SEC rcords confirm that before November 1998, Estrada was a principal shareholder of JELP since its formation in 1992, when he was still Vice President. But even after he had divested, he was an active participant in the real estate business. Residents of a subdivision near the JELP housing project in Antipolo say they witnessed Estrada himself taking active part in supervising the project in 1997 and 1998.

The project engineer, Romeo V. Escalona, has also told residents that he meets with the president regularly, often on a Friday. But on Wednesday last week, he was summmoned to Malacanang, Escalona told officers of the local homeowners association. In an interview last Thursday, Escalona admitted that he consults regularly with the owners of JELP, although he refused to name who those owners are.

This could be a violation of the prohibition contained in Section 13, Article VII of the Constitution, which says that the President, Vice President and members of the Cabinet cannot "directly or indirectly, practice any profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government."

JELP was incorporated on September 21, 1992, three months after Estrada assumed the vice-presidency. The name of the firm was based on the first letters of the First Couple's names-Joseph Estrada and Luisa Pimentel. Until November 20, 1998, when the President assigned his shares to the First Lady, SEC records show that the shareholders of the firm were Estrada, his wife and their three children. The assignment of shares was certified by JELP's corporate secretary in a notice to SEC on March 5, 1999.

JELP Stockholders

before divestment NAME Joseph Estrada Luisa Pimentel Jose "Jinggoy" P. Ejercito Jacqueline P. Ejercito Jude P. Estrada	NO. OF SHARES 80,000 60,000 20,000 20,000 20,000
after divestment NAME Luisa Pimentel Presentacion V. Ejercito Jacqueline P. Ejercito Jude P. Estrada Genoveva de la Fuente	NO. OF SHARES 120,000 20,000 20,000 20,000 20,000

Among JELP's real estate projects is the construction of 36 two-story houses at Vermont Park Executive Village in Barangay Mayamot, Lower Antipolo. The houses are being built at the cost of P3 million each-or about P108 million in all-on a one-hectare lot that JELP acquired in 1993, when Estrada was still Vice President. Clearing of the property began in 1998 and construction of the houses in 1999, when Estrada was already President.

The project puts Estrada in a real conflict of interest situation. To begin with, JELP, like all real estate developers, has to obtain a Certificate of Registration and License to Sell (CRLS) from the Housing and Land Use Regulatory Board (HLURB), an agency under the Office of the President. The HLURB, a quasi-judicial body, also polices real estate developers and handles complaints against them.

Presidential adviser on housing, Leonora de Jesus, an Estrada appointee and former Presidential Management Staff chief, chairs the HLURB board. As chair of the Housing and Urban Development Coordinating Council (HUDCC), she also heads four other housing agencies-Pag-IBIG, the Home Insurance Guaranty Corporation, National Housing Authority, and National Home Mortgage Finance Corporation-which are all under the administrative jurisdiction of the Office of the President.

Estrada, moreover, designated himself as the government's "housing czar," following the resignation last year of Karina Constantino-David as HUDCC chair over policy disagreements.

Estrada's November 1998 divestment from JELP creates more problems. SEC records show that the President transferred his 80,000 shares in JELP worth P8 million mostly in favor of the First Lady (60,000 shares) and a new director, Genoveva de la Fuente (20,000 shares).

The President's son, San Juan Mayor, Jose 'Jinggoy' Ejercito, divested his 20,000 shares in JELP in favor of the second new director, his wife Presentacion Vitug Ejercito.

These divestments may have violated Republic Act 6713 or the Code of Conduct and Ethical Standards for Public Officials, which says that public officials must divest themselves of shareholdings and interest in private business and corporations when conflicts of interest with their official duties arise, within 60 days from their assumption of office.

The Code also says that officials cannot divest to their spouses and relatives within the fourth civil degree of consanguinity or affinity. This rule applies to all officials, says former Senator Rene A.V. Saguisag, one of the authors of RA 6713.

That law states that conflicts of interest arise when an official is a substantial stockholder, board member, or officer of a corporation or an owner or has substantial interest in a business. A conflict of interest situation also arises "when the interest of such corporation or business, or his rights and duties therein, are opposed to or affected by the faithful performance of official duty."

The situation is complicated by the fact that the JELP and its contractors have not secured any of the numerous clearances, permits and licenses required by law for even one of the 36 housing units and clubhouse now nearing completion in Antipolo. These include zoning permits, building permits, an environmental clearance certificate and a license to sell.

Moreover, there is no evidence to show that JELP complied with HLURB regulations that state that housing developments of its category should set aside 20 percent of their land or its equivalent value for socialized housing. JELP also did not allot 30 percent of the Antipolo development to common spaces, in defiance of HLURB rules.

In addition, residents of a subdivision near the JELP project are complaining that the company has caused flooding and other problems in the area.

Since 1993, the President has consistently declared in statements of assets his wife's and children's interest in the firm. JELP documents list the family home at 1 Polk Street, North Greenhills, San Juan as the company's "principal office."

JELP has mobilized 13 small- and medium-size contractors to rush work on the Antipolo project. The contractors have been asked to finish within 120 days beginning January. The project is delayed, but contractors interviewed at the site say the houses will be inaugurated and sold from P6 million to P7 million each by the end of this month.

It is not clear from JELP's financial statements where the funds for this project are coming from. The houses are not being "pre-sold" to clients. Neither has the land on which the houses are being built been mortgaged as the titles covering the property have no mortgage notices.

JELP's financial statements show that the President's company relied heavily on loans that totaled P102 million in 1997 and P188 million the following year.

Why lenders chose to put money in a company that has been losing and already deeply in debt is anybody's guess. What is as confounding is JELP pays its contractors on a regular basis, sometimes in checks and at other times, in cash.

JELP reported losses from its operations: P1.5 million in 1997 and P7.9 million. With only about P11 million in cash, securities and receivables, it is difficult to see how the firm could have repaid its P188-million liabilities, all of them short term-short of selling its P144 million worth of real property or obtaining new loans.

The borrowings had made JELP a financial risk. Every P33 in debt was matched by only P1 in equity as of 1998. In fact, the firm's total stockholders' equity declined by over half in 1998 to P6.28 million from P14.3 million in 1997.

The one-hectare lot in Antipolo on which JELP is building is covered by two titles (Nos. 241995 and 241996), which the firm acquired in June 1993. The original titles covering the two properties were registered with the province of Rizal in 1923 as irrigated riceland. Their last owners, previous to JELP, were listed as Jose C. Lao and Rosanna Reyes Lao. In 2000, the market values of the two lots was assessed by the municipal government at P1.9 million.

According to Magdalena Vergara, assistant chief of the HLURB Licensing Division's Technical Services, JELP's housing project in Antipolo has committed at least eight major violations:

1. Failure to obtain a license to sell from the HLURB.
2. Failure to obtain an environmental clearance certificate from the Department of Environment and Natural Resources.
3. Failure to obtain a development permit from the city government of Antipolo.
4. Failure to obtain sanitation and water potability permits from the City Health Service.
5. Failure to obtain permits for water diggings from the National Water Resources Board.
6. Failure to obtain zoning clearance certificates and building permits from the city government of Antipolo.
7. Failure to obtain homeowners' clearance certificates and barangay clearance certificates from the residents of Vermont Park Executive Village.
8. Irregular subdivision of the transfer certificates of title covering the one-hectare project area.