Coup plotters and conflicts of interest

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Hiding under the skirt of senatorial immunity, Antonio Trillanes has accused the Solicitor General of violating the Constitution and Republic Act (RA) 6713, the “Code of Conduct and Ethical Standards for Public Officials and Employees” on provisions covering conflicts of interest.

Trillanes said, “Base sa ating (Based on our) 1987 Constitution, they shall not directly or indirectly practice any other profession, participate in any business or be financially interested in any contract with or any franchise or special privilege granted by the government.”

Article VII, Section 13 discusses focus and limitations on engagements of public officials. It applies the direct or indirect limitation to the practice of other professions and participation in any business. Should it apply these limitations to the state of being “interested” in any contract then note that being financially interested is vastly different from practicing a profession or participating in a business.

Attacking the Solicitor General, Trillanes targeted the latter’s equity in a company. But analyze Article VII’s legal construction. The Constitution prohibits being financially interested “in any contract” with a government agency. The prohibition is applied on “contracts” not equity in corporations. Such constitutional wisdom becomes clearer as we proceed.

Conflicts are principally addressed, not through the Constitution which deals with the requisite singularity of focus (the final interpretation of which is best left to the Supreme Court), but in RA 6713.

RA 6713 defines conflicts of interest as “when a public official or employee is a member of a board, an officer or a substantial stockholder of a private corporation or owner or has a substantial interest in a business, and the interest of such corporation or business or his rights or duties therein, may be opposed to or affected by the faithful performance of official duty.”

In Section 7, conflicted “financial interest” means having “any financial or material interest in any transaction requiring the approval of their office.”

Since separate and distinct government agencies do not require Office of Solicitor General (OSG) approvals for any transaction, then upon contracting the OSG cannot be in conflict with any of their actions in securing contracts from private corporations.

The law also defines “substantial shareholder” as “any person who owns, directly or indirectly, shares of stock sufficient to elect a director of a corporation.”

The sufficiency to elect directors is critical. It recognizes the difference between ownership and the power to control the corporation. Jurisprudence shows control is the more potent element checked by conflicts of interest provisions. After all minority controlling interests are not uncommon in business.

Moreover, note the verbiage, “the interest of such corporation” may be “opposed to or affected by the faithful performance of official duty.”

Official duties are those performed under the OSG. Conflicts arise only when those align with the interests of the corporation. The OSG’s official duties detailed under Book 4, Title III, Chapter 12 of the 1987 Administrative Code show no such alignments.

Trillanes claims the OSG is mandated to review all government contracts. The Administrative Code enumerates the OSG’s mandate. Contract review is not among the 15 listed.

Trillanes also rants that the Solicitor General still held equity in the corporation. Because RA 6713, Section 9 provides a choice between resigning or divesting, the Solicitor General chose the former and thus remains compliant.

Finally, Trillanes accused that, “Talagang pinakyaw niya lahat ng kontrata ng security agencies sa mga ahensya ng gobyerno mula noong naka-puwesto sila, (He gobbled-up all security contracts of government agencies from the start).”

Most of the contracts were negotiated prior to the Solicitor General’s appointment. Those that weren’t required no OSG approval.

Trillanes should really do his homework. Or at least seek professional help.

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