US court tells Lacson: pay P1.72-M damages

Two months ago Sen. Panfilo Lacson paid $20,000 (P1.1 million) for an Australian audio-tech to authenticate his copy–one of thousands–of the "Hello Garci" CD. Will he again not bat an eyelash in paying $31,262 (P1.72 million) this week to a California businesswoman he had wronged six years back?

The Alameda county Superior Court has subpoenaed Lacson to show up on Wednesday and recompense Filipino-American Blanquita Pelaez for business tort. Failure to appear could set off his "arrest and punishment for contempt of court," plus payment of costs to enforce the final judgment.

Judge Barbara J. Miller also ordered Lacson to explain how he came to own or earn the cash or assets he will use to pay the $31,262. Filipinos and Americans who have long accused him of illegal enrichment eagerly are awaiting his listings of bank accounts, real property, stock certificates, business books, incomes, insurance policies and vehicles. They aim to use the documents for money-laundering prosecution.

Pelaez told The STAR from Oakland City yesterday that Lacson was served the US court notice at his Senate office on Aug. 2, received by his staff lawyer. "If he doesn’t show up, my lawyer Rodel Rodis will secure an arrest warrant," she said. "His lawyers will be there to protect his rights, but they are not the losing defendant, so he must still appear."

An arrest order could prevent the senator from flying his usual twice yearly to the US, where he and wife Alice own houses, run businesses and hold bank accounts.

Lacson by default had lost Pelaez’s injury suit for nonpayment of a supply of Smith & Wesson handcuffs to the Philippine National Police, of which he was chief in 1999-2001. On advice of Manila counsel Sigfried Fortun, he ignored the case filed in 2001, when he became senator. Only when the court in 2003 awarded Pelaez actual damage of $31,262 and punitive damage of $3 million did Lacson recognize its jurisdiction.

Lacson hired American lawyers Barbara Zanger Zuñiga and Michael Cardoza to appeal the ruling. Citing the fresh Campbell case in which the US Supreme Court reversed an extraordinarily large $25-million damage against an insurance firm, the lawyers got the California court to defer the $3-million portion of Pelaez’s award. Still, Judge Steven A. Brick on July 26 ordered immediate payment of the $31,262, Pelaez’s lost commissions when Lacson unilaterally withheld payment of the handcuff deal.

In the appeal, Lacson also pleaded for $38,000-attorneys’ fees. Judge Brick rejected it, citing that Lacson was not a party to the contract between the PNP and Pelaez as Smith & Wesson’s agent. Lacson contested this too, but was denied with finality on June 30. If he has not done so already, he will have to cough up that $38,000 (P2.09 million) for Zanger and Cardoza.

As for the $3 million (P165 million), Pelaez said she would strive to prove on appeal suffering business losses, emotional pain and social shame when Lacson, during a Fil-Am party in California, called her a con artist.

Of the $31,626, "Lacson cannot just say, ‘here’s your money so you can shut up now’," Pelaez explained the difference between the US and Philippine tort laws. Because of statutes against smuggling and money laundering, Lacson must still prove that he earned his income and piled up his assets from legitimate sources. "He will be asked if he brought in legally and declared the dollars he deposited in America or used to buy houses, cars and businesses," Pelaez said. "Then, as winning plaintiff, I will be asked if satisfied with the legitimacy of payment." She hinted at using Lacson’s admissions for her subsequent $3-million claim.

In a 2001 Senate inquiry on Lacson’s covert deposits, multiple murders, kidnapping for ransom and drug trafficking, then-Armed Forces intelligence chief Gen. Victor Corpus presented bank statements, real estate and business papers, and vehicle purchases of the Lacson couple. California is a community-property state, akin to RP where one’s assets are deemed owned as well by a spouse.

The PNP had ordered 41,000 handcuffs from Pelaez in Dec. 1996 for P15,673,863, from which she was to earn $1 apiece. Instead of issuing a letter of credit within 30 days as contracted, the PNP took ten months, by which time the Asian financial crisis had crashed the peso from $26 to P52 to the dollar. After PNP officers inspected the supply in Massachusetts, Pelaez delivered in Dec. 1997.

To compensate for the peso devaluation, Pelaez negotiated to reduce the supply to 31,262 pieces for P15,673,828.94. The PNP relented, but only after raising other issues that dragged till Nov. 1998. Worse, due to unclear policies, Customs mislabeled the shipment as "smuggled" and confiscated it in Feb. 1999. The PNP later convinced Customs to release the cargo and waive duties.

In Aug. 1999, Pelaez swore in her complaint, Lacson approached her in Manila for help to become PNP chief (a post he publicly vowed to reject if offered). In exchange for suing 123 officers who had handled the bidding, signed the deal, inspected the supply or given her a hard time, Lacson would release her payment as soon as promoted. Pelaez refused to help oust the officers whom Lacson planned to replace with his loyalists. When Lacson did become PNP chief in Nov. 1999, he withheld the agreed sum and blacklisted Pelaez from future government deals, although his finance staff cleared everything in Feb. 2000.

The PNP consequently paid Smith & Wesson, sans Pelaez’s $31,262-fee. "After I collect here in California," she said yesterday, "I will sue Lacson in Manila for attempted extortion of P8 million that he demanded as import duties that already were waived."

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