Is the cat out of the bag?

Wow! How can the COMELEC Chairman be extraordinarily rich? How will he explain all the allegations of his unexplained wealth of P1 billion while his 2016 Statement of Assets, Liabilities and Networth (SALN) has only a total net worth of P176.3 million.

He has tried to explain himself to the public but everything fell on deaf ears. Now his brother has flown in, all the way from the US to save the day. But at this point, no justification from Bautista’s camp has persuaded many of us. Let’s see how this love story turned into an action-packed suspense series will come to an end.

Now, let’s try to understand this sensational case. If the allegations are true, then this man has to be punished. As it is, he probably is already suffering – physically and mentally not to mention emotionally. I am pretty sure, however, that if you open up all the accounts of certain public officials you may be more outraged by what you will find. The wife of Chairman Bautista must be really mad at him for her to create such a catastrophe.

Lesson: Always make sure your wife is happy. This will save you from getting burned into ashes!

Remember that every government official/ worker must submit a Statement of Assets, Liabilities, and Net Worth (SALN). The submission of a SALN is required by law under Article XI Section 17 of the 1987 Constitution and Section 8 of Republic Act No. 6713, the “Code of Conduct and Ethical Standards for Public Officials and Employees.” The SALN shall contain information on the following:(a) real property, its improvements, acquisition costs, assessed value, and current fair market value; (b) personal property and acquisition cost;(c) all other assets such as investments, cash on hand or in banks, stock, bonds, and the like; and (d) all financial liabilities, both current and long term.

The Code of Conduct and Ethical Standards for Public Officials and Employees (RA No. 6713) Rule VI - Duties of Public Officials and Employees (Section 8) states: 1) Officials and employees and their families shall lead modest and simple lives appropriate to their position and income; 2) They shall not indulge in extravagant or ostentatious display of wealth in any form. Basically, modest and simple living means maintaining a standard of living within the public official or employee’s visible means of income as correctly disclosed in his income tax returns, annual statement of assets, liabilities and net worth and other documents relating to financial and business interests; 3) Public funds and property for official use and purpose shall be utilized with the diligence of a good father of a family.

The Code of Conduct and Ethical Standards for Public Officials and Employees Rule VII – Public Disclosure (Section 1) states: 1) Every official and employee, except those who serve in an official honorary capacity, without service credit or pay, temporary laborers and casual or temporary and contractual workers, shall file under oath their SALN; 2) a disclosure of business interest and financial connections including those of their spouses and unmarried children under eighteen (18) years of age living in their households.

The law also states that: Disclosure of Business Interest and Financial Connections shall contain information on any existing interest in, or any existing connection with, any business enterprises or entities, whether as proprietor, investor, promoter, partner, shareholder, officer, managing director, executive, creditor, lawyer, legal consultant or adviser, financial or business consultant, accountant, auditor, and the like, the name and addresses of the business enterprises or entities, the dates when such interests or connections were established, and such other details as will show the nature of the interests of connections.

While the Chairman is confident in declaring his SALN, here are some thoughts from my friend Benny Gonzalez who was a financial analyst of numerous ADB, World Bank and other multilateral projects and is also one of our top SALN experts which I pondered on: 1) Since Bautista is not a new government official and not a first time SALN filer, shouldn’t they check his previous SALNs from the time he was first appointed in government as should be done with all those accused of SALN infractions? In other words, those under suspicion/ investigation should never be given the benefit of the doubt that any of their present and previous SALNs are correct; 2) Foreign exchange gains, especially from offshore accounts are normally untaxed here thus, exposing the family involved to further BIR audits and assessments. It can be shown that he had to be better than Soros to get such high yields amounting to P500k daily deposits; 3) The co-mingled family funds in a filer's SALN must be traceable to a prior distinguishable investment fund carried as an asset with a contra-liability set up for that purpose. It is highly questionable if it had never been set up before the accusations. In fact, from an accounting stand point, this is what every SALN filer should do if s/he has a similar situation. Ab initio, the ownership of the capital and fruits are transparent and identifiable; 4) The admissibility in court of the revelations and documents brought by the brother will surely be contested by his wife’s lawyers. Even if they were deducted from P1.2 billion, they may still produce a number bigger than his 2016 SALN’s of P176.3 million and he would still be in trouble. If less than P176.3 million, he should still be asked to explain the shortfall; 5) The possible absence of these entries and accounts in his SALN would reveal at the very least the lack of good accounting and financial advice which will turn out to be more costly for him.

The foregoing points are the thoughts of a 73-year old who has just recently completed 4 certificate courses from the University of Pennsylvania Wharton Online as part of his continuing education in order to further hone his skills at catching and removing scalawags from government. He further said that good SALN analysis demands three paradigm shifts: 1) Good SALN analysis should at the end of the day either exonerate or convict the filer under scrutiny; 2) Good SALN analysis is focused on HOW the Net Worth was accumulated rather than WHAT it is at the end of every year; 3) Good SALN analysis defines and limits legitimate and legal entries to only taxed evidence transaction.

Although not a lawyer, Gonzalez adds: 1) Because red flags have already been raised at this stage, Bautista should be asked to explain in accounting terms how the specific transactions causing these alarm bells are actually legitimate and legal movements of his net worth; 2) When Bautista’s explanations are questionable themselves, then appropriate charges should be filed against him for impeachment; 3) If red flags are detected during his earlier tenure(s), then it would be a strong case (in aid of legislation) for appointees to be asked to bare their past SALNs to public scrutiny before they can be eligible for reappointment in another capacity; 4) When his explanations are found unreasonable or unbelievable (i.e. he consistently beats Gorge Soros in currency trading), AMLAC should be asked to assist in the case build-up. A case for seizure and garnishment could then be filed with the Ombudsman.

Finally, he said, “It has become obvious to me as a SALN specialist that both camps do not have any financial expert working on the case unless they respectively believe that they already actually do. For instance, the Chairman is talking about sharing half of his SALN. Knowing their husbands, NO wife should agree on any settlement with her husband based on his SALN. SALNs are based on historical costs while settlements should always be based on current fair market values. This lack of sophisticated understanding is clearly a golden opportunity to seize the upper hand.”

Public officials must know their SALNs. In this day and age, even if you think you are wise enough – numbers don’t lie.