Witnesses drag SEC official, lawmaker into Legacy mess

MANILA, Philippines – Two witnesses on Monday implicated a Securities and Exchange Commission (SEC) official and a Metro Manila congressman in the alleged misuse and illegal disbursement of funds of the troubled Legacy Consolidated Plans Inc. (LCPI). Facing the Committee on Trade and Commerce, former Legacy officials Carolina Hiñola and Namnama Pasetes-Santos tagged SEC Commissioner Jesus Martinez and Parañaque Rep. Eduardo Zialcita as protectors of Legacy owner Celso de los Angeles Jr., who was accused of using the company’s funds for his personal use. “I know for a fact that Mr. De los Angeles is well connected with the SEC, the regulatory body in charge of the pre-need companies, as he is a close friend of Commissioner Jesus Martinez of the SEC," Hiñola said. Hiñola, a former chief operating officer of LCPI, alleged that Martinez and Zialcita met with her in a Japanese restaurant at Shangri-la Makati on February 14, 2006. She said Martinez offered to help Legacy. Martinez oversees the SEC Non-Traditional Securities and Instruments Department that has direct supervision over pre-need companies. Both Martinez and Zialcita denied the accusations, with Zialcita even threatening to file charges against the personalities who dragged his name into the controversy. Hiñola added she met with Martinez on November 9, 2007 at Linden Suites in Ortigas where she handed him P1.475 million reportedly upon the instructions of De los Angeles. She said the money was for the Ford Expedition acquired by the Rural Bank of San Jose, a company under LCPI. Meanwhile, Santos, LCPI chief finance officer, disclosed that De los Angeles has ordered her to disburse P1.8 million to Zialcita as “consultancy fee." Santos also accused De los Angeles of using the collapsed firm's funds for his personal use, including medicine and electricity bills, yacht repairs, talent fees for artists during birthday parties, salaries of household helpers, laundry expenses, and newspaper advertisements. She also accused De los Angeles of using LCPI funds for his mayoralty bid in Sto. Domingo town in Albay in the 2007 elections, which he eventually won. She said De los Angeles’ travel expenses were also sourced from Legacy funds. Denial Martinez, who was present during the hearing, said November 9 was SEC’s anniversary thus making his presence in the meeting improbable. He also denied that De los Angeles was a close friend. In a statement, Zialcita said he never acted as consultant for the LCPI but acknowledged knowing De los Angeles since LCPI had supported many of his programs in Parañaque. Zialcita said his lawyers are now studying what charges could be filed against those who implicated him in the Legacy controversy. "Inatasan ko ang aking mga abogado na ihanda ang mga karampatang kaso laban sa mga nagdudulot sa akin at sa aking pamilya ng ibayong hapis at pagkalungkot [I have ordered my lawyers to prepare the filing of appropriate charges to those who have caused me and my family such dismay and sadness]," Zialcita said. Resign During the hearing, Senate President Juan Ponce Enrile said Martinez should quit his post. “I think it is about time we call spade a spade. If I were Commissioner Martinez, I will tender my resignation this afternoon. Honor dictates that you must at least tender that and leave it to the chief executive of the land whether to accept or not to accept your resignation," Enrile said. Enrile said he was ready to file a resolution expressing the Senate’s "sense of disgust" over Martinez's conduct. He also asked Martinez to submit a copy of his resignation to the Senate panel. Martinez, for his part, said he would “weigh" his options. “I’m considering it (resignation), if that is what the Senate feels appropriate at this time, I might consider that," Martinez told reporters after the hearing. Asked when he would tender his resignation, Martinez said, “It should be very soon because they want me to do it quickly." He added that he would also consult his family before he finalizes his decision. Martinez said he already consulted SEC Chairman Fe Barin if he should file his resignation and he was told to think about it. Barin, for her part, said the SEC would conduct an investigation into the allegations that Martinez had dishonest transactions with De los Angeles. Barin told the Senate panel that the commissioners would discuss among themselves the issue. “We have to conduct our own hearing, difficult as it may be," she said, adding that this was the first time an accusation was hurled against a SEC commissioner. Pyramiding Senator Manuel Roxas II, chairman of the Trade and Commerce committee, said they have found evidence that LCPI was involved in a pyramiding scheme that defrauded its investors and plan holders their hard-earned money. Roxas at the same time scored the complicity of public officials in the scheme as he rapped owner De los Angeles for his attempt to thwart the Senate inquiry. “The brazenness of this scam is hair-raising. I pity those who were used by these scoundrels to enrich themselves," he said in a statement. With the testimonies of Hiñola and Santos, Roxas said it is now “crystal clear" that De los Angeles “swindled" his plan holders and investors “with the help of corrupt officials." "It is infuriating to know that even the agency that should have protected the interests of the victims was part of this collusion," he said, referring to SEC. - with Aie B. See, Jam Sisante, and D'Jay Lazaro, GMANews.TV