If you join the PCGG, is it true you strike it rich?

Tropical storm "Caloy", turning into a typhoon as it churned into the South China Sea, left a trail of damage, deaths and drownings, but what can anybody do about Mother Nature’s rages?

On the island of Java in Indonesia, hundreds of thousands of farmers and their families on the slopes and in the foothills of towering Mount Merapi were yesterday forcibly ordered to evacuate by the authorities in Jakarta as that volcano began spewing forth lava and flame at its crest.

The late founding President Sukarno used to refer to Mt. Merapi in his speeches frequently. Once we flew to Bali with him from Jakarta where he welcomed Cambodia’s visiting ruler, Prince Norodom Sihanouk with a ceremonial Pendet dance in which 100 maidens swathed in gold converged on the grandstand in entrancing hip-wiggling, consummately graceful unison. In his speech, Bung Karno thundered: "This morning, we flew over Mt. Merapi – and I said to myself, O Merapi, thou art tall and powerful, but the spirit of the Indonesian people is higher and more powerful than thee!"

The old Bung decreed that when he died, they should place over his grave: "Here lies the tongue of the Indonesian people." What a tongue it was, put to every imaginable kind of use. Like Merapi, Bung Karno was volcanic in temper, and in the end his radical and extravagant policies proved disastrous to his nation, but in a true sense, through fiery rhetoric and hubris, he "created" the Indonesian Republic, as its motto said: Bhinneka Tunggal Ika (Out of Many, One – paraphrasing America’s "Unity out of Diversity").

Somehow, we may long for the kind of leadership that could galvanize our people into unity, not squabbling diversity. But for the present, it’s enough that we are progressing, slowly but surely, despite all the political noise generated by those whose ambition is to "save the nation" by installing themselves in power.

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The Presidential Commission on Good Government is once again making a lot of noise, eager to make its presence felt anew, and convince President GMA and her government decision-makers to keep that agency going despite the growing realization that it has outlived its writ and demeaned the purpose for it was created.

The PCGG – a misnomer if you ask me – was one of the first agencies created by President Corazon C. Aquino in 1986. During the over 20 years of its existence it has proven to be a literal "gold mine" for its officers and agents.

As of November 30, 2005, there were and continue to be 250 PCGG commissioners and officials designated as officers and directors in 52 corporations. Senate records show that the cost of maintaining these PCGG-designated officers and directors is fabulous. (How did they get those juicy positions? They "designated" themselves!)

This is, of course, of common knowledge – but, despite widespread criticism, the PCGG merrily barrels along.

The details were disgustingly highlighted during a budget hearing of the Senate Committee of the Whole last December 12, 2005, where it was disclosed that PCGG Chairman Camilo Sabio alone is Chairman or Vice-Chairman, or Officer-in-Charge of various United Coconut Planters’ Bank (Cocobank) subsidiaries and affiliated CIIF Corporations numbering twenty-nine (yes, 29).

Among these business firms are Cagayan de Oro Oil Company, Granaport Manufacturing Corporation, Iligan Coco Industries, Legaspi Oil Company, San Pablo Manufacturing Corporation, Southern Luzon Coconut Oil Mills, UCPB-CIIF Finance and Development Corporation, UCPB-CIIF Foundation, and other affiliated firms. Whew.

Together with Chairman Sabio, all the other PCGG Commissioners are no doubt equally "blessed.

Senator Juan Ponce Enrile, if you’ll recall, bluntly told Chairman Sabio during that dramatic December 12th budget hearing: "Many people have become rich when they sit as Commissioners of the PCGG at the expense of the companies sequestered". Enrile asserted "you do not want to release these companies, you do not want to finish the cases because there’s too much to be stolen."

There is a point that must be raised in relation to the anomalous situation of PCGG officials sitting as officers or directors of companies whose assets the Commission is mandated to preserve and conserve while under sequestration, and during the pendency of cases involving these companies before the Sandiganbayan (our anti-graft court). This is the apparent violation of the "conflict of interest" provision of Republic Act No. 6713, otherwise known as the "Code of Conduct and Ethical Standards for Public Officials and Employees of the Republic of the Philippines" when public officials tasked to preserve and conserve the assets of private corporations, especially those against whom the agency has filed cases before the Sandiganbayan, sit as officers and directors of the same firms.

Sanamagan. How can these officials remain true to their mandate as PCGG officials if they receive monetary benefits from the companies whose interests may not be parallel with those of the government?

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Incidentally, who is the PCGG official who has been frequenting casinos – gambling heavily on a regular basis? According to reliable sources, before he joined the PCGG, this gentleman never wagered more than a few thousand pesos at each night-time sortie. Nowadays, he places bets by the hundreds of thousands of pesos. Did he suddenly come into an "inheritance"?

This same fellow, PCGG sources have averred, is the reason a former PCGG Commissioner (a former Congressman from a Mindanao province) resigned in high dudgeon. What was the quarrel about?

Sure, there are and have been honest officials in the PCGG, past and present. But you remember the ancient story of Diogenes of Greece going about with a lantern to find an honest man. In the PCGG’s case you may need a searchlight.

It’s time the PCGG was dismantled. The true owners of the corporations and institutions that government agency of 1986 was supposed to "save" have been milked enough.

But the PCGG won’t dismantle itself. Who wants to kill the goose that lays golden eggs?

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I’ve received calls from many of my friends, asking me to identify the accounting firm I mentioned in my column last Friday. I hate to disappoint you guys who’re curious to know which group has been committing a lot of . .well, "infractions." I won’t name it just yet. Let me just say that the number of foreign professionals, like accountants and auditors, who’re illegally working in this country has reached alarming levels.

These professionals and their parent companies not only violate the Philippine Constitution by practicing in fields exclusively reserved for Filipinos. These insolent firms even rob our revenue-starved government of much-needed tax income.

For example, a big British-American auditing firm with ties to a company here and boasting extensive business dealings in our country is fast becoming a notorious bete-noir in other Asian countries. This firm recently incurred the ire of the Chinese government when it "reported" that China’s central bank has been misreporting that country’s bad loans ratio. The People’s Bank of China angrily retorted the allegation was "ridiculous" and that it "distorted" the real asset quality of China’s banking. The irony of it is that the auditing firm’s report "severely contradicted" its own assessment of a number of Chinese financial institutions.

What is more troubling, however, is this firm’s seeming propensity to dodge tax payments. A former partner has said this huge firm has been illegally operating here while evading tax payments on, at the very least, P120 million worth of income. The whistleblower revealed that the same firm has already been fined US $750,000 by the South Korean government over a similar tax-dodging offense.

In the case of the Philippines, this auditing firm’s P120-million income came from only one government financial institution. It also chalked up earnings from two other state-run firms, and it is likely it also skipped tax payments on the income derived from them. The "whistleblower" disclosed in records filed in court that despite its troubles in South Korea, this influential firm withheld paying taxes on the incomes of some of its ranking executives in the Philippines. Why such cheeky self-confidence? Does it consider our regulatory officials push-overs? Apparently, this auditing . . well, giant has little regard for the sovereignty of governments in our part of the world.

And to think that some of its bosses constantly preach on the importance of adopting fair accounting principles, while they are the ones breaching these same principles. Perhaps it’s the hypocrites of the world who get away with their "crimes" owing to their glibly covering up their sins with pious bluster.

In a way, it makes sense. The "experts" in the field of detecting "crimes" are often the most capable of committing the same crimes. After all, those familiar with accounting concepts and entries are very deft at concealing their own sneaky activities.

My worry is that we’re talking of global accounting giants, to use that term anew, which transact business with major clients in a number of countries. It may not be far-fetched to imagine that similar felonies or criminal schemes could have been pulled off in other countries with the same malevolent panache.

It’s tempting to dredge up the Enron Case as an example of what is going on, but so many pundits have used that comparison already it has almost become a bromide. Let us just ask ourselves the question: Who’s going to audit the auditors?

I remember all too vividly the frustration of Zamboanga’s late Mayor Cesar C. Climaco (who was murdered during martial law for being too blunt of speech and honest in his dealings).

When GMA’s late father, President Dadong Macapagal was Chief Executive, he appointed Climaco his graft-buster against Customs Crime. Climaco finally gave up in frustration, and returned to Zamboanga. He told me: "I thought I could fight graft and crime by setting up a Watchdog committee, but later discovered I had to appoint another Watchdog committee to watch the first group of ‘watchdogs.’

In the current case, we must not give up. We must try, try again.

We must take a closer look at the auditing frauds and their tax dodges.