The GSIS–Meralco bribery case (G.R. Nos. 183905 and 184275; A.M. No. 08-8-11-CA) was a landmark case heard by the Supreme Court of the Philippines. This complex case began with a complaint filed by the Philippines' Government Service Insurance System (GSIS) with the Securities and Exchange Commission of the Philippines (SEC) questioning the unvalidated proxy votes used by the Lopez family in a board election of the Manila Electric Company (Meralco). The SEC issued a cease and desist order (CDO) against Meralco, which was ignored by the latter. A show cause order (SCO) was then issued by the SEC, whereupon Meralco petitioned the Court of Appeals, questioning the jurisdiction of the SEC. The Court of Appeals issued a temporary restraining order (TRO) to the SEC while the Special 9th Division composed of Associate Justices Vicente Q. Roxas, Jose L. Sabio Jr. and Myrna Dimaranan Vidal heard the case. Roxas was assigned as the ponente while Sabio was the acting chairman.
Later, Sabio called a press conference and alleged that an emissary of Meralco tried to bribe him with ₱10 million to have a case transferred to another appeals court justice. The criminal charges are obstruction of justice and malfeasance in office. Sabio did not mention any names, but businessman Francis de Borja stepped forward and claimed that he was the alleged emissary, accusing Sabio of asking for a ₱50 million bribe to side with Meralco, in response to De Borja's question “What will it take for you to resist the government’s offer?” The alleged government offer was a Supreme Court position. In the latter course of the investigation, Sabio let slip that his brother, Presidential Commission on Good Government (PCGG) Chairman Camilo Sabio, called him up twice to urge him to side favorably with the government. The late admission of the allegedly unethical and criminal action called into doubt the innocence of Sabio in coming forward with his expose and the veracity of his entire story. These acts are alleged to be punishable under Article 208 and 243 of the Revised Penal Code, respectively.
It also came out during the course of the Supreme Court investigation that Court of Appeals Justice Vicente Roxas, the ponente of the controversial Meralco decision, had himself committed improprieties. One such impropriety was that Roxas preempted the legal opinion of Presiding Justice Conrado Vasquez that the Special 9th Division should have ruled on the case as per the Internal Rules of the Court of Appeals (IRCA), and not the 8th Division to which Roxas was transferred, and which eventually promulgated a ruling in favor of Meralco, with Justices Reyes and Apolinario Bruselas hastily signing the ponencia without going over or reading the memoranda submitted by concerned parties.
The Supreme Court, voting 12–1, ordered the dismissal of Roxas after he was found guilty of multiple violations of the canons of the Code of Judicial Conduct, grave misconduct, dishonesty, undue interest and conduct prejudicial to the best interest of service.
Sabio was suspended for two months after he was found guilty of simple misconduct and conduct unbecoming of a justice of the CA. Vasquez was severely reprimanded “for his failure to act promptly and decisively in order to avert the incidence that damaged the image of the Court of Appeals,” Reyes was found guilty of simple misconduct with mitigating circumstance, and Vidal was found guilty of conduct unbecoming of a justice of the appellate court for being “too compliant" when she allowed herself to sign the decision without reading the parties’ memorandum.
History It started on May 11, 2008, when the Philippines' Government Service Insurance System (GSIS) accused Meralco of unlawful refusal to grant corporate access to documents despite the GSIS’ holding 4 seats in the 11-member Meralco board, amid GSIS' denial of plans to wrest control from the Lopez family.
The scandal originated from the Meralco and GSIS row after Sabio—in a letter-complaint against Justices Vicente Roxas and Bienvenido Reyes—complained of the circumstances that he was removed from the GSIS–Meralco case after a standard court reorganization, and an alleged bribe attempt by Manolo Lopez and Meralco in consideration for him giving way to Reyes' chairmanship of the CA's Special 9th Division It catches nationwide attention when businessman Francis De Borja surfaces and accuses Sabio via sworn affidavit that the justice had asked for P50 million to back away from the case, to counter a government offer of money and a Supreme Court appointment in exchange for a ruling favorable to GSIS.
Background In 1962, Don Eugenio López, Sr. acquired MERALCO and it finally became Filipino-owned, but Ferdinand Marcos, by decree, placed it under a shell company called the Meralco Foundation, Inc., controlled by a crony under government-controlled Napocor.
In 1978, Meralco was fully controlled by the Marcos administration, but its ownership was finally returned to the Lopez family after the People Power Revolution by President Corazon Aquino. By executive order, she allowed Meralco to directly compete with NAPOCOR.
Gloria Macapagal Arroyo on May 2, 2008, announced plans to reduce Luzon high power rates, amid a “tough legal fight” with Meralco before state energy regulators. Accordingly, GSIS, through its President Winston Garcia, on May 11, stated it "planned not only to buy out the Lopez family and other shareholders in Meralco but also to break up its concession to promote efficiency and transparency." But Meralco chair and CEO Manuel Lopez said he was not selling the utility.
The cases and facts Oscar Lopez blamed the Arroyo administration's moves to take over Meralco in a “reverse privatization,” because of the Lopez-owned ABS-CBN's negative publicity against the government.
May 27 stockholders’ meeting During the May 27, 2008, stockholders’ meeting, GSIS' President Winston Garcia obtained an SEC “cease-and-desist order” to stop and defer the counting of proxy votes held by the Lopez group until questions on its validity were resolved. GSIS accused the Lopezes of “rigging” the process. GSIS failed to gain control of Meralco after a TRO from the Court of Appeals was issued, and the SEC order was placed on hold. Meralco retained its 5 seats, the government its 4, while the 2 others are independent directors Artemio Panganiban and Vicente Panlilio. Aside from Manuel Lopez, the Meralco directors elected are Jesus Francisco, Felipe Alfonso, Christian Monsod and Cesar Virata, while the government board members elected aside from Garcia, are Bernardino Abes, Daisy Arce and Jeremy Parulan.
On May 30, the said temporary restraining order from the Philippine Court of Appeals, against the SEC order from the 9th Division, composed of Justices Roxas and Vidal, was released. They are joined by substitute Justice Jose Sabio, replacement for Justice Bienvenido Reyes, who was on leave. Despite the return of Justice Reyes in time from his leave, and his trying to claim back his post, Sabio refused to give up the position. The TRO is released with Sabio signing instead.
Senior Associate Justice Rodrigo Cosico retires, and the Court of Appeals undergoes a mandatory reorganization. Following court rules, the case followed the Justice-writer assigned to it, Justice Vicente Roxas. The case moved to the 8th Division, composed of Justice Reyes, Roxas, and Bruselas.
The Court's 8th Division rendered a 57-page judgment authored by Justice Vicente Roxas on July 24 against the GSIS, affirming Meralco's stance that the SEC has no jurisdiction over the issue.
A large-scale negative media blitz is launched by unknown persons against the author of the decision, Justice Roxas.
Justice Myrna Dimaranan-Vidal, together with Justice Jose Sabio, former special 9th Division members, challenged the decision, per letter to CA Presiding Justice Conrado Vasquez Jr., thus: "How can the 8th Division issue an order when it is the 9th that has been hearing the complaint of alleged irregularities in the Meralco election?" It is also the 9th Division that issued the temporary restraining order on the SEC order to Meralco on May 30."
Assistant Clerk of Court, lawyer Manuel Cervantes, said no irregularity had been committed when the 8th Division came out with the decision instead of the 9th, simply a result of the reorganization of the court. "The case goes with the ponente(justice assigned to pen the case),” Cervantes explained. “Justice Vicente Roxas is the ponente. Even with the change in division, the case stays with him." “Due to the retirement of some justices, Justice Vidal was reassigned to the 6th Division while Reyes became chair of the 8th,” Cervantes said. Roxas was moved to the 8th Division, Vidal went to the 6th, and Sabio to the 9th. And since the rule is that the case goes with the ponente, the 57-page decision was issued by the division of which Justice Roxas was now a part, he said. Permission is not required from the previous division nor its justices.
He said the IRCA (Internal Rules of the Court of Appeals) does not require the justices who issued the TRO to be the same justices to render the decision.
The Court of Appeals Reorganization Office Order No. 200-08-CMV was issued by Presiding Justice Vasquez on July 4, three weeks before the decision was released.
Justice Jose Sabio refuses to let go of the GSIS–Meralco case, and insists on being a part of the division to decide the case. He submits the case to the internal rules committee of the court, headed by Justice Edgardo P. Cruz. The Court of Appeals committee decides as early as June 20 that the committee, which clarifies internal rules of the court, rejects Justice Sabio's argument that the pending case should go with him following a court reorganization. By the rules, the division headed by Justice Bienvenido L. Reyes should hear the leadership row at Meralco. Sabio disregards Cruz's recommendation on the basis he was only a "junior justice".
On July 26, Justice Sabio, with the encouragement of Justice Vidal (his colleague in the 9th Special Division), broke news of a bribery attempt and wrote to P.J. Vasquez, Jr. He joined Justice Vidal, initiating further a media expose of their squabbles, alleging something “stinks” in the Meralco court ruling. Presiding Justice Vasquez released his opinion, also, per his July 24, 2008, Letter to Justices Bienvenido L. Reyes & Vicente Q. Roxas.
Businessman Francis de Borja emerges and reveals to the media a notarized and sworn affidavit that it was Justice Sabio who brought up a P50 million price for him to act in favor of Meralco in its dispute with the GSIS. Mr. de Borja asserts that Mr. Sabio had told him a Supreme Court seat was being offered in exchange for a ruling in favor of the GSIS, which is trying to wrest control of Meralco from the Lopezes. Expecting Sabio to answer that he would not be swayed by any offer and would rule according to his conscience, De Borja asked what it would take for him to resist the supposed government offer of a seat on the Supreme Court and money. He was taken aback when Sabio replied "P50 million”, and then left.
Presiding Justice Conrado Vasquez comes under fire in the newspapers. Vasquez is criticized for having been able to spare the Court this trouble on the court's integrity had he followed the recommendation of the rules committee. With Vasquez's opinion favoring Sabio despite the reorganization, and the lack of a preliminary injunction that would exempt Meralco from being transferred to Reyes's and Roxas's division, doubt is cast on Vasquez's motivations.