SALN: Good law, bad results

First of Two Parts

WHATEVER THE outcome of the impeachment trial of Supreme Court Chief Justice Renato C. Corona, a once-ignored piece of document seems to be getting the attention it deserves at last. The question, however, is whether or not the general public’s increased familiarity with the Statement of Assets, Liabilities, and Net Worth or SALN would finally shame public servants into taking it seriously and accomplishing it beyond token compliance.

Corona is on trial at the Senate impeachment court in part for his alleged failure to disclose not just his SALN, but also the full details of his wealth. According to his prosecutors, Corona misdeclared, underdeclared, or did not declare multimillion pesos of cash and other assets.

But one inconvenient truth is that misdeclaration, underdeclaration, and non-declaration of all sorts of assets in SALNs are rampant across branches of government, political parties, and administrations. Tellingly, too, instead of providing the public greater access to SALNs, internal guidelines in the judiciary, the House of Representatives, and the Ombudsman have led to the opposite and have created more barriers to securing copies of a document that was supposed to help foster transparency in government.

In other words, both individual compliance by public officials and institutional compliance by public agencies with the SALN law are wanting and have failed to honor and do justice to its spirit.

Twenty-five years ago, a new Constitution heralded what should have been an era of transparency, accountability, and good governance in the country. Among other things, it triggered the mandatory filing and disclosure by all civil servants of their SALNs, under Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees. R.A. No. 6713 was enacted in 1989.

The SALN is aimed at helping keep public servants honest, since the information it should contain would aid the public in keeping track of any sudden increases in a government employee or official’s wealth. The assumption, of course, is that the data entered in the SALN are all accurate and up to date. For any monitoring to be done, access to that data is also presumed.  

For years now, though, the SALNs of all members of the judiciary have been inaccessible to the public, including the media. Majority of Corona’s prosecutors and members of the House of Representatives have also dug in their heels regarding the release of their SALNs, reportedly because they want to skirt inquiry and intrigue – exactly the situation the chief justice is now in.

Poor form, substance

A cursory review of the SALNs of about 1,500 senior elective and appointive officials that PCIJ has gathered since 1998 yields a possible reason for this: SALNs are mostly deficient in form and substance, with the habitual and seemingly non-disclosure pointing to flagrant sins of commission instead of mere sins of omission.

Many officials, for instance, still refuse to disclose the full details of the current/fair market and assessed values of their real properties, their exact location, and the size of their real properties. They include President Benigno Simeon C. Aquino III himself, Budget Secretary Florencio ‘Butch’ Abad, Health Secretary Enrique T. Ona, and some senators, congressmen (as of their 2009 SALN), and other Cabinet members. 

For a man who knows both his law and his money, Abad offers a puzzling SALN. He reported owning six real properties worth less than a million pesos or basement prices that could leave eBay and bargain hunters slack-jawed in envy.

The six properties that Abad enrolled in his December 2010 SALN include a lot and a house in Quezon City (which he said bought and built in 1983 and 1990, and with assessed values of only P203,040 and P584,550), three lots in Batanes (acquired on sale in 2001, 2004, and 2008, with assessed values of P2,250, P64,000, P33,370), and a lot in Batangas (acquired in 2008 with assessed value of P105,000).

Altogether, Abad declared the assessed value of his six real properties to be only P993,070. He left blank the columns for data on current/fair market value and acquisition cost of his real properties.

Meanwhile, Health Secretary Ona, who had a long lucrative private practice as a kidney doctor before his Cabinet posting, declared a net worth of P78.24 million in his December 2010 SALN.  But he opted to be mum about the details of his wealth; regarding his real properties, Ona simply typed the word “various” under the columns for “kind,” “location,” and “year acquired,” and left blank those for the assessed value and fair market value of his properties.

Ona’s net worth was shored up, however, by unspecified “stocks and investments” declared at P75.43 million, even as he reported liabilities such as “personal loans” of P5 million, a car loan from a bank of P750,000, and income tax payable of P65,059.50.

Similarly, President Aquino himself filled out his SALNs for June 2010 and December 2010 by simply typing “various” on and on under the columns for personal and other properties, leaving out many important details like his purchase of a second-hand Porsche (that he later sold), and the firearms he owns.

Cash & investments

PCIJ’s survey of SALNs also shows that while many officials declare having piles of cash on hand and in bank, and investments, they do not disclose how and in what years they acquired their millions.

There is also a tendency by many officials to claim huge sums of investments, time deposits, stocks, and money market placements, but they would not disclose in which business entities, companies or establishments these are lodged. 

Examples of such filers are Vice President Jejomar Binay and Iloilo Rep. Niel Tupas, Jr., chair of the justice committee and lead prosecutor in the Corona impeachment trial.

Binay declared a net worth of P58.09 million in his latest SALN as of December 2010 – all of it representing assets. He had zero liability.

He declared 12 real properties (three in Makati City, three in Batangas, two in Laguna, one each in Muntinlupa, Cavite, Isabela, and Bataan). Of the 12, Binay said he purchased seven, inherited two, earned two others as legal service fees, while two remain mortgaged.

Binay placed the acquisition cost of the 12 properties at only P16.88 million. 

He reported though a constantly growing amount of personal and other properties totaling P42.7 million, or nearly three times more than his real properties. This accounts for P17.52 million “cash on hand and in bank”, P11 million in “receivables,” P7.07 million in “furnitures, antiques, clothings, etc”, and P4.05 million in “investment in business” that Binay said was the “exclusive property of the spouse.”

As for Tupas, his SALNs offer a curious case of constantly rising investments in “time deposits and money markets.”

He reported a significant steady growth in his net worth, according to his disclosed SALNs for 2007, 2008, and 2009, or the years when he served in the 14th Congress.

As of his latest available SALN – 2009 – “time deposits/money market” assets seem to be the pivot of Tupas’s wealth, even as it first appeared only in his 2008 SALN. It just kept growing, despite the fact of the global financial crisis that sent markets in Europe tumbling down in 2008 to the present.

In July 2007, Tupas said he had P8.5 million cash in bank, but zero “investments” or “time deposits/money market” assets. In December 2007, his cash in bank stood at P11.5 million, but still he had zilch for “time deposits/money market.” By December 2008, however, his cash in bank slipped to P2 million, and a new entry, “investments,” came in, which Tupas valued at P11.7 million.

In December 2009, the term “investments” disappeared in his SALN; in its place, Tupas reported he had “time deposits/money market” assets worth P22 million.

The paper trail of real properties (i.e. land, houses, buildings) is fuller and stricter, thus easier to track. In contrast investment instruments could be shrouded in corporate veil, or brokered and sealed with agents, thus easier to hide.

Conflict of interest?

But by not disclosing in which business entities they have investments, public officials open themselves up to conflict of interest situations, which anti-graft laws say could be real, perceived, or potential. Hence transparency requires that they disclose these details.

Too, while many officials admit to incurring huge loans, mortgages, and other liabilities from relatives, friends, banks, credit card agencies, and business associates, they withhold data on the names of their creditors. Yet again, by not disclosing the identities of their creditors, public officials open themselves up to real, perceived, and potential conflict of interest situations.

And even if the SALN form requires the disclosure of specific data, including the incomes of the filer and his or her spouse, many officials do not, or simply will not, file honestly and fully, often leaving the columns blank. 

There are also some senior officials who fill out their forms by hand – which would not be a bad thing in itself, except that the data enrolled usually end up illegible. 

Ex, present Ombudsman 

This is fortunately not the case with the SALN of Ombudsman Conchita . Yet what she filed may likely raise a few eyebrows anyway. 

As a retired associate justice of the Supreme Court, Carpio-Morales’s SALN had not been disclosed previously, on account of court resolutions that placed the SALNs of all justices, judges, and court personnel secret from the public.

But when she assumed office as Ombudsman in June 2011, Carpio-Morales promptly filed her SALN in July 2011. She would not voluntarily release copies of her SALN, though, until last January 2012, amid the impeachment trial of Corona for, among others, non-disclosure of his SALNs.

Carpio-Morales declared a net worth of P40.75 million, representing P14.1 million in real properties and P29.04 million in personal and other properties, but also P2.4 million in liabilities. The last amount, she reported, was “amortization of purchase price of condo unit” to her creditor, the “Eton Group of Companies.”

She said P14.10 million was the total  “acquisition cost” of the nine real properties she “purchased” or built – three residential lots in Muntinlupa, a house and lot in Lemery, Batangas, three condominium units (located at The Fort, Manila, and Albergo in Baguio City), and two memorial lots.

She purchased two of the three condominium units only recently: The Fort condo in 2008 supposedly for P4 million flat, and the Baguio City condo in 2011, for P2,508,000.

Yet while Carpio-Morales reported the “acquisition cost” of all her nine properties, she left blank all the other columns in her SALN where she should have disclosed such details as assessed value, current fair market value, and nature of property (paraphernal, conjugal or community).

She also did not disclose how much in income she is getting as Ombudsman, and what the P25 million she has in “cash/investment inclusive of retirement benefits” actually consists of, in which entities she has investments, and how much of the total was her “retirement benefits.”

In comparison, Carpio-Morales’s resigned predecessor, Ma. Merceditas N. Gutierrez, had stated in her December 2010 SALN the annual income she was getting as Ombudsman: P743,673.50.

Gutierrez also declared the “current/fair market value” of seven real properties she said were “conjugal” assets (three inherited, two “donation”, and two “sale on installment”). She tagged these to be worth P69.5 million in all.

Yet like Carpio-Morales, Gutiertrez withheld details of the P7.5 million she said she has as “investments/savings/retirement benefits,” as well as details of the P13 million of her “loans, credit cards” liabilities that she said she owed “banks/private.”  

In her 2006 SALN, Gutierrez said her P19.8-million “liabilities” then included P4.5-million “loans” with PCIB Equitable, P10.8-million “mortgages” with Allied Bank, and P4.5 million in “private loans.”

The senator-judges

Among the senator-judges, Senate President Juan Ponce Enrile and Sen. Edgardo J. Angara stand out with their fully filled-out SALNs, which show to the last detail of the registration and plate numbers of their vehicles, and dates of acquisition of how many stocks in whichever companies.

In contrast, like President Aquino, opposition Sen. Manuel B. Villar repeatedly typed “various dates” under the column for  “year of acquisition” of his real estate and other properties in his 2010 SALN. 

All that Villar revealed were “investment in shares of stocks” worth P147.8 million, and “other real and personal properties” worth P572.8 million. His net worth: P725.2 million, with zero liabilities.

The colorful Sen. Miriam Defensor Santiago meanwhile said in her 2010 SALN that her assets include nine residential and two agricultural lots (six located in La Paz, Tarlac; two in Iloilo, and one in Lipa, Batangas) worth only P4.18 million. 

The bulk of her wealth or P100.3 million consists of personal and other properties, including P51.2 million “cash on hand/in bank” and P29.06 million in “investments” in unnamed business entities. But because she declared P60 million in “personal loans” to unnamed creditors, Santiago’s net worth slipped to only P40.3 million.

Sen. Joker P. Arroyo filed possibly the most trite of all SALNs among his colleagues. He declared a net worth of P11.05 million in his 2010 SALN. He said he had P7.9 million in “investments” and offered no further details. He also said he owns a “residential” property in Makati City that he said was worth P3.15 million. 

Arroyo, a known resident of posh Dasmariñas Village in Makati, said he acquired it in 1968 for P450,000, but that its assessed value now is only P150,000; he constructed his house for P1.05 million, but that he had improvements made so its value should now be worth P3 million.  

Why bad compliance?

Lawyer Nepomuceno Malaluan, co-convenor of the Right to Know, Right Now! Coalition of the advocates of the Freedom of Information Act, sees three apparent reasons for bad compliance with the law.

The first and least worrisome: Officials who think the SALN is an invasion of their privacy. Malaluan says that “the fear of calling attention to their wealth, of being investigated” could be the most common reason why some officials do not want to expose details of their real and cash assets. 

But the lawyer says that “privacy is not an option for public officials,” and argues: “The minute they embraced public office, they have to embrace the principle of a public office is a public trust. Your personal discomfort (about lack of privacy) must be overcome because of your public mandate.”

Second and a bit worrisome: Officials with a “puwede na” attitude or who take to their duties, including filling out SALN forms, half-heartedly, or with less than best effort. 

“There are officials who think that filling out some spaces and leaving others blank is good enough.” Malaluan notes. And because the SALN custodians are not looking or auditing compliance by form and substance, these officials get away with filing defective or deficient SALNs year on year.

While the first two groups may not be readily accused of “malice” or “malicious intent to deceive” in filing bad SALNs, Malaluan takes exception to yet a third, and the most worrisome, group: officials who file defective or deficient SALNs “knowingly and willfully, with intent to deceive, to hide their unexplained wealth, to avoid compliance with the law.”

This third group includes, he says, “those who want to conceal corruption.”

According to Malaluan, any discussions on how to improve compliance with and enforcement of the SALN law must acknowledge these “multiple tendencies of non-disclosure.” 

Yet even more important, he says, the myriad problems of implementation must be the target of reforms. These include “the problems introduced by internal guidelines in some agencies, the norms and systems for disclosure of documents across government, the standards for filing and filling out SALN forms, and the lack of review by custodians of the quality of SALNs filed.”

Public demand

Through it all, Nepomuceno says the citizens have to demand better and more truthful compliance by public officials. “The reality is there should be more pressure from the people for public officials to disclose, and to disclose truthfully, their assets, their wealth.”

Jose Manuel Diokno, dean of De La Salle University’s College of Law and national chairman of the Free Legal Assistance Group (FLAG), for his part assigns the greatest role in punishing bad SALN filers to the Office of the Ombudsman.

After all, apart from simply submitting SALNs, all public officials are also obliged to grant the Ombudsman access to their tax records – yet another document that could help validate the integrity of the sources of their wealth.

Diokno cites that the law, or R.A. No. 6713, already imposes on all public officials the obligation “to execute…the necessary authority in favor of the Ombudsman to obtain from all appropriate government agencies, including the Bureau of Internal Revenue, such documents as may show their assets, liabilities, net worth, and also their business interests and financial connections in previous years, including, if possible, the year when they first assumed any office in the Government.”

Reiterating a recent FLAG position paper on the issue, Diokno says, “It appears, however, that our public officials have never complied with this requirement; and the Ombudsman has never exercised its right of access to public officials’ BIR and other government records to determine if they are acquiring ill-gotten wealth.” – PCIJ, March 2012