by Cress Vasquez
Working for the same organization for several years has its rewards, but wait until you see how the Filipino Centre Toronto (FCT) board of directors passed a special resolution that put some $500,000 into the pockets of a husband and wife.
The payment, according to lawyers from two different law firms, was likely a violation of FCT Constitution by-laws, while the passage of the special resolution that guaranteed the payment smacks of conflict of interest.
One of the people who voted for the approval of the payment was a recipient, while her husband too was a recipient. Even if she did not vote for the monetary award, her presence in the same room with the FCT directors would have constituted conflict of interest.
On May 20, 2017 the directors passed a special resolution awarding $546,296 to three individuals for unpaid salaries and allowances in 2016 and 10 years back. But the bulk of the money, $500,000 or more, reportedly went to the couple.
For a not-for-profit corporation like FCT, it seems odd that it can unload a large amount of cash without hesitation. But after selling its Toronto building for $5.9 million in January 2017, FCT directors have their milking cow.
Incredible as the 10-year back payment sounds, the plot thickens.
No Evidence of $548,296 Compensation in Arrears
A page by page, year to year inspection of balance sheets from 2012 until 2015 plus the 2016 unaudited financial statement failed to show a single entry on unpaid salaries or allowances as a liability.
So, how did the directors arrive at $548,296 calculated 10 years backward without a paper trail? Perhaps the directors have forgotten that, while it is easy to create bogus vouchers, incriminating evidence of balanced sheets and financial statements in the hands of several people cannot be deleted, doctored or substituted.
Before we proceed, let us look first at the major players in the money game.
Retroactive Pay, Money Grab, Conflict of Interest
Recipients of the large payment were the late FCT President and CEO Rosalinda C. Javier as Property Manager, gas and travel allowance from 1997 to 2016, her husband, Felino A. Javier as Building Superintendent, salary from January 2006 to October 2016, and Wendelina Arena as Office Manager and Assistant to the President, gas and travel allowance from 2005 to December 2016.
Rosalinda C. Javier likely voted to enrich herself and her husband, while the directors who were present in the same room with her did not raise a dissenting voice.
Dr. Antonina de Villa, long-serving FCT director and widow of the late Dr. Guillermo de Villa, co-founder and driving force behind FCT’s creation, who had sponsored the fundraising event, Dr. Guillermo de Villa Golf Tournament, was one of the directors who approved Javier’s fat pay check.
Maria Corazon J. de Villa, (whose father was a cousin of Dr. De Villa’s late husband) told this writer that when she was FCT treasurer from 2012 to 2015, she received signed vouchers for salary and gas and transportation allowance from various individuals.
She recorded and paid the vouchers and then passed the information to accountant Roman Chiu, a Certified Management Accountant (CMA), who entered the information in the balance sheet under Repair/Maintenance as there was no line item for Salary. In short taxable salaries vanished in thin air.
It is likely that salaries and allowances paid years ago but not recorded in the balance sheet as such, had been paid again on the strength of the special resolution passed on May 20, 2017.
Legal sources said that remuneration to an officer, director, and member likely violated FCT Constitution By-laws, and each board member is likely personally liable for breach of fiduciary obligation for passing the special resolution without first amending the FCT Constitution By-laws.
FCT CEO Uses Dr. De Villa
FCT President and CEO Mary Ann San Juan has been using Dr. De Villa as FCT’s frontliner when it came to social events like the inauguration of FCT’s new building on Aug. 12, 2018 and as moderator at FCT’s Special General Meeting on June 6, 2019 where FCT did not fully answer questions about previously unknown payables and their failure to engage an independent auditor as approved at the Annual General Meeting on Oct. 5, 2018.
The directors who signed the resolution for the monetary award were Dr. De Villa, San Juan, Theresa Lumanlan, VP/CFO, Frank Cruzet, Chairman Efren de Villa, Philip Beloso, Melchor Galeon, Mercy Maliglig, Bernie Carreon, and Rosalinda C. Javier.
Shortly after, one of the signers, Carreon, resigned. If it was pangs of conscience that caused him to quit, he did a noble act.
The same cannot be said of his cohorts on the board who continue to bask in broad daylight as transparent, honest, and principled citizens.
Lumanlan and Dead Bodies
Lumanlan, because of her financial position and long friendship with the previous FCT chief and the current FCT chief, surely knows the dark secrets of FCT. She would likely know where dead bodies had been buried with regards to genuine or bogus vouchers, cash flows, repair and maintenance fixes, who got what and how much, and unreported taxes.
Observers see her as next in line if San Juan leaves her post. Is she a clone of the authoritarian style of Javier and San Juan? Who knows, power intoxicates.
Lawyers’ Opinion on FCT Leaders’ Action
Payment of salaries, retroactive or not, that were authorized by one or more resolutions passed by the FCT Board on May 2, 2006, Aug. 14, 2006, and May 20, 2017 contravene FCT By-laws,” according to legal sources.
These sources refer to Article VII (4) of the FCT Constitution By-laws which provides that Board members, officers and members of the organization shall receive no remuneration for acting as such but shall be only reimbursed for reasonable expenses incurred in the performance of their duties.
They said that the passage of a special resolution purportedly to authorize payment to a director or member is not sufficient to authorize the payment because a special resolution is required to amend the FCT by-law (Section VII, 4), according to Section 1 of the Corporations Act.
Convoluted Reporting of Liability
Back to the 2017back payment, the entry in the 2018 unaudited financial statement was a liability expressed not in numbers but in words: “related due (Note 8)”
“This renumeration were approved by the Board of Directors through a special resolution upon the authorities (sic) vested to (sic) them by the Organization ’s Constitution.”
The information refers to the note on Page 11: “8. DUE TO RELATED PARTIES – “The amount due to related parties represents the remaining balance from the total due amount of $548,296 of renumeration payable in arrears, to certain current and former employees pertaining to 2016 and prior years.
“This renumeration were approved by the Board of Directors through a special resolution upon the authorities (sic) vested to (sic) them by the Organization ’s Constitution.”
Ask yourself why SRCO did not use $548,296 instead of “related due?” San Juan and Lumanlan might probably know.
FCT Directors Resign
Before and after the passage of the resolution, several directors resigned from the board. They were FCT Chairman Rey Tolentino, Dr. Mario Andres, FCT co-founder, lawyer Raffy Fabregas, Malou Parcero, Luna Vince, internal auditor, Teresa Sevilla, Bernie Carreon, and Dr. Vicky Santiago-Liu, a former FCT co-founder, Chairman, and major donor.
Dr. Santiago-Liu, who quit in 2013 because of business demands, rejoined the board in 2020, but resigned again last June because of what she described as the “nonchalance of the board” when it came to discussing important issues like the long delayed financial audit, which was the “last straw” that made her quit.
Tight on Audit Cost, Loose on Expensive Lawyers
Although San Juan had resisted the independent audit of FCT because, she said “…an audit would cost a lot more, about $10,000 more for each year.” She has exhibited a looseness with FCT funds for expensive lawyers, whose main job is apparently to write simple emails for San Juan or raise the specter of libel.
Under the Canada Not-for-profit Corporations Act (CNCA) public benefit or soliciting corporations like FCT must have a Public Accountant who should conduct an audit when its gross annual income is more than $250,000. FCT earned a gross annual revenue of $5.9 million from the sale of its building in 2017.
Sixteen FCT concerned members first petitioned the board for a third-party audit on Dec. 20, 2018. They followed up with a second petition for the same third-party audit on Feb. 17, 2019.
Among the petitioners were: Dr. Mario Andres, Perla Andres, Rey Tolentino, Maria CJ De Villa, Ed Birondo, Evelyn Birondo, Malou Parcero, Bay Bernabe, Daisy Bernabe, Toots Evidente, Noel Cruz, Bobby Gabat, Bernie Carreon, Teresa Sevilla, Rob Fuerte, Frank Maralag, Rudy Naval, Myra Naval, Cecile Kolmegies, Mercedes Tolentino, Elisa Pardinas, Frank Villanueva, and Luna Vince.
Yet San Juan delayed the audit for four years until last August when it hired Lauren Cole, Public Accountant of Yale PGC LLP, to audit FCT.
Meanwhile, San Juan had gone lawyer-shopping and short-listed Mark Donald, Robert Hayhoe, and Matthew Czerwinski. She finally settled on Donald, a libel lawyer, in addition to FCT’s long-time legal counsel, Ramon Andal of Andal Law.
Questions San Juan Passed to Her Lawyer
To get San Juan’s side on issues related to FCT’s fund management and its relationship with community newspapers, this writer sent her on Aug. 31, 2021 the following questions:
- Filipino organizations come and go, yet there are some that resist the pull of gravity like FCT which have existed for two decades. Despite its longevity and successes, why do you think FCT has now become the target of controversy? Is it because of its success, its management culture, or is it because of troublemakers?
- FCT has announced the payment of $678,000 in 2017, do you have financial reports showing these payments as liabilities in prior years and disbursements in 2017? If you have, could you provide me with a copy of the relevant financial statements? If not, why not?
- As FCT President and CEO of a not-for-profit organization funded by community donations, fundraising events, and government grants, do you think the Filipino community and the Canadian public deserve to know how and why money is being spent? Please elaborate.
- When you banned Filipino media from observing FCT’s Annual General Meeting in 2019 because they were “not FCT members,” you effectively prevented the larger Filipino public from knowing how successful FCT was, how its money was being spent, and what were your plans for the Filipino community. So, I would like to know what made you act as if FCT is a private club, exclusive to members only?
As the brains behind FCT, I trust you are performing your duties with due diligence, integrity, and transparency for the higher good of everyone in the Filipino community.
San Juan did not respond to the questions but rather passed them to her lawyer, Mark Donald.
FCT Lawyer’s Response
Here is Mr. Donald’s response:
In response to your email to the FCT’s President dated August 31, 2021, I emphasize the following:
- Details of the FCT’s financial status are disclosable to members of the organization only, and you have no right to demand the information sought in your email; and
Response: This writer has the right to ask questions in the light of public interest after FCT President and CEO Mary Ann San Juan and FCT Chairman De Villa have publicly proclaimed they were transparent, honest, open, fair etc.:
In a statement to a community newspaper on Oct. 3, 2020, San Juan said–“The Filipino Centre Toronto (FCT) solidly believes in transparency, honesty, fairness, and commitment to its decisions for the past twenty years in the Filipino community.”
During the inauguration of FCT’s new building on Aug. 12, 2018, Chairman De Villa said: “…in our operation…we are openly and honestly transparent and we do our finances religiously,…everybody is welcome to look at them.”
- What is more, any reasonably informed observer or member of the FCT would be well aware that the organization has made full and forthright disclosure to its membership regarding the payments you describe in your email. This has occurred on numerous occasions, and in spite of your insinuation to the contrary. All of which leads me to a troubling conclusion: one supposes that would like to consider yourself as an unbiased third party, but your statements show otherwise. I am particularly intrigued by the fact you saw fit to frame your questions with the following rhetorical flourish (amongst others in your email):
If FCT is a private club whose funding comes from the deep pockets of a few individuals, instead of government grants and community fundraising events, then who cares if its leadership spends FCT money like it is their own, indiscriminately, without accountability, and devoid of conscience.
Response: You stated “… any reasonably informed observer or member of the FCT would be well aware that the organization has made full and forthright disclosure to its membership regarding the payments you describe in your email. This has occurred on numerous occasions, and in spite of your insinuation to the contrary.”
Your statement is likely incorrect. The payment of $548,296 retroactive compensation to three individuals on May 20, 2017 was not known by the membership and board of directors, including then FCT Chairman Rey Tolentino. Inspection of balance sheets from 2012 to 2015 and the 2016 financial statement has disclosed no entry of compensation in arrears.
As you may, or may not know, the law in Canada cautions against sensationalism in publishing and is wary of publishers with an “axe to grind” (Grant v. Torstar Corp., 2009 SCC 31). Nor will a publication be considered “fair” when the author ignores known or easily obtainable facts that undermine the conclusion he or she proposes (Myers v. Canadian Broadcasting Corp., [2001) O.J. No. 2228). And it is trite law that unproven allegations of fraud and professional misfeasance will be met with higher costs awards following trial of an action. I would advise you take all of these principles into consideration before publishing anything about my client.
So, I suppose you are at liberty to publish what you want, but the FCT is similarly entitled to defend its reputation from ill-informed and scurrilous attacks before the courts. We will rely on this correspondence as necessary.
Response: This writer uses documentary evidence and written and personal interviews to write down facts in good faith, without malice, and with honest belief in the truth.
Statements in this and a previous article were made with the intent of protecting the public interest from the harm that would result from negligence or financial mismanagement of FCT by its executives and directors.
Any veiled threat would not deter responsible journalism.
Beginning of a Storm at FCT
Back in December 2016, when the sale of the FCT building became final, Javier asked then director and Internal Auditor Luna Vince to issue Javier pre–signed blank postdated checks. However, Vince refused because “as an internal auditor I have no authority to issue checks.” Instead, she told Javier to go to Lumanlan, the VP and CFO.
Vince then relayed her conversation with Javier and information on large unknown vouchers to then FCT Chairman Tolentino, who approached Javier to talk about the vouchers. However, Tolentino was taken aback when Javier responded with harsh and disdainful words.
On Mar. 19, 2017, Tolentino sent a memo to the board stating his concerns regarding “initiatives” that bothered him, hence he officially communicated to the Board the need for seeking official legal and financial advice. He said: “With the liquidation of the FCT building we should be extremely sensitive to the final outcome and disbursements of the sale knowing we are all answerable to our membership.”
Javier responded with a memo to Tolentino and the board, giving him a piece of her mind. Her vitriol even spread to three directors, Dr. Mario Andres, Luna Vince, and Malou Parcero. They all resigned with Tolentino soon after.
Dr. Andres Resigns
In his Mar. 20, 2017 message to FCT executives that included Javier and her factotums, San Juan, Lumanlan, Efren de Villa, Dr. De Villa, and Arena, Dr. Andres said: “The FCT is in shambles, disarray and broken. No more reasonable discussions. One word for FCT, thousands of words for intrigue and personal agenda. Which way are we going?”
“We have lost our senses,” he added.
Finally, he said: “I’m resigning as board member effective immediately.”
$300,000 Loan Repayment to Dr. Santiago-Liu
The special resolution passed on May 20, 2017 also authorized non-interest loan repayment of $300,000 to Dr. Santiago-Liu. The loans were for a series of payments to lawyers from 2006 to 2012 for a total of $205,255.70 and $90,000 for roof repair on Feb. 17, 2008.
Dr. Santiago-Liu told this writer that she received repayments in installments. But, she said, there was a personal loan to Javier that she repaid with an “FCT check.”
Goddess or Medusa?
When Javier was alive, she ran FCT with a strong arm and a strident voice. But she could be sweet like marshmallow if she likes you. And it is no wonder that she had disciples like Dr. De Villa, San Juan, and Lumanlan, who saw her like a goddess.
However, to gentlemen like Tolentino and Dr. Andres and ladies like Malou Parcero, Corazon J. De Villa , and Luna Vince, Javier was likely Medusa (of Greek mythology).
Back Payment Contravenes FCT Constitution By-laws
Concerning the FCT claim that payment of retroactive salaries was authorized by one or more resolutions passed by the board on May 2, 2006 and Aug. 14, 2006, legal sources said FCT directors do not have authority to pass resolutions authorizing actions that contravene the FCT By-laws.
If the FCT Board sought to pay salaries to its members, that would require an amendment to the by-laws in accordance with the procedures mandated by the FCT Constitution.
Audited and Reviewed Financial Statements Are Not the Same
San Juan, in a statement on Dec. 6, 2020, said that: “Review of the 2017 and 2018 financial statements was recommended by the auditors, since an audit would cost a lot more, about $10,000 more for each year and the result would have been the same. The FCT Board was being fiscally responsible when it accepted the recommendation by SRCO.”
San Juan’s statement is incorrect since the result of an audited financial statement is based on evidence gathered by the auditor, while review of a financial statement is based on financial data provided by the client. Also, one cannot call somebody an auditor if the individual did not do an audit.
Incidentally, Dr. Santiago-Liu, Bernabe, and Cruz are former presidents of the University of the Philippines Alumni Association-Toronto (UPAAT). Bernabe and Cruz are among 26 FCT members who clamored for a financial audit to strengthen FCT.
The delay in the audit was the last straw that made Dr Santiago-Liu resign from the board.
Filipino Community Needs Self-sacrifice
Concerned members and the public do not want FCT to be extinct, but rather an organization that is alive without personal agenda, financial mismanagement, false professionalism, and safe from moribund officers and directors.
The Filipino community in general does not need obstinacy. It only needs genuine transparency, vitality, and self-sacrifice.
