Rappler’s scheme was an attack on the Constitution and our nationhood

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RAPPLER president Maria Ressa’s caterwauling that the corporate regulatory body’s decision to close down her outfit is an attack on the free press is pure, unadulterated rubbish.

She is lying through her teeth. She fully knows that it took the Securities and Exchange Commission the whole of last year to investigate the allegations that Rappler violated the constitutional provision banning foreign money in and control of media firms. I don’t think anyone can accuse the SEC chair, Teresita Herbosa, of being a Duterte lackey: She was appointed by former President Aquino 3rd in 2011.

Ressa obviously doesn’t respect our laws nor our country, that she imputes other motives to the SEC decision, thereby portraying the Philippines as a dictatorship going after critical media.

Rappler was given a whole year and opportunity to respond to the allegations, with Ressa herself appearing in meetings with SEC investigators, who were even so patient as to acquiesce to her last-minute requests for postponement “for personal reasons.”

By taking P50 million from two US media outfits—even from one notorious in the world for destabilizing a Ukrainian government the US didn’t like—Rappler attacked our Constitution. It undertook a scheme that would have opened the doors to foreign control of an institution crucial to developing our sense of nationhood: media.

Rappler actually functioned as a tool of the Aquino regime. It was set up in 2011, when the Yellow Cult realized that in its ambition to completely control Filipinos’ minds, their hold of traditional media, through the two dominant TV networks and through the Philippine Daily Inquirer and Philippine Star, was not enough, especially in the new social-media world emerging.

It needed a mass media outfit in the cyber-world: Rappler became its principal vehicle, funded, I was told, not really by its main stockholder on record who is property tycoon Benjamin Bitanga, but by a Spanish-Filipino oligarch known to be close to Ressa and to Aquino.

In its first five years of existence, Rappler never had a single news article or opinion piece critical of Aquino and his regime.

In just the first few months of the new administration, it became so stridently anti-Duterte, spinning news stories to portray him as a cold-blooded killer. It even manufactured fake news, such as the 7,080 figure it alleged were the number of people executed by the police in its war against illegal drugs in the first three months of Duterte’s rule.

That figure has been extrapolated to the 13,000 figure of “extrajudicial killings” so far cited by foreign media and even in Facebook posts, such as one by Ayala executive Vicky Garchitorena that became viral for the number of netizens which criticized it.

Although Rappler accumulated a significant following in the first five years, its funders were shocked at how much of a money-guzzler it was, as its losses amounted to P200 million by that time.

This isn’t at all surprising. Rappler’s following was not due to its journalistic excellence, but to internet devices. In order to appear to have millions of “followers,” its two very knowledgeable techies, chairman Manuel Ayala and board director Nix Nolledo, employed—at astronomical prices—state-of-the-art technology.

For instance, it reportedly contracted cyber-experts in the US to monitor and adopt its online postings to top search engine Google’s algorithms (changed frequently) so that Rappler’s articles would be at the top of Google’s search results. Most Rappler readers until recently didn’t even know that Rappler captured the ISP addresses of anyone viewing its website, which the firm used to expand its viewers.

Oligarchic funders
As early as late 2014 though, Rappler’s oligarchic funders had become worried that with the scandals plaguing the Aquino government, the chances of Aquino’s sidekick Mar Roxas winning the presidency were not good. They decided not to throw in anymore money to the company, which even risked their discovery as its funders.

According to the SEC decision itself, it was Rappler president Maria Ressa (probably tapping the anti-Duterte network centered reportedly on New York billionaire Loida Nicolas Lewis) who asked for funding from North Base Media and Omidyar Network.

North Base Media is reportedly linked to billionaire George Soros, who gave $14 billion to his so-called Open Society Foundations which espouse the US views on democracy around the world.

Omidyar Network though is the more controversial funder. Respected investigative journalists in the US and Europe have alleged that this entity, funded by E-bay founder Pierre Omidyar, funded several of the opposition NGOs in Ukraine that conspired to oust through violent protests the pro-Russia President Victor Yanukovych in February 2014. (My column on this, “Rappler funder Omidyar helped topple Ukrainian president in 2014,”Manila Times, October 18, 2017.)

It obviously points to a certain mind-set devoid of nationalism for Rappler to get a foreign funder alleged to have destabilized governments elsewhere.

North Base Media and Omidyar’s investments were concealed as “Philippine Depositary Receipts (PDRs),” a document which assures a foreign firm that it would receive the income due its investment in a corporate share, while being technically not the share’s owners. This has been a legal trick used by public-utility companies in which foreign capital is limited by the Constitution—PLDT, Globe Telecom, ABS-CBN and GMA7—to skirt the constitutional provisions.

However, either Ressa or Rappler’s lawyers were so stupid as to have a provision in the PDRs sold to Omidyar Network that made it so obvious to the SEC that the Constitution had been violated.

The SEC found that the PDRs’ documentation had a provision that required Rappler’s stockholders to get the approval of “2/3 of all issued and outstanding PDRs” for major corporate decisions.

“The stockholder has become in effect subservient to the PDR holders. It is neither 100 percent control by the Filipino stockholders, nor is it 0 percent control by the foreign PDR holders,” the SEC decision said. “The Constitution is very clear that there must be no foreign control whatsoever. Anything less than one hundred percent (100%) Filipino control, as stockholder or through any other means, is a violation.”

Ressa or Rappler lawyers apparently admitted that the Omidyar PDRs were in violation of the Constitution that they submitted only last month, or when the SEC decision was to be released, a photocopy of a purported “waiver” of this provision that gave Omidyar veto power over the company.

That was a stupid move though. The SEC said: “The document is a private one, not subscribed before a notary or a Philippine Consulate. It was executed as recently as 11 December 2017. It is obviously inadmissible, a mere scrap of paper.”

I have always suspected that the Yellow DNA had a strand that made it as stupid as it was arrogant.

NOTE: For the readers’ full information, I am attaching in the internet version of this column the SEC’s decision in PDF format:

SEC decision on Rappler