Business execs’ summer exodus
The heat (or what we fondly call summer) is on.
Considered by many as the country’s second most awaited season of the year (after the Christmas holidays), summer, according to the Philippine Atmospheric, Geophysical and Astronomical Services Administration, set in last Monday.
For those who have the means, the two-month break presents an opportunity to travel to local or foreign recreational spots. For financially-challenged students, it’s a chance to raise tuition money from part-time jobs.
Woe to high school or college students who didn’t do well in the last semester. They may have to attend remedial classes to be eligible for enrollment in the coming school year.
For key executives of the country’s Top 100 corporations, the period is a good excuse to fly out of the country and disappear from the local scene for the next two months.
Why? Because, in case you have forgotten, the midterm election is scheduled on May 13, or eight weeks from now.
As the senatorial and congressional campaigns get into high gear, expect the candidates to scrounge for funds and campaign paraphernalia to get their names in the voters’ consciousness.
The potential (and logical) targets for financial and material contributions are public utility companies, holders of legislative franchises and businesses that require government approval for their rates and charges.
Authority
With the bosses out of the country, the people left behind to run the company can plead lack of authority when candidates call or visit to solicit contributions, either in cash or in kind, preferably the former.
The “caretakers” can claim that decisions on such a sensitive issue can only be made by the top honchos who have given strict instructions not to disturb their bonding time with their families unless, say, the office is on fire or a hostile takeover is being planned against the company.
No amount of threats of future reprisal against the company can persuade the holders of the fort to disclose the whereabouts of their bosses or disclose their personal cell phone numbers.
After all, the candidates are not paying their salaries. Besides, there is no assurance the soliciting hopefuls will win in spite of favorable poll surveys which are a dime a dozen every election time.
And even if the candidates have the executives’ cell phone number and, in a misguided feeling of hubris, dare to disturb their peace, the “call barring” mechanism of smart phones can be turned on to ward off unwanted calls.
Of course, the spurned candidates may win. No problem. Should the businessmen later need help in the legislative mill, a belated contribution would be sufficient to make them forget the brush off they suffered during the campaign.
As a political pundit once put it, our senators and congressmen are like ATM machines—they are as good as the amount of money placed in them.
Contributions
The practice in the past of hiding political contributions in the financial books as promotional expenses, attorney’s fees for phantom legal services or accounting charges for imaginary audit work may no longer work.
Judging from the latest pronouncements of Revenue Commissioner Kim Jacinto Henares on election spending, the tax authorities are not ignoramuses on this strategy.
Having cut her teeth in the private accounting sector prior to joining the government, Henares knows how companies source campaign contributions from the corporate coffers and make them look like legitimate business expenses without (hopefully) arousing suspicion from the regulators.
This “cooking of the books” is often done with the assistance of lawyers and accountants who, in an effort to keep these companies in their clientele list, would not hesitate to play around with tax and accounting rules to suit their clients’ interests.
If the expense is later determined to be a campaign contribution, the company could be held liable to pay a donor’s tax whose amount would depend on the value of the contribution.
The company (or business executive, in case he opted to treat the contribution as his personal act) has to cough up additional money to pay the tax, plus any penalties or surcharges that may have accrued as a result of the delayed payment.
Consequences
It’s okay if the recipients of the contribution got elected. The additional payment can be treated as “extra investment” for future favors. If they were not, it would be like throwing good money after bad.
That’s the easy part. The moment the BIR tax assessment becomes public, the contributor could find himself in serious trouble in other fronts.
Having been exposed as a willing contributor to political campaigns, he may find himself in the list of future candidates for possible funding support. If he is engaged in businesses that are heavily regulated, he could be summoned in congressional investigations in aid of extortion, oops, I meant legislation.
In addition, the winning candidates whose solicitation may have been spurned may bear a grudge against him and, like a woman scorned, try to get even with him or his company one way or the other.
Unless executives think their business cannot survive without the patronage of senators and congressmen, they are better off not getting financially involved in the ongoing political campaign.
Disappearing from the domestic scene for the time being could be good to their health and that of their company.
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