Who cares if it is illegal for corporations to financially support political candidates? For politicians who are into politics only for the money, whether they lose or win, every million-peso contribution counts.
By declaring that political donations by companies are illegal, the Securities and Exchange Commission (SEC) has, in effect, warned against the use of corporate funds for political purposes.
The declaration is not without legal basis to support it. In fact, the SEC quoted the governing provisions of both the Corporation Code and the Omnibus Election Code.
Yet, the SEC has failed us in rendering a legal opinion by not telling us the penalty that it could impose on violators. Are both the donors and the recipients liable under the law?
The SEC issued this legal opinion on July 27, 2015, in which it said companies should not finance the candidacy of politicians. The basic question, though, is this: Do its officials have enough mandate and political will to monitor the political contributions of corporations?
Citing the pertinent provisions of the Corporation Code, the SEC said: “There is an absolute prohibition for corporations, both foreign and domestic, from giving donations to any political party, candidate or for the purpose of any partisan political activity.”
The SEC even made it clear that the law covers all corporations doing business in the Philippines. “In this regard,” it stated, “the determination of whether or not your client-corporation is a domestic or foreign corporation is immaterial in relation to its ability to make political contributions.”
The SEC issued this legal opinion in response to a query posed by lawyer Erwin F.V. Zagala, managing partner of Legal Access Law offices.
While I do not have access to the query that Zagala sent to the SEC on May 4, 2015, I am basing this report on the SEC’s legal opinion signed, “by authority of the commission en banc,” by Camilo Correa, the SEC’s general counsel.
Yes, Zagala’s legal poser may be timely because of the forthcoming elections in 2016. Again, who cares when businesses and politicians are perceived to co-exist for the sake of one another? Are all politicians wealthy enough to spend their own money, particularly politicians who run for national office and thus need to campaign nationwide?
In laying down the SEC’s policy against political donations by corporations, Correa summarized Zagala’s query into two sub-queries, namely:
1. Did Section 95 of BP Blg. 881 or The Omnibus Election Code of the Philippines, which enumerates the juridical entities from making political contributions, amend or repeal the more general prohibition provided in Section 36(9) of BP Blg. 68, or The Corporation Code of the Philippines?
2. Is your client-corporation, as described in your letter, considered a foreign corporation for purposes of determining whether it is included in the prohibition under the Omnibus Election Code?
Besides the Corporation Code which warns corporations against giving political contributions, Correa also said the Omnibus Election Code contains a similar provision. Section 95, he said “provided enumeration of natural and juridical persons, including corporations, who because of benefits, privileges, license or franchise received from government, are prohibited from making contributions, directly or indirectly, for purposes of partisan political activity.”
In answering the first query, Correa said that as far as the commission is concerned, “Section 95 of the Omnibus Election Code neither amended nor repealed, whether expressly or impliedly, Section 36(9) of the Corporation Code. “There is no provision in the Omnibus Election Code that specifically provides for the amendment of Section 36(9) of the Corporation Code,” Correa said.
Correa also said that even the repealing clause of the Omnibus Election Code did not provide for such amendments. “Since the repealing clause does not indicate the Corporation Code or any part thereof, it is plain that Section 282 of the Omnibus Election Code does not expressly repeal Section 36(9) of the Corporation Code,” Correa said in the commission’s opinion.
As if this were not enough, Correa said that “neither has there been an implied amendment or implied repeal of Section 36(9) of the Corporation Code.” He explained that “an amendment or repeal by implication is neither presumed nor favored.”
With this legal opinion, the SEC has made it very clear that corporations should remain non-partisan. But are the stockholders of private companies, particularly those whose stocks are listed on the Philippine Stock Exchange, really apolitical? How could they be if politicians do not ask but blackmail them for donations?
It is time for SEC officials to strictly impose the rules against political donations. Instead of penalizing corporations for the non-filing of reportorial requirements, they should protect private companies against political harassments aimed at “forcing” them to fork out money.
Of course, there is no such thing as “forced donation” because as the word suggests, these are willingly given. However, who among corporate political donors could reject demands from unscrupulous political players who are in the race only for money and not for public service?