Reforms in immigration, taxation, labor and the powers of state gaming agency the Philippine Amusement and Gaming Corp. (Pagcor) and of free-port zones are among the key areas for remedial legislation seen arising from the ongoing Senate Blue Ribbon inquiry into the P50-million bribery scandal embroiling Macau-based tycoon Jack Lam and two former associate commissioners of the Bureau of Immigration (BI).
These possible points for reform were laid down by Senate Blue Ribbon Committee Chairman Sen. Richard J. Gordon, and most of them were concurred upon in separate interviews, with key committee members spearheading the probe.
Gordon, who presided over the second hearing into the case on Tuesday this week and has set the next hearing on February 9, also expressed a wish that people would see beyond the “political intramurals” that sometimes needlessly distract them from the core of the inquiry, and focus on the important reforms that could grow out of it.
“Taxation, immigration, labor. And a clearer delineation of the prerogatives of free-port zones that give licenses to gaming enterprises. We’re looking at all those,” Gordon said in an exclusive interview with the BusinessMirror.
He said Senate probers also see the need for the “tightening of internal rules of investigations of a confidential nature”, given the apparent abuse by certain immigration personnel, including dismissed BI associate commissioners Al C. Argosino and Michael B. Robles, and dismissed BI intelligence chief Charles Calima, of their mandates in the case of Lam’s online gaming business at Clark Fontana.
Raid, bribery
Immigration had raided the Fontana Leisure Park in Clark Field in November 2016, and rounded up 1,316 Chinese workers in the online gaming unit for allegedly working illegally in the country.
The ensuing disposition of their case gave rise to the alleged bribery of P50 million for the Chinese workers’ release, but Lam’s Filipino handler, retired police general Wenceslao A. Sombero Jr., had termed it as an “extortion” operation by Argosino and Robles.
According to Gordon, the Blue Ribbon panel will need at least “a couple more hearings” to get a full picture of what happened, and what systemic problems must be addressed with either executive action or remedial legislation; and who should be prosecuted for what.
Licensing, tax issues
Gordon said the inquiry, thus far, has shown the need to strictly curb the prerogatives of free-port zones like the Cagayan Export Processing Zone Authority (Ceza), which originally issued Lam’s enterprise the permit to engage in online gaming.
“If [a business] licensed by Ceza is operating outside Ceza, they’re violating their permit,” Gordon said, in reference to revelations that Lam got his license from Ceza, but was operating in Clark Freeport Zone in Pampanga.
The senator pointed out that “the idea [for free ports] is to generate business and employment” for certain geographic areas, so that allowing business licensed by one free port to operate in another area defeats the purpose.
Gordon also cited the need to clarify the tax regimes in which enterprises like Lam’s should operate. The justice department had alleged Lam owed the Bureau of Internal Revenue billions of pesos in taxes by operating his online business illegally in Clark.
Sen. Francis G. Escudero, Banks Committee chairman and a member of the Blue Ribbon committee, also listed basically the same areas for reform as laid down by Gordon.
Escudero, who had grilled Justice Secretary Vitaliano N. Aguirre II during the January 31 hearing, had gotten the Department of Justice (DOJ) chief to admit that online gaming remained a gray area of jurisprudence, as there is a pending court case on what constitutes “illegal online gaming”.
Escudero told the BusinessMirror he was keen on having the Senate inquiry resolve reform issues affecting Pagcor and the freeport zones’ licensing powers in taxation, and in limits to the hiring of foreign workers.
“And probably, also [to] clarify the job description of each position in the BI, in connection with the Immigration Act modernization bill,” Escudero added.
Immigration reforms
Escudero’s point about clarifying “job descriptions” was an apparent reference to the prolonged discussion at the last hearing on the basis for the two then-associate commissioners’ unilateral move to “investigate” further the Fontana case, even after the raid and arrests were conducted and inquest proceedings were apace.
In response to repeated questioning by Gordon, Argosino insisted he had the mandate to do so by virtue of his BI designation. To Escudero’s grilling later, he invoked the human-trafficking law, to which senators reacted with skepticism.
Sen. Leila M. de Lima, a former justice secretary, noted that if Argosino was drawing on the BI’s mandate as a member of the Inter-Agency Council against Human Trafficking (IACAT), then he should have gotten the clearance to investigate from the incumbent DOJ chief Aguirre, the IACAT’s chairman. Or, at the very least, their immediate superior, BI Commissioner Jaime H. Morente.
To Sen. Joel Villanueva, Argosino, in turn, also invoked the Administrative Code as basis for his and Robles’s actions.
Villanueva said that the BI, being a quasijudicial body, it was questionable for two associate commissioners to be directly acting like investigators in the case.
Gordon, asked about envisioned reforms during the phone interview with the BusinessMirror, said he was keen on having the Blue Ribbon inquiry “tighten the internal rules of investigations of a confidential nature in quasijudicial bodies.”
Gordon stressed the need to “tighten intelligence forays” by requiring “more frequent reporting to the relevant parties”.
The Senate chief prober aired dismay at the “cavalier” nature with which the two associate commissioners and even the then-BI intelligence chief Calima handled their respective investigations. Calima had claimed he was conducting counterintelligence on the two ranking officials. Argosino and Robles claimed they were being framed by Calima—with Sombero as accomplice—in an alleged extortion case, when the case is really for bribery. The two parties have filed suits against each other: Sombero charged them with extortion; the dismissed commissioners charged Sombero with bribery.
Employment issues
The Blue Ribbon inquiry, Gordon said, will hopefully also result in remedial legislation to prevent the undue displacement of qualified Filipino workers from businesses like Lam’s.
Villanueva had repeatedly raised this question in an earlier hearing he called as chairman of the Senate Labor Committee.
If gaming enterprises want to set up call centers for gaming, why, Gordon asked, “is there a need to employ Chinese from overseas, when they could very well do it [set up the call center] in their own countries?”
“If they want to do it here because of the more favorable tax regime,” then these enterprises should at least be required, Gordon said, to “teach Chinese to Filipinos”.
Corollary, the Philippine government and businesses should move to encourage more Filipinos to learn Chinese, especially considering the country’s expanding economic relations with its giant Asian neighbor.
“If there’s technology transfer, we should require language transfer,” Gordon remarked.
Meanwhile, as an additional immigration reform, Gordon suggests there’s a need to empower the BI to have better control of the entire system for handling foreigners in the country, expressing dismay at revelations that some of the Chinese workers allowed into Clark could not even present their passports.
As a “concomitant responsibility, all ports of entry should have better” detention places for foreigners taken in for immigration problems, noting the dilemma that confronted authorities in housing the over 1,300 Chinese workers in Clark Freeport Zone, problem went all the way up to the justice secretary, as Chinese embassy officials raised the poor facilities—not enough toilets—where their nationals were being held.
Image credits: AP/Bullit Marquez