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SALN: An Instrument of Good Governance
Atty. Jose A. Gangan [email protected] and [email protected]
LG Westgate Towers, Madrigal Business Park, Investment Drive, Alabang, Muntinlupa City
17th Floor, One Magnificent Mile Bldg., 39 San Miguel Ave., Ortigas Center, Pasig City
8 Marine Vista #11-33 Neptune Court Singapore 449032
Los Angeles Toronto Seoul Singapore
GACPA Annual National Convention April 19, 2013 @ Cebu City
Today’s Terrain
Graft’s Silhouette
World’s Take on Graft in the Philippines
Consequences of Graft
Anatomy Of Graft
SALN – An Effective Tool in Graft
Campaign
SALN
SALN Basics
Frequent SALN Problems
Defenses in SALN CAses
World’s take on Philippine Graft
• Latest Corruption Transparency Index of Transparency International, out of 160 countries surveyed the Philippines ranked among the Top 40 most corrupt countries in the World.
• Recent World Bank Report citing COA estimates, P3 Billion are lost to government corruption annually.
• Recent Asian Development Bank Report, about 17% of government contracts are given away as confidential payments (SOP or Tong-Pats) or gifts to public officials.
• Recent UN Report, annual revenue losses due to graft reaches P280 Billion per year.
• Recent SWS Survey of private sector businesses in Manila, Cebu and Davao revealed that 30% had been asked for a bribe in connection with a government license or transaction.
If Graft is the Rule & Good Governance, the Exception …
• Weak tax collection efficiency • Resulting in Fiscal Deficit • Need to Borrow more • Higher Debt Repayment • Decreased Investments (foreign and local) • Raise Taxes (from the poor by way of consumption taxes, diesel)
Poor delivery of basic government services Skewed government priorities Substandard public infrastructures Patronage and Cronyism and Culture of Corruption Lack of Accountability & Transparency
Higher Taxes Higher cost of doing business on private sector High Cost of goods and services Rising unemployment, poverty and criminality People lose faith in their Government
ANATOMY OF GRAFT
Stimulus
• Better Standards of Living
• Ethics and Integrity
Planning and Surveillance
• Leadership Competence ,
• Accountability
• & Transparency
• Internal Control
Execution • Fraud Detection
• Audit & Evidence Gathering
5
Greed, Good Life, Survival
P
Poor Internal Control, Culture of Corruption, Lack of
Transparency
E
Funds, Revenues, Projects,
Franchises
T
ANATOMY OF GRAFT
Concealment
• SALN, Income Tax Returns
• & AMLAC
• Lifestyle Check
• Identify & Locate & Preserve
• Case Build Up
Enjoyment
• Prosecution & Imprisonment
• Dismissal & Perpetual Disqualification
• Forfeiture
• Confiscation & Recovery
6
Bank Secrecy, Blind Trusts, Dummies, Layering
Lavish Lifestyle, Conspicuous consumption
SALN – Just the Tip of the Ice-Berg
SALN
ILL-GOTTEN ABROAD
ILL-GOTTEN LOCAL
7
Take-Off Point, Base-Line Data, Confirmatory
AMLC, Secrecy of Bank Deposits, FCDUs
Subpoena and other Coercive State Powers
Computerized Environment
Forfeiture The right of the State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees”. (Sec. 15, Art. 11, 1987 Constitution)
Power to institute a forfeiture proceeding against any public officer or employee to recover properties which are manifestly out of proportion to his salary as such public officer or employee and his other lawful income and the income from legitimately acquired property. (RA 1379
Independent CIVIL action – Filed Separately and independently from criminal case – Mere Preponderance of Evidence.
Filed in the Sandiganbayan by the Ombudsman
Running Rings Around the SALN
Retain the asset under one’s name but make it appear that it was lawfully acquired through loans and financial leases (lease-purchase, sale and lease back, back-to-back loans and others), inheritance, donation, financial aid, fruits of business profits and the like.
Properties or assets that are physically outside Philippine jurisdiction placed under the names of dummies or fictitious names, such as overseas bank accounts, numbered bank accounts, houses, condominium units, or business interests. Send Dollars overseas by means of couriers and diplomatic pouches.
Put the assets under the name of spouse, children, relatives, dummies or nominees, holding companies, blind trusts.
Shares, debt and other financial instruments that is easily negotiable, such as bearer bonds, treasury bills and certificates of deposits which are easily encashed.
Running Rings Around the SALN
Valuable works of art, objets de virtue, and jewellery items that are highly marketable
Vault, Bank vault, Safety deposit vaults.
Cash In Limbo (Secure a Managers Check before December 31 and return it after New Year)
Win the Philippine Lotto
Legal Bases of SALN
1987 Philippine Constitution A Public officer or employee shall, upon assumption of office and as often thereafter as may be required by law, submit a declaration under oath of his assets, liabilities and net worth.
Anti-Graft and Corrupt Practices Act (RA 3019)
Every public officer, within thirty days after assuming office and thereafter, on or before the fifteenth day of April following the close of every calendar year, as well as upon the expiration of his term of office, or upon his resignation or separation from office, shall prepare and file with the office of the corresponding Department Head, or in the case of a Head of Department or Chief of an independent office, with the Office of the President, a true, detailed and sworn statement of assets and liabilities, including a statement of the amounts and sources of his income, the amount of his personal and family expenses and the amount of income taxes paid for the next preceding calendar year.
Code of Conduct and Ethical Standards for Public Officials (RA 6713)
Basic Contents of SALN
SALN Proper Assets - Real and Personal [Tangible and Intangible] Properties
Liabilities
Net Worth (Including Family Income and Expenses)
Business Interests and Financial Connections
Relatives in Government
Certification, Undertaking and Waiver
Who should file the SALN?
All public official and employees shall file under oath their –
Statements of Assets, Liabilities and Net Worth
Disclosure of Business Interests and Financial Connections
SALN shall Include those of their spouse and unmarried children under eighteen years of age and living in their households.
Who are Not Required to file SALN?
Those who serve in an honorary capacity, laborers and casual or temporary workers.
Consultants?
First Gentleman? First Lady?
When to File SALN?
Deadline Cut-Off Date
Assumption of Office Within 30 days First day in Office
Yearly April 30 December 31 of previous year
Separation from Office Within 30 days Last day in office
SALN in Triplicate: (1) Ombudsman – regional and sectoral offices (2) Public Officer or Employee’s 201 File (3) Last copy to Filer. Head of Agency ensures compliance with SALN Regulation. Chief of Personnel receives and consolidates SALNs, and shall prepare a report indicating the list of those who failed to submit. (CSC Memorandum Circular No. 95-13)
Real Property Acquisition Cost
Personal Tangible Property Acquisition Cost
Other Tangible Property Cash on Hand and in Banks, Including Time Deposits, Treasury Bills – Philippine Currency
Face Value / Bank Balance as of Reporting Date
Foreign Currency and Cash Items, Foreign Currency Deposits, including Stocks, Time Deposits
Face Value as of Reporting Date converted into Philippine Currency
Shares of Stocks Acquisition Cost
Receivables Balance as Reporting Date
Basis for Using Acquisition Cost
Clarifying the importance of “acquisition cost”, the Supreme Court in Pleyto v. PNP-CIDG said –
“While it may be conceded that the adjusted market value of the real properties is true and correct, such valuation bears no significance to the issue in this case, namely, whether Pleyto and his wife had the financial capacity to acquire the real properties. To answer this question, the relevant valuation would be the acquisition cost of the real properties vis-à-vis, the financial capacity of Pleyto and his wife at the time of their acquisition. Any appreciation (or depreciation) in the value of the real properties after their acquisition until the present has no bearing herein.” The heart of the matter is whether or not a public official or employee had the financial capacity to acquire them at the time they were bought. Acquisition cost never changes as it indicates the asset value at a single point in time.
LIABILITIES
• Under liabilities, nature of liability and name of creditors
shall be indicated.
• All existing liabilities, secured or unsecured, whether or not incurred in trade or business, shall reflect the outstanding balance as of December 31 of the reporting year.
Salary Loans, Calamity Loans
Housing Loans – Pag-Ibig, GSIS
Credit Card Billing Car Loans and Appliance Loans
Personal Loans and Accounts Payable
Bank Loans
Sources of Income
Salary including bonuses, cash gift, allowances, honorarium, overtime pay , per diems and monetization of leave benefits.
Income from business and practice of profession
Interests and cash dividends
Gain on Sale of Property, whether real or personal
Donations, Inheritance and Financial Aid
PERSONAL AND FAMILY EXPENSES
Declaring of Personal and Family Expenses. A new feature of the revised SALN form is the disclosure of the estimated amount of the declarant’s personal and family expenses. In case of joint filing, the declarant and his/her spouse shall declare the estimated amount of their personal and family expenses for the preceding calendar year.
Estimates … Not Guestimates. Refer utility and phone bills, credit card receipts, etc.
Window to Correct SALN
Pleyto v. PNP-CIDG (538 SCRA 534)
Within the Agency – Internal Matter
SALN can still be corrected / filed
Ombudsman or Civil Service Commission
SALN can No Longer be corrected / filed
SALN Review and Compliance Mechanism Rule VIII Rule VIII of the Rules Implementing the Code of Conduct and
Ethical Standards for Public Officials and Employees
The following shall have the authority to establish compliance procedures for the review of statements to determine whether said statements have been properly accomplished:
• In the case of Congress, the designated committees of both Houses of Congress subject to approval by the affirmative vote of the majority of the particular House concerned;
• In the case of the Executive Department, the heads of departments, offices and agencies insofar as their respective departments, offices and agencies are concerned subject to the approval of the Secretary of Justice.
• In the case of the Judicial Department, the Chief Justice of the Supreme Court; and • In the case of the Constitutional Commissions and other Constitutional Offices, the respective
Chairman and members thereof; in the case of the Office of the Ombudsman, the Ombudsman.
The above officials shall likewise have the authority to render any opinion interpreting the provisions on the review and compliance procedures in the filing of statement of assets, liabilities, net worth and disclosure information.
In the event said authorities determine that a statement is not properly filed, they shall inform the reporting individual and direct him to take the necessary corrective action. The individual to whom an opinion is rendered and any other individual involved in a similar factual situation, and who, after issuance of the opinion acts in good faith in accordance with it shall not be subject to any sanction provided in the Code.
CSC Resolution No. 06-0231 dated February 1, 2006 on the establishment of a standard review and compliance procedure for the review of SALN
A Review and Compliance Committee composed of two (2) Members and a Chairman, shall evaluate the SALN Form submitted to determine whether it was submitted on time, accomplished completely and proper in form. *CSC Resolution No. 1100902 was published on August 6, 2011 in the Philippine Star.
“Petitioner argues that he should have been given the opportunity to correct his obviously incomplete and/or not properly filed SALN in accordance with the afore-quoted review and compliance procedure. This Court is unconvinced. From a reading of the provision in question, it is apparent that it primarily imposes upon the heads of offices the duty to review the SALNs of their subordinates. If a head of office finds that the SALN of a certain subordinate is incomplete or not in the proper form, then the head of office must inform the subordinate concerned and direct him to take corrective action. Unquestionably, it is an internal procedure limited within the office concerned. It does not even provide for instances when a complaint, not the head of office may question the SALN of a public officer or employee. Such a procedure does not find application in the Petition at bar, because petitioner’s SALN was not being reviewed or questioned by his head of office, but by the Office of the Ombudsman. Whether or not petitioner’s SALN was actually reviewed by his head of office is irrelevant and cannot bar the Office of the Ombudsman from conducting an investigation of petitioner for violation of Section 8 of the Code of Conduct and Ethical Standards for Public Officials and Employees, as well as Section 7 of the Anti-Graft and Corrupt Practices Act, upon the filing of a Complaint by the PNP-CIDG.”
CERTIFICATION I hereby certify that those are my/our true and detailed assets, liabilities, net worth, amount and source of income, personal and family expenses, amount of income taxes paid, business interests and financial connections, including those of my spouse and my/our children below 18 years of age living in my household, and the names of my relatives in Government as of December 31, ___, as required by Republic Acts No. 3019 and 6713.
WAIVER I hereby authorize the Ombudsman or his representative to obtain and secure from all appropriate government agencies, including the Bureau of Internal Revenue, such documents that may show my assets, liabilities, net worth, business interests and financial connections, to include those of my spouse and unmarried children, below 18 years of age living with me in my household covering previous years to include the year I first assumed office in the government.
UNDERTAKING* I further undertake to produce all supporting documents for each of the entries herein made when required.
*Not in RA 6713
DISCLOSURE OF BUSINESS INTERESTS & FINANCIAL CONNECTIONS
The declarant, including his/her spouse and unmarried children below eighteen (18) years of age living in declarant’s household, shall declare their existing or connection in any business enterprise or entity, aside from income from government. They shall also indicate the business address, nature of business interest and/or financial connection, and date of acquisition of interest or connection.
Business Interests and Financial Connections
Proprietor, Investor, Promoter, Partner, Shareholder
Officer, Managing Director, Executive
Creditor Debtor?
Lawyer, Legal Consultant, Accountant and Auditor
And the Like
Penalties for Violating SALN Law Law or Regulation Violated Penalty
Anti-Graft and Corrupt Practices Act (RA 3019) Fine not less than one thousand pesos nor more than five thousand pesos, or by imprisonment not exceeding one year and six months, or by both such fine and imprisonment, at the discretion of the Court
Code of Conduct and Ethical Standards of Public Officials and Employees (RA 6713)
Imprisonment not exceeding 5 years, or a fine not exceeding five thousand pesos (P5,000.00), or both, and, in the discretion of the court of competent jurisdiction, dis-qualification to hold public office
Uniform Rules on Administrative Cases in the Civil Service (URACCS) Failure To File Failure to Disclose
Less Grave Offense Grave Offense (Dishonesty)
SALNella VIRUS
Non-Filing and Late-Filing
Not complete or in Proper Form
Material Misstatements
Material Admissions
Non-Filling and Late-Filing Not Complete or in Proper Form
Covered by Review Mechanism if still an internal affair i.e. Ombudsman or Civil Service Commission had taken jurisdiction.
Code of Conduct and Ethical Standards of Public Officials and Employees provides for a mechanism of review and compliance to “determine whether [the SALNs] have been submitted on time, are complete and are in proper form”. When it is determined that a statement is not so filed, the reporting person will be informed and directed “to take the necessary action’’. Section 10 of RA 6713
Pleyto v. CIDG … case filed with Ombudsman
Carabeo v. Court of Appeals … charged under RA 6713 AND 3019
Material Misstatements
Wilfully or deliberately made untruthful statements
Perjury under Art. 183 of Revised Penal Code
Statement of affidavit under oath.
Oath made before competent official authorized to take oath.
Wilful and deliberate assertion of falsehood
Statement or Affidavit required by law or made for a legal purpose.
People v. Joseph Estrada (Sandiganbayan, Special Division, CC No. 26905
decided on September 12, 2007)
Dishonesty – Grave Offense – Dismissal even 1st Offense Uniform Rules on Administrative Cases in the Civil Service (URACCS) at Section 52 (A)
Material Admissions
Unauthorized practice of profession
Engaging in private business without the written permission of the head of agency
Private employment or side-line
Unauthorized or unlawful financial, pecuniary and other interest.
Conflict of Interest and Failure to Divest
Loans from Persons / Entities having Business with the Office
Violation of RA 3019 and 6713 and URACCS (administrative)
RA 3019 , Sec. 9 – Imprisonment not < 6 yrs and 1 mo. nor > 15 yrs, perpetual disqualification and confiscation or forfeiture
RA 6713, Sec. 11 – Imprisonment not > 5 years or Fine not > P5T or both, disqualification 53 [email protected]
Rule of Practice of Profession
PROHIBITED from engaging in practice of profession(Sec. 9, RA 6713)
EXCEPT – When allowed by Constitution or law
EVEN IF ALLOWED – Must not conflict or tend to conflict with public duties
Under the Administrative Code of 1987 (Sec. 46 (24), Chapter 6, Subtitle
A, Title I, Book V) –
No public officer or employee shall engage directly in private business, vocation or profession or be connected with any commercial credit, agricultural or industrial undertaking without the permission (from the head of department or agency) required by Civil Service rules and regulations.
LAW PRACTICE NOT ALLOWED
Judges and other officials and employees of the superior courts, of the office of the Solicitor General, Ombudsman and his deputies and of other government prosecution offices
President, Vice-President, and members of the cabinet and their deputies and assistants;
Local chief executives, such as governors, city or municipal mayors
Members of constitutional commissions
Civil Service whose duties and responsibilities require that their entire time be at the disposal of the government.
ALLOWED LIMITATIONS
Members of Congress Cannot personally appear
Sanggunian members Cannot appear where in LGU is adverse party
Doctors Only in times of emergency and cannot collect fee
Rule of Private Employment
Public Officer himself
Not Allowed – Except with written permission
Member of His Family
Pending Official Business with him – Not Allowed (RA 3019)
No Pending Official Business - Allowed
Rule on Private Business
Public Officer - NOT ALLOWED – Except Written Permission
Members of Family – ALL0WED
Passive Investments – No need for written permission provided no Conflict of Interest
Ramos v. Rada (65 SCRA 179) – Written permission is a mere technicality punishable by reprimand. There must be actual prejudice to public service.
Rule on Conflict of Interest
Conflict of interest arises when a public officer or employee –
Is a member of a board, an officer, or a substantial stockholder of a private corporation or owned or has substantial interest in business, and
The interest of such corporation or business, or his rights or duties therein, may be opposed to or affected by the faithful performance of official duty.
Resign within 30 days . Divest within 60 days.
When NO Conflict of Interest – No Need to resign or divest, provided PO secured written permission to engage in outside activities.
Antidote to SALN-ella Virus
DUE PROCESS
SELF-INCRIMINATION
SPEEDY DISPOSITION OF CASES
Right to Due Process “Hear before you condemn” - Daniel Webster
“No person shall be deprived of life, liberty or property without due process of law.” (Sec. 1, Art III, Bill of Rights, 1987 Constitution)
“No officer or employee of the Civil Service shall be suspended or removed except for cause as provided for by law and after due process.” (Sec. 2 (3), Art. IX-B, 1987 constitution)
“For Cause” - He / She cannot be removed at the mere whim or will of appointing authority. The cause must be substantial and relate to the office and public service.
Heart of Due Process is to give a person a reasonable opportunity to be heard and to submit evidence in support of his side or defense.
Right against Self Incrimination “No person shall be compelled to be a witness against himself.” (Sec. 17, Art. III on Bill of Rights, 1987 constitution)
A party or a witness and on situations where the person may be exposed to a criminal charge or an administrative case of a criminal or penal nature. In all civil, criminal, administrative cases, legislative proceedings.
Oral testimony where a person is forced to admit to a crime or administrative offense, or admit to a fact which will be a link in a chain of evidence to a commission of a crime or offense.
Right to remain silent where his silence or refusal to testify may not be used as a presumption of guilt.
Production of private documents and records of a person, for then he will be forced to make statements on those documents and records he produced
No statute can deprive a witness of his constitutional privilege against self-incrimination – UNLESS – it Gives Him absolute immunity from prosecution for the offense to which incriminating questions relate.
Witness With Immunity – cannot invoke Self Incrimination – and if he refuses – CONTEMPT
The Galman Case.
Witnesses testified after receiving immunity … Later convicted … Supreme Court said “deemed immunized.” Transactional Immunity. Use of testimony in exchange for immunity.
Any evidence obtained in violation of Self Incrimination is inadmissible
RIGHT TO SPEEDY DISPOSITION OF CASES
“All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial or administrative bodies.”
It encompasses all stage of the proceedings whether before, during and after trial.
Executive Order No. 26 (1992) – Speedy Disposition of Administrative Cases All contested cases shall be decided within 30 days from date of
submission for resolution.
Avoid postponement of hearings
Mandatory use of affidavits in lieu of direct testimony, Position paper as last pleading and submission of draft decision.
Encourages amicable settlement, compromise or arbitration
Defenses in SALN Cases
• Good Faith, Mistake or Oversight
• Mitigating or Moderating Circumstances, such as Habituality, Length of Service and Education
• Presumption of Due Performance
• Prescription
GOOD FAITH, MISTAKE OR OVERSIGHT Pleyto v. PNP-CIDG
People v. Joseph Estrada
MITIGATING AND MODERATING CIRCUMSTANCES Illness of the offender as would diminish the exercise of willpower
Physical defect as when the offender is deaf and dumb or blind which thus restricts his means of action or communication.
Voluntary confession
No prior offense or Habituality
Education
Length of service in government.
Prescription 15 years for offenses committed.
The prescriptive period begins to run from the discovery of the offense. The absence of offender from the Philippines will not stop the running of the prescriptive period.
A Friendly Reminder
• Do not omit material assets in your SALN
• Do not mis-state material information
• Keep tabs of major asset acquisition and identify source of funds
• File on time, always keep a received copy
• Keep tabs of Personal and Family Expenses
• Carefully review disclosures in Family Income (esp. practice of profession, private businesses, and conflict of interest)
• Keep tabs of loans, donations, inheritance and financial aids to justify increase in net worth
• Keep tabs of sale of assets
• Fill in the required spaces and check the boxes. Write N/A if not applicable.
In Closing • Upon appointment to a public office, an officer is required to take his oath
whereby he solemnly swears to support and defend the constitution, bear true faith and allegiance to the same; obey the laws, legal orders and decrees promulgated by the duly constituted authorities; and faithfully discharge to the best of his ability the duties of the position he will hold.
• Yet, time and again, We hear of public servants acting in utter defiance of the principle enshrined in the Constitution and in complete disregard of what they swore in the name of God before assuming their posts in the public service. Consequently, the people’s trust and faith in the government has slowly eroded. There is little respect and confidence left.
