruption.”

d. The 2009 G20 London Summit Agreement has a provision ending bank secrecy although some countries may opt not to observe it due to their Bank Secrecy Law. Under pressure though of G20 members and non-members that agree to end bank secrecy, the Swiss Government agreed to reveal to the IRS the names of 4,450 Americans holding offshore accounts at UBS. Similarly, Liechtenstein agreed to a tax-information sharing treaty with the UK. This agreement is expected to serve as a model for tax treaties PH may enter into with other countries. Also, the OECD, the international institution leading this transparency drive, announced that the British Virgin Islands and the Cayman Islands have implemented their compliance with the internationally agreed tax standards by signing 12 bilateral tax-information exchange agreements. They are the fifth and sixth jurisdictions to do so.

Switzerland meanwhile signaled a major change in its long-time maintenance of strict bank secrecy regime by saying it would accept the international standards on tax-information sharing and would negotiate bilateral treaties to this effect which the BIR should exploit if the Philippines had no tax treaty yet with Switzerland.

By Frank Wenceslao




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