Public office is a public trust–yeah, right
Posted by akosistella on March 12, 2010
By Dan Mariano
In one of his political ads Sen. Manuel Villar protests: If I wanted to get rich, I would just go back to business—or words to that effect. The problem is his campaign spin sidesteps charges that he never actually cut his business ties even after he became a politician.
According to several sources, Villar actually made use of his public office as a competitive edge in order to grow his various businesses. As congressman and later senator, Villar allegedly wielded his political clout to expand his real estate, banking and other interests.
Even before he launched his political career in 1992, Villar was said to have used his influence as a prominent figure in the real estate sector to gain key concessions from the government, which produced a mind-boggling windfall for his companies.
Antonio Hidalgo was the secretary-general of the Housing and Urban Development and Coordinating Council (HUDCC) from 1992 to 1998. In a letter widely circulated in the Internet, Hidalgo accused Villar of “making billions out of government funds for socialized housing through a questionable, unsustainable scheme that nearly destroyed our financial system in the ‘90s.”
During the time of President Cory Aquino, Hidalgo states, Villar—“through the CREBA [Chamber of Real Estate and Builders Associations] he controlled”—lobbied for a socialized housing law purportedly designed to encourage the development of low-cost shelter in the country.
“Cory approved it with her emergency powers, not seeing through Villar’s scheme,” Hidalgo said.
The law required the state-controlled pension funds—SSS, GSIS and Pag-IBIG—to put up a common fund for low-cost housing mortgages. Quotas were set for registered developers who were allowed to tap into the fund. “The largest quotas every year were for the Camelia and Palmera (C&P) company of Villar which got a very huge chunk of the funds for their home mortgages.”
According to Hidalgo, it was a clear case of conflict of interest because the builders were able to maximize their profits from easy credit—but did not have to bear the cost of mortgage defaults.
“Naturally, lots of problems arose in just a few years—fake mortgages to fictitious borrowers, nonexistent houses sold to nonexistent buyers, and the more common case: real, but substandard, houses, hastily sold to buyers who clearly did not have the capacity to pay back the loan during the agreed loan period,” Hidalgo said.
By the time HUDCC was finally able to rectify the anomaly in 1996, during Hidalgo’s watch, “some P42 billion [pesos] had been disbursed in mortgages under the Villar scheme. Only a little more than 20 percent of the loans were being repaid by borrowers, more than 70 percent of the mortgages had been defaulted or were in serious arrears.”
When reforms were later adopted to give control over the housing program back to the state pension funds, the share prices of Villar’s C&P homes collapsed. “Everyone knew that the company was profitable only for as long as it could bilk government funds,” Hidalgo said. “But then Villar found other rackets and the rest, as they say, is history.”
By the time the low-cost housing shenanigans were revealed—and corrected—Villar was already a congressman and speaker of the House of Representatives. Yet, even in Congress, his conduct continued to come under question.
On August 17, 1998 then Makati-Rep. Joker Arroyo delivered a privilege speech that listed down nine charges against Villar.
Arroyo’s allegations boiled down to the financial accommodation that Villar got from state banks and government financial institutions (GFIs) and his reluctance to divest himself of his interests in his real estate, banking and other companies.
Arroyo recalled that the Villar-controlled Capitol Bank received loans, financial accommodations and guarantees courtesy of the Bangko Sentral ng Pilipinas from 1992 to 1998 while he was a congressman.
Another Villar company, Manuela Corporation, applied for and was granted a loan of P1 billion by the SSS and another P2 billion loan syndicated with the GSIS. It was, according to Arroyo, an “indirect financial accommodation.”
Arroyo also claimed that Villar violated the spirit, if not the letter, of the Comprehensive Agrarian Reform Program. All lands covered by CARP cannot be used for residential, agricultural, industrial or other uses unless a clearance, conversion, or exemption for a particular property is first issued by the Department of Agrarian Reform (DAR).
In his 1998 privilege speech, then-Congressman Arroyo said: “Speaker Villar’s companies are developing or have developed 5,950 hectares or almost 60 million square meters of CARP lands into residential subdivision without the appropriate DAR issuances that would authorize such lands to be used for residential purposes.”
The 60 million sq. meters covered by Villar’s subdivisions at the time are equivalent to the land area of the cities of Makati and Las Piñas combined. That was 12 years ago. Since then, Villar’s real estate empire has reportedly grown even larger—much larger.
“Public office is a public trust,” Arroyo underscored in his 1998 privilege speech. “We, the representatives of the people pay a price for getting elected to public office. The Constitution imposes on us certain constraints which we must follow to the letter.”
Arroyo added: “So in the case of Speaker Villar, it is simple. If he wants to continue in business and deal with government financial institutions, he can do so but he cannot also be a congressman. If he wants to be a congressman, then he must not be in business, which deals with the government. We have to pay a price.”
Indications are that Villar did not pay the price of public office as demanded by the Constitution—a pattern that would reportedly persist as he climbed the political ladder.
More next time.