2 firms paid pol ads, defy
SEC ruling vs. partisanship

TWO COMPANIES have done what they shouldn’t and couldn’t have.

First, they separately paid for political ads for and against two candidates in the May 2016 elections. They should not have done that. According to a ruling of the Securities and Exchange Commission (SEC), no corporate entity, Filipino or foreign, should donate money to the candidates or to any partisan political activity.

But then both companies could not have done it. There is little to show in their latest financial statements that they could. Both companies, as of their 2014 filing with the SEC, appear to be in the red, with little or no operation at all.

The first firm, AB Ison Pilot Trading & Construction Corp., is listed in the Nielsen Media monitoring reports to be the “advertiser” of a total of P8,835,162 worth of pre-campaign political ads, by published media rate cards, that aired on national television in January 2016.

These 21 ad spots criticized Vice President Jejomar Binay, candidate for president of the United Nationalist Alliance or UNA, for his failure to explain his supposedly numerous bank accounts and the allegedly overpriced contracts that the City of Makati had awarded during his stint as mayor.

The second firm, Patriot Freedom Air, Inc., was listed as the “payor” in three advertising contracts signed with ABS-CBN network in February 2016 for the benefit of independent candidate for senator Francis Tolentino, former chairman of the Metropolitan Manila Development Authority or MMDA.

The three ad contracts that ABS-CBN submitted to the Commission on Elections listed Patriot Freedom Air as payor or “advertiser” of the ads worth a total of P12,567,772.

This amount consisted of:

  • P964,873, for twenty 30-second ad spots for Tolentino that aired from Feb. 9 to 29 on ABS-CBN’s regional TV stations in Baguio, Lipa in Batangas, Cebu, Davao, General Santos, Iloilo, and Naga City.
  • P9,971,628 for twelve 30-second ad spots for Tolentino that aired between Feb. 9 and 29 on “TV Patrol” and the prime-time teleserye “FPJ’s Ang Probinsyano” and “Dolce Amore”, and the variety show “Pilipinas Got Talent”; and
  • P1,631,271 for three 30-second ads for Tolentino that aired on ABS-CBN’s Sunday variety program “Showtime” last Feb. 13, 20, and 27, with each spot valued at P543,907,000.

Firms may not donate

SEC Opinion No. 15-08 issued on July 27, 2015, says that it is taboo for all companies to donate any amounts to candidates and political parties.

Signed by Camilo S. Correa, SEC general counsel, “by authority of the Commission En Banc,” the ruling states, “Section 36(9) of the Corporation Code imposes an absolute prohibition for corporations, both foreign and domestic, from giving any donations to any political party, candidate, or for the purpose of any partisan political activity.” (underscoring supplied in SEC Opinion No. 15-08)

In Section 144, the Corporation Code or Batas Pambansa Blg. 68 says that “violations of any of the provisions of this Code or its amendments not otherwise specifically penalized therein shall be punished by a fine of not less than one thousand pesos but not more than ten thousand pesos, or by imprisonment for not less than 30 days but nor more than five years, or both, in the discretion of the court.”

The same section of the Code, however, says, “If the violation is committed by a corporation, the same may, after notice and hearing, be dissolved in appropriate proceedings before the Securities and Exchange Commission.”

Ex-Makati employee

AB Ison registered with the SEC on Sept. 27, 1977, and listed its office address at 7029 Wilson St. Pio Del Pilar, Makati City.

SEC records showed that as of Aug. 31, 1998, six names are listed as incorporators, with Pedro Ison serving as treasurer. According to SEC papers, Cynthia Ison holds the designation of corporate secretary, but is not among the incorporators who include, apart from Pedro Ison:

  • Luis R. Ignacio of Gapan, Nueva Ecija;
  • Jacinto S. Navarro of Guagua, Pampanga;
  • Lorenzo R. Rapanan of Villasis, Pangasinan;
  • Enrique C. Rivera of Cablao, Nueva Ecija; and
  • Arturo R. Rivada of 3776 Gen. Mascardo, Makati City

In addition, Arthur Ison, Michael Gonzales, Fernando Ablaza, and Amalia Gonzales, were listed as subscribers owning varying amount of company stocks.

In its 2013 Statement of Financial Position, AB Ison declared having a total of P11,112,485 worth of current assets, including P 2.5 million in cash and cash equivalents. It also reported non-current assets composed of property and equipment and reserves of P25,229,344, bringing the firm’s total assets to more than P36 million.

Still, AB Ison’s cash position is just a fourth of the P8.84-million value of the pre-campaign political ad spots against Binay that the company acquired in January 2016.

The amount it splurged on its political ads against Binay is twice to thrice more than its P3.466,800 net profit from operation in 2013, and P2,8982,319 in 2012, according to AB Ison’s records at the SEC.

MMDA contractor

For three weeks now, PCIJ has tried to reach AB Ison President Arthur Ison by phone and letter for comment, but he has yet to respond as of press time. His secretary said Ison’s “busy schedule” was the reason why he could not respond to PCIJ’s request.

PCIJ research meanwhile reveals that AB Ison, through Arthur Ison, has been engaged in a private-public partnership project with the MMDA for the cleaning of esteros in Metro Manila. San Miguel Brewery Corp. and RM Gomez Construction were also involved in this project that was supposed to be a step toward making Metro Manila “climate-resilient.”

Photos of the Memorandum of Agreement signing between AB Ison President Arthur B. Ison and then MMDA Chair Francis Tolentino seemed to be unavailable from the MMDA website despite the presence of a webpage for the event, but PCIJ managed to get the photo below after scraping uploaded MMDA references.

The Department of Labor and Employment had also listed AB Ison in 2012 as one of its accredited contractors and subcontractors in the National Capital Region.

AB Ison may have also had other projects, based on the claims of a certain Marianne Joy Machitar in her LinkedIn account. According to Machitar’s LinkedIn profile, she worked for AB Ison from November 2009 to September 2011 as Project Engineer/Safety Officer, and that she “handled projects of well-known clients in the Philippines like Rockwell Land Corporation, Vista Land Corporation, Picar Holdings Inc. and Ayala Land Inc.” during her stint in the firm.

Machitar worked for DPWH Surigao del Sur for two years and eight months after leaving AB Ison, according to her LinkedIn profile.

Worked under Binay

Interestingly, the archives of the Makati City government’s website show that Arthur Ison’s father and the firm’s founding president, Pedro Ison, had served as the municipal secretary of Makati for more than 26 years, even before Makati was declared separate from Rizal province.

A municipal resolution extended Ison’s term as municipal secretary despite reaching the forced retirement age of 65, supposedly because his service was still needed “especially during the period when the Local Government Code is to take effect on January 1992.”

Makati’s vice mayor at the time, Augusto V. Pangan served as temporary presiding officer, because Makati’s then mayor, Jejomar Binay, was not present at the gathering. The same resolution in favor of Pedro Ison also urged the city council to “make strong representations with the Civil Service Commission” so that Ison’s term would be extended for six more months.

The Makati City portal listed Pedro Ison as one of the “prominent residents” of Pio del Pilar, Makati City.

Zero revenue

As for Patriot Freedom Air, the receipts that ABS-CBN issued for the ad contracts worth nearly P12.6 million listed the company’s taxpayer identification number to be 008-850-909 and address at 502 Greenhills Mansion, Annapolis Street, San Juan City.

Tolentino; Rizalina Hombre, media director of his ad placement agency, AdmediaEdge; and Jaewoo Chung, president of Patriot Freedom Air, signed the documents covering the ad buys.

PCIJ checked out the firm’s records at the Securities and Exchange Commission or SEC and found no evidence at all that it could afford to finance the former MMDA chief’s political ads.

Patriot Freedom is a stock corporation that registered with the SEC only on Sept. 1, 2014. It is said to be engaged in “tourist assistance activities.”

Jae Woo Chung is named as president in the company’s papers with the SEC, with his personal address shown to be 502 Greenhills Mansion. The other incorporators and officers of the firm are Angieneth Alma, Alex Ico, Twinkle Joy Sagun (treasurer), and Jean Ella P. Ico (corporate secretary). All five are listed to be Filipinos.

As of 2014, Patriot Freedom’s authorized capital was only P250,000, and its paid-up capital, only P62,500. As of Dec. 31, 2014, it reported to the SEC zero revenues, zero administrative expenses, and thus zero net income.

From its paid-up capital of P62,500, Patriot Freedom ended the year 2014 with only P57,250, on account of a decrease in current assets of P4,950. — With research and reporting by Vino Lucero and Malou Mangahas, PCIJ, March 2016

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