Being transparent: presidential son Mikey Arroyo came into question last year after VERA Files reported he failed to declare in his SALN a million-dollar bay front house in California under his wife’s name. Courtesy of Boy Santos/news.flash.org

How honest are our elected officials?

In theory, this should be easy to tell since all public officials and employees are legally obliged to report everything they own and owe in their annual Statement of Assets and Liabilities and Net Worth (SALN).

In reality, though, it is an altogether different story. It is no secret that a substantial number fail to declare their real worth for one reason or another: Officials under-declare or even fail to declare all their assets and properties. In many instances declarations are shorn of specifics, making it very difficult for government investigators and citizens to determine their real wealth and work out whether it was all accrued legally—or otherwise.

But precisely because many public officials are unforthcoming about their wealth the SALN is a vital public document. Essentially it can prove—or disprove their honesty. It is a critical tool that can be used to ensure public officials—whether elected or appointed—are working for the public good or their private interest. On numerous occasions the SALN has served as the basis for suing those caught misdeclaring their wealth for lying under oath.

The legal requirement for officials and employees to file their SALN dates back to 1960. Back then, Republic Act 3019, the Anti-Graft and Corrupt Practices Act, required public officers to submit a detailed and sworn statement of assets and liabilities on taking and leaving office—as well as on every April 15. It included a statement of the amounts and sources of their income, the amount of their personal and family expenses, and even the amount of income taxes paid.

RA 3019 was the perfect companion to an earlier law, RA 1379 of 1955, the law on Forfeiture of Illegally Acquired Wealth which empowers the government to recover unexplained wealth or ill-gotten assets. Under that, a public officer can be dismissed or removed from office or convicted and imprisoned if found to have wealth “manifestly out of proportion to his salary and to his other lawful income.”

The SALN, in effect, is then an essential anti-corruption tool since it was designed specifically to be a lifestyle check to dissuade people in public service from enriching themselves.

These days, public officials and employees file the SALN on or before April 30 every year in compliance with the post-EDSA RA 6713. The 1989 Code of Conduct and Ethical Standards for Public Officials and Employees mandates them to lead “modest lives” and live within their “visible means of income.”

Almost everyone in government service from the President to a very junior clerk has to file. The only exceptions are those serving in an honorary capacity, temporary laborers, casuals and contractual workers.

RA 6713 expands the items in the SALN to cover not only assets—the money and property they have—and liabilities of public officials to determine the net worth (total assets minus total liabilities), but even the companies and businesses they have interests in and their relatives in government as a safeguard against conflict of interest, both potential and real. Even assets and liabilities of their spouses and unmarried children below 18 must be declared.

The SALN breaks down assets into real property and personal and other properties.

Government officials must declare the kind of property—land, house and lot, building—its location, the year and mode it was acquired, assessed value, current fair market value and any improvements made.

Acquisition cost is the amount paid in obtaining the property. Assessed value is the value stated in the records of the local assessor in the local government unit where the property is located. Fair market value is the purchase price a real buyer and real seller can agree on. A property acquired at no cost, through donation or inheritance for example, must be declared—and at the fair market value.

Assets that are movable such as cash, vehicles and jewelry comprise personal and other property and once again public officials must indicate the year these were acquired and the cost in acquiring them.

Loans, mortgages and other obligations that government officials have form liabilities which also must be registered. These include personal loans, bank loans, loans from government institutions such as the Government Service Insurance System, insurance payments, even unpaid rent. The nature of the liability and the amount have to be included.

Besides the name of the business they are connected with or have a stake in—as proprietor, investor, promoter, partner, shareholder, officer, managing director, executive, creditor, lawyer, legal consultant or adviser, financial or business consultant, accountant or auditor—officials ought to report the business address, the nature of the business, and the date the shares were acquired or the connection made. The information is useful to help guard against public officials having financial or material interest in transactions requiring approval of their office. The law requires those caught in conflict-of-interest situations to resign from the business enterprise or divest themselves of their shareholdings or interest.

All relatives within the fourth degree of consanguinity and affinity, which means blood relatives as well the spouse’s including bilas, inso and balae, must be declared. The names, positions, relationships and office addresses of relatives are required information.

In February 2008, then Civil Service Commission revised the SALN form after it observed that the form in use for nearly two decades was difficult to accomplish and that government officials and employees were merely repeating the same entries year in and year out.

The revised SALN now consists of two forms: the Baseline Declaration (BD) and the Annual Declaration (AD).

As its name suggests, the BD is a comprehensive listing of all of the government official’s assets, liabilities and net worth. New hires or appointees must submit it within 30 days of assuming office. Incumbent officials were given until April 30, 2008 to fill up the form, covering information up to Dec. 31, 2007.

Filed yearly on or before April 30, the AD is not as detailed and merely updates the BD. Government officials and employees declare in the AD whether they bought or sold assets, created or ended business and financial connections, and reduced or paid for liabilities.

Anticorruption advocates know that the SALN is one of the basic documents in conducting lifestyle checks: The annual disclosure is used either as a starting point or is the missing piece in a jigsaw puzzle.

Also known as “net asset evaluation,” lifestyle checks have been conducted since the 1920s in the U.S., taking into account the fact that extravagant lifestyle is the most obvious indicator of corruption. The process is pretty straightforward: Compare how much public officials spend to how much they declare as income. Because income tax declarations of individuals, including government officials and employees, are nonpublic or private documents, this makes the SALN even more valuable.

A number of news organizations diligently try and gather the SALN of public officials, including those in Congress, but limit themselves to reporting who are the richest and poorest. As a result, they miss out on a range of good stories.

Failure to file the SALN is already an offense and makes a good story. How officials omit required details, intentionally or not, or supply erroneous entries is yet another. Even more challenging is proving nonreporting or underreporting of assets. And perhaps the biggest challenge: Proving that wealth was acquired through illicit means.

Weeks after the arrest of the Ampatuans for their alleged involvement in the November 23 massacre of about 60 civilians, half of them journalists, in the country’s worst pre-election violence, MindaNews editor-in-chief Carolyn Arguillas reported the declared net worth of members of this powerful clan: the patriarch Andal Sr., governor of Maguindanao, the country’s second poorest province, and his sons Zaldy, governor of the Autonomous Region in Muslim Mindanao, the country’s poorest region; Andal Jr., mayor of Datu Unsay town in Maguindanao and principal suspect in the November carnage; and Sajid, vice governor of Maguindanao.

But as Arguillas points out: “As with all politicians, however, whether or not all their assets, liabilities and net worth are listed –it all needs to be verified. As with most politicians, there are no specifics as to the location or size of the land they claim to own.”

Many of the mansions and vehicles that law enforcers would later come upon during their raids in the Maguindanao capital of Sharik Aguak and Davao City were either not properly declared or were not reported at all in the Ampatuans’ SALN.

It is also common for public officials to just declare the acquisition cost instead of the assessed and fair market values of their real property—even those that they have had for ages—in effect understating their total assets and net worth.

Veteran government investigators also consider the following as “red flags” that could indicate assets and other ill-gotten wealth being amassed and concealed: reporting having a wealthy spouse, transferring property to spouses or listing them under corporations, taking out “loans” from relatives for which there are no paper trails for which loans from banks have, owning unprofitable businesses with substantial assets and racking up increasing liabilities that cannot possibly be paid for on a public official’s salary. These are usually justifications given by those whose SALN and lifestyles are under scrutiny.

Public officials rarely file supplemental SALNs. Those who resort to supplemental filings are usually already under investigation, says former Civil Service Commission chairperson Karina Constantino-David.

RA 3019 explicitly states that public officials may try to conceal their wealth in the name of other persons. This is why it considers properties in the name of spouses and dependents, their bank deposits, “manifestly excessive expenditures” that include club or association, or “any ostentatious display of wealth” including frequent travel abroad of a non-official character that are out of proportion to legitimate income – as evidence of unexplained wealth and therefore suspect.

Former president Joseph Estrada was impeached in 2000 for, among other reasons, his untruthful asset declarations. He had failed to report companies he and his family owned, as well as failed to divest his shareholdings in his real estate company within the 60-day period given him upon his assumption to the presidency. When he did, he divested to his immediate family in violation of the law. Many pieces of real property he and his family acquired during his presidency were placed in the names of friends, lawyers or corporations, including the infamous “Boracay” mansion in Quezon City—so-called because white sand from Boracay beach was trucked to this property—which was seized and forfeited following his downfall.

More recently, Pampanga congressman and presidential Juan Miguel “Mikey” Arroyo’s SALN came into question after the nonprofit news organization VERA Files reported that he failed to declare in his SALN a USD 1.32 million bay front house in California that was in his wife’s name. He would later say that the property, subsequently transferred to a corporation, was bought from campaign contributions—a statement he quickly took back after his filings at the Commission on Elections showed he had no campaign donors—and wedding gifts. In the end, he said he had married a wealthy woman, his cousin Angela Montenegro, and belatedly presented a supplemental SALN supposedly filed after his marriage. Arroyo has also consistenly reported “personal loan from relatives” or “advances from relatives” as part of his liabilities since 2005, a sum that grew from PhP 27 million to P33 million in 2008.

Tracking down the assets of public officials and employees certainly entails going beyond the SALN. It means combing for land records, company filings, vehicle registration, share of stocks, schools their children attend, trips abroad—a process that becomes even more time-consuming when assets are placed in somebody else’s name. It also means finding sources knowledgeable about the transactions, including business associates, lawyers and accountants, to help investigators connect the dots. But the effort is worthwhile when one finally proves the disparity between what public officials declared in their asset statements and what other public records show they actually own.

What happens to perjury cases involving SALN misdeclarations is yet another story. The Office of the Ombudsman, then under Simeon Marcelo, slapped perjury charges against Estrada. It also moved in on former Armed Forces comptroller Maj. Gen. Carlos Garcia after one of his sons was caught in December 2003 bringing USD 100,000 into the U.S. and held by Customs authorities. Garcia allegedly failed to declare vehicles and bank deposits in his SALN from 1997 to 2000. Charges were also filed against officials of the Department of Public Works and Highways, Bureau of Customs, and Bureau of Internal Revenue.

In all these cases, graft investigators at the Ombudsman used the SALN as a tool to compare officials’ lifestyles with their declared incomes. Yet in a number of the perjury cases, including those of Estrada and Garcia, the court subsequently let them off the hook by ruling that they did not intentionally and maliciously try to hide their assets and income.

It is not only state investigators that experience setbacks in their search for the unexplained wealth of public officials. Many citizens, including journalists, run into obstacles right at outset, when they file a request for the SALN.

Public officials and employees complete three copies of the SALN form and submit them to the Human Resource Management Office or Administration Office of their agency. The forms are then transmitted to specific offices that keep custody of the asset declarations.

The statements of the President, Vice President and commissioners of constitutional bodies can be accessed from the national Office of the Ombudsman. The sectoral offices of the Ombudsman in Luzon, Visayas and Mindanao keep records of appointed and elected local officials.

The declarations of senators and representatives are kept at the Senate and House of Representatives. Those of Cabinet secretaries, undersecretaries and assistant secretaries, as well as those of Armed Forces officers with the rank of colonel or naval captain, can be accessed from the Records Office of the Office of the President.

The records of justices and judges can be found at the Clerk of Court or at the Office of the Court Administrator. The Civil Service Commission keeps the records of all other officials and employees.

Filipinos enjoy the constitutional guarantee to right to information on matters of public concern, and that includes asset disclosures of government officials. RA 6713 and its implementing rules and regulations adopt a policy of full disclosure of transactions involving the public interest. As an offshoot, the law mandates that the statements should be made available for inspection at reasonable hours and for copying or reproduction after 10 working days from the time they are filed. All a requesting party has to do is pay a reasonable fee to cover the cost of reproduction and mailing of the SALN, as well as the certification. The law requires that the document should be available to the public for 10 years after its receipt, after which it may be destroyed unless needed in an ongoing investigation.

In agencies like the House of Representatives and the Senate, the release of the SALN to requesting parties has become routine. Not so in the Supreme Court. Although the high tribunal has consistently upheld the right to information, it has ironically blocked free access to the SALN of justices and justices by way of an en banc resolution it handed down in 1992 and reiterated in 2006.

Besides the CSC, the Office of the Ombudsman is the biggest repository of the annual declarations. There is no guarantee, though, that it would release the SALN to a requesting party even if it has a copy on file. The waiting time also varies. It took Arguillas, for example, six weeks to get the SALN of the Ampatuans and other Mindanao officials even when the records were all available at the Ombudsman’s sectoral office in Davao City where MindaNews is based. She made it a point to track her request and, she says, “it seemed so slow.”

A June 2009 memo from Ombudsman Merceditas Gutierrez has further restricted public access to the SALN, imposing guidelines supposedly to put some order in the procedure in securing the statements and to ensure the documents “will not be used for illegal or immoral purposes.”

The Ombudsman requires a person seeking a copy of a SALN to prove that the reason for the request is “legitimate,” which it defines as to be used for school or study, to be disseminated to the public by the news media, or upon a court subpoena signed by a judge in connection with a case. A request may be denied if the purpose is “contrary to moral or public policy,” if it is commercial in nature, if the requester appears to be fictitious and if the reason for the request does not fall under the legitimate reasons listed.

All requests are to be filed with the Public Assistance Bureau, and requesters must accomplish a form that will bear the full name, signature, business or residential address and telephone number. This form shall be subscribed and sworn to before a prosecutor in the Office of the Ombudsman.

In addition, one must present two government-issued IDs, or in the case of students a Student ID. This is to ensure that the “requesting party is not fictitious.” This provision is also meant to protect the right to privacy of public officials and employees.

The memo states that the written request will form part of the public record and be made available to government officials or employees who may resort to legal remedies if they feel their right to privacy has been encroached upon or if the requesting party had violated the Ombudsman’s guidelines.

Several civil society groups have taken issue with other provisions of the Ombudsman’s directive that prevent citizens from conducting lifestyle checks. Under the guidelines, the private address of the owner of the SALN is blackened in the copy to be released “in all cases” supposedly to maintain his or her privacy. If the reason is for study purposes, the name of the SALN owner will, in addition, be blackened.

The memo would also rather that citizens who have “reason to believe that an official or employee's assets and properties are unreasonably disproportionate to his/her income” report this to the Ombudsman’s Field Investigation Office instead of requesting a copy the SALN and conducting his own lifestyle check. Philippine Public Transparency Reporting Project

(The author is a VERA Files trustee and writer.)

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SALN Annual Declaration Form

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