At Senate probe, more questions beg for answers on Michael Yang

FILE PHOTO

MANILA, Philippines—Amid the ongoing Senate investigation on the controversial transactions between the Department of Health (DOH), Procurement Service-Department of Budget and Management (PS-DBM), and foreign firm Pharmally, one name has been sticking out—Michael Yang.

Yang, a Chinese businessman who established the Davao City Los Amigos (DCLA) mall when President Rodrigo Duterte was still Davao City mayor in the early 2000s, was first mentioned and linked to the controversy by the end of August to early September.

His name surfaced in the Senate blue ribbon committee investigation after a video from Radio TV Malacanang (RTVM) surfaced showing Yang and officials of Pharmally Pharmaceuticals Corp. meeting with Duterte in Davao City in 2017.

Opposition Sen. Risa Hontiveros, who presented the video at one hearing of the committee, said last Aug. 30 that Yang was “possibly among the supporting actors” in the Pharmally scandal.

READ: ‘Cameo role’ for Duterte?: Senators flag ‘actors, mystery backer’ in Pharmally deals

Sebastian Angliongto, former Mindanao Economic Development Council chair, earlier said that Yang and Duterte had been spotted dining together at a Chinese restaurant in the past.

READ: Yang, 2 lawyers with Go, Duterte ties called to Senate probe

Aside from his years-long ties with Duterte, who exactly is Yang and why is the Senate blue ribbon committee so set on uncovering his identity and link to the Pharmally controversy?

Duterte’s economic adviser

The Chinese businessman first made the headlines in October 2018, when Duterte denied that Yang was his then-economic adviser.

This was after Yang claimed to be Duterte’s economic adviser on his website www.opea.com.ph.

“[He] cannot be because he’s a Chinese,” Duterte said.

Yang has been seen in several photos with Duterte, including during the President’s visit to China in 2016.

Duterte likewise said Yang joined the entourage of Chinese Premier Li Keqiang when he visited the Philippines in 2017.

Graphic by Ed Lustan

Prior to Duterte’s denial, he cleared Yang of speculations about involvement in drugs during a speech in Malacañang as he cited close ties between the businessman and Chinese Ambassador to the Philippines Zhao Jianhua.

READ: Palace explains Duterte didn’t link Chinese Ambassador to ‘drug lord’

However, the following month, then-presidential spokesperson Salvador Panelo confirmed that the Chinese businessman was indeed one of Duterte’s advisers.

“Michael Yang is just one of those advisers that the President consults on particular matters,” Panelo explained.

The confirmation was made after a report citing records from Malacañang showed that the Palace entered into contracts with Yang, giving him the title of “Economic Adviser to the President.”

Yang’s term as an economic adviser to the president, however, ended on Dec. 31, 2018.

Alleged drug links

Allegations about Yang’s supposed involvement in drugs revolved around claims made by Eduardo Acierto, a dismissed senior superintendent of the Philippine National Police (PNP) who had also been linked to the drug trade.

Acierto, former deputy PNP chief for drug enforcement, claimed that he had submitted to Duterte and then PNP chief and now senator Ronald “Bato” Dela Rosa an intelligence report on Yang’s alleged involvement in the drug trade.

In March 2019, Acierto called a press conference to claim his life was in danger after he made the allegations against Yang. Acierto himself had been linked to a case of meth smuggling worth P11 billion. He had gone into hiding since.

But before he went into hiding, Acierto claimed that he provided a confidential intelligence report on Yang and a certain Alan Lim to Dela Rosa, then Philippine Drug Enforcement Agency head Aaron Aquino and then PNP deputy director Gen. Camilo Cascolan.

Acierto said he also gave copies of the intelligence report to then PNP Chief Oscar Albayalde, Sen. Richard Gordon (chair of the Senate blue ribbon committee) and Executive Secretary Salvador Medialdea.

READ: Ex-police official: Duterte photographed with drug-linked Chinese

Duterte has already cleared Yang in October 2018.

Following Acierto’s claims, the Palace said there was no proof to link Yang to the drug trade.

READ: Palace: Michael Yang not involved in drug trade

Then-PDEA chief Aquino also cleared the Chinese businessman.

Duterte, in the meantime, continued to have encounters with Yang.

In August 2019, Sen. Bong Go, the President’s most trusted confidant, confirmed that Duterte met with Yang in Beijing, China at a private lunch, which was also attended by then-Chinese Ambassador to the Philippines Zhao Jianhua.

Pandemic fund mess

After video of the meeting between Yang, Pharmally executives and Duterte was presented at the Senate hearing, Yang initially skipped the blue ribbon committee hearings. In September, his alleged involvement with Pharmally was revealed at the committee investigation.

Pharmally, at the center of the ongoing Senate investigation, was among the firms recommended to and chosen by the Procurement Service Department of Budget and Management (PS-DBM) to supply face masks, test kits, PPEs and other medical supplies for the pandemic.

The little-known company, which was registered at the Securities and Exchange Commission (SEC) on Sept. 4, 2019 by Huang Tzu Yen, a Singaporean, bagged 13 contracts with the government worth a total of P11 billion—all involving supplies for COVID response—despite having a declared paid-up capital of only P625,000.

READ: Pharmally scandal: When middlemen profit even during a pandemic

Huang, during a Senate hearing on Sept. 10, admitted to senators that Yang lent money to Pharmally for the procurement of PPEs in 2020.

“I just wish to state on record that we did receive Mr. Michael Yang’s help. We borrowed money from him,” said Huang during his remote testimony before the committee.

“Since we were not able to finance these things and we really needed to do that so that we will not get blacklisted, he offered to borrow (lend) us the money so that we will be able to pay for it,” Huang added, referring to Yang.

Huang, however, did not give exact figures as to how much Pharmally borrowed from Yang. He added that Pharmally would pay Yang back after receiving payments from the government.

Pharmally director and supply chain head Linconn Ong backed Huang’s statement, recalling two instances when he sought Yang’s assistance.

This was for two separate transactions involving P3.82 billion and P2.877 billion.

Although Ong said he did not know where Yang had gotten his funds, he confirmed to Sen. Richard Gordon that Yang was involved practically in most of the big-ticket supply deals of Pharmally.

READ: Pharmally exec’s admissions suggest Yang has deep financial ties – Gordon

READ: Pharmally exec admits company ‘swindled’ gov’t

Yang earlier stated that he was not involved in Pharmally with his role being just to introduce the controversial company to Chinese suppliers and guarantee that the company can pay its dues.

On Sept. 21, Yang contradicted Huang’s and Ong’s testimony and said that he did not lend money to Pharmally. Instead, he said it was his friends whom he had referred to Ong.

He also said there was no contract between Ong and the friends he introduced for the loans.

“In actuality, Mr. Chairman, it’s the money of his friends,” Yang said through his translator.

At a hearing in the House of Representatives, Yang said that he had no idea that Pharmally was joining the process of supplying COVID supplies to the Philippine government.

“Mr. Chairman, according to Mr. Yang, he had nothing to do with nor did he influence the award of the contract,” his interpreter explained.

READ: Pharmally funding came from friends, not me, Michael Yang insists

Despite denying ties with the pharmaceutical company, Yang admitted that in 2017, he already met Huang and his father who currently serves as chairman of Pharmally’s Taiwan-based parent company.

But after that, according to Yang through his translator, “they have no communications.”

Malacañang earlier said that Duterte’s former economic adviser did not influence the award of any supply contract to Pharmally.

On Oct. 19, Gordon said the blue ribbon committee’s initial recommendations included filing of charges against Yang, Pharmally executives and Christopher Lloyd Lao, former PS-DBM chief who approved the Pharmally deals.

Getting back at Duterte?

Graphic by Ed Lustan

Duterte, who has been defending Yang, also started attacking Gordon and Philippine Red Cross after the blue ribbon committee continued to pursue Yang.

READ: PRC in line of fire as Duterte blasts Gordon over Pharmally probe

In September 2021 and other dates, Duterte had these to say about Yang:

“Ngayon, iyang Michael Yang na ‘yan, you know now for 20 years iyan…. Ito si Michael Yang, kasama negosyante… Ang karamihan nito pumasok sa bidding sa lahat ng negosyo dito sa Pilipinas….”

“Akala ko ba we are inviting investors? That’s why I went to China several times to ask them to help us. Investments, iyong pera nila ibuhos nila dito para magkaroon tayo. Now kung kulang, kung wala…”

“Ito iyong mga Chinese na nandoon iyan kung nandoon si [Chinese President] Xi Jinping. Itong Michael Yang na ito kasama palagi kung makipagkita sa akin si Ambassador, iyong the previous one? Si Zhao, iyong na-transfer ngayon sa Indonesia. O, ‘di tawagin natin. Kaya bakit ako magduda? Bakit ako magsabi na drug lord siya?”

“At that time, itong si Michael Yang, nakita niya – negosyante eh. Eh nakita niya na kailangan ito mas maraming pera. Kaya ‘yong mga nakikita ninyo, ang partner niya puro korporasyon ng sa labas, korporasyon ng sa China, halos lahat. So ‘yon ang nag-produce ng materials. Ganoon. Si Michael [Yang] ang pagador diyan. Siya ang nag-ano ng mga – “Sige, mayroon doon negosyo, Pilipinas wala…”

“Ano bang reklamo ninyo? Kasi si Michael Yang daw. Eh negosyante ito, ‘adre. Hindi naman ito sabihin mo na… nagtatapon ito ng pera. May contact ito sa China na malalaking korporasyon at siya ang nagpagador sa – made their entry here.”

“Itong si Michael Yang, middleman lang ‘yan. A Chinese doing business because we were encouraging everybody in the world to come to the Philippines and do business. Kaya sabi ko nga akala ko ba p*… Akala ko ba we were trying to invite everybody to do business in the Philippines? Iyon ang nangyari.”

“Ang key diyan si Yang. Yang is known to me, I admit it. And it was Yang whom I requested to… lay the ground or do the legwork of my going to China and getting into a new deal and a new relations because of – iyong foreign policy ko nag-neutral ako para makagalaw ako sa ibang… Kasi had I, you know, you stick with America, then limitado ka because they would not enjoy you doing business.”

“Wala naman si Michael Yang. He has no manufacturing factory in Davao. Ganoon ‘yan. Walang record ‘yan. Hindi kriminal ‘yan. Iyan ang gusto kong malaman ninyo…”

By grilling Yang during Senate hearings, are senators just trying to get back at Duterte?

Senators, however, insisted that there were enough reasons to continue questioning Yang and determining his role in the transactions involving Pharmally.

Following the Pharmally executives’ statements on Yang’s involvement with the company, Gordon warned the Chinese businessman about a possible investigation by the Anti-Money Laundering Council (AMLC).

“Michael Yang, how did the money reach the country?” Gordon had asked the Chinese businessman.

Gordon said Yang and Pharmally must identify the source of funds used by the company to pay suppliers in China. “It will have repercussions, they can be held liable for money laundering,” Gordon said.

Yang insisted he did not lend money to Pharmally and only helped the company network with suppliers in China.

But Gordon said signs of money laundering were all over the transactions.

“I’ve been trying to pursue Linconn Ong and really, there is a travesty here because billions of funds went to Pharmally, which they shared with their suppliers, and Michael Yang’s name always appears,” Gordon said.

“It appears Michael Yang always saves them, right?” he said at the blue ribbon committee hearing on Sept. 13.

To establish his credentials as a businessman, Yang was asked about his educational history especially after one senator cited a news article in a Chinese publication about Yang’s having a doctorate degree in Princeton University, an Ivy League school.

Yang clarified that he participated in a “program in China where they can visit and study in Princeton University.”

“Because Princeton University had a branch in Beijing, I was able to participate and they gave me the certificate,” Yang said through his translator.

The interpreter added that Yang was “not clear what this certificate is for.”

“I went there to study and participate in the program and they gave me a certificate and what is written in that certificate is not very clear, so you would have to ask Princeton,” Yang said.

Sen. Franklin Drilon during the Oct. 28 hearing, raised the issue of tax payments by Pharmally and Yang. Drilon said a check with the BIR showed that Yang did not file income tax returns for several years while he was staying in the Philippines.

“Mr. Michael Yang, interesting,” Drilon said.

“The income tax returns for taxable years 2017 and prior years were not filed.  No income tax return filed, based on the verification made by the district’s collection section, and the income tax returns for 2014 to 2017 could not be found in the records of the BIR,” Drilon said.

“In 2018, the taxable income of Mr. Yang was at P208,000 and the taxes paid in 2018 was P7,600. In 2019 and 2020, we’re sorry but the records are not readable,” he added.

TSB