Corona's tax records presented, ill-gotten wealth issue set aside

MANILA, Philippines (Jan 26, 2012) – Despite persistent opposition of the defense on technicalities, Internal Revenue Commissioner Kim Jacinto-Henares was able to present the tax records of Chief Justice Renato Corona and his wife, Cristina, at the resumption of the Corona impeachment trial yesterday.

The decision to allow Henares' testimony was arrived at yesterday morning in a closed door caucus of senators, acting as impeachment court judges, who allowed the prosecution to present and mark the evidence on properties Corona acquired while in government service. The senators, however, did not allow the presentation of evidence on Corona's alleged ill-gotten wealth mentioned in paragraph 2.4 of the Article 2 of the 8 Articles of Impeachment. The presentation of the tax records of the Corona children and in laws was also disallowed.

But the prosecution was not entirely precluded from presenting evidence of Corona's ill-gotten wealth or even the children's tax records at later time if it can successfully lay the basis of such presentation of evidence.

As soon as presiding senator-judge Juan Ponce-Enrile finished announcing this ruling, defense lead counsel Serafin Cuevas made a manifestation admitting as authentic all Income Tax Returns (ITR) that Henares was expected to present, arguing further that the testimony of Commissioner Henares would then become irrelevant and need not be heard.

Enrile, however, ruled to call Henares to the witness stand to avoid creating the impression that the court might be hiding something from the public.

Lead prosecutor Iloilo Rep. Niel Tupas Jr. received some dressing down from Senator-judge Miriam Defensor Santiago when he grasped for words answering why Henares was being called as a witness of the prosecution.

"Are you calling Commissioner Henares as an expert witness or an ordinary witness," Santiago asked.

"Atty. Arthur Lim shall be doing the direct examination of Ms. Henares, your honor, " replied Tupaz.

"No, dapat alam mo ito (You are expected to know this)," Santiago snapped back.

After some hesitations, Tupaz answered: "As an ordinary witness, your honor."

Private prosecutor Arthur Lim was then allowed to conduct direct examination of Henares.

Enumerating the reasons why Henares was called us a witness, Lim said the first reason was that the BIR chief would present evidence that will show that Corona, based on his reported income, had no capability to acquire high-value assets.

This did not impress the defense counsel nor the chair because this would touch on the prohibited ill-gotten wealth issue that the court would not tackle at the moment, so lively exchanges of rhetorics followed.

Lim revealed that Corona in fact did not file ITRs for the period 2002 to 2010 and that Henares would be presenting the so called "alpha list," which contains names of employees with their corresponding monthly salaries and the amount of tax withheld each month.

Henares confirmed that Corona did not file any ITR but explained that alpha listing is an alternative tax remittance method designed for taxpayers who derive their income solely from employment; the employer, the Supreme Court in the case of Corona, withholds computed amount based on salaries of the employees and remits them to the BIR in bulk.

ITR shall be filed if one's income is not derived from salary, she added.

Cuevas was all set to block the presentation of "alpha-list" documents, but Senator-judge Ralph Recto saved the day for the prosecution when he used his inquiry privilege to elicit from Henares the content the "alpha-list" in her possession.

Recto sought clarification from Henares that the non-filing of the ITR by Corona did not mean that he did not pay his taxes.

Recto asked: “Hindi nangangahulugan na hindi s’ya [Corona] nagbayad dahil trabaho ng Supreme Court ang kumaltas at magremit sa BIR [This doesn’t mean that he didn’t pay because it is the work of the Supreme Court to deduct and remit to the BIR]. Tama ho ba iyon [Is that right]?”

“Tama ho iyon [That is correct],” Henares replied.

Recto also clarified that Corona did not need to file an ITR if he did not have income outside of his salary. Henares confirmed this, being provided for under Section 51 of the National Revenue Code of 1997.

On Recto's piecemeal questioning that the defense cannot object to by virtue of Senate impeachment rule, Henares said Corona's tax records as shown in the alphalist include the following: gross income of P657, 755.57 and P176,577.32 tax paid in 2010; income of P621, 528.62 and withholding tax of P155,556.20 in 2009; gross income of P604,388.46 and P154,057.75 in 2008; gross income of P488, 156.57 and withholding tax of P117, 399.31 in 2007; and a total income of P465,156.57 and withholding tax of P109,706 in 2006.

From 2002 to 2005, the Supreme Court did not file any alphalist, so the BIR has no tax records of Corona for the said period, Henares said.

Henares also revealed that Mrs. Cristina Corona, the Chief Justice's wife, became a taxpayer only in September 9, 2003 when as a “one-time taxpayer” she bought a property at the La Vista subdivision in Quezon City and paid P11-million.

Mrs. Corona registered as a taxpayer 7 days before she bought the said property.

Queried by Lim whether Mrs Corona had any income when she bought the La Vista property, Henares said: “She did not file any income tax return and she was registered only as taxpayer on September 9, 2003 so any year before that she’s not a taxpayer.”

Hinting that the BIR might have been remiss in its investigation function, Enrile asked Henares what actions are being taken by her office regarding purchased made by buyers who have no known income. Henares said she only found this information last Friday and investigation might be in order.

“We only found out about this because of the impeachment proceedings, to be specific we only found about these things last Friday,” Henares said.

“Madam Commissioner, the certificates issued by your office to authorize the registration of properties were issued on prior year, isn’t that a matter of record in your office? And was that supposedly enough for you to inquire into the source of money that was used by this taxpayer to pay for the land and why did you not exercise your power as commissioner to assess?” Enrile asked Henares.

Henares said the transactions happened in 2003 when she was not yet commissioner of the BIR.

“That’s the responsibility of the BIR and I’m quite surprised why was it that no action was taken by the agency if this is an income earned and for which no tax was paid,” Enrile said. Henares said the BIR will conduct further investigation into the matter.

The BIR chief is expected to continue her testimony today.

The alphalist documents filed by Mrs. Corona's employer, the Camp John Hay Management Corporation, showed the following: gross income of P623,000 and withholding tax of P154, for 2007; gross income of P1 ,024, 303 and withholding tax of P279, 656 in 2008; gross income of P1,106, 201 and tax due of P302, 984 in 2009; and taxable income of P469,986 and tax payment of P100, 995 in 2010.

Henares said taxes were withheld from director’s fees that Mrs. Corona received from 2006 to 2010.

Furthermore, Henares said the certificate authorizing registration (CAR) for the La Vista property was issued on Sept. 9, 2003.

The CAR is a certification issued by the BIR that the transfer and conveyance of the property was reported and the taxes due have been fully paid.

Henares said a CAR was also issued on Oct. 28, 2004 for the property acquired by Corona’s wife in The Columns, Ayala Avenue, Makati City worth P3,588, 931. Cristina bought another condominium in Bonifacio Global City, Taguig City worth P9,159,940 on Nov. 16, 2008. The couple also acquired a unit at the Bellagio 1, Taguig worth P14.5 million on Dec. 17, 2009.

Corona and his wife likewise bought a property at One Burgundy Plaza on Katipunan Avenue worth P2,508,000 on Dec. 8, 2003.

Henares also disclosed that Corona’s wife sold a lot at La Vista (1,200 square meters) to her daughter Ma. Carla Castillo worth P18 million on Oct. 22, 2010.

She also sold a lot in Pansol, Diliman, Quezon City to a certain Amelia Rivera worth P8 million on March 12, 2010.

Prosecution spokesman Marikina Rep. Miro Quimbo, meanwhile, insisted Corona lied in his SALN when he declared that he bought his Bellagio property for only over P6 million when he had actually bought it for P14.8 million.

“Even as he undervalued his properties, there is still a big disparity in his income and assets acquired. Even under the forfeiture law, if your income is disproportionate to your assets, that is considered ill-gotten wealth,” Quimbo said. “His wife, Cristina, has no income declaration in BIR, but she bought a property worth P11 million (which) she declared in 2007. There is a discrepancy,” Quimbo said in reaction to Henares’ testimony.

Earlier, House impeachment prosecutors asked the Senate impeachment court to subpoena the records of the accounts of Corona and his wife in four banks.

In a four-page request filed by Rep. Tupas, the prosecution panel asked that Bank of the Philippine Islands, Rizal Commercial Banking Corp., Philippine National Bank, and state-owned Land Bank of the Philippines also send officers to testify on the Coronas’ bank records.

Tupas said Republic Act 1405 or the Bank Secrecy Law allows the disclosure of bank records in an impeachment case. He said among the documents they want the banks to produce are the forms the Corona couple filled out when they opened their accounts as well as monthly statements of transactions and balances.

He said the bank records are material and relevant to determining whether the Coronas could have afforded the luxurious condo units and other assets that they have acquired.

The prosecution panel is also seeking records on a P11-million “cash advance” that Corona declared in his SALN for 2003. It has asked the Senate impeachment court to subpoena the records of the Securities and Exchange Commission on Basa-Guidote Enterprises Inc. (BGEI), a corporation owned by the family of Corona’s wife Cristina.

In his 2003 SALN, the Chief Justice declared that he took out an P11-million cash advance from this corporation.

The SEC documents prosecutors want to examine include BGEI’s financial statements, where Corona’s debt and his payments presumably would be reflected.

Corona declared his liability in his SALN up to 2009, when it went down to only P3 million. It disappeared in his 2010 SALN after he apparently paid off his creditor.

A research conducted by investigative journalist and blogger Raissa Robles showed that based on SEC records, BGEI was dissolved in 2003 and was officially nonexistent in 2007, since dissolved companies are given some time to wind down their affairs. How could the Chief Justice have owed and paid a legally inexistent corporation? Robles asked.

The television network ABS-CBN interviewed Randy Basa, an aunt of Corona’s wife, who said they became aware of the supposed cash advance to the Chief Justice only from news reports.

“There was no meeting held nor any authorization for the cash advance. My husband was one of the original stockholders of the corporation. I think we deserve some answers,” she was quoted as saying.

Randy Basa is the widow of Jose Basa III, a brother of Mrs. Corona’s mother Monina Basa-Roco.

She said she wants to know who authorized Corona’s wife to lend BGEI money to the Chief Justice because the corporation was dissolved in 2003 and most of its board members are already dead. Earlier, prosecutors exposed what they claimed were “lies” in the Chief Justice’s declarations in his SALN.

Prosecution panel spokesman Quimbo said records of the Land Registration Authority (LRA) on the properties of Corona and members of his family do not tally with Corona’s assets as declared in his SALN.

He said the Chief Justice did not declare some properties, while others were declared with understated values.

He said Corona did not declare the luxurious condominium units he and his wife acquired in Bonifacio Global City in 2005 and 2009 in his SALN for those years.

“He declared them only in his SALN for 2010, which was filed in April 2011, when he was already feeling the heat after the House impeached then Ombudsman Merceditas Gutierrez. It was almost an afterthought,” he stressed.

But with the impeachment court ruling against the inclusion of the ill-gotten wealth issue, defense spokespersons Tranquil Salvador III and Karen Jimeno said Corona’s and his family’s bank records should not be included as evidence in the deliberation on Article 2 of the impeachment complaint.

Citing rules of evidence, Jimeno said Commissioner Henares cannot testify on the veracity of Corona’s income tax returns and bank records since the documents were merely submitted to her office.

“How will she know if what was written in the ITR were true and accurate? She doesn’t investigate what’s written on it,” Jimeno said in a press briefing during a break in the trial. Enrile ruled that Article 2.4 pertaining to Corona’s alleged illegal wealth should not be tackled in the hearing. Article 2.4. states that “respondent is likewise suspected and accused of having accumulated ill-gotten wealth, acquiring assets of high values and keeping bank accounts with huge deposits.”

Enrile also stressed that the ITRs of Corona’s family members may be presented only if the prosecution can establish their relevance to the impeachment hearing. (With report from Philstar.com)