‘The Firm’ stands firm

Pancho Villaraza of “The Firm” sent me a note the other day claiming that his Villaraza and Angangco law office had been vindicated with the decision of the World Bank’s International Center for Settlement of Investment Disputes (ICSID) to junk the arbitration case filed by Fraport in an attempt to collect its $425-million investment for the NAIA Terminal 3. The German firm filed the arbitration case in September 2003 claiming that the government had breached its obligations, further stressing that Malacañang through Villaraza had tried to extort $70 million to “fix” Fraport’s troubles with the administration and smoothen things at the courts in exchange for the ouster of the Cheng family, majority shareholders of Piatco – the local consortium that built the mothballed NAIA 3.

The Washington-based ICSID said it did not find the Philippine government in violation of any international trade treaty. The arbitration court instead concluded that the German company, including its Board of Directors, secretly arranged for management and control of the project in such a manner that they knew was in violation of Philippine government laws – in effect “consciously, intentionally and covertly structur(ing) its investment in such a way which it knew to be in violation of the Anti-Dummy law.”  Piatco claimed the consortium was 60 percent owned by the Chengs, 30 percent by Fraport and 10 percent by a Japanese company. ICSID, in its 194-page ruling, said Fraport knew it violated the Anti-Dummy law of the host country yet “consciously concealed” the fact.

Of course, the top winners here are the Philippine government since the ruling could pave the way for the much-anticipated opening of the terminal, as well as the Villaraza and Angangco law office since it validates their claims that the extortion charges were mere fabrications. It can be recalled that Fraport filed the case in what was obviously an attempt to embarrass the Arroyo administration, with Fraport chairman Wilhelm Bender and vice chairman Manfred Scholch accusing Villaraza of demanding “tens of millions of dollars,” even sending a purported “taped conversation” as proof of the extortion attempt.

Fraport’s German lawyer Dietrich Stiller however denied the extortion attempts, saying there was never a discussion of “fees” and that there was only one single meeting with the Villaraza law firm which was arranged upon Stiller’s request on behalf of Fraport. Ironically, Bender had written a letter of apology to Villaraza claiming a simple “misunderstanding” of the discussions, and that Fraport did not intend to discredit Villaraza or his law firm in any way.

Pancho Villaraza reiterated that all these “extortion” claims were fabricated particularly by Piatco lawyer Eduardo “Dindo” de los Angeles of the Romulo Mabanta Buenaventura Sayoc & delos Angeles law firm “to mask the massive corruption” allegedly committed by Piatco and Fraport. This prompted Villaraza to file 47 counts of libel against Fraport, its German officials and their Philippine lawyers, as well as Daily Tribune publisher Ninez Olivarez for continuously publishing Fraport’s claims in her paper. It can be recalled that Olivarez was arrested on the strength of these charges, and she and her other co-accused are currently facing prosecution.

There has been a lot of talk going around that the Villaraza and Angangco law office is no longer on strong footing with the present occupant of Malacañang. But the way Pancho Villaraza sounds, whichever the way wind blows – it certainly looks like “The Firm” continues to stand firm.

* * *

It looks like there’s been a lot of winning going on lately with the junking of Fraport’s case against the government and the expected opening of Terminal 3 in 2008, and now comes PAGCOR’s winning streak as relayed to me by MOPC member Dodie King.

PAGCOR apparently posted a P13.3 billion income for the first half of this year – beating its target of P12.47 billion and exceeding the P12.22 billion earnings it posted for the same period last year. Based on its audited report, PAGCOR set a record-breaking P24.3 billion total earnings last year. The state gaming firm has contributed more than P6 billion to the government as of June, with P528.49 million going to the Bureau of Internal Revenue as franchise tax.  

Of course, PAGCOR chair Efraim Genuino has been at the helm of PAGCOR since 2001 and it certainly looks like he’s doing a good job, with the state gaming firm posting record earnings year after year since the time he took over. He’s also starting a “paradigm shift” from gaming to entertainment with the launch of the musical production “Wanders.” The show combines the elements of theater, concert and circus all in one production and it’s been getting a lot of good reviews.

Efraim has a vision for an entertainment city complex that could make the Philippines a world class tourist destination patterned after Macau and Las Vegas . With the way he’s been running PAGCOR, it’s now considered as one of the best run and most profitable government owned and controlled corporations in the country today.

* * *

Email: [email protected]