Case Vs Rappler Not A Freedom Of The Press Issue.docx

Case vs Rappler not a freedom of the press issue? Please. The case against Rappler is just part of President Duterte's war against the critical press

In the days following the Securities and Exchanges Commission’s (SEC) decision to revoke Rappler’s articles of incorporation, Malacañang repeatedly denied that it was a form of political harassment. In an interview on ANC’s Headstart, Presidential Spokesperson Harry Roque said: "What evidence does she (Maria Ressa) have that government orchestrated this decision? None, given the credibility of the persons who wrote the decision, and given the legal mandate of the SEC.” Inasmuch as the administration would like to paint the issue as one that is not politically driven, it's imperative to look at the issue and see that it does not exist in a vacuum. Let’s take a look at the timeline. In President Rodrigo Duterte's second State of the Nation Address in July 2017, he echoed a false claim that Rappler is owned by Americans: “ABS, o Rappler, kayo ba ‘yan? Have you tried to pierce your identity? And I would lead you to America. Do you know that? And yet the Constitution requires you to be 100% media, Filipino. Rappler tried to pierce the identity, and you will end up American ownership.” The President and his cabal of pundits have conflated the existence of Philippine Depositary Receipts or PDRs to be tantamount to ownership which is false. The President had echoed this claim since then. Six months later, the SEC came with its decision based on an investigation conducted upon the prompting of the government’s counsel, Solicitor General Jose Calida. (READ: Solicitor General initiated SEC investigation into Rappler) During the investigation period, Rappler cooperated with the SEC, cognizant of the SEC’s mandate to perform its due diligence. But due process was not followed and the company was meted with punitive action that is arguably not commensurate to the alleged violation. Rappler's lawyer, Francis Lim, pointed out that other remedies were available to cure the violations without resorting to the revocation of the license: "Stockholders remain the same. Voting power remains with the stockholders of Rappler Holdings and Rappler Inc. Why do you revoke? Why do you go to that extreme penalty – kill the company – when there are other measures?" (READ: If there was a violation, Rappler not given time to cure it – lawyer) In a similar case involving foreign ownership and PLDT Incorporated, SEC Memorandum Circular 8, Series of 2013 gave corporations a one-year curing period to correct violations of the foreign ownership rule. The same was not applied to Rappler’s case. SEC chairpersonTeresita Herbosa told the Philippine Daily Inquirer that the Securities Regulation Code "does not provide for it (one-year curing period) in case of violation of any of its provisions.”

A history of hostility While the Duterte administration would like to insist that the incident involving Rappler is an isolated case, it would be remiss to ignore the context and the current political climate that news and media organizations perceived as critical of the government currently function in. There have been several incidents in the past few months that show that this isn’t the first time the President and his administration have flexed their muscles to intimidate news organizations that they deem critical. In August of 2016, Solicitor General Jose Calida himself personally served the notice to vacate to tenants of the Prietos' Mile Long property. In July 2017, President Duterte threatened an exposé against the Inquirer. He insinuated that the Prietos, the owners of the Inquirer, skirted tax laws regarding the Mile Long property. It didn’t take long before the family announced the sale of their majority stake inInquirer to Ramon Ang, a businessman, who President Duterte calls his friend. Ang is also his campaign donor. The pressure was on and it was palpable in the Inquirer newsroom. Rappler gave a glimpse in a Newsbreak report, "Duterte's target: The Philippine Daily Inquirer." Aware of the difficult terrain that the newspaper was navigating under Duterte, some Inquirer editors exerted extra effort to show balance in their stories to show management they were not being unreasonable. "We would catch ourselves practicing self-censorship," one of them said. "It was sad and tears were shed," said another. Nothing they did, though, could seem to pacify the powers that be. The Newsbreak report, written in August 2017, proved to be prophetic. For even after the Prietos had given up the Inquirer, it appeared that President Duterte was still not satisfied. Just this week, he hurled yet another grave threat at the family: "One of these days, I’ll file a plunder case. When I file a plunder case, you will go to jail without a bail. You'll see, you fools."

FRANCHISE RENEWAL BLUES. The franchise of ABS-CBN lapses in 2020, within the term of President Rodrigo Duterte who has vowed to block its renewal for another 25 years. Photo of ABS-CBN building from Wikipedia

Apart from print and online media, Duterte also had a bone to pick with broadcast media. In April 2017, President Duterte sought to block the renewal of ABS-CBN's franchise, accusing the network of "swindling" him when he was still a presidential candidate. In an interview, he said: “[The franchise] has been there for 25 years. The law said it’s okay, only if you adhere to journalistic standards. What did you do to us? Estafa, swindling, not only me but Chiz Escudero, many of us. Son of a bitch, you collected outright then you commit estafa." The accusations are rooted in Duterte's allegations that the network refused to air his ads during the 2016 campaign. (READ: Duterte's ace against ABS-CBN, the Philippines' biggest network)

ABS-CBN's franchise ends in 2020, subject to renewal of Congress which is dominated by Duterte's allies.

#DefendPressFreedom Malacañang has repeatedly denied the political motivations behind the Rappler case but the President's words and demeanor towards the media companies suggest otherwise. In March 2017, he had a few choice words for Inquirer and ABS-CBN, warning them of karma. "Tingnan kung magslant. Ewan ko ba. But someday – hindi ko tinatakot – but someday, 'yung karma, dadating 'yan....Inquirer, mga bullshit kayo, pati 'yang ABSCBN, basura 'yang inano ninyo. Dapat may magsabi sa inyo ngayon, mga putang-ina ninyo, sinobrahan 'nyo ang kalokohan ninyo." (See how they slant. I don't know. But someday – I'm not scaring them – but someday, karma will come....Inquirer, you are bullshit, also ABS-CBN, you publish trash. Someone should tell you, "You are sons of bitches, you went too far in your nonsense.") After Rappler reported on the alleged intervention of Special Assistant to the President Bong Go on a P15.5-billion Navy project this week, Duterte tagged the news group as a producer of "fake news." (READ: Bong Go intervenes in P15.5-B project to acquire PH warships): "For your information, you can stop your suspicious mind from roaming somewhere else. But since you are a fake news outlet then I am not surprised that your articles are also fake... Sumobra kayo (You are going overboard), you are not only throwing toilet paper, you are throwing shit at us." After the President's latest rant against Rappler, Justice Secretary Vitaliano Aguirre II said that the Department of Justice's investigation into Rappler will not be limited to possible violations of the Constitution and the Anti-Dummy Law, but "other laws" as well. Well, this is nothing short of a "fishing expedition, and pure and simple harassment," said Rappler. "We thought this was supposed to be in relation to PDRs and the alleged violation of the Constitution." Then, the National Bureau of Investigation suddenly summoned Rappler CEO Maria Ressa and a former Rappler reporter over a cyber libel complaint for a story that was posted in 2012. The story even predated the effectivity date of the Cybercrime Prevention Act of 2012. The exercise of the law by the state, especially towards the constitutionally-protected press, is a freedom of the press issue, especially in the context of a President who has not shied away from cursing, criticizing, and slamming what he perceives as critical coverage. Even more so, in a climate where his supporters and followers constantly attack mainstream media and journalists online.

Journalist organizations, international publications, legislators, and human rights groups have voiced their concern regarding the developments in the Philippines.Human Rights Watch said: “What we're looking at here is nothing less than a politicized attack on a critical media voice in the Philippines using the pretext of alleged foreign ownership....To a certain extent, this is a weaponization of state regulatory processes to undermine and to stifle media freedom."

While the Philippine media and the government had gone through a rough patch from time to time – some rougher than others – in the period after the Marcos regime to the previous administration, there's no doubt that the current government's brazen moves are not unlike something this country had seen during his strongman idol's time. (READ: From Marcos to Duterte: How media was attacked, threatened) –

Rappler.com

SEC stands firm on decision to strip Rappler's license This comes amid public outrage over the regulator's decision, with some condemning it and calling it an obvious attack on press freedom

STANDS FIRM. Rappler on January 15, 2018 holds press conference on SEC's decision to revoke its registration. Photo by LeAnne Jazul/Rappler

MANILA, Philippines – Despite calls from local and global organizations to reverse its order, the Securities and Exchange Commission (SEC) stood firm on its decision to strip Rappler Incorporated's of its license to do business, citing clear violation to "foreign equity restrictions in mass media." Local and foreign journalist groups, as well as some senators, condemned the corporate securities regulator's move, calling it an obvious attack on press freedom. But Armand Pan, officer-in-charge of the Office of the Commission Secretary, denied the accusations, saying SEC "just did what it has to do based on its mandate as an corporate securities regulator." He said a provision in the Philippine Depositary Receipts (PDRs) issued to Omidyar Network Fund LLC – which seeks approval of 2/3 of PDR holders on corporate matters – "is a violation of Foreign Equity Restriction of the Philippine Constitution." "It stated in the 12.2-2 [clause] of the Omidyar PDR itself that Omidyar must have prior approval when it comes to changing the articles of incorporation or by-laws of the company. That means, Rappler cannot even change the principal office address, the date of meeting, so those are operational policies of corporations. That means PDR

holders exercise right of ownership," Pan said in an interview with ANC on Tuesday, January 16. He added that the mere act of giving Omidyar the right to participate in the management of Rappler is enough to validate its decision to revoke the media organization's incorporation papers. "They need not exercise the right," Pan added. For Rappler's part, its acting managing editor Chay Hofileña said PDR holders have "no involvement, no say in Rappler's day-to-day operations, especially in editorial."

'More harsh' than previous rulings Rappler chief executive officer Maria Ressa said SEC made the decision "without due process," as it was made in "less than 5 months" since the media outlet received a show-cause order from the regulator in August. SEC chairwoman Teresita Herbosa, meanwhile, explained that the probe was initiated after her office received a "referral letter" from the Office of the Solicitor General (OSG) on December 22, 2016, asking it to conduct an investigation into Rappler "for any possible contravention of the strict requirements of the 1987 Constitution." Although the show-cause order was only issued in August 2017, Herbosa said her office undertook an "internal, inter-departmental investigation into Rappler" between December 2016 to July 2017. "We take cognizance of any complaint, tip, or referral if there is," she said in a text message. (READ: Supreme Court upholds SEC foreign ownership rules) On a related matter, a few days before SEC received the OSG referral letter to probe Rappler's ownership structure, the Supreme Court (SC) upheld the foreign ownership guidelines set by the SEC, which a lawyer alleged was made to accommodate PLDTIncorporated, which then exceeded the 40% foreign ownership cap to public utilities mandated by the 1987 Constitution. By a vote of 8-5, the SC on November 22, 2016 denied the petition filed by Jose Judd Roy III, a former dean of the Pamantasan ng Lungsod ng Maynila, who questioned the constitutionality of SEC Memorandum Circular 8, series of 2013, or Guidelines on Compliance with the Filipino-Foreign Ownership Requirements. The circular gives corporations, like PLDT, which were not compliant with the nationality requirement one year to cure the violation. PLDT was then able to issue preferred voting shares to BTF Holdings Incorporated and adhere to the foreign ownership rule.

But in the case of Rappler, Herbosa told the Philippine Daily Inquirer that the Securities Regulation Code "does not provide for it (one-year curing period) in case of violation of any of its provisions." The Philippine Center for Investigative Journalism (PCIJ) denounced this move, saying the SEC treated Rappler "more harshly" than PLDT when it faced the foreign-ownership violation issues.

"The SEC seem to have glossed over the fact that the harshest penalty of revoking the corporate registration of the Rappler would have impaired its delivery of news and information on matters of public concern, or even the Constitutional guarantees of press freedom and the people's right to know," PCIJ said in a statement. Meanwhile, Rappler said it will exhaust legal means to reverse the SEC order. –

Rappler.com

Herbosa: SEC ruling not final but Malacañang's call to ban Rappler 'We will not implement [the SEC ruling] until after the final and binding decision of the Court of Appeals or the Supreme Court,' says Securities and Exchange Commission chairperson Teresita Herbosa

SEC CHIEF. Securities and Exchange Commission Teresita Herbosa attends a Senate hearing on February 12, 2018. Photo by Angie de Silva/Rappler

MANILA, Philippines – While Rappler continues to be registered with the Securities and Exchange Commission, Malacañang can independently decide to ban the news site's reporters from Palace coverage, SEC chairperson Teresita Herbosa said on Friday, February 23. Herbosa made the statement in response to questions at a forum, where she was asked about the position of President Rodrigo Duterte on banning Rappler reporter Pia Ranada and CEO Maria Ressa from entering the Palace compound because he was following the SEC decision to revoke Rappler’s business registration. The SEC chair, speaking only for the second time on the Rappler case, reiterated that the SEC decision is not yet final and executory. (READ: Rappler still free to continue operations) “We will not implement it (the SEC ruling) until after the final and binding decision of the Court of Appeals or the Supreme Court,” Herbosa said. Herbosa however added: “But in the case of Malacañang, they have their own standards and they have their own basis for allowing access to Malacañang by journalists, reporters, and the fact that because of that decision, it was a signal for them to again consider the accreditation or recognition of some people regarding access to Malacanang, I guess that’s their own independent decision."

Accreditation rules of the Malacañang Press Corps, which processes applications for MPC membership, indicate that among the requirements for media organizations is SEC registration. Given Herbosa's pronouncement, that registration remains in effect. Malacañang had said that the "loss" of Rappler's business registration following the ruling has made it ineligible for MPC accreditation and thus, ineligible for access to the Palace too. Duterte himself had said that he ordered the ban on Rappler following the SEC decisionwhich to him, and other officials, was already “executory.” Palace officials maintained this position even after the SEC itself said otherwise as early as January 16. (READ: Rappler to Malacañang: Don't use power to obstruct) Asked about the position taken by Rappler that it remains registered with the SEC and qualified for MPC membership, Herbosa said: “But you know, Malacañang is not a party to the case. So it makes its own decision based on whatever they see.” Rappler has maintained that access to Malacañang by a legitimate online news organization cannot be dictated upon by government. "It is not the government's role to say who can cover what, and when, and where. There is a clear line between a nation's officials, and the press whose job it is to hold them accountable by informing the public of their actions," it said in a statement addressed to Presidential Spokesman Harry Roque. (READ: Rappler to Harry Roque: Duterte ban about press freedom) Herbosa also reiterated that the SEC decision is "not politically motivated." She said the insinuation that she had been "pressured" had hurt her the most. "That, I vehemently deny," Herbosa said. – Rappler.com Filed under:MalacañangRapplerRappler banRodrigo DuterteSecurities and Exchange CommissionTeresita HerbosaSEC

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Herbosa: SEC ruling not final but Malacañang's call to ban Rappler 'We will not implement [the SEC ruling] until after the final and binding decision of the Court of Appeals or the Supreme Court,' says Securities and Exchange Commission chairperson Teresita Herbosa SEC CHIEF. Securities and Exchange Commission Teresita Herbosa attends a Senate hearing on February 12, 2018. Photo by Angie de Silva/Rappler

MANILA, Philippines – While Rappler continues to be registered with the Securities and Exchange Commission, Malacañang can independently decide to ban the news site's reporters from Palace coverage, SEC chairperson Teresita Herbosa said on Friday, February 23.

Herbosa made the statement in response to questions at a forum, where she was asked about the position of President Rodrigo Duterte on banning Rappler reporter Pia Ranada and CEO Maria Ressa from entering the Palace compound because he was following the SEC decision to revoke Rappler’s business registration. The SEC chair, speaking only for the second time on the Rappler case, reiterated that the SEC decision is not yet final and executory. “We will not implement it (the SEC ruling) until after the final and binding decision of the Court of Appeals or the Supreme Court,” Herbosa said. Herbosa however added: “But in the case of Malacañang, they have their own standards and they have their own basis for allowing access to Malacañang by journalists, reporters, and the fact that because of that decision, it was a signal for them to again consider the accreditation or recognition of some people regarding access to Malacanang, I guess that’s their own independent decision." Accreditation rules of the Malacañang Press Corps, which processes applications for MPC membership, indicate that among the requirements for media organizations is SEC registration. Given Herbosa's pronouncement, that registration remains in effect. Malacañang had said that the "loss" of Rappler's business registration following the ruling has made it ineligible for MPC accreditation and thus, ineligible for access to the Palace too. Duterte himself had said that he ordered the ban on Rappler following the SEC decisionwhich to him, and other officials, was already “executory.” Palace officials maintained this position even after the SEC itself said otherwise as early as January 16. Asked about the position taken by Rappler that it remains registered with the SEC and qualified for MPC membership, Herbosa said: “But you know, Malacañang is not a party to the case. So it makes its own decision based on whatever they see.” Rappler has maintained that access to Malacañang by a legitimate online news organization cannot be dictated upon by government. "It is not the government's role to say who can cover what, and when, and where. There is a clear line between a nation's officials, and the press whose job it is to hold them accountable by informing the public of their actions," it said in a statement addressed to Presidential Spokesman Harry Roque. Herbosa also reiterated that the SEC decision is "not politically motivated." She said the insinuation that she had been "pressured" had hurt her the most. "That, I vehemently deny," Herbosa said. – Rappler.com

Duterte to lift ban on Rappler if SEC ruling overturned President Rodrigo Duterte also revives his old claim that Rappler is 'CIAsponsored'

MEDIA INTERVIEW. President Rodrigo Duterte answers questions from the media in Iloilo on February 22, 2018. RTVM screenshot

MANILA, Philippines – President Rodrigo Duterte spoke for the first time about his order to ban Rappler reporter Pia Ranada and CEO Maria Ressa from Malacañang on Thursday, February 22. Responding to questions in an interview with reporters in Iloilo, he said he would only allow the two in Malacañang if the Securities and Exchange Commission's (SEC) decision to revoke Rappler's registration is overturned. "Kung sabihin na legitimate sila, pasok kayo uli, walang problema sa akin 'yan (If they say that [Rappler] is legitimate, then come back in, no problem with me)," he told reporters after attending the wake of slain overseas Filipino worker Joanna Demafelis.

The President said his reason for giving the order was to enforce the SEC ruling. "Because it is not a legitimate agency, according to SEC. So I am now invoking executive action based on the SEC ruling," he said.

Presidential Spokesman Harry Roque had previously said Duterte ordered the ban because he was "irritated" by Ranada's questioning on the Philippine Navy frigates deal even after the Senate hearing which, Malacañang claimed, proved the "innocence" of Special Assistant to the President Bong Go.

'CIA-sponsored' Duterte also revived his allegation that Rappler has ties with the United States' Central Intelligence Agency (CIA). "'Di naman Filipino pala ang may-ari o baka CIA-sponsored, bawal rin yan...That is the history of America, CIA, and 'yung political dissenters inaalagan nila. Eventually mamili sila ng kandidato, utusin sila," said Duterte.

(They aren't owned by Filipinos or maybe they are CIA-sponsored, that's also prohibited...That is the history of America, CIA, and they take care of political dissenters. Eventually, they will choose a candidate they will order around.) He alleged that Rappler had constantly tried to "undermine" his administration. "Rappler, read it, it takes every chance to undermine you," said Duterte. He then told reporters around him to observe the "distortion" Rappler makes when it reports news. "They will make a distortion or a report that is distortion. Read it. We're all together here. Look at their reporting," he said in a mix of English and Filipino. Rappler has denied all of the President's allegations. In a statement, Rappler said it is 100% owned by Filipinos and that is not in any way controlled by the CIA. Human rights groups and media groups have slammed the SEC decision and Malacañang's coverage ban on Rappler as assaults on press freedom. –

Rappler.com

EC defends decision to revoke Rappler’s license It’s seen as either a blatant attack on press freedom or a corporate regulator’s crackdown against “deceptive” violation of the Constitution, which mandates Filipino control of mass media. But outside of the conspiracy theories behind the Securities and Exchange Commission (SEC)’s controversial order to revoke the registration of online media outlet Rappler Inc. and its controlling stockholder Rappler Holdings Corp. (RHC), the SEC believes it has built an air-tight case on the basis of legal loopholes found on the structure of Philippine depositary receipts (PDRs) issued by RHC to Omidyar Network Fund LLC, an offshore fund created by eBay founder Pierre Omidyar and his wife. In a 29-page SEC en banc ruling dated January 11, the SEC voided these PDRs issued by RHC to Omidyar.

Rappler, on the other hand, argued that the SEC had approved the issuance of these PDRs in the first place and claimed that the “kill order” had the hand of Malacanang, allegedly upset with certain articles critical of the Duterte administration, particularly a series about how the internet had been “weaponized” to intimidate critics. “What was approved was the issuance of PDRs as an exempt transaction, not the validity of any of its provisions,” SEC chair Teresita Herbosa said in a text message on Tuesday, when asked whether the transaction had been previously cleared. Exempt securities are financial instruments that do not need to be registered with the SEC, such as those sold to less than 19 qualified investors. Depositary receipts refer to derivative instruments which are based on the value of equities as underlying assets but don’t grant ownership to the holder. They aren’t rare among Philippine

corporate issuers, with blue chips like PLDT and SM Investments Corp., and even other mass media outlets like ABSCBN and GMA-7, having issued such kinds of instruments to foreign investors. RHC itself has issued PDRs not just to Omidyar but to Washington DC-based NBM Rappler LP, a unit of North Base Media. However, only those PDRs issued to Omidyar in exchange for about a million dollars were voided by the SEC. These Omidyar PDRs were likewise tagged as a “fraudulent” transaction under the Securities Regulation Code (SRC) and cited as a ground for violation of the “anti-dummy” law, a criminal offense. Unlike the PDRs issued to North Base or even the PDRs issued by media outfits like ABSCBN and GMA7 to foreign investors, the Omidyar PDRs were voided by the SEC because they carried provisions for “negative control.” The SEC ruling said every security, including derivatives, must be evaluated on its unique terms and not just on the nomenclature. The corporate regulator also stressed that the foreign equity restriction on mass media prohibited anything less than 100 percent control and it defines “control” as “embracing not only stock ownership, but also other schemes that grant influence over corporate policy, actions and structure – even sometimes.” To protect its investment, the SEC noted that “Omidyar Network had RHC agree to secure approval for at least two-thirds of all the PDR holders before RHC takes any action that would prejudice the rights of Omidyar Network…” This was thus interpreted as Omidyar Network specifically wanting to have some degree of control over Rappler’s corporate policy. As such, Rappler was accused of colluding to “grant control, or to become a dummy, as long as Omidyar was not given equity per se.”

In 2015, RHC filed a notice of application for exempt transaction three times, representing that: 264,601 PDRs were issued on May 29 to NBM Rappler; 11,764,117 PDRs were issued on July 29 to NBM Rappler; and, 7,217,257 PDRs were issued to Omidyar Network. Asked whether the SEC had seen the contentious provisions before exempting these from registration requirements, Herbosa said: “Definitely, the handling lawyers or task force saw it for the first time when Rappler was asked to give copy during the proceeding already.” On Dec. 22, 2016, the SEC received a letter from the Office of the Solicitor General requesting an investigation into Rappler and RHC “for any possible contravention of the strict requirements of the 1987 Constitution” with regard to the issuances of PDRs to NBN Rappler LP and Omidyar Network. It was upon further investigation that the SEC uncovered the violation on the PDRs issued to Omidyar Network, citing the verified explanation dated Aug. 29, 2017 submitted by the group. But even assuming there’s violation, one securities law expert who declined to be identified said that the penalty meted out by the SEC was “grossly disproportionate” to the alleged violation. “The SEC should have given Rappler time to cure the violation. It did the same under Memorandum Circular no.8, series of 2013, where it gave companies that were not compliant with the nationality requirement one year to cure the violation,” the lawyer said. In the past, a landmark Supreme Court ruling stated that PLDT had exceeded the maximum 40 percent in foreign equity prescribed by the Constitution. The SC ruling essentially defined a company’s capital, stating that non-voting shares should not be counted as equity when computing Filipino ownership in relation to the 60-40 percent constitutional requirement for key industries. To cure this situation, PLDT issued new voting preferred shares to BTF Holdings Inc., a subsidiary of its employee beneficial trust fund, bringing down its foreign holdings to the prescribed level.

The SEC afterwards issued memorandum circular 8, series of 2013, then giving companies which were not compliant with the nationality requirement one year to cure the violation. Asked whether giving Rappler group a curing period was ever an option, Herbosa said: “We discussed that but the SRC does not provide for it in case of violation of any of its provisions,” Herbosa said. “And I don’t recall Rappler wanting to be given a curing period,” she added