Of Idiots and Liars

After hearing the first few minutes of Alan Peter Cayetano's privilege speech before the Philippine Senate on September 16, 2008, I can't understand why the other senators (or senate-tors, as Benjamin Abalos would say) tried so hard to prevent him from doing so. Peter Cayetano rose on a matter of personal privilege... and proved that he is either an idiot or a liar.

Senator Lacson, in a previous privilege speech regarding the alleged insertion of an additional item amounting to some two hundred million pesos in the 2008 national budget, made an issue of Peter Cayetano's seemingly cavalier comment that the additional 200 million pesos tacked onto the bill was just loose change. Peter Cayetano took offense.

In his privilege speech, Peter Cayetano said that his off-the-record comment to the news media was taken out of context and given a sinister meaning. And so, he set forth to lay the proper context to his comment.

He claimed that Senator Manny Villar earned 20 billion pesos in the latter's company's went public via an initial public offering (IPO) some years ago. He further claimed that 200 million pesos, although a big amount in itself, is relatively very small to the twenty billion pesos that Senator Villar earned in a clean and honest manner. Therefore, according to Peter Cayetano, Senator Villar would not be interested in benefitting from a mere 200 million pesos in the national budget. In that way, 200 million pesos is just loose change.

Logicians call what Peter Cayetano laid out a syllogism. Syllogism is a method of proof in logic where two premises are established to reach a conclusion. In this case, the premises are: 1) Senator Villar earned a huge amount of money when his company went public—in other words, he is very rich; 2) Two hundred million pesos is not a lot of money—mere loose change—compared to the 20 billion pesos he earned when his company went public so he would not be interested at all in padding the national budget by that amount. The conclusion then, is that Senator Villar has nothing to do with the insertion of an additional line in the 2008 national budget

The thing is, both the premises are wrong. Consequently, the conclusion is a fallacy.

First, Senator Villar did not earn 20 billion pesos when his company went public. Apparently, Senator Villar's company raised that amount in the IPO. Generally, the proceeds of an IPO is additional capital for the corporation and not income for the owner of the company. In fact, doing an IPO is one of the popular ways by which a company raises additional capital that it can use to expand its business. Capital is not the same as income. Of course, some investors may cash out their investments in a company when it goes public via an IPO. Senator Villar may have cashed out some of his investment in his company during the IPO but surely, not the entire proceeds. Doing so could have violated several provisions of the Corporation Code as well as SEC rules, at the very least.

Peter Cayetano might have confused capital and income because his father, the late Rene Cayetano, admittedly earned millions from trading BW Resources stocks. That was income. Most if not all of the money raised in the Camella & Palmera Homes IPO was capital. A lawyer should know the difference.

Second, there is no such thing as being too rich. Martha Stewart who was worth at least a billion dollars at the time she traded on inside information regarding the biotech company ImClone served time in federal prison for what experts calculated as only about $70,000 difference in the sale price of ImClone stocks.

The conclusion is also wrong because one does not have to actually receive the 200 million pesos to gain unfair, and ultimately, financial advantage or benefit from it. A politician can take credit for the program where the additional funding was used, as they often do.

Now, Peter Cayetano should find himself in what logicians call the “horns of a dilemma.” That is just a fancy way of saying that one is between a rock and a hard place. One is left with only two options, both of which are bad. On one hand, he can admit that he did not know the difference between capital and income and come out a fool. On the other hand, he can say that he knew the difference between capital and income and admit that he lied about Senator Villar earning 20 billion pesos from the Camella & Palmera Homes IPO.

Maybe Peter Cayetano was thinking about an American politician when he made that flippant comment about 200 million pesos being just loose change—the politician whose comment went something like this: “A billion here, a billion there. Pretty soon we're talking about real money.”

Peter Cayetano should probably emulate his fellow senator Lito Lapid who seems to have taken Mark Twain's words to heart. It is better to keep your mouth shut and be thought a fool than to open your mouth and prove it.

A Growing, Festering Cancer

The Supreme Court resolution regarding the investigation by the special panel on the briber scandal in the Court of Appeals case regarding the controversy involving MERALCO and the GSIS came out on yesterday, September 9, 2008. The Supreme Court removed Vicente Roxas from the Court of Appeals, suspended Jose Sabio for two months, severely reprimanded Presiding Justice Conrado Vasquez, reprimanded and admonished three other justices who were part of the controversy, recommended the institution of disbarment proceedings against PCGG chairman Camilo Sabio and for the Justice Department to study the criminal charges that may be filed against businessman Francis De Borja.

In a way, it may be said that a cancerous growth has been removed from the judiciary but continuing on this analogy, more needs to be done. As anyone who had cancer or knows someone who did, removing a cancerous growth is only the first step. First, one must make sure that all the cancerous growth have been removed. Then there is also a need to determine if there are other cancerous growths elsewhere. If so, those have to be treated as well.

On the issue of whether or not the all the cancerous cells have been removed, most people are of the belief that that is not the case. Only one of the justices of the five who have been found to have varying degrees of culpability have been removed from his position. We are talking here of the Court of Appeals, the second highest court in the land. While negligence or ignorance of the rules and procedures may me excusable in lower courts, we require a higher standard of behavior, if not ethics, of the higher courts. All this talk about members of the judiciary being like Caesar's wife is not idle talk. At least it should not be. Not only must judges be pure, they must also appear to be pure, just like Caesar's wife.

Jose Sabio entertained, or at least did not shun attempts to influence his decision, a clear violation of the Code of Judicial Conduct. Worse, he thought there was nothing wrong with his brother calling him and trying to convince him to rule one way as he did not allow himself to be influenced. I do not believe it is ignorance that led him to believe this. Even a first year law student would know that such behavior is unacceptable. Hell, any person with some sense of decency and fair play would find such actuations contrary to everyday, run-of-the-mill rules of fair play. It was possibly hubris, thinking that the standards set out in the Code of Judicial Conduct were open to one's interpretation.

The other justices who were found wanting also got off easy, to the detriment of the judiciary. It bears reiterating that the Court of Appeals is second only to the Supreme Court as the highest judicial authority in the land. It is already unconscionable that justices with malice in their hearts or mush in their heads have reached this high in the judiciary, it would be much worse that after finding out who these are, they are merely given slaps on the wrists. Any case that would later on come before these erring justices would be tainted with suspicion. And suspicion has a funny way of rubbing off on those around it. Second chances are good but with the integrity of our judicial system at stake, let these justices get their second chances somewhere else.

The Supreme Court should take this opportunity to do a major housecleaning in the Court of Appeals and elsewhere in the judicial branch. How likely is it that all the bad eggs in the Court of Appeals found their way to just one division? Not very likely. Rumors of impropriety reek around labor cases so the the Supreme Court may start with the Court of Appeals division handling labor case, down to the National Labor Relations Commission and the labor arbiters. The Supreme Court might as well extend the housecleaning down to the rank and file like clerks of court and sheriffs who seem to be much well off financially than the officers of the court that they serve.

Unfortunately, if history is any indication, the Supreme Court would just rule that the matter of corruption has been resolved as in two previous occasions when members of the Court of Appeals have been dismissed. We'd then be clamoring again for a clean-up of the judiciary once another scandal erupts in the judiciary.