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REPUBLIC OF THE PHILIPPINES CONGRESS OF THE PHILIPPINES SENATE

SITTING AS THE IMPEACHMENT COURT '12 FEB -8 P12 :00

IN THE MATTER OF THE IMPEACHMENT OF RENATO C. CORONA AS CHIEF JUSTICE OF THE THE COURT OF SUPREME PHILIPPINES,

CASE NO. 002-2011


REPRESENTATIVES NIH C. TUPAS, JR., JOSEPH EMILIO A. ABAYA, LORENZO R. TANADA, III, REYNALDO V. UMALI, ARLENE J. BAG-AO (other complainants comprising one third (1/3) of the total Members of the House of Representatives as are indicated below.)

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COMMENT/OPPOSITION (To Respondent's Motion to Quash Subpoena Ad Cautelam)

The HOUSE OF REPRESENTATIVES, through its PROSECUTORS, and unto this Honorable Impeachment Court respectfully submits the instant Comment/Opposition to the Motion to Quash Subpoena Ad Cautelam and respectfully states:

1.

In the Motion to Quash Subpoena Ad Cautelam dated 07 February 2012, the

Respondent alleged that the Subpoenae issued by this Honorable Tribunal to the Bank of the Philippine Islands (BPI) and PSBank dated 07 February 2012 will allow the Prosecution to support its allegations under paragraph 2.4 of the "Verified Complaint". He cited the

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Resolution dated 27 January 2012 rendered by this Honorable Tribunal prohibiting any introduction of evidence pertaining to Par. 2.4 of the complaint, which includes evidence to prove respondent's supposed bank accounts with huge deposits.
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2.

At the outset, it must be stressed that the Motion to Quash does not raise any

new arguments and is clearly a mere pro-forma Motion. All the arguments raised therein were fully and adequately discussed in the Resolution dated 06 February 2012 which ruled that: "After an examination of the documents sought to be produces in both requests, this Court is of the strong view that the production of documents pertaining to the bank accounts of Chief Justice Corona should be closely related to the filing of his Statement of Assets, Liabilities and Net Worth ("SALN") inasmuch as the funds in said bank accounts may be considered as his personal properties which are required to be properly and truthfully declared in the SALN. xxx xxx xx xxx

The court had to consider whether or not the issuance of the subpoenae would violate existing laws on secrecy of bank deposits. Under Republic Act 1405, as amended, and the Anti-Money Laundering Act, the disclosure of information relating to bank accounts in local currency cannot be made except in five (5) instances, namely: (a) upon written permission of the depositor, (b) in cases of impeachment, (c) upon order of a competent court in the case of bribery or dereliction of duty of public officials or. (d) when the money deposited or invested is the subject matter of the litigation, and e) in cases of violation of the Anti-Money Laundering Act (AM LA). However, it appears that for foreign currency bank accounts, the disclosure may be made only upon written permission of the depositor, pursuant to Section 8 of Republic Act No. 6426. However, the court has taken due notice of the fact that the Supreme Court, has in several decisions, relaxed the rule on the absolute confidential nature of bank deposits, even foreign currency deposit accounts, in the cases of Salvacion vs. The Central Bank of the Philippines, GR No. 94723 August 21, 1997 and China Banking Corporation vs. Court of Appeals, GR No. 140687, December 18, 2006 and Ejercito vs. Sandiganbayan, GR No. 157294-95, November 30, 2006. The Majority is of the view that the present impeachment proceedings present a valid exception to the general rule on confidentiality of information on bank accounts, even for foreign currency bank accounts. The court would like to emphasize that the non-disclosure of information relating to the bank accounts of individuals is still the general rule and it has no intention of going against the public policy on this matter. However, the court is only issuing the subpoena relating to the bank accounts of Chief Justice Corona because of the pendency of the present impeachment proceedings and for no other reason."

Motion to Quash Subpoena Ad Cautelam dated 07 February 2012, par. 3, p. 2.

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The subpoenae to BPI and PSBank are being presented to prove the allegations in pars. 2.2 and 2.3 of the Verified Complaint and are therefore, relevant and material to the instant case.

3.

As emphasized by the Prosecutors time and again, the BPI and PS Bank records

are not intended to prove the allegations contained in paragraph 2.4 of the Verified Complaint but are being presented to prove the allegations in paragraphs 2.2 and 2.3 thereof. Further, in the same Resolution cited by the respondent, this Honorable Tribunal actually allowed the Prosecution to introduce evidence in support of the said paragraphs.

4.

Paragraph 2.2 of the Impeachment Complaint alleges that respondent failed to

disclose his Statement of Assets, Liabilities and Net Worth (SALN) as required by the

Constitution. 2

Paragraph 2.3 of the Impeachment Complaint alleges that some of the


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properties of respondent are not included in his SALN.

These allegations in the Impeachment

Complaint (both of which were denied by respondent in his Answer) give rise to the issue of whether respondent declared all of his assets (including moneys, cash, and funds) in his SALNs and whether the SALNs he filed were truthful, accurate and complete (as required by the Constitution 4 and the laws).

5.

In this case, the subpoenaed documents would prove and establish that

Respondent Corona did not make true disclosures of his assets. It will likewise prove that he did not declare all his assets in his SALNs because the bank accounts contain funds which are greatly in excess of the amount declared in his SALNs.

6.

To be more specific, in respondent's SALNs for 2002 to 2010 (adopted as

common exhibits by both parties). he declared "cash & investments" in the following amounts: 2002 2003 2004 2005 2006

= = = = =

P2,700,000 P3,300,000 P3,300,000 P3,300,000 P2,500,000

2 "2.2. Respondent failed to disclose to the public his statement of assets, liabilities, and net worth as required by the Constitution." 3 "2.3. It is also reported that some of the properties of Respondent are not included in his declaration of his assets, liabilities, and net worth, in violation of the anti-graft and corrupt practices act." 4 The Constitution requires the SALN to be under oath (Art. XI, Section 17). s Section 7 of RA 3019 legally requires the statements to be a "true detailed and sworn statement of assets and liabilities".

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2007 2008 2009 2010 7.

=
=

P2,500,000 P2,500,000 P2,500,000 P3,500,000 the documentary evidence presented thus far indicate that

However,

respondent has bank accounts with funds which are greatly in excess ofthe amount declared in his SALNs. For instance, respondent has drawn checks, in the following amounts: BPI Check No. 0000404870 Based on Megaworld Official Receipt No. 600312 dated April 20, 2009 (Exhibit CCCe) BPI Check No. 0000404774 Based on Megaworld Official Receipt No. 529859 dated October 17, 2008 (Exhibit CCCC-l) BPI Check No. 0000404955 Based on Megaworld Official Receipt No. 677400 dated October 16, 2009 (Exhibit CCCC-2) BPI Check No. 0000404753 Based on Megaworld Official Receipt No. 499170 dated August 29, 2008 (Exhibit FFFF)

P5,000,000.00

P5,000,000.00

P4,510,225.00

P4,858,114.80

8.

As may be seen above, there is a great disparity between the amounts indicated

in respondent's SALNs and the amounts in respondent's checks (based on official receipts issued to him). This disparity is very apparent from the records. Thus, there is sufficient basis and reason to look into the bank accounts of respondent. It will be highly relevant to the

allegation that some of respondent's assets (including moneys, cash, and funds) were not included by respondent in his SALNs.

9.

Moreover, the PSBank bank account shows that it was opened with an initial

deposit of $700,000 or around PhP 30,000,000 in 2008. However, his 2008 SALN only listed PhP 2,500,000 as Cash and Investments which clearly did not include the PhP30,000,000 in his PSBank account. From this alone, it can be derived that respondent failed to include in his SALN the difference of around Php27,500,000 as Cash and Investments. Therefore, the documents subpoenaed are relevant and material to the case.

10.

It bears emphasis that a false or untrue disclosure is no disclosure at all. Section

7 of RA 3019 legally requires the statements to be a "true detailed and sworn statement of

assets and liabilities". In turn, Section 8 of RA 6713 obligates public officials to accomplish and
submit their declarations under oath which the public has the right to know:

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"Section 8. Statements and Disclosure. - Public officials and employees have an obligation to accomplish and submit declarations under oath of, and the public has the right to know, their assets, liabilities, net worth and financial and business interests including those of their spouses and of unmarried children under eighteen (18) years of age living in their households."

11.

Being under oath, every declaration in the SALN must be true. Else, it is as if no

declaration is made since it will only give a false information to, and mislead, the public. Indeed, as an obligation of every public official, RA 6713 requires that public officials should remain true to the people at all times: "Section 4. Norms of Conduct of Public Officials and Employees. - (A) Every public official and employee shall observe the following as standards of personal conduct in the discharge and execution of official duties:

xxx xxx xxx


(c) Justness and sincerity. - Public officials and employees shall remain true to the people at all times. They must act with justness and sincerity and shall not discriminate against anyone, especially the poor and the underprivileged. They shall at all times respect the rights of others, and shall refrain from doing acts contrary to law, good morals, good customs, public policy, public order, public safety and public interest. They shall not dispense or extend undue favors on account of their office to their relatives whether by consanguinity or affinity except with respect to appointments of such relatives to positions considered strictly confidential or as members of their personal staff whose terms are coterminous with theirs." (Emphasis supplied)

12.

Further, even the Supreme Court held that SALNs should contain true details. In

the case of Pleyto vs. PNP (G.R. No. 169982, November 23, 2007), the Court stated that "Both Section 7 of the Anti-Graft and Corrupt Practices Act and Section 8 of the Code of Conduct and Ethical Standards for Public Officials and Employees require the accomplishment and submission of a true, detailed and sworn statement of assets and liabilities." (Emphasis supplied)

13.

In the recent consolidated cases of Galeos v. People and Ong v. People (G.R. No.

174730-37,174845-52, February 9,2011), the Supreme Court convicted petitioner Paulino Ong (On g) with eight counts and petitioner Rosalio Galeos (Galeos) of four counts of falsification of public documents under Article 171, par. 4 of the Revised Penal Code. The conviction was rooted on the fact that both petitioners, who were first cousins, failed to declare in their SALNs that they have a relative "within the fourth degree of consanguinity or affinity to anyone

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working in the government" and that they did not declare each other in the space for the list of names of relatives related to said query. The decision affirming the conviction was even certified by none other than respondent himself. 14. Clearly, a public official's act of disclosing his assets, liabilities, and net worth is The declarations in his SALN must reflect the true, honest and

not a pointless exercise.

accurate details of the public officer's financial status. Thus, evidence which will show that the public officer failed to declare his assets, (including personal assets such as the bank accounts of respondent in BPI and PSBank in this case) is relevant and material to the determination of whether there was a true, honest and accurate declaration of SALNs.

15.

Furthermore, in the impeachment trial of District Court Judge Charles Swayne,

the Presiding Officer admitted evidence on the expenditures of the judge, because the pleading raise the issue. Whether or not the expenses were less than the sum charged was material to proving the charge that Judge Swayne made false certificates of expenses. (3 Hinds' Precedents of the House of Representatives 2225, 551 (1907; citing 39 Congo Rec. 2240, 2241 (1905))

16.

In the same vein, the Verified Complaint charges respondent with failure to

disclose his SALN, the contents of which must be truthful, honest, and accurate. Whether or not the personal assets of the respondent, which include bank deposits, were less than that which respondent declared in his SALN is material to proving that he failed to truthfully, honestly and accurately disclose his SALN to the public as required by the Constitution.

17.

Undoubtedly, the bank accounts under the custody of BPI and PSBank are

relevant and material to the allegations contained in the Complaint, specifically Pars. 2.2 and 2.3.

The subpoenae issued to BPI and PSBonk do not violate any law on the secrecy of bank accounts.
18. With regard to his bank account in BPI, respondent has not proffered any

argument as to why disclosure should not be allowed. Being a local currency bank deposit, there is no question as to the power of the impeachment court to issue subpoenae to BPI.

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Republic Act No. 1405,6 which applies to local currency bank deposits, expressly excludes impeachment from the general rule of secrecy or confidentiality of bank deposits.

19.

By providing for this exception, the law makes it clear that there is a very

important public interest involved in impeachment cases, which interest trumps or overrides the privacy rights of account holders. Thus, any local currency bank deposit which is the subject of an impeachment trial, such as respondent's account in BPI, may be validly inquired upon by the impeachment court.

20.

Respondent, in his attempt to repress the disclosure of his bank records, further

alleges that his dollar bank account in PS Bank should remain confidential relying on Section 8 of Republic Act No. 6426 otherwise known as "The Foreign Currency Deposit Act of the Philippines" .

21.

Although R.A. No. 6426 does not specifically mention impeachment cases, there

is nothing therein to indicate a legislative intent to diminish the pUblic interest in impeachment cases, or to subordinate the same to privacy rights. R.A. No. 6426 was not enacted to shield wrongdoings by high public officials, or to immunize them from accountability, or to hobble impeachment trials, or to diminish the Senate's power to try impeachment cases.

22.

An impeachment proceeding, serves a higher public interest, i.e., to hold high

public officers accountable, under the Constitutional principle that public office is a public trust. The overriding public interest in impeachment cases is evident from the fact that the Law on Secrecy of Deposits expressly carves out impeachment cases as an exception to the general rule of confidentiality of bank deposits. Because of the higher public interest involved, the search for truth in impeachment proceedings should be given preference over mere investment promotion and other related economic policies of the government.

23.

Further, the confidentiality of foreign currency deposits provided for under R.A.

6426 is intended for foreign lenders and investors. This can be gleaned from the Whereas

clause of Presidential Decree No. 1246, amending R.A. No. 6426, which states: "WHEREAS, in order to assure the development and speedy growth of the Foreign Currency Deposit System and offshore Banking System in the Philippines, certain incentives were provided for under the two systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest of the

An Act Prohibiting Disclosure of or Inquiry Into, Deposits With Any Banking Institution and Providing Penalty Therefor

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income of depositors who are nonresidents and are not engaged in trade or business in the Philippines."

24.

As discussed by the Office of the Solicitor General in Salvacion v. Central Bank,

supra, which view was adopted by the Supreme Court, the offshore banking system and the
foreign currency deposit system where designed "to draw deposits from foreign lenders and investors. It is these deposits that are induced by the two laws and are given protection and incentives by them." (Emphasis supplied)

25.

This view is further strengthened by Estrada vs. Desierto (G.R. No. 156160,

December 9, 2004) where the Supreme Court stated"Finally, with respect to the complaint for violation of Section 8 of Rep. Act No. 6426 (Foreign Currency Deposits Act of the Philippines), public respondents ratiocinated -At this point, it is worth stressing, that this office in its previous Order dated 20 February 2001, ruled that the absolute confidentiality of foreign currency deposit account provided for under RA 6426 does not apply to the foreign currency deposit accounts of herein complainant, since the protection under the said law is intended only for depositors who are non residents and are not engaged in trade and business in the Philippines. In coming out with such ruling, this office has as its basis one of the Whereas clauses of P.D. 1246 which amended Sec. 8 of R.A. 6426. For emphasis, the pertinent provision of the said law is hereby quoted: WHEREAS, in order to assure the development and speedy growth of the Foreign Currency Deposit System and offshore Banking System in the Philippines, certain incentives were provided for under the two systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest of the income of depOSitors who are nonresidents and are not engaged in trade or business in the Philippines. Considering the previous Order of this Office, it necessarily follows that the accusation for violation of Sec. 8 of R.A. 6426 against herein respondents has no leg to stand on, thus, the dismissal of the charge for violation of Sec. 8 of R.A. 6426 is therefore in order. 'And: In Sa/vae/on v. Central Bank and China Bank, 278 SCRA 27 (1997), the Highest Tribunal adopted the opinion of the Office of the Solicitor General (OSG) that only foreign currency deposit of foreign lenders and investors are given protection and incentives by the law, and further ruled that the Foreign Currency Deposits

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Act cannot be utilized to perpetuate injustice. Following such pronouncements, it is respectfully submitted that foreign currency deposits of Filipino depositors, including herein complainant, are not covered by the Foreign Currency Deposits Act, and are thus not exempt from the processes duly-issued by the BIR." (Emphasis supplied)

26.

It then follows that the foreign currency deposits of respondent, an impeached

public official who is not a "foreign lender or investor", is not the kind of deposit encouraged by R.A. No. 6426 and given incentives and protection by the same.

27.

Moreover, the framers of R.A. No. 6426 never meant to perpetrate injustice or

shield wrongdoers and law offenders from accountability. Thus, in a catena of cases, the Supreme Court itself refused to apply Section 8 of R.A. No. 6426 in cases where strict application of the law will result in outright injustice and inequity.

28.

In So/vacion v. Central Bank (G.R. No. 94723, August 21, 1997), the Supreme

Court allowed garnishment of the foreign currency deposits of an American tourist who committed a heinous crime against a Filipino minor, since to hold otherwise would result in injustice to a citizen perpetrated by a foreigner. The Supreme Court allowed this

notwithstanding the provisions of Section 8 of R.A. No. 6426 against garnishment of foreign currency deposits, thus: "It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country's economy was in a sham bles; when foreign investments were minimal and presumably, this was the reason why said statute was enacted. But the realities of the present times show that the country has recovered economically; and even if not, the questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the questioned law may be good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us."

'In his comment, the Solicitor General correctly opined, thus:

xxx

xxx

xxx

"On the other hand, the Foreign Currency Deposit system was created by PD No. 1035. Its purpose are as follows: 'WHEREAS, the establishment of an offshore banking system in the Philippines has been authorized under a separate decree; 'WHEREAS, a number of local commercial banks, as depository bank under the Foreign Currency Deposit Act (RA No. 6426), have the resources and managerial competence to more actively engage in foreign exchange transactions and participate

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in the grant of foreign currency loans to resident corporations and firms; 'WHEREAS, it is timely to expand the foreign currency lending authority of the said depository banks under RA 6426 and apply to their transactions the same taxes as would be applicable to transaction of the proposed offshore banking units;' "It is evident from the above [Whereas clauses] that the Offshore Banking System and the Foreign Currency Deposit System were designed to draw deposits from foreign lenders and investors {Vide second Whereas of PD No. 1034; third Whereas of PD No. 1035}. It is these depositors that are induced by the two laws and given protection and incentives by them."

'In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section 113 of Central Bank Circular No. 960 7 which exempts from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides that "in case of doubt in the interpretation or application of laws. it is presumed that the lawmaking body intended right and justice to prevail. "Ninguno non deue enriquecerse tortizerzmente con damo de otro." Simply stated, when the statute is silent or ambiguous, this is one of those fundamental solutions that would respond to the vehement urge of conscience. (Padilla vs. Padilla, 74 Phil. 377)" {Emphasis supplied}

29.

Anent thereto, the pronouncement of the Supreme Court in China Banking

Corporation v. Court of Appeals {G.R. No. 140687, December 16, 2006} merits mentioning.

While the ruling was rendered pro hac vice, the Court noted that it was not the intent of the legislature when it enacted the law on secrecy on foreign currency deposits to perpetuate injustice and ruled against the strict application of the confidentiality rule provided under R.A. No. 6426 in the interest of substantial justice and fairplay, thus: 'All things considered and in view of the distinctive circumstances attendant to the present case, we are constrained to render a limited pro hac vice ruling. Clearly it was not the intent of the legislature when it enacted the law on secrecy on foreign currency depOSits to perpetuate injustice. This Court is of the view that the allowance of the inquiry would be in accord with the rudiments of fair play, the upholding of fairness in our judicial system and would be an avoidance of delay and time-wasteful and circuitous way of administering justice.' [Emphasis and underscoring supplied]

Section 113 of Central Bank Circular No. 960 copied verbatim a portion of Section 8 of R.A. No. 6426,

as amended.

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30. Clearly then, the privilege granted by R.A. No. 6426 to foreign currency accounts

cannot be used as a tool to perpetrate injustice. In the instant impeachment case, respondent cannot hide behind the cloak of RA No. 6426 to evade and frustrate investigation as to the truth and veracity of his declarations in his SALN.

31.

The impeachment trial against respondent involves the primordial interest of the

public. The inquiry upon the foreign currency deposits of the Chief Justice is an important factor in deciding whether respondent was truthful in his declarations appearing in his SALN which will support the allegations that he betrayed the public trust.

32.

The untruthfulness of the declarations in his SALN is an impeachable offense.

Applicable to the case is the impeachment of District Court Judge Harry Claiborne. The Senate convicted Claiborne of "willfully falsifying his income on his Federal tax returns for 1979 and 1980, has betrayed the trust of the people of the United States and reduced confidence in the integrity and impartiality of the judiciary, thereby bringing disrepute on the Federal courts and the administration of justice by the courts." (132 Congo Rec. 29870-873 (1986))

33.

In the same vein, the willful non-declaration of his bank accounts, including the

$700,000 account in PSBank, in his SALN amounts to a betrayal of trust of the Filipino people and reduced the confidence in the integrity and impartiality of the judiciary. Furthermore, by making false declarations in his SALN under oath, respondent likewise committed perjury which is an act that amounts to a betrayal of public trust. (see Impeachment of District Court Judge Walter Nixon, 135 Congo Rec. 27101-104 (1989)).

34.

In consideration of the foregoing, we are reminded of the basic rule in statutory

construction which states that when the interpretation of a statute according to the exact and literal import of its words would lead to absurd or mischievous consequences, it should be construed according to its spirit and reason, disregarding or modifying, so far as may be necessary, the strict letter of the law.

RESPECTFULLY SUBMITIED. Pasay City, Metro Manila, February 08, 2012.

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THE HOUSE OF REPRESENTATIVES Republic of the Philippines Ambrosio Padilla Hall nd 2 Floor, GSIS Bldg., Financial Center, Roxas Blvd., Pasay City

By:

Lead Prosecutor

Copy Furnished:

Justice Serafin R. Cuevas (Ret.) et al. Counsel for Respondent Chief Justice Renato Corona Suite 1902 Security Bank Centre 6776 Ayala Avenue Makati City, Philippines 1226