Martinez goes on leave

MANILA, Philippines - Embattled Commissioner Jesus Martinez filed a leave of absence from the Securities and Exchange  Commission (SEC) yesterday on the eve of his retirement and as the depth of his alleged role in the Legacy mess was revealed.

Martinez, who is slated for retirement today, stands to lose all his benefits and may even serve time in prison if he is found to have covered up Legacy’s financial troubles in exchange for lavish presents including a house and lot.

A ranking SEC official said Martinez did not go to work yesterday and instead filed a leave of absence. Martinez is also on the hold-departure list of the Bureau of Immigration. President Arroyo ordered him on Tuesday to go on leave.

At the resumption of the Senate hearing on Monday on the state of the pre-need industry, former Legacy chief operating officer Carolina Hinola revealed Martinez’s anomalous dealings with Legacy Group chairman Celso de los Angeles. She said the pre-need firm bought a house in Parañaque City for P3.2 million. The ownership of the property was later transferred to a son of Martinez.

Apart from this, the Legacy Group in 2006 issued a check amounting to P1.465 million to Martinez as payment for a Ford Expedition it acquired reportedly from Martinez’s son.

SEC chair Fe Barin, who is herself being pressured to resign, said the attacks on the SEC as a result of the Legacy scandal could scare away investors.

She insisted there is no reason for her and the other commissioners to resign, but it is up to President Arroyo to decide on their fate.

Barin said the SEC has been doing its job but the attacks on its credibility might mislead potential investors into thinking that the country is not a safe place to sink in funds.

She pointed out the pre-need industry accounts for less than 10 percent of SEC operations.

Executive Secretary Eduardo Ermita also came to Barin’s defense, citing her track record in government service over the last 53 years.

He said that while the Palace fully respects the opinions of lawmakers who demand her head, due process must be followed.

“While we have respect for the Senate, our feeling is that we don’t see any reason for us to resign and we leave our fate to the President as appointing authority,” Barin told a news conference at the Palace.

“We have to go on operating. Of course on the matter of whether there should be an investigation, this should go unimpeded and we welcome the chance to air our side,” she said.

She said she has not yet spoken with Martinez since Monday’s hearing but he has indicated that he is on sick leave.

Ermita said the investigations being conducted by the Department of Justice and the Presidential Anti-Graft Commission (PAGC) would continue even after Martinez’s retirement.

“He (Martinez) can still be sanctioned if the allegations are proven. The criminal aspect will be handled by the Secretary of Justice,” he said.

Barin said she and other SEC officials are open to lifestyle checks by the PAGC.

Barin also admitted that there had been rumors of SEC commissioners engaging in anomalous dealings with pre-need firms, but no complaints had been filed.

“There were talks that this firm was favored because it was close to a certain official who was not mentioned,” she said.

She said the SEC has been pushing for the passage in Congress of the proposed Pre-Need Code.

She declined to comment on whether the allegations against Martinez were true.

“We’re not deserting Commissioner Martinez but all the allegations were specifically directed against him,” Barin said, adding that based on the disclosures in the Senate hearing, “the impression that there is some impropriety will hold.”

“It’s difficult to judge someone’s action because you’re not privy. While it appears to you there’s some impropriety, the person himself should be given a chance to be heard,” she said.

Barin said she would soon be turning 75 and in all the 53 years she has been in government, she has never been involved in any controversy.

“I hope it (her career) doesn’t end this way,” she said.

Resign just the same

“Even without the Martinez scandal, Barin and the other SEC commissioners should have resigned for allowing another CAP and Pacific Plans incident to happen right under their noses,” said Bayan Muna Rep. Teddy Casiño.

“Their failure in preventing Legacy from victimizing thousands is unforgivable, given their previous failures. The Martinez exposé merely seals their fate,” he said. 

“They should all resign for their failure to protect the public interest and for allowing a crook like Martinez to operate among their midst,” Casiño added.  

“Refusing to resign on the strength of a presidential appointment is the weakest rationalization in the face of controversy,” said Bukidnon Rep. Teofisto Guingona III.

“This administration should learn to operate with some delicadeza. If Barin does not have any of that, Gloria Macapagal Arroyo should at least feign it and ask her appointee to step down,” he said.

“The rights of two million plan holders are at stake here,” he added.

DOJ panel

The Department of Justice formed yesterday a panel of prosecutors to look into the alleged involvement of Martinez and other SEC and BSP officials in the Legacy mess.

As this developed, the Philippine Deposit Insurance Corp. filed syndicated estafa charges against De los Angeles, his son Martin Nicolo, and several Legacy officers.

Justice Secretary Raul Gonzalez said comprising the panel are senior state prosecutor Aileen Marie Gutierrez as chair and state prosecutors Romeo Galvez and Ramonchito Mendoza.

President Arroyo on Tuesday ordered the DOJ and the PAGC to conduct separate inquiries into allegations that Martinez covered up Legacy’s financial travails.

The panel is separate from the task force handling the cases filed by the Bangko Sentral ng Pilipinas against De los Angeles and other Legacy officers.

Meanwhile, Provincial Prosecutor Emmanuel Velasco, head of the task force, said it would ensure a speedy resolution of the Legacy case by barring “dilatory and prohibited machinations from either complainants or respondents during the conduct of preliminary investigation.”

He said they expect to wrap up their preliminary investigation by next month.

He said he has instructed prosecutors handling the cases against De los Angeles and other Legacy officers not to entertain “prohibited pleadings” and to simply stick to basic rules. This means respondents may answer charges by filing counter-affidavits on which complainants may comment. Respondents may again reply to the comment.

He said a preliminary investigation normally takes 30 days after the filing of complaint.

“They have to answer within the prescribed period. If they don’t, that means they have waived their right. We will resolve the issues based on the evidence on hand,” Velasco told reporters.

“There will be no extension whatsoever unless for very meritorious reasons,” he said, adding that respondents would be treated with fairness. “There will be no sacred cows here. If there’s evidence and we find probable cause, we will file a case with the court. If none, we will dismiss the case,” he said.

He said the preliminary investigation for first criminal case against De los Angeles and the Legacy officers filed by Indian investors would be held on March 20.

Deeper probe pushed

Senators Richard Gordon and Loren Legarda yesterday urged government investigators to also look into the culpability of the BSP for the collapse of Legacy, including its 12 rural banks.

“The BSP officials should be made accountable for the collapse of the rural banks. This is about trust. The BSP takes care of the integrity of the banks,” Gordon, blue ribbon committee chairman, said. 

“They (depositors) should have been given some protection,” he said.

“(The BSP) officials are the ones responsible. Why were they not able to monitor this?” he asked.

Legarda, for her part, said the SEC has been “flagrantly lax and extremely negligent” in performing its mandate of protecting the public against companies that solicit funds in trust, such as banks and pre-need corporations.

“The most blatant of these cases is that of the Legacy Group that has bilked hundreds of depositors and subscribers,” Legarda said.

“We will continue to pound on the DOJ for them to immediately file cases against Legacy officials, especially De los Angeles,” said Sen. Manuel Roxas II, chairman of the Senate Committee on Trade and Commerce, which is hearing the Legacy issue.

“All these are now in the hands of the DOJ because it will be the one which would file cases against Celso de los Angeles. We will watch them closely. We will not allow them to sit on the cases until the public forgets about them,” he added.

He exhorted prosecutors not to follow the path of the 2005 Task Force Against Bank Frauds, which until now has yet to file a single case against anyone.

“The question now is, how about Nanay Beth, Nanay Mila and the other victims? How about their savings?” 

He also assailed De los Angeles for accusing him of politicking. 

“This is about the victims who are desperate to get their monies back and who demand justice from those who stole from them,” he said. – With Paolo Romero, Edu Punay, Chrsitina Mendez, Delon Porcalla