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Do the Yellows now control Rappler?

WITH the Aquinos’ Yellow Cultists losing control of media that was their biggest strength in the past regime, they have turned to the financially troubled, foreign-funded news website Rappler as their main propaganda venue. If Rappler would be true to itself, it should change the orange color of its logo to yellow.

Sources in the business community claim that at least two old oligarchic clans that were close to former President Benigno Aquino 3rd are now either the biggest funder, or in fact the largest stockholders, of Rappler.

Its original biggest shareholder, property tycoon Benjamin Bitanga, gave up on the controversial media firm in in 2016, exasperated over the reckless anti-Duterte reportage of the media outfit he couldn’t control.

On the other hand, Rappler’s two American funders, North Base Media and Omidyar Network, which had put in P150 million from 2015 to 2016, won’t touch the firm now with a ten-foot pole, as they are irate that they were misinformed on the legal issues their funding would encounter, which involves the constitutional ban on foreign participation in any form in Philippine media.
Rappler’s financial requirements since its start in 2012 have gone way beyond those needed by an ordinary news outfit, as it has relied on expensive technology and internet experts, rather than solid reportage (its staff is composed mostly of straight-from-college reporters supervised by Yellow editors), to carve out a presence in the world wide web. It has for example been able to use expensive internet software so that its articles would be ranked high in Google search listings—even if these posts aren’t really viewed much—and for the website to appear to have a bigger viewership.

New stockholders’ board directors: Monsod and Factoran

Two Coryistas
The allegation that the Yellows have moved into Rappler is bolstered by the fact that last March, Bitanga’s representatives in the board were removed. Among the new board members are two who are not only of the Yellow Cult but are staunch “Coryistas”:

Solita Monsod, the late former President Corazon Aquino’s economic planning secretary (who writes a vociferous anti-Duterte column in the Philippine Daily Inquirer). Monsod’s husband Christian has been a director of several companies controlled by the Eugenio Lopez elite clan;

Fulgencio Factoran, Jr., who served as Cory’s environment and natural resources secretary, was for nearly a decade a director of the Cojuangco-Aquino clan’s Central Azucarera de Tarlac. A human-rights lawyer during the late stages of the Marcos era , “Jun” Factoran appears to have successfully parlayed his experience as environment secretary into directorships in mining firms such as Atlas Consolidated Mining and Nickel Asia for many years now. His curriculum vitae posted at Rappler’s website, however, reports him as director of firms controlled by the country’s richest billionaire Henry Sy—Belle Corp. and Banco de Oro Leasing & Finance. While Factoran has become rich, reported among the top 500 taxpayers for 2013, I don’t think he has the kind of money to burn as an investment in Rappler.

Another new board member is lawyer Federico Prieto. I was told however that is not related to the Prieto clan that controls the Philippine Daily Inquirer.

What is strange about Rappler’s new board is the appointment of one Carlo Almendral, a technology entrepreneur whose work has been entirely in San Francisco. Almendral should disclose if he is a Filipino citizen, as no foreigner is allowed by the Constitution to be in the board of a media firm. He should also disclose if he has been close to the Lopez clan, which spent most of the martial law years in San Francisco.

Media firms have a higher standard of disclosure since, unlike ordinary firms, they disseminate information and are therefore in a strategic position to affect public opinion. The very false notion in the US and in the world that because of Duterte’s anti-drug war, “tens of thousands have been murdered” was started way back by Rappler in a September 2016 report, which cleverly distorted government data to claim that that at the time there were already 7,000 “extrajudicial killings. (See my 2017 column, “How Rappler misled EU, Human Rights Watch, CNN, Time, BBC—the world”.)

Who nominated them?
Rappler hasn’t disclosed which of its new stockholders had nominated Monsod and Factoran, as well as the other new board members. Rappler must disclose this. Its readers are entitled to information that would enable them to judge whether its reports are biased or not, whether it is a Yellow propaganda machine or not.

Rappler’s Yellow investors, and especially Factoran’s law firm, would have their work cut out for them not just in terms of funding in order to keep it afloat but more importantly to solve its problems with the law.

The Securities and Exchange Commission early this year ruled that Omidyar Network’s P100 million funding of Rappler violated the constitutional ban on foreign participation in Philippine media, a decision the Court of Appeals affirmed on July 26.

Rappler has tried to wriggle out of this violation by claiming that the Omidyar Network would give up its money anyway and instead donate its shares (disguised as Philippine Depositary Receipts, or PDRs)—valued at $1 million (P80 million)—to its 14 managers.

Rappler thinks the Court of Appeals, the SEC, and us are all stupid.

No matter how well-funded it is by eBay founder Pierre Omdiyar, Omidyar Network is corporation with a board of directors. Will that board simply agree that it’s $1 million investment goes down the drain? Strangely there is posted in Omidyar’s website a reference to an announcement entitled “Omidyar Network Donates Philippine Depositary Receipts to Rappler Staff.” There’s no such announcement though that could be accessed. Or did a Yellow funder simply reimburse Omidyar’s $1 million investment?

Rappler hasn’t presented the actual documents attesting to Omidyar’s donation of its shares, nor how exactly this will be done. Omidyar probably thinks the Philippines is some backward country, whose legal system can be skirted with a mere press announcement. The Court of Appeals directed the SEC to investigate whether Omidyar Network in fact donated its shares to Rappler’s managers.

Huge headache
Instead of a boon, Rappler would be giving its 14 managers who would receive Omidyar’s donation a huge headache.

The Bureau of Internal Revenue in March already charged the firm with a tax evasion charge, claiming that it issued and sold P181.67 million worth of Philippine Depositary Receipts to the American firms but failed to pay income and value-added taxes for the transaction. The BIR claimed that Rappler’s tax liability amounted to P134 million, which the media outfit had not paid, and had not even reported.

On top of that tax case would be that to be slapped on the 14 managers who would receive the “donation.” Whatever Omidyar calls it, the “donation” would be treated as extraordinary income of the 14 managers under Philippine tax laws, and would each have a revenue —even a paper one—for the year it is made, of P4 million.

Would the managers be willing to pay the P1 million in taxes due on that income, especially as they would really be receiving not a single centavo as the proceeds of those PDRs has already been used up for Rappler’s operations in the past two years?

The Yellows’ move into Rappler and consequently into cyber media is strategic. Traditional media has fast been losing ground in terms of influencing public opinion to internet-based media and social media, especially since these are accessible almost freely, compared for example to the P600 monthly subscription for just a single newspaper. One factor for the defeat of the Yellows’ presidential candidate Mar Roxas to Duterte in the 2016 elections was the latter’s focus on social media, as the Yellows had a tight control of newspapers and broadcast media. Apparently the Yellows’ war cry now is, as Rappler’s editor in chief arrogantly put it two years ago, “Time to take back the internet.”


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