(First of three parts)

MANILA, Philippines?Simeon Marcelo has seen it all before.

As a lawyer who won his spurs during the martial law years, Marcelo is familiar with the methods that governments use to make private businesses bend to the will of the sitting administration. If they refuse to bend, they are broken.

?Clarong claro (It?s crystal clear) that this is a repeat of what happened during the Marcos era,? he said, explaining how the Marcos dictatorship sold to the public the idea of a government takeover of Meralco.

Marcelo served as a widely admired Ombudsman, with a solid reputation for incorruptibility, in the earlier years of the Arroyo administration.

He left government service just as his former law firm parted ways with the First Family and is now back as a partner at the revitalized Villaraza Cruz Marcelo & Angangco Law Office. The firm provides legal advice to the Lopez family.

Pointing to the similarities between past and present moves against Meralco, Marcelo noted that ?they even used the same lines about [high power] rates to justify the takeover.?

?Back then, they said power rates could be brought down if government would step in. But then they turned around and gave the company to Imelda?s brother (Benjamin ?Kokoy? Romualdez).?

Roots in halls of power
Thus, it is clear in his mind that the ownership fight besetting Meralco nowadays has its roots in the Palace corridors of power.

For him, the Marcos-Romualdez conspiracy to take over the power distributor in the 1970s mirrors a similar relationship between the Arroyo administration and the corporate empire of businessman Eduardo ?Danding? Cojuangco Jr.

?From the beginning, we were telling our clients that it was Cojuangco and his group that really wanted Meralco,? he said.

But the Lopezes would not believe their lawyers, saying that Manuel ?Beaver? Lopez, the son of Meralco chair Manolo Lopez, had asked San Miguel president Ramon S. Ang (RSA) about the food and beverage giant?s rumored interest in Meralco and Ang had denied it.

?GSIS doing it for SMC?

According to Marcelo, any state intervention in Meralco could have only happened through the Government Service Insurance System (GSIS) which initially held a 9-percent stake in the Lopez-led distribution utility.

In the weeks leading up to the contentious Meralco stockholders? meeting in May 2008, however, the state pension fund?s stake ballooned to 27 percent?a sign that the GSIS and its allies were not just interested in being a passive investor.

?Manila is a small place, and rumors were spreading that the GSIS was doing this for San Miguel,? Marcelo said.

A few months after failing in his bid for control of the Meralco board, GSIS president and general manager Winston Garcia sold the pension fund?s entire 27-percent stake to the San Miguel group.

Ramon Ang in charge

With Cojuangco reportedly more involved in overseeing the preparations of his party, the Nationalist People?s Coalition, for the 2010 elections, the day-to-day business of running San Miguel has been left to his trusted lieutenant, Ang.

Ang has managed to accumulate a combined 43-percent stake in Meralco through direct ownership of shares as well as proxies from trusted allies.

Bayan Muna party-list member Teddy Casiño also has no doubts about the root of Meralco?s troubles.

?What happened was not just state-sanctioned. It was state-initiated,? he said.

Battering ram

Casiño said that the GSIS, which has assets of about P480 billion, was used as a ?battering ram? by the Arroyo administration.

?And this administration has many reasons for doing so,? he said.

?Meralco is the crown jewel, so many cronies are interested. The Alcantaras, the Aboitizes and [port operator Enrique] Razon are now in power. Now Danding Cojuangco is also interested,? Casiño said.

The situation was aggravated by the Lopez family?s and its ABS-CBN television network?s very critical stance against the Arroyo administration.

All these factors came together to provide the means, motive and the opportunity to act against Meralco, Casiño said.

He also believes that the 2010 elections, and the scenarios that could unfold after it, are closely intertwined with Meralco?s fate.

?President Macapagal-Arroyo is getting ready for all kinds of options,? Casiño said.

?The elections are crucial. The NPC is a party to reckon with, and they have strong presidential contenders. Danding himself is a force to reckon with as a kingmaker,? he said.

?If and when Danding?s party becomes dominant after 2010, the favors that she?s done for them will not be forgotten.?

Some business leaders, however, see the Meralco-GSIS imbroglio and its aftermath not as signs of an unfolding conspiracy, but simply as a once-in-a-lifetime opportunity that could not be passed up.

Purely as investment
?GSIS looked at it purely as an investment,? said veteran stockbroker and Philippine Stock Exchange director Vivian Yuchengco.

?To me, it looked like the best investment that the GSIS ever made,? she said.

Yuchengco recalled that Garcia?s move to acquire a stake in Meralco actually started out in a very friendly manner. She said she herself had encouraged Eugenio ?Gabby? Lopez III, the ABS-CBN chair and CEO, to allow the GSIS chief to buy the equivalent of one seat on Meralco?s board.

?I don?t see anything political in it. The stock was very cheap,? Yuchengco said.

But thanks to a last-minute alliance with mega businessman Manuel V. Pangilinan, the Lopez family managed to stave off the most serious assault on their business empire since the martial law era.

But just barely.

Razor-thin edge

The Lopez family sold 30 percent of Meralco?s stock to the PLDT chair and his group in order to have a solid 43-percent voting block.

With San Miguel?s Ang believed to own an almost equal number of shares, market watchers believe that the Pangilinan-Lopez alliance may have managed to accumulate slightly more proxies since they are set to nominate six Meralco directors at the May 26 board elections, against San Miguel?s five?a razor-thin margin of only one director.

So for the second year in a row, the Lopezes are set to thwart an attempt by Palace allies to wrest control of the country?s largest power distributor from them.

But even Lopez allies concede that the sun is setting for the family, as far as its stake in Meralco is concerned.

?Meralco is now a fight between MVP (Pangilinan) and RSA (Ramon S. Ang),? said one businessman familiar with the situation.

Losing with dignity

?But for what it?s worth, [the Lopezes] are losing Meralco with dignity,? he said.

The Lopezes did not succumb to the brutal assault of the GSIS, when the family?s name and business practices were dragged through the mud before an awe-struck public.

And so far, they have not caved in to the slick boardroom maneuvers of San Miguel and its wily president.

?The Lopezes have lost Meralco,? said an energy company executive.

?But they are going out on their terms.? (To be continued)