But his unaccountable oversight empowers Duterte to reclaim BuCor lands
TAGUM Development Corp. (Tadeco) which since 1969 has used for its banana production 5,343 hectares of public lands under the Bureau of Corrections (BuCor) was actually majority-owned by the strongman Ferdinand Marcos, according to an unimpeacable source who was involved in setting up the firm as a banana producer and in the crafting of the legal basis for its alleged contract to use BuCor lands for its banana plantation.
“You would be stupid if you think that the BuCor, or even the justice department would have the guts to give a mediocre Mindanao businessman such a lucrative enterprise that not only depended on a small agency’s largesse but was based on flimsy legal basis,” the source explained.
Tadeco, owned by the late Antonio Floirendo, in 1956 obtained the contract to process in its mill the abaca stalks planted on the Davao Penal Colony by the government-owned Abaca Corp. of the Philippines, which was organized by law that year–something which had already raised eyebrows at that time.
The source explained that it was somewhat the Marcos style for him to piggyback on new government initiatives that contributed to the growth of the economy. In 1969, the Marcos associate explained, the global economy became turbulent—leading to a severe foreign exchange crisis in 1970—which constricted the flow of foreign exchange into the Philippines. The Marcos government scrambled to find other sources of foreign exchange other than sugar and coconut exports.
“We were able to find a legal loophole for giant US firms like Castle and Cook to operate plantations producing pineapple and bananas for export,” he said. This involved the ownership of lands by law firms, which then leased these to US companies, to get around the constitutional ban for foreign firms to own lands. (The exception was for US firms which were given full parity rights under the Laurel Langley Agreement, but which however expired in 1974.)
“But why would we just let the Americans make tons of export dollars through plantations in Mindanao, the legal basis for which we set up,” the source said. Either Marcos himself or some other Cabinet member had the bright idea of mimicking what the US companies did, but to be undertaken by Filipinos.
Tadeco was one such firm that we decided to convert into a plantation for banana exports, which the US firms were going into, the source explained. But instead of having Tadeco finance the purchase of the land, a law firm would technically own the land (and lease it back to Tadeco). It was a lot cheaper to just have the BuCor let Tadeco have a contract to use the lands, initially for five years.
The source explained: “Tadeco was chosen because it already had this processing contract for the abaca produced on BuCor’s lands by a government firm, Abaca Corp.
“But for BuCor to let a private firm, Tadeco, set up on its land a plantation of 3,400 hectares, without having the contract auctioned out was a big, unusual move,” the source claimed.
Marcos ordered the contract approved, and everyone knew he had huge shares in the firm. The area was even expanded to 5,495 has. in 1979, and the contract’s term lengthened to 25 years, renewable for another 25 years.
“Do you really think that Marcos was so clean that he’d let alone such lucrative firm whose operations depended on a questionable contract by a small agency like the BuCor?” the source asked rhetorically.
“It wasn’t Floirendo who pioneered the banana-for-export industry in the Philippines,” the source claimed. “It was the American companies, and we piggybacked on the industry they opened up.”
Marcos of course supported the industry with such drive since he was Tadeco’s secret stockholder.
What bolsters the claim that Marcos was Tadeco’s real owner is the fact that the strongman, who had been a corporate lawyer before he went into politics, had a penchant for owning—secretly—stocks in major corporations and property. After the dictator’s fall in 1986, documents which the fleeing Marcos family left in Malacañang (or were leaked to the Cory government by US authorities), revealed Marcos to be the secret owner of several major companies and properties, mainly through documents by which such companies’ shares were endorsed to him in blank.
The biggest of this was—as the Presidential Commission on Good Government alleged in the forfeiture cases it brought before the Sandiganbayan—was the Philippine Long Distance Telephone Co., the largest bloc of shares of which were Marcos’ but held officially by the Cojuangco family. While the country cheered when PLDT was nationalized in 1967, years ahead of the expiration in 1974 of the Laurel-Langley agreement (which required its US owner to give it up), Marcos took advantage of the opportunity to own, secretly, a huge chunk of its shares.
More importantly, the late Antonio Floirendo himself admitted in 1987 that he was a dummy for the strongman’s assets. He turned over to the Cory government prime properties in the US which he said was just under his name, but were really the dictator’s: Lindenmere Estate and Olympic Towers in New York and a residence on Makiki Heights Drive, Honolulu, Hawaii. Floirendo also turned over P70 million in cash to the Presidential Commission on Good Government in what was euphemistically called a “compromise agreement.”
It is difficult to believe that Floirendo was a dummy for several of Marcos properties but not the most prized asset, Tadeco.
However, so uncharacteristic of Marcos, he failed to make a crucial move to legalize Tadeco’s lease of the BuCor lands. While these lands were reserved in 1931 for the use of the Davao Penal Colony and in 1969 leased to Tadeco, these remained to be “unclassified public forest,” according to a May 29, 2017, letter from Justice Secretary Vitaliano Aguirre to Rep. Johnny Ty Pimentel, chairman of the House committee on good government.
Such lands are considered “inalienable and outside the commerce of man,” i.e., they cannot be used by any private entity through any type of contract, whether it be called a joint venture or a lease.
Marcos in the 16 years that he was President could have simply reclassified the land, as he would have been authorized to do under Commonwealth Act 141, so it could be subject to exploitation by private entities. But he never did.
Why the usually meticulously legalistic Marcos made such an error of omission is a mystery of course, which my source himself couldn’t explain.
Only after 50 years is Marcos’ oversight uncovered, but it is also puzzling why the five Presidents after him didn’t unearth this blatant violation of our laws and the Constitution itself.
But this fortuitous oversight gives the anti-oligarch Duterte administration the authority to take back the government lands that have been the source of billions of pesos in profits of an oligarchic clan.
Justice Secretary Aguirre, in his letter to Pimentel, also ordered his subordinate, BuCor Director General Benjamin de los Santos to declare “the nullity of its [BuCor’s] 1969 contract with Tadeco and all its supplements.”