Mayor Vico Sotto faces graft complaint over alleged illegal discount to telco

Pasig City Mayor Vico Sotto and two other city officials are facing complaints for graft, violation of the Code of Conduct for public officials, grave misconduct, gross neglect of duty, and conduct prejudicial to the best interest of the service over alleged illegal grant of discount to telecommunications provider Converge.

In a 17-page complaint, Pasig City resident Ethelmart Cruz accused Sotto, Business Permit and Licensing Department (BPLD) personnel Melanie de Mesa, and City Administrator Jeronimo Manzanero of illegally granting a 100% discount on Converge’s waiver of penalties as the telecommunications provider accumulated business tax amounting to P3.67 million in 2022.

The complaint stated that the P3.67-million business tax dues included surcharge and interest due to Converge’s under-declaration of the extent of its operations, in particular the number of its employees and the size of its office space.

Cruz alleged that since 2018, Converge has been declaring that its office space is 12 square meters with four to five employees when it is employing more than 2,000 employees, and occupying four floors of office space.

“Converge was granted a full 100% discount, despite the fact that the Office of the Mayor is not authorized to grant a full 100%, causing injury to the Local Government of the City of Pasig City as the latter was practically deprived of the right to generate additional income and control and/or regulate a property which belongs to its jurisdiction,” the complaint read.

The complainant also said that while Section 358 of the Pasig City Ordinance No. 51 is titled “Grant of Discounts and/or Waiver”, the same clause also states that “discounts may be granted by the City Mayor or his duly authorized representative as prescribed in this Ordinance, provided the same falls under any of the following conditions:

• taxes, fees or charges or any portion thereof  including the surcharges and interest appears to be  unjustly or excessively assessed;
• the administration and collection costs involved do not  justify the collection of the amount due;
• a reasonable doubt as to the validity of the claim against the taxpayer exists;
• the financial position of the taxpayer demonstrates a clear inability to pay the assessed taxes, fees, or charges;
• other circumstances deemed just including but not limited to, among others, closure, legal disputes, strikes, lingering illness, and death

“In this instant case, none of the above-mentioned conditions are present. It should be emphasized that a reading of Section 358 shows that the imposition of taxes, fees, and charges, including surcharges and interests for late payment, is mandatory, and only discounts, not waivers, may be granted,” the complaint read.

“Clearly, the authority of respondent Mayor Sotto is only to grant a deduction from the amount of obligation assessed by [the city’s] business permit and licensing office. Glaringly, nowhere in Ordinance No. 51 was the Office of the Mayor allowed to grant a full 100% discount,” the complaint added.

The complaint said that the acts of Sotto and two others should be seen as blatant support to a private company's fraudulent acts against the local government since “it is a well-established rule in the law on taxation  that there is a presumption of falsity of return when there is a  substantial under-declaration of taxable assets, receipt or income of more than 30%.”

“Even assuming that Converge did not intend to commit fraud in under-declaring its number of employees and the size of its office, the patent discrepancy between what Converge reported and what was actually true should have prevented Converge from enjoying any discount,” Cruz said.

“In view of the foregoing facts, I respectfully pray of this Honorable Office to hold respondents liable for violations of R.A. 3019 Section 3 (e) and R.A. 6713 Section 4, paragraphs (a) and (b), as well as grave misconduct, gross neglect of duty, conduct prejudicial to the best interest of the service, and dishonesty,” Cruz added.

'Dirty tactics'

In a comment on a Facebook post regarding the filing of the complaint on Tuesday, Sotto said that he has yet to receive a copy of the complaint.

“It's important to understand the process that cases go through in the Office of the Ombudsman. It's easy to have a complaint received and then sensationalize it by bringing the "received" copy to the media,” he said.

“With this particular complaint, I can't even comment because I don't have an official copy. In some cases, the Ombudsman dismisses it outright, and we won't even receive a copy. Other times, there will be a clarificatory hearing,” he added.

According to Sotto, the filing of the case was part of dirty tactics of some political groups.

“This is not the first time. Notice the interesting timing of this - at the same time that certain political groups are ramping up their political activities,” he said.

“Mahirap ang kalaban na may bilyones, galit sa mga reporma, at handang magbayad ng proxies, facebook trolls, former at incumbent officials, etc. Pero hindi na basta-basta gumagana ang old traditional politics at dirty tactics sa Pasig,” he added.

(It’s hard to face an opponent who has billions of pesos, hates reforms, and is willing to pay proxies, Facebook trolls, former and incumbent officials, etc. But the old traditional politics and dirty tactics don't just work in Pasig anymore.)

GMA News Online has sought the comments of Converge and will publish them as soon as available.
—with Joviland Rita/LDF/KBK, GMA Integrated News