The grandmother of all scams

Last of three parts

GEORGE TRIVIÑO, Ital-Thai’s Philippine representative, was livid when he found out that the company had begun negotiating the purchase of three reclaimed islands in Manila Bay without his knowledge.

He had been kept out of the deal by the other brokers and most likely found about it from the idle talk that was circulating in Binondo. “Sinekreto nila sa akin (they kept it a secret from me),” he told the Senate committees investigating the sale of the reclaimed land. “Lahat na business dito, kailangan dumaan sa akin (All their business here should pass through me).”

Triviño, Senate sources say, then reported the matter to House Speaker Jose de Venecia, who had been helping Ital-Thai acquire infrastructure contracts in the Philippines.

Our sources say that at about this time three years ago, de Venecia met in his home with Frank Chua and Benito Co, the two brokers hired by Ital-Thai to arrange the purchase of the property from the government. In that meeting, the Speaker asked the two men to work out an arrangement that would make “everybody happy.”

What happened next is amply supported by documentary evidence subpoenaed by the Senate investigation. Amari, the Philippine company formed by Ital-Thai and its Filipino partners, issued to Triviño 31 manager’s checks totaling P300 million from its Citibank account in Makati.

The checks, copies of which were obtained by the Senate, were signed at the back by Triviño. They were dated April 28, 1995, the same day the board of the Public Estates Authority (PEA) approved the joint-venture agreement with Amari.

Amari representatives also told the Senate that they deposited P100 million more in an account in Hong Kong, also on April 28. The money was sent by telegraphic transfer from Ital-Thai’s account in Bangkok.

A footnote in the final report of the two Senate committees investigating Amari says that the P300 million was encashed by a sister-in-law of a high Congress official. Senate sources say that the official referred to was de Venecia, and the woman who collected the money just before the 1995 elections, was a sister of his wife Gina.

Senator Juan Ponce Enrile, chairman of the committee on government corporations and public enterprises, put that footnote there. He said that the information was passed on to him by a source he could trust. “I would not put it as a footnote if I had no confidence that the story was probably true,” he said.

In 1995, de Venecia was in charge of the Lakas campaign at the local level, recalls former executive secretary Ruben Torres, then the party’s campaign manager. Torres says he took care only of the Lakas senatorial slate and received money for this from Emilio “Lito” Osmeña, then the party fund-raiser.

The Speaker, Torres adds, raised his own funds. “De Venecia spent for the congressmen, governors, and mayors, so he spent more than we did. For him it was a strategic thing as he was preparing for 1998, hindi siya agree na hahawakan ko lahat (he didn’t want me to manage everything,” Torres says.

The Speaker, however, denies any involvement whatsoever with Amari and points out that he had been cleared by an exhaustive Senate investigation. As he pointed out, “In a letter dated March 1 (1997), Mr. Triviño, the Senate witness in the Amari-PEA land probe, was emphatic in saying that I precisely refused to intercede for him in the Amari deal: ‘I wish to confirm that since you refused to help me on the Amari case, despite my repeated requests, I could not extend financial assistance to you or to the ruling party then and do not intend to in the future.'”

By the time that letter was written, however, it was two years after the 1995 elections, long after the P300 million had already been released through Triviño. What Triviño was actually writing to the Speaker about this time was his attempt to get more money out of Amari.

By all accounts, Triviño is a slippery character with a checkered past. Nor does he have compunctions about turning against his patron. Conveniently used as a front for payments, he wanted a cut in the deal as well. When that was not forthcoming, he squealed.

Drilon reveals that it was Triviño who gave Senator Ernesto Maceda the basis for his Amari exposé. Triviño also furnished the senator a copy of the “Dear Joe” letter he wrote de Venecia on November 7, 1996.

In that letter, Triviño complained: “Amari cut me out of the deal after I had formulated a perfectly legitimate deal. In that deal everybody – squatters, Amari, our friends, partymates, and supporters – would have been happy.”

He also warned of “dire consequences” unless Amari was pressured to “fulfill its obligations” to him. He added that he was committed to bankroll de Venecia’s monthly needs “and to save up for future operations, including an airplane.” He said that he had already paid the deposit on two jets. It is no secret that at that stage de Venecia was already preparing for his presidential campaign.

Our sources say that it was made clear to the Chinese brokers who had been negotiating with the PEA that Triviño was fronting for a powerful politician. Thus, in effect, the two brokers, Frank Chua and Benito Co, fronted for a string of public officials and private individuals who played a role in ensuring that Amari would acquire the reclaimed islands at a bargain-basement price.

It will be recalled that the total amount Ital-Thai’s Premchai Karnasuta was willing to pay for the property was P2,250 per square meter. Originally, in the November 1994 agreement, this amount was to be divided this way: P1,000 per square meter as the purchase price, and P1,250 for the brokers. When PEA insisted on the price of P1,200 per square meter, the balance of the P2,250 – P1,050 a square meter, or a total of P1.657 billion – went to the commissions.

Later, the total commissions were adjusted to P1.596 billion, our sources say. To save on cash, Amari also told the two Chinese that it would pay P300 million of this amount in the form of reclaimed land in the project area. The company computed the price of the property at P5,500 per square meter. The P300 million therefore translated into 54,545 square meters.

In addition, to make up for the intrusion of the politician who took P400 million of their commission, Chua and Co were promised a cash bonus of P157.84 million once the property had been developed and was to be sold.

The cash bonus, together with the P1.596 billion the two Chinese had earlier been promised, brought the total commissions to P1.75 billion, nearly equal to the price at which Amari bought the property from PEA.

Amari records show that the first payment of the brokers’ commissions was the P400 million released just before the elections, on the same day the PEA board passed a resolution confirming the joint-venture agreement with Amari.

In a letter on June 9, 1995, the day after Ramos signed the joint-venture agreement, Amari asked the two brokers to acknowledge receipt of the P400 million paid on April 28. Also on June 9, Chua and Co were paid P262.5 million in the form of 14 manager’s checks from Amari’s Citibank account. In addition, Amari gave the two men the following:

10 checks totaling1 P27 million and payable 60 days from the date of the letter

24 checks totaling P150 million and payable monthly from August 31, 1995 to January 31, 1998

48 checks totaling P357.36 million and payable in monthly installments of P29.75 million beginning July 1996 and ending June 1997.

By the time Senator Ernesto Maceda blasted the deal in a Senate speech in November 1996, Amari had already paid P969.7 million through Triviño, Chua and Co. Payments on postdated checks were stopped at this point.

In whose pockets these amounts eventually ended up is another of the many questions that still surround the Amari deal. There is evidence to show that some of the money coursed through Cuevo reached PEA deputy manager Justiniano “Bobby” Montano IV and his cousin Auring.

The Senate dug up a credit memo transferring P6.25 million from Cuevo’s account to the account of Bobby Montano at the Pilipinas Bank branch at the Holiday Inn. Our sources say that there were other, more substantial payments to Montano, and that these can be traced by following the trail of the blank checks issued by Amari after the June 9 letter.

In a separate hearing, Auring Montano also admitted that she was given P30 million as her share of the fees: P10 million in cash and P20 million in postdated checks, which she never encashed.

We also found an ethnic Chinese hardware storeowner in Cavite who revealed, on condition of anonymity, that he was approached by Auring Montano just weeks after the May 1995 elections. In a meeting at the Holiday Inn, Auring wanted him to encash P10 million worth of postdated checks in exchange for a rebate. Auring, this source says, was accompanied by Cuevo and a Cavite politician who, he was told, needed the money as he was leaving for a trip to the U.S.

Apart from the Cavite hardware dealer, there were others who rediscounted Amari’s checks. These include businessman Sy Pio Lato, believed to be the principal behind the jai-alai gambling operations in Manila, and his wife Wee Te Lato, who encashed four checks worth P45.35 million, according to records obtained by the Senate.

There were apparently several layers of payments. Chua, Co, and Cuevo were merely the conduits for a network of other wheeler-dealers. This network included a Metro Manila mayor who also demanded a share. Polly Tragico, who was Bobby’s girlfriend at the time of the payoffs, told us that she accompanied Cuevo when he paid off the mayor at the Westin Philippine Plaza.

Our sources say that the entire package of bribes includes more than the commissions paid to the brokers. Apart from the close to P1 billion paid to Chua, Co, and company, our sources say, P600 million was paid to a high official to clinch the deal. But that’s not all: when the story broke out in late 1996, another series of payoffs was made, several of our sources say.

Since so many others were making millions from the transaction, Triviño should probably not be blamed for having wanted to cut his own deal. What can be gleaned from his Senate testimony and the letter he wrote to de Venecia in November 1996 is that he had proposed to Amari that he would take care – for a fat fee– of the relocation of the squatters living on the three islands.

Amari agreed but Triviño became greedy. He wanted Amari to pay him an advance of P400 million. When the company refused, saying it would deal directly with the squatters, Triviño asked de Venecia to intercede. The Speaker, however, did not.

Thus, Triviño wrote the alternately threatening and supplicating “Dear Joe” letter quoted above. He also exposed the deal to Maceda. That was when all hell broke loose. The Amari scam unraveled. The share price of Centennial City, the new owner of Amari, plummeted. There was also panic at the highest levels of officialdom.

Bobby Montano was in pieces, sources in his family say. He was forced to resign on December 10, 1996, 11 days after Maceda’s exposé. After that, Bobby’s lines to Malacañang were cut, says a close friend who asked not to be named.

Desperate, the friend called a congressman to tell him that Bobby was in bad shape. Apparently, the congressman called de Venecia. Not long afterward, just before the Speaker’s birthday on December 26, 1994, de Venecia summoned Bobby to his home in Dasmariñas Village, Makati. Bobby lost a bit of his shakes after that.

The friend also ran to a Palace official to say that Bobby was in a state of panic. She warned that if Bobby talked, many people could be hit. That was when Agnes Montano, Bobby’s wife, got the reassuring call from Presidential Security Group commander Brig. Gen. Jose Calimlim.

On the November morning the day after Maceda’s speech, de Venecia was also worried enough about the consequences of the exposé to summon to his home for a breakfast meeting then executive secretary Torres and political affairs adviser Gabriel Claudio. “He was consulting me on how to handle the situation, which he said was politically damaging to Lakas,” remembers Torres. “Asikasuhin ninyo ito (Take care of this).”

As the Senate investigation progressed, de Venecia made more determined efforts to sort things out. Sometime in February 1997, he called to his home Centennial City officials Micky M.S. Yong and Louis Coson, and Triviño in what Drilon describes as a “family council.” Yong told the Senate that the meeting was held “to clarify the problem with Mr. Triviño.” Seeks later, Triviño fled the country, as did Chua and Co, who said they feared for their lives.

Without these key witnesses, the Senate investigation was stymied from pursuing its inquiry. Amari was also not completely forthright and held back vital documents. Some of the witnesses, particularly Cuevo, lied through their teeth, even if they were put under oath.

The Senate also failed to follow the trail of the checks paid through Triviño. Although Senate investigators summoned records of Amari’s bank transactions, they made no effort to check out the bank withdrawals allegedly made by de Venecia’s sister-in-law and the account from which these funds were drawn.

Moreover, Drilon says, both Maceda and Enrile, who were among the toughest interrogators during the hearings, were soft on Triviño. “He was treated with kid gloves,” says Drilon. “Hindi ko maintindihan (I could not understand it). And the thing that floored me was that after the executive session with Triviño, the following day, I see George Triviño acting as a godfather at the wedding of Maceda’s son.”

Irwin Maceda was wed on February 28, 1997. Apart from Triviño, the other sponsor at his wedding was de Venecia. Gina de Venecia, the Speaker’s wife, is the younger sister of Marichu Vera Perez, Maceda’s estranged spouse.

Not surprisingly, weeks later, Maceda issued a press statement that said in no uncertain terms, “As far as the Senate hearings on this detestable scam have gone, there is no evidence at all of Speaker Jose de Venecia’s participation in the negotiations on this deal.”

In the end, the Senate committees recommended the prosecution of several officials for violations of the anti-graft law, including PEA general manager Amado Lagdameo, Bobby Montano and two other deputy managers of PEA. The committees also recommended that charges be filed against 12 private individuals, including Cuevo, Chua, Co, Triviño, Manuel Sy, Aurora Montano, and several Amari officials led by Premchai.

The Office of the Ombudsman is still looking into the Senate’s findings. Always one step ahead, Cuevo and Sy hired lawyer Jose Flaminiano to be their counsel. Flaminiano happens to have been Ombudsman Aniano Desierto’s own lawyer when he was facing a House investigation.

Subsequent efforts to investigate the deal, such as that undertaken by the House of Representatives, a Malacañang legal task force, and a Palace committee of peers have upheld the legality of the contract and recommended only amendments to certain provisions.

Although the Senate report said the joint-venture agreement should be voided, PEA is merely renegotiating the terms of the old agreement. As far as the government is concerned, the project is still on.

What went on behind the scenes can only be speculated about at this point. One high government official told us that after the scandal broke out, Amari sent a representative to presidential friend Rosemarie “Baby” Arenas to ask her to intervene with her favorite senator. The representative came with P35 million. Arenas delivered the money to the senator, who was supposedly insulted by the “small” offer. She then went back to the company representative to say that the money had been turned down, but she did not return the cash.

When asked about this at a January 1998 luncheon with journalists, Arenas denied that the incident took place. “I was never approached by Amari to talk to the senator,” she said. “There’s no such thing. That’s one million percent wrong. May God punish me right now. Nobody offered money to anybody.”

There are other rumors, including how the senator later asked to be paid in US dollars an amount that came close to the nearly P1 billion the brokers had been given. The purchase of his cooperation cleaned out the company’s entire dollar account. The money was stuffed in boxes and delivered to the senator’s home in the dead of night.

In a way, the scam itself has become larger than life, challenging our notions of what is plausible. It becomes harder to distinguish rumor from fact. Once the payoffs are in hundreds of millions, who knows what people will do? Who among the most pious can resist the temptation? If someone told us two years ago that a company was willing to pay up to P3 billion in bribes and commissions, we would have laughed in his face. Now we are dead serious. Amari has created a new standard for thievery.