BACKBENCHER
Rod Kapunan
11/12-13/2011
There is nothing wrong with putting up a corporation, especially if motivated with some “laudable” projects, like building low-cost housing and carrying out urban renewal for the city. But in Quezon City, its officials, many of whom were not even elected by the residents, organized a corporation and giving it a high-sounding name called “Quezon City Housing and Urban Renewal Authority (QC-HURA), Inc.”
Among the incorporators of this mutant corporation that was granted certificate of incorporation by the SEC on July 15, 2003, were Feliciano Belmonte, Jr., former mayor and now Speaker of the House; Herbert Bautista, the incumbent mayor; councilor Jesus Suntay; Tadeo Palma, secretary to the office of the Mayor; Paquito Ochoa, Jr., former city administrator and now executive secretary; Bernadette Herrera-Dy, now party-list representative; and Salvador Enriquez, Jr., former budget secretary and now president and general manager of QC-HURA, Inc.
There are asking why our big time operators in City Hall took it to themselves to organize a corporation using the funds of the city government, specifically its revenues, with them openly parading as incorporators. These people should know that as officials they are required by law to divest their holdings in any private corporation, and the reason behind is to prevent then from incurring possible conflict of interest. In their case, they defied with impunity the ban by using their position to funnel the funds entrusted to them to their newly-created “private corporation.”
One lawyer whom this column consulted said local governments are prohibited from forming a corporation, be it public or private. Only Congress, by a legislative act, can create a government-owned and controlled corporation, irrespective of its purpose, and whether its scope and jurisdiction is national or local. The prohibition goes with the saying that public funds cannot be diverted by the simple expedient of forming a corporation, and making it appear that their systematic looting of public funds is legal all because they complied with the requirements of registering their corporation with the Securities and Exchange Commission.
Aside from being required to have their own charter, the law mandates the officers to act independently, as they can likewise be held liable for graft and corruption. Hence, for all their ranting of QC-HURA, Inc. as a city--owned corporation, it is nothing more but an illegal corporation using the funds of the city as their seed capital, and the incorporators having their final say on how they intend to dispose of the funds they looted from the city government.
As the lawyer explained, for the city government to appropriate an amount to an illegal corporation amounts to malversation, and those who allowed it, including those now manning that questionable corporation, are liable for graft and corruption. For the fact that the amount is more than P50 million that now could make them liable for plunder for illegally diverting the funds of the city government to a “private corporation” thinking it could transform the status of the funds to a private fund, with them free to hire their private external auditor.
What is shocking about this last HURA of Belmonte and his acolytes is their enumeration of its primary duties. Among them: 1) “To own, develop, improve, administer, deal in, subdivide or lease any and all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by the Quezon City Government”; 2) “To borrow funds from any local or foreign institution independent of the bonds it may issue or may continue to issue, to carry out its purposes; and” 3) “To enter into contracts of any kind and description, to enable it to carryout its purposes and functions.”
Evidently clear in the ultra vires purposes of this questionable corporation is it practically usurped all the functions of the city council where as a matter of legal procedure every undertaking requiring the release of public funds has to be approved by an ordinance. The premium to this circumvention is it allowed the incorporators to open a sluice channel directly to their corporation with no responsibility to the people of Quezon City, they not having been elected or if were elected before are no longer officials of the city government. Some are even be thinking they could continue their racket of siphoning the funds of the city for as long as the illegal ordinance is not repealed, superseded or abrogated by another ordinance.
Curiously enough, the city government approved recently an ordinance dated October 17, 2011 imposing a special assessment tax equivalent to 0.5 percent of the assessed value of the land in excess of P100,000.00, as if there is still a property in the city valued less than that. The proponents, mostly hucksters of that Bautista-Belmonte tandem in the City Council, argued they need P223 million to finance the socialized housing and urban development forgetting it was their erstwhile boss who made a valedictory bluff of leaving a P6.5 billion surplus to the coffers of the city.
The question that puzzles is why Mayor Herbert Bautista and his confederates kept it to themselves the existence of QC-HURA, Inc. which was approved by city ordinance SP-1236 S-2003. Even if at its face the ordinance is patently illegal, the city government paid P100 million for the paid up capital upon incorporation, with the remaining P150 million of its subscribed capital paid later. In that one could see how these hustlers committed P250 million of our taxes to finance their “privatized corporation,” which they could operate even if they have long been trashed out by the voters of Quezon City.
If one will dissect QC-HURA, Inc., it states to have a subscribed capital of P250 million divided into 250,000 shares. All the mentioned incorporators contributed less than one percent of its capital stocks, while committing the city government they have made their regular milking cow to subscribe more than 99 percent amounting to P249,993,000.00. The ugly part is while the incorporators contributed a consuelo de bobo of P1,000 each representing their respective one share of stock, the city government paid the P249,993,000.00 for the project that is now being repeated by the so-called “socialized housing tax.”
Many are wondering because the objectives of this dubious corporation are no different to the objectives of their newly approved ordinance. The question is not even about the duplication of funds and functions, but the ulterior motive for clearly we have been witnessing how our corrupt and greedy officials in City Hall have been imposing confiscatory taxes left and right that every time they run out of money all they do is pass an ordinance, an actuation no different from an alley extortionist.
(rodkap@yahoo.com.ph)
