By Atty. Josephrally L. Chavez, Jr., CPA, LLM
For I tell you the truth, you give to Caesar what is due to Caesar, and to God what belongs to God. [Matthew 22:21] This was Jesus’ response to the Pharisees’ trap when asked as to the permissibility of paying taxes to Caesar. In the movie “The Untouchables”, Al Capone famously said that “you can get more with a kind word and a gun than with a kind word alone”. But when it came to catching him, all it took was a diligent and skilled forensic accounting. Simply put, and as it became an old adage, “Only an accountant could catch Al Capone”. This holds true despite the fact that Al Capone was a known gangster who dominated organized crime in Chicago. Capone happened to be indicted of assault, murder by gunning down rivals, became a crime czar, running gambling, prostitution but went unpunished. But when his wealth ballooned to almost $100 million, he was charged with federal tax evasion and was found guilty. He was convicted and sentenced to 11 years of federal prison.
In this relation, Michiavelli on The Prince, he said, “That he who abandons what is done for what is ought to be done, will rather bring about his own ruin than his preservation”. Marcus Aurelius uttered that: For all things soon pass away and become a mere tale, and complete oblivion soon buries them. Napoleon Hill pronounced that: Big pay and little responsibility are circumstances seldom found together. Rick Warren verbalized that: Leadership starts with understanding responsibility, not ability. Leadership is a stewardship, not a show.
In accounting parlance, there is a principle called “full disclosure” where one is duty-bound to include in an entity’s financial statements and its related supporting documents all information necessary that would affect a reader’s understanding of those statements and documents. Any deviation in this principle is well within the bailiwick of the auditor, one who conducts audits & reviews in accordance with specific laws or rules. However, when it comes to government funds and property, owned or held in trust by, or pertaining to the Government, or any of its subdivisions, agencies, or instrumentalities, the Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities
COA shall have the exclusive authority, subject to the limitations in the Constitution, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds and properties.
On the other hand, the Bureau of Internal Revenue shall be under the supervision and control of the Department of Finance and its powers and duties shall comprehend the assessment and collection of all national internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties and fines connected therewith, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts. The Bureau shall give effect to and administer the supervisory and police powers conferred to it by this Code or other laws.
While COA concerns its audit on the propriety of government expenditures, the Administrative Code provides that every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received. Likewise, PD 1177 provides that any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice and hearing by the duly authorized appointing official. If the appointing official is other than the President and should he fail to remove such official or employee, the President may exercise the power of removal.
Parenthetically, browsing upon the Government Auditing Code of the Philippines (PD 1445), it states that the head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency and persons entrusted with the possession or custody of the funds or property under the agency head shall be immediately responsible to him, without prejudice to the liability of either party to the government.
The participation of these public officers, such as those who approve or certify unlawful expenditures, vis-a-vis the incurrence of civil liability is recognized by the COA in its issuances, beginning from COA Circular No. 81-15654.
It is also settled that the Constitution vests the broadest latitude in the COA in discharging its role as the guardian of public funds and properties. In recognition of such constitutional empowerment, the Court has generally sustained the COA’s decisions or resolutions in deference to its expertise in the implementation of the laws it has been entrusted to enforce. In this relation, the Constitution has an entire Article focused on Public Accountability. Article XI, section 1 enshrines that “Public office is a public trust. Public officers and employees must, at all times, be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest lives.”
NOW, if all these seem to be inoperable, inadequate, ineffectual, unavailing and unsuccessful, invoke the Al Capone Doctrine. That is, seize, catch, indict and convict the gangster(s) in the government using the might and fortitude of the Bureau of Internal Revenue. The Tax Code empowers the Commissioner to obtain information and to summon/examine and take the testimony of persons. In fact, the Commissioner is also authorized to file the necessary civil and criminal cases. He can even suspend and/or shutdown businesses, in proper cases, can inquire into the bank deposit account and other related information held by financial institutions. Significantly, the Commissioner can even confiscate and forfeit proceeds or instruments of crime, or value of goods, and instruments or tools with which the crime was committed.
[This Article is humbly dedicated to Dean George Erwin Garcia of Pamantasan ng Lungsod ng Maynila, College of Law, an exceptional and superb boss, an icon, a respectable comrade, a first-rate and the best election lawyer in the Philippine archipelago. Mabuhay ka Dean George at Maligayang Kaarawan sayo Dean Boss!]
