Philippine Center for Investigative Journalism
SENATOR MANUEL ‘Manny’ B. Villar Jr. and Congressman Joseph Victor ‘JV’ G. Ejercito are from rival political coalitions. Villar played a lead role in the impeachment and eventual ouster from the presidency of Ejercito’s father Joseph Estrada.
In the May 2013 elections, Villar’s wife Cynthia is running for senator with President Benigno Aquino III’s Team PNoy while Ejercito is part of the senatorial slate of the United Nationalist Alliance (UNA) led by Vice President Jejomar ‘Jojo’ Binay.
But in one important respect, Villar, 63, and Ejercito, 43, are pretty much alike. Both businessmen-politicians own secret offshore corporations in the British Virgin Islands (BVI), a privacy and tax haven where a global elite of wealthy people like to keep their money away from the prying eyes of the authorities.
Villar is the beneficial owner of a BVI international business corporation called Awesome Dragon Holdings Limited. It was incorporated in the BVI on July 26, 2007 while he was president of the Senate. Villar served as Senate president from July 2006 to November 2008.
Ejercito is a director of a BVI company called Ice Bell Properties Limited formed on July 8, 1999, when his father was still president. In 2001, Ejercito became mayor of San Juan City, and in 2007, a freshman congressman form his father’s political bailiwick.
In their separate written replies to the PCIJ, Villar and Ejercito differed yet again, however.
Villar admitted to being the “ultimate shareholder” of Awesome Dragon Holdings Limited but said it was a dormant company with a capital of just one US dollar. He said it was put in place in 2007 “as a ready corporate vehicle for any strategic multinational business opportunity that may become available.”
PCIJ checked with the BVI authorities and learned that contrary to Villar’s statement, Awesome Dragon Holdings remains active as of April 2, 2013.
Ejercito did not confirm or deny his directorship in Ice Bell Properties Limited. Instead, he raised questions about the timing of this story, which, he said, “is highly suspicious considering the on-going electoral campaign of which I am one of the leading contenders among the UNA senatorial candidates.”
Ejercito wrote: “I have held high respect to (sic) the PCIJ as an institution. I hope that you will not allow yourself to fall in (sic) the manipulative efforts of desperate people in (sic) dirty politics.”
Both Villar and Ejercito did not report their links with their respective offshore companies in their annual Statements of Assets, Liabilities, and Net Worth (SALNs), copies of which were gathered by PCIJ.
The PCIJ secured copies of Villar’s SALNs from 1992, when he was first elected member of Congress, to 2011, the latest available, as well as Ejercito’s SALNs from 2001, when he began his political career as San Juan City mayor, to 2009, the year for which the latest copy is available.
As public officials, Villar and Ejercito are required by law to list all their assets, liabilities, business interests, and financial connections, including those located in other countries, in their annual SALN.
In his reply, Villar said Awesome Dragon Holdings Limited does not appear in his SALN because it is owned by Fine Properties Inc., which he has already enrolled in his SALN. “I do not own it – it is owned by Fine Properties Inc.,” he said.
Fine Properties does not appear as shareholder or officer of Awesome Dragon Hioldings, however.
Records maintained by Portcullis Trust Net Limited, the offshore servicing company that was instrumental in incorporating Awesome Dragon Holdings Limited in the BVI, listed Villar as “beneficial owner” in the data sheet of the offshore corporation.
His ties to the offshore company are also apparent from the due diligence documents submitted by UBS AG (Hong Kong) to Portcullis Trust Net. In a September 5, 2007 letter to Portcullis with the subject heading “Re: Manuel Bamba Villar (‘the Client’),” UBS AG (Hong Kong) certified that Villar was a client of good standing of the bank since 1999 and confirmed his residential address.
Attached to the letter was a certified true copy of an image of the main page of Villar’s passport with a handwritten note stating “Re: BVI Co & Awesome Dragon Holdings Limited.” It was signed by Linda Chew, UBS AG (Hong Kong) executive director at that time.
Ejercito’s net worth has grown steadily through the years – from P53.3 million in 2001, when he was only 32 years old, to a high of P64 million in 2009
While he disclosed a fairly detailed list of his business interests and financial connections in over two dozens of family-owned and publicly listed companies, he did not include Ice Bell Properties Limited.
In his reply to PCIJ, Ejercito did not squarely address the question why Ice Bell Properties Limited is not mentioned in his SALN. He merely said: “To the best of my knowledge, I have truthfully and accurately declared all my assets, liabilities, and net worth in my Statement of Assets, Liabilities and Networth (SALN) since 2001 when I became Mayor of San Juan and up to the present, that I am now a member of the House of Representatives.”
Like Villar, JV Ejercito’s name also appears in the documents – he is listed as the sole director of Ice Bell Properties Limited. Records show the same San Juan city residential address that Ejercito wrote in his 2001 SALN.
Ownership, however, is lodged in a single-bearer share, which means no record of ownership is maintained by the company. Rather, ownership rests with whoever is in possession of the bearer instrument at any given time.
Ejercito’s Ice Bell Properties was incorporated in the BVI in July 1999, a time when he was overseeing a business conglomerate of close to 30 companies, including almost a dozen founded by his mother Guia Gomez, one of Estrada’s wives who is now the re-electionist mayor of San Juan City.
PCIJ checked with BVI authorities and found that Ice Bell Properties remains active as of last Tuesday, April 2, 2013.
Though they may not breaking any laws per se, politicians and public officials with ties to secret offshore corporations are regarded rather dimly by advocates of good governance.
“The intention is to hide the transactions or hide their income so they made use of tax havens or places where there are no rules on transparency,” said Milwida Guevara, a former undersecretary at the Department of Finance and one of the founders of the Movement for Good Governance, a civil society organization.
“It’s hypocritical that they are sponsoring legislation that calls for faithful compliance with laws. At the same time, they are themselves trying to get away with it,” says Guevara. – PCIJ, April 2013
Source: Roel Landingin and Karol Ilagan, Philippine Center for Investigative Journalism. 5 April 2013.
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Repentant, reticent, rude
SIDEBAR
HOW DO public officials with secret offshore accounts react, when found out?
The PCIJ confronted a senator, a congressman, and two former government executives with questions about secret accounts that each had opened separately in offshore havens. It’s diff’rent strokes for diff’rent folks.
San Juan City Rep. Joseph Victor G. Ejercito evaded questions about his role in Ice Bell Properties Limited as sole director. The offshore corporation that registered in the British Virgin Islands (BVI) in 1999 remains ‘active” to this day but which he has not disclosed in all the Statements of Assets, Liabilities, and Net Worth (SALNs) that he had filed since 1999.
Cocky at worst, cagey at best, one could say of Ejercito’s reaction. He calls “the timing” of the story “highly suspicious” while he campaigns, he says, as a top contender for the Senate.
He offered the PCIJ unsolicited advice about what he seems to suspect could be the ill motives of unnamed people that he seems to suspect are behind the story, “I hope that you will not allow yourself to fall in the manipulative efforts of desperate people in dirty politics.”
Sen. Manuel B. Villar Jr., on the other hand, sounded upfront and diplomatic in his reply. He laid out the story of his family’s investment holding company, Fine Properties, Inc., acquired Awesome Dragon Holdings Limited in the BVI in 2007.
Villar was then serving as president of the Senate. Awesome Dragon Holdings was registered in the BVI on the same day that shares sold in the initial public offering of his family-owned Vista Land and Lifescapes Inc. at the Philippine Stock Exchange in Manila. That day: July 26, 2007.
Yet in his reply to the PCIJ, Villar wrote that the US$1-shell company “is dormant and so it has remained, up to now.”
Second, he said, Awesome Dragon Holdings is not awesome at all; it is supposedly “without any asset and with no more than its original capital of one American dollar (US$ 1.00)”
Third, Villar said he was “indicated as owner” of Awesome Dragon Holdings simply because of the BVI requirement “to identify the natural person or persons who is/are the ultimate shareholder/s of said company.”
And fourth, he added that the company does not appear in his SALNs, however, “because I do not own it — it is owned by Fine Properties, Inc.,” which, in turn, “has not made any investment” in Awesome Dragon Holdings.
But the devil is indeed in the details, and the documents.
While Villar claims that Fine Properties Inc. owns Awesome Dragon Holdings, Fine Properties’s name does not appear in any of the corporate and financial records of the offshore corporation. Instead, Villar is named in the company data sheet as the beneficial owner.
Though it was “dormant” from the start, as he describes it, the offshore corporation remains active as of April 2, 2013, based on inquiries made by the PCIJ with the Financial Services Commission’s Registry of Corporate Affairs in the British Virgin Islands.
Accounting entries from July 2007 to Jan. 4, 2009 show that fees are being paid by or on behalf of Awesome Dragon Holdings for such items as “nominee services,” “annual renewal,” “10% late payment penalty,” among others.
If the company was “dormant,” it was not by design but from the lack of international investment opportunities in the wake of the global financial crisis. It can be activated any time such an opportunity arises.
To their credit, however, Villar and Ejercito replied to the PCIJ’s queries. Ilocos Norte Gov. Maria Imelda Marcos, named as the beneficiary of a secret offshore account in the Caribbean, did not respond at all to an inquiry letter that PCIJ sent by fax, email, and surface mail.
While the three elective officials turned elusive or evasive when asked about their secret offshore accounts, two officials appointed to government corporations showed more upfront, even repentant, behavior during interviews with the PCIJ for this report.
Alan Ortiz was profusely apologetic for what he called “legal and moral implications” of a decision that he and mentor-friend Jose Leviste Jr. made when they registered Windsor Star Consultants Limited in the BVI on May 6, 2004.
Ortiz was president of what was then the state-owned National Transmission Corp. (Transco) from March 2003 to September 2006 when this happened. “I’m sorry, I’m sorry, it was a mistake,” Ortiz told the PCIJ in a phone interview.
He said the amount he lodged in the account were “life savings” that he raised from work in the private sector, and which he had used to support his four children’s schooling.
Yet even in his very detailed email replies to the PCIJ, he acknowledged that it was also wrong that he did not enroll the existence of Windsor Star, as well as his previous dollar earnings from the private sector, in his SALNs from the years 2002 to 2006.
Ortiz was upfront, too, in admitting sending his money abroad could raise doubts about his patriotism, amid the government’s efforts to court financial resources into the country. “I had private sector sources for my life savings, most of which remained in Hong Kong due to the widespread negative impact of the 1997 financial crisis which extended until 2005.”
He saved, he said, so he could send his children to good schools overseas. “I preferred to keep my savings offshore and out of the weakened Philippine financial system starting in 1995… I hope my penalty will not be so severe.”
Jesus Alcordo, former president of the National Power Corporation and later commissioner of the Energy Regulatory Commission, and a career senior executive in a number of big chemical and power companies, was just as candid.
On Tuesday, he flew back to Manila from a visit with his grandchildren in Cebu, and for the first time saw the PCIJ inquiry letter. That same day, Alcordo called his employer of over two decades, the Salim Group of Indonesia, which had asked him to sit as nominee director of Pentergy Limited, an offshore company that was registered in Labuan, Malaysia in October 2005.
At that time, Alcordo was in government service. He said he consulted and cleared with his lawyer if it was all right for him to sign on as Pentergy director. It was a foreign entity that had no business in the Philippines, and on his lawyer’s go, Alcordo said he signed on.
Alcordo said he had not invested nor received a single dollar in Pentergy, and knew nothing at all about its work or operations then and now.
Alcordo also promised to send certifications from the Salim Group executives that he had nothing to do with Pentergy’s work, except sign on to certify the conduct of board meetings, for five years straight ending 2010.
Already 76 with three children and eight grandchildren, Alcordo says, “I’m comfortable in life but I am not rich.”
To prove that he speaks the truth on the matter, he offered to have the PCIJ check “all my bank accounts, dollars and pesos” in the banks he named, “even without a court order.”
The morning before the interview, Alcordo said he had actually checked his dollar-account balance with his bank. It was, he says, a whopping $3,400. — PCIJ, April 2013
Source: Malou Mangahas, Philippine Center for Investigative Journalism. 5 April 2013.
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