Is SALN declaration vital to good governance?

Manila, Philippines -  Inside the blue-carpeted session hall of the Senate, on a rainy Tuesday afternoon, a man named Renato Corona was convicted for betrayal of public trust.

His sin? He did not disclose his millions of dollar deposits in his Statement of Assets, Liabilities and Net Worth (SALN). Corona admitted to owning $2.4 million in dollar deposits but cited the Foreign Currency Deposit Act, which provides confidentiality to dollar accounts as the reason for his non-disclosure of his greenback assets in his SALN.

Corona claimed he was standing on legal grounds but failed to convince the 20 out of 23 senators acting as presiding judges in the impeachment court.

The historic impeachment trial has put the spotlight on government employees and officials’ compliance with the SALN.

The SALN is supposed to be a declaration of a government employee’s assets including land and vehicles and liabilities such as loans and debts.

According to the Official Gazette, the SALN shall also include one’s business and financial interest and that of his or her spouse and of his or her unmarried children under 18 years old and still living in their parents’ households.

The 1987 Constitution and Republic Act 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees require the submission of a SALN.

“It includes a waiver authorizing the Ombudsman or his authorized representatives to attain documents that may show assets, liabilities, net worth, business interests, and financial connections from all appropriate government agencies,” according to the Official Gazette.

Furthermore, the Constitution mandates that all public officials and employees, whether regular or under temporary status, are required to file a SALN.

“A public officer or employee shall, upon assumption of office and as often thereafter as may be required by law, submit a declaration under oath of his assets, liabilities, and net worth,” it said.

Essentially, the SALN should include “real properties and their acquisition costs, assessed value and current fair market value. It must also include property and acquisition cost as well as all other assets such as investments, cash on hand or in banks, stocks, bonds, liabilities and all business interests and financial connections.”

The public official must also identify and disclose all his relatives in civil service.

“It shall be the duty of every public official or employee to identify and disclose, to the best of his knowledge and information, his relatives in the government in the form, manner and frequency prescribed by the Civil Service Commission,” according to the Official Gazette.

But SALN violations are so rampant, according to experts interviewed by The STAR.

Corona’s non-disclosure of his dollar assets in his SALN paled in comparison with the many violations committed by other government employees.

In an interview with The STAR, the Department of Finance’s Revenue Integrity Protection Service (RIPS), the department’s anti-corruption unit, said the schemes employed by government workers to conceal their wealth have become more and more sophisticated.

RIPS is the government agency created in 2003 under Executive Order 259 to “detect, investigate and prevent corrupt practices involving officials and employees belonging to the revenue generating agencies under the jurisdiction of the department, including the BOC and the BIR.

As of April, RIPS has so far filed 108 graft and lifestyle cases against 149 personalities and successfully secured 61 suspensions from office and 21 dismissals from service.

Overstating one’s assets

RIPS executive director Romeo Tomas said that based on the unit’s investigation on Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC) employees, one rampant form of SALN fraud is overstating one’s assets.

This is to make it appear that the government employee has enough wealth even before he or she joined the government.

This is among the more sophisticated form of SALN violations, which is common within the two revenue agencies, notorious for their rampant corruption.

Tomas said the practice is that a government employee declares in his or her entry SALN – the SALN he or she is required to file within 30 days upon entering civil service – a bloated record of his assets.

One such case was against Manuel Relorcasa, a Supervising Customs Operations Officer who, according to RIPS, bloated his wealth to make it appear that even before he joined government, he already had real estate properties.

In its complaint filed before the Office of the Ombudsman on April 19, 2012, RIPS said Relorcasa declared in his SALNs from 2000 to 2010 that he owned a house and lot in Albay, which he supposedly acquired in 1980.

Upon investigation, however, RIPS found out that the property was already transferred to the Home Development Mutual Fund since July 2, 1999.

The Finance department unit also alleged that Relorcasa also claimed to own other real estate properties in Antipolo and Baras, Rizal.

But a verification by RIPS with the Assessor’s Office of the respective jurisdictions, however, revealed that there were no real properties in the respondent’s name.

Kamag-anak incorporated

Tomas said this is not the only common and rampant violation of the SALN.

Among corrupt government officials, another favorite scheme is the use of relatives, law offices and even foundations as fronts for their properties.

“Usually, they put the properties in the name of a sibling, their mother or a trusted friend,” Tomas said.

What RIPS does is to do surveillance, through its field agents and investigating teams, on the government officials suspected of amassing illegal wealth to ascertain their ownership of mostly real estate properties or luxury vehicles, Tomas said.

However, Tomas concedes that corrupt officials have become so sophisticated with their methods of corruption.

Lottery

Another method, this time unearthed by the Office of the Ombudsman, is pretending to have won the lottery.

This is an easy escape, Assistant Ombudsman Asryman Rafanan told The STAR, because there is no question than can be raised on its ownership.

He said that there was one case wherein the anti-graft body discovered that a government official had declared that he won the lottery.

But did he or did he not win?

The Office of the Ombudsman said this could no longer be pinpointed but upon investigation, witnesses said that the government official merely bought with the same cash value or more, the price of a winning Lotto ticket from a neighbor.

“He gave the winner the cash value in exchange for the winning ticket and redeemed the prize himself,” said Asryman.

Non-disclosure of properties

While there have been no similar non-disclosure cases such as what Corona has done with his dollar deposits unearthed by RIPS in the recent past, Tomas said non-disclosure in general is prevalent.

There is for instance a Customs Collector who did not declare in his SALN his complete address.

For instance, instead of declaring the complete address the collector merely put the name of his city of residence.

However, upon investigation and through photos taken by RIPS investigating teams showed his resident in a posh exclusive village in the country. Further verification through local government officials also pointed to the collector’s ownership of the property.

Declaring properties as part of their inheritance is also common among government officials.

“There are some officials who declare their properties as part of their inheritance even if this is not the case or this is not yet the case because their parents are still alive,” Rafanan said.

Customs, BIR

Of the different government agencies, the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) have the most number of respondents of graft and corruption including SALN violations.

In 2007, the Ombudsman, through its fact-finding units, investigated officials of the BOC, the BIR, the Department of Public Works and Highways, Department of Finance and the Local Government Units for unexplained wealth.

Latest available data from the Office of the Ombudsman showed that the positions of respondents with the largest amount of unexplained wealth include Customs Operations officers with P37.2 million in 2007 alone and Revenue Officer with P15.6 million for the same year.

Other notorious officials belonged to local government units.

Provincial treasurers and city treasurers have amassed ill-gotten wealth of P20.6 million and P18.4 million, respectively, in 2007 alone.

“The BIR and the BOC are among the agencies that are notorious for their deeply-entrenched corruption,” Tomas said.

Flaws and what can be done

There is no question that the SALN Law is potentially a good tool in preventing government officials from amassing ill-gotten wealth, experts said.

However, experts agree that there is a need to revise the implementation of the law to avoid vague or ambiguous reporting.

Some officials, although probably with no intention of concealing their properties simply report to owning “various” properties instead of providing full details of their assets such as cars or residential assets.

The CSC has earlier announced the use of a new SALN form but the commission shelved this after various groups said there was no consultation among different sectors.

But last March, Congress asked the CSC to defer the implementation of the commission’s resolution 1100902.

This resolution, issued in July 2011, provides for the guidelines in the use of the revised SALN form for year 2011.

Acting on the request of the Senate and the House of Representatives, the CSC agreed to undertake a more thorough and comprehensive review of the issues raised, as this would greatly affect the proper filling out of the revised SALN form.

Under the revised SALN form, supposedly effective last April, government employees much put their other sources of income, derived from the practice of a profession or business.

Filers must also include their income taxes paid the previous year and the total amount of one’s personal and family expenses.

These personal and family expenses include trips abroad.

The CSC required only a general statement for the year and its corresponding amount.

The commission said the revised SALN form was envisioned to properly implement the Anti-Graft and Corrupt Practices Act or Republic Act 3019 and the Code of Conduct and Ethical Standards for Public Officials and Employees or RA 6713.

The CSC also said that the committee that recommended the new SALN form was composed of representatives from the Office of the President, Ombudsman, Commission on Audit, Supreme Court, Department of Justice, Sandiganbayan, and both Houses of Congress.

But government officials objected to the new features of the form, particularly the requirement to declare all sources of income, family and personal and family expenditures as well as taxes paid.

Some government workers said some terms required under the new SALN form may be difficult to accomplish. These are conjugal property, tangible assets, and intangible assets.

Employees from the Bureau of Customs (BOC) were among the first to ask the CSC to junk the new SALN form.

In a position paper sent to CSC chairperson Francisco Duque before the supposed April 2012 implementation date of the new SALN form, the Bureau of Customs Employees Association (BOCEA) said the new form violates the basic rights of government employees.

BOCEA president Romeo Pagulayan said under the new SALN form, government employees are required to provide information that are too personal.

“The information that you wish to extract from us, government employees, are too personal that, if we will comply with filling-up the new form, will expose us to abuse of our basic constitutional rights as we have mentioned above. It may also expose us to the charge of perjury since the SALN is under oath,” BOCEA said in its position paper.

The BOCEA national leadership strongly objects to the use of the new form for including our personal and family expenses and other sources of income (including interest income) for violation of our right to due process, right to privacy, right against self-incrimination and the Bank Secrecy Law,” BOCEA said in its position paper.

The group clarified that while they not against changes in the SALN, the revisions should “also adhere to our basic rights as government employees and as citizens of the republic as provided for by the Constitution.”

 “Hence, we demand for the setting aside of the new SALN form and to revert back to the old SALN form which is more humane, fair and reasonable,” BOCEA said.

Despite the deferment, the CSC said that those who have already used the new SALN form are deemed to have complied with the required submission of the SALN.

A ranking Finance official said that as it is, some requirements in the existing SALN are already too difficult to comply with.

These include the requirement to use the current or assessed value of their properties.

“As it is now, there are requirements that are difficult to comply with,” Finance Assistant Secretary Teresa Habitan said. Nevertheless, experts maintained that the SALN is a device that can be effective in the government’s fight against corruption if used properly.

Revenue Commissioner Kim Henares said in a recent interview that SALN is a device to determine the real assets of government employees.

“It is an effective tool to monitor allegations of unexplained wealth especially in lifestyle cases,” Henares told The STAR.

It can also be used to look into the business interests of government employees.

Justice Undersecretary Francisco Baraan III agreed that SALN helps in government efforts to be transparent.

He also said that is especially useful for the Office of the Ombudsman when they need to investigate government officials.

But Nepomuceno Malaluan of the transparency watchdog Action for Economic Reforms (AER) said what is needed is better compliance of the SALN Law.

He said the move of the CSC to require the reportorial requirements of the SALN is good if it is implemented.

Lessons from the impeachment

Malaluan said that one of the “positive” things that emerged from the historic trial of ousted chief justice Renato Corona was that it raised the standards of SALN reporting.

“Certainly, the impeachment process has elevated the standards and norms that were problematic before as far as the impeachment is concerned,” he said.

He said that the impeachment process showed that failure to declare truthfully one’s SALN is an impeachable offense. “As a result, voluntary compliance may improve,” Malaluan said. But he conceded that guidelines on SALN reporting are really vague.

“The guidelines do not tell you. Some submit very detailed very general statements but some provide very ambiguous answers,” he said.

The government itself imposes restrictions that make it difficult for the public to gain access to SALN of employees and officials, he said.

One such move is the CSC’s imposition of a P200 fee per every copy of the SALN.

AER, as an advocate of transparency and governance plans to question this regulation.

“We will be questioning that legally and ask them to reconsider it,” Malaluan said.

SALN for transparency

Malaluan said AER is prepared to help in the process in pushing for better reporting, use and access to the SALN.

The cooperation of all branches of government is also required to achieve this goal.

Assistant Ombudsman Rafanan said it would be difficult to check the compliance of all government agencies.

As a possible improvement, he said that the respective Human Resource departments in the different government agencies must already check the compliance of their employees upon submission of their SALN forms.

It would also be good if they include additional or supporting documents such as land titles, bank statements, certificate of ownership of stocks and bonds and other assets.

“This would deter any violations of the SALN Law at the level of the Administration Office,” said Rafanan.

Indeed, as experts have said, SALN is a good tool to improve transparency in government and help curb corruption but as AER’s Malaluan said what is important is to improve compliance.

And if and when this happens, maybe President Aquino’s Tuwid na Daan governance platform may actually happen.