‘Biggest joke of century’

MANILA, Philippines—Senior Associate Justice Conchita Carpio-Morales of the Supreme Court believes that businessman Eduardo “Danding” Cojuangco Jr. and the late President Ferdinand Marcos had ties so close that to claim otherwise would be a joke.

“The argument that Cojuangco was not a subordinate or close associate of the Marcoses is the biggest joke to hit the century,” Morales wrote in her dissenting opinion on the Supreme Court ruling that Cojuangco was the legitimate owner of 20 percent of conglomerate San Miguel Corp. (SMC).

Morales said that aside from holding positions that had power over coconut levy funds, “Cojuangco admitted … in his answer [to the court case] that on Feb. 25, 1986, Cojuangco left the Philippines with former President Ferdinand Marcos.”

“Clearly, the intimate relationship between Cojuangco and Marcos equates or exceeds that of a family member or Cabinet member, since not all of Marcos’ relatives or high government ministers went with him in exile on that fateful date.

“If this will not prove the more than close association between Cojuangco and Marcos, the Court does not know what will.”

In its decision, the high court said “identifying other persons who might be the close associates of President Marcos presented an inherent difficulty, because it was not fair and just to include within the term ‘close associates’ everyone who had had any association with President Marcos, his immediate family and relatives.”

Morales cited the importance of the relationship between Cojuangco and Marcos in discussing the businessman’s violation, in her opinion, of his fiduciary duty as a public official.

UCPB president

Morales noted that Cojuangco did not deny the allegation in the complaint that he “served as a public officer during the Marcos administration,” but only made a specific denial on the acquisition of his assets.

“The Court takes judicial notice of the political history that 1983 (when the subject SMC shares were acquired) formed part of the Marcos [era].

“Cojuangco, not having specifically denied or even qualifiedly admitted his tenure as public officer during the Marcos administration vis-à-vis his earlier admissions on the specific public offices or directorships he had held, the ineluctable conclusion is that he held the positions of president and member of the board of directors of the UCPB and of director of the PCA during the Marcos administration or, at the very least, in 1983,” she said.

UCPB refers to United Coconut Planters Bank, the bank acquired using coconut levy funds, and PCA, the Philippine Coconut Authority.

Illegal loan transactions

Morales said that since Cojuangco was a director and corporate officer of PCA and UCPB, “he was considered a fiduciary of the coconut levy funds, its derivatives and assets, which are public in character being administered by said entities.”

“His use for his personal benefit of the very same funds entrusted to him, which was released to him through illegal and improper machination of loan transactions, and his contravention of the then existing corporation laws and laws restricting a bank’s exposure to its director or officers indicate a clear violation of such fiduciary duty.

“These shares which respondents acquired using the proceeds from such loans do not thus pertain to them but to the UCPB and the CIIF (Coconut Industry Investment Fund) oil mills pursuant to a constructive trust, and following Section 31 of the Corporation Code, said shares should be reconveyed to the Republic in trust for the coconut farmers,” she said.

Dissenters

Apart from Morales, Justices Arturo Brion, Jose Catral Mendoza and Maria Lourdes Sereno, dissented from the majority decision that gave Cojuangco perhaps his biggest legal victory in years.

Morales and Brion, in their separate opinions, said Cojuangco had admitted in his pre-trial brief that he used loans from the UCPB and advances from CIIF oil mills.

Both UCPB and CIIF were established during the Marcos administration using the farmers’ coconut levy, which had been determined as public funds.

Brion said that while Justice Lucas Bersamin, the writer of the majority decision, contended that these statements of Cojuangco were “mere proposals” by the businessman that “do not constitute an admission,” there was still the intent to present these as evidence.

“Cojuangco did not need to enumerate… his alleged various sources of loans, as these are evidentiary matters that need not be actually introduced until the trial. At the time he filed his answer, it was sufficient for him to aver, as his defense, that the coconut levy funds were not used to fund the purchase of the SMC shares; rather, he obtained the funds from “various sources.” What these various sources are, are matters of evidence that he would introduce,” Brion said.

“In his pre-trial brief, however, what he generally claimed in his answer became concrete when he represented that these pieces of evidence consist of UCPB documents and testimonies of witnesses from UCPB and CIIF oil mills. As no evidence can be considered during trial unless they have been identified during pre-trial, this identified evidence substantiating the material allegation in his answer is effectively an admission of what the various sources of funding were,” Brion added.

Unlike Morales, however, Brion agreed with the majority that the government failed to prove that Cojuangco was indeed a crony of Marcos who was able to take advantage of ill-gotten wealth.

“The Republic has taken a significant step in proving a claim for reversion of ill-gotten wealth against Cojuangco, but simply failed to make a complete case leading to that conclusion,” Brion said.

The Supreme Court decision drew mixed reactions from congressmen.

Double injustice

Anakpawis party-list Rep. Rafael Mariano said the court decision was a double injustice to small coconut farmers who were forced to pay the levy.

“It is a big blow to the coconut farmers’ struggle for justice and recovery of the funds,” he said.

Bayan Muna party-list Representatives Teodoro Casiño and Neri Colmenares said the decision was not surprising but must still be challenged before the high court through a motion for reconsideration.

“If more than 200 congressmen can sign a resolution allowing Marcos to be buried as a hero at the Libingan ng mga Bayani, how hard could it be for a majority of 15 members of the Supreme Court to say that a Marcos crony did not rob coconut farmers of their money? ” asked Casiño.

Colmenares said the decision should be questioned by government lawyers by asking the Supreme Court to reconsider it given the votes on the decision—seven justices in favor, four dissented and four others took no part.

“I believe that the coconut levy funds coming from the farmers should be returned to the coconut farmers and those who used it at the expense of the rightful owners should be held accountable,” he said.

But Manila Rep. Amado Bagatsing Jr. concurred with the decision, saying it was about time the high court puts closure to the ownership issue. “I agree with the Supreme Court that nothing was proven by the accuser,” Bagatsing said. “It is good to put an end to this so that everybody can move on. The case had been there for 30 years.”

Motion for reconsideration

In Lucena City, Oscar Santos, who headed the PCA during the time of former President Corazon Aquino, said coconut farmers should not be demoralized by the decision.

Santos said his group, the Coconut Industry Reform Movement, would call for an emergency meeting to prepare a motion for reconsideration.

He said the court decision would not be good for the presidency of Mr. Aquino. “This is not an issue of coconut levy alone. What is at stake here is justice,” Santos said.

“We will once more ask the Supreme Court not to forget the spirit of the presidential decrees imposing the levy,” Santos, a lawyer, said.

He recalled that for nine years (1973-1982), coconut farmers paid a levy of P60 on the average for every 100 kilo of copra sold was.

Citing voluminous levy-related presidential decrees (PDs) issued by Marcos, Santos said the levy was done “for the benefit of the coconut farmers.”

“But it seems that the Supreme Court has forgotten the spirit behind the decree imposing the coconut levy,” Santos said.

He said the multibillion-peso coconut levy should not have been taken advantage of by its caretaker, apparently referring to Cojuangco. With reports from Cynthia D. Balana in Manila and Delfin T. Mallari Jr., Inquirer Southern Luzon