Hon. Licurgo P. Tirador

March 7, 1996 Hon. Licurgo P. Tirador Chairman, Committee on Government Reorganization House of Representatives Quezon City, Metro Manila S i r : This refers to your letter requesting comments on House Bill No. 6061, entitled "AN ACT CREATING A BOARD OF DIVESTMENTS AND FOR OTHER PURPOSES." prcd At present, while the function of the proposed Board of Divestments can effectively be discharged by the Civil Service Commission insofar as the lower level of public officials or employees are concerned, there lies a problem in the case of higher government officials not falling under the jurisdiction of the Civil Service Commission. Thus in view of the non-coverage of certain higher government officials within the ambit of jurisdiction of the Civil Service Commission, it is therefore advisable to create a new independent body, the Board of Divestments, as proposed in the above-mentioned Bill to deal with the problem. In addition to the foregoing comments, we would like to take this opportunity to suggest to the proponent of the Bill to also include therein an amendment to the strict " divestment requirement " under RA No. 6713 otherwise known as the "Code of Conduct and Ethical Standards for Public Officials and Employees". The existing provisions in the law relative to divestment requirement prevent competent and successful private businessmen and entrepreneurs from joining the government service for obvious reasons. Instead of the harsh and strict divestment requirement, the government must find means to attract competent men who are now successful businessmen in the private sector. What the government needs are well-trained individuals from the business sector with strong practical, not only theoretical background. It is thus suggested that instead of the actual divestment requirement which is impractical and can easily be circumvented, government appointees coming from the private business sector may only be required to put their corporate shareholdings or partnership interest in a " qualified blind trust wherein the appointee shall be required to entrust his shareholdings or financial interest to the Board of Divestment intended to be created under the Bill which shall choose a qualified independent trustee (financial institution or individual) to manage the appointee's shareholdings whose identity is not known and who is not associated with the appointee or his relative within the fourth civil degree of consanguinity. The Divestment Board shall provide for and maintain a mechanism to ensure that the identity of the trustee shall not be disclosed to the trustor appointee. Allowing public officials to establish a qualified blind trust in lieu of the required divestment requirement allows the appointee to hold on to the properties acquired either through inheritance and laborious efforts without taking advantage of his office. We believe that allowing government officials to maintain their private business interest under the " blind trust principle " would enhance the retention of competent people in the government service and entice business technocrats to join the government. Accordingly, it is recommended that a " blind trust " provision and the mechanics on how to implement it, be incorporated in the subject Bill replacing the existing harsh and strict divestment requirement. cdlex Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner