The $3-M case Lacson lost

On Sept. 12, 2001, members of the Filipino community in Alameda, California, gathered to hear an important visitor from the home country speak. They had originally planned to ask Sen. Panfilo Lacson about bills in the Philippine Congress on dual citizenship and absentee voting. But on everyone’s mind that afternoon were the events of the previous day, when hijackers slammed two commercial jetliners on New York’s World Trade Center. Lacson had his own thing in mind, though. In one portion of his talk, he called Filipino-American Blanquita H. Pelaez a "scam artist na, smuggler pa." He was referring to the defense contractor who had gone to the press months earlier to decry unpaid commissions from the sale of US-made handcuffs to the Philippine National Police when Lacson was still its chief in 1999-2000.

That senatorial tirade precipitated a $1-million civil damage suit for slander on Dec. 14, 2001 in Alameda county where Pelaez resides. Having lost face and income from disrupted business, Pelaez also sued Lacson for another $1 million for intentional infliction of emotional distress. She threw in a third $1-million suit, intentional interference with economic relationship, concerning the handcuff deal.

Lacson lost all three suits on Jan. 10, 2003. California Superior Court Judge Julie Conger awarded Pelaez not only the $3 million she asked for, but $31,262 as well representing sales commission of $1 for each handcuff delivered by Smith & Wesson long ago in 1997. To enforce the ruling, Lacson was directed on Jan. 13 to disclose all his bank accounts in the past five years, and submit a list of real property, stock certificates, insurance policies, vehicles, businesses and other financial dealings pertinent to paying the $3 million. He was also ordered to appear in court on Mar. 5, 2003 under pain of "arrest and punishment for contempt."

Press reports in Manila quoted Lacson in subsequent days as saying that if such is the price he must pay for saving millions of pesos in Filipino taxpayers money, then so be it. Yet $2 million of the $3-million award have nothing to do directly with the handcuffs deal, but with his actions in California the day after 9/11. The last $1 million, plus $31,262, is about the handcuffs alright. Yet it is not about a scam or smuggling as Lacson makes it out to be, but about his own attempt to arm-twist a woman into obeying his sinister bidding.

Left unrefuted is Pelaez’s sworn declaration of Sept. 12, 2002, to which she testified in court in Dec. It is an interesting story.

Pelaez said that Smith & Wesson authorized her in Alameda in Oct. 1996 to represent it in dealings with the PNP and the Armed Forces of the Philippines. (Hence, the case filed in that county.) Defense contracting is a tight game. But she won a bid in Dec. 1996 to supply the PNP with 41,297 pairs of handcuffs for the equivalent of P15,673,863, inclusive of taxes and duties. Pelaez was to earn $1 from each pair. At P379.54 apiece, it was a bargain. The purchase contract stated that the price was not to be affected by any fluctuation in the peso-dollar exchange rate, provided the PNP issues a letter of credit to Smith & Wesson within 30 days of signing.

For some reason, the PNP took all of ten months to issue the LC on Oct. 22, 1997. By that time, the Asian financial crisis of July had sunk the peso to almost half its value, and the bargain was lost. Smith & Wesson nonetheless delivered the cargo to Manila on Dec. 19, 1997 after inspection by the PNP technical team in Massachusetts.

The PNP had to compensate Smith & Wesson for the losses resulting from its delay. In May 1998, the bidding committee amended the original contract. Smith & Wesson was to reduce the number of handcuffs to 31,262 pairs, and the PNP was to pay P15,671,828.94. After six more months of delays, the interior department and the PNP brass finally approved it.

A funny thing happened on the way to the ports, however. In Feb. 1999 the Customs bureau mistakenly labelled the shipment "confiscated, smuggled goods." The PNP subsequently asked the bureau to correct the mislabelling. waive the storage charges, and release the goods.

While all this was taking place, then-President Joseph Estrada began looking for a new PNP. Lacson was a leading candidate, although he publicly had declared several times that he would not accept the post.

In August 1999, Pelaez swore, Lacson met her at a Mandaluyong hotel’s Japanese restaurant "to obtain my support and endorsement in his campaign for chief of the PNP. He assured me he would quickly resolve payment of the handcuffs when he was appointed."

Lacson did bag the post in Nov. 1999. "(He) arranged with me to discuss the Smith & Wesson issue," Pelaez narrated. They met at another Japanese restaurant in San Juan where, Pelaez said, "he told me he would resolve the issue and see that I was paid my commission if I would help him in the ‘cleansing, overhauling and eradication of unwanted elements’ in the PNP." To secure payment to Pelaez’s principals, "Lacson asked me to file charges against the 123 PNP officers who had approved the contract. He told me later he wanted to have them all removed and replaced by his men, whose trust and loyalty to him were unquestioned."

Pelaez refused to implicate the officers to a wrongdoing she did not see. "True to his threat," she said, "Lacson ordered the PNP to stop making any payments to me supposedly until the dispute with the government was resolved."

Investigators did resolve the dispute in Feb. 2000. But Lacson refused to talk to Pelaez or return her calls, much more release the payment for the 31,262 pairs of handcuffs. Until he stepped down on Jan. 19, 2001, Lacson did not entertain Pelaez’s pleas to be able to colleect her long-delayed, much-reduced commission from the original contract.

Lacson in recent reports was quoted as saying the deal was dirty, so he had to junk it. Strange, for Pelaez’s lawyer Rodel Rodis says they discovered that Lacson, sometime in 2000, released payment of 80 percent of Smith & Wesson’s collectibles. If it was anomalous, Rodis asks, how come he paid?

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