Carpio: Tragic or jinxed?

By Rigoberto D. Tiglao         October 23, 2019

First of two parts

LOVE him, as the Yellows do, or hate him, as those who were sympathetic to the late Chief Justice Renato Corona — whom he is alleged to have helped oust — do, Senior Associate Justice Antonio Carpio, who retires from the Supreme Court on Friday, has had a fascinating career, marked by episodes one might term either tragic or jinxed.

You, dear reader, decide which would be the best description.

What is mostly forgotten now is that Carpio and his ideological mentor, retired Gen. Jose Almonte executed in 1992 then President Fidel Ramos’ bold tack early in his administration of going against two of the country’s powerful oligarchs then: tobacco magnate Lucio Tan and the Antonio Cojuangco clan which claimed to own Philippine Long Distance Telephone Co. (PLDT).

The first Yellow regime practically wanted the Tan conglomerate wiped out of the Philippine business landscape as Tan was branded as one of Marcos’ richest cronies. The Presidential Commission on Good Government (PCGG) “sequestered” the tycoon’s biggest firms, while it tried to gather evidence — unsuccessfully — that he had amassed ill-gotten wealth with the dictator’s help.

But not only that, with the PCGG cases appearing to be going nowhere—one reason being that documents held by Cory Aquino’s officials couldn’t be found—the Ramos administration led by his then Chief Presidential Legal Counsel Carpio slapped in 1992 a P25 billion tax-evasion case against Tan’s Fortune Tobacco Corp., claiming that it had been using forged BIR stamps on its cigarettes.

Carpio (upper left) and the tycoons he once crossed swords with.

Fizzled

The high-profile media coverage of the case, however, fizzled out and was gradually forgotten, with the charge finally dismissed in 2006, 14 years later. Tan’s black-propaganda machine was vicious at that time. As a correspondent of the Far Eastern Economic Review at the time, I even had to ask Carpio point blank to comment on the rumor circulating that Tan, known to be “accommodating,” decided instead to dig his heels in against the Ramos government as his legal counsel was allegedly asking for P5 billion for the case to be dropped. (Carpio vehemently denied it.)

Nearly three decades after Carpio and Ramos moved against Tan, the tycoon has survived the Ramos-Carpio siege and become richer than ever, with the case against Fortune Tobacco said to have prodded him to move out of that industry and into airlines and property.

Tragic or jinxed?

The other oligarch Carpio and his gang tried to topple was the Antonio Cojuangco clan, indeed a bold move as the family was blood-related to Ramos’ benefactor, Cory Cojuangco Aquino. The assault was in the form of dismantling PLDT’s monopoly in the telecoms industry, which had been protected for decades by such means as its refusal to interconnect telecom services by any competitor that emerged.

I was told at that time that it was Carpio’s idea to subject to linguistic analysis a decision written by a Supreme Court justice favorable to PLDT to prove that it was written by PLDT lawyers. After the findings were released to media confirming the claim, that Supreme Court justice stepped down. Ramos and Carpio had sent a strong message to the Supreme Court: “Do not stop our reform program, or you will be swept away.”

PLDT monopoly

Ramos, Carpio and Almonte did break PDLT’s monopoly by deregulating the industry, allowing the Ayalas’ Globe Telecom Inc. and then the start-up firm by engineers, Smart Communications, to enter the industry.

What Carpio had not expected though was that First Pacific Co., a Hong Kong-based firm owned by the Indonesian-based Salim family, the biggest crony of the strongman Suharto, would purchase PLDT months after President Joseph Estrada won the presidency. Various reports, including an account by tycoon Alfonso Yuchengco, alleged that Estrada got a P3 billion-bribe to allow the sale — as it meant giving control of a utility firm to foreigners, a patent violation of the Constitution that limited foreign ownership to just 40 percent. The capture of PLDT by First Pacific was crucial in the conglomerate’s growth as it leveraged the telecom firm’s resources to purchase control of Meralco, and from then on to other sectors.

(The Cojuangcos though happily got the proceeds of PLDT’s shares sold to Salim, which the Marcoses claim are theirs. Sources claim though that the Cojuangcos dilly-dallied in putting their cash proceeds into investments in the country, which explains the gradual demise of the once rich clan.)

With the profits of its huge conglomerate, the foreign-controlled First Pacific has been remitting profits of about $1 billion a year to its head office in Hong Kong.

Salim’s First Pacific Co — run by Manuel V. Pangilinan — concocted a scheme to go around the constitutional restrictions. This involved issuing cheap preferred shares to a Filipino entity that the Salim group controlled (PLDT Pension Fund) which purportedly had voting rights. This created the legalistic illusion that it was Filipino-controlled, and therefore was not violating the Constitution.*

When the issue reached the Supreme Court, Carpio was already there, appointed in 2001 by then-President Gloria Macapagal Arroyo. Carpio very ably convinced most of his colleagues that, as he put it in the 2011 court decision, the scheme “contravenes the express command of the Constitution” that public utilities must be controlled 60 percent by Filipinos, and that a contrived system of corporate layering cannot hide that.

Unfazed, Pangilinan appealed the case to the Supreme Court, which in 2016 reversed the decision on grounds as flimsy as the “the key to nationalism is to the individual,” not on a percentage of shares held by Filipinos.

Caguioa

It was Justice Alfredo Caguioa — President Benigno Aquino 3rd’s last appointee to the court — who penned the decision, which was concurred in mostly by the Aquino 3rd-appointed justices, including the Chief Justice then, Maria Lourdes Sereno. Carpio, with Justices Teresita Leonardo-de Castro, Arturo Brion, Jose Mendoza — all appointees of former president Arroyo — dissented.

That ruling is one of the most damaging decisions by the Supreme Court on our sovereignty. It opened the floodgates to foreign control of our telecoms (Globe’s scheme for skirting the nationality restriction was the same) and water distribution as well as its increasing control of the country’s largest infrastructure projects, with First Pacific having become the biggest expressway operator and builder. The scheme has even been adopted by such companies as media firm ABS-CBN Broadcasting and property and finance firm GT Holdings.

Carpio, with Ramos and Almonte, undertook a historic project to dismantle a monopoly. The country ended up with a foreign duopoly, one controlled by an Indonesian tycoon and the other, Globe Telecoms, by a conglomerate, Singtel, owned by the Singaporean government.

How tragic that certainly is…or jinxed?

(To be continued on Friday)

*Details of this as well as First Pacific’s growth is comprehensively discussed in my 2016 book Colossal Deception: How Foreigners Control Our Telecoms Sector, available at Popular Book store, at rigobertotiglao.com and Amazon.com

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https://www.manilatimes.net/2019/10/23/opinion/columnists/topanalysis/carpio-tragic-or-jinxed/650255/