BIR Officials Amass Unexplained Wealth
by TESS BACALLA
LIKE MANY of its neighbors, the house at 266 Cuenca St. in posh Ayala Alabang Village looks like a multimillionaire's home. Expensive orchids adorn its landscaped front lawn while the house itself is imposing, the use of the best materials evident. Recently seen parked in its garage were luxury vehicles, including a white Land Cruiser, a blue Ford Expedition and a new blue BMW.
The occupants of 266 Cuenca, however, are not movie stars or business moguls. Instead, it is the home of a government official whose annual salary is less than P300,000.
Lucien E. Sayuno, former regional director of San Pablo City and the recently appointed Makati regional director of the Bureau of Internal Revenue (BIR), lives there, as do his wife Amelita, and their two children. They also own a house in Dasmariñas, Cavite. According to records at the Securities and Exchange Commission, they own businesses that include the Agricultural Services, Inc., La Immaculada Trading Corp., and Limtra Homes Development Corp.
Not too long ago, Amelita Sayuno also put up the Summit Rural Bank in Lipa, Batangas, says one of her distant relatives. She and her husband, said a friend who knows them well, have a lavish lifestyle that includes frequent trips abroad.
Such a lush life is not unusual in the BIR, which gives rise to the popular perception that it is a cesspool of corruption. According to the World Bank, half of every peso that can be collected is lost to corruption. The Department of Finance also says that the total annual tax leakage adds up to about P240 billion.
While there are those who openly display their extravagant way of life, the more circumspect BIR officials and personnel try to hide their ill-gotten wealth. But these, too, are well known to BIR insiders. Says one: "Walang sikreto sa BIR. (There are no secrets here)." A Makati-based businessman who has frequent dealings with tax personnel scoffs that their lifestyles are "totally disproportionate to their salaries."
In the course of six months, a team of PCIJ researchers did a search of assets of about 25 BIR officials and employees — including assistant commissioners, regional directors, assistant regional directors, examiners and division chiefs — across the country. These are some of the most lucrative BIR posts because they deal directly with taxpayers, especially during tax audits, which present opportunities for extortion or collusion. Examiners exercise a great deal of discretion when it comes to tax assessments and are therefore prone to corruption.
Individuals in these positions were chosen for scrutiny based on information culled from more than a dozen informants, including officials of the bureau. Not all of those investigated, however, had a reputation for being "notoriously corrupt"; some were chosen based on the availability of documents attesting to their assets.
The PCIJ team looked for land and corporate records and checked vehicle registrations as well as their annual Statements of Assets and Liabilities (SALs). The investigation shows that the bureau that repeatedly admonishes people to be honest about their annual tax declarations has officials who have no qualms about underreporting their own assets and net worth and using dummies to hide their ownership of lucrative properties.
BIR postings are so lucrative and BIR officials so used to tampering official records that they try to delay retirement by "correcting" — pushing forward — their dates of birth. The PCIJ's research uncovered that from 1989 to the first quarter of 2001 alone, 24 BIR personnel have petitioned the Civil Service Commission to change their birth records.
Anyone who wants to run a lifestyle check on BIR officials and employees need only to go to the parking lots of the bureau's main and branch offices. There one would find cars that cost way beyond the annual salary of an official of the bureau, much less one of its personnel. A staff member of a Metro Manila district office also observes, "They change cars so often."
Driving in Luxury
It is telling though that when residents of the BIR Village in Fairview, Quezon City, were told that they only had to present their car registrations to get a gate pass, many complained. "Umalma (They raised a howl)!" laughs a BIR insider recounting the story. The idea was promptly set aside, because most of the car registrations were not in the residents' names.
Lucien Sayuno, in a written reply to PCIJ's query, denied owning the Ayala Alabang home and a fleet of expensive vehicles. But records at the Land Transportation Office show that the spanking new BMW in his garage, which has a vanity plate "AMS 101" (after his wife's initials) and is worth over P1.5 million, is registered in the name of Limtra Development Corp., a Sayuno company.
Not quite in his 50s, Lucien Sayuno is still years away from retirement. But he is among the BIR officials whose SALs contain incomplete information. Not one of the companies recorded by the SEC as belonging to him and his wife, for instance, appears in his SAL.
Neither does the Ayala Alabang house, which the village guard calls the Sayuno residence. In addition, the telephone book lists Amelita Sayuno's address as 266 Cuenca St. And when Lucien Sayuno went overseas in 1998, he wrote down the same address in his immigration form.
Land records show that the house is registered in the names of Minerva C. Castillo, wife of Bacoor, Cavite mayor Jessie Castillo, and Elsie H. Mercado (now Sosa), younger sister of Amelita and a resident of Lipa.
Sayuno says the Castillos are "family friends." He failed to say, though, that Minerva Castillo is also a business partner, being one of the stockholders of the Sayunos' Agricultural Services Credit, Inc. Based on the company's general information sheet filed last year with the SEC, Minerva's address is 13 Malvar St., Ayala Alabang, Lucien Sayuno's 126 P. Campos St., Dasmariñas, Cavite, and Amelita's Mataas na Lupa, Lipa City.
Like Sayuno, most of the BIR officials and personnel who replied to written queries from the PCIJ denied owning valuable pieces of property, many of which are in the multimillion range. Novaliches revenue district officer (RDO) Ernesto Kho, though, had a unique explanation for continuing to list his old Tondo address in his SAL despite having moved to another house in upscale New Manila, Quezon City in 1983.
According to Kho, brother of Masbate governor Antonio Kho, his "superior" instructed him to stick to his old address to avoid complications. But, he says, his true address is reflected in his income tax returns.
Kho has a declared net worth of only P947, 231. This, however, appears to be an underdeclaration, considering his wife and children's business interests, as well as the family's properties. Based on his 2001 SAL, Kho owns nine pieces of real estate, most of which are in Masbate. SEC records also show several companies where his wife and/or his children are listed as incorporators; two of these were not included in his SAL.
One of the smallest declared net worth encountered by the PCIJ was that of Nieto Racho, who had a paltry P198,758 in 1998 and P203,758 in 1999. But Racho, chief for the Special Investigation Division of the Revenue District Office in Talisay, Cebu, left out key items in his SALs.
For instance, the papers of Angelsons Lending and Investors filed with the SEC in April 1999 list Racho and his wife Lourdes among the firm's officers, incorporators, and stockholders, all of whom are surnamed Racho and carry the same middle initial as Nieto. Racho never reported this company, which has its office in Tagbilaran City, in his 1999 SAL.
n November 9, 2002, DYHP Balita Action Team of the Radio Mindanao Network wrote then BIR Commissioner Rene Bañez about Racho's bank deposits totaling P5.8 million. Attached to the letter were certifications from three banks that said the BIR official had deposits with them of more than P1 million each. One of the banks said Racho had P2.93 million in his account.
Asked to explain himself, Racho replied by saying the same issue was already being investigated by the Office of the Ombudsman-Visayas. He asked that any administrative investigation be withheld pending the resolution of the case with the Ombudsman's Office. The case, however, is still in the preliminary investigation stage.
In the meantime, Taguig-Pateros RDO Rosemarie Ramos Ragasa told the PCIJ that she still had "to complete the documents needed" to answer queries about the choice properties she is said to own. Ragasa, a widow who has an annual salary of about P250,000, is acknowledged by residents of the Maria Makiling Greenheights subdivision in Calamba, Laguna, as part-owner of two houses there.
One of the houses is really grand: a white mansion with a roof deck and swimming pool on a sprawling piece of land. The visitor enters it through a winding, concrete driveway with a tiled design and which leads to a rotunda decorated with a white fountain. The other house, painted sunshine yellow, is more modest. Both are commonly referred to as the "BIR houses," even by the subdivision's guards. A neighbor says the white house is refurbished every year.
One of Ragasa's acquaintances says the BIR officer and her constant companion Victor Manlongat visit the properties almost every weekend. "She's very luxurious," said a retired BIR official who has personally witnessed Ragasa's lifestyle.
A check with the City Assessor's Office in Calamba yielded no property declarations in the name of Ragasa or Manlongat, a retired BIR employee. But three parcels of land that correspond to Ragasa's alleged Greenheights properties show that they belong to two couples who share the same surname: Artemio and Josefina M. Mercado, and Josefino and Violeto G. Mercado.
There is no Maria Makiling Greenheights property listed in Ragasa's SALs. In her earlier years in the BIR, Ragasa's listed address was 615 Boni Avenue, Mandaluyong. After her contractor-husband died, it became Sto. Niño, Meycauayan, Bulacan. A check with the City Assessor in Meycauayan, however, showed no records of real property tax payment in her name.
On weekdays, Ragasa is said to stay at a condominium in Richbelt Towers on Annapolis St., Greenhills, an upmarket residential area in San Juan. The monthly rental of a three-bedroom apartment there is about P32,000. The going rate for condominiums in the area ranges from P35,000 to 40,000 per square meter. When the PCIJ called her there, the woman who answered the phone said, "Dati ho dito s'ya nakatira pero hindi na ngayon (She used to live her but not anymore)." Ragasa, however, never declared Richbelt Towers as her address in any of the records that are in her 201 employment file at the BIR.
BIR insiders say, however, that Edwin Abella, formerly Assistant Commissioner of the Large Taxpayers Service and recently appointed regional director of Quezon City, easily beats many of them when it comes to property ownership. He has a house in 1817 Job St., Jordan Plains, Novaliches — his listed address — but his mother-in-law, who now lives there reportedly with a sister-in-law and her family, says "he only comes here on weekends."
He has another house Xavierville Avenue in Quezon City that has its own security guard. When visited by PCIJ, the house was being refurbished.
Widely known in the BIR as a cockfighting enthusiast, Abella owns a cock farm in Norzagaray, Bulacan. The property is known as Strike Eagle Farm, but Abella's SALs indicate it only as "pasture" land. Someone who has visited the property, though, says the only animals he saw there were fighting cocks. A senior tax examiner in the national office also confirms that some of his BIR colleagues frequent Abella's cock farm.
Abella's declared net worth has grown steadily from P3.8 million in 1999, to P4.3 million 2000, P4.6 million in 2001, to P8.4 million in 2002. In a faxed reply to PCIJ's queries, however, Abella said his total income for 2001 was actually a mere P902,000, derived not only from salaries from the BIR and the University of the Philippines (where he teaches at the College of Law), but also from lecture fees as a reviewer in various law schools, honoraria from lectures in seminars, "plus a modest income from agricultural products."
In 2002, his "sweepstake winnings" added to his family income, said Abella.
"While I was able to purchase properties during my stint with the BIR, these properties acquired were all within my legal means," Abella wrote.
His name, however, has been dragged in a number of controversial tax-related cases and issues in the bureau. One of these was the Joaquin O. Ramirez estate tax return case, which became the subject of an investigation by the bureau in 1989 and 1991. It was also the target of a privileged speech delivered by then former Senator Ernesto Maceda, who denounced the case as an example of anomalies in the BIR.
The estate tax case involved some P344 million in tax deficiencies that arose from the "the fraudulent estate tax return" filed by Marisol T. Ramirez, daughter of the late Joaquin Ramirez. The amount covered a 50-percent statutory surcharge for filing a fraudulent estate tax return and a 20 percent interest covering three years.
The P344-million tax deficiency assessed was eventually reduced to P1.6 million, upon the recommendation of Abella and fellow revenue examiner Felix Sumbillo, both of whom took on the case despite the absence of a Letter of Authority authorizing them to do so. At the time Abella and Sumbillo were revenue examiners for the BIR's banks, financing and insurance division.
An anti-graft case was consequently filed by a private individual with the National Bureau of Investigation against the BIR officials and employees involved in the processing and investigation of the Ramirez estate tax return. The case remains unresolved.