Corporations as campaign donors? No way, law says

MANILA, Philippines – The controversy over Grace Poe’s use of helicopters in campaign sorties raised the issue about corporations as campaign donors.

Liberal Party standard-bearer Manuel “Mar” Roxas II dared his rivals last February to identify the owners of planes and helicopters they’ve been using in their campaign sorties. For her part, Poe, named conglomerate San Miguel Corporation and Helitrend Corporation as the companies lending them or renting out private planes for her campaign.

These disclosures highlighted a possible violation of at least two laws – the Corporation Code (Batas Pambansa 68) and the Omnibus Election Code (Batas Pambansa 881), particularly the provisions that ban companies from making donations for election purposes.

Section 36(g) of the Corporation Code specifies that companies can make reasonable donations for charity and for the public welfare, but not “in aid of any political party or candidate or for purposes of partisan political activity.”

Meanwhile, section 95 of the Omnibus Election Code states that among those prohibited from contributing “for purposes of partisan political activity” are:

• public or private financial institutions
• operators of public utility or those in possession of or exploiting any natural resources of the nation
• contractors or sub-contractors that supply the government with goods or services, or perform construction or other works
• grantees of government-granted franchises
• grantees of loans worth more than P100,000 by the government
• educational institutions that have received grants of public funds of more than P100,000
• officials/employees in the civil service, or members of the Armed Forces of the Philippines
• foreigners and foreign corporations

Unnoticed rule

These rules have been in place for quite a long time now – the Corporate Code was signed in 1980, while the Omnibus Election Code was approved in 1985.

Yet Comelec documents show that these provisions had been violated in past elections.

In the 2013 senatorial elections, for instance, Rappler saw names of corporations – some even executives of various firms – in the Schedules of Contributions Received (SCRs) forms submitted by candidates from Team PNoy and the United Nationalist Alliance (UNA).

This, despite the creation in 2012 of the Comelec’s Campaign Finance Unit (CFU) which, according to spokesperson James Jimenez, was intended to “increase the Comelec’s ability to enforce election laws on campaign spending and donations.”

This may already change in the 2016 elections, as the Comelec teamed up with the Securities and Exchange Commission (SEC) in determining whether some firms will continue to engage in partisan political activities. Both agencies agreed on mutual assistance and information-sharing for the effective implementation of the ban on corporate election contributions.

Conflicting provisions?

Both the Corporation Code and the Omnibus Election Code provisions have a similar theme: banning corporations as campaign donors.

But while the Corporation Code covers all firms in the ban, the Omnibus Election Code provision limits the scope to specific institutions only. So, what do we follow?

In an opinion letter released by the SEC in July 2015, the agency said that the Omnibus Election Code – despite its being implemented at a much latter time – should not be considered as an amendment of the ban in the Corporation Code.

The SEC added that there is no conflict in these provisions, and that “both can be harmonized”.

“However, if we are to harmonize and give effect to both laws, it is prudent to uphold the absolute prohibition on donations to any candidate or political party or for purposes of partisan political activity by any and all corporations.” – Rappler.com

Philippine currency image from Shutterstock