SEC reminds firms of ban vs campaign contributions

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WITH the campaign period set to officially start next month, the Securities and Exchange Commission (SEC) reminded all corporations on the prohibition against giving campaign contributions to any candidate on pain of incurring administrative or even criminal charges.

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Citing the Corporations Code of the Philippines (CCP), the law that governs all SEC-registered corporations and entities, Teresita Herbosa, chairperson of the agency, reminded all corporations that they are prohibited from making any donation or contribution, monetary or otherwise, to support any partisan political activity or finance any campaign expenditure of election candidates.

Under Section 36(9) of the CCP, “no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political activity.”

“This means that they [corporations]are, by law, prohibited from making any contribution or donation to any political or election-related activities,” Herbosa said.

The campaign period for national candidates such as president, vice president, senators, congressmen and party-lists will officially start on February 9, or 90 days prior to the election date set on May 9, while the campaign period for local candidates will begin on March 25, or 45 days before election date.

She said corporations found violating the prohibition would face administrative or criminal penalties and either the corporation and/or its responsible officers will be slapped with penalties, depending on the gravity of the offense.

Herbosa said the penalty would depend on the gravity of the violation and whether there is fraud.

“If no fraud, it could be a mere imposition of a fine, but should it be committed through or with fraud, suspension or even revocation shall be imposed upon them,” Herbosa added.

“For example, here is this company which already made some [election-related] contribution. Thereafter, its directors or officers concealed said gift in their financial statement. Consequently, it becomes a submission of a false financial statement, making the act fraudulent,” she explained.

Another fraudulent act is when companies were organized as mere dummies or flow-through entities for raising and disbursement of campaign funds, she said.

Violation of the CCP is punishable by a fine ranging from P1,000 to P10,000 or by imprisonment of not less than 30 days to five years, or both.

In October, the SEC and the Commission on Elections (Comelec) entered into a Memorandum of Agreement (MOA) to be “information-sharing partners.” The MOA was aimed at ensuring the effective implementation of election laws vis-à-vis the enforcement of the CCP.

The MOA provides, among others, that Comelec will furnish the SEC the names of corporations or other SEC-registered entities which made political contributions or donations to candidates and parties.

Information that will be furnished by Comelec would come from the campaign finance submissions of candidates and parties, as well as from advertising contracts furnished to Comelec by mass media entities.

“The reason why we went to that agreement was to make it easier for both of us because candidates are required by law to submit to the Comelec the list of donations given to them. Hence, we would find out. Sad to say, some corporations violate the prohibition to donate, and some of them were not even aware of the prohibition and keep on donating,” Herbosa said.

In line with this MOA, the responsible officers of corporations violating the Omnibus Election Code (OEC) may also face criminal charges, since the act of donating to political parties and candidates is also an election offense punishable under the election law.

The penalties under the OEC include imprisonment of not less than one year to six years, without the benefit of probation.

In addition, the guilty party shall be sentenced to suffer disqualification to hold public office and deprivation of the right of suffrage or the right to vote.

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