Source of Napoles wealth questioned

Coal firms bogus, says ex-employee

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The rise of Janet Lim-Napoles from a modest family home in a Laguna subdivision to a mansion at Forbes Park in just a little over 20 years is the stuff most Filipino dreams are made of.

She claims her great wealth came not by defrauding the government of billions of pesos in lawmakers’ pork barrel funds meant to ease rural poverty, but from sound investment. Her whistle-blowers say Napoles’ fortune certainly did not come from exporting coal as she had claimed in a TV interview.

“They do not know anything about coal,” said Merlina P. Suñas, who registered for Napoles dummy companies and nongovernment organizations (NGOs) with the Securities and Exchange Commission (SEC).

Suñas is one of six former employees of Napoles who have executed affidavits accusing the president and CEO of the JLN Group of Companies of turning the Priority Development Assistance Fund (PDAF), or pork barrel, into a source of kickbacks. The racket came to light when Benhur Luy, the principal whistle-blower, was allegedly detained by Napoles and subsequently rescued by the National Bureau of Investigation.

The NBI is investigating the claims of the whistle-blowers.

Napoles, 49, has remained secretive about how she and her family accumulated such great fortune despite a ruthless desire to be accepted in high society by throwing lavish parties and hobnobbing with the rich and the powerful.

The Inquirer asked Napoles’ camp to reveal the family’s source of wealth. Her counsel, Lorna Kapunan, replied: “My client feels that she cannot trust you. We will present proof in the appropriate venue. We have sent a demand letter to PDI … expressing our client’s concern over your demolition job.”

Luy (a relative and former personal assistant) and Suñas (a former staff member and president of one of the 20 bogus  NGOs formed by Napoles) revealed in interviews that JLN was a tightly managed, family business preying on taxpayers’ money with the connivance of senators, representatives and their staff, and government officials and bureaucrats.

“They cannot say how they earned their money because they are probably ashamed to tell their high society friends about it,” Suñas said.

In an interview with ABS-CBN News’ Korina Sanchez on July 23, Napoles, her husband and two children, James and Jo-Christine, explained that the family’s wealth came from “a successful business in coal export and trade to China, India and Pakistan, and others since the 1990s.”

Sanchez even interviewed “a longtime business partner who flew in to testify to the legitimacy of the Napoles family business.” The unidentified business partner said: “In 1998, we grew together up to right now. Now we become bigger. In Jakarta, we have property, around 650 hectares.”

Napoles claimed that her business partners are in the country to prove the legitimacy of her businesses and that she did not deal exclusively with the government. Her husband, former Marine Maj. Jaime Napoles, said: “It is true we have a business, but this is not just any business. This is legitimate business.”

In a letter to President Aquino on April 17, Napoles said:

“We are decent law-abiding citizens all our lives. We are not kidnappers; we are not criminals. My family and I are legitimate businessmen. We have been engaged in the business for the past 29 years and the main reason for our success is because of the trust and integrity attached to our good name.”

Napoles sought the President’s intervention in what she claimed was an extortion attempt by “suspicious characters” and some NBI agents.

Congressman, generals

Suñas said she was assigned to handle the registration of Napoles’ supposed coal companies, Asia Prime Energy Development Corp. and Asia Star Power Resources Corp., between 2010 and 2011, and she knew that these companies were bogus.

“They do not know anything about coal. Their goal was to go into a high-profile business from the money they made out of their real business. I think their next plan was to go into power generation,” Suñas said.

Asia Prime had a former Mindanao representative as head, while Asia Power had former generals as stockholders. SEC records show that these two companies remain in their start-up phase.

Luy said that as a Grade 3 pupil, he once spent his summer vacation at the three-bedroom Napoles home on Teresa Street, South City Homes, Biñan, Laguna. “We were crammed in there. They had a red Toyota car and it was really beat up,” Luy said.

He said that after he got his license as a medical technologist in 2002, Napoles recruited him to help her. “I was working at Chinese General Hospital then and I had planned on moving to work for a drug-testing company. But she wanted me to just work for her and offered to match my salary, which was P14,000,” Luy said.

He was paid P8,000 a month and stayed with the Napoles family who by then had moved to No. 635 San Isidro St., Ayala Alabang Village in Muntinlupa City.

Husband as driver

Luy said that Napoles was fully in charge of the business with her husband as her driver, a far cry from the  mutineer in 1989 who commandeered a Marine tank in a failed solo mission to crash the gates of  Camp Aguinaldo. (His vehicle lost fuel. He suffered burns when soldiers poured gasoline in the tank to flush him out).

“Our days were mostly spent talking to congressmen, mayors and chiefs of staff of senators mostly outside their offices. It was Evelyn de Leon who was tasked to go to Congress or the Senate or their offices to follow up,” Luy said.

De Leon is the president of the Philippine Social Development Foundation Inc. (PSDFI), one of the bogus NGOs. The foundation was among those accused of rigging the bid for P3.8 million worth of Kevlar helmets in 1998. The charges against Napoles were dropped for lack of probable cause.

Luy said De Leon and Napoles met when they were members of the “Most Blessed Sacrament,” a Christian organization in Laguna.

Luy said that in 2005, he was asked by Napoles to join the JLN office on the 25th floor of Discovery Suites in Ortigas. “She realized that I was good in liquidation of money and that I was thorough in monitoring collections and disbursements, everything was recorded and balanced,” he said.

In the office, Luy met De Leon, Suñas and other JLN employees who were also named president of the Napoles NGOs, like Marina Sula (Masaganang Ani para sa Magsasaka Foundation Inc.) and John Lim (Ginintuang Alay para sa Magsasaka Foundation Inc.).

“There were a lot of congressmen, senators, former senators visiting our office,” Luy said.

Fertilizer scam

When Napoles was embroiled in another high-profile controversy in 2006, the P728-million fertilizer scam masterminded by then Agriculture Undersecretary Jocelyn “Joc-Joc” Bolante, Luy said the original Napoles NGOs had to lie low—De Leon’s PSDFI accounted for P31 million and Suñas’ People’s Organization for Progress and Development Foundation Inc. accounted for P5.2 million of taxpayers’ money diverted to the campaign of then President Gloria Macapagal-Arroyo in 2004.

Among the Napoles NGOs formed after the fertilizer scam was the Social Development Program for Farmers Foundation Inc. where Luy was president.

“I accepted because I thought foundations were meant for good deeds. I didn’t know at first that what we were working on were ghost deliveries. When I finally realized it, I was already in too deep,” he said.

At first, Luy said he was given a salary raise from P8,000 to P12,000. Napoles then offered him 0.5-percent commission when the amounts involved got bigger. “I got around P200,000 to P300,000 from our collections …. If the commission got too big, say P500,000, then Madam brought it lower. She was very tight with money,” he said.

Luy said Napoles’ acquisitions became more lavish in 2009 when she cornered the entire P900-million Malampaya fund allocated to the Department of Agrarian Reform (DAR).

“She really hit the jackpot then because she never delivered anything from the project, she got all the money. She ordered our foundations to start buying dollars from a black market trader on Pasong Tamo Avenue, Makati. She used these dollars to buy a hotel in Anaheim, California, ($7 million) and a condominium in LA ($1 million),” said Luy.

Suñas said she was responsible for coordinating with then Agrarian Reform Secretary Nasser Pangandaman and his undersecretary, Narciso B. Nieto, what NGOs would be used as conduits. She said the NGOs were supposed to provide P35,781 worth of agricultural products (gloves, seeds sprayers, and containers) to each beneficiary.

She said the Malampaya funds were paid in the name of the NGOs that took out the money as soon as they were ready for withdrawal and delivered them promptly to Napoles’ office or home for deposit in her safe or her personal dollar or peso account, or to the Air Materiel Wing Savings and Loan Association Inc. (for higher returns), or her bathtub.

P75M withdrawal

Suñas said the P900 million was paid out in three batches in 2009 and 2010. “The biggest withdrawal I made was for P75 million in one day. We brought [the money] out of the bank using four traveling bags,” she said.

After the Malampaya fund windfall, Napoles acquired in 2010 her first mansion on Narra Street at Forbes Park Village (a source claimed that Napoles has at least five lots in Forbes alone), units at Pacific Plaza in Fort Bonifacio Global City, a  hotel in Davao, and two units on the 53rd floor of Primea Tower on Ayala Avenue (worth at least P50 million each).

Luy and Suñas said Napoles’ modus operandi was no different from what she did in the Kevlar and the fertilizer scams—Napoles offered to pay in advance cash to the winning bidder of the project or the government agency handling the release of the funds or the senators or congressmen or governors or mayors who had pork barrel and internal revenue allotment funds at their disposal.

The two said Napoles’ partners got 40 percent to 60 percent of the project value up front while the brokers (normally their staff or friends or relatives) got a standard 5-percent commission and the NGO staffers, 0.5 percent. Napoles would get the rest, they said.

“We just do the paperwork and the follow-ups. We hardly meet with the big bosses, only Madam gets to meet them,” Luy said.

He said the Napoles couple were fond of throwing parties that were always bigger and more expensive than what they had before. “They wanted to be accepted into high society,” Luy said.

But the biggest party was reserved for what could only be termed as a “crocodile’s ball” where all business partners and agents gathered yearly at Discovery Suites to celebrate the years’ collections.

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