Doubts about the Marcos administration’s resolve to pursue the key figures in the “Floodgate” scandal were captured in a pointed question from retired associate justice and former ombudsman Conchita Carpio Morales: Why are there no tax evasion cases?
The government’s failure to identify the ringleaders of what is considered the country’s biggest corruption scandal has contributed to the decline in public support for President Ferdinand Marcos Jr.
Yet despite promises to reel in the “big fish,” and even setting timelines for doing so, only former senator Bong Revilla, a familiar figure in past cases, has ended up behind bars.
Carpio-Morales ceded, “it would appear that (the administration) has been doing in earnest what it sought to do in the first place to file corruption cases, but they forget they should also file tax evasion cases promptly.”
“A tax evasion case is part of the scheme of the government to run after these malefactors,” the magistrate who had played a key role in prosecuting high officials in the P10-billion Priority Development Assistance Fund scam, indicated.
The filing of delinquency charges on tax payments is a potent weapon to jail crooks and prevent them from exploiting the slow grind of justice for their benefit.
The so-called “Floodgate” scandal has implicated high-level officials, including senators Jinggoy Estrada, Joel Villanueva, Chiz Escudero and Bong Revilla, as well as congressmen, whom some witnesses have accused of being the mastermind.
Testimonies from former Department of Public Works and Highways engineers like Brice Ericson Hernandez, Roberto Bernardo, Henry Alcantara, and contractors such as the Discayas detailed a web of corruption, including demands for 20 to 30 percent commissions.
Prosecuting key individuals in the lucrative racket of pilfering the yearly national budget through traditional channels is notoriously slow.
Cases require proving graft beyond a reasonable doubt, often involving complex evidence trails, political interference, and lengthy appeals, sometimes taking five to 10 years or more, exemplified by the PDAF cases.
Tax evasion charges or running after the crooks by proving underreporting or non-declaration of income can effectively put them, if not in jail, then under close government monitoring.
In the context of corruption like the “Floodgate” scandal, kickbacks and ill-gotten gains from projects are considered taxable income if not declared, creating a direct link.
While corruption cases, such as allegations of malversation of public funds or plunder, demand proof of the illegal act, like accepting bribes, intent and damage to the government.
Tax evasion, however, focuses on discrepancies between declared income and actual assets/earnings, which are often easier to establish via bank records, lifestyle audits, or suspected unexplained wealth under the Tax Code.
For instance, if a senator receives P200 million in kickbacks and fails to report it as “other income,” that constitutes evasion.
The Bureau of Internal Revenue can promptly initiate Run After Tax Evaders investigations upon the presence of red flags, such as Anti-Money Laundering Council-frozen assets revealing undeclared funds.
Tax evasion cases were filed mostly against contractors, former DPWH engineers and lower-level officials, not the high-profile senators and congressmen implicated in testimonies.
The most vital component of a tax evasion proceeding is immediate remedies, such as preliminary attachments or AMLC freezes, that prevent suspects from dissipating assets.
In the “Floodgate” episode, AMLC’s P22.8-billion freeze already sets the stage, but tax charges should have expanded this.
Tax evasion cases may help hasten efforts to uncover the true extent of the scandal and where the trail ultimately leads.
Avoiding the tax-evasion route has become part of the ongoing cover-up.