ABS-CBN, Meralco and Lopez family - are they victims or Marcos regime beneficiaries?

Monday March 02, 2020 ()

Barely a few days after the Lopezes and the Cojuangcos had moved into the [Corazon] Aquino administration after the EDSA uprising that toppled the Marcos regime in 1986, the Lopez family requested President Aquino for the return of all the Lopez assets, including Meralco (Manila Electric Co.), which by then was under the First Philippine Holdings Corporation (FPHC).

ABS-CBN and Meralco

Official documents showed that on April 17, 1986, the Lopez family, through its counsel Lorenzo Tañada Sr., also formally requested President Corazon Cojuangco Aquino “for the return of all the assets of the ABS-CBN Broadcasting Corporation still under the possession of the Aquino government.” ABS-CBN at that time included TV stations 2 and 4.

In the case of the Meralco, President Aquino created a three-man board of arbitrators, specifically to render a final adjudication and settlement of the Lopez claim. The next thing the public knew, the Lopez family was already in complete control of Meralco, ABS-CBN’s channel 2, part of the Philippine Commercial and International Bank (PCIB) and other corporations.

In reaction to the Lopezes’ effort to also regain control of channel 4, then being operated by the government, a group of citizens led by former constitutional convention delegate Jose Luiz “Chito” Gascon filed a taxpayers’ suit in the Supreme Court questioning the creation of the three-man arbitration board.

Invoking a question of law, Gascon petitioned the high court for prohibition with prayer for the issuance of restraining order and a writ of preliminary injunction. Nothing was ever heard of the suit again. Channel 4 eventually remained in government hands.

Official documents, including one titled “Summary of the answer of the Republic of the Philippines to the claim filed by ABS-CBN,” showed that “ABS-CBN’s right to compensation does not mean or compel the return to them of Channel 4 and the radio stations.”

The summary argued that the Lopez properties in question could not be returned without violating the spirit of the constitutional provisions that “the state shall regulate or prohibit monopolies when the public interest so requires” (Article 12, Section 19) and “Congress shall regulate or prohibit monopolies in commercial mass media when public interest so requires” (Article 12, Section 11).

“Reconveyance to (the Lopezes) of the subject properties,” according to the summary, “cannot reconcile with the constitutional provisions declaring oligarchy as subversive of the general welfare and public interest considering that claimants represent persons, families, clans, and entities who have controlling and dominating influence in newspaper, radio, TV, electronic utilities, banking, politics and related enterprises.”

The summary added that the reconveyance contemplated violated the equal protection clause of the Constitution: “Other parties whose properties were similarly confiscated by the previous (Marcos) Administration have presented their claims and yet have not been extended accommodations as the Lopezes had been.”

Documents recovered from Malacañang at the end of the 1986 EDSA uprising and from channel 4 during the November to December 1989 coup revealed an alleged intricate web of greed, corruption, machination and tax evasion involving the Lopez family that covered 10 presidents, from Manuel Quezon to Cory Aquino, over a period of more than two generations.

In fact, when Marcos declared martial law in 1972, he used these issues (details of which are in the succeeding paragraphs) to prosecute the Lopezes and incarcerate many of them.

Lawyer Jake Almeda Lopez, who acted as spokesman when this writer sought the comment of the Lopezes, said the documents were specifically used by Marcos to destroy the Lopezes.

The documents said the Lopez family emerged from their provincial bailiwick in 1947 and began building its own empire with the acquisition, among other things, of the Manila Chronicle through the help of Roberto Villanueva who subsequently got involved in other organizations set up by the family.

To Don Eugenio Lopez, father of the Lopez clan and father of Geny (Eugenio Lopez Jr.), choosing the right politicians was to get ahead in business, the documents said.

When President Osmeña succeeded Quezon following the latter’s death in the US on Aug. 1, 1944, the Lopez family was among the first supporters of the new head of state. Grateful for their support, [Sergio] Osmeña appointed Fernando Lopez mayor of Iloilo City in 1945.

Then the Lopezes junked Osmeña and supported [Manuel] Roxas for president and [Elpidio] Quirino for vice president. For their support, Roxas named Fernando [Lopez] a senatorial candidate in 1947. After Roxas’s death, Quirino drafted Fernando, his running mate in the 1949 presidential polls, with both of them winning amidst charges of massive election fraud.

In 1953, the Lopezes abandoned Quirino and formed their own Democratic Party with Carlos P. Romulo as the presidential standard bearer. During the presidential election that year, the Lopezes junked Romulo and supported [Ramon] Magsaysay.

That support to Magsaysay marked the rise of the Lopez business empire, whose foundations were set up during the term of Quirino. Pressured by the Lopezes, Magsaysay ordered the foreclosure of the loans of Antonio Quirino, the brother of President Quirino, with the Development Bank of the Philippines and the Philippine National Bank. Among the corporations foreclosed were the Bolinao Electronics Corporation and the Alto Broadcasting System.

Upon foreclosure, the Lopezes moved quickly, bidded for the companies and won them.

Bolinao became the precursor of ABS-CBN. The Lopezes then also acquired the Monserrat Broadcasting System and Chronicle Broadcasting Network and put them under the Benpres Holding Company.

In 1956, the Lopezes, after setting up a powerful relay transmitter in Mount Sto. Tomas, a forestry reservation, without a permit, mysteriously acquired the People’s Homesite and Housing Corp. (PHHC), a 4.4-hectare lot on Bohol Avenue, through a certain G. Palomar.

The PHHC price was P14 per square meter with a downpayment of 10 percent and the balance amortized monthly over a period of 10 years.

In less than a year, the Lopez family requested the PHHC that the property be sold to Eugenio Lopez Sr. instead of the Manila Chronicle. The PHHC general manager, however, stated that the conditional contract of sale to Eugenio could not be approved due to several violations.

The government through its corporate counsel subsequently filed a case against the Lopezes. However, the PHHC and the Lopezes reached a compromise settlement that was approved by a court in 1966. Even without embellishment, said the documents, the normal course of events showed that the acquisition of the property was made with considerable stealth and malice, with the Lopezes using the media at their command to batter down any opposition to the transfer.

Later, Eugenio Sr. transferred the same property to the Bolinao Electronics Corporation, represented by Eugenio Jr.

Fernando Lopez was vice president during Quirino’s term, senator under Magsaysay, Garcia and Macapagal, and vice president again for two terms under Marcos.

The Gascon documents, marked “Case study of oligarchy-4,” said that although the general impression was that Fernando was a harmless, charming fellow, ignorant of his brother’s machinations, he was not actually that harmless and ignorant.

Fernando was a stockholder of Meralco Securities Corporation (MSC), and the brothers controlled MSC through shares of stock in their own names and under the names of persons they helped enrich. These were Roberto Villanueva, Pacifico Villaluz, Vicente Arenas, and Hector Moreno. The documents showed that Fernando and Eugenio were more than just brothers; they were business partners with Eugenio’s investments also being Fernando’s. Together, they owned Haciendas Antolanga, New Casalanga, and Pilar; Iloilo City College; Lopez Building; Paradise Stable; and Chronicle Building.

According to the documents, since Meralco was acquired by the Lopezes, it was transformed from a highly profitable organization distributing electric power to the Greater Manila area into a “hydra-headed monster that branched out into real estate, construction, petroleum refining, and the manufacture of electric goods and merchandise.”

It was said that the Lopezes could supply everything a person needed from birth to death. Ever since the Lopezes took over Meralco, they were able to secure approval for several rate increases using their political influence in the Public Service Commission, at the same time raking in huge profits at the expense of the consumers.

Meralco was able to buy out several small franchise holders and also opposed several attempts made by the government to provide electricity to the surrounding areas of Metro Manila.

One particular document revealed that the profits derived by Meralco through successive power rate increases were used by the Lopezes in sundry undertakings far removed from the main business of Meralco.

The documents, found in a steel cabinet in Channel 4 during the 1989 coup attempt, said that Meralco, under the Lopezes, grew so huge that it defied the powers of the President, and any government attempt to curb its greed was called oppression or fascism. It resisted government efforts to collect legitimate taxes on its income and its imports, passing off its defiance as enlightened criticism of the government.

According to the documents, Meralco Securities Corporation violated provisions of the Internal Revenue Code when it did not report its true gross income. In 1969, MSC received regular dividends from Meralco amounting to P233,258,720. But MSC reported as its gross income only 25 percent of the amount or P58,314,680.

For its crude oil importation, Meralco brought a total of 32,583.65 metric tons but paid only P13,033.00 as specific tax.

Since 1965, according to the documents, the Lopezes had remitted abroad a total of $44,164,671.11 for payment of contractual obligations and services rendered by some people.

However one looked at it — the dollar reserves of the country were depleted considerably and the fact that only one family did it must be viewed as a grave abuse of power.

The Lopezes through their advantages were able to borrow a grand total of $245,353,906.95 from foreign financial institutions. Documents revealed that Romualdez inherited this huge indebtedness when he acquired Meralco after Marcos declared martial law in 1972.

Another set of documents revealed that Asunta Development Corporation, owned and controlled by a woman, said to be a very good friend of Fernando Lopez, was granted a special timber concession for over 6,000 hectares in Surigao del Norte, with an allowable cut of 13,000 cubic meters despite an appeal for reacquisition by the former concessionaire with the office of the President and defects in the Asunta documents.

Among these defects was that the application was filed in January but was executed before a notary public in June. The application was received on January 5, but the residence certificate of the applicant was issued on January 7. The license was issued in August but the application and license fees were paid in December. The foregoing facts, said the documents, showed a great deal of accommodation given to the woman.

As owner of Maro Enterprises, the woman got another timber license covering 12,000 hectares in Isabela. Several requirements were waived in her favor.

Again as owner of Pacific Timber Corp., the woman got a third concession covering 23,900 hectares in Quezon and Isabela provinces. Thus, her total timber grants reached 41,900 hectares. At that time, Fernando was the Secretary of the Department of Agriculture and Natural Resources.

The crowning glory of the Lopezes’ ostentatiousness was made during the 40th wedding anniversary of Eugenio Sr. and Doña Pacita in 1968, said the documents. Eugenio’s gift to his wife was a fabulous neckpiece of dangling emerald-cut diamonds, each stone evenly matched in size and weight with matching earrings and ring, all valued at more than P2 million. Guests numbered in the hundreds with the cream of the country’s society in attendance.

Some of Europe’s royalty who traveled at the expense of the Lopezes were billeted at first class hotels, driven around in limousines and toured [across] the country in chartered planes. Two bands, both from the United States, were hired for at least $100,000 and played throughout the night.

A showpiece was the fountain of champagne that was specially made for the occasion.

In a country that was starving for rice, the ostentatious extravagance of the Lopez wedding anniversary made the people blush with utter shame, the documents said.

It was not surprising, therefore, that the Lopez family was placed among the first 10 targets of Marcos when he declared martial law. In fact, the Lopez clan was considered the number one oligarch in the country at that time.

Making sure that the clan would not be able to launch a countermove, Marcos put in jail some of the Lopezes, closed the family’s tri-media network, and ordered the military to run Meralco.

When the Lopezes retook Meralco, ABS-CBN, and other corporations after the EDSA uprising, they claimed that they were victims of the Marcos regime.

But a set of documents gathered by this writer belied their claim, showing that they sold their Meralco shares without duress on Dec. 16, 1974 to Meralco Foundation Incorporated, which assumed the indebtedness of Benpres Holdings in Meralco Securities Corporation to foreign and local banks amounting to P101.1 million.

The deed of sale was guaranteed by the Philippine National Bank through a letter of credit it issued to the foundation for the purchase of the Benpres shares of stocks.

The foundation also assumed Benpres’ P9.5-million debt on stock subscription and an obligation to pay Benpres P48.6 million on its equity, payable by installment over a 10-year period at a 10-percent interest on the unpaid balance.

In other words, what this particular set of documents showed was that the Lopezes were not victims of martial law but were in fact beneficiaries of martial law when Marcos helped them out of their financial mess.

What was ironic was that the takeover by the Lopez family of the Meralco after the EDSA revolt was shrouded in mystery despite President Aquino’s avowed policy of full disclosure and transparency.

The same set of documents had this to say on the claim of the Lopezes:

“There may be some truth to the claim that the Lopezes were victims of the Marcos regime and they were only asking for what may have been taken from them in the past. But one important question must be asked: Why are the wealthy Lopezes favored over thousands of other victims of the Marcos regime? Hundreds of sons and daughters have been salvaged or been made to disappear and their families have not been compensated.

“Many ordinary people who resisted the Marcos regime have been tortured or disabled and they have not been compensated.

“Many small businessmen lost their businesses during those dark years and they have not been compensated.

“The government has limited resources and a long list of Marcos victims to be compensated — why do the multi-millionaire Lopezes get priority?

“Whatever happened to our much-touted fundamental option for the poor?

“It has been said so many times, that the dictator is gone, but the structure of dictatorship remains. The institutions and systems, which preserved the monopoly of political power and wealth of a few, are still intact.

“One manifestation of this continuing malady is the reemergence of the old oligarchies, the powerful and wealthy families that dominated the country before Marcos cracked the whip,” said the documents.

Sources:

  • This article, exclusively written for The Manila Times was lifted with permission from Greed & Betrayal, a bestselling book published in 2000 by Amazon, one of the world’s largest publishing houses in the United States and written by multi-awarded journalist Cecilio T. Arillo

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