Government loses P51-billion ill-gotten wealth case vs Marcos, cronies

THE Supreme Court (SC) has junked the government bid to collect P51 billion in damages against the estate of the late strongman former President Ferdinand E. Marcos Sr. and his cronies  for allegedly conniving to acquire ill-gotten wealth through behest loans.

In a 28-page decision penned by Associate Justice Noel Tijam, the SC’s First Division affirmed the August 5, 2010, ruling issued by the Sandiganbayan which dismissed for insufficiency of evidence the complaint for reconveyance, reversion, restitution and damages filed by the Presidential Commission on Good Government (PCGG).

“Juxtaposing the specific allegations in the complaint with the Republic’s documentary and testimonial evidence and as against the respondents’ documentary and testimonial evidence… the Court agrees with the Sandiganbayan that the weight of evidence fails to
preponderate in the Republic’s favor,” the SC said.

The Court held that the PCGG failed to present documentary evidence and testimonies from witnesses to prove its allegations in the complaint.

The PCGG, in its complaint filed 31 years ago, claimed that the Marcoses and their alleged cronies engaged in “schemes, devices or stratagems” in order to supposedly acquire ill-gotten assets.

It named former First Lady Imelda R. Marcos, representative of the Marcos estate, as respondent in the case, together with former construction magnate Rodolfo Cuenca, his son Roberto Cuenca, former Philippine National Bank President Panfilo O. Domingo, former Trade Minister Roberto Ongpin, former Development Bank of the Philippines officer Don Ferry and 11 others.

The PCGG specifically accused Cuenca and the Marcoses of conniving to create the Construction and Development Corp. of the Philippines (CDCP), predecessor of the Philippine National Construction Corp. (PNCC), in order to obtain ill-gotten wealth.

Based on the complaint, the CDCP obtained favored public works contracts amounting to billions of pesos from the Department of Public Works, which later became the Department of Public Works and Highways (DPWH) and from the National Irrigation Administration, such as the construction of sugar centrals, the Philippine Associated Smelting and Refining Corp. (Pasar), the Philippine Phosphate Fertilizer Corp. (Philphos) and the Light Railway Transit (LRT) Project, among others, under terms and conditions manifestly disadvantageous to the government.

Furthermore, the PCGG said the CDCP secured loans and financial assistance from government financial institutions without sufficient collateral, in contravention of banking laws and sound banking practices.

The PCGG added that Cuenca and the Marcoses also organized the now-sequestered Universal Holding Corp. (UHC), a holding company for CDCP, Sta. Ines Melale Forest Products Corp. and Resort Hotels with the participation of other defendants,  namely, Jose L. Africa, Roberto Cuenca, Manuel Tinio, Mario Alfelor, Rodolfo Munsayac, Arthur Balch, Nora  Vinluan and Ricardo de Leon.

The UHC, according to the PCGG, was controlled by the Marcoses and served as conduits or deposit abroad of illegally obtained funds and property.

On August 5, 2010, the Sandiganbayan dismissed the complaint against the respondents for insufficiency of evidence, noting that most of the evidence presented by the PCGG consisted of executive issuances of then-President Marcos and of court decisions and resolutions.

The Sandiganbayan explained that executive issuances are not  illegal per se considering that every public official is entitled to the so-called presumption of good faith in the discharge of official duties.

The Sandiganbayan further declared that in the absence of bad faith and malice, the presumption of regularity in the performance of official duties stands.

In its petition filed before the SC, the PCGG sought the reversal of the Sandiganbayan’s decision, insisting that it has established prima facie case against the respondents.

It argued that Cuenca admitted in his testimony that CDCP obtained loans from local and Amer can banks and government financial institutions.

Thus, the PCGG said, the Sandiganbayan should have only resolved whether said loans were grossly disadvantageous to the government and to the Filipino people.

It also assailed the Sandiganbayan’s exclusion of its evidentiary evidence on the ground of the best evidence rule.

The PCGG argued that it has proven that the documents showing the loans, financial assistance, guarantees and other favors given to Cuenca really existed and were actually executed.

However, the SC held that it ca not rule on the PCGG’s claim that it has established prima facie case against the respondents since under Section 1 Rule 45 of the Rules of Court, only questions of law should be raised in appeal before it.

“In order to determine the veracity of the Republic’s main contention that it has established a prima facie case against respondents through its documentary and testimonial evidence, reassessment and reexamination of the evidence is necessary,” the SC explained.

“Unfortunately, the limited and discretionary judicial review allowed under Rule 45 does not envision a reevaluation of the sufficiency of the evidence upon which respondent court’s action was predicated,” it added.

Likewise, the SC said the Sandiganbayan was correct in excluding government’s documentary evidence consisting of reports, sworn statements, memoranda, board resolutions, letters of guarantee, deeds of undertaking, promissory notes letters and loan agreements for being mere photocopies.

The High Tribunal explained that a photocopy, being merely secondary evidence, is inadmissible unless it is shown that the original is unavailable.

The Court noted that there was no proof that the PCGG exerted efforts to produce the original.

“When the Sandiganbayan inquired as to whether the Republic will present the original or certified true copy of its documentary exhibits, the Republic answered that it will do so if necessary, as the originals are kept in the Central Bank vault. Despite knowledge of the existence and whereabouts of the documents’ originals, the Republic failed to present the same and contented itself with the presentation of mere photocopies,” the SC stated.

Furthermore, the SC said although the PCGG insisted that the documentary exhibits are public documents, it failed to show a copy attested by the officer having the legal custody of the record.

The SC also likened the PCGG’s case against Cuenca et al., to the case Republic of the Philippines v. Marcos-Manotoc, et al., where it pointed out the importance of the best evidence rule in recovering ill-gotten wealth.

In the said ruling, the Court noted that the best evidence rule, which regards original copy of a document as superior evidence, has been recognized as evidentiary standard since the 18th century.

It added a law student could not have finished the law school and passed the bar examinations without knowing such elementary rule.

In Marcos-Manotoc case, the Court noted that “despite having the expansive resources of the government, the members of the prosecution did not even bother to provide any reason whatsoever for their failure to present the original documents or the witnesses to support the government’s claims”

“In sum, absent preponderant evidence to hold otherwise, the Republic failed to prove that the respondents by themselves or in u lawful concert with one another, accumulated or participated in the accumulation of ill-gotten wealth insofar as the specific allegations in the subject complaint are concerned,” the Court ruled.


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