"ALI BABA and the FORTY THIEVES"
January 29, 2008

Privilege Speech of SENATOR ENRILE
(Philcomsat Holdings Corporation)

“I would like the indulgence of the Senate and the leadership to take a little bit of their time to discuss an issue that although dealing with a specific corporation, nonetheless, it may nave a very deep impact on the condition and future of this country, and I refer to the case of Philcomsat Holdings Corporation.

Mr. President, when I was young, I remember a fabled story about “Ali Baba,” a woodcutter who happened to overhear a group of thieves, 40 of them, visiting their treasure store in the forest, where he was cutting wood. The thieves’ treasure was kept in a cave; the opening of which was sealed magically and it could only be opened when the famous word was uttered, “open, open sesame,” and the cave would open; then the treasure, immense treasure is bared. Ali Baba also noted that the entrance would seal itself when the words “close sesame,” were said. And one night, when the thieves were away, Ali Baba all by himself entered the cave and took all of the treasures home.

In other popular tales, this is where the narrator is supposed to say, “And he lives happily thereafter.”

Now, that was in the olden days, Mr. President. In our modern times, there is a similar situation, although not quite similar in all respects but, nonetheless, it parallels the Ali Baba and the 40 thieves.

But in order, Mr. President, for this Chamber to understand the problem, allow me to, first of all, lay out the corporate structure which will be the centerpoint of our discussion. During the Marcos years, Mr. President, when satellite communication was in its infancy we were among the nations that aspired to have one satellite in our land and we did have a satellite. And we organized at that time the Philippine Overseas Telecommunications Corporation which was the holding company of what is now known as the Philippine Communications Satellite Corporation, the operating company. Philippine Overseas Telecommunications Corporation, POTC, for short, was organized by the government. The government invested P55,000 in this corporation to control it in order to put up a satellite station. In fact, President Marcos was flabbergasted when he was told that all it needed to put up the project was P55,000. And so when it was explained to him, he said: “My God! Why has this project languished in the hands of my Cabinet members for six months without any result when after all the solution to the problem was so simple?” And so the government invested P55,000 of its money from the National Development Corporation and the rest of the money needed for the project came from the pockets of the private sector. And the private sector in this case happened to be Mr. Potenciano Ilusorio who owned 18.1% of POTC, Manuel H. Nieto Jr. who owned 13.1%, Honorio Poblador who owned 14.4%, Africa who owned 7.1%, Roberto Benedicto who owned 7.1%, Elizalde who owned 1.01% and yours truly who was asked to subscribe to 6.1% of the capitalization of POTC. While the government paid P5 for each share of its stockholding in POTC, the private investors paid P500 for their shares per share that they acquired in this corporation. And with this money, Philcomsat Corporation was organized and set up the satellite station in Pinugay, I think it is in the town of Baras in the province of Rizal. True to the estimate of those who studied the project, although this was not shared at that time by the government, the venture became so profitable that even after the EDSA Revolution of 1986, Philcomsat continued to pay dividends to the government all the way to I think 1998 and the government received a total of almost a billion peso during that period just in dividends. And Philcomsat was one of the most envied corporations in the country in its time.

After the EDSA Revolution, Mr. President, the Presidential Commission on Good Government was organized supposedly to take over and preserve what were then termed and even now termed as the “ill-gotten wealth of the Marcos regime” to be held in trust and for the benefit of the Filipino people. In the course of time, the PCGG assigned after every administration, PCGG agents in Philcomsat and the corporation was looted and plundered.

And under this present administration, about 2004, when I was no longer in this organization because I used to chair it since its inception up to the time I got out of the Aquino government in 1986, the corporation was systematically plundered. And I understand that sometime after I was gone in this corporation, the bright minds, but not quite lawful, who were sent to Philcomsat to represent the Presidential Commission on Good Government thought out a very neat way of further plundering this business organization. They bought a small moribund but listed company in the Stock Exchange for a sum of money and transferred almost P1 billion in cash and assets to this corporation and they changed its name into what is now known as Philcomsat Holdings Corporation.”

Mr. President, in the course of time, from 2004 to 2007, what happened to the money that was transferred from Philcomsat Satellite Corporation to Philcomsat Holdings Corporation (PHC)?

Mr. President, distinguished members of this Chamber, we may be surprised to know that during this period of four years, from 2004 to 2007, the Philcomsat Holdings Corporation was plundered to the extent of 481.2 million. And where did this money go?

Summary of looted, plundered, embezzled and unaccounted for amounts disbursed by PHC directors, officers and staff from 2004 to 2007:

1. Excessive, unreported, surreptitious compensation of PCGG nominees, relatives, lawyers and cronies in Philcomsat Holdings Board and Management amounts to P161.1 million;

2. PHC cash advances, mostly unliquidated without disbursement vouchers or authorization, cashed at BPI Pacific Star Branch, P41.9 million;

3. Legal fees and expenses, including cash for legal services, P84.7 million;

4. PR and media expenses, including cash for PR and media expenses, P56.1 million;

5. Donations, contributions to philantropic, religious, political or otherwise, causes of Enrique Locsin, a certain Mr. Andal, Philip Brodett and Johnny Tan, the accountant of this company, P7.1 million;

6. Phony cash advances to affiliates, POTC and Philcomsat which were never received by either POTC or Philcomsat but were actually compensations to PCGG nominees and cronies. P119 million;

7. Direct payments or cash gifts or in kind to PCGG, SEC, Supreme Court, Sandiganbayan, Bureau of Internal Revenue allegedly, including the Office of the Solicitor General and other government agencies, P11.3 million. All told, a total of P481.2 million.

Now, Mr. President, where did these monies go? As I have already indicated, they went to the enormous compensation, exorbitant travel allowances, inordinate, wasteful expenditures of directors and their cronies and payment for expensive lawyers.

I have the listing here in this record of those who are responsible for this sordid affair in Philcomsat Holdings.

Mr. President, I would like to recite their names one by one for Record of the Senate.