CHAPTER 2: THE "MIDNIGHT CABINET"

The company President Erap Estrada keeps. Cartoon by PCIJ.
 

A

t noon on June 30, 1998, Erap took his oath as the 13^th President of the Republic of the Philippines in what promised to be one of the most auspicious of times.

It was, after all, the country’s centennial year. On June 12, 1898, Emilio Aguinaldo declared Independence from the colonial government of the United States of America which, after a mock battle against the Spanish navy at the Manila Bay in May 1898, had just grabbed imperial control over the Philippine Islands from Spain.

The nation was in a celebration mood. After two presidential elections—in a span of 12 years—where the results have been close and contentious, the nation this time witnessed the rise of a leader with an overwhelming mandate. Observers noted that the results, for a change, augured well for promoting unity among the citizenries.

When, in his inaugural speech, Erap boomed that in his administration there will be no “kumare, kumpare, kaibigan (friends), kamag-anak (relatives),” his audience erupted in approval.

The team he brought with him to office elicited mix reviews. The Philippine Center of Investigative Journalism (PCIJ) reported that “Erap, after five months in office, has appointed over 60 people to such [dubious] positions, so many in fact that the Office of the President has trouble keeping track of them, so many it has become laughable, like invitations to a wedding party that got out of hand. The list of presidential consultants, assistants and advisers includes some worthwhile individuals whose talents can be put to good use, but also a lot of other hangers-on from business, politics, the movies and, Malacañang insiders swear, God knows where else.”

One of those who might be considered as management talents was Prod Laquian, whom Erap appointed as Chief of Staff mid-way into his short-lived term, supposedly to bring order to what had been reported as messy (read: turf conflicts) day-to-day conduct of business inside the Palace.

Then a Professor Emeritus at the University of British Columbia, Canada, Prod brought to his Malacañang post sterling academic and work credentials. He had a Ph.D. from the Massachusetts Institute of Technology and did some consultancy work at the United Nations and the International Development Research Center, among other international organizations. 

Although born and raised in the Philippines, Prod had relocated to Canada, eventually acquired a Canadian citizenship, and was in the process of re-acquiring Philippine citizenship when he forced himself to quit. He did that by publicly shaming his boss.

Talking to members of the Manila Overseas Club in March 2000, Prod was reported to have commented that, among other things, “Erap spent long hours drinking with shady characters.”

Laquian added: “There have been reports...that most of the major decisions made by the president were made at the ungodly hour of 4 o'clock in the morning after he had had some sessions with his friends with monosyllabic surnames,” Kyodo News said.

Although he explained later that his verbal ejaculations were nothing more than products of light banter, Prod nevertheless knew that his Palace foray was over. He served Erap for 42 days, probably even less.

Erap bristled. Hot Manila posted: “In the aftermath of Laquian's departure, a furious Estrada went on to summon reporters to a very unpresidential press conference where he proceeded to slander his undearly departed chief of staff. Spouting the language of a palengkera, Estrada said Laquian was a whoreson (a poor translation of one of Pilipino's strongest curse words) who was a henpecked husband (ander di saya) and was mentally malfunctioning (sira ulo—another choice Filipino imprecation).”

That Erap presided over a “Midnight Cabinet” was a matter of public knowledge. “I wasn’t saying anything that everybody didn’t know,” Laquian commented on what he said.   

In his International Herald Tribune report on November 3, 2000, Thomas Fuller described, quoting former Erap aides, how Malacañang looked like during those times:

“It is the story of Mr. Estrada's disdain for the day-to-day tasks of running a government: his refusal to hold regular cabinet meetings and his unwillingness to read government reports, newspapers or magazines. During his first two years in office, the president missed appointments and skipped speeches. After hours, when much of the business of government was conducted, family members, corporate figures and friends congregated at the presidential palace, blurring the line between private socializing and public duties. Mr. Estrada’s critical shortcoming, former colleagues say, is his inability to reconcile his presidential obligations with his personal excesses: his late-night drinking sessions and gambling. ‘There are basic flaws in him that would have been fine if he were not president,’ said Karina David, who served 15 months in the Estrada administration as the housing secretary.”

Fuller, once more with a gnarly broadside:

“As Mr. Estrada's administration wore on, the president's friends, family and business associates joined discussions. ‘His classmates, his relatives, his children were there all over the place,’ Ms. David said. Another former member of the administration added: ‘The problem wasn’t that the president had people over for drinks. The problem was that there were unsavory characters around who wanted to cut deals.’ There was little that could distract the president during these drinking and eating sessions, based on Mr. Singson’s recollection of one such incident. Mr. Singson, whose allegations of gambling payoffs led to the impeachment proceedings, recounted one particular drinking session when the foreign secretary, Domingo Siazon, entered the presidential mansion to request that Mr.  Estrada attend a scheduled speech. Mr. Siazon informed the president that there would be many members of the diplomatic corps in attendance and that they were all expecting him to attend. ‘No,’ Mr. Estrada replied in his characteristic gruff manner. ‘Zamora will read my speech,’ he said, referring to the executive secretary. Mr. Siazon left the room but returned several minutes later. ‘If you could reconsider, Mr. President, there are foreign dignitaries waiting,’ Mr. Singson recalled the foreign secretary as saying. The president refused a second time. Mr. Singson said the president gave no reason for not wanting to attend the function. ‘'We were just drinking and eating,’ Mr. Singson said.”

The PCIJ looked from another angle with an article titled “The Nocturnal President.” Written by Ellen Tordisillas, the piece opens with these paragraphs:

“The meetings take place at night and last until dawn. There, views are traded, strategies prepared, and deals struck. By the time the men at the table stand up and stagger out the door, much has been accomplished that may affect the way things are done in this country. President Joseph Estrada, of course, presides over these meetings. But more often than not, those gathered around him during these caucuses are far from being Cabinet secretaries. Rather, they are his personal friends, some of them buddies of long-standing, such as Ilocos Sur Rep. Luis “Chavit” Singson and Caloocan congressman Luis “Baby” Asistio, with whom, it is said, the president shares a fondness for the pleasures of the good life—gambling, alcohol and women included. Singson and Asistio, say Malacañang insiders, are among the president’s most constant late-night companions.

“There are other persistent hangers-on, wheeler-dealers like online bingo operator Dante Tan whose BW Resources Corp. has been accused of insider trading and manipulation of the stock market. Certainly, it would seem that ethnic Chinese businessmen are keenly aware that with Estrada, out of sight is out of mind, and are among those that a Palace insider says are fond of ‘slipping in when dark sets in.’

“Ramon Lee, a close associate of Dante Tan and an Estrada election contributor, drops in occasionally, say Malacañang sources. So does Lucio Co, the goateed owner of PureGold duty free stores who was recently accused of being a big-time smuggler. Another fixture of the late-night tet’-a-tet’s is Jaime Dichaves, a fiberglass manufacturer and real estate developer who was recently involved in the corporate coup at Belle Corporation, operator of the controversial jai-alai games. Dichaves, who has no official post except as head of the Malacañang golf club, is another of the President’s most trusted businessmen-friends.

“Also sighted keeping Estrada company at night are presidential adviser on overseas Filipinos William Gatchalian, who has shifted from plastics to airlines and the tourism business, and Eusebio Tanco, who recently acquired the Tiwi-Makiling-Banahaw geothermal power plant from the National Power Corporation. Tanco is the brother-in-law of one of the country’s biggest coconut millers, Douglas Lu Yin.

“(But the most trusted—and most reclusive—of the president’s friends is multimillionaire Jacinto ‘Jack’ Ng, owner of Republic Biscuit Corp. or Rebisco and of some hefty real estate. Ng, however, reportedly does not take too well to the night life and is rarely seen in the late-evening socials the president enjoys.)

“Whatever their past with the president and no matter where they come from, these men offer the actor-turned-President a respite from the heavy demands of being the head of state. This they do by keeping him company while he unwinds over drinks; they even sing with him on the karaoke, as well as play mahjong, which could stretch these boys ‘nights out way past their usual quitting time if the President is losing. For the country’s chief executive apparently does not take defeat at the gaming table very well.

“But he takes well to recommendations and pieces of advice offered by his friends during these midnight sessions, say some government officials. Indeed, they even say a number of presidential decisions with wide-ranging implications have been reached not during the Cabinet meetings that are usually held once a month, but during the informal discussions that take place while the President relaxes with his pals, who are not exactly without business interests to advance and defend.

“That, say the officials, has made for policies and appointments done on the fly, actions that come not from careful thinking and consultations with experts, but from what appear to be off-the-top-of-the-head remarks of private individuals, who may or may not have been inebriated when they made their suggestions. For example, the use of pension funds of the Government Service Insurance System and the Social Security System for corporate takeovers was the bright idea broached on one of those late evenings with presidential friend Mark Jimenez, a shadowy businessman wanted for illegal campaign contributions in the U.S. Jimenez is reportedly a mean singer at the karaoke and is an occasional ‘good time’ associate of Estrada.

“Then again, perhaps this could only be expected of a presidency in which decision-making is seemingly dependent on the interplay not so much of ideas but of the vested interests of individuals who align themselves in loose blocs. The ‘Midnight Cabinet’ is just one among the many groups that compete for the President’s attention, groups that have their respective trump cards to play whenever they feel someone else is gaining precious ground, or simply whenever they feel that the timing is right. There are no rules and no guarantees in this game, after all, and a bloc cannot hope to keep bending the President’s ear for too long.”

In another PCIJ article, published in late 2000, titled “The Company He Keeps,” author Yvonne T. Chua describes Erap’s midnight friends (mostly ethnic Chinese), as follows:

“Charlie ‘Atong’ Ang gained notoriety when he was caught on videotape gambling with Estrada, then vice president, at the Casino Filipino at the Heritage Hotel. The tape was released by former movie and television board chair Manuel Morato at the peak of the 1998 presidential campaign.

“Estrada was said to have distanced himself from the 43-year-old Ang when he was handed an unflattering dossier that detailed Ang's supposed involvement in criminal activities. But somehow, Ang managed to worm his way back into the President's good graces.

“Last year, Ang became chief executive officer of Fontana Resort and Country Club, a membership club that boasts of villas, a water park and a nine-hole golf course at Clark, Pampanga. According to Singson, Estrada is one of the owners of Fontana, as well as the now-defunct Fontainbleau, which Fontana bought out.

“Ang is also consultant of the Philippine Amusement and Gaming Corp. (Pagcor) on jai alai operations. His company, Power Management and Consultancy, is paid P500,000 a day, excluding bonuses.

“Ang told the Senate in October that another of his companies, Prominent Management and Marketing, is a ‘consultant’ of Pagcor on Bingo 2-Ball, a legalized form of jueteng. It was Ang's decision to award the Bingo 2-Ball franchise in Ilocos Sur to Singson's cousin and long-time foe, former Rep. Eric Singson, that had triggered the governor's rampage, which quickly exploded into the jueteng controversy. 

“Lucio Lao Co topped the list of 14 suspected major smugglers ordered investigated in 1999 by no less than Estrada himself.

“Co's Puregold Duty Free Shop had come under fire when it bagged the contracts to run the government's duty-free shops in Davao, Cebu, Laoag and Clark without a public bidding. The businessman was subsequently accused of smuggling fake Maling pork luncheon meat, Hope and Champion cigarettes, and Fundador brandy.

“The goateed Co also became known as the "chicken king" for shiploads of chicken that he supposedly imported from the United States duty-free then diverted to Metro Manila retail outlets.

“A resident of Paco, Manila, Co's family made a fortune from importing cheap glassware from Indonesia. Co himself controls RN Development Corp., which owns the majority shares of Fontana. He is also a director of exploration firm Alcorn Petroleum & Minerals Corp. (APMC).

“Co is associated with FVC Realty and Development Corp., which holds the title to Laarni Enriquez's residence at 771 Harvard St. in Wack-Wack, Mandaluyong. The property was formerly under the name of Jacinto Ng, another Estrada friend.

“Co once used Luneta as a helipad, to the chagrin of friends and park goers. He is also known for being formerly close to socialite Rosemarie 'Baby' Arenas. 

“William Gatchalian, he of the Erap-like pompadour and moustache, is at present in trouble after business tycoon Lucio Tan, to whom he turned over control of Air Philippines Corp., discovered fictitious multimillion-peso purchases by the airline company.

“In February, he also closed Philippine International Airways Inc. (PhilAir), a firm he formed when he lost majority control of Air Philippines and is in the process of disposing of the firm's 15 planes.

“During the Senate hearings, Singson described Gatchalian as among the President’s gambling buddies, and among the most frequent losers ‘because he didn't really know how to play.’ Despite his recent streak of bad luck, Gatchalian is said to remain a frequent Malacañang visitor.

“Named presidential adviser on overseas Filipinos workers, Gatchalian built a fortune making plastic products, earning him the title ‘Plastics King.’ His plastics firm Wellex has expanded so rapidly—and especially since Estrada became president—that opposition congressman and former investment banker Oscar Moreno has identified it among the companies that have made a killing ‘largely because of their special ties with the President.’

“Since 1998, Gatchalian has forayed into leisure-oriented businesses, buying up Waterfront Philippines Inc., which operates the Waterfront Mactan Casino Hotel and Waterfront Cebu City Hotel; Fort Ilocandia Hotel in Ilocos Norte; and Davao Insular Hotel (which ceased operations in November).

“He also has shares in Forum Pacific Inc., Philippine Estates Corp., Petrochemicals Corp. of Asia-Pacific, Plastic City Industrial Corp., Wellex Industrial Corp., Rexlon Industrial Corp., Kennex Corp., Pacific Plastic Corp., MPC Plastic Corp., International Polymer Corp., Recovery Development Corp., Pacific Rehouse Corp., Orient Pacific Corp., Philfoods Asia Inc., Sun-Star Manila Publishing, Forum Exploration Inc., Cophil Drilling, and Wellex Petroleum Corp.

“Once considered a fake Filipino, Gatchalian fought his controversial citizenship case before the courts for nearly 20 years. In the eighties, the Bureau of Internal Revenue accused his companies of failing to pay P87.2 million income, sale and compensating taxes. In addition, he allegedly owed Meralco P49.8 million arising from 88 tampering cases since 1981. 

“Lucio Tan has been friends with the President since Estrada's days as San Juan mayor. Although the tobacco magnate did not appear on the official list of Estrada’s campaign contributors in the 1998 elections, his brother, Harry, did. Nevertheless, Lucio Tan is said to have forked over P1.5 billion to Estrada's campaign kitty.

“In return, Estrada worked for Tan's election as president of the Federation of Filipino Chinese Chambers of Commerce and Industry, a position Tan had coveted but had eluded him for 20 years.

“Born in 1934 to a struggling immigrant family in Naga, Tan worked his way through college, set up a business dealing with scrap in the late 1950s, and also found employment in a cigarette factory, where he was assigned to buy leaf tobacco in the Ilocos provinces. This was where Tan probably encountered the young congressman Ferdinand Marcos, says one of Tan's long-time associates.

“He formed Fortune Tobacco in the 1970s, which prospered with the generous incentives he obtained from Marcos’s martial-law government. He has since branched out to other fields—banking, beer manufacturing, agriculture, realty, chemicals, travel, liquor, textiles, and hotel—and is considered the country's wealthiest man. Recently, he acquired Philippine National Bank and three public listed companies: Baguio Gold Holdings Corp., MacroAsia Corp., and Asian Pacific Equity Corp. (now renamed Tanduay Inc.).

“Tan was believed to have been one of Marcos's fronts. Marcos was believed to own 60 percent of Shareholdings Inc., which owns shares of Fortune Tobacco, Asia Brewery, Allied Bank and Foremost Farms.

“In 1992, Tan acquired the beleaguered Philippine Airlines. Estrada threw his support behind PAL in its dispute with two Taiwan airlines that resulted in the cancellation of Manila’s air agreement with Taipei. For keeping PAL afloat, Tan was hailed a ‘hero’ by the President, to the consternation of airline workers who had filed labor cases against the firm.

“Estrada has also honored Tan as the among country's biggest taxpayers, despite a P27-billion tax evasion case against Tan's Fortune Tobacco Firm. Last September, the case was dismissed by the Court of Appeals after ruling that the government had filed the complaint 11 days late.

“But tough times may be ahead for Tan. In October, the government was compelled to resume the air agreement with Taiwan, on Taipei’s terms, after the Taiwanese government halted the hiring of Filipino workers. A few weeks later, the Estrada government announced it would appeal to the Supreme Court to allow it to file the tax evasion case against the kapitan.

“Aides close to Tan say that Estrada broke the news about the government's decision to pursue the tax evasion case to the business tycoon himself. But Tan, they say, seems hardly perturbed. He is said to have told associates that he has survived three presidencies—two of them extremely hostile to him and his business—losing a lifeline to Malacañang would not exactly be a new experience.

“Dante Tan hails from the same town as Estrada does: He is a long-time resident of A. Lake St. in San Juan. Tan comes from a wealthy family and comes into his inheritance, placed at about P20 million, in the late 1960s when he was barely out of his teens. His buddies included George Go of Equitable Bank.

“Friends say he was a gambler even in his youth and was a frequent habitué at mah-jong joints in Ermita.

“Tan became a small-time distributor of auto supplies parts, selling the items mostly to auto supplies stores on Banawe St., Quezon City. In 1992, with financial backing of friends, he formed Right Track Corp., which became the exclusive distributor of Gajah Tunggal radial tires from Malaysia. In the years to follow, he formed First Megatrack Corp. and Rightrack Insurance Agency Inc.

“Right Track Corp. is now under investigation for using tax credit certificates of textile firms to skirt the payment of customs duties of importation of tires worth $3.5 million.

“Tan is also being investigated for insider trading and manipulating the price of BW Resources to surge by more than 4,000 percent to its peak in October 1999. Tan and his partners formed BW Resources Corp. in 1998. The firm won the online bingo franchise from PAGCOR, supposedly upon the intercession of President Estrada, who was later accused by former Securities and Exchange Commission (SEC) chief Perfecto Yasay of unduly intervening in the investigation of BW.

“Tan loves to tell friends that he was one of the first Chinese Filipinos to have bet on Estrada's presidential bid and had been delivering funds long before May 1998. He was listed as a contributor to Estrada's presidential campaign. 

“Jacinto Ng Sr. is said to be one of the people closest to Estrada, although he is not a member of the Midnight Cabinet. Just like Lucio Tan, Ng's friendship with the President dates to when Estrada was still mayor of San Juan. But unlike the selectively shy kapitan, Ng was officially listed as one of Estrada's campaign contributors.

“Ng has interests in Asia United Bank, iVantage Corp., Belle Resources Corp., Republic Biscuit Co., Stateline Snack Food Corp., Nutritive Snack Food Corp., Extraordinary Development Corp., Manila Bay Development Corp., Far East Timberland and Plywood Corp., Suncrest Food Corp., and Ciudad Nuevo, among others.

“But more interesting is the fact that he seems to be so trusted by Estrada that he has connections to at least three of the President's households. For instance, Ng has stood as ninong at the wedding of Jinggoy Estrada, the President and First Lady's eldest, and at the baptismal of Jacob Ejercito, the President's son by Laarni Enriquez.

“Ng is also a business partner of JV Ejercito at Foremost Credit Resources Inc.

“In 1993, Ng bought the property at 771 Harvard St. in Wack-Wack, Mandaluyong, where Enriquez moved into in the mid-1990s. He sold the property in 1998 to Co's FVC.

“In 1998, Ng's group bought KB Space Holdings Inc. from the Roxas-Chua family, which held the title to the property at 796-798 Harvard St., also in Wack-Wack. The group then bought the adjoining property at 800 Harvard St. A luxurious mansion, supposedly intended for Enriquez, has since risen on this 5,000-square-meter lot.

“Ng also owns the property in Malabon where the eight-story Star J Mall is located. The mall is managed by Enriquez's Star-J Management Corp. 

“Luis ‘Baby’ Asistio is now a congressman representing the 2nd district of Caloocan City. But he had first gained notoriety in the 1960s when he was the leader of the ‘Big Four Gang,’ a group of young men from Caloocan and Malabon who ended up being charged with various crimes. In their heyday, the Big Four members liked brandishing guns and acting like Mafiosi and were feared on the nightclub strip in what was then Dewey (now Roxas) Boulevard.

“Asistio was among those accused in the December 1962 kidnapping-for-ransom of a certain Chua Pao. A co-accused, Benigno Urquico, was sentenced to life imprisonment in 1964, but was granted absolute pardon by Estrada in December last year without the recommendation of the Board of Pardons and Parole. Urquico applied for pardon on Asistio's advice.

“Asistio belongs to a political clan founded by his father Macario Sr., a well-known athlete and Manila policeman who became mayor of Caloocan from 1951 to 1971. The congressman's brother Macario ‘Boy’ Jr. was a three-term mayor of the city, while sister Aurora Asistio-Henson represented the 1st district of Caloocan in Congress.

“A party mate of the President and a horseracing aficionado, Asistio is said have been instrumental in getting many people appointed in government, including a special friend, Mariles Cacho Romulo, who was named to the board of the Philippine Long Distance Telephone Co. and Century Bank in California.

“He has also been identified as one of the President's friends who obtained P2 million from the President's Social Fund for two projects in Caloocan City without prior approval of the board of directors of the Philippine Charity Sweepstakes Office. Estrada wrote his approval on the margin of Asistio's letter, which was coursed through Leonora Vasquez-De Jesus, then chief of the Presidential Management Staff and a close friend of Asistio.

“Members of Asistio’s family have also been busy. Last April, Asistio’s son, Luis ‘Peting’ Asistio III, was charged with drug trafficking and direct assault when he was caught with 106.15 grams of shabu in a drug bust in Caloocan City.

“His brother Macario Asistio, meanwhile, was linked early last year to a syndicate of textbook publishers who tried to corner a P200-million contract and sent one of its agents, Mary Ann Maslog, with a P3 million bribe to the Department of Budget and Management. Laarni Enriquez was also linked to the syndicate. She and Asistio's former live-in partner, singer Djoanna Garcia, are good friends. 

“Mark Jimenez, born Mario B. Crespo, is among the President's more constant goodtime companions. A shadowy businessman who is wanted in the United States for mail fraud, conspiracy, tax evasion and illegal campaign contributions, Jimenez was hailed by Estrada as a ‘corporate genius,’ and even became a presidential adviser on Latin American affairs until the United States government sought his extradition. The Supreme Court recently paved the way for extradition proceedings against him to continue.

“Before he relocated to the United States in the 1980s, Crespo was among the accused in an estafa case filed by Globe-Mackay Cable and Radio Corp. primarily against his brokerage firm, Atrium Airfreight. Apparently, though, Jimenez made good in many of the businesses he set up abroad, before he ran afoul of the law once more. His companies overseas include Future Tech International, a computer distribution company based in Miami, MarkVision Inc., with headquarters at the British Virgin Islands, and Kalisol, S.A., a Uruguay-based marketing firm.

“Jimenez supported former Defense Secretary Renato de Villa in the 1998 polls but, through businessman Manny Zamora, befriended Estrada when the latter assumed the presidency. Jimenez, a mean karaoke singer, soon moved smoothly into Estrada’s inner circle of friends and brokered the sale of Philippine Long Distance Telephone Co. to the group of Manuel Pangilinan and PCI Bank to Equitable Bank, from which he supposedly turned a neat profit.

“Jimenez is now the publisher of the Manila Times, the paper that had earned Estrada's wrath last year for saying he was an ‘unwitting ninong" to an "irregular’ deal struck by the National Power Corporation with an Argentinian firm. The Times was then owned by the Gokongwei family, which, months later, was apparently forced to sell the paper to people believed to be fronts for Jimenez, who unsurprisingly denied such an arrangement. Today, he also writes a column for his paper thrice a week. 

“Jaime Dichaves, who claims to have known Estrada for at least 10 years, has described himself as one of the President's ‘errand boys.’ He is also known as the Chief Executive’s red wine buddy (for supplying Estrada with his $1,000-a-bottle Petrus) and advance party at Tagaytay Highlands whenever Estrada goes there (nearly every weekend).

“Along with Ng, the 44-year-old Dichaves is one of the directors of Belle Corp., the publicly listed property and gaming company that owns the members-only Tagaytay Highlands resort where Estrada is said to have at least three vacation houses.

“Dichaves is also a business partner of Laarni Enriquez in Star J Bingo and Star J Games. He is president of the homeowner’s association at Corinthian Gardens in Quezon City, where presidential daughter Jackie lives with husband Manuel ‘Beaver’ Lopez in a mansion that the President gifted them during their wedding.

“When he is not attending to the President or members of the extended Estrada family, Dichaves attends to his duties as president of Plasterglass Manufacturing Inc., which makes plasterglass sheets, cornices, moldings and center panels. He is head as well of the Philippine National Basketball Academy and vice president for Luzon of the Basketball Association of the Philippines.

“In September 1999, Dichaves was also dubbed ‘King of Subic’ for allegedly smuggling cigarettes, chicken and other products through the Subic Bay Freeport, purportedly with help from broker Johnny Sy, a partner of Dichaves in Kinetric Realty Inc. and who was ranked second on Malacañang's list of 14 suspected smugglers. He has denied the allegation.

“But that has not been the only controversy Dichaves has found himself in. Recently, Rep. Ernesto Herrera wrote to the Senate blue ribbon committee, naming Dichaves as Estrada's ‘tong collector’ at the National Telecommunication Commission. The businessman is said to have collected millions of pesos in ‘tong’ for giving his imprimatur to applications of telecommunications and television and radio broadcast companies for provisional authority and additional frequencies.

“Dichaves is also suspected of having engineered the ouster of two other Estrada supporters, Ronaldo Salonga and Benito Araneta, from the sequestered Philippine Communications Satellite Corp. and putting his nominee, Pacifico Marcelo III, on the board. Marcelo is consultant of Dialogue Communications, a telecom trading firm owned by Dichaves. 

“Jose Luis ‘Sel’ Yulo, a member of one of the country's wealthiest landowning families, was a Palace perennial during the first two years of the Estrada administration. But it was not until October last year that Yulo caused controversy after the President named him chair of the Presidential Commission on Mass Housing and presidential adviser on housing—without the courtesy of first notifying Housing and Urban Development Coordinating Council head Karina David that she was, essentially, being replaced.

“Yulo’s appointment came just two weeks after his newly incorporated firm, St. Peter Holdings Corp., bought a 7,000-square-meter property at 100 11th Street in New Manila, Quezon City from the Madrigals on behalf of Estrada. But he would not last even a month in government. He resigned after the Manila Times, which had by then been acquired by Mark Jimenez, reported that he was facing lawsuits for issuing bouncing checks and not paying credit card bills.

“Known as his family’s ‘black sheep,’ Yulo was virtually cut off from his father's will (he inherited only some of his father's personal jewelry) and is suing his mother who has been named administrator of the estate. Although he describes himself as a real estate developer, he does not appear to have established any track record in the business.

“What the bearded, avuncular real estate developer became known for within the Estrada circle at least, was his good singing voice. He was a must in Malacañang parties, where he was jokingly referred to as ‘Pavarotti.’”

It was hardly surprising then that Nene Pimentel who, after surviving Martial Law as an outcast would probably not mind being a masochist, did say something about how Erap made it tedious for him to get through the gates of Malacañang when Atong Ang and his kind had that kind of access to the same hollowed grounds. On the one hand, Erap tried to brand his administration as one that did not discriminate; on the other hand, he favored friends who favored him.

Aside from alcohol and mahjong, Erap and his midnight friends appeared to have a common thread in gambling (both legal and illegal), company take-overs (forced or not), and smuggling.

As president, one of Erap’s first acts was an attempt to gain control of Mimosa Regency Casino at the Clark Special Economic Zone, located at what used to be—until 1992—the Clark Air Base of the United States. (The Mimosa, owned by Speedy Gonzalez, the Tourism Secretary during the Ramos administration, had reportedly closed shop in December 1998 due to rental issues with the Clark Development Corporation [CDC]). It was part of a bigger design to position Clark as the Las Vegas of Asia or something, where patrons would flow in directly via the Clark International Airport. 

In a 2000 PCIJ report, author Maritess Vitug wrote:

“In an affidavit, Gonzalez named the presidential cronies who approached him with various offers: fugitive Mark Jimenez, Ang, CDC board member Sunday Pineda, owner of Best World Gaming and Entertainment Corp. Dante Tan, Jaime Dichaves, Bank of Commerce president Raul de Mesa, and presidential adviser Robert Aventajado.

“Two common strands in most of these offers were: the desire for majority ownership of the company; and the mention of President Estrada as co-owner and beneficiary.

·        Jimenez wanted 40 percent of MLRC ‘for free, asked for voting rights, and wanted to install his own nominee as chairman of the board.’

·        Ang proposed getting 80-percent share of casino revenues to be ‘divided among special interest groups, including the President.’ 

·        Tan wanted 40-percent equity for his company and 40 percent for a foreign investor which he would choose. ‘Tan made clear that whatever percentage will go to his group, half of it will go to President Estrada,’ Gonzales states in his affidavit.”

The same PCIJ report described Erap’s eye for a gambling joint at Clark.

“Singson says that Estrada instructed him to set up a casino here, using funds obtained from jueteng collections. ‘Kung hindi natin makuha ang Mimosa, magtayo ng sarili (If we can't get Mimosa, let's build our own),’ Estrada reportedly told his friend, the governor. ‘Masyadong magulo ang Mimosa (Mimosa is too messy).’”

The Vitug report continued:

“When that failed, the President ordered his associates to build the Fontainbleau Casino in Clark, said Ilocos Sur Governor Luis ‘Chavit’ Singson, a charge corroborated by testimonies in the impeachment trial that show the funneling of jueteng funds into Fontainbleau.

“But when Fontainbleau shut down because of the rivalry among the President's cronies, preparations were made for the takeover of the Fontana resort complex from Chinese-Filipino businessman Robin Tan and the establishment of a casino there with Estrada's blessings.

“The same pattern of corporate layering and formation of shell companies that Estrada's friends used to purchase real estate was evident in the attempts to acquire a casino in Clark for the President.

“In fact, the same law firm—the De Borja Medialdea Bello Guevarra & Gerodias law partnership—and the same lawyer, presidential adviser on political affairs Edward Serapio, a former partner of the firm, that formed the shell corporations for President Estrada's mansions were also those that set up the companies that would take over the Fontana Casino.

“Indeed, the same crony, businessman Lucio Co, whose company owns the house in which presidential mistress Laarni Enriquez currently resides, appears on paper as the main owner of Fontana.

“The rise and fall of Fontainbleau, said to be owned by Estrada, and the emergence of Fontana Casino, in which the President reportedly also has a stake, shows how business deals are brokered on Estrada's behalf and how rivalries among cronies determine the final configuration of these deals. 

“In October 1999, Serapio, then presidential assistant for political affairs, asked senior and junior associates in his former law firm to incorporate Alexie Holdings and Pio Holdings, admitted Pablo de Borja, a founding partner of the firm.

“Earlier, in July and August 1999, the law firm had formed six other shelf companies on Serapio’s request. Two of these companies would later be used to purchase real estate for the President. One of them, St. Peter Holdings, was the corporate vehicle used for the acquisition of the now-famous "Boracay" mansion in New Manila, QuezonCity. After all, Singson said in his testimony at the impeachment trial last week, Serapio was "in charge of Estrada's properties."

“Like the other companies formed by the firm on Serapio's request, Alexie and Pio Holdings had identical incorporators, all members of the de Borja law office; the same paid-up capital of P62,500; and had accounts in the same bank, AsiaTrust.

“Alexie and Pio are the names of children of the law office's employees. "It was easy to register names," Dawn Flores-Castro, one of the firm's partners, said.

“After the companies were formed, the incorporators, who were all members of the firm, signed blank deeds of assignment. De Borja and Flores-Castro said they do not know to whom the shares were assigned. "We knew nothing of these companies after they were incorporated," de Borja said.

“‘The papers just landed on their (associates) desks, given by Michael (Leslie de los Reyes),’ Flores-Castro added. By then, Serapio, who was appointed to Malacañang in April 1999, had taken a leave from the firm although he continued to hold office there. He hired a junior associate, Michael Leslie de los Reyes, as assistant. De los Reyes, who quit the firm in March 2000, handled the paperwork for Serapio, the firm's partners say.

“At about the same time that Alexie and Pio were formed, another company, Bellagio Holdings, was set up by Lucio Co, a presidential friend who runs the duty-free shops and who has been investigated for smuggling. Four of Bellagio's incorporators are the same individuals who are listed as incorporators of Co's Puregold Duty Free (Subic), Inc. All four listed the same address: 900 D. Romualdez St., Paco, Manila.

“In addition, the corporate registration records of Bellagio show five other incorporators with one share each: Lucio Co, his wife Susan, his lawyer Jose Santos, a certain Luis Co Chia Kiat, and Leonardo Dayao, executive vice president of Fontana Resort.

“All these companies are listed in a fact sheet from the Philippine Amusement and Gaming Corp. (Pagcor) as the owners of RN Development Corporation, the company that owns the Fontana resort and casino. According to the fact sheet, Bellagio Holdings owns 55 percent of RN Development; Alexie Holdings, 10 percent; and Pio Holdings, five percent.

“The remaining 30 percent is owned by Marlon Holdings Limited, an offshore company registered in Western Samoa in 1996. Western Samoa is classified as a ‘low tax financial shelter.’

“In a memorandum signed by Nathan Inc., the sole director of the company, in June 1999, Marlon Holdings placed its correspondence address as Suite 602, 76 Kennedy Road, Hong Kong. The area is an exclusive apartment complex along a tree-lined residential street. It is not a place of business.

“‘Whoever is operating out of suite 602 is a private resident. It is the best apartment house on Kennedy Road. It is an expensive place to live, with excellent security,’ said a Hong Kong resident contacted for this article. Offshore companies usually maintain addresses in Hong Kong, where an accountant or lawyer operates.

“These complex layers of companies indicate a serious attempt to hide the real ownership of Fontana. In fact, Singson recalls a conversation with Lucio Co wherein the latter told him: ‘Kay Boss din 'yan (That also belongs to the boss),’ referring to the Clark casino.

“Rufo Colayco, former CDC head, corroborates Singson's story. ‘Estrada summoned me to the Palace February or March 1999 and introduced me to Chavit. He said that he wished to let the governor have a casino to be operated in the Fontana Resort. He wanted me to help the project along. I took the instruction to mean that the project is important and that it should not be hindered by the bureaucracy,’ Colayco said in an interview.

“Singson said that the President instructed him to ‘use’ his Ateneo classmate, businessman Jesus Pineda, and friend Jaime Dichaves, known supplier of telecommunications equipment, as fronts. Thus, when Fontainbleau Holdings was formed in February 1999, Pineda and Dichaves—representing Estrada—were listed in its corporate records as owning 70 percent of the company.

Singson, on the other hand, represented by his daughter Regina S. Lim and friend Romeo Reyes, owned 25 percent. Edmundo Silverio, who had the remaining five percent, was a nominee of Pagcor president and CEO Reynaldo Tenorio, Singson told the Senate blue ribbon committee.

“Fontainbleau kept an account at Metrobank, Ayala branch. Its signatories were Yolanda Ricaforte, who Singson said was the President's auditor, and the governor's daughter, Regina S. Lim. Deposits to the account came from jueteng collections, according to both Singson and his accountant, Carmencita Itchon.

“Fontainbleau entered into a lease agreement with RN Development Corporation, then controlled by Robin Tan - which owns the 300-hectare Fontana Resort that has 300 two-bedroom villas, a convention center, clubhouse, and ballrooms - to lease the convention center and convert it into a casino.

“Under the lease agreement, Singson paid Tan P30 million down payments for the lease. Renovation of the convention center began in February 1999. Singson spent another P34 million for refurbishing the place and acquiring gambling paraphernalia.

Manuel Singson, a lawyer and the governor's relative who formed Fontainbleau Holdings, explained the advantage of putting up a separate company to run a casino. ‘Fontainbleau would get a bigger share for Estrada rather than if the casino would be operated by Fontana,’ he said. ‘Under Fontana, Estrada would only get a percentage (of revenues).’ Manuel Singson was Fontainbleau's corporate secretary. 

Enter Atong Ang 

“Although he had already leased part of his resort to Fontainbleau, Tan did not give up his plan to operate his own casino. He and Singson also began to have disagreements. To establish a casino, however, Tan needed connections that would enable him to secure a license from Pagcor, Colayco and Manuel Singson said in separate interviews.

“Tan found that connection in another presidential friend, Charlie ‘Atong’ Ang, who, at that time, already had a falling out with Chavit Singson. With Ang's help, RN Development Corporation applied for a casino license.

“The rivalry between Ang and Singson was intense. Colayco recalled that Ang even made him listen to a telephone conversation the latter had with the Ilocos Sur governor. ‘Chavit told Ang that he couldn't have another casino in Clark. Chavit was adamant. He said only Fontainbleau was going to operate. The boss, Singson said, will decide if we'll be together in Fontainbleau.’

“Because of this rivalry, two applications for a casino license landed in Pagcor: one from Fontainbleau and another from RN Development. Pagcor called both parties to a meeting. Manuel Singson represented Fontainbleau. To qualify for a casino license, the applicant should have more than 100 hotel rooms. Fontainbleau had none and was hoping to get access to Tan's Fontana villas. RN Development Corp., which Tan owned, therefore had the upper hand.

“Estrada instructed the two parties to settle," Manuel Singson said. "It was justifiable for Fontana to get the license. Chavit told the President about this."

“Between Tan and Ang, things started to fall apart, too. ‘Atong became too ambitious. He wanted Robin (Tan) out," Colayco said. "He (Atong) told me that he wanted to own 70 percent of Fontana for himself and Erap. He wanted me to kick out Robin Tan.’

“Eventually, because of disagreements, Fontainbleau folded up in July 1999. RN Development Corporation reimbursed P64 million that Fontainbleau had advanced: P30 million for advance rental and P34 million for expenses incurred in the purchase of gambling paraphernalia and renovation of the convention center.

“But Fontainbleau still entered into an agreement with RN Development that it would get 10 percent of net earnings of the Fontana casino once it started operations. However, in February 2000, when Lucio Co and the shelf companies bought RN Development, Estrada asked his classmate Pineda, the former Fontainbleau president, to sign a ‘deed of mutual waiver and quit claim’ giving up the 10-percent share in earnings, said a Fontainbleau official.

“Pineda had already resigned from Fontainbleau at the time, so he asked the board to authorize him to sign the quit claim. ‘The President wanted all the earnings to go to the new owners. He decided to take over through Lucio Co,’ Manuel Singson said. 

“‘If you think about it, President Estrada is facing the worst crisis in his political life because of one man, Atong Ang, and one plot, Bingo-2 Ball,’ says a gambler-friend of Ang’s.” 

At the height of the juetengate scandal, amidst mounting pressure for Erap to resign, the President mulled the idea of privatizing Pagcor.

It attracted sarcasm from Federico Pascual, among other people in media, who, in his October 26, 2000 article published by the Filipino Reporter, said:

“Finally, Erap Estrada came up Saturday with the bright idea of privatizing Pagcor (Philippine Amusement and Gaming Corporation), the state gambling house whose mass-based Bingo 2-Ball is threatening to bring him down like a deck of cards.

“The President stayed up late with the boys the night before to kick around his grand privatization plan for Bingo 2-Ball, Erap's dressed-up version of the illegal numbers game of jueteng.

“Let's help them polish the idea hatched in the night by subjecting it to the searing light of day.

“In privatizing Bingo 2-Ball, Erap appears more obsessed with solving his problem of negative public perception, and not really the more basic problem of lifting a people mired in poverty.

“The logic seems to be that if a thing poses some problems, get rid of it. State-run Pagcor has given rise to some serious problems for the President, so get rid of it fast.

“But while privatization can erase the jueteng payola scandal blown up by Ilocos Sur Gov. Luis Singson, it does not offer a solution to the problem of government allowing gambling to sap the productivity of the masses.

“Privatization means running away from the vicious cycle of poverty and poor productivity.

“There’s suspicion that privatization is more of a money-making scheme than a sincere attempt to solve the myriad problems posed by state-sponsored gambling victimizing the masses who have been reduced to dasal and sugal to lift themselves from poverty.

“What is our guarantee that Pagcor or Bingo 2-Ball does not land on the waiting palm of a Dante Ang type or some crony who had contributed heavily to the 1998 campaign chest and to some private coffers?

“Privatization may just be a case of shooting two birds with one stone: Getting rid of a virulent problem and making money in the process.

“‘Wala na bang expertise ang Estrada Administration kundi sugal? (Does the Estrada Administration have any other expertise except gambling?).’”

And with gambling (both legal and illegal) came its cousins in the underworld, smuggling among them. Another PCIJ report, written by Glenda Gloria, quotes intelligence officials who said: “Several of this new breed of gambling entrepreneurs are linked with organized smuggling activities … You must remember that legal and illegal gambling is the heartland of organized crime. That's what the experience of other countries has shown. That's what we fear is happening now in the country.”

“Once when I was with Erap and Lucio Co,” Chavit recalled the times when friendship offered the luxury of light and candid talk, “Erap asked me how it feels to be beside a smuggler.” 

In that 2009 speech (titled “Dalawang Mukha ng Sining,” (or “Two Faces of Art” in English) which I mentioned a couple of times earlier, Senator Ping Lacson had a mouthful on smuggling that concerned Erap and his select friends. Ping said:

“When Mr. Estrada transferred the mission of going after smugglers from the late Lt Gen. Jose Calimlim’s unit in PSG to the PAOCTF, he gave me the mandate to go hammer and tongs against smugglers.

“Yet one morning, I received a call from Mr. Estrada. ‘May mga tao ka raw na nangha-harass sa Customs,’ (I have been informed that your men are harassing Customs personnel) he said with a low tone.

“After checking with my officers, I replied, ‘Wala sila sir sa loob ng Customs zone kaya imposibleng makapang-harass sila doon. Nandun sila sa labas, malapit sa Manila Hotel at may inaabangan na ilulusot na shipments ng dressed chicken parts from China and the US (They are not inside Customs, Sir, it is not possible for them to harass anyone there, they are outside near Manila Hotel on the lookout for smuggled chicken parts from China and the US).’

“He bellowed, ‘Basta i-pull out mo! (Just pull your men out!)’

“A few days later in a light conversation on the topic of smuggling, inside his office in Malacañang, I told Mr. Estrada, ‘Alam mo sir, dalawampung 40-foot containers sana ng dressed chickens ang nahuli natin kung hindi mo iniutos i-pull out ang mga tao natin (You know, Sir, 20 40-foot containers of dressed chicken could have been apprehended had you not instructed me to pull out our operatives).’

With a mocking voice, he said, ‘Sana hindi kayo nag-pull out (You should have not pulled them out).’

“Akala ko, nang bigyan ako ng kautusang lipulin ang mga smugglers sa pier, totoong-totoo at seryoso. Ako namang si gago, trabaho lang ng trabaho. ‘Yun pala, moro-moro (I thought my order to go after smugglers was true and serious. And here I am, a fool, doing his job. It turns out everything is a sham).”