Yahoo CEO right to cut remote work

STORY HIGHLIGHTS

• Raymond Fisman: Marissa Mayer needs to revive Yahoo, and face time at the office is key


• Fisman: Granted, this goes against Utopian vision of everyone working from cafes


• Fisman: In-person work means innovations, avoids misunderstood directives


• He says more jobs will get done and it'll encourage those who work in a half-empty office

Editor's note: Raymond Fisman is the Lambert Family professor of social enterprise at the Columbia Business School. He is the co-author, with Tim Sullivan, of "The Org: The Underlying Logic of the Office."

(CNN) -- When Yahoo's relatively new CEO Marissa Mayer decreed that workers would be required to show up at the office rather than work remotely, the immediate backlash from outsiders was mostly on the side of the angry Yahoo employees who were losing the comfort and convenience of telecommuting. Inside the company, reactions were mixed.

It struck a deep chord, contrary as it was to the techno-utopian impulse that has helped define Silicon Valley: the idea that someday soon we'll all be working in coffee shops or at kitchen tables, with broadband connections replacing in-person interactions.

Mayer may have been extreme in her demands for face time at the office, but it's the right call for a leader who is working to turn around one of the Internet's laggards.

Raymond Fisman

First, let's consider what's at stake for the company and what Mayer is hoping to accomplish. Yahoo is famous for having bungled its position as a one-time Internet leader. Mayer was brought on specifically to revitalize the benighted company after the departure of Jerry Yang; the firing of Carol Bartz, and the departures of another CEO who inflated his resume and an interim director. All the while, Yahoo has been a company in search of a direction.

What does the end of telecommuting have to do with giving the company a sound footing? The reasons go well beyond the obvious issue of reining in slackers who have taken advantage of Yahoo's reportedly lax monitoring of work done from home.

Talk Back: Is Yahoo wrong to end telecommuting?

Jackie Reses, Yahoo's head of human relations, has it exactly right in the memo she wrote to employees about the policy: Personal interaction is still the most effective way of conveying a company's direction, and keeping tabs on what different parts of the organization are up to. And that's what Mayer has to do with all of Yahoo's 11,500 employees to succeed.

What do in-person meetings accomplish that e-mail can't? Part of the answer lies in time use surveys of CEOs that go back nearly 40 years.

Management scholar Henry Mintzberg was among the first to track how top managers spend their time in the early 1970s. Much to his surprise, he found that around 80% of their time was spent in face-to-face meetings; the subjects of his study had few stretches of more than 10 minutes at a time to themselves.

More recent time use studies by researchers at Harvard, the London School of Economics and Columbia have found that little has changed. Despite the IT revolution, business leaders still spend 80% of their time in face-to-face meetings.

The reason is that there's only so much that one can glean from a written report or a spreadsheet. To cut through the hidden agendas, and office politics, most of the time you need to look someone in the eye and ask them, "Really? How exactly would that work?" It is this probing and questioning that allows effective managers to gather the scraps of information needed to understand what's really going on.

Similarly, all the way down the organizational chart, person-to-person interactions are crucial to ensure that an organization's change of direction isn't misrepresented or garbled in its retelling.

The bland proclamations made in reports and e-mails are given clearer meaning through the way they're communicated in the "high fidelity" that only personal interaction will allow. In-person meetings can also help teams avoid misunderstandings: As one of our friends who runs a virtual workplace puts it, with e-mail exchanges alone, everyone starts to get a bit paranoid.

Finally, the Yahoo memo notes that it's hard to innovate via e-mail exchanges or the occasional agenda-filled meeting. New ideas spring up through chance encounters in the cafeteria line and impromptu office meetings. It's an assertion that's backed up by academic research highlighting the importance of physical proximity in driving scientific progress.

Work at home? Share productivity tips

Yet there are rarely benefits without cost. Lots of tasks are easily managed from a distance. A large number of the affected Yahoo employees are customer-service representatives who aren't going to be driving innovation at the company anyway.

In one study of telecommuting at a Chinese online travel agency, customer-service reps were both happier and more productive when working from home -- probably Yahoo service reps aren't any different from their Chinese counterparts in this regard. And every Yahoo employee surely has some aspects of their jobs that could be done just as well at the kitchen table as in an office cubicle.

But it's hard to create a norm of "physically together" if the office is always half-empty. And once it becomes that way, the half that have been showing up will be less and less inclined to bother. Finally, such a shocking and provocative directive will most certainly have the effect of imbuing the organization with the sense of urgency it needs to get the job done.

Will Yahoo employees come around to appreciating the change? Not necessarily the ones that liked to sleep in or work on a startup on Yahoo's dime, but it may be welcomed by the ones already showing up. Will it be damaging to morale? Possibly, though it may help Yahoo employees to remember that, if they're successful, the change is likely to be temporary.

But the job of the CEO isn't to maximize worker happiness. It's to make sure they get their jobs done. And in driving change at Yahoo, Mayer thinks they need to show up at the office.

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The opinions in this commentary are solely those of Raymond Fisman.

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Hong Kong unveils budget, warns on global risks

HONG KONG: Hong Kong's finance chief on Wednesday unveiled a budget to kickstart growth in the city and temper property prices but warned the world economy could face headwinds from possible trade and currency battles.

During a speech interrupted by protests, Financial Secretary John Tsang also set out a series of measures to support the middle class and alleviate poverty in the first budget under an increasingly unpopular leader Leung Chun-ying.

The announcement came as data showed the southern Chinese financial hub saw growth of just 1.4 per cent in 2012 and was tipped to expand only 1.5-3.5 per cent this year.

In unveiling measures to boost the city's financial sector and private equity industry he warned: "The whole world will have to face wars on three fronts, namely 'currency', 'trade' and 'geopolitics'.

"As a highly open and small economy, Hong Kong will be impacted by the development of these wars to a certain extent."

His comment come after a sharp drop in the value of the yen sparked accusations of government meddling and concerns about a possible global war in which nations weaken their currencies to gains give a jolt to softening exports.

Tsang outlined plans to boost the city's financial sector, including extending profits tax exemption for offshore private equity funds, with an eye on regional rival Singapore.

He also unveiled a string of populist measures aimed at supporting the middle class and poor, while looking to address the city's chronically high property prices, which have doubled since 2009, squeezing average citizens.

Tsang vowed to increase land-supply to allow the building of more houses while quarterly rates amounting to HK$11.6 billion and covering 75 per cent of properties will be waived. That follows Friday's decision to double stamp duty on second homes to 8.5 per cent.

Also on Wednesday, Tsang said there will be a 75-per cent cut in salaries tax to a ceiling of HK$10,000.

However analysts said the budget would do little to improve the lot of the middle-class or poor or give a lift to the popularity of Leung, whose government has been rocked by a series of protests since he came to power in July.

Leung, who was chosen by a committee dominated by pro-Beijing elites, has seen his support rating drop after scandals involving illegal structures at his home, and last year came close to facing impeachment proceedings.

"For the middle class there is very minimal. If the middle class is renting property -- those rates are nothing to do with him," said Philip Hung, President of the The Taxation Institute of Hong Kong.

Hung added the level of some of one off measures, such as the salary-tax cut, was lower than last year.

Despite announcing a budget surplus of HK$64.9 billion ($8.4 billion) this year -- which swelled reserves to HK$734 billion -- the new measures totalled only HK$33 billion, down from the HK$80 billion-worth introduced last year.

In a sign of the dissatisfaction with the administration, dozens of people, some dressed as the Chinese "wealth god", waved banners and shouted slogans outside government headquarters demanding handouts of HK$10,000 and more welfare spending.

"The government should give money directly to the general public so that they can make ends meet," activist Tam Kwok-kiu told AFP, adding that the government is sitting on a fiscal surplus.

Two lawmakers including radical Leung Kwok-hung were escorted out of the chambers after interrupting Tsang's speech and calling him a "liar".

Tsang said he had had been listening to the concerns of the middle class, who are faced with rising bills for rent, medical care, and supporting their parents and children.

"I agree that middle-class families should be given some support. However, as one may appreciate, it is impracticable for the government to respond to each and every demand," he said.

- AFP/xq

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Peru: 'Missing' U.S. couple found, but family wants proof

STORY HIGHLIGHTS

• Peru's tourism minister say Jamie Neal and Garrett Hand were found in the Amazon


• Hand's mother says she won't believe the news until she hears directly from her son


• Family and friends have not been able to reach the couple since January


• Some areas they planned to visit are out of cell phone and Internet reach

(CNN) -- An American couple that went missing on a bike trek through Peru has been spotted "safe and sound," the South American country's top tourism official said Tuesday.

Jamie Neal and Garrett Hand are heading upstream in a small boat on a jungle river, said Jose Luis Silva, Peru's minister of tourism and commerce.

"They're currently in a remote, paradise-like region of the Peruvian Amazon, which is difficult to access," he told CNN.

But even as authorities trumpeted the news, Hand's mother said in a statement that she won't believe it until she hears directly from her son.

"We have not heard from them since January 25, nor have they accessed bank accounts since that time," mother Francine Fitzgerald said. "We have only the worst to consider as to why."

The couple, who hail from the San Francisco area, left last November and began a series of social media posts chronicling the trip of their dreams -- a four-month bike adventure through South America.

"Will be riding my bike in other countries and out of contact for 4 months!" Neal wrote in a November Facebook post before flying with Hand to Buenos Aires, Argentina.

But for weeks, the couple shared photos online from their trek through Argentina, Chile and Peru, showing themselves posing beside their bikes on remote mountain roads, camping out in tents and smiling at the beach.

In late January, however, their Internet postings stopped and calls to their cell phones went unanswered. Family members say no one has been able to get in touch with them since then.

Fitzgerald said both the U.S. Embassy in Peru and the country's interior ministry have called to say that Neal and Hand were spotted.

But that's not enough, she said.

"Let me reiterate, until we have PROOF OF LIFE, we cannot celebrate these rumors and sightings," she wrote on a Facebook page set up to facilitate a search for the couple. "Proof of life is my son's voice on the phone and a picture of him holding the missing poster."

Silva told CNN that the tourism ministry learned of the couple's location from police, who received a report from a clinic in the town of Angoteros after sending out a nationwide alert about the missing couple.

The ministry will send a hydroplane tomorrow to shoot video of the couple and provide proof they're doing OK, he said.

"They have no idea of the commotion they have caused in the media," he said, "because they simply can't communicate with family from where they currently are."

Neal and Hand, both 25, according to a family flyer, were last seen in Lima, the Peruvian capital. But some of the areas they planned to visit are out of cell phone and Internet reach.

The Peruvian National Police earlier told CNN that the manager of a hostel in Pucallpa, where the couple stayed, confirmed to a police investigator they reached the jungle city in early February.

The manager of Arco Iris Amazonica, a small hotel in the rain forest city of Iquitos, told police the couple stayed there on February 16 and told him they planned to travel to the town of Naplo, a 15-day trek.

Peru is known for the Inca ruins of Machu Picchu, located in the Cusco region, which attract hundreds of thousands of international travelers each year.

Two weeks ago, the U.S. Embassy in Lima issued a security message warning Americans of "a potential kidnapping threat in the Cusco area."

"The Embassy has received information that members of a criminal organization may be planning to kidnap U.S. citizen tourists in the Cusco and Machu Picchu area," the message said.

But it also clarified that "thousands of U.S. citizens routinely travel to the Cusco region without undue incident. The U.S. Embassy remains confident of the Peruvian government's efforts to ensure the safety of all tourists in the region."

Peru's tourism minister said Tuesday that he was "deeply concerned" about the negative impact of reports of the missing American couple.

The reason the couple has been out of touch for so long has nothing to do with any crime, he said.

"These two young people have fallen in love with Peru," Silva said. "They have visited off-the-beaten-path places and it seems like they're having a blast -- so much so that they have forgotten to communicate with their families."

CNN's Catherine E. Shoichet and Tom Watkins contributed to this report.

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Two cops, suspect dead in Calif. shootings

Updated 1:50 a.m. EST

SANTA CRUZ, Calif. Two police officers were shot and killed Tuesday while investigating a sexual assault, and a suspect was also fatally shot, authorities said.

Santa Cruz police Chief Kevin Vogel says Sgt. Loren Butch Baker and Detective Elizabeth Butler were gunned down in mid-afternoon Tuesday as they followed up on a sexual assault investigation. He says Baker was a 28-year veteran of the department and Butler had been with the department 10 years. Vogel says Baker was married and the father of two daughters, while Butler leaves behind two young sons.

A suspect, identified as 35-year-old Jeremy Goulet, was shot and killed a short time later while authorities were pursuing the gunman, the Santa Cruz County sheriff's office said.

Residents on the adjoining streets where the shootings occurred received an automatic police call warning them to stay locked inside. About half an hour later, more than a dozen semi-automatic shots echoed down the streets in a brief shootout that killed the suspect.

Witnesses described hearing a "multitude of gunfire" - with 20 or more shots fired during that gun battle between the suspect and law enforcement, reports CBS San Francisco station station KPIX-TV.

Police were going door-to-door in the neighborhood, searching homes, garages, even closets, although the sheriff said authorities didn't know if another suspect remained at large.

Police, sheriff's deputies and FBI agents filled intersections, some with guns drawn, in what is ordinarily a quiet, residential neighborhood in the community about 60 miles south of San Francisco.

A store clerk a few buildings away from the shooting said the barrage of gunfire was "terrifying."

"We ducked. We have big desks, so under the desks we went," said the clerk, who spoke on condition of anonymity and asked that her store not be identified because she feared for her safety.

She said she remained locked in her store hours after the shooting and was still scared.

Two schools were locked down during the shooting. The students were later evacuated by bus to the County Government Center about half a mile away.

As darkness fell, helicopters and light aircraft patrolled above the neighborhood, which is about a mile from downtown Santa Cruz and the Santa Cruz Beach Boardwalk. The campus of University of California, Santa Cruz, is about five miles away.

The city's mayor, Hilary Bryant, said in a statement that the city was shocked over the shootings.

"Tonight we are heartbroken at the loss of two of our finest police officers who were killed in the line of duty, protecting the community we love," the statement said. "This is an exceptionally shocking and sad day for Santa Cruz and our Police Department."

Santa Cruz has faced a recent spate of violence, and community leaders had scheduled a downtown rally Tuesday to speak out against shootings. That and a city council meeting were canceled after teary-eyed city leaders learned of the deaths.

Those shootings include the killing of Pauly Silva, a 32-year-old martial arts instructor who was shot outside a popular downtown bar and restaurant on Feb. 9.

Two days later, a UC Santa Cruz student waiting at a bus stop was shot in the head during a robbery. She is recovering from her injuries.

Then on Feb. 17, a 21-year-old woman was raped and beaten on the UC Santa Cruz campus. Four days later, a Santa Cruz couple fought off two men who came in their home before dawn and threatened them with a sword.

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What's Next for Pope Benedict XVI?

The party for the world's most prominent soon-to-be retiree began today when Pope Benedict XVI hosted his final audience as pontiff in St. Peter's Square.

More than 50,000 tickets were requested for the event, according to the Vatican, while the city of Rome planned for 250,000 people to flood the streets.

FULL COVERAGE: Pope Benedict XVI Resignation

With his belongings packed up, Pope Benedict XVI will spend the night, his final one as pope, in the Apostolic Palace.

The pontiff, 85, who is an avid writer, will be able to take his personal notes with him. However, all official documents relating to his papacy will be sent to the Vatican archives.

On Thursday, Pope Benedict XVI will take his last meeting as pontiff with various dignitaries and the cardinals, said the Rev. Federico Lombardi, director of the Vatican Press Office.

INTERACTIVE: Key Dates in the Life of Pope Benedict XVI

While not all of the cardinals are in Rome, it is possible that among the princes of the church saying farewell to the pope could be the man who will succeed him.

"I think the overall tone is going to be gratitude. From the cardinals' perspective, it'll be like the retirement party for your favorite professor," said Christopher Bellitto, a professor at Kean University in New Jersey who has written nine books on the history of the church.

AP Photo/Andrew Medichini

Papal Appearance: Faithful Flock to Saint Peter's Square Watch Video

RELATED: Cardinal Resigns Amid Sexual Misconduct Allegations

Pope Benedict XVI will depart the Vatican walls in the afternoon, taking a 15-minute helicopter ride to Castel Gandolfo, the papal retreat just outside of Rome, where he will live while his new Vatican quarters undergo a renovation.

Around sunset, the pontiff is expected to greet the public from his window in the palace, which overlooks the small town square, for the last time as pope.

At 8 p.m. local time, the papal throne will be vacated. The man known as Pope Benedict XVI for the past eight years will take on a new title: Pope Emeritus.

What Lies Ahead for the Pope Emeritus

The announcement that Benedict XVI would be the first pope to resign in 600 years shocked the world and left the Vatican with the task of creating new rules for an event that was unprecedented in the modern church.

"Even for the historical life of the church, some of this is brand new territory," said Matthew Bunson, general editor of the "Catholic Almanac" and author of "We Have a Pope! Benedict XVI."

"The Vatican took a great deal of care in sorting through this," he said. "This is establishing a precedent."

Along with Benedict's new title, he will still be allowed to wear white, a color traditionally reserved for the pope.

He'll still be called Your Holiness. However, the Swiss Guards, who are tasked with protecting the pope, will symbolically leave his side at 8 p.m. Thursday.

His Ring of the Fisherman, kissed by thousands of the faithful over the years, will be crushed, according to tradition.

Not much is known about the pope's health.

In his resignation statement, the pontiff said his physical strength has deteriorated in the past few months because of "an advanced age."

He also mentioned the "strength of mind and body" necessary to lead the more-than-1-billion Catholics worldwide.

If he is able to, Bellitto believes the pope will keep writing, perhaps on the Holy Trinity, a topic of great interest to him.

RELATED: Papal Conclave 2013 Not Politics as Usual

As the pope emeritus settles into the final chapter of his life, experts have said it is likely he will stay out of the public realm.

"[Pope Benedict XVI] has moved very deliberately in this process," Bunson said, "with an eye toward making the transition as smooth, as regal, as careful as possible for the election of his successor."

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Vatican 'Gay lobby'? Probably not

STORY HIGHLIGHTS

• Benedict XVI not stepping down under pressure from 'gay lobby,' Allen says


• Allen: Benedict is a man who prefers the life of the mind to the nuts and bolts of government


• However, he says, much of the pope's time has been spent putting out fires

Editor's note: John L. Allen Jr. is CNN's senior Vatican analyst and senior correspondent for the National Catholic Reporter.

(CNN) -- Suffice it to say that of all possible storylines to emerge, heading into the election of a new pope, sensational charges of a shadowy "gay lobby" (possibly linked to blackmail), whose occult influence may have been behind the resignation of Benedict XVI, would be right at the bottom of the Vatican's wish list.

Proof of the Vatican's irritation came with a blistering statement Saturday complaining of "unverified, unverifiable or completely false news stories," even suggesting the media is trying to influence the papal election.

Two basic questions have to be asked about all this. First, is there really a secret dossier about a network of people inside the Vatican who are linked by their sexual orientation, as Italian newspaper reports have alleged? Second, is this really why Benedict XVI quit?

John L. Allen Jr.

The best answers, respectively, are "maybe" and "probably not."

It's a matter of record that at the peak of last year's massive Vatican leaks crisis, Benedict XVI created a commission of three cardinals to investigate the leaks. They submitted an eyes-only report to the pope in mid-December, which has not been made public.

It's impossible to confirm whether that report looked into the possibility that people protecting secrets about their sex lives were involved with the leaks, but frankly, it would be surprising if it didn't.

There are certainly compelling reasons to consider the hypothesis. In 2007, a Vatican official was caught by an Italian TV network on hidden camera arranging a date through a gay-oriented chat room, and then taking the young man back to his Vatican apartment. In 2010, a papal ceremonial officer was caught on a wiretap arranging liaisons through a Nigerian member of a Vatican choir. Both episodes played out in full public view, and gave the Vatican a black eye.

Pope Benedict XVI

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In that context, it would be a little odd if the cardinals didn't at least consider the possibility that insiders leading a double life might be vulnerable to pressure to betray the pope's confidence. That would apply not just to sex, but also potential conflicts of other sorts too, such as financial interests.

Vatican officials have said Benedict may authorize giving the report to the 116 cardinals who will elect his successor, so they can factor it into their deliberations. The most immediate fallout is that the affair is likely to strengthen the conviction among many cardinals that the next pope has to lead a serious house-cleaning inside the Vatican's bureaucracy.

It seems a stretch, however, to suggest this is the real reason Benedict is leaving. For the most part, one should probably take the pope at his word, that old age and fatigue are the motives for his decision.

That said, it's hard not to suspect that the meltdowns and controversies that have dogged Benedict XVI for the last eight years are in the background of why he's so tired. In 2009, at the height of another frenzy surrounding the lifting of the excommunication of a Holocaust-denying traditionalist bishop, Benedict dispatched a plaintive letter to the bishops of the world, voicing hurt for the way he'd been attacked and apologizing for the Vatican's mishandling of the situation.

Even if Benedict didn't resign because of any specific crisis, including this latest one, such anguish must have taken its toll. Benedict is a teaching pope, a man who prefers the life of the mind to the nuts and bolts of government, yet an enormous share of his time and energy has been consumed trying to put out internal fires.

It's hard to know why Benedict XVI is stepping off the stage, but I doubt it is because of a "gay lobby."

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The opinions expressed in this commentary are solely those of John L. Allen Jr.

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GIC raises US$1.25b by selling shares in Global Logistic Properties

SINGAPORE: The Government of Singapore Investment Corp (GIC) has raised US$1.25 billion by selling about 596 million shares in warehouse operator Global Logistic Properties (GLP).

GIC sold the shares at S$2.60 each, which is a 4.8 per cent discount to Monday's closing price.

Following the share sale, it now holds a 37 per cent stake in GLP, down from 49 per cent.

GIC said the move is part of the fund's portfolio rebalancing and it will remain a substantial shareholder for the long run.

- CNA/ms

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Family fights $474K hospital bill

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At least 19 tourists die in hot air balloon crash in Egypt

Updated 4:30 a.m. EST

LUXOR, Egypt A hot air balloon flying over Egypt's ancient city of Luxor caught fire and crashed into a sugar cane field on Tuesday, killing at least 18 foreign tourists, a security official said.

It was one of the worst accidents involving tourists in Egypt and is likely to push the key tourism industry deeper into recession. The casualties included French, British, Japanese nationals and nine tourists from Hong Kong, the official said.

Three survivors of the crash -- two tourists and one Egyptian -- were taken to a local hospital. Local media reports say the pilot was among the survivors.

According to the Egyptian security official, the balloon carrying at least 20 tourists was flying over Luxor when it caught fire, which triggered an explosion in its gas canister, then plunged at least 1,000 feet from the sky.

It crashed into a sugar cane field outside al-Dhabaa village just west of Luxor, 320 miles south of Cairo, said the official, speaking on condition of anonymity because he was not authorized to talk to the media.

Bodies of the dead tourists were scattered across the field around the remnants of the balloon. An Associated Press reporter at the crash site counted eight bodies as they were put into body bags and taken away. The security official said all 18 bodies have been recovered.

The official said foul play has been ruled out. He also said initial reports of 19 dead were revised to 18 as confusion is common in the aftermath of such accidents.

In Hong Kong, a travel agency said nine of the tourists that were aboard the balloon were natives of the semiautonomous Chinese city. It did not say whether all nine were killed. The information was posted on the agency's website.

In Paris, a diplomatic official said French tourists were among those involved in the accident, but would give no details on how many, or whether French citizens were among those killed.

Speaking on condition of anonymity because he wasn't authorized to be publicly named according to government policy, the official said French authorities were working with their Egyptian counterparts to clarify what happened. French media reports said 2 French tourists were among the dead but the official wouldn't confirm that.

Hot air ballooning, usually at sunrise over the famed Karnak and Luxor temples as well as the Valley of the Kings, is a popular pastime for tourists visiting Luxor.

The site of the accident has seen past crashes. In 2009, 16 tourists were injured when their balloon struck a cell phone transmission tower. A year earlier, seven tourists were injured in a similar crash.

Egypt's tourism industry has been decimated since the 18-day uprising in 2011 against autocrat leader Hosni Mubarak and the political turmoil that followed and continues to this day.

Luxor's hotels are currently about 25 percent full in what is supposed to be the peak of the winter season.

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Americans Targeted for Allegedly Running Underage Prostitution in Philippines

Arthur Benjamin is sitting at the edge of a small stage, wearing a lavender Hawaiian shirt and nursing a bottle of San Miguel Light beer. The 6-foot-6 mustachioed Texan lazily watches the half dozen or so girls dancing rather unenergetically around the stage's pole.

"I forgot your gift again, it's in the car," Benjamin says to one of the girls on stage, shouting above the pop music blaring from the speaker system.

The small, dingy bar, which Benjamin says he owns, is called Crow Bar. It's in a rundown part of the picturesque Subic Bay in the western Philippines, about a three hour drive from the capital, Manila. Home for 50 years to a United States naval base, Subic Bay has become synonymous with foreigners looking for sex in the long string of bars that line the main road along the coast.

Watch the full story on "Nightline" TONIGHT at 12:35 a.m. ET

The bars in this area are often packed with older foreign men ogling the young Filipina women available for the night for a "bar fine" of around 1,500 Filipino pesos, or just over $35. Many of the bars are owned and operated by Americans, often former military servicemen who either served on the base or whose ships docked here until the base was shuttered under political pressure in 1992.

Alleged Underage Prostitution in Philippines Watch Video

Authorities Raid Philippines Bar Suspected of Underage Prostitution Watch Video

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Most of the prostitutes working in the bars are indeed 18 or older. But in the Philippines, just a small scratch to the surface can reveal a layer of young, underage girls who have mostly come from impoverished rural provinces to sell their bodies to help support their families.

Benjamin, 49, is, according to his own statements, one of the countless foreigners who has moved beyond just having sex with underage girls to owning and operating a bar where girls in scantily-clad outfits flaunt their bodies for patrons.

"My wife recently found out that I have this place," he tells an ABC News "Nightline" team, unaware they are journalists and recording the conversation on tiny hidden cameras disguised as shirt buttons.

Benjamin said that a "disgruntled waitress" had written his wife on Facebook, detailing his activities in Subic Bay.

"She sent her this thing saying that I have underage girls who stayed with me, that I [have anal sex with them], I own a bar, I've got other girls that I'm putting through high school, all this other crap," he said.

"All of which is true," he laughed. "However, I have to deny."

He sends a text message summoning his current girlfriend, a petite dark-skinned girl called Jade, who he said is just 16 years old. Benjamin says he bought the bar for her about a year ago and while most still call it Crow Bar, he officially re-named it with her last name.

"She needed a place to stay, I needed a place to do her. I bought a bar for her," he says, explaining that she lives in a house out back by the beach.

"You're not going to find anything like this in the States, not as a guy my age," he said as he looked down at Jade. "Ain't going to happen."

Benjamin is the latest target of Father Shay Cullen, a Catholic priest with a thick Irish brogue and fluency in the local language, Tagalog. Through his non-profit center called Preda, he's been crusading against underage sex trafficking in the Philippines for 40 years.

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