Pinoy Watch Dog.com
By Dionesio C. Grava
In the allegory about the battle of the ants in “Brute Neighbors,” Henry David Thoreau, American author, poet, philosopher and historian drew on the unequal combat between the red ant against its twice bigger black counterpart, egging them on because, he said, “I have no doubt that it was a principle they fought for…”
Hardly is there any doubt, too, that Danny Pacaňa, a David of a whistleblower, has risked his life and spent much resources going after a very influential business titan for the sake of a principle. The possibility of reward money for his whistle blowing, if successful, would be a welcome bonus.
He reportedly filed tax evasion charges against Fortune Tobacco Corp.-Philip Morris Fortune Tobacco Corp. (FTCPMFTC) and Asia Brewery Inc. (BI) at the Bureau of Internal Revenue (BIR) on December 6. Pacana, a former regional auditor of the Tan-owned Allied Banking Corp., charged that the two firms owned by tycoon Lucio Tan used dummy companies to avoid paying taxes in the billions of pesos.
The question is whether Commissioner Henares of BIR and the president would be different from their predecessors who proved no match against the wily tycoon, Pacaňa said.
In response to a question about his safety considering the crime situation in the homeland, Pacaňa answered: “Dionesio, since I started this crusade for corporate integrity in 1987 and fight against corruption in my own little way, I considered myself dead already as I’m up against the Great Wall of China. This had been a lonely journey on a path less traveled. What keeps me breathing are people who look at the forest instead of just the tree.”
Pacaňa added that he always carry in his pockets a crucifix, a rosary and a whistle for protection. He also requested that should anything happen to him, “please shout to the whole world that no one else is responsible for it but Lucio Tan.”
FACE OFF AGAINST A TYCOON by Danilo Pacaňa chronicles the author’s true-to-life crusade that spans 15 years “against economic sabotage and corruption by tycoon, Lucio C. Tan, world’s 582 billionaire and 2nd richest in the Phils, in connivance with top government officials up to the level of the Presidency.” It is further described as an epic battle between David and Goliath in the modern era; the first and only book on corporate whistle blowing in the Philippines. The book is available in Kindle edition at Amazon.com for $8.99.
By all accounts, Lucio Tan, who reportedly quit school to seek his fortune in scrap dealing, found success in no time at all. The article entitled “Philippines’ most notorious crony capitalist comes to NZ” by Murray Horton showed that indeed Tan didn’t need a degree to achieve meteoric rise. Horton wrote: “As a young man he (Tan) moved into the tobacco industry, where he first met the young Congressman, Ferdinand Marcos. That was the key. In 1966, when Marcos was President, Tan founded Fortune Tobacco, which is now the country’s biggest tobacco company. It accounts for over half of all cigarettes sold in the Philippines. Fortune took off after Marcos imposed martial law, in 1973, thanks to generous tax and other incentives… In 1982 he established Asia Brewery, benefiting from a Marcos ruling that allowed new beer companies to open.” Another report mentions a sweetheart deal in which Tan reportedly paid only P500,000 for the bankrupt government-owned General Bank and Trust Co. (GENBANK).
Horton went on to narrate that in 1987 Rolando Gapud, the dictator ’s financial adviser, bared how Tan had been regularly paying Marcos 60-100 million pesos a year — in addition to the 60% equity given to the strongman on Tan’s businesses “in exchange for privileges and concessions that Mr. Marcos has been giving him.” However, to the great consternation of Imelda Marcos, Tan managed to keep for himself Marcos’ interests in his businesses after the latter was overthrown.
The China-born tycoon managed to survive through the succeeding Cory Aquino administration and emerged a rising star again when Erap Estrada became vice-president and, later, president. According to the article, “Tan was the major financier of his (Estrada’s) successful Presidential campaign. He became Estrada’s closest crony, regularly being seen with him in public and travelling with him (most unusual for the usually circumspect Filipino-Chinese business class). Estrada looked after his mate – when the tax department charged Fortune Tobacco with P26.5 billion in tax evasion, Tan’s well placed connections throughout the bureaucracy, judiciary and the political system (including the President) ensured that the charges were dropped (the Court of Appeals ruled that the Government had filed its case 11 days too late).”
Another article by Sheila Coronel noted “that the Estrada government made sure that Tan would have no more tax hassles by appointing a new tax commissioner who proclaimed himself a longstanding friend of Tan.”
An entry in Wikipedia states that Beethoven Rualo, a close associate of Tan, was the new commissioner. Within five months of Rualo’s appointment, two tax evasion charges against Tan’s firms that former Internal Revenue Commissioner Liwayway Vinzons Chato had been pursuing – one against Allied Bank for PHP 338 million, and another against Fortune Tobacco for PHP 8 billion – were reduced to zero and PHP 5 million, respectively.
The Philippine Center for Investigative Journalism blog has also an item about the Tan-Estrada connection. It said, “Other presidential friends such as Lucio Tan and Eduardo ‘Danding’ Cojuangco are also said to have made sure that the President’s women would be well provided for, and have even given them or members of their families either businesses or jobs that come with huge incomes.”
Writers Yvonne T. Chua, Sheila S. Coronel, and Vinia M. Datinguinoo said that such acts had “raised serious questions of conflicts of interest, since many of these presidential friends are engaged in various businesses that inevitably need or seek out help from the government. Some of these pals have even found themselves entangled with the law, and many have noted the seeming inability of authorities to deal with them because of their perceived ties with the President.”
Estrada suffered the fate of Marcos but soon enough Tan’s uncanny instinct to survive found him in bed with yet another Philippine president, Gloria Arroyo Macapagal. The article said that “politics is only the means to enable him (Tan) to acquire more wealth and power. And any means will do.”
It is becoming apparent that even in the present Noynoy Aquino administration Lucio Tan’s influence displays no decline as demonstrated recently by the controversial reversal of a final ruling by the Supreme Court on the plight of Philippine Airline employees dismissed in 1998. Not until 2008 did the SC ruled that the retrenchment was illegal. However, on Oct. 4, last year, the same SC reversed that decision prompted by a mere letter from Tan’s PAL pointing out a supposed technical flaw in that decision.
Akbayan party-list Representative Walden Bello said the high tribunal’s decision created the impression that Philippine Airlines management was above the law.
“Lucio Tan,” according to Solita Monsod, economics professor and former economic planning secretary, “is a role model for the worst kind of conduct as far as our national economic objectives are concerned. He signals that you can evade taxes and get away with it, pay the courts and get the judges to decide in your favour, get good lawyers and delay your cases. The messages that are given by the kind of treatment that he gets from the Government are the antithesis of what we need for sustainable development: an even playing field and Government intervention of the right kind.”
This is the sort of dragon that Cebuano-Leyteno whistleblower Danny Pacaňa has undertaken to slay.