Effect of pending cases on the Senate’s power to conduct investigation in aid of legislation

There’s a radio commentary discussing the possible effect of the pending complaints filed with the Office of the Ombudsman on the Senate hearings in connection with the aborted $329-million national broadband network (NBN) deal with China’s ZTE Corp., with Rodolfo Noel “Jun” Lozada, Jr. as the central witness. The commentary cited the case of Bengzon, Jr. vs. Senate Blue Ribbon Committee, in which case the Supreme Court (SC) stopped an investigation of the Senate Blue Ribbon Committee as “the issue to be investigated was one over which jurisdiction had already been acquired by the Sandiganbayan, and to allow the [Senate Blue Ribbon] Committee to investigate the matter would create the possibility of conflicting judgments; and that the inquiry into the same justiciable controversy would be an encroachment on the exclusive domain of judicial jurisdiction that had set in much earlier.”

The radio commentary, however, failed to note the later case of Standard Chartered Bank (Philippine Branch), et al. vs. Senate Committee on Banks, Financial Institutions and Currencies. The SC upheld the Senate’s power to conduct an investigation in aid of legislation in this 2007 case, distinguishing it from Bengzon.

By way of background, in 2005, Senator Enrile, the Vice Chairperson of Senate Committee on Banks, Financial Institutions and Currencies, delivered a privilege speech entitled “Arrogance of Wealth” before the Senate denouncing Standard Chartered Bank (SCB)-Philippines for selling unregistered foreign securities in violation of the Securities Regulation Code (R.A. No. 8799) and urging the Senate to immediately conduct an inquiry, in aid of legislation, to prevent the occurrence of a similar fraudulent activity in the future. Prior to the privilege speech, Senator Enrile had introduced a Resolution “directing the Committee on Banks, Financial Institutions and Currencies, to conduct an inquiry, in aid of legislation, into the illegal sale of unregistered and high-risk securities by Standard Chartered Bank, which resulted in billions of pesos of losses to the investing public.”

The Committee thereafter conducted hearings and invited the petitioners, among others, requesting them to submit their written position paper. Petitioners submitted a letter stressing that there were cases pending in court allegedly involving the same issues. In the petition that reached the SC, petitioners argue, among others, that the Senate has no jurisdiction to conduct the inquiry because its subject matter is the very same subject matter of pending cases (three cases with the Court of Appeals, a civil case with the Regional Trial Court, two criminal cases with the Metropolitan Trial Court, and a criminal complaint with the Office of the City Prosecutor). Citing Bengzon, they claim that since the issue of whether or not SCB-Philippines illegally sold unregistered foreign securities is already preempted by the courts that took cognizance of the foregoing cases, the respondent, by this investigation, would encroach upon the judicial powers vested solely in these courts.

The SC ruled that Bengzon does not apply squarely to the case. It is true that in Bengzon, the Court declared that the issue to be investigated was one over which jurisdiction had already been acquired by the Sandiganbayan, and to allow the [Senate Blue Ribbon] Committee to investigate the matter would create the possibility of conflicting judgments; and that the inquiry into the same justiciable controversy would be an encroachment on the exclusive domain of judicial jurisdiction that had set in much earlier.

To the extent that there are a number of cases already pending in various courts and administrative bodies involving the petitioners, relative to the alleged sale of unregistered foreign securities, there is a resemblance between this case and Bengzon. However, the similarity ends there.

Central to the Court’s ruling in Bengzon — that the Senate Blue Ribbon Committee was without any constitutional mooring to conduct the legislative investigation — was the Court’s determination that the intended inquiry was not in aid of legislation. (See also the Primer on Separation of Powers, Inquiry in Aid of Legislation). The Court found that the speech of Senator Enrile, which sought such investigation contained no suggestion of any contemplated legislation; it merely called upon the Senate to look into possible violations of Section 5, Republic Act No. 3019. Thus, the Court held that the requested probe failed to comply with a fundamental requirement of Section 21, Article VI of the Constitution, which states:

The Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in or affected by such inquiries shall be respected.

Unfortunately for the petitioners, this distinguishing factual milieu in Bengzon does not obtain in their case. The Resolution filed by Senator Enrile is explicit on the subject and nature of the inquiry to be (and already being) conducted by the respondent Committee.

The unmistakable objective of the investigation, as set forth in the said resolution, exposes the error in petitioners’ allegation that the inquiry, as initiated in a privilege speech by the very same Senator Enrile, was simply “to denounce the illegal practice committed by a foreign bank in selling unregistered foreign securities x x x.” This fallacy is made more glaring when we consider that, at the conclusion of his privilege speech, Senator Enrile urged the Senate “to immediately conduct an inquiry, in aid of legislation, so as to prevent the occurrence of a similar fraudulent activity in the future.”

Indeed, the mere filing of a criminal or an administrative complaint before a court or a quasi-judicial body should not automatically bar the conduct of legislative investigation. Otherwise, it would be extremely easy to subvert any intended inquiry by Congress through the convenient ploy of instituting a criminal or an administrative complaint. Surely, the exercise of sovereign legislative authority, of which the power of legislative inquiry is an essential component, cannot be made subordinate to a criminal or an administrative investigation.
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Whether which doctrine applies – Bengzon or (SCB)-Philippines – would depend on the surrounding circumstances. That matter, however, is to be resolved in the appropriate case.

2 comments

  1. I believe these Senate investigations are merely meant for the Senators to gain points in the next elections, that they are merely grandstanding.
    Not that I’m not concerned with stamping out corruption, but I feel it’s our democratic system itself which is the main problem. The person next in line to take over was voted purely because he’s popular with the masses, and not because of his ability to run the country. You’re not solving the main problem by booting her out, until our voters learn to vote wisely.

  2. i agree with pian. ousting GMA will never solve the problems our country is facing right now. why not let her finish her term and let the people vote wisely come 2010? if she will be ousted, the vp will take place. and if people won’t be satisfied, oust him too? come on people! if you only knew, the people you think who are better than GMA are all in greed of political power!

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