Did Cebu cardinal get preferential treatment?

Vicente Atilano, the former president of financially disabled Corporate Investment Philippines, Inc. or CIPI, sought us to explain his side of the multi-million peso financial disaster. Fair's fair, so I sat down to listen. One of his first words as we shook hands was "I am not a crook. If I were, I would not be here. I would have more than enough money to be elsewhere."

With his forlorn eyes threatening to burst into tears at any moment, the former high flying executive of an investment firm was trusted by his fellow members of the Opus Dei. He said he only has two accounts, both at UCPB, and an examination of these accounts will belie accusations that he diverted funds for his personal enrichment.

He said his troubles began with the fall of Urban Bank. Investors and funders became skittish and a panic ensued that made it difficult for him to meet the cash demands of clients pre-terminating their accounts. But he claimed, he had more than enough assets on paper to meet liabilities. Except that much of what he had were tied up in long gestation projects and real estate. His mistake, if you believe him, is funding long term projects with short term commercial papers. He believes that without the Asian financial crisis, he might have been home free.

But, he insisted, on the day he was forced out of CIPI by Cebu Cardinal Vidal, the company was more than viable. He said he even had a good idea of a rehabilitation plan that would enable the company to get back in business and payback creditors and funders. But when Cardinal Vidal told him to sign a prepared resignation paper on the assurance that both the Church and San Miguel would help revive CIPI, he said he agreed to go. In fact, he said, he assigned his shares to the Cardinal as a sign of good faith.

He lamented that neither the Church nor San Miguel came to help. It turns out, he explained, that the Cardinal took control of the company only to make sure he would be able to get all his investments intact and ahead of other creditors. That happened when CIPI sold its 6,418-square meter property in Baguio City for over P68 million to Ayala Land. Some P40 million of the proceeds were paid directly to the Cardinal and his representative, Lino Lebron.

This means, the Cardinal received preferential treatment, having used his control of the company to get back his investments ahead of the other investors. Everyone else, including the nuns and the missionaries, were left by the Cardinal in a lurch. Atilano also felt sorry that the company went into a liquidation mode, which means there are no activities that would attempt to earn something from its assets in the hope of reviving it. However, the company continues to pay staff salaries of over a million pesos a month, more than half of which is accounted for by its top three officials, thereby dissipating its resources for nothing.

Atilano cites its Cebu real estate development project as one of CIPI's more promising assets and should be pursued. Even its pioneering technology venture in California's Silicon Valley was a going concern until CIPI's local voluntary insolvency filing made it necessary for the American operation to close shop too. Atilano claims they have more than enough orders from the giants of technology to earn good money in the US.

In fact, even a local technology venture should have been nurtured, he said. A small division of CIPI's local technology venture was bought by the late Francisco Ortigas IV and is now a flourishing business, he claimed. The people of Cardinal Vidal did not allow the investments to bear fruit, he rued.

Economist Bernie Villegas, for his part, observed that the current officials of CIPI are lawyers when entrepreneurs are needed more. They are just out to get those in the old management and not working to earn from the assets so that those with exposure to CIPI could be eventually kept whole, the economist said.

"Look," Atilano addressed us, "this had been a nightmare that refuses to go away." But he insisted that he has done nothing he should be ashamed of. He said he had been selling his cars and other possessions one by one to raise funds for his daily needs. His six children sleep together in one room to save on electricity costs.

He said he is ready to face investors and look them in the eye that he did nothing wrong. He admits he has lost a lot of friends, many of whom lost hundreds of millions in CIPI. If at all, he said, he may be guilty of lapses in business judgment but not estafa or worse. He claims all his transactions have a paper trail. His biggest fear, he said, is that some vital documents disappear.

He is saying that investors can get nothing by bringing him to court or otherwise harassing him. If the investors want their money back, they must knock on Cardinal Vidal's door. The Cardinal is effectively in control of the company. Atilano said he is praying that the Cardinal's aides who run the day-to-day affairs of CIPI now would do something to make the assets start earning.

Is the Cardinal aware of what is going on? Through his aides, he has effectively screwed the other investors by getting paid first. The other investors are not less worthy of consideration. An updated list of victims and their exposure show a far wider damage. Here is a partial list of religious organizations with investments similar to Cardinal Vidal's but remain in limbo:

Assumption College, P25,121,109.18; Agustinian Schools, 26,956,521.95; Cannosian Sisters, 10,579,908.64; La Consolacion, 10,841,897.97; Procurador General de Franciscan, 7,568,451.82; Sacred Heart Missionaries, 5,981,186.04; St. Joseph College, 9,608,979.55; St. Mary's College, 47,604,889.98; St. Scholastica's College, 13,531,116.09; Caritas Cebu, 3,297,399.04; Letran College, 3,580,167.18; Holy Spirit, 3,156,231.25.

I would like to believe that the Cardinal is not aware of the magnitude of the problem. Nor is he abreast of what could be done to help investors other than himself and the Archdiocese of Cebu. Like Cardinal Sin in the Monte de Piedad case, Cardinal Vidal is most likely ill-equipped to handle details of financial transactions. God and money do not mix and this case makes that eloquently clear.

Speaking of preferential treatment, Atilano himself was supposed to have given Sen. Robert Jaworski such treatment too, including large discounts to the detriment of creditors and investors. Then there is this matter of selling investment papers on an off-books basis. These are reasons why, among others, I am not ready to say Atilano had merely been unlucky.

What I cannot understand, however, is why are supposedly holy people fighting over money. Shouldn't they be working together to make sure money serves the greater purpose of God? None of these are sanctifying.

Meeting the Lord

Dr. Ernie E has something to contribute on the subject of meeting the Lord.

A church deacon, who was a barber, was feeling guilty because he had never witnessed for the Lord. One day a man came into his shop and asked for a shave.

The barber put him in a chair and lathered his face. He thought this would be the perfect time to witness to the customer. Nervously he asked, "S-S-Sir, are you r-r-ready to m-meet the L-L-Lord?"

The man opened his eyes wide, and saw the barber holding the razor with a shaking hand. He jumped out of his chair and took off running down the street with the hair cloth flapping in the wind.

(Boo Chanco's e-mail address is [email protected])