Tuesday, November 20, 2012

Kim Henares, One Tough Chick

"One trillion smackeroos, Mr. President? Sure 'nuf!"
I find it amusing that in the manly Philippines, where men wear their macho stuff like fighting cocks doing the victory strut, women occupy three of the toughest jobs in the land:

  • Ombudsman:  Conchita Carpio-Morales
  • Secretary of Justice:  Leila de Lima
  • Head of the Bureau of Internal Revenue (BIR):  Kim Henares

Why women get the nasty job of hunting down killers and thieves warrants an investigative report, but that is a different blog. I will offer a simple guess that men don't like to investigate other men, or be investigated by them. It's too murderous.

Of these three powerful women, I'm guessing the toughest chick is Kim Henares. She's been tracking down scoundrels for years, and wants to keep doing it.

Incidentally, the Humpty Dumpty New World Dictionary has several definitions of "chick", and the one which is pertinent here is "chick: (3) noun, cool woman". The, we have to flip a few pages forward to find this definition: "(5) cool: adjective, admirable and hip". Flipping yet again: (3) "hip: adjective, stylish".

So thanks to the Big Egg Humpty, we discover that Commissioner Henares is one tough, admirable, stylish woman.

Why she is a cool woman

Well we can confirm this straightaway. For one thing, she does her job with no need to play games. She shoots straight, in more ways than one. Her job is to enforce tax collection in a nation where people take pride in cheating. But she goes after big fish, no matter who they may be, or to whom they are connected.

Try to find her biography on Wikipedia and you won't. She is not a political woman. She doesn't need fame and votes. She is a professional. She needs accomplishment.

Her available background information is sketchy. She graduated from Ateneo and got her law credentials. She has held private sector jobs as head of the ING Barings Bank’s compliance and legal department and senior private sector development specialist for the International Finance Corporation (IFC)/World Bank.

She joined BIR during the Arroyo Administration, serving as deputy commissioner for special concerns. She led the “Run After Tax Evaders” (RATE) operation, which led to cases being filed against celebrities Regine Velasquez and Richard Gomez among others. She was appointed to head the BIR in 2010 by incoming President Noynoy Aquino.

She was nominated as Chief Justice in 2012 but politely declined, arguing that she already had a big job, an important job, where she can make a difference.

The BIR

The goal of BIR is to reach 1.066 trillion pesos in collections this year. This is done through 19 regional offices responsible for  enforcing tax laws and collecting taxes. President Aquino has been applying some  heat to the tax offices, citing an expectation that they will reach the annual goal. Commissioner Henares acknowledges the challenge is tough, but is focused on making the goal.

"Yes, Comissioner, I'll pay, I'll pay!"
The BIR web site is an interesting place to visit. The home page is rather 50's in style, cluttered and hard to grasp. This is not an elegant site, by any standard. It is written for people who understand taxes, not those who don't, as there are links to resources a newbie would not understand, and can't understand because signing in requires a password.

The link to financial information in the right column leads to PDF scanned paper files that show expenditures for BIR as a whole. The revenue side - - how much each of the 19 regional agencies generates -- is not shown. So it is a secret, at least to JoeAm, as to how the 19 perform. Can you imagine the constructive heat that would be applied if the revenue generation accomplishments of each agency office were trended, say for five years, as a percentage of some indexing standard such as regional income or GDP?

That is what transparency is all about. That is what FOI is all about. That is what President Aquino is NOT advocating in a proactive way. Rather than complain about the level of taxes being generated, why not simply report results to the public and let the public's attention do the incenting for higher revenue? Publicly embarrass a couple of laggard regional offices, or, better yet, praise and reward the top achievers, and let me assure you, performance will improve.

But I digress.

The web site does reflect that automation is taking root, and that's good. It is possible to apply for a tax identification number on line, and, as a business, to report sales and taxes with payments made via participating banks. It is also possible to file a "whistle-blower" complaint about corrupt BIR employees on line.

The BIR value statement mentions that the BIR is "God fearing". That kind of thing is always a jolt to this westerner where laws requiring separation of church and state would make such a statement impossible. It is a clear indicator that the Philippines is motivated by values different than America.

Between totally modern and totally clunky, the BIR web site is half clunky. Or half modern, depending on how you need to use it.

RATE Progress

Commissioner Henares' priorities are to tighten up on collections and to automate processes to make the paper-intensive job of recording and reporting taxes easier, better and less susceptible to  manipulation. She grew up with the RATE operation, so she is riding it hard now.

According to a GMA news report, the BIR has filed 133 tax evasion cases representing P50 billion in unpaid taxes. One case case is P16 million from a contractor who has not filed tax returns for three years.  In another case, the BIR has filed criminal charges against the Registrar of Deeds in Manila who allowed a property transfer to take place without payment of the required P461,433 in taxes.

GMA also reported on a P63.9 million judgment successfully won in the Supreme Court against St. Luke's Medical Center in Manila. The precedent-setting ruling means that all hospitals that are non-profit but proprietary will have to pay income tax. The court ruled that the tax exclusion applies to charitable organizations, not organizations providing health care. The tax rate is a preferential 10%.

In August of this year, ABS-CBN reported on a BIR initiative to collect more taxes from sole proprietorships. The agency knows this area is grossly abused by tax evaders, and will deploy a larger field force through regional offices to identify evaders.

So the tax woman cometh in the Philippines.

Performance facts

Let's look at the BIR performance from the standpoint of a top-level observer, like, say, if we were President Aquino. Here's what we might look at:

Millions of Pesos
Measure
2009
2010
2011
2012
Notes
Philippine Tax Revenue
1,123,211
1,207,919
1,359,942
1,560,600
(a)
  1. BIR Revenue
750,287
822,623
924,146
1,036,587
(a)
  1. BIR % of Phil Rev
67%
68%
68%
66%

  1. BIR Rev Growth
-3.6%
7.9%
12.3%
13.7%

  1. BIR Rev % GDP
10.1%
9.1%
9.5%
10.0%

BIR Expenses (Actual)
5,737
6,508
7,178
10,114
(b),(c)
  1. BIR Exp to BIR Rev
0.76%
0.79%
0.78%
0.98%

(a) 2012 is annual projection by Department of Finance
(b) 2012 reconciliation is impossible to the layman as quarterly accounting forms are detailed and technical
(c ) The 2012 BIR expense budget is P11.114 billion. History shows that actual expenditures can be as much as P1,000,000 less than budget, and that adjustment has been made to reflect estimated "actual" 2012 expenses.

Here are some highlights we can pull from this table:

  • Overall Philippine revenues are up steadily and BIR revenue growth is a major contributor, steady at one-third of all Philippine revenue. Customs and other agencies make up the other third.

  • Growth at 13.7% this year is a huge step-up. The pace has accelerated three years running.

  • BIR expense to revenue is increasing. I liken this to oil fields that are maxed out. The hunting for the remaining sources is difficult and costly. The BIR's hunt for tax cheats is returning smaller denomination "finds". But they are still worthwhile, considering that it costs only 1% to acquire 99% usable revenue.

Proposed "sin taxes" of from P20 to P60 billion would be a nice kick to total revenue.

Some expansion of the tax base is natural as the Philippine economy grows. Add to that more disciplined collections and new taxes like sin taxes, and the Philippine revenue stream looks healthy.

Better automation is a priority for Commissioner Henares, and will be a good investment both for improved  BIR management "by objectives" and for ease of processing by tax payers.

Conclusions

The BIR is in good hands.

Web-available information on revenue generated by the 19 agency offices would help incent good performance by those offices. Similarly, web-based  financial reports of the agency would be more useful if recorded in spreadsheet format rather than as scanned paper documents.

Conclusion: sound agency, making progress, lots of work to do.

42 comments:

  1. Recognition is well-deserved. Some good moves. Nice, tough mama. Some say she's a party pooper. Tax cheats hush up in her presence. Cheats you find in society pages. The problem that I hear in regard to running after cheats is DOJ, same with drug cases, it's the bottleneck, manned by lackadaisical people and headed by a bitch as well.

    DocB

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    Replies
    1. Interesting, Johnny's perspective below. He'd put the BIR in the same bucket as the DOJ.

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    2. I don't know about Purisima. He's like the principal conductor of BIR, Customs. It seems he's just continuing on with GMA's "economic fundamentals" schtick.

      DocB

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    3. Yes, I need to study Purisima. To some extent the economic fundamentals are what they are, the tax laws and the customs laws, and the trick is to shore up enforcement. But I read a note that smuggling is more rampant today than it was under Arroyo, and I wonder, if true, whom do we blame for failure to shut it down? I'll put Purisima on the "to look at" list.

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  2. Flashy players do not guarantee championship trophy. Show us the money, Kim.

    After 3 years nobody went to jail yet or been tried publicly in court. Farthest so far is being investigated at DOJ level which is ridiculous.

    The law was created by corrupt politicians so they made sure they could extort the executive office by running the process of tax evasion charges thru the DOJ. BIR is under Finance.

    Only in the Philippies the taxman could not file tax evasion charges directly to the court. Too many layers to go thru, more than the sediment filters of a clean water. Well, the end result of comparison is the same. Eventually, water and taxpayer are cleansed.

    No wonder Pacman beat the BIR. Corona and Mikey Arroyo had been delaying the process. Nobody went to jail or found guilty yet.

    The problem is the system. All publicities, no final resolutions.
    Only the unknown and big fish running out of bribe money to prosecutors will be finally charged, the better known and eqipped ones will escape as usual.

    Remember the Johnny Lin definition of "Litigation" - the pork barrel of prosecutors. The tax evasion charge passing thru DOJ is perfect example. Another example is compaint against corrupt govt employees filed with the Ombudsman.

    All for show. Fools are those praising the show because venue attracts with fireworks and colorful decorations without seeing the show finale. This kind of show we call "Perya" during fiestas. No quality, all gimmicks, our current government system of prosecuting tax evaders and corrupt officials.

    It's more fun in the Philippines!

    Johnny Lin

    ReplyDelete
    Replies
    1. I actually started the blog with the numbers in the table. "Show us the money" is correct. I suspect the task is daunting, to be a Henares or a De Lima or a Morales in a world of power that cheats. You are asked to clean it up, then the people behind you (like President Aquino) fail to step to the bar, too. Like, fail to insist on FOI and publication of SALN's to bring the public spotlight to bear on the thieves. But he does not. He lets the women flail away, largely drowning in a sea of power peddling.

      So rather than place the buck with Henares or De Lima or Morales, my blogging eyeballs gets yanked directly to the Palace.

      Thanks for the term Perya.

      "Palacial Perya."

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    2. Marcos's time-"isang bala ka lang." Cory, Tabako, Erap, GMA, PNoy's time-"isang tawag ka lang."

      Delete
  3. 1. “...steady at one-third of all Philippine revenue” should read “two-thirds”?

    2. All pistol-packing mamas except Conchita who only needs to point a finger.

    3. Agree that Filipinas have more balls than their male counterparts.

    4. I like the table. You can’t argue with figures – only in their interpretation.

    5. Has anyone been actually sent to jail for tax offenses? In Australia, the government ran after Paul Hogan of Crocodile Dundee fame, and the case was settled confidentially after mediation. Convicted tax evader Gloria Kintanar escaped after the mandatory hospital arrest? What about Corona?

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    1. 1. Thanks for the erratum datum. Yes, it should read two-thirds.

      2. You got it! I thought about drawing a gun in the hand to make it more obvious, but you will note that her finger is smokin'

      3. Seems to be.

      4. That's the kind of stuff I did for 30 years. It's rather like my shoes. I got so sick of spit-polishing shoes in the army that, when I got out, I NEVER polished my shoes. When the wing tips got scruffy enough, I'd buy another pair. So I don't go to statistics too often.

      5. Johnny says no one notable has gone to jail. I rather sense that stealing taxes is not a jail-worthy crime around here. Getting the money, plus a fine, makes authorities happy. I don't know how Corona will pan out. I doubt he would go to jail.

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  4. I think the problem lies in the institutions like BIR, DOJ that have been weakened by corruption and inefficiencies through the years. Like a person sick with malaria, the rigors we see we take as achievement when really it is part and parcel of the disease. JoeAm's prescription of a meritocracy is a step in the right direction. But wirhout Pnoy's full support tough mamas are left twisting in the wind. Weakened institutions are not helped by the absence of FOI.

    DocB

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    Replies
    1. Yes, exactly. Twisting slowly slowly in the wind.

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  5. The system is crooked, Kim, Leila and Conchita should lead in crying Wolf.

    Being contented as clowns because there are many spectators coming to see the circus is not enough. The clowns should start.yelling that the audience deserves quality performances, not simple magic tricks and trapeze acts.

    Top chefs do not end with fancy plating of their food, it must taste delicious too.

    Don't share the accolades showered on them until I see ONE good result, that is going to jail without presidential pardon.

    Johnny Lin

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    Replies
    1. Well, I don't deny that your view is ideologically pure and correct. However, it is one of those cases where you are in the armchair and the three ladies are on the field amongst a bunch of powerful guy guys. Now, you can have a job or not have a job. But if your boss is one of the powerful guy guys, it is hard to cry wolf. If you lose your job, you can do nothing, and the job is turned over to a wolf cub.

      I think you push and push doing what you can do, within the system that exists. You can't remake the system on a wish.

      The P64 million judgment against St. Lukes, pushed all the way through the supreme court, to me is the kind of example you ought not discount. It established new tax groundrules for the entire private hospital line of business. No one NEED go to jail.

      The suit against a Registrar of Deeds. Honorable.

      Corona. Ongoing. Not ignored, no rush to judgment.

      Who should be in jail in your opinion?

      I'm thinking Henares is working diligently and to cry "wolf" is a political job that is outside her job description. And who knows what conversations she has had with her boss, Purisma. I fear you may be pushing an ideological burden onto a practical working lady.

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    2. Genuino should have been incarcerated for plunder already but as I said the prosecutors are turtle pace. They know there is so much grease to squeeze from him.

      Did you see the recent findings of Louis Freeh, the former FBI Director. $40 million of bribe money, $ 5million had been exposed where it went, to the bagman of Genuino. Bank paper trail on that money, AMLA could easily trace and guaranteed people from Bangko Sentral AMLC are getting oiled too.

      Watch which senatorial candadates will have so much spending money who by all accounts could not afford personally. Those people will be the stooges of those floating money from corrupt people under GMA.

      Johnny Lin

      Johnny Lin

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    3. I suppose there is a reason why congressional SALN's remain locked up. And why FOI will go nowhere.

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    4. Big time crime pays in the Philippines. It's more fun for decent white collar criminals.

      DocB

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    5. Another bottleneck: Judiciary.

      DocB

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  6. I understands Johnny Lim’s point, but it’s the old dilemma: should perfection prevent the very good? Can you eliminate cheating? No. Can you raise the hurdles for cheating? Yes, in many ways and being an optimist, I think that’s what these ladies are trying.

    In my previous life, working with a government agency, I saw indications of a lot of corruption from the secretary to the lowest clerk. Everybody knew, many were upset but felt powerless to do anything, not always knowing who was protecting the corrupt and because of the Filipino timidity to blame people in person. By “process mapping” and installing objective measurements (= six sigma) things got very visible, cheating more difficult, talking about figures easier the talking about people. Discussing the maintenance cost of a car per km official use is much easier here than discussing why employee X is using a public car for private taxi services.

    As a director or secretary, you do not only have to manage your boss but also your subordinates and I believe that all three are building on the good elements in their departments, trying to bent cultures and by doing so they raise the hurdles for cheating. Eventually, to break the wolf club you'll need an army of righteous civil servants.

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    Replies
    1. Right. And you need honest, honorable information, the kind the President is willing to keep hidden in locked file cabinets.

      My oh my. The more I write, the more y'all write, the more this becomes clear. The buck is stopping squarely on the President's desk, and it has FOI scrawled all over it.

      Delete
    2. Hyatt 10 cried wolf, people followed. GMA is the most ridiculed ex president. Members of Hyatt 10 are back in business. Halfway down the mark now for PNoy. I understand they would not stir or shake his martini because of the coming election, expect them to do something immediately after.

      As I said in earlier posting, if nothing happens before the end of 2013, that is nobody yet is charged in court , arrested and jailed for plunder, goodbye to PNoy's popularity.

      In this and Raissa's blog I will be the first yelling "we were robbed"!!

      Johnny Lin

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    3. "We wuz robbed!"

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    4. You'll have to explain Hyatt 10 to me. I'm not familiar with it or what you mean by shaking his martini. Must be my dull day.

      If he continues the do-nothing approach of authoritarian rule (pro-libel, pro right of reply, anti-FOI, anti-RH), I'll be yelling with you.

      Delete
    5. Earlier GMA allies, the Hyatt 10 were cabinet members who resigned after the wake of reports that GMA cheated in the 2004 polls. They were 10 of them, counting among them Henares, Purisima, Soliman, and Abad, and they held a press conference at the Hyatt Hotel. Who were the rest?

      DocB

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    6. Ah, okay, yes, they cried wolf. Thanks for the explanation, Doc. I'm not sure how Henares resigning would do much for Philippine stability and well-being. I'd rather she do a good job collecting taxes, which the number suggest she is doing. Jailing people? If you jailed all the crooks in the Philippines, half the adult population would be in jail. In reading about her pursuits of taxes owed, I got the impression she is aggressive. Maybe not in jailing people, but in getting taxes paid.

      And I think Aquino is no Arroyo trying to rig elections and re-write constitutions for personal power. His main weakness seems he likes to hang with his buddies.

      Delete
    7. Kim has to shout loud that her efforts are wasted by long and tortous process passing thru DOJ. Her office should have the ability filing charges directly in Tax Court. How could prosecutors decipher mumbo jumbo numbers and decide who will be charged when audit and investigation were already finalized by BIR?

      Leila has to complain that Ombudsman takes a lot of time to file plunder on the accused after their exhaustive investigation. Fact of the matter there is redundancy of investigative bodies at this level by two government prosecuting(pork barrel litigation) offices.

      Carpio has to voice out that Ombudsman must have authority to issue warrant of arrest and travel restrictions upon filing charges while the accused files for MR.

      Johnny Lin

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    8. I believe BIR is taking the initiative to try to get what you suggest in para 1.

      Para 2 is common in the U.S. where law enforcement agencies are always playing turf war. But you are right. Ombudsman is slow and weak. All agencies seem weak at investigations, like using technology and forensics. NBI hires thousands to do required background checks that are nonsense. When will we see a TV show called "CSI Manila?"

      Delete
  7. Without FOI and citizens outraged by corruption, Pnoy and his cabinet are only being Asses or Donkeys. Read Tulfo on Almendras and cabinet. A cautious Pnoy won't cut it.

    DocB

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    1. Tulfo's spy says: "Mr. Aquino is bullheaded and usually doesn’t listen to advice from his Cabinet members, but he listens to Almendras, Naguiat and Mercado."

      Link to article is: http://newsinfo.inquirer.net/306142/aquino-doesnt-fire-inefficient-subordinates

      Delete
    2. Actually, it was not Tulfo who named those 3 initially in media. It was an investigative reporter from Inquirer or Star. At any rate, they missed another name. He is a priest assigned in Malabon and member of the original Fab Five. They were all schoolmates in Ateneo, only Almendras does not speak kapampangan.

      Johnny Lin

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    3. The Beatle Almendras speaks Cebuano.

      DocB

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  8. In that case Pnoy is more bull than ass.

    DocB

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  9. Or he has a bull for a head and an ass for a backside. This picture would make Lilia Cuntapay pretty.

    DocB

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  10. One goot thing I like about the Philippines is Filipino men likes to be led by women unlike Americans. Here are more women personalities:

    1. Aling Gloria Macapal-Arroyo. That was one tough job she did for the country.
    2. Current Cebu Governor Gwendolyn Garcia. Skinny and pretty. She can cut anyone with her acerbic tongue BUT NOTHING BEATS MERIAM. She's currently charged by Ombudsman, I hear. She makes men kneel before her.
    3. Of course, my favorite, Meriam Defensor. International Court Judge. Just love her swagger and choice of words. She doesn't kneel to no one.
    4. 3rd largest city of the Philippines, the largest city in the world by land mass, is run by Mayor Sara Duterte. She packs a pistol. Slaps anyone, literally, that gets in her way.
    5. Imelda Marcos, Oh la la, she still has that whip.
    6. Mama Cory. She ran the country under the bed.

    WOMEN RUNS THE PHILIPPINES AND THE FILIPINOS. That is why Filipinos has this "UNDER THE SAYA" (Under the skirt). Bec;ause women literally run the lives of men.

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    1. On my 5. Imelda Marcos. Actually, Imelda ran the Philippines in the background. Ferdie was just a front-man. A ceremonial president.

      I forgot this very important woman which Filipino men desires and would love to get their hands on her ... the cute younger sister of benign0 ... serial philandering bed-jumper ... She whined and dined some of benign0's important visitors ...

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    2. Hey, leave my friend little sis alone. If a guy prowled among the women visitors he would be considered a stud. A macho man. I'm for gender equality, myself. Sex is fun no matter the make or model.

      Delete
  11. That is why the Philippines is better off with benign0 because he is not a marriageable type. If he were married, his wife would not only run his household but the Philippines as well.

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    Replies
    1. I'd make a sly comment but my wife is in the room and I dare not take the chance.

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    2. Is Mariano referring to Pnoy's sis Kris? If yes, check professional heckler's blog. Interview with Kris. Hilarious. Venti!

      DocB

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    3. Yes, sis Kris, who has been kind enough to visit us here at the Society. She is on my list of really good people. People with personality.

      The Heckler teases her quite regularly. This is the latest one: http://professionalheckler.wordpress.com/2012/11/10/exclusive-krissy-returns/

      Delete
  12. This may explain why Imelda doesn't want Ferdie buried yet. By the way the number one party-list in the Philippines is UHAW.

    DocB

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  13. Union of Husbands Afraid of their Wives

    (I'm not a member...yet)

    DocB

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    Replies
    1. Well, it certainly represents the disadvantaged and disenfranchised.

      Delete

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