WATCHING PAGCOR LIKE A HAWK: THE GAMBLING REPUBLIC, PART 2
Re: PAGCOR Officer’s Anomalies, Philippine Senate, April 25, 2005
Posted: August 6th, 2008 @ 12:34am
I rise again today to denounce the continuing and scandalous anomalies and excesses of the present management of the Philippine Amusement and Gaining Corporation, or Pagcor.
The last time I stood before this august Body on March 7, incidentally two years when I was freed on bail, to expose irregularities in Pagcor, I committed to watch this gambling apparatus like a hawk.
That is what I have precisely done. Some well-meaning friends and colleagues have advised me to give up this campaign.
Binalaan ako na naghahanda raw ang mga opisyal ng Pagcor na gagamit ito ng malaking halaga at ng buong puwersa ng kapangyarihan at impluwensiya nito para siraan ako at maglunsad ng isang malawakang smear campaign laban sa akin at sa aking pamilya.
Sa unang privilege speech ko pa lamang tungkol sa Pagcor, nakatanggap na ako ng pahiwatig ng areglo at suhol para manahimik lang ako. Nang hindi ako pumayag, hinigpitan nila ang galaw ng aking ama, ang Pangulong Joseph Estrada, sa Tanay sa pagtanggap ng mga dalaw at bisita.
But I cannot, in conscience, stand idly and watch Pagcor's management bleed the agency and deprive our government of badly needed resources while we continue to impose new taxes on our citizens to raise funds.
I cannot close my eyes to the continuing plunder and pillage of Pagcor winnings and resources while a gambling culture continues to be institutionalized in our country today.
Sa araw na ito. Abril 25, may apat na taon na ngayon ang nakararaan, ako at ang aking ama ay hinuli at ikinulong ng gobyernong ito dahil sa isyu ng sugal. Ito po ang ika-apat na anibersaryo ng aming pagkaka-aresto.
I find this bitter and ironic na kami ni Pangulong Estrada ang nakulong dahil sa paratang na may kaugnayan sa sugal, samantalang ang mga galamay ng gobyernong ito ang patuloy ngayong nagpapasasa sa sugal - kaliwa't-kunan, garapal at walang pakundangan.
As I stand before yon today, freed on bail, my father continues to suffer in detention and denied the society of his friends and family.
Meanwhile, the gambling and plunder machineries of the minions of this present administration continue to pursue their illegal activities with impunity, with boldness and audacity, to the extent of even expanding its illegal operations.
A lot of things have happened since my last privilege speech. Three more slot machine arcades under the same dubious 60-40 contract arrangements have been opened. These are the East Bay Hotel Casino in Antipolo-Binangonan, the Sogo Hotel in San Pedro, Laguna, and the Subic International Hotel in the Subic Free Port Area. East Bay Hotel Casino, incidentally, not only operates slot machines, but also maintains table games.
Sa madaling salita, sa halip na magpalipas muna dahil may imbestigasyon na sa Senado, nagdagdag pa. Walang tigil ang panganganak ng programang ipinaabort kuno ni Ginang Arroyo. May bendisyon kaya ito ni Ginang Arroyo?
These ventures will add up to the losses being incurred by government that are growing day by days especially now that the operations of the Hyatt Casino are in full swing.
The Hyatt Casino - which is the main subject of my speech today -is an entirely different story. This contract is more anomalous than the 15 contracts Pagcor has with private operators of slot machine arcades.
Mas masahol ito dahil hindi lang 40 porsiyento ng kita sa slot machines ang ipinamimigay ng Pagcor sa ka-partner na private operator.
Pati po kita sa table games kasali na po sa hatian.
Sa madaling salita, 40 porsiyento ng kita ng buong Hyatt Casino ang nawawala sa gobyerno at napupunta sa may-ari ng hotel.
Sa halip na piso ang pumasok sa kaban ng bayan, 60 sentimos na lang.
At tulad po ng ibang kontrata, bayad daw ito sa renta.
The Hyatt Casino generated net winnings of P1.22 billion from March 2004 to February 2005. But out of this amount, only P733.8 million was recorded in the books of Pagcor as its income. A total of P489 million went to Marina Square Properties, Inc. supposedly as Pagcor's rental payment.
I say supposedly because the amount is not recorded in the financial books of Pagcor as rent. If, as Pagcor officials say, what they have is a lease contract and not a joint venture agreement, then how come it does not record a rental expense in its books?
I ask this because I have been informed that, by some kind of accounting magic, the rental payment is not recorded at all. We do not know how and why it passes the scrutiny of the Commission on Audit.
But that is not all.
The rent - if they wish to call it rent - is excessive, and is becoming more excessive everyday because it is fixed at 40 percent of the winnings of the entire casino.
In its first 12 months of operations, Pagcor paid Hyatt almost half-billion pesos in rent for one casino. This is more than
half of the rent paid by Pagcor in its 13 other wholly owned casinos.
But what is more disadvantageous is that the Hyatt Casino - from which Pagcor gets only 60 percent of winnings-competes directly with those 100-percent owned by Pagcor. It cannibalizes Pagcor's own market.
Patunay po dito ang patuloy na paglipat ng mga manlalaro mula sa ibang casino ng Pagcor patungo sa Hyatt Casino. Kaya po habang tumatagal ang ganitong klase ng kontrata, ang kinikita po sa mga casinong pag-aaring buo ng Pagcor ay parang spaghetting pababa ng pababa. Samantala ang kinikita ng kapartner ng Pagcor sa Hyatt ay parang spaghetting pataas ng pataas.
There is another question that begs an answer.
Who owns Marina Square Properties and who owns the Hyatt Marina Hotel?
According to the contract, Marina Square Properties is a subsidiary of the Chow Tai Fook group of companies of Hong Kong. The Chow Tai Fook group of companies is controlled principally by Henry Cheng, who also owns New World Hotel. Henry Cheng is an old partner of Mr. Stanley Ho. There are many companies to this day in which they remain partners, including casinos in Macau.
It is therefore not without basis when some people suspect that Mr. Stanley Ho is also involved in Marina Square Properties. Marina Square Properties supposedly acquired the land on which Hyatt Marina Hotel stands from Fairmont Holdings. Records in the Philippine Stock Exchange show that Mr. Stanley Ho not only owns substantial interest in Fairmont Holdings but is the chairman of the board.
Mr. Stanley Ho, if you will remember, was received warmly with open arms by Malacañang during his visit to the Philippines last March 2004. Malacañang even sent its Presidential Assistant for Foreign Investments, Atty. Dan Rolleda, to welcome Mr. Stanley Ho.
On top of this gracious welcome, Mr. Stanley Ho was conferred an honorary doctorate degree by the Angeles University Foundation in Mrs. Arroyo’s home province, and which prompted Archbishop Oscar Cruz to return his honorary doctorate degree to the same university in protest.
That is why I ask the Senate also to investigate the true ownership of Marina Square Properties so that we may know if, in fact, Mr. Stanley Ho has taken a big chunk of casino operations in the Philippines.
Napakarami pa pong anomalya sa Pagcor ang dapat pagtuunan ng pansin ng Senado. Talking about the monster that Pagcor has become under Mrs. Arroyo is like opening Pandora’s box. You do not know where to start, and you do not know where to end.
For instance, with respect to the Hyatt Casino, Pagcor has illegally extended the exemption it enjoys from customs duties to the owners of the hotel, by misrepresenting that the other importations made by Hyatt are that of Pagcor’s.
Mapapansin din na sa halos lahat ng casino ng Pagcor ay bumabaha ngayon ang kape, at hindi lang basta kape, kundi kapeng Figaro pa. Lahat po ng kape para sa mga manlalaro ng Pagcor ay binibili sa branch ng Figaro Coffee sa loob ng casino ng Pagcor. Doble ang presyo nito kung ihahambing sa presyo ng Figaro sa labas.
This exclusive contract was awarded to a company managed by the relatives of Pagcor President Rafael Francisco without bidding whatsoever. Since Pagcor has previously denied Mr. Francisco’s relationship with any Figaro official, perhaps he may want to explain his relationship with Figaro Chief Operating Officer Regina Francisco and her fellow Figaro Directors Randy and Raffy Francisco. Hindi kaya magkakapatid iyan?
Equally anomalous is that Pagcor maintains 116 consultants and 103 retainers for various services. What these consultants and retainers do, I do not know yet, as of now, but we will find out.
Kasama dito ang isang arkitekto na kinikilalang Jeremiah T. Cruz na pinsan ni Pagcor Chairman Ephraim Cruz Genuino. Nguni’t ang mabigat dito, pati ang mga designer at mga staff ng architectural company ni Architect Cruz ay mga consultant at retainer din na sumasahod sa Pagcor.
Ang arkitekto ding ito, ayon sa kanyang biodata, ang nangasiwa sa renovation ng bahay sa La Vista ni Ginang Arroyo at itong consultant na ito ay tumatanggap ng P80,OOO kada buwan sa Pagcor. Hindi kaya garapal ito?
We also ask why Pagcor is probably the only casino in the world that resorts to the emergency purchases of its playing cards. This is done by making it look like there is always bidding failure to justify emergency purchases, The ultimate effect is that they have artificially jacked up the price of Pagcor playing cards from 54 cents per pack in 2001 to $1.05.
This procurement fraud is not at all surprising with the appointment of a former official of the Trace Computer School, Mrs. Ma. Lourdes Jose, as managing head of Pagcor’s Procurement Department. It is interesting to add that the Trace Computer School, which has now become a college, is owned by the Chairman of Pagcor, Mr. Ephraim Genuino. This is reflected in his Statement of Assets and Liabilities for the years 2003 and 2004.
Mrs. Lourdes Jose wasted no time awarding a purchase order in favor of Labelmen Enterprises based on a quotation
submitted and signed by her husband, Jay Jose, and supported by quotations from nine other suppliers’who uniformly indicated “no quote.”
I cannot think of any government agency that can match this record especially at a time when this government is pontificating the need for austerity measures and avoid extravagant wastage of precious resources.
But even more appalling are the excessive benefits and perks enjoyed by Pagcor officials which no regular government agency or corporation can have, including the members and staff of the Philippine Senate.
One member of the board of directors of Pagcor, who served only for nine months, was given a retirement package of P3.3 million by the Pagcor Board. When this was leaked in the media, this retiring member returned the money. Well and good, but on the same day, the same amount returned by this member of the board was disbursed from the Pagcor’s intelligence fund.
Meanwhile, the Pagcor chairman’s benefits under the Pagcor’s generous car plan program was increased from P1.3 million to P2.5 million, and which could now be availed of every three years.
Napakasuswerte talaga nitong Chairman ng Pagcor. Lahat tayo tipid ng tipid, siya may bagong kotse every three years, at hindi lang ordinaryong kotse ang mabibili mo ng P2.5 million.
I wish to stress that Mrs. Arroyo cannot claim ignorance of Chairman Genuino’s new-found life of privilege since she has authorized more than 20 PSG personnel to act as his bodyguards, round-the-clock, three shifts a day.
And these bodyguards ride in style inside two black Nissan Safari Patrols costing more than P2 million each, and which were bought specifically as back-up vehicles for Chairman Genuino’s day-to-day security convoy. Meanwhile, Pagcor directors live it up in terms of membership in plush and expensive leisure clubs with related privileges such as playing rights and food consumption.
I am informed that the members of the Pagcor Board are members of such elite clubs as the Rockwell Leisure Club, the Wack-Wack Golf and Country Club, the Alabang Country Club, the Tagaytay Highlands, the Riviera Golf, Fairways and Blue Water and other clubs. All these are being paid for by Pagcor!
I have on hand a purchase order coming from Pagcor purchasing one Callaway golf set. I do not play golf but I understand the brand “Callaway” is very expensive, and this is for one of the board of directors of Pagcor amounting to P183,900. This is for Director Gozo, whoever he is, and for Director Roxas - not related hopefully to one of our colleagues - P185,300 for a Callaway golf set.
It is no wonder that Pagcor’s net income remitted to the President’s Social Fund, or PSF, has gone down during the last three years. In fact, in 2003, while it boasted net winnings of P16.5 billion, it remitted less than P500 million to the President’s Social Fund.
In the first full two years of the administration of President Estrada, from 1999 to 2000, Pagcor’s winning in its operations grew by an average of 17.4 percent. During this time, the net income of Pagcor, after operating expenses and taxes, increased by an average of 35.3 percent.
But in the first three years of the Arroyo takeover, net winnings grew only by an average of 9.2 percent while net income grew only by 6.3 percent. I maintain my position that Pagcor is grossly mismanaged, abused and bled by the very people that Mrs. Arroyo appointed to its management to oversee its operations.
While we in Congress are being pressured to burden our people with more and higher taxes to address the fiscal deficit, the Arroyo administration, in its Pagcor operations, is systematically squandering away billions and billions of pesos and giving them away to private partners.
Our people are suffering today because of the excesses and extravagance of this administration and Pagcor is perhaps just the tip of the iceberg.
We must stop these excesses today with deep sense of urgency and mission because at stake is the future of this nation.
And this august Body must be at the forefront of this crusade against these anomalies!
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