Get Real
Questions raised on Ilocos Sur’s adopted son  (part 1)

By Solita Collas-Monsod

Philippine Daily Inquirer
First Posted 01:48:00 07/05/2008

MANILA, Philippines—Neal Cruz’s column Friday (“How about workers abused by their employers?”) was fortuitous, because I had just received by surface mail—how quaint—material from one Elpidio Que of Vigan, Ilocos Sur, which illustrates, among other things, some of the issues Cruz was talking about.

What Que sent me was a copy of a letter he wrote to the provincial board of Ilocos Sur protesting in no uncertain terms that body’s resolution adopting the tobacco tycoon Lucio Tan as a son of the province last May 28. In a subsequent email to me, Que said that adoption was “a betrayal of the tobacco farmers and oppressed and cheated workers in Tan’s interests in our province.”

Que had entered my radar screen about three years ago, when he sent me materials against Lucio Tan, but I disregarded these at the time because he had just been dismissed from a Tan company (as Asia Brewery Inc.’s regional sales manager of Northern Luzon); and although his materials were pretty damaging, I wasn’t sure that he hadn’t been dismissed for cause, and that he was just getting back at Tan any way he knew how.

It turns out, from the materials he sent, that he won his case of illegal dismissal against the Tan company last year—at least at the arbiter’s level with the National Labor Relations Commission (NLRC). It is now under review by Commissioner Raul Aquino of the NLRC, and will be appealable all the way to the Supreme Court, as Cruz pointed out. And many people are aware of Tan’s very impressive string of legal and other victories at every level of the justice system. One remembers his successes against the pilots and ground crew of the Philippine Airlines, not to mention the stories about how Supreme Court Justice Teodoro Padilla was shocked and angered when what he thought was a majority decision he had written against Tan became the dissenting opinion at the last minute.

It turns out also that Que served, for a short period of time during President Cory Aquino’s administration, as an appointed member of the Ilocos Sur provincial board. I am reprinting excerpts from his letter and leave it to the reader to judge its merits:

“I am registering my vehement objection to the resolution approved by this honorable body last May 28, 2008, adopting Mr. Lucio Tan, a super rich but looked upon by most … to be a businessman of ill-repute, far worse than Stonehill who was deported in the 1950s because of economic crimes… May I call your attention to the following events….”

On tobacco farmer exploitation: “We all know that the tobacco farmers in the province of Ilocos Sur, and elsewhere in the North, are victims of the greed of the person whom you want to adopt as a son of our beloved province .… Last November, a very influential government official of our province personally related to us in a group that you, as Provincial Board, were investigating the practices of this man congruent to the tobacco industry, and found out that in Yunnan Province, China, said to be a sister province of our province, the per kilogram price of Virginia tobacco leaves equal to our product here was as high as the equivalent of P200, while he was buying it only at a high of P40 here. No amount of tripartite agreement had remedied the exploitative price because he used his monopolistic grip over the poor farmers in our province. He had no qualms … robbing them of their back-breaking legitimate income.…”

On labor exploitation: “… employees in his infamous Northern Tobacco Redrying Company, Incorporated (NTRCI) and Asia Brewery, Incorporated (ABI), just two of many others, have been victimized by his anti-labor practices. Many have chosen to accept whatever fate they have because of fear that if they were to seek justice and redress, the power of his wealth would blow their complaints to nowhere, leaving them in prolonged pain or, as what happened to ABI branch manager Ronnie Robles, to die in humiliation, heartbreak and anger. As an individual complainant, only a few of his cheated and oppressed workers stood up against his and his ilk’s power.

“My case is a typical example …

“... 52 of the band of laborer-complainants, all our province mates, of NTRCI have recently won their cases at the NLRC against their oppressive employer. Nevertheless, they are pressed even more against the wall. Victory for justice and restitution due them are still hanging in the air.… Because Tan has the money, he will keep filing an appeal up to the Supreme Court knowing that the poor victims and their families will go hungry and many, if not all, will accept his onerous condition. The strategy is clear: prolong the labor dispute until the poor will either bow down before him in defeat or simply not be able to do anything until the case is decided in his favor.

“And recently also, an illegally dismissed driver of ABI’s dummy company, Wellform Trading Corporation, Laoag Sales Office … won his case at the NLRC San Fernando City, La Union. And again, just like the other anti-labor cases filed by Tan’s workers in his other business interests like PAL [Philippine Airlines], UE [University of the East], etc., that won at the NLRC level, the same strategy is used—the moneyed oppressor appealing the lost case step by step because he has the money to sustain while the victim only has few coins and money to use.

“Not only is this ill-repute billionaire victimizing the people—the workers and farmers—but even the government (sic). The City of Vigan is being grossly shortchanged of taxes due her.”

(To be continued)

Copyright 2008 Philippine Daily Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Get Real
Questions raised on Ilocos Sur’s adopted son (part 2)

By Solita Collas-Monsod

Philippine Daily Inquirer
First Posted 03:25:00 07/12/2008

 (Conclusion)

(Elpidio Que, whose letter to the Ilocos Sur Provincial Board protesting its resolution to adopt the tobacco tycoon Lucio Tan as a son of the province I quoted extensively last week, has sent me several email with further information volunteered by other people regarding Tan. I will forward all of them to the Philippine Center for Investigative Journalism. More than 15 years ago, the late Raul Locsin’s Business Day newspaper published an investigative report on so-called “ghost companies” that “bought” the cigarette and beverage products at extremely low prices, thus depriving the government of tax revenues, because tax collections were—and still are—based on the manufacturer’s registered prices.)

MANILA, Philippines — Elpidio Que supports his statement that Vigan City is being shortchanged of taxes with two documents: an internal sales volume report by a branch accountant of the Vigan sales office and noted by the “Market Territory Manager” (Que was the regional sales manager until 2005), and a certification from the Vigan City Treasurer’s Office of the sales volume reported by Wellform Trading Corp. (the company handling Vigan) for the same period of time. The documents show the peso value of the sales of beer and distilled water in 1999 as over P33 million, while the gross sales reported by Wellform was P2 million. The next year, the Vigan sales office reported sales of P39 million, while Wellform reported sales revenues of P2.1 million. The same pattern was followed for 2004 showing sales of almost P50 million, and taxes paid on only the P4 million reported by the trading company.

Que was obviously aware of, and participated in, what he claims are the successful efforts, allegedly under the instructions of one Anthony Dy, to underdeclare sales (by more than 90 percent). He says that in the course of his career with the Tan company, he also handled North Metro Manila, Southern and Bicol Region, and Central Luzon—under similar instructions.

If Que’s assertions are correct, underdeclaration seems to be company policy, with declared yearly sales revenue of no more than 10 percent of actual sales. He claims that Mayor Delfin Ting of Tuguegarao City once padlocked the Asia Brewery sales office in his city when he became aware of such practices.

Aside from the documentary, Que offers an indirect calculation of lost taxes as follows: “Consider the year 2005. It is public records (sic) that Philip Morris (PM) declared … a sales revenue of P29 billion. FTC [Fortune Tobacco Corp.] declared lower at P27 billion. FTC commands no less than 70 percent of the cigarette market while PM has about 25 percent, with the rest shared by … other small players.” He does a little arithmetic: If P29 billion represents a 25 percent market share, the total market must be P116 billion; and 70 percent of that would be about P81 billion. Thus, he estimates an underdeclaration of P54 billion (P81 billion minus P27 billion) for 2005. How much was the lost taxes on that?

The question that comes to mind, of course, is how come the Bureau of Internal Revenue cannot come to the same conclusions? And how come the BIR/government doesn’t grab Que, who seems to know where all the dead bodies are, and use him as their witness, or at least pick his brain and follow his leads?

The government in its case against FTC (which it lost) cited as evidence of tax evasion such data as: the trading corporations having the same addresses, their articles of incorporation notarized by the same notary public, having the same auditor (who was also the auditor of the FTC, etc., etc. as listed in my column two years ago). Judge Alex Ruiz of the Marikina Trial Court ruled in 2006 that there was no evidence that the Tan companies had anything to do with those trading companies, and that there was no evidence that the 2000 or so individual “buyers” from FTC—none of whom, according to the government, had a tax identification number or even an address, and who would have had to carry on their persons P4 million to P6 million in cash for their transactions with FTC—were fictitious.

And of course, the next question that comes to mind is: How can the province of Ilocos Sur think of adopting as a son someone who is accused of exploiting Ilocano tobacco farmers, treating Ilocano laborers with contempt, and cheating on taxes to the provincial government (not to mention the national government)? That is, of course, if Elpidio Que is to be believed.

Is Que credible? One can only say that he would have to be insane to take on someone like Tan unless he is sure and can fully support his allegations. And he would have to be angry enough at what he says is the injustice to himself and his co-“provincianos.”

I don’t know how the Provincial Board of Ilocos Sur will respond to Que’s letter. Of course, it can cite the fact that it is not the only entity that has adopted Tan: reportedly Tan has also been adopted by Dagupan City in Pangasinan as well as Bacolod City in Negros Occidental. I am also told that a Lucio Tan Day is celebrated in Guam every year. And Tan has a foundation that reportedly makes numerous charitable contributions to needy groups.

In any case, it has to be easy to be generous when one has saved an estimated minimum of P11 billion in taxes (at 1991 prices up to that time), as calculated by the government. Even a small percentage of that amount would be a huge donation that can buy a lot of respectability.

As a quarter-blooded Ilocano, I join Elpidio Que in his protest.

Copyright 2008 Philippine Daily Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed