MANILA – Committee hearings on ABS-CBN resumed Monday, 01 June 2020 with more fireworks expected from Deputy Speaker Rodante Marcoleta who effectively positioned himself as the main critic against the network’s franchise renewal efforts citing massive violations by the network with the law and the constitution.
In the previous joint hearing last week of the House committee on legislative franchises and the House committee on good government and accountability, Marcoleta urged both panels to deny the franchise application of ABS-CBN.
For one, Marcoleta said, the embattled broadcast network ABS-CBN has not complied with the terms and conditions of its franchise, as well as with existing laws and the country’s Constitution.
“In fact, they will show in the succeeding hearings in the committee of legislative franchises that ABS-CBN deliberately and with impunity violated the conditions of its legislative franchise, and more so of our laws and our Constitution,” Marcoleta said.
The next committee hearing on ABS-CBN’s franchise application is set Wednesday, 03 June 2020, the final week before Congress goes on a break.
Marcoleta urges the panel to deny the 25-year franchise application of ABS-CBN as the network’s previous franchise lasted longer than the constitutionally-mandated 50-year period.
“The ABS-CBN has been using the airwaves for more than 50 years, 53 years today to be exact. Our Constitution says that Congress can grant a franchise of up to 50 years only,” he said.
“The committee on the legislative franchise should not allow itself to be used by ABS-CBN to again circumvent the Constitution and violate the categorical 50-year limitation imposed on franchises,” he added.
Lopez, American citizen
He also cited that the ABS-CBN violated the Constitution, which requires 100-percent Filipino ownership and management of mass media companies.
He said the network’s former president, Eugenio “Gabby” Lopez III, was an American citizen when he took the helm of the company in 1986. It was only in 2000 that Lopez petitioned for recognition of Filipino residency.
He further argued that the network is foreign-owned because of its Philippine Depositary Receipts (PDR), which virtually allowed foreign holders beneficial ownership and potential voting rights.
Marcoleta said the network committed unfair labor practices, which consequently denied its employees the benefits required by law.
He said that of the 11,000 ABS-CBN employees, almost 8,500 are contractual workers and talents.
“ABS-CBN has not regularized its contractual workers and talents despite performing the functions of regular workers,” he said.
“Hindi po maikakaila sa publiko na napakarami ng labor cases na hinarap at haharapin pa ng ABS-CBN. Ang masaklap pa dito, ni hindi nagbibigay ang ABS-CBN ng contribution sa benefits,” he added.
Marcoleta also slammed ABS-CBN for its alleged political bias for certain candidates in the 2010 and 2016 presidential elections, contrary to the terms of its franchise and in violation of the Omnibus Election Code.
“It is also a matter of record that ABS-CBN failed to air some of President Duterte’s political advertisements during the 2016 campaign period despite receiving the payment of these political ads,” he added.
Other violations enumerated by Marcoleta include offering a pay-per-view service Kapamilya Box Office (KBO) channel (via TV Plus) through free-to-air signals, and the “tax evasion” schemes of the network.
Violated terms and conditions
“ABS-CBN violated the terms and conditions of its franchise by offering its TV Plus boxes for a one-time fee, but using the free-to-air signal authorized in the franchise granted by Congress to ABS-CBN at no cost,” he said.
“ABS-CBN also violated the terms and conditions of its franchise by engaging in tax avoidance schemes which deprived the government of the much-needed revenue,” he added.
He said that the network used its fully owned subsidiary, Big Dipper Digital Content, and Design, as a tax shield. The Big Dipper’s main customer is a foreign Hungary-registered company, which is also a fully-owned subsidiary of ABS-CBN.
“Because of this unconscionable tax avoidance scheme, ABS-CBN’s alleged effective tax rate in 2018 was at -5 percent. This means that ABS-CBN managed to avoid paying taxes in 2018,” he said.
He said the network also did not pay its rightful taxes in 2019 by entering into a compromise agreement with the Bureau of Internal Revenue, with the latter accepting the former’s settlement of around PHP152 million, equivalent to 40 percent of its assessed deficiency in income tax, value-added tax, and documentary stamp tax payments.
ABS-CBN president and CEO Carlo Katigbak denied the accusation as he said the network has not violated any laws during the same hearing adding that they are prepared to fix any issues of the company.
“It is but right for the House of Representatives to deny this time the franchise of ABS-CBN,” according to the paper read by Marcoleta.
Aside from the March 10 meeting on “ground rules,” the joint committee hearing was the first since ABS-CBN’s application for a new franchise during the present Congress.
Similar other bills seeking to renew ABS-CBN’s operating franchise are allegedly gathering dust at the House of Representatives since 2014 or until the network’s free TV and radio channels were ordered shuttered by the National Telecommunications Commission last May 5.
Tuesday’s hearing came after House leaders dropped a plan to grant a 6-month provisional franchise even as it also set off what could be a protracted process by the media network to resume regular broadcasts.
The third session on Monday (June 1) was to tackle in detail accusations, for instance, of “unfair labor practice” with most of ABS-CBN’s employees allegedly not hired as regulars.
Marcoleta raised ABS-CBN’s alleged tax avoidance, claiming the network did not pay taxes in 2018, and the right amount the following year.
The anti-ABS-CBN position paper also echoed Solicitor General Jose Calida’s allegation that the company violated constitutional foreign ownership restrictions “through an intricate web of corporate layering.”
In particular, this is the alleged issuance by ABS-CBN of Philippine Depositary Receipts (PDRs), which through ABS-CBN Holdings Inc. gave foreign holders “beneficial ownership and potential voting rights,” Marcoleta alleged.
Marcoleta also explained Eugenio “Gabby” Lopez III, ABS-CBN Corp’s chairman emeritus, was an American citizen during the time he headed the company, a supposed violation of the constitutional provision against foreign ownership in mass media he said.
Marcoleta also echoed a complaint by a group of cable operators (Federation of International Cable TV and Telecommunications Association of the Philippines) that ABS-CBN violated the terms of its old franchise by introducing a pay-per-view feature in its TV Plus box, and having 6 channels under 1 franchise.
To top it all, Marcoleta also confronted the network for its alleged “bias” in favor of Benigno Aquino III in 2010 presidential elections, as well as Sen. Grace Poe and then Rep. Leni Robredo, who ran separately for president and vice president in 2016.
The lawmaker recalled an anti-Rodrigo Duterte political ad aired by ABS-CBN during the 2016 campaign, and a Duterte campaign ad that was not aired by ABS-CBN regional stations. Since 2016, President Duterte has complained about these two incidents involving political ads.
“You are a broadcasting company, not a political kingmaker. Either you play ball or you play fair,” Marcoleta said.
ABS-CBN president Carlo Katigbak earlier explained that all of Duterte’s national ads were aired in 2016, except for around P7 million worth of local ads, which could no longer be accommodated close to the elections.
The company refunded P4 million but Duterte refused to accept the remaining P2.6 million, which was delayed.
Who is Marcoleta?
It may be recalled that SAGIP Representative Rodante Marcoleta initiated a move by a majority of the House of Representatives to vote and give the Commission on Human Rights a measly P1,000 budget in 2018.
During the interpellation, Marcoleta slammed the CHR for deferring “more to the United Nations special rapporteur,” further questioning why it didn’t protect the human rights of President Rodrigo Duterte when he was criticized for his bloody war on drugs.
The legislator who represents the urban poor, at least according to his party mission, didn’t stop there. Among other things, he claimed that the CHR has not been validly created – even if the Constitution provides for it.
But who really is Marcoleta?
Marcoleta represents 1-SAGIP and is a member of PDP-Laban. He was elected SAGIP representative in 2016. SAGIP, according to its website, envisions a pro-poor Philippines.
He is no stranger to legislative work. Prior to SAGIP, Marcoleta used to represent the Alagad party list. He held the position from 2004 to 2007 and 2009 until 2013.
Marcoleta wasn’t always part of the majority, however. In October 2016, he joined more than 250 lawmakers in the supermajority allied with Duterte.
He used to be part of the “Legitimate 8” or the House minority bloc which was formed to protest Quezon 3rd District Representative Danilo Suarez’s controversial win as House Minority Leader.
The members regarded themselves as the “true” fiscalizers in the House of Representatives.
But Marcoleta voted against the return of the death penalty, similar to the stand of the CHR.
He also voted in favor of free tuition in college and the highly controversial Reproductive Health bill. He is also one of the co-authors of the free basic medical services for Filipinos and the Magna Carta for the poor, among others.