‘Take advantage of the corrupt courts’—Winston Garcia?
By Lala Rimando, abs-cbnNEWS.com/Newsbreak | 08/25/2008 8:02 PM
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An audio recording posted on the popular video-sharing Web site, YouTube, exposed an insinuation from a government official to "take advantage of the corrupt courts," particularly the Court of Appeals, to win cases.
The video, entitled "Hello Garci-a," was made public recently at the height of an investigation of an alleged bribery attempt at the Court of Appeals and on how some appellate justices displayed undue interest in a high-profile Manila Electric Co (Meralco) case.
The YouTube posting features a voice recording of what sounds like that of Winston Garcia, the head of pension fund Government Service Insurance System and who is at the forefront of the boardroom-turned-legal battle with the wealthy Lopez family and their allies who control Meralco.
Garcia's picture is flashed on the video while a transcript of the voice recording is displayed on-screen.
We sent the transcript of the YouTube audio posting to GSIS vice-president for public affairs, Elia Valencerina, and asked her to comment. She replied through a text message that they have seen the YouTube posting but are “not dignifying” it. When asked if this means a denial, Valencerina said they are not going to make any comment.
We also called Winston Garcia and sent him text message but he has not replied.
Context: meeting in 2003?
The YouTube video, which was uploaded on August 18, 2008, a day before the 8th day of the Supreme Court panel investigation on the CA handling of the Meralco case, was posted by an accountholder who goes by the name of "WagKoyaMasakit." In the accountholder's profile page, it says he or she is from the Philippines, is 47 years old, and joined the networking site last August 8, 2008.
In the run up to the controversial May 27 Meralco stockholders meeting, where Garcia failed to wrest control of the company from the Lopezes by obtaining more board seats through proxies, abs-cbnnews.com/Newsbreak reported that personality differences between Garcia and the Lopez family and allies triggered what is now a full-blown row.
The Lopezes and their allies were apparently already wary of Garcia when he rejoined the Meralco board in March 2008. Garcia was part of the Meralco board for a short period in 2003.
According to two sources present during a Meralco board meeting in mid-2003, Garcia allegedly remarked that Meralco should resort to extra-judicial means to win its court cases after it lost a major legal battle in the Supreme Court and the company was ordered to refund P28 billion to its customers.
The YouTube posting seems like the purported audio recording of that remark.
Two sources who were present in a mid-2003 board meeting told abs-cbnnews.com/Newsbreak that Garcia rubbed them the wrong way when Garcia reportedly remarked something about bribing justices to win their court cases.
"Can you imagine the face of those in the board when that was said, including his colleagues in government?" one of the sources who heard Garcia's 2003 board meeting remark told abs-cbnnews.com/Newsbreak in an interview last May.
Meralco officials confirmed to abs-cbnnews.com/Newsbreak that their board meetings are always recorded. The minutes of the meeting, however, do not contain all the details and comments mentioned by the board members. But the audio recordings are kept and filed.
Garcia represented GSIS in the Meralco board in 2003. At that time, GSIS only had eight percent stake in Meralco and was entitled to only one seat. Garcia left the Meralco board the following year and their one-seat allocation in Meralco board was assumed by someone else.
Garcia only returned to the Meralco board in March 2008, after GSIS upped its stake to 18 percent in January 2008. Garcia's return to the Meralco board did not sit well with the Lopezes.
After the news on the boardroom row erupted in the headlines in late April, Garcia has been citing the P28 billion refund order as one of the proofs that the Lopezes were mismanaging the company.
Take advantage of corrupt courts
The voice in the YouTube post starts with how the public disdains increases in electricity rates: "The point here is that even if we have…that's the public sentiment. Nobody likes to increases in electric rates. Nobody wants to pay for any increase. That's the public sentiment."
"But why is it that the oil companies do not have the same, do not have the kind of success we have in courts as Meralco? It's something really that we have to seriously think about. I think we have to come down to reality right now."
The speaker then segues to how corrupt the courts are and that Meralco could take advantage of it.
"Our courts are the most corrupt at any point in time. And I have been in practice for several years. Today, it's worse than five years ago. It's worst, at its worst stage.
"And if it's the most corrupt right now at this stage, then Meralco can also take advantage of that. Take advantage of this misfortune of this country. If you want to survive…I think that's to be blunt about it.
"It's not a question anymore of what's the legal issue. It's a question of how to take advantage of this corrupt system. Your enemies, our enemies, have been taking advantage of this corrupt judicial system we have. Let's open up our eyes.
He then highlights the appellate court: "The Court of Appeals is at its dirtiest right now.
"It's a comment. Think about it."
Court of Appeals case
In April 2003, the Supreme Court ruled that Meralco must refund customers for charging P0.184 per kilowatt hour instead of only P0.017/kwh from 1994 to 2002. Based on the Commission on Audit's findings, Meralco overcharged its customers because its regulator should not have allowed it to pass on income taxes to consumers and that it used an inappropriate accounting method for booking asset values.
The Supreme Court ruling, which was finalized in June 2004 after several motions for reconsideration from Meralco, resulted in Meralco having to shell out a whopping P28 billion to refund its customers.
However, the audio recording in YouTube was referring to the Court of Appeals, not the Supreme Court. At that time, the Meralco case in the Court of Appeals was regarding another rate increase petition lodged with the Energy Regulatory Commission (ERC) in 2001. This Meralco rate increase petition came almost seven years after the controversial 1994 ERC-approved rate increase, which was eventually reversed after the COA report came out.
Energy utility companies such as Meralco are regulated by a government entity, the ERC, which, among others, approves, disapproves, or limits Meralco's requests for rate increases. In turn, these rate increases dictate how much Meralco would earn.
The 2001 rate increase petition was questioned by consumer, lawyers, and party-list groups for having been granted by ERC in June 2003 even before COA audited Meralco. The petitioners included Lawyers Against Monopoly and Poverty and the Alliance of Consumers Against Monopoly, and party lists Bayan Muna, Alyansang Makabayan, Kilusang Mayo Uno, Gabriela, and Kalipunan ng Damayang Mahihirap,
The petitioners questioned why ERC approved Meralco's P0.22 per kilowatt hour additional charges in 2003 before the COA completed its audit.
In 2004, the Court of Appeals decided in favor of the petitioners.
Eventually, in 2006, the Supreme Court overturned the decision of the appellate court but compelled the immediate audit of Meralco's books by COA.
