First Gentleman Arroyo accused of evading CARP law for seven years

There was a time in their lives when Negros Occidental farm worker Rogelio Salva and his family not only knew how to be poor as a rat - they had in fact eaten rats and gnawed on sugarcane for lunch and dinner. Salva resigned himself to the sorry fate until President Gloria Macapagal Arroyo made a promise to give up some 1,000 hectares of the First Family’s inherited landholdings to beneficiaries of the Comprehensive Agrarian Reform Program (CARP). The promise revived Salva’s hope for a better life. "Pag sa amin na ang lupa, may maipapamana na ko sa mga anak ko. Di na sila magiging katulong (If the land is ours, I would have something to bestow to my children. They wouldn't anymore work as house helpers)," he said. Salva has been working in Hacienda Bacan since 1973. The Department of Agrarian Reform (DAR) said the property, a 157-hectare sugar farm in Barangay (village) Guintubhan in Isabela town, belongs to the Arroyos. The money that Salva earned from working in the hacienda for 35 years has not made his life any sweeter. Not one of his children finished college. Six of them, all women, are working as maids, while his son helps him in his work at the hacienda. Despite the President’s order to immediately distribute her family's haciendas to poor Negros tillers like Salva, the CARP coverage of Bacan has dragged on for years. Seven years after Mrs Arroyo made the promise, and less than a month before the expiration of Republic Act 6657 or the 20-year-old Comprehensive Agrarian Reform Law, the DAR says the hacienda remains under the Arroyos. The hacienda workers, who belong to the peasant federation Task Force Mapalad (TFM), claimed that the fruition of their dream of owning the land has been hindered by the DAR – along with the President, her husband Jose Miguel "Mike" Arroyo, and her brother-in-law, Negros Occidental Rep. Ignacio "Iggy" Arroyo. But lawyer Alberto Ruy Rondain, counsel of the Arroyos, said the family does not have any intention to delay the coverage of the hacienda. He blamed the delay solely on the DAR's "lack of action" to the offer made by Iggy to have the hacienda placed under the program. He said the government’s inaction made the offer "deemed abandoned." Slow, toothless Even without President Arroyo’s 2001 promise, farmlands such as Bacan should have long been distributed to farmer-beneficiaries.

Farmers accuse lawmakers of blocking CARP. (photo by AR Sabangan, GMANews.TV)

The law mandates the DAR to prioritize the CARP coverage of vast farmlands, mostly owned by the country’s influential families. According to lawyer Carl Carumba, counsel for the TFM farmers, Section 7, Phase 2 of RA 6657 mandates the DAR to "immediately distribute" to landless farmers private agricultural landholdings of more than 50 hectares. "The distribution of all big landholdings like Bacan should have been completed by the DAR in 1992 or within a period of four years since the law became effective in 1988," he said. TFM farmers, led by its president Jose Rodito Angeles, claimed that the DAR, under past and present administrations, weakened CARP's implementation because it "lacked the teeth" to prioritize CARP coverage of big private landholdings. Angeles said the DAR "lagged behind its CARP schedules," especially in Negros Occidental, the province touted as the country's "bedrock of feudalism." According to the DAR's latest data, Negros Occidental is the province with the biggest estimated balance of land that has not yet been distributed to CARP beneficiaries - 105,240 hectares, or six times as big as the total land area of Quezon City. "The program hasn't succeeded in the province," said Angeles. "That’s why the CARP was extended for another 10 years or until 2008. And now there are moves to again extend its implementation." "And because the government was too slow and lacked the political will to implement the law, recalcitrant landowners were able to have a leeway to consolidate their forces, and ensure that CARP won’t succeed in Negros," he added. Based on the DAR’s calculation, it only takes about five to 15 months to complete various processes in the acquisition and distribution of a landholding to its farmer-beneficiaries. The land acquisition process starts from the time the agency informs a landowner that his farm "is covered under the CARP." This is done through CARP Form No. 5 or "notice of coverage and field investigation" (NOC). The process ends when the beneficiaries receive their certificates of land ownership award (CLOA) and occupy the land. But even after President Arroyo made her promise in 2001 – seven years ago – the DAR still failed to fast-track the distribution of the hacienda to farmers. CARP notices for Mike

WAITING FOR TOO LONG: Farm worker Rogelio Salva hopes President Arroyo will fulfill her promise. (photo by AR Sabangan, GMANews.TV)

It wasn't only the farmers who were troubled by the snail-paced acquisition of Hacienda Bacan. The DAR too was beset with problems on how to place the landholding under agrarian reform due to disputes in its ownership. DAR officials in charge of placing Hacienda Bacan under the CARP believed that the delay in the distribution was caused by its supposed owners. This claim was countered by Rondain who said that in 2001, Iggy offered the hacienda for agrarian reform, but DAR did not act on the offer. "There was no action," he said. "At least there is nothing in my file indicating an action by the DAR in 2001. We’re not talking about today, these all happened in 2001... DAR’s responsibility at that time was to have acted on it. Since they did not act on it, we assumed that it was denied." But DAR records obtained by GMANews.TV showed that the agency moved for the hacienda’s CARP coverage in 2001. The department admitted that it did not accept Iggy’s offer. But DAR officials said it was only because it should be Mike who surrendered the land, not Iggy. For three times in 2001, DAR officials moved for CARP coverage of Hacienda Bacan by issuing three NOCs – two to Mike and one to Iggy. The DAR, according to its own records, got no reply from either one. But Iggy offered to sell the land for CARP in 2001, the same year that President Arroyo made her promise. The DAR usually issues only one NOC to inform a landowner that his property is subject to agrarian reform. So issuing three NOCs, as in the case of the Arroyos, was uncommon. But then Bacan also appeared to be an uncommon and difficult case for the DAR. There were at least three provincial agrarian reform officers (PARO) of Negros Occidental who handled Bacan’s case since 2001. They all attempted, but failed to place the hacienda under the CARP. They claimed the land belonged to President Arroyo’s husband. In 2001, the DAR identified Mike Arroyo as the owner of Hacienda Bacan. A municipal agrarian reform officer of Isabela town, Jose Renato Defiño, sent him the NOCs to start the reform process. In the NOC, Defiño "invite(d)" Mike, or his representative, to a "field investigation" of the farm so that he could identify the five hectare-area that he wants to retain after the government compensates him for taking the land and awarding it to farmer-beneficiaries. The first NOC was sent through registered mail to Mike care of his brother Iggy on April 21, 2001, at No. 7, 10th St., Bacolod City. Failing to get a response, Defiño sent another NOC to Mike on May 4, 2001, again inviting the latter for a field investigation. The second notice was again sent through registered mail, this time at No. 14th St., Badjo (sic), La Vista, Quezon City. Defiño still did not get a response from President Arroyo’s husband. Iggy asks P45 milion for Bacan The response Defiño had long been waiting for did not come from the First Gentleman, but from Iggy who offered the land for CARP for P45 million. The DAR could not accept Iggy's offer – because the hacienda, according to the agency, did not belong to him, but to his brother Mike. This is aside from the fact that the land offered by Iggy for CARP was different from the property identified for sale by Rivulet Agro-Industrial Corp., the company claiming to own the hacienda. On June 11, 2001, Iggy, voluntarily offered to sell (VOS) the 152.2992-hectare portion of the hacienda to the department for P300,000 per hectare, or for a total of P45,689,760. In his "letter offer" addressed to the DAR secretary, Iggy said: "In support of the Comprehensive Agrarian Reform Program of the government, I have the honor to voluntarily offer to sell to the Republic of the Philippines my land, including the improvements thereon." In the same letter, Iggy asked that the remaining five-hectare portion of the land be retained by the landowner, as prescribed under RA 6657. Iggy was acting on behalf of Rivulet. Ten days after Iggy made the offer, Regino Q. Ferraren Jr, assistant corporate secretary of Rivulet, issued a "secretary's certificate." The June 21, 2001, certificate noted that the company’s board of directors authorized Ignacio T. Arroyo "to represent the Corporation… to sign all documents necessary to effect… the sale…" of Hacienda Bacan. After the offer made by Rivulet and Iggy, Defiño issued a third NOC for the hacienda. This time, Defiño addressed the Sept. 7, 2001, notice to Ignacio Arroyo, which was sent by mail to 8th Floor, LTA Bldg., 118 Perea St., Makati City. Right land, wrong title Iggy's offer, however, did not make the job of placing the hacienda under CARP any easier. It complicated matters because the land offered by Iggy for CARP was different from the property that Rivulet identified in the certificate issued by Ferraren. This was aside from the fact that Iggy’s offer did not include other documents required by the DAR to complete the process of acquiring and distributing the land to farmers. On September 14, 2001, seven days after the issuance of the third NOC, Defiño acknowledged receiving Iggy’s VOS application and Ferraren's certificate. In the letter of acknowledgment, Defiño called Iggy's attention to the "inconsistencies" between the title and lot number of the land that he offered for CARP. Defiño also informed Iggy that the title number of the land that he was offering for CARP was different from the title number of the land that was being offered for sale by Rivulet. Defiño told Iggy that in his June 11 letter, he offered a landholding with title number T-105742 and lot number 524-C. Documents from the DAR showed that Hacienda Bacan's title was indeed T- 105742. However, the property's lot number was 41, and not 524-C as claimed by Iggy in his letter offer. Defiño also pointed out to Iggy that in Ferraren's certificate, Rivulet offered a land with title number T-119601, which was different from Bacan’s title number. "In view hereof, we are requesting you to correct the Lot. No. and Title No. as reflected in the VOS (voluntary offer to sell) application and secretary's certificate respectively, so as to conform with the data reflected in the title," Defiño told Iggy in the letter. Not deliberate

RONDAIN: “The First Gentleman doesn’t own the hacienda. What reasonable man, a lawyer at that, would buy a headache? That is shooting one’s self on both feet." CARUMBA: “President Arroyo and the First Gentleman own Hacienda Bacan. They should give it up to farmers."

Rondain, who also acts as a counsel for Rivulet, denied that there was a deliberate move to confuse the DAR. "No. (There was) nothing to be gained (from it)," the lawyer said. "It would have been a foolhardy thing to do na manloko ng tao (to cheat on people). The President was already the president at the time. If you are the presidential brother-in-law, doing something like that could have been suicidal." As of posting time, the DAR's "claim folder" for Hacienda Bacan did not show that Iggy or Rivulet made the corrections requested by Defiño. The folder contained various documents on the CARP processes and actions taken by the agency to place the landholding under the program, as well as its correspondences with the supposed landowner. On September 16, 2001, Defiño, through a certification, also noted that Rivulet "failed to submit" to his office statements of production and net income from Hacienda Bacan. Under the CARP process, a landowner who voluntarily gives up his property for agrarian reform should submit the statements to the DAR to enable the agency to complete the process. The documents will also enable the DAR and the Land Bank of the Philippines (LBP) to determine the value of the property, and the compensation for the landowner. Offer not from the owner But even if Iggy or Rivulet was able to make the corrections, and complete the requirements being asked by Defiño, placing the hacienda under CARP won’t still materialize. The three PAROs that handled the Bacan case since 2001 rejected Iggy's offer to sell the hacienda to the DAR because they claimed the presidential brother-in-law was offering a property he did not own. The PAROs said that while at one time, Rivulet owned the hacienda, it no longer belonged to the company when Iggy offered to sell the land for CARP in 2001. They said Mike already owned the property since 1994 when he bought the landholding from Rivulet. Four months after Iggy made the offer, then PARO Alexis Arsenal informed the First Gentleman that the DAR could not fast-track the CARP coverage of the hacienda, because, among others, Iggy was not authorized by Mike to sell the latter’s land. In his October 8, 2001, letter, Arsenal told President Arroyo's husband: “We cannot expedite submission of your claim folder with the Land Bank of the Philippines for valuation due to some deficiencies of documents." He said the VOS application filed by Iggy “has no attached special power of attorney (for him) to sign and dispose the property under CARP executed/issued by the landowner, Atty. Jose Miguel Arroyo." In the same letter, Arsenal told Mike about the annotations found in the title of the hacienda, particularly “Entry No. 361407," which noted that the “purchaser" of Bacan was issued “certificate of sale of delinquent property" by the Office of the Treasurer of Isabela in 1994. To hasten the process of placing the hacienda under CARP, Arsenal requested Mike to annotate “documents of sale" at the back of Bacan’s title, sign a new VOS application offering the land for CARP, or sign a special power of attorney for Iggy. But Arsenal told Mike that before he could annotate the sale of Bacan at the back of the land title, he must first settle the capital gain tax, or the profit realized from the sale of a non-inventory asset purchased at a lower price. Final bill of sale Documents from the Office of the Treasurer of Isabela showed that Rivulet sold Bacan to Mike during a public auction at the town on April 8, 1994. Araceli Garcia, the municipal treasurer, certified that Bacan, “a delinquent property declared in the name of Rivulet" was “sold...to Mr Jose Miguel Arroyo." Garcia said the property then valued at P1.04 million was sold to Mike for P176,722.89 – the same amount of property taxes and penalties that Rivulet failed to pay for Bacan from the second to the fourth quarter of 1989, and from 1990 to 1993. Nearly two years after the auction in Isabela, Mike's purchase of Bacan became final. On March 27, 1996, Enrique Pinongan, provincial treasurer of Negros Occidental, issued a “Final Bill of Sale," stating that the 157-hectare landholding “was sold to Mr. Jose Miguel Arroyo...married to Gloria M. Arroyo." The same document also “conveyed" the hacienda to Mike, identified as the “holder of certificate of sale issued on Apil 8, 1994, covering said property." No intention to own Rondain claimed that the First Gentleman is not the owner, but only a “trustee" of the hacienda, which still belongs to Rivulet. On Oct. 6, 2007, the First Gentleman signed a “declaration of trust" stating that the hacienda “is the exclusive property of Rivulet." While he admitted in the declaration that he bought the farm, he only did it as a “trustee" of Rivulet. Rondain said Mike came out with the declaration after he belatedly came to know that the hacienda was bought on his behalf through a final bill of sale. “He wrote (the declaration)... because we didn’t know this was going on. When I saw the Rivulet file, I said Sir, mayroong ganitong (there is a) certificate of sale in your favor, etong (this) Hacienda Bacan. Sabi niya (He told me), I'm not involved in Hacienda Bacan," said Rondain. Records from the Office of the Treasurer in Bacolod City show that it was Iggy who bid on behalf of Mike during the 1994 auction of the hacienda. Iggy was the lone bidder at the time of the auction, the office's records show. Rondain said Mike did not have any intention to own the hacienda. He said the First Gentleman only helped Rivulet when the landholding was about to be foreclosed because someone in the corporation “forgot to pay real estate taxes." “And I said, well, it says here (in final bill of sale) that you bought it. Sabi niya (Mike told me), no, I lent them money because it was about to be foreclosed. It was only then that everything fell into place. And I said, there was no intention, but there is a certificate of sale in your favor. Sabi niya (He said), well, we have to disown it because I don't own it. It's ridiculous. You own a 157-hectare hacienda for P100,000? Di ba (Isn't it that) it’s ridiculous? And it’s not fun to some of the real owners who all of us know," said Rondain. Rondain said “one or two" of Rivulet’s owners are the cousins of the First Gentleman, but “neither the First Gentleman nor Rep. Arroyo can control their cousins and friends." No intention to redeem? However, Carumba said that if the First Gentleman really had no intention to acquire the hacienda from Rivulet, the 1994 auction should not have pushed through. “Rivulet could have instead paid for its tax delinquency. It could have requested the municipal treasure or anybody from the government in-charge of the auction not to push through with the sale," he said. Carumba also claimed that if Rivulet wanted to regain ownership of the hacienda, it could have redeemed the property from Mike two years before the sale of the landholding to the First Gentleman became final. “I did not see any effort on the part of Rivulet to redeem the property from the First Gentleman. It had two years to do so. It could have been easy because the company was represented by Mike Arroyo’s brother at the time," he said. It’s not his Asked if it was the intention of President Arroyo’s husband to delay the distribution of the hacienda to farmers, Rondain said: “Answer to your question that he’s delaying because he owns it? No, on both counts. He doesn’t own it, and he doesn’t delay it because he doesn’t care. It’s not his." Rondain said it was impractical for the First Gentleman to buy a farm that is already covered by the CARP. “So many people are accusing First Gentleman Arroyo of delaying this because he is the owner. It’s easy to believe what we want to believe if we want to demonize someone. But look at the facts, the CARP was signed into law in 1988. The certificate of sale in favor of (the First Gentleman) was executed in 1994. So when he supposedly bought the property, CARP was already in effect," he said. “What reasonable man, a lawyer at that, would buy a headache? Why would I buy an hacienda that I know is covered by CARP? Isn't that shooting one's self on both feet? So talagang (it is really) foolish," said Rondain. Mike’s parents used to own Bacan Annotations on Bacan’s title did not state when Rivulet acquired the hacienda. But it was indicated in the annotations that the land was once owned by Lourdes Tuason de Arroyo and Ignacio Lacson Arroyo, the parents of Mike and Iggy. According to the annotations, spouses Arroyo obtained a loan of P58,834.40 after they mortgaged Bacan to the Philippine National Bank in 1962. Records from the Securities and Exchange Commission (SEC) showed that Rivulet, with a capital stock of P2 million, was incorporated on April 25, 1977. The company’s incorporators and directors are: Alejandro Z. Barin, Domingo D. Sison, Pablo Venido, Severo J. Tuason, and Vicente Lopez. Barin was appointed by President Arroyo as commissioner of the Energy Regulatory Commission (ERC) in September 2004. He is the husband of Fe B. Barin, the chairman of the SEC, who was earlier appointed by President Arroyo as the first chairperson of ERC. Alejandro’s profile posted on the ERC Web site says that he was a partner in the law firm of Arroyo, Barin, Villanueva & Associates. He was also an associate in the law firm of Macapagal, Alafriz, Mutuc & Associates. He also holds key positions in the private sector. He is chairman of the board of Leyte Agri Corporation, Equitable Securities (Philippines) Corporation, and ZD Industrial Services, Inc. Still no response In 2004, three years after Arsenal appealed to Mike to help facilitate the land’s CARP coverage, another PARO of Negros Occidental, Felicidad Bañares, returned Bacan’s claim folder to the office of the municipal agrarian reform officer (MARO), still headed by Defiño. Returning the folder from the PARO down to the MARO level indicated the DAR’s failure to have Bacan undergo the next level of the CARP process – the property’s valuation by the LBP that paves the way for the land’s distribution to farmer-beneficiaries. “Series of communications were made to the landowner/representative for him to submit needed requirements, but no response had been received up to this writing," said Bañares in her January 19, 2004, letter to Defiño. “Meanwhile, we are returning the VOS claim folder...so you can coordinate with (the owner or the representative) in the settlement of ownership problem soonest," Bañares further told Defiño. Another try Another three years later, Teresita Depeñoso, the PARO who replaced Bañares, again tried to convince President Arroyo’s husband to give up the land for CARP. In her August 2, 2007, letter, the PARO reiterated to Mike that he is Bacan's owner, and that he could help facilitate the distribution of the land to its beneficiaries. "Per our findings, you bought the said landholding in the auction sale conducted by the municipality of Isabela, Negros Occiental, per Certificate of Sale issued on April 08, 1994," Depeñoso told Mike, adding that a final bill of sale was issued in favor of President Arroyo’s husband in 1996. “Further, may we request from your good self to annotate documents of sale at the back of the title to facilitate immediate processing of your claim folder if ever you decide to sell voluntarily your property to the DAR," the PARO added. In another letter of the same date, Depeñoso told Iggy that the DAR “cannot process (his) offer (to sell Bacan) under the name of Rivulet...considering that at the time of the offer, the said landholding...was already owned by Atty. Jose Miguel T. Arroyo per Final Bill of Sale dated March 27, 1996." She likewise appealed for Iggy’s help “to convince the First Gentleman, your brother...to offer the subject landholding to the DAR under the VOS scheme." Another VOS Rondain maintained his claim that Rivulet owns Hacienda Bacan. He said Rivulet might again offer the hacienda to the DAR through the VOS scheme. But this time, he said, it would be the corporation, and not Iggy, that would directly offer to sell the hacienda to the department. He said Rivulet has a pending application to have the hacienda converted into a bioethanol farm. But “in deference" to President Arroyo’s policies, the corporation might decide not to push through with the conversion, which would exempt the land from CARP coverage. “In view of the moratorium (on conversion) issued by the President, and in deference to the President’s policies, we are now seriously considering abandoning the petition for conversion," said Rondain. “This time, malinis at malinaw na (This time it will be clean and clear). It will be the corporation that will make the offer," he said, adding that Iggy had earlier involved himself in the VOS because he “was once the administrator" of Bacan. Revoked A check with the SEC showed that Rivulet’s registration papers have been revoked since 2003. “This is to certify that based on available records of Rivulet Agro-Industrial Corp., with SEC No. 73198 on file with this Commission show that subject corporation’s Certificate of Registration was revoked as of August 11, 2003, for failure to comply with the reportorial requirements," read the “certificate of corporate filing/information" signed last May 2 by Gerardo F. Del Rosario, assistant director of the SEC's Corporate Filing and Records Division. According to Carumba, the revocation means that Rivulet has already lost its “legal personality" to transact business, including the move to transact with the DAR for the sale of Hacienda Bacan. He said the DAR must compulsorily acquire the hacienda. Depeñoso said she would ask for the DAR’s legal opinion on the matter, but claimed that because of the revocation, the agency might be compelled to put the land under compulsory acquisition. Rondain disagrees with Carumba and Depeñoso’s opinions. “That is correct, but not accurate," said Rondain. “If your corporate franchise is revoked, you lose the power to transact, that’s correct. But she’s simply implying that… if there is no personality to transact, we should take the land. That is incorrect. That would be confiscatory." He added: “You don't lose your property just because your franchise is revoked... You lose the right to transact...but you don’t lose your right to the property...The properties of a corporation are preserved in a trust fund doctrine for the benefit of its stockholders and its creditors. What if the company dies, in quote, and the state takes the properties? What happens to the creditors?" President Arroyo owns it, too Carumba offered another solution to hasten the hacienda’s CARP coverage: Let President Arroyo herself offer the land for CARP, and if possible, give it to the farmers for free. He said that in 1994, when the First Gentleman supposedly bought the hacienda, “he was already married to Gloria Macapagal Arroyo, thus the landholding is a conjugal property." “The First Gentleman’s waiver of rights over Bacan through his 2007 declaration of trust was not binding, because it apparently did not have the consent of his wife. Thus, the couple still owns the property," said Carumba. “In fact, the President could choose to give the land to the farmers for free. There’s a big difference when someone promised that she will give something for free and another offered it in exchange for a P45-million compensation," he added. Last month, Salva and his fellow farm workers in Bacan came to Manila, with other Negros farm workers from two other Arroyo haciendas, which also remain undistributed. “Pumunta kami dito sa Manila para ipaalala sa Pangulo ang kanyang pangako. Pero di ko rin maintindihan kung bakit kailangang ipaglaban pa ang naipangako na (We come here to remind the President of her promise to us. But I cannot understand why do we have to fight for something that has already been promised," said Salva. On April 22, Salva and other Negros farm workers did something daring and dangerous to get President Arroyo's attention. They staged a protest action outside the Presidential Palace, took off their shirts, and shouted the words written on their bodies: “Lupa ng Arroyo, ipamahagi Distribute Arroyo lands!" Salva, however, was not sure whether the noise reached Malacañang or if President Arroyo would still fulfill her promise. Weeks later, Malacañang issued a statement assuring Salva and other farmers that Bacan would be distributed to them. The Palace told the farmers to be patient. Familiar words, according to Salva. “Hindi ako uuwi, sana ngayon patunayan ni Presidente (I won't go home. I hope that this time the President means what she says)." – GMANews.TV