18-20 MARCH 1998
1ST PRIZE—1998 JVO INVESTIGATIVE JOURNALISM AWARDS
The Grandmother of all Scams

by SHEILA S. CORONEL and ELLEN TORDESILLAS

ON FRIDAY, April 28, 1995, George Triviño, a convicted gold smuggler with a long history of wheeling-dealing, received 31 checks totaling P300 million from the Amari Coastal Bay Resources Corp., a Thai-Filipino company that had just entered into a P1.8-billion contract with the government to buy reclaimed property off the Manila-Cavite coastal road.

All the checks were deposited into an account at the U.N. Avenue branch of the Traders Royal Bank. As soon as they cleared, on Tuesday, May 2, just nine days before the local elections, P273 million was withdrawn from that account. The following day, the balance of P27 million was drawn from the same bank.

Triviño was the Philippine representative of the Ital-Thai Development Corporation Ltd., the Thai construction conglomerate that set up Amari. According to a Senate investigation of the Amari transaction, the checks were "encashed by the sister-in-law of a high ranking leader of Congress after said checks were endorsed by George Triviño." When the Senate released its report last year, the chamber buzzed with the rumor that the official was House Speaker Jose de Venecia.

De Venecia emphatically denies this allegation. "The alleged withdrawal of P300 million by a sister-in-law of the Speaker from commissions paid to one George Triviño is a wild, untrue, and unfounded conjecture. For no such withdrawal ever took place," he says.

Close to a year after two Senate committees wound up their investigation of what Senator Ernesto Maceda has called the "grandmother of all scams," many questions about Amari remain unanswered.

De Venecia's role in the deal is one. President Fidel V. Ramos's possible involvement is another.

The payoffs that were made to several officials in an effort to hush up the investigation of the transaction also remain carefully cloaked in secrecy.

Our own investigation shows that from 1995 to 1997, as much as P3 billion in bribes and commissions was paid by Amari to a cast of brokers, government bureaucrats and politicians, making this the single biggest scam in memory, dwarfing the amounts made in single transactions by the most avaricious of Marcos's cronies.

In the course of several months, we have interviewed some two dozen people, including several who were privy to the transaction. These sources as well as a trail of documents, many of them subpoenaed by the Senate, indicate that the following payoffs were made:

P300 million - to George Triviño, who later turned over the amount to the politician who was his principal

P100 million - to a Hong Kong bank account held by Triviño's principal

P 225 million - blank checks paid to Benito Cuevo, the broker who made the connection between Amari and officials of the Public Estates Authority (PEA), the government agency in charge of the reclaimed property

P344.7 million - paid to two ethnic Chinese brokers, Frank Chua and Benito Co, who were negotiating with an array of officials.

P300 million - paid to various individuals and officials in order to persuade a Korean company to give up its bid for the property.

These payoffs total P1.269 billion. A large part of that amount was passed on by the brokers to their contacts in various government agencies. In addition, our sources say, close to P2 billion more was paid to various individuals and officials last year, after the scandal broke and the parties involved made frantic attempts to cover up the deal.

This story began in 1994, at the height of the property and stock market boom, years before the Southeast Asian currency crisis that sent fortunes crashing. Land prices were soaring then, the Manila skyline was crowded with cranes, and the highrollers in the stock market were making so much money it was obscene.

At that time, every wheeler-dealer in town was looking for an opportunity to cash in on the boom. They seldom cared about the rules and believed that everyone, even the top officials of government, has a price. In their world, connections and access to the rich and powerful are the most valuable assets. More than anything else, what counts is whom you know and whom you can influence.

The key characters who would figure in the Amari scam belong to this netherworld of wheeler-dealers. They include Benito Cuevo, the quintessential deal maker who hangs around at the Patisserie, the coffee shop of the Holiday Inn hotel in downtown Manila. Triviño, the smuggler who told the Senate that the House Speaker was his "long-time friend." Frank Chua and Benito Co, loggers and high-stakes gamblers who can smell a business deal a mile away. What brought them together was one of the biggest deals in the era of the fast buck.

Initially, they and their accomplices and principals were to be paid P1.75 billion in brokers' commissions from the purchase by Amari of three reclaimed islands not far from the coastal road leading to Cavite.

The islands were an accident. In the 1970s, the area was reclaimed from Manila Bay by the Construction Development Corp. of the Philippines (CDCP), the Marcos crony company that was building the coastal road. But the road was realigned, leaving three mounds of reclaimed land stranded in the bay, in the foreshore area of the towns of Parañaque and Las Piñas.

In 1981, Ferdinand Marcos tried to rescue the bankrupt CDCP by ordering the sale of several portions of the Manila Bay reclamation area, including the three islands and the site of the ill-fated Film Palace, to the PEA, a government agency he created in 1977. PEA was asked to pay CDCP P1.5 billion for the land and to assume another P1.5 billion of CDCP's debts.

Fifteen years later, in the 1990s, PEA found itself the fortunate owner of what had become prime real estate in Manila's hot property market. Although the three islands had by then become a teeming slum marooned in the polluted waters of Manila Bay, developers were quick to see the potential of seafront property just off scenic Roxas Boulevard, only a spit away from the international airport, and with a view of a world-famous sunset.

On April 28,1995 the PEA board approved the contract selling the three islands to Amari, which was awarded the Philippines' biggest real estate project ever. On July 23, 1996, Centennial City, a publicly listed company, assumed complete control and ownership of Amari through a stock swap. Centennial then made a killing in the stock market by selling the idea of a new city complete with skyscrapers, parks, a marina, a golf course and casinos that would rise out of Manila Bay.

Not long afterward, two Senate committees investigated the transaction, concluding, after four months of hearings, the government was defrauded of billions of pesos in that deal.

But the investigation was unable to find conclusive evidence of the possible involvement of a string of public officials led by de Venecia. The Senate also looked the other way as frantic attempts were made to derail its investigation.

The key person in this transaction was Justiniano "Bobby" Montano IV, an aging playboy named after his grandfather, the strongman who held Cavite in thrall from the 1940s to the 1960s. In the course of the Senate investigation, Maceda pointed to Bobby Montano as "the real architect and engineer and sponsor of this deal."

Bobby is the son of retired army colonel Ciriaco "Akoy" Montano, who was the Philippine military attaché in Washington, D.C. in 1950, the year Bobby was born and also the year the young cadet Fidel V. Ramos graduated from West Point. As military attaché, Akoy Montano took care of cadets like Ramos.

When Ramos fell ill and needed surgery, Akoy Montano arranged with the U.S. defense department to get free treatment for his ward. After all, Akoy's brother, Julian, was married to Ramos's first cousin, and the Montanos were a large clan with a strong sense of family ties and filial obligation.

In the 1960s, when Ramos's promotion to the rank of colonel was being questioned by the commission on appointments in Congress, he approached then senator Justiniano Montano Sr., who interceded on the officer's behalf with his Liberal Party colleague, Senator Benigno Aquino Jr. The old man Montano likes to recall this story, which is embedded in the Montano family lore.

For this is what political families are all about: a shared myth about favors traded and owed through generations of deals and compromises. It was therefore not surprising that when Ramos was seeking the presidency in 1992, the Montanos helped him, particularly in Cavite, where they retained some residual influence.

In 1993, Senator Montano went to Malacañang to pay a courtesy call on the newly elected Ramos. He brought along his favorite grandson, Bobby. Right there and then Bobby was offered a government job.

Then 43 years old, Bobby had so far had an unremarkable career. He once ran a travel agency and dabbled in real estate. He also ran for provincial board member in Cavite in 1988, but lost. Bobby was first offered a post at the National Housing Authority, his father Akoy recalls. But when that didn't work out, the position of deputy manager for special projects was created for him at PEA, and he assumed that post in July 1993. Bobby is the only PEA deputy manager so far who was a presidential appointee.

By everyone's account, Bobby Montano pushed aggressively to speed up the development of the three islands. In 1991, the PEA board had already authorized the bidding of the 157-hectare property and set the minimum bid price at P1, 680 per square meter. The bidding was scheduled in December that year, but none of the prospective buyers submitted a proper offer. The bidding was declared a failure.

In 1993 and 1994, there were other offers, but none of them were seriously considered. In August 1994, the PEA board approved a second public bidding and set the minimum price again at P1,680 per square meter, with the option to reclaim 250 hectares more, subject to a 60-40 sharing in favor of the buyer.

By this time, Bobby Montano was already scouting for a developer. He was confident that he could push this deal through. His family was close enough to the President. And Agnes Doneza Montano, the woman he had been living with, was vice-president of the Women Auxiliaries for Ramos Movement (WARM), that was formed during the President's 1992 campaign.

The WARM women were often at the Palace in to entertain guests during open-house events or to fill the hall whenever Ramos had a social occasion that needed an audience. WARM members were friendly with the Palace staff and had access to the President himself. Some of them even attend press conferences, joining those who approach Ramos to have papers signed or ask for favors.

Agnes Montano is not a shrinking violet. A former Miss Gingoog, she has beauty queen looks and a steely determination to get close to the top. Indeed, she would tell friends that she helped Bobby get his PEA post. More than that, several of those we interviewed say that it was through Agnes's lobbying efforts that Bobby managed to get Malacañang approval for the Amari deal.

Typically, Bobby employed the family network to arrange the sale of the three islands. Once the word was out that he was looking for a buyer, his cousin-in-law, Aurora "Auring" Montano, a small-time real estate broker, put him in touch with Ben Cuevo. Auring was herself a member of WARM.

Interviewed by the Senate committees investigating the Amari deal, both Auring Montano and Cuevo admitted they had done business deals in the past and that it was through Auring that Cuevo made the connection to Bobby. Confronted by receipts of payments made to her, Auring admitted that she received P30.5 million in checks for making the right introductions.

Benito "Ben" Cuevo is a cagey, nondescript man in his late 60s. He is a seedy character, the kind who spends hours at coffeeshops making deals. The waiters and the hangers-on at the Patisserie, where he stops for coffee and assorted deal making nearly every morning, refer to him as the "commissioner," because that is essentially what he is known for: making commissions on all sorts of transactions.

Cuevo owns the International Merchandizing and Development Corp., a trading company through which some of the Amari commissions were coursed. Lawyer and former Cabinet secretary Fulgencio Factoran Jr., who has encountered Cuevo, describes him as the "caricature of a hustler," a man who "is a friend to everybody he can make use of." Indeed, when one of us interviewed Cuevo, she was offered a cut in the Amari deal once he had collected on still uncashed commissions from the company.

From the accounts of various people who have encountered Cuevo, as well as testimonies and documents obtained during the Senate hearings, and from an interview with the man himself, this is what we could piece together.

When Bobby was peddling the three islands around, Cuevo saw the opportunity for another commission. He contacted old acquaintances, two Chinese-Filipino businessmen who moved in the same world of coffeeshop hustlers that he did.

Cuevo admits that he had done business in the past with Frank Chua (also known as Chua Hun Siong ) and Benito Co (also known as Chin San Cordova), but he is vague about the details.

Chua and Co are known in Binondo as buccaneer businessmen with an instinct for a fast buck. They are also inveterate gamblers who would lose millions in one night of gaming at the casino.

Both men jumped at the opportunity to be in on the three islands deal. The key was to find a big company who could develop the property. Cuevo would then bring the company to Bobby Montano, so all four of them could then skim off fat broker's fees from the deal.

The two Chinese businessmen did not have to look very far. One of their casino buddies was Manuel Sy, whose family was involved in steel manufacturing. Sy would tell the Senate that the two men asked him whether he knew of any contractor. Sy referred his Thai partner, the ethnic Chinese tycoon Premchai Karnasuta, who ran the biggest construction outfit in Thailand.

Sy and Premchai have been partners for 18 years in a Thai company called Siam Steel. Together, they put up Amari in 1994. By then, Premchai's Ital-Thai, which was founded in 1958, had grown into a multibillion-baht company that cornered the largest construction projects in Thailand and even in Burma and Laos.

Premchai had cashed in on the construction boom in fast-growing Thailand, and was building, among others, hotels, airports, power plants, and an elevated railway system in Bangkok. He was definitely big-time. Awash with cash like many other Thai companies during that period, he was also eager to spread his wings to the Philippines.

Premchai was a veteran of the rough-and-tumble world of Thai politics where, much like in the Philippines, access to top decision makers is the key. When he came to Manila on the lookout for investment possibilities, he was introduced by Sy to his casino crony, George Triviño.

Sy would tell the Senate blue-ribbon committee that Triviño was in search of a "medyo sikat na contractor na may pangalan (big-time contractor with a name)." When Triviño met Premchai, he offered to be Ital-Thai's Philippine representative and also arranged to introduce the Thai tycoon to de Venecia. The Speaker, in turn, brought Premchai to Malacañang to meet the President.

Triviño, originally Uy Han Kiat or George Uy before he took on the name of his godfather, Bicol politician Juan Triviño, was convicted of smuggling in 1969. He fled to the Dominican Republic, where he got himself a new citizenship. He later moved back to Asia and was reported to have run afoul of Singaporean authorities for illegally trading gold.

Somehow, Triviño wormed his way back to the Philippines where, like Chua, Cuevo, and Co, he acted as a bridge between the underworld of crooked deals and illicit commissions and the very public klieg-light world of politics. Before long, Triviño was seen around in the company of the House Speaker whom he described in the course of the Senate investigation as an old friend, "matagal ko nang kaibigan."

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