This will require congressional action. The SSS and GSIS charters state that Malacañang must name the CEOs and board trustees. No confirmation needed from Congress’ Commission on Appointments. Despite their oaths of office to serve SSS and GSIS members to the best of their abilities, the appointees thus owe fealty to the President and the friends who recommended them. Congress can change all that by revising the SSS and GSIS charters to provide for ways by which members can elect – and recall – the trustees. Also, for regular board consultations with members about their actions and policies. Just like annual stockholders meetings in private corporations, in which they get to vote board directors and question management directions. After all, SSS and GSIS are private mutual provident funds – owned by contributing members and merely administered for them by government. They are not GFIs (government financial institutions) like Land Bank or Development Bank of the Philippines. If SSS and GSIS did get seed capital from government at their inception, the money misused by a succession of Palace appointees has more than made up for it. Besides, that seed capital is also taxpayers’ money. And most taxpayers are also SSS and GSIS members. A quick look at their monthly pay slips shows that income taxes are withheld along with SSS and GSIS mandatory contributions.
Under Joseph Estrada alone, SSS and GSIS money was misused at least five times. First was in First Pacific’s buyout of PLDT. Presidential crony Mark Jimenez brokered a deal in which SSS and GSIS threw in billions just so First Pacific can consummate the deal despite insufficient cash. The buyers conducted haphazard due-diligence studies of PLDT finances. Only after the purchase did they find out that PLDT subsidiary Piltel was ten times deeper in debt than they thought. Former SEC chief Perfecto Yasay Jr. swore that Estrada earned a billion-peso kickback from the use of SSS and GSIS money. Another stink will soon explode. Business circles are abuzz with talk that big PLDT shareholders Alfonso Yuchengco and Antonio Meer were arm-twisted to sell to First Pacific.
This was followed by Equitable’s buyout of PCIBank. Again, SSS and GSIS money was thrown in so Equitable could consummate the purchase despite insufficient cash. No due-diligence was made this time. Equitable was racing against other bidders who were taking long to study PCIBank’s financial papers. Luckily for SSS and GSIS members, Equitable-PCIBank rose to banking prominence. SSS earned from this investment P148 million in 1999 and P160 million in 2000. But Yasay again swore that Estrada made more billions in "commissions" from the deal. Estrada was so happy he started describing Jimenez as a "financial genius."
Crony Jaime Dichaves, who had wanted a piece of the First Pacific-PLDT action, learned some tricks from Jimenez. In September 1999, he advised Estrada to order SSS and GSIS to again throw money into Belle Corp. Belle, in which Dichaves is stockholder and director, was at that time asking Estrada for Pagcor’s franchise to operate jai alai. Estrada demanded a kickback for it, Jimenez swore. But Belle was short of cash, so Estrada just asked for shares of Belle stocks. Belle issued new shares and turned over 25 percent to Estrada. Estrada then ordered SSS president Carlos Arellano and GSIS general manager Federico Pascual to buy the 75 percent for P745 million and P1.103 billion, respectively, or a total of P1.848 billion. It was an overprice, Jimenez swore. Arellano and Pascual, too, swore that Estrada got a P190-million commission from it. Jimenez added that Estrada even borrowed P126 million from him while waiting for delivery of the SSS-GSIS kickback. He said Estrada never repaid him, although the President deposited the check under alias Jose Velarde in Equitable-PCIBank.
State prosecutors are investigating two other SSS-GSIS investments: in crony Dante Tan’s BW Resources where Estrada is a silent partner, and in William Gatchalian’s Waterfront Hotel to which Estrada alias Velarde lent P500 million. Going by his modus operandi, Estrada surely made more money from these deals. Tan was at that time manipulating BW prices in the stock market. Gatchalian was under orders from Estrada to open a casino in Waterfront in exchange for the loan. Private lawyers are complaining that Justice Secretary Hernando Perez readily gave Arellano and Pascual immunity from plunder suits. SSS and GSIS managers suspect that the two also made commissions from the many lousy deals.
Under the Ramos administration, GSIS sank billions in various firms. Among them is a drug company from which GSIS earns a few thousand pesos a year for its multimillion-peso shares. Under the Aquino administration, SSS gave its trustees and managers brand-new cars. All this time, SSS and GSIS members have been asking for higher pensions and dividends, more benefits and lower-interest loans. How can they get it if their trustees are more concerned with cutting deals under the table or following dictates from Malacañang.
SSS’ Nañagas gives hope of changes for the better. We have yet to hear from GSIS’ new general manager. But the system under which they work does not promise much hope for members. Only if they are made directly answerable to us can we ensure that our money won’t be wasted.