Manny Pacquiao won. The judges have so ruled, contrary to kibitzers’ opinion.
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The Office of the Solicitor General has picked US law firm White & Case to represent the Philippines in arbitration with a Belgian dredger. The firm was chosen from a shortlist of five lawyers experienced in cases before the International Centre for Settlement of Investment Disputes in Washington DC. Only state bar exam passers may practice law in the US.
White & Case will defend before the ICSID the Philippine scrapping of the Laguna de Bay dredging by Belgian firm Baggerwerken Decloedt en Zoon. Four years ago it had won the Philippine voiding of the contract of Fraport AG of Germany to operate NAIA-3.
Other US law firms in the shortlist were Arnold & Porter, Dechert, Foley Hoag, and Orrick Herrington & Sutcliffe. Assisted by retired Supreme Court justice Florentino Feliciano, Solicitor General Jose Anselmo Cadiz set stringent selection criteria. First was on conflict of interest; that is, the firm should not have represented any case against the Philippines, has not rendered legal service to the other side, and is willing to not represent any government other than the Philippines up to five years after the case. Second was on experience: the number of ICSID arbitrations representing governments, cases won, and composition of the legal team. About the fees, Cadiz had asked for a 35-percent discount because the Laguna Lake Development Authority that will shoulder it relies on congressional allocations.
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The Senate inquiry on the Development Bank of the Philippines resumes this week on a wider plane. The first two hearings in October strived to resolve if the state-owned bank had granted a P660-million behest loan to Roberto Ongpin. This time it will examine if there was a pattern of DBP behest lending to the former Marcos industry minister.
Leading the charge are Senators Sergio Osmeña and Panfilo Lacson. In past hearings they focused on Ongpin’s Delta Ventures Resources Inc., the P660-million borrower. The loan was used to accumulate stocks of Philex Mining and then sell at 70-percent profit. Osmeña and Lacson noted that such lending was not part of the DBP’s development banking mandate. They also insisted that the loan was under-collateralized, while the DVRI was under-capitalized at P625,000. Further, they noted corporate layering of the loan through another Ongpin firm, Golden Media Corp. Too, the DBP board had approved the loan in 2008 in record speed of a few days. Five of nine factors by which the Supreme Court defines a behest loan were present.
Other details surfaced during the hearings. Allegedly the DBP waived ten of its normal requirements to evaluate a borrower. The DBP allowed the release of 50 million Philex shares, the collateral for an initial P510-million loan, prior to full payment. While this allowed Ongpin to flip the shares at hefty profit and quickly repay the loan, it precariously defeated the purpose of the collateral. The DBP sold its own Philex shares to Ongpin at P12.75 apiece, instead of directly to Ongpin’s buyer at P21, depriving the bank of a potential P412.4-million markup.
Through lawyers, the absent Ongpin denied the accusations of Osmeña and Lacson. The DBP chairman at the time, Reynaldo David, swore that he never knew that Ongpin was aiming to sell his gathered Philex shares to Manny Pangilinan. This, although David, Ongpin and Pangilinan all sat in the Philex board then. Another legal breach was raised: insider trading by Ongpin, aided by David.
Ongpin has promised to attend this week’s hearings. Osmeña is to grill David on DBP loans that enabled Ongpin to buy the sizeable government shares in Petron, Meralco, and Metro Rail Transit.
Also in 2008 the DBP lent Ongpin’s Sea Refinery Holdings $80 million. Another $35 million each came from the Land Bank of the Philippines and the Philippine National Bank. The loan was to fund his purchase of the government’s 40-percent stake in Petron, the country’s biggest oil refiner-distributor. Also to refinance Ongpin’s earlier purchase, through Ashmore-Philippines, of Aramco’s 40-percent share. Osmeña says that like in the DVRI loan, the DBP waived its standard documentation prerequisites. Financial evaluation was lacking. And the loan was approved in only six days, faster than DBP’s smaller loans.
Still in 2008 DBP loaned Ongpin’s Global 5000 P546 million, to accumulate shares of Meralco. Pangilinan’s group and San Miguel Corp. were at the time vying for control of the country’s largest power distributor. Osmeña says the DBP served as secondary buyer of the shares, effectively turning the lender as a guarantor.
David and Ongpin have admitted to closeness to former first gentleman Mike Arroyo. Osmeña and Lacson suspect Arroyo to be the “big man” behind the loans.
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The original news story was that Gloria and Mike Arroyo had obtained Dominican Republic passports. So Justice Sec. Leila de Lima was looking into it. The Caribbean country’s foreign minister now denies that the former first couple had sought political asylum. Who wants to live there anyway? The point was that the Dominican passports would allow the Arroyos extended stay abroad even if their Philippine passports are revoked. It’s like Imelda Marcos once carrying a Tongan passport as fallback in case the government barred her foreign travel pending trial for illegal enrichment.
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E-mail: jariusbondoc@gmail.com