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Monday, February 6, 2012

Teaching points

By Amelia H.C. Ylagan

"I am sorry I have to lecture you on Corporation Law," Senate President Juan Ponce-Enrile, presiding judge at the Senate impeachment of Supreme Court Justice Renato Corona, publicly embarrassed Atty. Benito Cataran, the director of the Securities and Exchange Commission (SEC) Company Registration and Monitoring Department and prosecution witness for Day 10of the televised trial.

The defense lawyers and some senators had been bullying and battering Atty. Cataran for over an hour, until an exasperated Senator-judge Manuel "Lito" Lapid broke his habitual silence to complain about the time. Some disrespectful laughter was heard as he bared his location at square one vis-a-vis the madding crowd: was it a loan or an advance to the Coronas that was being debated? The prosecution had said that CJ Corona and his wife Cristina purportedly got P11 million in 2003 from Basa-Guidote Enterprises, Inc., a company reportedly owned by Mrs. Corona’s family. Cataran testified that the SEC had revoked Basa-Guidote’s registration on May 26, 2003.

How then was the P11 million declared as a liability (a deduction from assets, and a shield to net worth) in Coronas’ Statement of Assets, Liabilities and Net worth (SALN) for 2003 and 2004, later reduced to P10million in the 2005 SALN, to P8 million in 2006, P6.5 million in 2007, P5 million in 2008 and P3 million in 2009? Was the company that lent the Coronas dead, or still alive and able to grant loans or advances, and receive payments of these over five years?

The lead defense counsel, Serafin Cuevas, citing a 1995 SEC opinion, mockingly said, "this honorable court has been fed with erroneous presumption… that the moment there is a certification of revocation, a corporation cannot do any business anymore. This is not true." The prosecution counsel immediately countered that a 2009 SEC opinion clarified that "an order of revocation is immediately effective once the revocation order is issued… and such subject corporation’s existence is terminated at that very instance."

Cataran, the expert on SEC registrations and regulations, had tried to explain the mechanics of voluntary and involuntary dissolution of a company, the determination of when a company is dissolved or its license revoked, and the cessation of regular authorized operations in lieu of which only wind-down activities are to be allowed by the SEC for three years after such dissolution. Certainly, he knew the workings of a corporation and the interpretation of the Corporation Code -- as a corporation lawyer for 37 years and the respected head of the SEC Registration and Monitoring Department for more than two decades. Yet it was violently jarring how his credibility as a witness was smashed with waylaying questions that crucified him -- he who was not the accused or even a suspected accomplice. It would seem that the often-invoked "due process" and the assumption of innocence before guilt was reserved for those who by lay instinct, seemed guilty as hell.

Litigation lawyers can feel superior to the non-litigating corporate lawyer, a practicing lawyer said of his colleagues. In the courtroom, he who has the louder voice can present selective precedent rulings that can drown the more timid opposing counsel’s arguments even while the latter is yet trying to lay a logical presentation of facts. Wisdom that comes with age and reputation earned from court battles won are intimidating to the younger practitioners, who may nevertheless be more updated on relevant laws and rulings. Body language reeks power and control, as with the strong aura of Chief Defense Counsel Serafin Cuevas, 84 years old, appointed associate justice (1984-1986) by then President Ferdinand Marcos in the martial law years.

Nervously, those non-lawyers who by practice knew corporation law and its mechanics watched the discussion on February 1, 2012 go askew to mock the pathetic witness Cataran. Television caught the eyes of the Chief Judge, Senate President Enrile, 88 years old, Justice Secretary and then Defense Secretary in Marcos’s time, and then EDSA People PowerRevolution facilitator, meeting those of Atty. Cuevas, as they probably chuckled over Cataran squirming in his seat and unable to answer the rapid volley of questions. Just submit a legal memorandum explaining the SEC’s authority to dissolve a corporation, Enrile said to Cataran. Surely the 76-year-old SEC will be able to justify its reason for being.

Bewildered and frustrated are those who sincerely want to know the truth about corruption in the country as the start to a real cleanup, and would like to see punitive closure to the betrayed accountability of public officials. As in previous Senate investigations on cheating, plunder, lying and manipulations in the precedent Gloria Arroyo administration, there are always the twisted technicalities of the law, the ludicrous alibis and convenient justifications that have exonerated the obviously guilty. Just be patient, the avowed-reformist Benigno Simeon Aquino III government consoles its panicking public. But can your little boys match up to the game the big bad boys play?

Meantime, the more impressionable in society are force-fed the gory mafia techniques that those inpower can avail of in temporary crunch times. Few knew that Supreme Court Justices were exempt from submitting their yearly SALN with the Commission on Audit, or that they did not have to be honest about it because it was only confidentially filed with the Supreme Court Clerk of Court. The Senate hearings are demonstrating to the public that unexplained wealth is not prima facie evidence to plunder and moral turpitude, because an impeachment is like a criminal case where the lack of proof beyond reasonable doubt can clear a strongly suspected suspect.

Get feisty old lawyers who will not bat an eyelash at claiming omniscience over the fundamental workings of everything and anything, and subliminally suggesting the morally-corrupt justification that everyone is doing it, as corroborated by one Senator-judge who implied that corporations can do what they want to do, behind the SEC’s back. Take a loan from a convenient defunct corporation to cover your property shopping.

Twist and mangle the ownership trail in a series of property transfers to hoodwink the inefficient Registries of Deeds and dupe the sleeping Bureau of Internal Revenue. Call the government agencies inefficient to their face, in aggressive offense being the best defense to the willful deception of tax evasion. Mock real estate developers/sellers who have not kept original records and hard files of transactions going back to ten years ago, and call the honest testimony of current company representatives all hearsay.

Those are only some of the sorry lessons learned in the frustrating Senate trial for the impeachment of one of the most honorable leaders of the land, the Supreme Court Justice.

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