A trail of anonymous money

Fundraisers scooped P383M
from secret donors for Binay

PCIJ. Binay Fundraisers, Dec16

GERMELINA I. Taylor, Wilbert T. Lee, Danilo E. Suarez, and Teddie E. Rivera were among the 10 biggest donors of then presidential candidate Jejomar C. Binay. The four alone gave Binay P172.3 million altogether – except the money wasn’t really theirs.

Taylor, Lee, Suarez, and Rivera were among 24 fundraisers who coordinated meetings, lunches, and dinners to collect money for Binay’s presidential run in the May 2016 elections.

In documents he submitted to the Commission on Elections (Comelec), Binay used the names of these fundraisers to account for 80 percent or P382.8 million of his P463.4-million campaign fund. He kept the identities of his actual donors secret, however.

Binay’s party, the United Nationalist Alliance or UNA, also did the same. In its Statement of Contributions and Expenditures (SOCE) it filed with Comelec, UNA listed four “fundraising organizers,” who collected 70 percent of the total contributions the party obtained during the campaign.

Section 98 of the Omnibus Election Code prohibits persons from making “any contribution in any name except his own nor shall any candidate or treasurer of political party receive a contribution or enter or record the same in any name other than that of the person by whom it was actually made.”

Mazna Lutchavez, Attorney IV at the Comelec CFO, says, however, that Comelec’s Campaign Finance Office (CFO) may not see a problem so long as the SOCE filed by candidates and political parties provides names where the donations came from and does not list anonymous donors. She says the fundraisers Binay and UNA reported appear to be existing persons, as evidenced by acknowledgment receipts and other details provided by the candidate and his party in their SOCEs.

Tax issues

But the buck doesn’t stop with Comelec. Indeed, while the CFO may not find any issue with Binay’s and UNA’s reporting, the Bureau of Internal Revenue (BIR) may take such kind of information on the documents as lead and look into the donors.

Binay’s SOCE shows donations totaling P382.8 million coming from a law office and 23 persons who all acted as his “fundraising activity organizer.” UNA, meanwhile, reported P62.3 million coming from four individuals who the party identified as fundraisers.

Except for the date when each fundraising event was supposedly held, no other detail was provided in the contribution reports that Binay and UNA submitted separately. Neither Binay nor UNA included any information that could show how each “organizer” raised amounts that ranged from P1 million to over P64 million. Of all national candidates and parties participating in the May 2016 elections, only Binay and UNA reported donations to their campaign coffers this way.

Lawyer Rona Ann V. Caritos, executive director of the Legal Network for Truthful Elections (LENTE), says that the expression about being able to tell who someone is through his friends captures the spirit of the Omnibus Election Code. She says that all donations must be accounted for so people would know who the donors are, and if the candidate wins, how he might run a public office.

And while Binay and UNA may be in the clear as far as the Comelec CFO is concerned, their fundraisers may be at a disadvantage taxwise.

Saying that she is speaking in general and not on a particular case, Assistant Commissioner Marissa Cabreros comments that while BIR relies heavily on voluntary declaration such as income-tax returns and withholding-tax returns, it also matches these with third-party information. She says that BIR may look into a taxpayer and assess whether he or she can make such donation. This, says the tax bureau’s legal-service director, is part of every revenue district office’s audit authority to ensure proper collection.

For example, Cabreros says, if Candidate A reported Taxpayer X as his donor and later on Taxpayer X will say that he just organized a fundraising event, BIR will ask for Comelec’s interpretation. In the instance that Comelec treats a certain person as the donor, Cabreros says that BIR will have to follow the interpretation of Comelec as a co-equal government agency.

Nameless money?

To check whether a person has the capacity to donate, BIR may review his or her income-tax return and check for sources of fund. Possible sources are loans or inheritance. If there is no such explanation, BIR by default treats the fund as income, which may correspond to taxes that must be paid.

Cabreros says that one reason why Comelec requires candidates to declare all their donors is to avoid having one person carry the burden of multiple donations, and in turn avoid tax-related questions. She says that it’s also in the interest and protection of a candidate to protect his donors from consequences like this.

For instance, she says, if 10 people donated but only one is named as the source of fund, “it places that one name at a disadvantage because it seems that only he or she made the donation as opposed to the actual 10 people.”

Caritos of LENTE says, though, that this type of nuance in the reporting of donations is not specifically covered in the Omnibus Elections Code. The Code, she says, has a blanket prohibition only on anonymous donations. But she says that fundraising activities should be well-documented to promote transparency and for people to know who the donors of these candidates are.

“If you know the donors, alam mo ‘yung magiging takbo ng kandidato, kung mananalo siya (you know how he’ll run an office, if he wins),” she says.

Caritos says that candidates, either through his treasurer or counsel, should explain these types of tax implications to fundraisers. She says that this might not have been done in the case of Binay; nevertheless, BIR has every right and the authority to conduct an investigation.

Fundraisers galore

PCIJ reached out to all of Binay’s fundraisers who had an email address and phone number in his SOCE. Six took PCIJ calls and confirmed that they organized fundraising events for the former vice president.

Mall consultant Germelina I. Taylor estimates that she organized about 60 activities to raise funds for Binay. These were in the form of luncheons, coffee meet-ups, private parties, and get-togethers with both small and big groups, including friends in government and business. Her effort resulted in donations amounting to P53.05 million for Binay’s campaign.

Taylor says that she sent a list of donors to Binay’s campaign team, but some did not want to be named because they gave small amounts. This means some of the donations came from anonymous sources. Says Taylor: “Some amounts are not that big kasi. Some were shy about the small amount they gave.”

Some gave P7,000 or P8,000, but there were also those who were able to give as much as P1 million, she says.

Taylor also says that she did not keep anything for herself and gave the money in a lump sum, complete with information where everything came from.

Teddie E. Rivera, another fundraiser, encountered the same situation with his donors. A nominee of Aangat Tayo Party List in past elections, Rivera used to serve as the national president of Alpha Phi Omega (APO), one of the largest fraternities in the country and which counts Binay as one of its members. To help their brother Binay, Rivera was assigned to collect P20,000 each from about 1,000 APO members, particularly those who were accepted and initiated during his term as president.

The target was to raise P20 million but Rivera was able to collect only P16.1 million. He says that many in his group gave money directly to Binay’s campaign manager.

Rivera recalls organizing events in Wack Wack in Mandaluyong, Sulo Hotel in Quezon City, and another venue in Makati. He says that he has a list of the donors, but this does not include the amount each gave.

‘Patak-patak’ system

At the event in Sulo Hotel, Rivera says that he submitted a list of all the guests, but not everyone on it had a corresponding donation indicated. Explains Rivera: “Ang in-identify lang ay ‘yung malalaki. ‘Yung maliliit, nahihiya (They only identified the big amounts. Those who gave small amounts were shy.)”

Rivera says the practice they employed was similar to “patak-patak” or “pass the hat,” a tradition they used to do as students.

“If you don’t have money, but you want to eat or drink, we resort to ‘patak-patak’,” he says. “So no one gets embarrassed, we pass the hat. Whatever you can give, that would be fine as your contribution.”

Rivera, however, also says that some donors did not want to be named not because they gave small amounts, but because they are affiliated with another party.

From frat brods

Jose Antonio L. Dimaano, who also set up a fundraiser attended by APO members, said the money he turned in as contribution to the Binay campaign came from different sources. Dimaano, an architect and contractor, was able to raise P8.6 million.

Quezon 3rd District Rep. Danilo E. Suarez also raised funds and collected P51 million for Binay. The House of Representatives minority leader, however, says that he can only confirm that he did raise campaign funds for Binay. He cannot talk in detail about the contributors, he says, because he had assured them that he will not name them.

Similarly, lawyer Melvin C. Rillo, who collected P5 million, says he cannot divulge any information other than that “classmates and friends” of Jejomar Erwin ‘Junjun’ Binay Jr., the presidential candidate’s son, participated in the fundraiser he organized. Rillo is the brother of Quezon City Councilor Marvin C. Rillo.

Businessman Wilbert T. Lee also confirmed that he organized fundraisers for Binay. Lee was able to raise P51.8 million. He was assigned to small businessmen, he said.

PCIJ sent a letter and communicated through text with Emmanuel V. Clariño, the person authorized to receive contributions and issue receipts on behalf of Binay. He responded by text but did not provide answers to PCIJ’s questions. He only confirmed that his email address is correct and also gave an alternative email address.

PCIJ also sent letters to Binay through his party the United Nationalist Alliance and the Subido Pagente Certeza Mendoza & Binay Law Offices, which raised funds as well for the candidate. Binay, UNA, and the law office have not responded as of this writing.

— With research by Floreen Simon, Fern Felix, Vino Lucero, Davinci Maru, Steffi Sanchez, Jil Caro, and John Gabriel Agcaoili, PCIJ, December 2016