HOW DO public officials with secret offshore accounts react, when found out?
The PCIJ confronted a senator, a congressman, and two former government executives with questions about secret accounts that each had opened separately in offshore havens. It’s diff’rent strokes for diff’rent folks.
San Juan City Rep. Joseph Victor G. Ejercito evaded questions about his role in Ice Bell Properties Limited as sole director. The offshore corporation that registered in the British Virgin Islands (BVI) in 1999 remains ‘active” to this day but which he has not disclosed in all the Statements of Assets, Liabilities, and Net Worth (SALNs) that he had filed since 1999.
Cocky at worst, cagey at best, one could say of Ejercito’s reaction. He calls “the timing” of the story “highly suspicious” while he campaigns, he says, as a top contender for the Senate.
He offered the PCIJ unsolicited advice about what he seems to suspect could be the ill motives of unnamed people that he seems to suspect are behind the story, “I hope that you will not allow yourself to fall in the manipulative efforts of desperate people in dirty politics.”
Sen. Manuel B. Villar Jr., on the other hand, sounded upfront and diplomatic in his reply. He laid out the story of his family’s investment holding company, Fine Properties, Inc., acquired Awesome Dragon Holdings Limited in the BVI in 2007.
Villar was then serving as president of the Senate. Awesome Dragon Holdings was registered in the BVI on the same day that shares sold in the initial public offering of his family-owned Vista Land and Lifescapes Inc. at the Philippine Stock Exchange in Manila. That day: July 26, 2007.
Yet in his reply to the PCIJ, Villar wrote that the US$1-shell company “is dormant and so it has remained, up to now.”
Second, he said, Awesome Dragon Holdings is not awesome at all; it is supposedly “without any asset and with no more than its original capital of one American dollar (US$ 1.00)”
Third, Villar said he was “indicated as owner” of Awesome Dragon Holdings simply because of the BVI requirement “to identify the natural person or persons who is/are the ultimate shareholder/s of said company.”
And fourth, he added that the company does not appear in his SALNs, however, “because I do not own it — it is owned by Fine Properties, Inc.,” which, in turn, “has not made any investment” in Awesome Dragon Holdings.
But the devil is indeed in the details, and the documents.
While Villar claims that Fine Properties Inc. owns Awesome Dragon Holdings, Fine Properties’s name does not appear in any of the corporate and financial records of the offshore corporation. Instead, Villar is named in the company data sheet as the beneficial owner.
Though it was “dormant” from the start, as he describes it, the offshore corporation remains active as of April 2, 2013, based on inquiries made by the PCIJ with the Financial Services Commission’s Registry of Corporate Affairs in the British Virgin Islands.
Accounting entries from July 2007 to Jan. 4, 2009 show that fees are being paid by or on behalf of Awesome Dragon Holdings for such items as “nominee services,” “annual renewal,” “10% late payment penalty,” among others.
If the company was “dormant,” it was not by design but from the lack of international investment opportunities in the wake of the global financial crisis. It can be activated any time such an opportunity arises.
To their credit, however, Villar and Ejercito replied to the PCIJ’s queries. Ilocos Norte Gov. Maria Imelda Marcos, named as the beneficiary of a secret offshore account in the Caribbean, did not respond at all to an inquiry letter that PCIJ sent by fax, email, and surface mail.
While the three elective officials turned elusive or evasive when asked about their secret offshore accounts, two officials appointed to government corporations showed more upfront, even repentant, behavior during interviews with the PCIJ for this report.
Alan Ortiz was profusely apologetic for what he called “legal and moral implications” of a decision that he and mentor-friend Jose Leviste Jr. made when they registered Windsor Star Consultants Limited in the BVI on May 6, 2004.
Ortiz was president of what was then the state-owned National Transmission Corp. (Transco) from March 2003 to September 2006 when this happened. “I’m sorry, I’m sorry, it was a mistake,” Ortiz told the PCIJ in a phone interview.
He said the amount he lodged in the account were “life savings” that he raised from work in the private sector, and which he had used to support his four children’s schooling.
Yet even in his very detailed email replies to the PCIJ, he acknowledged that it was also wrong that he did not enroll the existence of Windsor Star, as well as his previous dollar earnings from the private sector, in his SALNs from the years 2002 to 2006.
Ortiz was upfront, too, in admitting sending his money abroad could raise doubts about his patriotism, amid the government’s efforts to court financial resources into the country. “I had private sector sources for my life savings, most of which remained in Hong Kong due to the widespread negative impact of the 1997 financial crisis which extended until 2005.”
He saved, he said, so he could send his children to good schools overseas. “I preferred to keep my savings offshore and out of the weakened Philippine financial system starting in 1995… I hope my penalty will not be so severe.”
Jesus Alcordo, former president of the National Power Corporation and later commissioner of the Energy Regulatory Commission, and a career senior executive in a number of big chemical and power companies, was just as candid.
On Tuesday, he flew back to Manila from a visit with his grandchildren in Cebu, and for the first time saw the PCIJ inquiry letter. That same day, Alcordo called his employer of over two decades, the Salim Group of Indonesia, which had asked him to sit as nominee director of Pentergy Limited, an offshore company that was registered in Labuan, Malaysia in October 2005.
At that time, Alcordo was in government service. He said he consulted and cleared with his lawyer if it was all right for him to sign on as Pentergy director. It was a foreign entity that had no business in the Philippines, and on his lawyer’s go, Alcordo said he signed on.
Alcordo said he had not invested nor received a single dollar in Pentergy, and knew nothing at all about its work or operations then and now.
Alcordo also promised to send certifications from the Salim Group executives that he had nothing to do with Pentergy’s work, except sign on to certify the conduct of board meetings, for five years straight ending 2010.
Already 76 with three children and eight grandchildren, Alcordo says, “I’m comfortable in life but I am not rich.”
To prove that he speaks the truth on the matter, he offered to have the PCIJ check “all my bank accounts, dollars and pesos” in the banks he named, “even without a court order.”
The morning before the interview, Alcordo said he had actually checked his dollar-account balance with his bank. It was, he says, a whopping $3,400.— PCIJ, April 2013