SALNs: When is non-disclosure dishonesty?

The SC says there should be intent to deceive

STANDARDS. The Supreme Court cites past cases that indicate when non-disclosure in SALNs constitutes dishonesty. 

MANILA, Philippines – When is a failure to declare all assets in the Statement of Assets, Liabilities and Net Worth (SALN) simple negligence or dishonesty, considering that the offense is punishable by dismissal from office?

This question is worth looking into as the prosecution asserts that Chief Justice Renato Corona should be convicted by the impeachment court because he allegedly failed to accurately disclose the properties he purportedly owned. The prosecution earlier claimed there are 45 properties; they later backtracked and said there were only 21. Corona also failed to disclose in his SALN the reported P1-M he won in a 2008 raffle of PS Bank.

Corona declared that he owned a Burgundy Plaza condominium unit in his 2003 SALN, even as he bought it much earlier in 1997. Some of the properties he owned were also allegedly undervalued.

The defense said, however, that there are remedies to correct the SALN, and that an intent to mis-state assets and liabilities should be present for non-disclosure to qualify as dishonesty.

But how does one establish this “intent?”

Failure to explain

The Supreme Court (SC) second division, in a January 2011 decision, ruled there is an intent to deceive when “the accumulated wealth becomes manifestly disproportionate to the employee’s income or other sources of income and the public officer/employee fails to properly account or explain his other sources of income.”

The second division is chaired by Justice Antonio Carpio and was then composed of Justices Antonio Nachura, Jose Mendoza, Diosdado Peralta and Roberto Abad.

In the case Ombudsman v. Racho, the SC second division sided with the Office of the Ombudsman when it ordered the dismissal of Nieto Racho, chief of the Special Investigation Division of the Bureau of Internal Revenue. Racho belatedly admitted that he owned bank deposits worth P5-M and was judged to have presented proof that lacked credibility.

Racho said he did not declare the said bank deposits in his SALN from 1995-1999 because he is not the sole owner of the deposits — the money came from his nephews and siblings who have a business. He showed a special power of attorney (SPA) dated Jan 28, 1993 which listed his nephews and siblings as stockholders of Angelsons Lending and Investors Inc, and of Nal Pay Phone Services. These were registered in the name of Racho’s wife in 1999. He also submitted a joint affidavit from his relatives.

The Office of the Ombudsman said there were inconsistencies in the document he submitted — the SPA was dated 1993 but the business was registered in 1999. This prompted the Office of the Ombudsman to affirm its 2008 ruling ordering Racho’s dismissal. 

Racho elevated the case to the Court of Appeals, however, which ruled in his favor because the BIR official “never” denied that the said bank deposits existed. He later showed the necessary documents to support his claim that the bank deposits consisted of investments from his relatives.

Simple negligence

The CA invoked the ruling of the SC second division in another case, Pleyto v. Philippine National Police Criminal Investigation and Detection Group, where the high tribunal found Salvador Pleyto — a former undersecretary of the Department of Public Works and Highways — guilty only of simple negligence in 2007 after he failed to disclose the details of his wife’s business interests in his 2001 and 2002 SALNs.

The SC said there is no clear intent to “mislead” the public because he did state in his SALN that his wife is a businesswoman; he only did not specify her business interests. 

The SC, however, said that the ruling in the Pleyto case does not apply to Racho because of the spurious nature of the SPA that he presented. What made his claim more doubtful is that his nephews later denied that they executed a joint affidavit. The SC also said that Racho did not show documents establishing that the business establishments in question did exist and were indeed making a profit.

If the impeachment court looks at how the SC ruled on this case, they would take note of these factors: If Corona did win P1-M in the said bank raffle, did he declare it in his SALN? If not, to establish if there is intent to deceive, they would ask him to explain why the P1-M winning was not declared and to show the necessary supporting documents. The same goes for his alleged properties. 

In the case of the properties belatedly declared in the chief magistrate’s SALN, however, the defense said there is a provision in RA 6713 (the Code of Conduct and Ethical Standards for Public Officials) that states the filer should be informed of inaccuracies in his SALN.

The SC said that while this provision stands, it qualified in its ruling on the Pleyto case that a public official “clearly violating” RA 6713 need not be informed beforehand of inaccuracies in his SALN before he could be administratively charged. –

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