Archive for the ‘corruption’ Category

Small town lottery also prone to corruption – Bayan Muna (

July 30, 2011

Bayan Muna Representative Neri Colmenares revealed that there is no accountability and reporting of actual sales in the current system of the STL making it highly vulnerable to corruption.


The Philippine Charity Sweepstakes Office is mandated by Republic Act No. 1169 to help various government agencies that need financial assistance; it is also the main government agency responsible for raising and providing “funds for health programs, medical assistance and services, and charities of national character.”

In the last few months, however, the same agency has come under scrutiny because its ranking officials have been named in several corruption issues. Earlier this month, even leaders of the Catholic Church were criticized after several bishops were reported to have received sports utility vehicles from PCSO and former president Gloria Macapagal-Arroyo.

Now, it’s the PCSO’ Small Town Lottery (STL) that’s under scrutiny and how it is said to be bolstering corruption in the provinces.
Bayan Muna Representative Neri Colmenares revealed that there is no accountability and reporting of actual sales in the current system of the STL making it highly vulnerable to corruption.

The issue of the STL is currently being investigated in the senate after reports have come out that there has been massive fund misuse and illegal distribution of revenues to certain congressmen and officials of the Philippine National Police (PNP). There have been calls to scrap the STL, which the PCSO plans to re-launch as the Loterya ng Bayan within the year.

Colmenares said he had discussed the issue of STL sales with a supplier of the hand held STL machines.

“Supposedly under the STL charity fund sharing scheme, revenues accruing to STL will be divided as follows: city or municipality, 10 percent; provincial government, five percent; congressional district, 2.5 percent; and the PNP, five percent. The PCSO has also executed memorandum of agreements (MOAs) with local government units on how to disburse the funds given to them via STL. The remaining 7.5 percent of the charity fund will go to the PCSO, while the rest goes to the operator,” he said.

According to reports, by the end of 2007, the PCSO was able to launch the STL in 15 approved test run areas: Quezon province, Angeles City, Bataan, Occidental Mindoro, Pampanga, Laguna, Bulacan, Negros Oriental, Iloilo City, Tarlac, Oriental Mindoro, Ilocos Norte, Albay, Olongapo City, and Batangas. During this first year, STL generated revenues supposedly totaling more than P3 billion (US$69.7 milion).

“But the problem with this is that many of the hand held machines are not being used by the STL operators and the reporting capacity of their handhelds is not utilized because the STL operators do not want to report their real gross sales to the PCSO,” Colmenares said.

In her testimony during the senate Blue Ribbon investigations, PCSO Chair Margarita Juico said during the first half of the year, the agency collected “nearly P2 billion” (US$46.5 million) from STL, up from the P1.57 billion (US$36.5 million )in the same period last year. She said the PCSO intends to “fine-tune” the ST operations to raise PCSO revenues further. She said among the improvements to the system that are being considered are stricter screening and evaluation of STL franchise applicants, social security benefits for bet collectors; and increased transparency during draws.

According to the Colmenares however, the STL’s system makes it impossible for the PCSO and the Commission on Audit (CoA) to determine the actual amount that has to be divided and remitted. He said it’s highly likely that the actual sales of the STL operators are more than what they report.

“Why the old PCSO board allowed such a disadvantageous arrangement to exist for so long is highly questionable. It seems that this is an anomaly waiting to be unearthed,” he said.

Colmenares also scored the virtual lack of control by the PCSO over the STL and the lotto machines. “The old PCSO board has practically abandoned its power to oversee the STL and lotto operations. Sen. Enrile is right. We have no control at all of the lotto machines being operated by the PGMC. Now, we are informed that we also do not have control over the STL. I would not be surprised if billions are lost in the process.”

Anomalous PCSO deal on lotto machine rentals

The Bayan Muna lawmaker has been monitoring senate and congressional investigations concerning the PCSO and has already filed plunder and corruption cases against former president Gloria Macapagal-Arroyo and former PCSO general manager Rosario Uriarte at the Office of the Ombudsman.

He said the irregularities in the PCSO include anomalous contracts, diversion of funds and overpriced machines and that these anomalies involve amounts much bigger than the $330 million national broadband network contract with Chinese firm ZTE Corp. and the P728-million fertilizer scam. He said that that he was exposing the issues in the PCSO because “the common denomination is that the victims are still the Filipino people, especially the poor who need medical and other assistance,” he said.

Earlier in June, Colmenares commended the PCSO for canceling what he said was the anomalous P42 billion (US$ 976,744,186) deal it forged with Australian firm TMA for thermal paper supplies. In a privileged speech, Colmenares said the thermal paper contract where the former PCSO board committed to purchase thermal paper for 50 years was termed as a “joint venture” with TMA Australia.

“ This joint venture is actually a contract requiring the PCSO to purchase its thermal paper from TMA for half a century! The estimated cost of thermal paper which PCSO will buy in the next 50 years is at least 42 billion pesos(US$ 976,744,186). PCSO must now trace whether TMA actually gave four billion pesos (US$93 million) to PCSO as its ‘contribution’ to the joint venture,” he said.

After the PCSO cancelled the contract soon after Colmenares brought up the issue and called for investigations, Colmenares insisted that Congress continue investigations.

“We must know how much of these amount have been given and where, as well how, this type of contract came to be,” he said.
Colmenares is now heading calls for the PCSO to cancel the Philippine Gaming and Management Corporation (PGMC)-Bergaya contract which cost PCSO billions of pesos in the lease of the lotto machines used in various lotto outlets. He said the PCSO must work for the revocation of this overpriced contract.

In 1995, instead of buying lotto machines, the PCSO executed a lease agreement with the PGMC for the lease of its lotto machines for eight years. It was said the PGMC will be paid an amount equivalent to 4.3 percent of the total gross sales of the lotto machines. The PCSO was also given the option to purchase the machines at the end of the eight-year contract in 2003 for P25 million (US$ 581,395)

“One would expect the PCSO to purchase these machines in 2003 and either take over the lotto operations considering that the PCSO should have developed the capacity to do so during the eight years of lotto operations. This, or at least open the operations for bidding to look for a better deal considering that 4.3 percent of the gross sales is not only steep, but is in violation of the PCSO charter which requires that operational expenses should be deducted from the net receipts and not the gross sale,” Colmenares said.

The PCSO, however, extended the lease contract with PGMC in 2004 for another eight years, without any bidding in the guise of “upgrading” the lotto machines.

Worse, Colmenares said, there was an increase in the rental rates to 6.85 percent of the gross sales of lotto tickets. PCSO also obligated itself to pay PGMC-Berjaya 0.15 percent of the gross sales of lotto tickets to maintain and repair the machines being owned and operated by PGMC-Berjaya.

The PCSO further gave PGMC another three percent for telecommunication services, practically giving PGMC a total of 10 percent of the gross sales of lotto tickets in its territory.

According to Colmenares, the PCSO has virtually wiped out its 15 percent share of the net receipts for its operations by giving PGMC 10 percent of the gross sales of lotto.

In 2009 the gross sales of Lotto amounted to 27 billion (currently US$627,906,976) and 10 percent of this is a staggering P2.7 billion (currently US$ 62,790,680) PGMC in one year alone.

“This amount could have helped at least 157,000 PCSO beneficiaries suffering from tuberculosis, diabetes, heart, lung and kidney diseases as well as other diseases. These could have bought 2,700 units of ambulances, or could have been used to fund 2,700 organ transplants,” he said.

The gross sales of lotto during the eight year agreement in 1995-2003 in Luzon was P56.4 billion (currently US$1.3 billion). This means that the PGMC was paid almost three billion ($69 million) for its 4.3 percent share.

The gross sale of lotto from 2004 to 2010 was is P82.7 billion or an equivalent of P8.2 billion for PGMC’s 10 percent share, giving it a total of P10.62 billion in rentals since 1995.

Through another amendment of the lease agreement, which is unclear as of now, the lease contract will end in 2015 instead of 2012.

“These lotto machines cost at most US$ 6,000 in 1995 which means that the 3,225 machines that the PCSO contracted would have cost P507, 937,560 at the exchange rate of P26.25 to one US dollar. The central computer system and software would have upped the expense to merely 1 billion pesos but would not have reached the P10.62 billion ( $246 million) that it cost the PCSO now.

Congress should immediately start its investigation on the PCSO so that the institution will no longer be used as a milking cow of unscrupulous officials and the billions can be used for the upliftment of the poor,” he said.

Albay legislators’ incentives exposed (Bicol Mail)

July 30, 2011

Albay legislators’ incentives exposed
By Elmer James Bandol

LEGAZPI CITY — A private college in Guinobatan, Albay has certified in writing that Vice-Gov. Harold Imperial together with three provincial board members and a town councilor have received an amount as “incentive” for their participation in the recruitment of students specifically grantees under the loan program by the provincial government supposed to be just “the tip of the iceberg.”

Document from PLT College, Inc., San Francisco, Guinbatan town showed that Imperial has received P7,000; while Board Members Herbert Borja, P4,500; Ireneo Sales, P3,750; Ramon Alsua, P21,000 and Guinobatan Councilor Julio Tingson, P44,750. This is part of their allotted quota under grand educational program dubbed as Albay Higher Education Contribution Scheme (AHECS) of Gov. Joey S. Salceda with funding support of P700 million loan from Land Bank of the Philippines.

The document signed by a certain Nenita R. Osia in lieu of the Acting College President, Ma. Nonette Osia-Tiam, states that the money was released in a form of checks to the local legislators in line with the college’s Recruitment Incentive Scheme for hosting student-grantees under AHECS that provides loan of P5,000 for every student for every semester until graduation depending on the course taken.

When asked to comment, Imperial said “I did not accept the amount, we don’t need it, though there is a contract signed with colleges and universities according to the choice of student-grantee but the provincial government will release the amount directly to the school.”

Imperial explained that under AHECS every Board Member is given 800 slots in 2010 and 300 each for 2011 while Salceda will have his own out of the 25,000 student-grantees targeted by the program aiming to have at least one college graduate for every poor family.

For local legislators alone, more than 13,000 students under their slots were accommodated since the program begun on June 16, 2010 and according to documents obtained by this paper, an amount of P120 million and P115 million were released by the government bank for the years 2010 and 2011 respectively.

The total amount of P235 miilion released is part of the P700 million loans by the provincial government payable in 12 years while paying for the initial draw down inclusive of two years grace period in principal and amortizing it in 40 equal quarterly payments with interest rate of 8.5% per year.

The proverbial hornets’ nest was stirred as “just tip of the iceberg” following the request for certification from PLT College, Inc., by Board Member Neil Montallana (Albay 2nd Dist.), regarding the amount of the “incentives” given to his fellows under AHECS which believed to have resulted to unplanned overhaul of the chairmanships of the different committees at the Sangguniang Panlalawigan during its regular session last Tuesday.

Nuns Decry Inclusion of Church Workers in Military’s ‘Order of Battle’

May 26, 2009

An association of 350 Catholic nuns from 40 congregations in Mindanao expressed outrage over the inclusion of Church people to the reported ‘order of battle’ of the 10th Infantry Division of the Armed Forces of the Philippines.

In a document titled “JCICC ‘AGILA’ 3rd QTR 2007 OB VALIDATION RESULT,” several Catholic and Protestant groups were listed, including the Archdiocesan Council of Lay Apostolate and Integrated Movement (ACLAIM), Missionaries of Assumption (MA), National Council of Churches in the Philippines (NCCP), Promotions of Church
Peoples Response (PCPR), Philippine Independent Church (PIC) and Mindanao Interfaith People Conference (MIPC).

Bishop Felixberto Calang of PIC and Bishop Anacleto Serafica of the United Church of Christ in the Philippines (UCCP), along with Catholic priests and nuns were also named in the document.

In a recent statement released to the media, Lt. Col. Kurt A. Decapia, chief of the 10th ID’s Public Affairs Office, did not deny the existence of such list but criticized Bayan Muna Rep. Satur Ocampo for “falsifying” the document.

Ocampo presented the order of battle in a press conference of the International Solidarity Mission in Davao City on May 18.

Decapia said that the words “targeted,” “dominated” and “organized” in the document mean that the individuals and groups on the list are targeted, organized and dominated individuals and groups by the Communist Party of the Philippines (CPP) and the New People’s Army (NPA).

The Sisters’ Association in Mindanao (SAMIN) said in a statement, “It is indeed disturbing to know that such an order exists from the AFP, which labels church people, lawyers, journalists, activists and NGO workers as enemies of the state.”

“It is condemnable that church people who are fulfilling Christ’s mandate to bring the Good News to the poor are subject to this vilification campaign,” said SAMIN executive secretary Sr. Elsa Compuesto MSM.

Compuesto said that the order puts all the individuals and organizations in the list in grave danger, including church people.

The SAMIN recalled the harassment against SR. Stella Matutina OSB and the raids in two sisters’ convents in Butuan City in 2006. “Both cases have shown that even religious can be subject to the attacks of the state,” Compuesto said.

In February this year, Matutina along with her three companions was illegally held against her will by the elements of the 67th Infantry Battalion in Cateel, Davao Oriental after doing advocacy work against large-scale mining.

In November 2006, the convents of the Contemplative Good Shepherds and the Missionary Sisters of Mary were raided by the police on allegations that they are keeping a rebel leader in their convents.

In 2005, the SAMIN was already among those included in the military’s powerpoint presentation “Knowing the Enemy.” Compuesto said that pictures of their members and their activities were downloaded from their old website and inserted in the powerpoint.

“These accusations remind us of the Biblical times, when being Christians meant putting one’s life in danger of being persecuted and killed by the soldiers of the Roman Empire. Today, this persecution continues with the military’s attack on the religious, especially on those who dare to speak God’s message of hope, denouncing the evils of society and taking sides with God’s chosen poor,” Compuesto said.

The association of nuns vowed, “As a new tyranny is in our midst, SAMIN is emboldened to continue with its commitment of fighting the darkness of oppression and corruption, and bringing the light of hope and justice for the poor and Creation.”

The group called on the government authorities to stop the “persecution of church people and the poor.” (

Editorial Cartoon: E-Devil

April 20, 2009


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Teachers say GSIS deductions illegal

March 8, 2009

BAGUIO CITY — The Alliance of Concerned Teachers (ACT) criticized the Government Social Insurance System’s (GSIS) automatic deductions from the salaries of those members with arrears on their benefits upon claiming.

ACT National Chairperson Antonio Tinio said the move is so unilateral, summary and not subject to appeal.

In a forum organized by ACT-Metro Baguio held at the People’s Multi-Purpose Hall in city hall, Tinio lambasted the GSIS for being unfair to its members for implementing such policies without looking first into the welfare of its members.

Under the Claims and Loans Interdependecy Policy (CLIP) which was introduced in mid-2002 by GSIS President and General Manager Winston Garcia, automatic deduction and posting of the deducted amounts as payments of outstanding loan arrearages with the system will be allowed. The CLIP is said to cover loan Accounts such as salary Loan , housing loans, emergency loans, pension loans and policy Loans. It will also include claims and benefits, life insurance benefits, such as maturity, cash surrender value, disability and death, retirement benefits, survivorship and funeral benefits.

Tinio said GSIS should first establish members who really have outstanding arrearages and who are the responsible because it is not automatically the member’s fault.

“Tama lang na singilin ang mga nakautang pero dapat idaan muna sa due process bago gumawa ng hakbang na makakaapekto sa kalakhan ng miyembro,” Tinio added. He also said if they found out that a member is really liable then they should file a case against that particular member.

Tinio, an instructor in the Filipino department in University of the Philippines in Diliman, Quezon City cited Section 41(w) of the GSIS Act of 1997 which stipulates that the GSIS board of trustees must file a legal suit before the proper court or body in order to recover any arrears incurred by its members.

“This process provides members with an opportunity to challenge or disprove the claims of GSIS,” he said.

Tinio said there are cases that the premiums of public teachers are being deducted by the Department of Education (DepEd) from salaries but are not posted in the GSIS books.

Tinio accused GSIS, for being notorious in maintaining an incomplete and erroneous membership database. “While GSIS itself acknowledges that it is currently engaged in a massive ‘reposting’ project to bring these up to date, this does not keep it from using this flawed database to deduct alleged arrears” he explained.

He further explained in most cases these so-called premiums in arrears are false, merely the result of the failure to post premium payments, thus making members to be subjected to double deductions.

The forum is a part of the nationwide coordinated activities of ACT in its campaign against illegal deductions. Forms were given to teachers to help document their experience from the deductions.

Tinio said the nationwide ACT campaign against illegal deductions entitled “GSIS refund now!” will involve the suing GSIS officials responsible for the policy and filing a motion to nullify the automatic deduction policy and a demand for a refund of all allegedly illegal deductions GSIS made. # Aldwin G. Quitasol

Student groups say tuition freeze no impact

March 6, 2009

BAGUIO CITY — Tuition freeze has not relieved students here with schools now contemplating to increase miscellaneous and other fees.

Student groups here assailed the Commission on Higher Education (CHEd) stance on tuition freeze, saying said order is now being used as an excuse to increase miscellaneous and other school fees.

Earlier in the National Capital Region, youth groups dismissed as ‘toothless’ the recent CHEd memorandum appealing for a moratorium on tuition increases. The National Union of Students of the Philippines (NUSP), Kabataan Youth Party, Anakbayan and Student Christian Movement of the Philippines held a picket protest outside the CHEd main office, Tuesday.

In a press conference here Tuesday, the fifth of a series of media blitz launched by progressive youth and student organizations based here, representatives of NUSP, College Editors Guild of the Philippines (CEGP), and student councils of two universities hit CHEd fornot ordering a freeze in all school fees, as well.

NUSP’s Maria Finela Mejia said the youth and student organization has earlier called on CHEd not to allow the increase in tuition and other fees considering the global financial crisis that has obviously affected everyone, especially the poor.

Mejia said, “Di namin naramdaman ang epekto ng pag-apila ng CHEd sa mga paaralan na di magtaas ng tuition, dahil nagtaasan naman ang ibang bayarin,” (CHEd’s appeal for schools not to increase tuition has no impact on us because these increased other fees.)

Saint Louis University (SLU) and the University of the Cordilleras (UC) are among the universities which had drumbeated an increase in miscellaneous fees.

Marcius Aquino, vice-governor of the Kasama Supreme Student Council (SSC) said, with 10% increases in miscellaneous fees, SLU is even getting more than the 2007-2008 increases in tuition (4.5%) and miscellaneous (4.5%), which is only a total of 9%.

Aquino divulged the lack of a genuine consultation with students, saying the administration has not replied on the student request for a dialog.

In UC, the administration has not called for student leaders in a consultation, according to William Mamaglo, UC Supreme Student Government (SSG) president. He said, the student gfovernment would ask that the increases should not be higher than 5% but the proposal is 10%.

STI Computer College asks for a 6% increase in tuition and other fees, while the University of the Philippines proposes a 15% increase in tuition and other fees.

This semester SLU tuition is 357 per unit. Both UC and University of Baguio now collect an average of P370/unit; UPcollects P600/unit. Tuition is P352 per unit in Easter College.

Based on CHEd data, 372 private colleges and universities increased their tuition at an average of P36.75 per unit last year. In the NCR, average tuition is P855.20 per unit. # Lyn V. Ramo

Anakpawis probes CMP

March 5, 2009

BAGUIO CITY — Anakpawis and Organisasyon dagiti Nakurapay nga Umili ti Syudad (Ornus) will conduct a fact-finding mission (FFM) on the implementation of Community Mortgage Program (CMP) in Cypress, Irisan.

Ornus, a Baguio-wide alliance of urban poor communities, its allied organizations and advocates in the national and local level will conduct the said fact-finding mission in an attempt to bring their issues to the attention of the public, and to local and national legislation.

The FFM aims to involve affected residents in various caucuses in Cypress Point Village (CPV) and will reach out to the implementers of the CMP through the Homeowners Associations and dialogs with government offices, agencies and the Baguio City government. The FFM will be on March 5-6.

Complicated history

CMP is a mode of land acquisition defined by Republic Act 7279 commonly known as the Urban Development and Housing Act (UDHA). It is intended to help under priviliged and homeless citizens to own and develop home-lots. In the said program, communities are encouraged to organize associations to acquire the land.

According to the initial data of Ornus, the CMP in Irisan missed its objectives at delivering decent housing to the poor. Ornus alleged that CMP’s implementation is marred with serious allegations of corruption of its mandate to provide low-cost housing, among other needed social services.

According to the primer by Ornus, Cypress is an 18-hectare area in Barangay Irisan with more than 500 households and 2,700 individuals. Its title, OCT No. 56, in the name of CPV was subdivided into 248 lots. The title was among the 211 titles which were declared null and void by the Supreme Court in 1973 but was given consideration by Presidential Decree 1271.

In the 1970’s, the property was occupied by migrants from different places and was densely populated by the 1990s. Earlier occupants were not disturbed by the so-called original claimants or title holders. So that they even processed their claims through the Townsite Sales Application (TSA).

In 1993, a certain Arsenio Menor from the Presidential Commission for the Urban Poor came to Irisan and told the residents that the property was bought by a Mr. Peter Santos of the Asia Pine Hills Development Corporation (APHDC).

He then introduced the CMP to the actual occupants for them to own the lots. But the residents rejected it and instead negotiated to pay P350.00 per square meter. Menor however never went back to Irisan to finalize the negotiation.

During the term of then Councilor Betty Lourdes Tabanda as Chairperson of Committee on Land and Housing, a proposal to continue the plan of Menor pushed through. In 2000, the City Council passed a resolution authorizing then City Mayor Mauricio Domogan to negotiate with Peter Santos. In 2003, a subdivision plan for Cypress was approved by the council.

Three Homeowners Associations collected from the equity of members a total of P17, 335, 011.40 for the total of 77, 876 square meter or 7.8 hectares.

On August of 2003, more than houses were demolished by Baguio City demolition team in Purok 14-B in Cypress. Some residents were forced to stay with their relatives in other places of Baguio and the rest went back to the area and rebuilt their houses.

After barely a year, the person claiming to be Peter S.L. Santos wrote a letter to the different homeowners associations demanding to remit the equity. More or less P17 million was then paid by the residents as their equity to Santos.

As of now, the true identity of Santos who was claiming to be the president of APHDC has yet to be established especially that his signature in the Articles of Incorporation is different from other alleged signatures.

Demands on the CMP

Ornus has asked for an in-depth investigation of the CMP in Irisan as irregularities in its implementation has surfaced implying corruption.

They also further call for an investigation and the suspension on the said equity and amortization without any penalty should push through and the suspension of demolition orders within the CMP affected areas, according to ORNUS.

Moreover, Ornus demands that victims of demolition will be allowed to re-occupy their lots. Ornus also demands the investigation on the real identity of Peter Santos.

The results of the FFM will be released in a public program to be graced by Anakpawis representative Rafael Mariano. Ornus hopes through the FFM, Baguio officials will learn to look seriously into the case and initiate its own investigation and discuss appropriate legislation and action.

Besides Mariano, representatives of the national alliance of urban poor Kalipunan ng Damayang Mahihirap (Kadamay), National Union of People’s Lawyers (NUPL), Tongtongan ti Umili (TTU), Interfaith Gathering for Truth and Accountability. # Aldwin Quitasol

Scientists advise against BNPP

February 21, 2009

QUEZON CITY — Warning of a P20 billion nuclear tax and more loans, progressive scientists group AGHAM or the Samahan ng Nagtataguyod ng Agham at Teknolohiya para sa Sambayanan called on Congress to develop other energy sources instead of the Bataan nuclear power plant (BNPP).

“The projected shortage in 2012 can be addressed by building geothermal, hydro power, natural gas, wind, and solar power plants even without the operation of the nuclear plant in Bataan if only government builds the necessary indicative capacity additions and develop and upgrade exisiting power plants,” Dr. Giovanni Tapang, national chairperson of AGHAM, told the House Committee on Appropriations today.

Quoting figures from the various updates of the Philippine Energy Plan from the DOE on their website, the physicist pointed out that instead of looking at nuclear power to supply the projected energy needs, government only has to realize that most of the energy resources they auctioned could have provided the Philippines cheap and renewable energy.

“The Philippines has many available energy resources from hydrowater, geothermal, natural gas, wind and solar sources but these have been all put to sale by the government to private independent power producers (IPPs)”, Dr. Tapang said.

He further noted that the proposed bill would pass on the cost to ordinary consumers as a de facto nuclear tax of P 0.10 per kilowatt hour of the total electric power generated in the country. According to figures from the DOE website, the total electric power sales in 2007 is 48,009 GigaWatt hours (1,000,000,000 or billion watt-hour) or 48,009 million kilowatt hours. AGHAM computed that this translates to a nuclear tax of around 4 billion pesos per year or US$100 M per year to be imposed on electric consumers.  For five years the total would be 20 billion pesos.

“That is an extra 10 centavos per kwh more on your bill. If one consumes 300 kwh per month, you would have to pay an additional of 30 pesos (no VAT yet) per month for that nuclear tax or a total of 1800 pesos for five years.”, said Dr. Tapang The remaining 500 Million USD balance from the projected one billion dollar cost is to be obtained by entering into international or domestic loan agreements.

“Despite this cap on a billion dollars for the combined surcharge and loan, delays and interest repayments can drive this higher and become a new burden for the Filipino people”, Tapang added.

“The projected peak demand for 2012 should be recomputed to include the effects of the global economic crisis and recession. There should be a second look at these growth projections. Furthermore, having a stable or even a surplus of electricity capacity does not necessarily translate to lower energy costs. In recent years when we had an energy oversupply, power rates have still gone up due to one sided contracts and the pass on provisions of EPIRA”, pointed out the AGHAM chairperson.

“Passing this bill would make the operation of the BNPP a fait accompli despite the absence of studies on the actual safety of the plant after 20 years of non-operation, on its site location, its long term economic viability with regard to the risks associated with the plant,” Tapang concluded.

AGHAM is part of the Network Opposed to BNPP Revival (NO 2 BNPP Revival) – a broad alliance of scientists, environmentalists, experts and multi-sectoral formations opposed to the revival of the BNPP as it is not the answer to climate change nor will it address the energy crisis. # Vincent Michael L. Borneo


Manila waits for US move on Cpl Smith DFA: Americans not ready to discuss issue

February 14, 2009

By Tarra Quismundo, Kristine L. Alave
Philippine Daily Inquirer
First Posted 03:11:00 02/14/2009

Filed Under: Crime and Law and Justice, Subic rape case, Diplomacy

MANILA, Philippines — A Philippine official on Friday said any new negotiations on custody of Lance Cpl. Daniel Smith would have to wait until the Americans were ready to talk, and indicated Manila was powerless to compel Washington to sit down immediately.

“Right now, the department is very serious in coordinating with the US embassy. But they had to approach first their experts to get their legal opinion,” Department of Foreign Affairs spokesperson Bayani Mangibin said in a phone interview.

Mangibin said: “We don’t have a policy to wait for them … What can we do if they are not ready?”

Earlier, US diplomats made it clear they were firm in their position to keep custody of the American Marine convicted of raping the Filipino woman “Nicole” until the courts had ruled with finality on Smith’s appeal.

Smith has been confined in the US Embassy compound, according to US and Philippine officials, since December 2006 after he was sentenced by a Makati court up to 40 years in jail for raping Nicole during a one-night encounter at Subic Bay Freeport. He has elevated his case to the Court of Appeals.

A new furor erupted over the custody issue after the Supreme Court last week ruled that the US-Philippine executive agreement that allowed the embassy to keep Smith ran counter to the two countries’ Visiting Forces Agreement. The court ordered the DFA to immediately negotiate with the US the transfer of Smith to a Philippine-controlled facility.

Main concern

Mangibin said the DFA had started the “process of coordination” with the embassy on the issue of custody, based on the Supreme Court ruling. He said the DFA was also consulting the Departments of Justice and Interior and Local Government, and the Solicitor General.

“Our main concern is to look for appropriate arrangements for Daniel Smith,” he said.

The embassy has said it is studying the court decision and referred it to government legal experts in Washington.

Mangibin said formal negotiations could begin after the embassy had received the legal opinion from Washington and that in the meantime, Smith would stay at the embassy compound.

3 scenarios

Interior Undersecretary Marius Corpus said yesterday that after his last check on Smith on Feb. 5—or several days before the high court’s ruling came out—he met with an embassy political officer and discussed three possibilities in anticipation of a court decision.

In that meeting, Corpus saw the embassy’s steadfast position to continue holding on to Smith until the appeals process had been completed. After his December 2006 conviction, Smith was briefly held at a Makati jail before the embassy took custody of him—in the middle of the night—based on the controversial executive agreement.

“We talked about the possible consequences of the Supreme Court decision,” Corpus said. The discussion was not prompted by any advance information on the court’s eventual ruling, Corpus said when asked if there was any leak.

“One, that the Supreme Court would declare the VFA unconstitutional. Two, I said it’s highly probable that the court would affirm the VFA’s constitutionality, including the agreement [to hold Smith at the embassy], and that it would order some provisions of the VFA revised,” Corpus said by phone.

“Third, that everything will be upheld, both the VFA and the transfer (of Smith to the embassy).”

Lobby for Smith

Corpus said when the issue of custodial arrangement was brought up, the US side said: “We’ve already agreed on that. We’d like to continue what was agreed upon.”

Corpus said he heard that a congressman from Smith’s home state of Missouri was “lobbying in the State Department for it to take care of Smith.”

“That’s the reason why they defend Smith so much,” Corpus said, adding however that he had no categorical information about the supposed lobby.

Also discussed at the meeting was Smith’s condition while in detention, particularly his having gained a lot of weight, according to Corpus, who said he had been visiting Smith almost monthly.

“They (the embassy officials) said, ‘We should give him work, with your permission,’ so that he will not deteriorate physically,” Corpus said.

Corpus said he agreed, noting that similar activities were allowed local prisoners. He said he just asked that any chores given to Smith should not compromise the terms of his confinement.

‘He is bored’

“You can see the emotional stress in him,” Corpus said. “Every time I talk to him, I can see that he is emotionally suffering. He is very bored. The condition is even better in detention facilities outside, where [detainees] have some company.”

Corpus assured the Nicole camp that Smith remained inside the embassy compound, contrary to claims by some of the rape victim’s supporters that he had been spirited out of the embassy.

“Even if I visit him every day, they will not believe me,” Corpus said.

Send him to Munti

Bayan Muna Rep. Satur Ocampo has joined growing calls for Smith’s immediate transfer to a local prison.

“We demand that the Philippine government immediately effect the transfer of Smith to the New Bilibid Prison,” Ocampo said in a press statement. “We cannot understand why a clear-cut exercise of sovereignty, in this case custody over a convicted foreign felon, should be subject to negotiations.”

Ocampo added: “What the Philippine government should do is simply impose its own laws over a foreigner who violated those laws. It should not negotiate but order the US Embassy to turn over Smith to the proper local authority.”

Indefinite delay

The leftist lawmaker said the high court’s order for the DFA to arrange a detention place acceptable to Washington was just a ruse to “indefinitely delay” Smith’s transfer. With a report from Gil C. Cabacungan Jr.

Govt’s stimulus package mere gimmick–IBON

February 14, 2009

By Rommel C. Lontayao, Reporter

The Palace said the allocation for the economic stimulus package is not an old measure contrary to the statements of the independent think tank Ibon Foundation.

Ibon on Friday said in a statement that the government’s P330-billion stimulus package is a “mere spin” of “existing allocations . . . to create the impression that something is being done to address the crisis.”

“These ‘stimulus’ funds are already there even before the recent descent into crisis . . . There is very little to indicate that . . . government is pouring any substantially new efforts to deal with the economic downturn,” said IBON research head Sonny Africa.

Deputy Presidential Spokesperson Anthony Golez belied the statement, saying the current stimulus package is a genuine allocation intended to finance infrastructure projects and create jobs.

Golez said that besides providing assistance to the marginalized sector, the package is also expected to create three million jobs this year on top of the regular job-generation programs of various government agencies.

The reported stimulus plan, which opposition Bayan Muna Rep. Teddy Casiño calls a “simulation package,” includes the P160-billion increase in the 2009 national budget, the P100-billion off-budget infrastructure fund, the P40-billion corporate and individual tax breaks, and alternative livelihood programs, among others.

Africa said that contrary to what government officials claim, the P1.4-trillion budget for 2009 is not a pump-priming budget, and actually is the smallest share of government spending to the GDP (gross domestic product) since 1986.

“The tepidness of the supposed pump-priming is also apparent if the effects of inflation are taken into consideration. In real terms, total non-debt spending in 2009 is only an 8.6-percent increase from the year before,” he explained.

He further said that the tax relief, which refers to foregone revenues from reducing the corporate income tax to 30 percent from 35 percent, is actually already part of the reformed value-added tax law of 2005 and exemptions from withholding tax for those earning P200,000 or less annually.

The research group head also pointed out that the P100-billion infrastructure stimulus package required the Government Service and Insurance System, Development Bank of the Philippines and LandBank to commit P50 billion with the private sector shouldering the other P50 billion.

“All these imply that the administration is not really taking additional measures in the face of the crisis, and leaves the majority of poor Filipinos on their own,” Africa said.

“If it wants the public to believe that it is taking serious steps to address the crisis, it should at the very least preserve current jobs in the public and private sectors, restore real per capita social services spending to at least 1997 levels, free public resources by stopping debt payments, and remove the value-added tax on petroleum products, among others,” he opined.

The economic resiliency plan was announced by the National Economic and Development Authority (NEDA) early this year.

It is intended to upgrade infrastructure and capital stock and expand social protection. NEDA said the plan aims to save and create jobs, protect the poorest of the poor, returning overseas Filipino workers and workers in export industries, ensure low and stable prices to support consumer spending, and enhance competitiveness in preparation for the rebound of the global market.

Golez said the allocation of P330 billion for the economic stimulus package is intended to blunt the impact of the global economic meltdown on the poor and out-of-school youth.
–With Angelo S. Samonte(ManilaTimes)

What the Witnesses Said(Excerpts)

February 14, 2009

Note from the PCIJ: What follows are excerpts from the “Record of Interviews “ with some of the witnesses who met with the investigators of the World Bank’s anti-corruption unit, Department of Institutional Integrity (INT). on the alleged fraud and collusion in the National Road Improvement and Management Program-1 (NRIMP-1) projects. The interviews were separately conducted between April 2003 and November 2006 in the Philippines, Japan and South Korea.

Date of Interview            – 28 April, 2003

Interviewee/s                 –  William Paterson, lead highway engineer – World Bank East Asia and Pacific region; task team leader for the Philippine National Road Improvement Project Phase 1(NRIMP1)

–  Denis Robitaille , regional procurement adviser

Interviewers                  –  Mike Richards and Athene Vila-Boteler

Paterson told INT about two incidents in the NRIMP1 that caused him to believe there was collusive bidding in the project:  He had heard from ‘informal sources’ that government officials usually took 3% of the contract value in kickbacks, but learned in the discussions on five contracts for bidding, the demands had increased to 10%.

He said the DPWH secretary who assumed power in January 2001 had a ‘much better reputation for honesty’ than his predecessor but the replacement in January 2003 was “for the worse.”

The large variation in unit prices alerted him to the possibility of collusion in the bidding. He noted overpricing of materials like asphalt, which was around 50% higher than it should be. The cost of concrete that should be around P700 to P800 per cubic meter was charged P1,100 to P1,400 per cubic meter and the cost of clearing and grubbing was charged P290,000 per hectare when it should only be at P40,000 per hectare.

Paterson raises the possibility that the government, through the DPWH, is actively involved in the collusive arrangements, noting that the bill of quantity (BOQ) is not being reviewed. The excessive pricing of materials, he noted, still conform with the Owners Estimate that is held by the Bureau of Construction.

Paterson found it odd that two local senators have gone to the press to announce the result of the bid evaluation even before the results were published. One of the bidders was rejected because it submitted bogus documents.

According to Paterson, he has “sources” who told him that DPWH takes 10% while senators intend to get 10 – 15% cut of the contract price.

The projects under suspicion of collusion are all in Mindanao. Paterson noted that the DPWH secretary, his deputy, and the project manager that time were all from Mindanao.

Paterson described his sources to INT, including their proximity to the events at issue, but did not identify them by name.

Date of Interview           – 17 March, 2005

Interviewee/s                – William O. Paterson, task team leader

Interviewer/s                 – Merly Khouw, Athene Vila-Boteler, Christian Kammer, Annie Yau and                                                                Thilda Outhuok

It was suggested that there be an independent analysis by an engineer to benchmark the prices and check against excessive price distortions. Paterson was asked if the Philippine President’s personal interest in the project was related to the alleged involvement of her husband as alluded to in the complaint. He said his impression was that it was not as the timing of the government’s complaint was circumstantial to the CG meeting in Mindanao, the location for one of the road packages in question.

EC de Luna, considered as a fairly young contractor with good connections at DPWH, did not qualify on its own merit so it had to tie up with China Road for the 2nd bidding for the 1.6 package.

Date of Interview           – 3 August, 2005

Interviewee                   – Shingo Nakamura, vice president, Yoshida Construction Co.

Interviewers                  – Tim Carrodus / David Hawkes / Michael Kramer

Nakamura filed a complaint against Eduardo C.  de Luna and Augusto Miranda, alleging that the two defrauded Yoshida by falsely representing E.C. De Luna as having been already awarded the contract when in fact it had not. Nakamura said he paid de Luna and Miranda P2 million (about $40,000) in exchange for a P592-million subcontract on a World Bank-financed project (NRIMP-1, CW-RU 1.6) in 2003.

The business environment in the Philippines, he said, is “very dirty,” “as Japan had been 20 to 30 years ago.” All contract awards require “undertables” or corrupt payments. A “syndicate” organized by  de Luna with Miranda, local politicians, and other bidders selects the winning bidder or the “champion.” The champion then pays the losing bidders one to three percent of the contract price.

Contract prices are inflated 25 to 35 percent to cover the cost of bribes that must be paid to various parties, including First Gentleman Mike Arroyo, certain politicians, DPWH officials and others. As a result, contractors must cut back on quality and safety in the construction of roads.

Nakamura first met Eduardo De Luna and Tito Miranda in 2002 through Yoshida’s agent, “Trix”Lim. Yoshida signed a P592-million subcontract with De Luna in Feb. 2003, and paid the $40,000 in cash in local currency in April 2003 to Miranda. Miranda was always asking for contributions to the DPWH Secretary and Mike Arroyo.

Yoshida paid a total of about P10 million to a variety of people: P100,000 for Sen. Barbers, P200,000 during Christmas, etc.

E.C. de Luna was Mike Arroyo’s man. He travelled with Mr. Arroyo, the President, and Tito Miranda to Japan. Luna organized a syndicate to control the award of contracts. Miranda is involved as an intermediary for Sen. Barbers.

All the companies that participated in the preliminary qualification process had to be a part of the syndicate, especially the Chinese and Korean. Members of the syndicate – bidders, politicians, DPWH officials, Lim. De Luna, and Miranda – would congregate at the Diamond Hotel every three days to discuss the contract awards.

Contract prices were inflated 25- to 35- percent over the actual costs to generate funds for necessary payments which included the following:

–         1 percent to the Malacanang Presidential Palace (Nakamura said this meant the “Cabinet”)

–         5 percent to Senators (including Sen. Barbers and Sen Rebeira (Revilla?) and his son) 5 percent to Mike Arroyo

–         1 percent to DPWH personnel

–         1 percent to DPWH director

–         3 percent to other local officials, mayors, etc.

·        Contractors also had to make payments of P100 to P300 to government pay clerks. Inspectors were also paid relatively small amounts. Some of the bribe funds came from the 15-percent mobilization payment to contractors at the outset of the contract.

Nakamura introduced Mr. Suzuka of Suzuka Construction Co. to the Philippines after Suzuka heard that it was easy to get contracts because of the syndicate arrangement. Mr. Washo of EIWA Construction was also introduced.

Date of Interview            – 5 August, 2005

Interviewee                   – Tomatu Suzuka -president, Suzuka Construction Co. Ltd.

–         Masaki Suzuka – manager

Interviewers                  – Tim Carrodus, David Hawkes and Michael Kramer

Suzuka’s Philippine office ceased to have business involvement in the Philippines after it had “various issues” three years before the interview. Tomatu Suzuka cited the foreign exchange issues and damage to reputation among the issues his firm withdrew from the Philippines in November 2002.

He said he met with Senator Barbers and Mike Arroyo and “first discussed bribes” but had a “rough approach.” He said he “learned that money was important to do business in the Philippines, which was a “fundamental difference in the way of thinking.”

A certain Mr. Lim, Suzuka’s agent, said Suzuka would have to pay to get a contract, and that dollars would settle problems with the World Bank. He mentioned 2 – 3% to obtain credit or financial support.

Suzuka said he met Lim four years ago (2001) at Diamond hotel. There were policemen and government officials present when they discussed payments. A certain Tito Miranda was also with Lim’s group. Suzuka said he met Sen. Barbers separately. He said he thought Tito was a secretary of Barbers. Tito asked Suzuka to pay for Barbers’ trip to Japan, but that he refused. He said local contacts introduced him to Barbers.

He identified one Trix Lim as the person he was dealing with in the Philippines.

Suzuka even recalled a meeting with Barbers on an island in the Philippines while President Arroyo was delivering a speech and welcomed the Japanese companies. He said he had no contact with President Arroyo.

Suzuka said it was made clear to him that there would be no business in the Philippines without paying money. Money would have to be paid as high up as the president,  senior government officials and politicians in order to do any further business in the country. To win a contract, it would also be necessary to pay the head of the bureau (PMO?) and politicians several million yen.

Suzuka said he knew that the President’s husband handles her business, as what he had heard from local companies and the consultant who prepared the documents for the bidding. However, he said he had no specific information or any direct evidence of any money being paid to somebody specifically.

When shown the bid documents for the contract, Suzuka said his signatures were forged.

Date of Interview            – 8 August, 2008

Interviewee                   – Kyung Hwan Ko – trade service department, Shinhan Bank

Interviewers                  – Athene Vila-Boteles and David Hawkes (in Seoul, Korea)

Ko told the INT that the bid guarantees submitted by Dongsung Construction Co. Ltd. were forged. The document was signed by one Byung Jin Kim, a regular officer of the bank, not a general manager. In addition, Ko said a signature by Shinhan staff on a document would not be in Korean characters, but in English. The letter head of the document was also not correct and that the bank guarantees it issues do not have the guaranteed sum printed on the side. He said the bank does not have a business relationship with Dongsung, which had been bankrupt.

Date of Interview            – 8 August, 2005

Interviewee                   – Young Min Noh – general manager, marketing division -Shingsung Engineering and Construction Co.

Interviewers                  – Tim Carrodus and Michael Kramer

Noh said he was not familiar with details of the company’s operations in the Philippines, having worked in the last six years in the Middle East. His company received two World Bank contracts in the Philippines.

Date of Interview            – 9 August, 2005

Interviewee                   – Choong-Jo Oh, general manager- overseas civil project team, Daewoo E&C

Interviewers                  – Tim Carrodus and Michael Kramer (at Daewoo head office in Seoul)

Oh said he has heard about problems in the Philippines such as bid rigging but has no personal knowledge about it. He said infrastructure projects are simple and the Chinese companies are very aggressive. Korean companies cannot compete in open tender because of their wage rates and longer depreciation schedule – Korean companies have 10 years compared to Chinese firms’ four years.

Date of Interview            – 9 August, 2005

Interviewee                   – M. G. Kwon – overseas business department/ senior vice president,                                                              Hanjin Heavy Industries & Construction Co. Ltd.

– Hyun Woo Ko, overseas business team manager

–  B.D. Park, senior vice president -international finance

Interviewers                  –  Tim Carrodus and Michael Kramer (in Seoul, Korea)

Kwon and Ko both said they have never heard of Suzuka Construction. The Philippine road construction market is difficult for Korean companies. The Chinese companies are ‘quite aggressive’ while the local companies have political connections.

Date of Interview            – 15 August, 2005

Interviewee                   – Min Young Lee – general manager, Dongsung Construction Co. Ltd, Manila

– Angelico “Bong” Teraga – office engineer/project coordinator

Interviewers                  – David Hawkes and Athene Vila-Boteler

Dongsung Construction was one of the losing bidders in the second round of bidding for contracts 1.4B and 1.6 of NRIMP-1

INT found Dongsung’s bid security was forged. Teraga and Lee acknowledged having prepared the bid documents for both contracts, but said the Shinhan Bank bid securities came from the head office in Korea.

Date of Interview            – 17 August, 2005

Interviewee                   –  Oscar Mercado, vice president – marketing and engineering, EEI Corp.

– Ferdy M. del Prado, group manager – marketing and proposal

Interviewers                  – W. Michael Kramer and David Hawkes

EEI does not usually take part in DPWH controlled projects because of the bad reputation of DPWH and because of the perceived system of collusion governing awards. EEI took over from Philrock, Inc.’s contracts with DPWH. It participated in the 1.4B and 1.6 contracts in joint venture with Hanjin.

Date of Interview            – 18 August, 2005

Interviewee                   –  Manuel M. Bonoan, undersecretary – DPWH

–  (Raul) Asis, assistant secretary

Interviewers                  –  Tim Carrodus and Athene Vila-Boteler (at 17th floor, Shangri-la Hotel, Manila)

Undersecretary Bonoan acknowledged the existence of a major problem in the bidding for WB-funded road projects. He said, “We know they are doing it. We know that they are talking to each other, we can see the pattern, but we don’t know how to document it.”

He said collusion has been talked about a lot, but DPWH have problems documenting it. The interference of politicians, he said, is “where the problem  begins.” He told the INT, “We know all these things; everybody demands money from the contracts so the contractors have to recoup by increasing prices.”

Date of Interview            – 18 August, 2005

Interviewee                   – Engr. Lambert Lee, president, Cavite Ideal

Interviewers                  – W. Michael Kramer and David Hawkes

Gist                              – Lee denied the existence of a syndicate and the rigging of bids. Later in the afternoon, he called Athena Vila-Boteler of the INT to request for a second meeting and said the idea of the existence of a syndicate insulted him deeply.

Date of Interview            – 19 August 2005

Interviewee                   – Fu Yu Cheng, president- China State (Phils) Construction and Engineering Co.

Interviewers                  – Tim Carrodus and Michael Kramer

Fu, who had spent eight years in the Philippines, told INT that it was difficult to do business in the country, particularly in public projects. He noted that China State had withdrawn from Packages 1.4B and 1.6, but refused to explain why. He said no one gave him a price to bid as a losing bidder; neither was China State paid to lose a bid.

Date of Interview            – 1 November, 2006

Interviewee                   – S.J. Kim, general manager-civil department

Heunghwa Industry Co. Ltd.

Interviewers                  –  Tim Carrodus and Edil Dushenaliyev (in Seoul, Korea)

Heunghwa submitted bids for the 1.4B and 1.6 contract packages, but was found ineligible to bid. The INT found that unusual, given the size of the company and its capacity to bid for large-value contracts.  The DPWH cited the company’s lack of experience in construction projects.

Date of Interview            – 1 November, 2006

Interviewee                   – Kuk Jung-Soo -deputy general manager, Keangham Enterprises Ltd.

Interviewers                  – Tim Carrodus and Edil Dushenaliyev (in Seoul)

After INT explained its findings of collusion in biddings, Kuk said that the business environment in the Philippines is difficult and that Keangham intend to withdraw from the country. The company is unprofitable, he said.

One of the biggest problems, according to Kuk, is that the length of the roads put up for         bidding is too short to be commercially feasible for the company. The scope of the road construction       could be initially 100 kilometers and the value of the contract could be up to $60 million, but when    the company buys bidding documents, the length of the proposed road becomes just 20 kilometers.

The company most likely withdrew from the bidding not because of collusion, but because of lack of profitability. Kuk, however, did not rule out that the firm could have withdrawn       because of corruption.

Date of Interview            – 2 November, 2006

Interviewee                   – Young-Myung Noh – general manager, marketing division – Shinsung Engineering & Construction Co., Ltd.

Interviewers                  – Tim Carrodus and Edil Dushenaliyev (in Seoul, Korea)

Noh mentioned that the company’s former branch manager in the Philippines had left the Philippines under difficult circumstances but he refused to provide the manager’s contact information. He said he was not aware of the details of his company’s bids in the Philippines, but had been told of collusion where companies were told to put in a bid even if they were going to lose. He said his company reluctantly participates in such tenders because it did not want to be blacklisted informally from future bidding by the DPWH.

INT wanted to find out why Shinsung withdrew from the second round of bidding for package 1.4B and discuss the contract it won for the rehabilitation of the Buug-Kabasalan section of the Zamboanga-Pagadian road. The company had been implicated in collusion on both projects.

Date of Interview            – 2 November, 2006

Interviewee                   – O.Y. Kwon – general manager, overseas civil team-Daelim Industrial Co. Ltd.

– Hun-Tak Kim- general manager , overseas civil engineering department

Interviewers                  – Tim Carrodus and Edil Dushenaliyev (at the company’s office in Seoul)

Kwon and Lim told the INT that Daelim never took part in a collusive scheme and that the company was involved only in plant building and operations projects in the Philippines. They said there are many powerful people around the President of the Philippines who determine the outcome of bidding on road contracts. Because of that, Daelim does not participate in road tenders. Daelim withdrew from the first round of bidding for the 1.4B project because they could not accept a proposal from a powerful man. However, he did not know the name of that person whose supposed agent contacted the company’s representative at his hotel in Manila and offered his services to win a package, in exchange for an unsolicited bribe of an unreasonable amount. Kim said he did not know the powerful people behind the road projects, but assumed they could be retired generals.

Date of Interview            – 2 November, 2006

Interviewee                   – Pan-Seop Lim -team manager, Daewoo E&C

–  Eun-Yong Chang – assistant manager, overseas sales and marketing team

Interviewers                  – Tim Carrodus and Edil Dushenaliyev (at Daewoo’s head office in Seoul)

Lim said he had little knowledge of the details of the allegations of collusion in the bidding of the Philippine road projects. He expressed surprise about bidding pre-arrangement and high level political interference in the WB-financed project.  INT said Daewoo could be implicated and that the meeting was an opportunity for them to cooperate by responding to its findings of collusion. Lim said he was not involved in the bidding preparation and that he was not the right person to be asked why the company did not participate on a contract.  Lim said the company’s involvement in the alleged collusion was insulting and that he was not prepared to hear that.

Date of Interview            – 3 November, 2006

Interviewee                   – Hyun-Woo Ko – manager, Hanjin Heavy Industries

– Nack-Young – deputy manager, overseas business marketing team

Interviewers                  – Tim Carrodus and Edil Dushenaliyev (in Seoul, Korea)

Hanjin placed bids for two packages, one in joint venture with EEI. Both packages were re-bid three times, and the analysis of the bids had shown collusion in the process, with senior level government officials allegedly involved in pre-arranged procurement.

Ko said the competition was very strong in the Philippines and that he was not aware of any cartel operating in the country.

Date of Interview – 3 November, 2006

Interviewee         – Jeong-Sam Kim – team manager, overseas operation team
– Sammi Construction Co., Ltd

– Jae-Yong Heo – department manager, civil engineering team

Interviewers         – Tim Carrodus and Edil Dushenaliyev (in Busan, Korea)

INT indicated that Sammi could be implicated in collusion in the third round of bidding for contract packages under NRIMP 1 project in the Philippines.  Sammi bid for 1.6A and 1.6B contract packages, but was unsuccessful.

Kim told the INT that he heard from the Manila branch office that corruption was a very serious issue in the country, but he said the company never paid a bribe. The company did not win a single contract although it pre-qualified for four packages under the NRMP 1. He said Chinese companies were acting aggressively in the Philippines, driving the costs extremely low and squeezing out their competitors. For this reason, only a few Korean companies compete with the Chinese on the same tender.

While saying that the company prepared its bid independently of other bidders, Kim admitted to INT that his company had to participate in a collusive scheme out of a concern of being blacklisted and denied future work from DPWH.

Date of Interview            – 7 November, 2006

Interviewee                   – Yu-Tae Kim – director/authorized representative, Manila branch office-Sammi Construction Co., Ltd

Interviewers                  – Terry Matthews, Tim Carrodus and Edil Dushenaliyev

Kim told the INT that he heard from third parties about “unordinary” bidding on the NRIMP packages. He denied that his company was told to put in a losing bid. When told of possible consequences Sammi may face in case of non-cooperation, Kim started to show signs of anxiety and stayed nervous through the rest of the interview, according to INT. Sammi had the highest bid for both the 1.6A and 1.6B packages.  INT said the proposed winner was known one week before the opining of bids. Kim explained its bids were very high because it incurred huge expenses to establish its Manila office but it had to participate in the bidding so as to stay visible in the DPWH radar and not be excluded from future biddings.

Date of Interview            – 7 November, 2006

Interviewees                 – Xie Wen Peng, general manager, China Wu Yi Co. Ltd.

– Wu Yi Bao -deputy general manager

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

Xie said nobody called or exerted pressure on the company and that it was usual among Chinese companies to call and ask each other whether they are going to but. However, they never shared their bid price with others. He denied paying money to secure the contract. But he sometimes gave Christmas presents and invite project officials over lunch or dinner. He said he could not complain about the business environment in the Philippines and noted it is no different than in other countries.

Date of Interview            – 8 November, 2006

Interviewee                   – Suh Seung Wong – general manager, Sinsung Engineering & Construction Co. Ltd.

Interviewers                  – Terry Mathews, Tim Carrodus and Edil Dushenaliyev

Wong said he had been in the Philippines for 15 years and found it very difficult to do business in the country. He said some corruption exists, but that he had no evidence to corroborate it. He said he encountered corruption only with the traffic police. He said Shinsung withdrew from the second round of bidding for the 1.4B package because the head office in Korea failed to provide a bid security on time and that the project would overlap with other projects of the company.

Date of Interview            – 8 November, 2006

Interviewee                   –  Kim Won-Ho – general manager-Manila branch office, Daewoo E&C

Interviewers                  – Terry Matthews, Tim Carrodus and Edil Dushenaliyev (in Manila)

Kim recalled that a local politician made him attend a hearing in Congress involving Daewoo’s subcontractor on the Halsema project in Benguet. He said the politician probably wanted to get a portion of the contract to be assigned to a local subcontractor in the area. He said it is a practice in the country for local contractors and government officials to ask to be included in the contract with international companies. Kim said Daewoo could have been disqualified in the 2005 pre-qualification bid for the 1.4A and 1.4C contract because of the INT’s suspicion that it did not want to be part of the collusive scheme on the two packages.

He said local politicians have a vested interest in having large value contracts sliced into smaller package for re-election purposes, and that some, but not all, of the politicians may extract money from smaller contractors to fund their re-election campaigns.

Asked what he knew about EC de Luna Construction, Kim said a person he refused to name told him that EC de Luna could be involved in bidding pre-arrangements and that the Bank’s investigation was triggered by a congressman who wrote a letter to the DPWH.

Date of Interview            – 8 November, 2006

Interviewee                   – Li Peng, general manager-China Geo-Engineering (Phil) Corp.

Interviewers                  -Terry Matthews and Tim Carrodus

Li talked about payment of revolutionary tax to NPA rebels. “The NPA demand a revolutionary tax in order that you can work and protect your machinery and workers. If you have a contract in their areas you have to negotiate. A fee is fixed. If you disagree, then you are summoned by a NPA liaison officer t a meeting, blindfolded and taken to a mountain area and there you meet the NPA people who tell you what the fees or revolutionary taxes are. If you don’t accept you get a bullet in a letter, then a bullet.”

Li also said there were instances when he had to talk to the mayor, governor and congressman to do work in their areas, to be allowed to use the roads. “If you do not cooperate with these politicians, they arrange for your contract to be terminated and rebid and so on.” He said he had to pay “protection fees or commissions” to do work in the project sites.

“Japanese, Korean and Chinese all bid low, then transfer the risk by selling the contract on for a management fee, they do not do the work they win the contract by diving low and then sell to local contractor or a stranger. There are some Chinese companies, no qualifications bid very low and sell to Korean and Chinese. The one who does the work gives fee –maybe 8% of contract price. The project suffers and the contractor who buys has a loss.”

Li said he “paid some money,” 10 percent of contract price, to Sen. Barbers and Tito Miranda who promised to help him. He said he had also talked to Congressman Pichay and asked him if he could assist in getting the contract.

The protection fees or commissions are booked as consultant’s fee, legal expenses or even donations.

Date of Interview            – 8 November, 2006 and 15 November, 2006

Interviewee                   – Noelito D. Policarpio, R.D. Policarpio & Co., Inc. [Philippines]

Interviewers                  – Terry Matthews, Tim Carrodus, and Tom McCarthy (11/08/06)

– Tim Carrodus, Tom McCarthy, and Edil Dushenaliyev (11/15/06)

·        R.D. Policarpio & Co., Inc. (Policarpio Co.) participated in the NRIMP project in the following packages: 1.4A, 1.4C and 1.4B (third round).

·        The involvement of politicians in the awarding of contracts had increased, said Policarpio. In many instances, politicians organize biddings and contractors work together to set how bidding process will turn out.

·        Contractors obtained the price of the contract by paying bribes to individuals of the implementing agencies. All the bidders would then coordinate which contractor would win the bid. This is referred to as the “standard operating procedure” or “S.O.P.”

·        Now, however, politicians heavily influence the S.O.P. by supporting particular contractors. A politician’s support is obtained through a sort of an auction where the contractor willing to pay the highest price gets the necessary political support. This system favors the rich, foreign contractors who can outbid local firms.

·        Policarpio stated that the contractors have had to take part in the corrupt scheme in bidding on all projects in the Philippines that are funded by the World Bank, JBIC, and ADB, as well as locally funded projects.

·        National Road Improvement and Management Project:

–         Packages 1.4A and 1.4C

–         Policarpio explained that the government rejected the application because it could not supply the proper quantity/quality of cement. This, Policarpio said, was merely a pretext, used to make sure that his company did not “play the game.” INT understood this as his company’s exclusion from the bid collusion that would be formalized by the bidders.

–         Pre.-qualification, according to Policarpio, is based on “who you know” – not experience. The company had to be close to certain government officials and politicians. If the company does not cooperate, they can “kick you out.”

–         Package 1.6 (First Round)

–         INT asked Policarpio why his company withdrew from the bidding even if it was pre-qualified. He said he “just didn’t have the time.”

–         INT also asked Policarpio if the reason for his withdrawal was because he knew that he was not going to win so he just gave up early. Policarpio did not agree with this. But he admitted, “they tell me how to bid.”

–   The ABC’s of the Collusive Bidding Scheme

–         The bid collusion involves an entire plutocracy, according to Policarpio. “We will talk to each other, and decide who will get the contract. Sometimes will (agree to) have a small contractor get pre-qualified for strategic reasons.”

–         Policarpio knows that Tito Miranda and Boy Belleza both actively work to manipulate bidding. He said that Eduardo de Luna is “behind” Tito Miranda and “Mr. A” is “behind” de Luna. Mr. A is Mr. Mike Arroyo, Policarpio said.

–         Policarpio said that  de Luna takes an active role in arranging collusive bid schemes in behalf of contractors and politicians. The late Senator Barbers used to be active in using his influence to participate in collusive bid schemes. These activities are now continued by the Barbers sons. Senator Barbers initially used Tito Miranda to arrange his schemes, but later on used  de Luna.

–         Miranda realized that  de Luna is very close to Mr. Arroyo, and has now formed a partnership with de Luna in making arrangements on collusive schemes in behalf of the Barbers sons.

–         Mr. Arroyo is very powerful and places officials in positions, and these officials do what he wants. Policarpio also said he does not believe that Mr. Arroyo’s wife is aware of his corrupt actions.

–         In large government projects, Policarpio said that the process is completely fixed. Prices and winners and losers are determined before the bidding even takes place. Foreign contractors approach politicians and outbid the Philippine companies.

–         Policarpio explained that before, contractors would meet among themselves but now, the decision regarding who will win the contract is made not by contractors but by politicians through the results of the “influence action” system.

–         Losing bidders are paid off by the winning bidder. Politicians would then receive their S.O.P. monies from the contractor’s advance payment, in accordance with the percentage that they have previously negotiated on. Two politicians are usually involved: the politician whose area is hosting or affected by the contract and the politician who controls the implementing agency.

–         For the collusive schemes to work, Policarpio said that the implementing agency must work with the scheme. The DPWH Secretary exercises a very large influence on the schemes and plays a significant role in their success.

–         All payments are paid in cash.

–         Meetings take place at the Diamond Hotel and at a hotel near the U.S. Embassy in Manila. The last meeting Policarpio attended was two weeks ago (check date of interview) at the Diamond Hotel to fix the bidding for a JBIC-funded project.

–         INT asked Policarpio how he accounted for the S.O.P. payments in his company books. He said he does not worry about accounting for the payments because the company books are all “faked” anyway to avoid taxes.

–         INT also asked Policarpio what would happen if he refused to participate in the collusive bid schemes. Policarpio said if he does participate, “they” would try to do something to eliminate his company from bidding in future contracts.

–         Policarpio Co. prepares two bids when tending for a contract: one that conforms with the collusive scheme and one that is a legitimate, “commercial” bid to be submitted in case the collusive scheme falls apart prior to bid submission. Policarpio said he would make the decision as to which bid to actually submit the day before the bid submission deadline.

–         The joint bid submitted by Policarpio/Pancho/Sebastian joint venture in Package 1.4B on August 8, 2006, was part of a collusive bidding scheme, said Policarpio. Prior to the preparation of the bid, he had a telephone conversation with Clemente Pancho, vice-president for Business Development of the Pancho Co. Pancho informed him that he had received the fixing price from the “arrangers” and that he would prepare the bid to reach the predetermined price.

–         Consequently, Policarpio understood that the bid was not going to win and that it was not prepared to win.

–         In a follow-up interview on Nov. 15, 2006, INT asked Policarpio if he was aware if there was a collusive bidding arrangement in the first round of bidding of Package 1.6, where the JV prequalified but withdrew from bidding process. “All bids are fixed,” said Policarpio, noting that the JV in which he was bidding was a designated loser in the scheme.

–         INT asked him why the JV withdrew from bidding. Policarpio said that many times participants in the schemes would decide that they do not have – or unwilling to devote – the resources and time necessary to prepare the bid package since they know that they are going to lose anyway. The JV withdrew because the companies did not have the time to put together a bid at that time which they knew would be unsuccessful.

–         Policarpio also informed INT that he did not understand why the DPWH did not use the ABC formulated by the consultants and used instead used the ABC formulated by its staff. He believes that the ABC’s used in these projects are routinely unrealistic.

Date of Interview            – 9 November, 2006

Interviewee                   –  S.Y. Yoon – commercial and marketing manager, Hanjin

Interviewers                  – Tim Carrodus and Terry Matthews (in Manila)

Yoon said Hanjin’s bid was higher than that of the winning bidder because Hanjin employs Koreans for its projects while local companies use local labor, which is considerably cheaper. In recent times, he said Hanjin decided not to participate in bidding for IBRD projects because of too much competition. He said his company has interest in water-related projects.

Date of Interview       – 9 November, 2006

Interviewees             – Xu Gian -CEO/GM, China International Water and Electric Co.

– Jiang Xiao Hua – chief engineer

Interviewers              -Tim Carrodus, Terry Matthews and Duncan Smith

Xu described the Philippines as “not so easy.” He said that when he took over from the previous general manager in the country, he found the company’s finances “very tight,” the material prices were higher, and prices were manipulated by local people, making it difficult to negotiate prices.

He agreed with INT that one of the big problems in the Philippines was the politicians.  XQ admitted going “sometimes” to meetings of contractors at the Diamond hotel but said he preferred to keep “clean hands.”

Xu said he knew Senator Barbers and met him in 1994 but only as a courtesy and never talked about projects. According to him, it was necessary to “know people” and keep them “happy.”  The local contractors had to pay money to politicians.

Date of Interview            – 9 November, 2006

Interviewee                   – Man-Tae Kim -Keangham Enterprises, Ltd. (Korea)

Interviewers                  – Tom McCarthy and Edil Dushenaliyev (in Manila)

Kim explained that the company couldn’t compete in the Philippines primarily because the       market had many Chinese firms bidding on projects so low that Keangnam cannot get contracts. He       also said it is difficult to operate in the Philippines because the government is not “clean.”

The company has had continuing problems in taxes, which are unclear and too high. According       to Kim, employees in the Philippines have “a difficult attitude” and are “always striking.”

Date of Interview            – 9 November, 2006

Interviewee                   – Junshi Liu, general manager, China Harbour Engineering Co. (ML                                                                 China)

Interviewers                  – Tom McCarthy and Edil Dushenaliyev

The company merged with China Road and Bridge Corp in August 2005, and had changed its name to China Communications Construction Company, Ltd.

It failed to pre-qualify in six packages, pre-qualified but withdrew from bidding in August 2006 on Package 1.6A and pre-qualified and lost in the bidding for Package 1.6B.

Liu described the Philippine government as being “very bureaucratic” on payments and, at time, payments were withheld pending requests for gifts. He found it odd that the government does not favor local contractors. Liu emphasizes the importance of having a good relationship with the DPWH in bidding for projects.  But he denied involvement in any discussions with other contractors to arrange bidding, or pricing. He said he had no knowledge of other contractors working together to fix bidding or prices. However, he said there were informal discussions between contractors prior to submission of bids “to exchange views and lessons learned, informally and privately.”

Date of Interview            – 10 November, 2006

Interviewee                   – Pil Koo Kang – general manager-Manila, Heunghwa Industry Co. Ltd (Korea)

Interviewers                  – Tom McCarthy and Edil Dushenaliyev

Heunghwa submitted to be pre-qualified in a joint venture with EC de Luna but was not pre-qualified for packages 1.4C, 1.4B(1st) and 1.6 (1st); and for 1.4B (2nd) and 1.6 (2nd).

Kang said his company has not bid on IBRD-financed projects because it has no chance of winning the contracts. He said he had heard rumors about IBRD-financed projects in the Philippines, that the contractor has to be connected to many people to win contracts. “We are weak, in that sense and do not know the people you need to know to get the contracts.”

He said the contractors must have connections to government officials, and to agents, or messengers of the government officials. He said there are arrangements made between top government officials and contractors to win contracts. He suggested that INT investigate the winning bidders and talk to the losers “because they always have something to say.”

Kang said he had heard of Tito Miranda and Boy Belleza as agents or messengers for top government officials in arranging bidding on contracts. He confirmed that contractors meet with agents and messengers of government officials before the bidding in order to fix the contract tendering process. Kang said he was told that to get contracts, he has to form a relationship with Eduardo de Luna who was supposedly very close to a top government official. He described de Luna as president of a construction company who is very active in making arrangements between government officials and contractors on contracts. He said de Luna wins contracts with Chinese contractors.

Kang identified the government official that de Luna was connected to as Mike Arroyo, through de Luna’s father-in-law. He admitted that he never participated in any of these dealings and that his knowledge were based on what Kim, his predecessor, had told him and on rumors.

Date of Interview         – 10 November, 2006

Interviewees               – Wen Yuegang, general manager/senior engineer, China Road and Bridge Corp.

– Xiong Shiling, deputy general manager

Interviewers                -Terry Matthews, Tim Carrodus, Duncan Smith and Edil Dushenaliyev

Yuegang said the Philippines was “not an easy place” to work, with NPA and local armed gangs confiscating or restricting access to equipment, and forcing them to pay money. (CRBC’s equipment was burned twice and work forced to be stopped by local armed people.

He denied being instructed by others to put in a specific bid price and stressed that the company’s policy is to set its price at a level so that it will not make a loss. He said his company had never been asked to join a collusive group.

Date of interview           – 13 November, 2006

Interviewee                  – Gerardo V. Pancho, president, C.M. Pancho Construction, Inc. (Phils.)

-Clemente V. Pancho, vice president-business development; head, estimating department

Interviewers                 –  Tim Carrodus, Edil Dushenaliyev and Tom McCarthy

Gerardo Pancho told the INT that the company experiences problems when it competes against foreign contractors, which are able to outbid his company. The Chinese companies are competing unfairly against other companies by using the influence of local politicians…using the names of politicians. His company does not need any political support even if has a relative who is a congressman (Pedro Pancho of Bulacan).  He says his company does not believe in giving money to politicians, and then getting the money back from the project.

Date of Interview            – 15 November, 2006

Interviewee                   –  Panya Visetnut – operations and country manager, Italian-Thai Development Public Co. Ltd (Thailand)

Interviewers                  – Tim Carrodus and Tom McCarthy

The company failed to pre-qualify in six packages and pre-qualified in three others but lost in the bidding.

Panya said it was difficult to do business in the Philippines as a foreigner, and that foreigners themselves present tough competition. He said that while his company could outbid the Japanese firms, he could not submit bids lower than the Chinese companies who can offer lower prices because they are subsidized by the Chinese government.

On the alleged collusion in WB-funded projects, Panya said his company was “ignored” and was  never offered a chance to participate in the collusive bid schemes. He complained that the ABC used by the government is unrealistically low, and does not take into consideration special costs such as the revolutionary tax paid to rebels groups.

Panya said Boy Belleza once offered to do ‘follow up’ services for him for a fee. He denied participating in any collusive bidding schemes or engaging in any arrangement with any other bidder or participating in meetings to designate the winning bidder.

Date of Interview            – 17 November, 2006

Interviewee                   – William (Bill) Paterson, former task team leader East Region, now based in Hanoi, Vietnam

Interviewers                   – Tim Carrodus,  Edil Dushenaliyev, Duncan Smith, Thomas McCarthy and                                                 Richard Leonard

Paterson explained the circumstances leading up to the award of the contracts for NRIMP1 projects.

Date of Interview            – 21 November, 2006

Interviewee                   – Edward C. de Luna, EC de Luna Construction Corp.

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

EC de Luna, in a joint venture with China State, was a proposed winner on one of the contract packages but the World Bank did not concur with the DPWH recommendation. De Luna said he did not participate in the third round bidding for the contract because he did not want to lose money again. He said he ‘hates’ politicians. He has to pay them and cannot do anything about it. Some politicians, but not all, want to get a share of contracts in certain areas of the country. Asked of his personal experience with politicians, he said he had to hire local subcontractors connected to politicians in some areas. He likened politicians to the NPA rebels extorting money from contractors. But he denied paying politicians. According to him, politicians meddle in locally funded projects, but not on foreign-funded projects because foreign companies fight back if politicians tried to get a cut out of them.

De Luna denied any involvement in bid collusion. He said one of the losing bidders told him about the alleged collusion. But he did not mind it, thinking that losing bidders in the Philippines always complain about winners and get involved in an intrigue. He admitted knowing Tito Miranda, who coordinates the Philippine-Japan Highway Loan Project of the DPWH, and that he has one contract under the PJHL. But he said he did not know Boy Belleza, an assistant director of Region 4A of the DPWH.

Date of Interview            – 21 November, 2006

Interviewee                   – Federico S. de Vera – sales supervisor- marketing department, EEI Corp.

–  Christopher ‘Peng’ F. Esguerra, sales supervisor

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

De Vera said EEI felt it would not able to meet the pre-qualification criteria, so it entered into a joint venture with Hanjin. In bidding, he said the price is kept confidential before its submission, with very few people in the company knowing about it. Neither de Vera nor Esguerra knew about the alleged bid rigging or the contractors’ meeting at Hyatt or Diamond hotels before the bid opening to designate the winners. Both also said they know either Tito Miranda or Boy Belleza.

The EEI officials said there was a delay in the payment of the P43-million locally-funded Pila-Kalayaan project because of a politician who wanted to get subcontracting work for a local company in his area. They said they did not know if money was given to the politician. Esguerra said he was not aware of any politician asking for a kickback from EEI. Inc as when a local politician expresses interest, EEI can subcontract some work, provided the subcontractor can meet EEI standards.

Date of Interview            – 21 November, 2006

Interviewee                   – Rodolfo J. Corpus, former account of Daelim branch office in Manila

–         R.S. Corpus & Associates

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

Corpus said he was not familiar with the details of Daelim’s bidding for the World Bank projects. But having worked for many years at the Construction Development Corporation fo the Philippines (CDCP), he told the INT that he had witnessed the corruption that attended infrastructure projects. He said a third of the project money is lost to corruption of government officials and politicians. He said congressmen would immediately ask for 10 percent of the contract amount, especially on locally-funded projects. World Bank projects are no exemption to this. He said collusion is widely known in the construction community and that it involves all parties, including politicians, government officials, bidders, auditors and officials of the Commission on Audit who get one to two percent of the contract amount. He described DPWH officials as hatchet men or pawns who pull the strings. Contractors who do not participate in the collusive scheme do not get any contract at all. He likened the system to an organized crime where winners are known before the actual bidding could take place.

Corpus said corruption starts from the top, and is a by-product of the political system. He mentioned that Mrs. Arroyo appoints retired generals to top and juicy government positions to buy their loyalty, citing the secretaries of transportation and public works among retired generals who were appointed to plum civilian posts.

Date of Interview            – 21 November, 2006

Interviewee                   – Petronilo Sebastian -P.L. Sebastian

Interviewers                  – Tim Carrodus and Edil Dushenaliyev (at EDSA Shangri-la Hotel)

·          Sebastian denied submitting a pre-arranged bid for the 1.4B package in a JV with Policarpio and C.M. Pancho and that each contractor submitted its own bid. He did not recall making any side payments to politicians or government officials. But the situation with the NPA, he said, is different. He called them extortionists. He has to pay otherwise the NPA will burn the equipment.

·          He had experienced some level of corruption but refused to speak further. He said it involved certain government officials and added that INT should understand his position. Contractors who do not obey the system will be disqualified or face other sanctions. “You know what I mean,” he said.

Date of Interview            – 22 November, 2006

Interviewees                 – Xie Wen Peng – general manager, China Wu Yi Co. Ltd.

–  Wu Yi Bao -deputy general manager

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

Xie and Wu denied being asked by politicians or government (officials) to make illicit payments. Wu said that if they had done so, they would have been immediately fired by their head office management. Peng said he believed that some disgruntled losing bidders were not happy with the results of the third round (of bidding) and probably complained to INT. He said local contractors always do “such kind of talk.”

Date of Interview            – 22 November, 2006

Interviewee                   – Clemente V. Pancho, VP – CM Pancho Construction, Inc.

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

Clemente Pancho said his firm, as the lead partner in the joint venture with Policarpio and PL Sebastian on the 1.4B package, was responsible for the bid preparation, including site visit and cost calculation. The joint venture was formed to meet pre-qualification requirements that were discriminatory against local contractors and favored foreign contractors. Pancho said neither he nor any of his staff attended the Nov. 7, 2006 meeting of the contractors at Hyatt Hotel supposedly to designate CM Pancho as winner in the bid for 1.4.A.1 contract.  Pancho said it was unfair to implicate his company in collusion based on INT’s source and suggested that the source file a complaint to the DPWH or the Ombudsman.

Pancho complained to INT that nobody checks the accuracy of the papers submitted by the Chinese contractors and certified by the Chinese embassy in Manila. He said he was not aware if the Chinese companies made illicit payments to politicians or government officials. The Chinese companies can afford to bid at a loss because they are subsidized by their government.

Date of Interview            – 23 November, 2006

Interviewee                   – Kim Won-Ho, general manager-Manila branch office, Daewoo E&C

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

Kim said Daewoo was not at any point in time under pressure from DPWH to submit a bid out of fear of being sanctioned. He said the company withdrew from the second round bidding for the 1.4B package because of tougher competition from the Chinese and manpower problems. And having heard of the INT investigation of alleged collusion, the company did not participate anymore in the third round bidding.

Date of Interview            – 23 November, 2006

Interviewee                   – Manolito Madrasto – chief operating officer, permanent secretariat

— International Federation of Asian and Western Pacific Contractors’ Association

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

IFWAPCA is made up of builders’ associations in 15-member countries.

Madrasto told the INT, “Those who don’t cheat are penalized by the ones who do.”  He said any sanctions against contractors should be made with due process and that contractors accused of any wrongdoing should be afforded the opportunity to defend their actions.

He said corruption in the Philippines starts with locally-funded projects and has expanded to internationally-funded projects. He noted that at the local level,  the local politician decides who wins. If an international contractor wins, there will be local subcontractors suggested by the local politician. He said he is fully aware of the collusive and corrupt system in the Philippines. According to him, some contractors were threatened physically during the third round of bidding for the packages CW-RU-1.4B , 1.6A and 1.6B where everybody knew who was going to win.

Madrasto estimates that 40 percent is added to the cost of a contract to facilitate payments to the politicians.

He said EC de Luna and J.D. Legaspi are connected to the ‘first gentleman’ and they brag about this relationship; RII Builders and 310 Construction are connected to former president Fidel Ramos while J.M. Luciano Construction is connected to a congressman.

Date of Interview            – 23 November, 2006

Interviewee                   –  Yoon Choi -estimation manager, Hanjin

–  Jong II Eum, operations manager

Interviewers                  – Tim Carrodus and Edil Dushenaliyev (in Manila)

Mr. Choi explained the process the company undertakes in bidding for contracts.

Date of Interview           – 24 November,  2006

Interviewee                  -Junshi Liu, China Harbor Engineering Company

Interviewers                 -Tom McCarthy and Edil Dushenaliyev

Liu  said the level of political interference, especially in the project area, was the most difficult factor in doing business in the Philippines. He said politicians and government officials at all levels want to benefit from contractors. In a project in Zamboanga City, he said Chian Harbor had to hire security to protect its staff. He said he heard from the local personnel that they had to pay the politicians also. He said it was an accepted rule to pay the politicians and that contractors have to play this game in the Philippines. According to him, contractors bid very high to cover all potential side payments in the future. There’s also a lot of competition between the politicians in picking the winners for the contracts.

Date of Interview            – 28 November, 2006

Interviewee                   – Jonathan M. Amon -manager, J. M. Luciano Construction, Inc.

Interviewers                  – Tim Carrodus and Edil Dushenaliyev

Amon said that Luciano has an ongoing WB-funded project in joint venture (JV) with RII       Builders and 310 Construction. This contract (1.4C package) is progressing very slowly because       of the low bid price, peace and order, and the politicians. The last two factors were the most serious,       he said.

Amon said that the engineers of all three companies (Luciano, RII Builders and 310       Construction) worked collectively on the cost estimation, each providing an input to its own part of       the work. The cost estimates were consolidated by RII. The JV presented a “normal” bid on both       contract packages (1.4A and 1.4C) and did not factor in any “external” factors such as the side       payment to politicians.

Amon repeated that the JV presented a normal bid for the 1.4A package and the termination of       the contract then was “revenge” from politicians whom the JV refused to pay. It was the politician       in the project area (Surigao), Amon said, but he refused to identify the person. He said that the       DPWH officials were also part of the retaliation action against the JV. Asked about filing a case           with the DPWH Ombudsman, Amon said that he (the Ombudsman) is part of the system since he is       appointed by the President and politicians.

·          Aside from track record and experience, Amon said that one needs to cooperate with everybody to pass pre-qualification. “You know what I mean,” he said, referring to such “cooperation” as paying money to the politicians and government officials. If one does not pay, one does not get the contract.

·          Amon also described Boy Belleza (Asst. General Director of Region 4A) and Tito Miranda (President, DPWH Employees Union Association) as decent persons who would not fix the bidding. He also does not know anything negative about E.C. de Luna.

·          Amon refused to identify the facilitators of the collusive scheme, adding that they are different from project to project and much higher than the persons mentioned above. When asked if these could be the Secretary or Undersecretary of the DPWH, Amon refused to answer, saying that he has five children and needs to think of them.

·          If the bid prices are 20 to 30 percent above the cost estimate (ABC) then politicians are involved in the project, according to Amon. To do away with the interference of politicians, the ABC should be published and no bids above the ABC should be accepted.

·          Amon also said that Chinese companies are winning all the internationally funded tenders because they pay the local politicians and government officials since they have the money to make illicit payments. He knows this because he said he is in the “system” and that everybody in the contracting community is aware of the situation.

·          The surplus amount above the ABC goes to the politicians through the foreign banks of international contractors.

·          Amon noted that foreign contractors rarely partner with local firms but if they do so, they do it for “political insurance.” Foreign contractors need no JVs because they have their own resources and sufficient capacity.

·          Amon denied attending any pre-arrangement meetings at the Diamond or Hyatt Hotels, but said such meetings could take place after the pre-qualification to finalize the list of winners.

·          The current Secretary of the DPWH is a retired general and has been in the position for two years. He said that contractors try not to “mess” with him in order to avoid any harm.

·          Amon stated that Luciano currently has two active projects (hospitals) financed by Land Bank. The company recently finished a P800-million JBIC-financed project in the peaceful part of Mindanao.

·          Amon said they had to pay the NPA both in kind (computers, cellphone, medicine, rice and other goods) and in cash on the 1.4A and 1.4C contract packages, among others. If the company would not pay, its equipment could be burned or destroyed. He admitted that RII Builders paid P1 million to the NPA. He also noted that the local politicians and rebel groups have a mutual respect for each other and do not step into each other’s turfs.

·          Amon told INT that the winner of the 1.4A.1 contract package, C.M. Pancho, was predetermined. He advised INT to look at the result of the bidding in order too see a pattern. He also said that the bidders knew about the outcome and therefore intentionally put in losing bids.
–Compiled by Tita Valderama and Karol Ilagan, PCIJ 2009 (ManilaTimes)

The Confidential Witnesses: Full Testimonies(From PCIJ/ManilaTimes)

February 14, 2009

Note from the PCIJ:  Apart from the 54 witnesses identified in the “Record of Interviews” of the World Bank’s Department of Institutional Integrity (INT),  seven other persons testified on the alleged fraud and collusion in the National Road Improvement and Management Program-1 (NRIMP-1), The INT’s report refers to them as the CWs or Confidential Witnesses. Their full testimonies follow:

Confidential Witness No.1 (CW01):

“A former government official with personal knowledge of the DPWH bid process. CW01 requested that his identity remain confidential. CWO1 expressed concern over collusion in the bidding for said projects, and stated that the primary ‘arrangers’ or ‘facilitators’ of the collusion included: a. contractor Eduardo de Luna (who)… was ‘masterminding’ bids, is close to Mike Arroyo (husband of President Gloria Macapagal Arroyo) and is a go-between for Mr Arroyo on foreign-assisted projects; and b. DPWH staffmember ‘Boy’ Belleza whom CW01 described as a long-time ‘arranger’ dating back to the Marcos regime. CW01 said Mr Belleza had been barred for a time from the DPWH offices.”

“CW01 named multiple Congressmen and Senators who had taken bribes, including former Senator Barbers. According to CW01, members of the DPWH who have taken bribes include: former Secretary Florante Soriquez (who is close to Mr Arroyo and Mr de Luna), and Project Director Lope Adriano.”

“CW01 knew details of the operations of the cartel and echoed others in stating that this process was known as the ‘Standard Operating Procedure.’ First, a Congressman would anoint a winner prior to the bidding by identifying the winner to the District Engineer. The Congressman will tell the District Engineer, ‘This is my Man.’”

“CW01 said contractors pay 15-20% of the contract to the Congressman who sponsors them, either up-front or progressively through the various stages of a project.”

“CW01 said the winning bidder gives the losing bidders 1.5% of the contract value; government officials share in another 2-3%; BAC (bid and awards committee) members also sometimes take money in exchange for not forwarding bids to the central office.”

“CW01 stated that the ABC can also be ‘padded’ by engineers who are paid to increase required quantities and thus manipulate the contract specifications to increase the price.”

“CW01 also said contractors take shortcuts in the execution of the contracts to cover these various costs; according to CW01, the DPWH loses between 15-27% on each contract, not including up to 20% in unnecessary costs added to projects.”

“In essence, CW01 said the bidding process is ‘a sham.’ The only contractors who get contracts are the ones who comply with the system.”

Confidential Witness No. 2 (CW02):

“…another government official with knowledge of the process asked that his identity remain confidential. He noted that witnesses had received threats related to the investigation.”

“Stated that DPWH staff, in particular Mr. Soriquez, would not move on the approval of a contract until a contractor pays them 5% for the approval. CW02 was aware of the ‘SOP.’”

“He said contractors have told him that politicians, district engineers, BAC members, losing bidders, and the media are paid under the SOP. He said politicians in the provinces sometimes interfere with the bid award process if they have friends who want to bid; the politicians insist that their friends win.”

“CW02 said Boy Belleza is in charge of arranging the bids and prices for the losing bidder, and Tito Miranda is the arranger for locally-funded projects.”

“CW02 also identified multiple areas where the bid process was subject to manipulation, noting that (a) the ABC is sometimes padded and calls for more work and supplies than are needed; (b) contractors can shift their bids up as much as 30%, citing the danger of currency fluctuations; and c) contractors can obtain contract variations in order to increase their profits and recoup early losses; these variations can double the price of the contract.”

Confidential Witness No. 3 (CW03):

“CW03, a manger in the Philippines office of a foreign firm, participated in the bidding at issue here. CW03 insisted several times during his interview that his identity remain confidential.”

“CW03 told investigators that bids on public construction contracts are prearranged, the bid rigging is an “open secret,” everyone knows about it, and all contractors must participate to get work. He said every layer of the system is corrupt, and all details for the bid documents are prearranged.”

“CW03 said the bid-rigging system is present on contracts with the National Irrigation Administration, the Department of Transportation and Communications, and the Department of Environment and Natural Resources, as well as with the DPWH.”

“Based on his own personal interactions and involvement in the syndicate, CW03 named a number of other companies involved in the collusion. They include Hanjin, China State, Daelim, and Cavite Ideal. CW03 said Cavite Ideal is ‘famous’ for working with the syndicate, and that China State is a ‘very strong, big payer’.”

“CW03 said some companies meet to discuss bids and other issues on a regular basis. Government officials, according to CW03, act as ‘mediators,’ arranging the collusive pricing. ‘Mediators’ assign prices to the losing bidders for submission on the fraudulent bid documents. CW03 named Mr. Belleza and Mr. Miranda of DPWH as mediators; he specifically noted Mr. Belleza’s involvement in the 1.4B and 1.6 packages.”

“CW03 said mediators hold meetings at the Diamond Hotel near DPWH, before each contract goes out to bid. He told investigators that normally, all prequalified bidders attend these meetings. (He said the prequalification process itself is sometimes prearranged.) The mediator discloses the approximate budget amount to the contractors, and asks who is interested in the contracts.”

“Through private follow-up meetings with the interested contractors, the mediators decide on the winner – i.e., the company promises the largest kickbacks. The mediators assign prices to the losing bidders, and check colluders’ bids just before submission to be sure they are ‘correct.’ The winner gets the contract, and support from local politicians, in exchange for the promised payments.”

“Contractors make payments on the bidding date, on the award date, and when they receive payments under the contract. CW03 told investigators he knew about these matters first hand.”

“CW03 noted that the ABC is widely known by bidders. He told investigators that contractors typically add between 20% and 28% to the ABC.”

“CW03 told investigators that each percentage point added to the ABC and dedicated to a corrupt payment is known as a ‘share.’ The apportionment of shares typically is as follows:

1.      the BAC members each receive one share;

2.      the BAC Chairman receives one extra share;

3.      the DPWH Legal Department receives one share;

4.      relevant NGOs or local media receive one share (as payoff to avoid publicity);

5.      the mediator receives one share;

6.      four to five shares go to the Project Management Office (PMO); and

7.      three to five shares are divided among the losing bidders.

“Thus typically between 17 and 20 shares must be allocated to the cartel’s various facilitators.”

“CW03 said contractors know they can add 25% to the ABC and the World Bank will approve the contract. So the winning bidder typically bids 24% higher than the ABC, and the losers bid higher than that.”

“CW03 said work suffers because of the bribes; contractors cut back on implementation, and simply pay off inspectors with food, lodging, and pocket money. CW03 also stated that corruption is “a way of life” in the Philippines. He predicted that even if solid evidence were to be provided, the government would do nothing to remedy the problem.”

Confidential Witness No. 4 (CW04):

“CW04, another foreign firm, has also participated in DPWH bidding. CW04 agreed to provide information only on grounds that it be treated confidentially. Investigators interviewed CW04A and CW04B, both officials in CW04’s manila office.”

“General Description of Syndicate Operations. CW04 told investigators, ‘(If) you have a project with DPWH, you have to give.’ CW04 said that the syndicate operates on a ‘gentlemen’s agreement,’ and it is understood in the syndicate that those who violate it will be excluded from future pre qualifications and will not win further contracts.”

“According to CW04, ‘coordinators’ – among them the winning contractors – arrange the prices at which losing bidders will bid. CW04 identified Mr. Belleza, (the DPWH Region 1V-A Assistant Director), and another DPWH official as coordinating the collusion for DPWH. They have networks of collaborating officials in all PMOs (i.e., PMOs for JBIC, ADB, and World Bank projects).”

“CW04 showed investigators a chart which outlined payments made and due to each of the colluding contractors, as well as the amounts of their bids. Both individuals said the BAC is involved in the bid-rigging, but they do not know what share it receives, because payments to the BAC are handled by the contractors. Both said the payments would be distributed once the contract was awarded.”

“Bid-Rigging on the 1.4B and 1.6 Contract Packages, CW04 said companies sometimes pay a small amount to be prequalified. He said bribes and kickbacks paid by CW04 are hidden in financial reports under vague expense lines. He provided INT with a copy of an example record of payments to a DPWH official.”

“CW04 said contractors were engaged in negotiations with one another. CW04 said that in at least one of the bidding rounds, the company that was designated by the cartel to be the winner thereafter arranged the bids. CW04 confirmed that CW04 had placed bids that were ‘not meant to win’ because another company already had been designated to be the winner of the contract package. They nonetheless tried to demonstrate participation, in hopes of gaining future contracts.”

“CW04 explained that CW04 had been provided a ‘lump sum’ price to bid by a coordinator. He said he then had to ‘jack up’ the other items in the bid to meet the lump sum.”

“CW04 said the Bill of Quantities in CW04’s bids is obviously inflated by at least 20 to 25%. The choice of how to inflate the prices to meet the requested sum was not imposed by the syndicate but was left to each contractor.”

“Other Contracts. CW04 showed investigators other corporate records concerning cartel payments in other contracts. According to cartel procedure, the designated winning bidder was responsible for paying out a portion of the ABC to the losing bidders.”

“CW04 said the winner paid off politicians for election campaign funds, and paid direct bribes to senior DPWH officials. He provided documentary evidence of some of these payments.”

“CW04 explained that, to avoid bookkeeping problems, CW04 obtained fake receipts to balance out any payment discrepancies. The books were prepared by a certified public accountant, and were sent to CW04’s head office without any supporting details. Moreover, he said, CW04’s submissions to the Philippine Bureau of Internal Revenue (BIR) did not necessarily reflect the company’s true financial condition, as CW04 was also bribing officials of the BIR.”

“In a follow-up interview with investigators, CW04 identified an additional World Bank financial project manipulated by the cartel.”

Confidential Witness No. 5 (CW05):

“CW05 participated in bidding on these contracts. CW05 began his interview by noting that he is afraid for his safety if he speaks about Mr. de Luna; he asked the Bank to protect him.”

“CW05 said it has become difficult to do business in the Philippines. In the last three or four years, he said, politicians have gotten involved in the construction business; they ask for money, and his company does not want to pay it.”

“CW05, just as CW03 and Mr Liu of China Harbour had, described corruption in Philippine road projects as ‘an open secret.’ ‘Everyone knows the situation in the Philippines but no one wants to talk about it because they have to survive.’”

“CW05 commended the Bank for its rejection of the bid in the 1.4B and 1.6 contract packages. He said this rejection showed the Bank understood how corruption had infected the bids.”

“CW05 said Tito Miranda, DPWH Region IV-A Assistant Director, is close with both Mr de Luna and important politicians. CW05 said that Mr de Luna appears to have connections with the police, within the agencies, and with the first family.”

“CW05 said under the syndicate system, contractors are to inform Mr Miranda of their intent in a contract. CW05 said contractors cannot say no to Mr Miranda, and he noted that a contractor in Northern Luzon was shot in the mid-1990s because he would not go along with the syndicate.”

“CW05 told investigators a bid may be inflated up to 50% if the bidder has the support of government officials and is willing to pay what he characterized as ‘expenses.’”

“CW05 said companies sometimes withdraw from bidding because they hear the bids are rigged, and they feel a bid under these circumstances is hopeless.”

Confidential Witness No. 6 (CW06):

“CW06 participated in bidding on these contract packages. CW06 noted that he feared repercussions if his cooperation were to become known.”

“CW06 told investigators that Eduardo de Luna was managing the 1.4B and 1.6 contract packages, as well as the NRIMP 1.4A, 1.4C and 1.5 contract packages. He stated that Mr de Luna claimed to be able to arrange for companies to win any of the contracts for a fee.”

“CW06 said politicians were involved in the bid-rigging on Bank projects, and he identified particular individuals.”

Confidential Witness No. 7 (CW07):

“CW07 is a former employee of a DPWH contractor. CW07 agreed to speak only on conditions of anonymity.”

“CW07 told investigators that one of his employer’s contracts had been prearranged by a DPWH employee.”

“CW07 said that for a given contract, the ‘matchmaker,’ who was in charge of arranging the bidders, would ask contractors if they were interested in a particular project. During a subsequent follow-up meeting, the arranged winner would negotiate the markup necessary, and arrange the payments of the bribes and kickbacks to government officials.”

“According to CW07, under the bid-rigging system, ‘silent guidelines’ are followed which direct the amounts of payoffs to which losing bidders in the cartel are entitled. Under these guidelines, the winner would set aside 3% of the ABC for the participating pre-qualifying and losing bidders to share.”

“CW07 told investigators that losing bidders are told the price they are to bid one day before the bid documents are to be submitted. The arrangers check the losing bidders’ prices immediately before submission to make sure they are ‘correct.’ CW07 said ‘divers’ can avoid the prearranged bidding by bidding lower than the others but they will be punished for it by the syndicate.”

“CW07 said that his company has placed bids for contract packages that it had no intention of winning. CW07 said his company received the bid price from the ‘arranger.’ His company then marked up the price computations to meet the arranged total bid price.”

“CW07 also acknowledged other kickbacks his company paid to the DPWH. He told investigators that he was approached by one senior DPWH official who demanded a kickback in connection with an ongoing contract. CW07 said he ‘couldn’t say no’ and admitted that he paid off the official.”

“CW07 said the headquarters offices of some foreign companies know generally about the bid-rigging system in the Philippines, but prefer not to hear the details.” –PCIJ, 2009 (ManilaTimes)

$45M lost to bribes for ‘cartel’ backed by govt officials

February 14, 2009

By Malou Mangahas, Philippine Center for Investigative Journalism

Corrupted to the core—and entirely—by a “cartel” of kickback-takers with support from the highest levels of the Philippine government.

In gist, this is the damning conclusion of the World Bank’s anti-corruption unit, the powerful and dreaded Department of Institutional Integrity (INT) regarding the bank-funded National Road Improvement and Management Project-1 (NRIMP-1).

According to the department, “the entire NRIMP-1 Project has been corrupted,” and had put “at least $30 [million to] $45 million of the entire $150-million loan at risk,” or lost to “a cartel” of contractors, bureaucrats, politicians. Two witnesses said bribes were also “shared” with “relevant local media and non-government organizations . . . to avoid bad publicity.”

The cartel has been “institutionalized and has operated with impunity for at least a decade, possibly longer,” on account of the “systemic corruption and bid rigging” in the Philippine public works sector.

Even worse, “evidence suggests [that] the cartel may enjoy support at the highest levels of the Government of the Philippines, including several officials of the DPWH [Department of Public Works and Highways] and even reaching the husband of the President [Gloria Arroyo] herself.”

“Ultimately,” said the Department of Institutional Integrity, “the cartel harmed development itself—NRIMP funds were not disbursed because of the fraud and corruption, and the roads were not rehabilitated with the development funds allocated to this purpose.”

60 witnesses, piles of docs

The Department of Institutional Integrity said its investigation—which eventually implicated 16 individuals and had the unit’s acting director Johannes Zutt recommending sanctions against 17 companies—involved 60 separate witness interviews and the evaluation of hundreds of documents.

“Despite fears that they risked their physical and economic well-being,” the department said, “over a dozen witnesses confirmed the existence of the cartel and provided details on its practices.”

By the department’s reckoning, “a syndicate made up of contractors and corrupt officials in the DPWH had organized and had been operating a cartel to control road projects at least as early as 1998.”

But “Filipino politicians later took a managing role in the organization,” while public works officials “arranged for contracts to be awarded to particular contractors in exchange for bribes and kickbacks,” said the Department of Institutional Integrity.

With the cartel’s operation, it continued, “the entire system operated [and may continue to operate, with respect to other contracts . . .] under ‘a gentlemen’s agreement,’ with implicit understanding that those who violate the agreement will be denied the prospect of winning future contracts.”

The cartel provided “the illusion of competition—the appearance of a free market [that] was entirely simulated,” the Department of Institutional Integrity said.

According to the department report signed by Zutt, “The evidence is sufficient for a determination that it is more likely than not that the respondents, with the active cooperation of numerous officials of the Government of the Philippines, participated in an institutionalized cartel replete with collusive tendering, bid rigging, price fixing, and the routine payment of bribes and kickbacks.”

In the 260-page report on the findings dated March 20, 2008, Zutt also recommended sanctions against a Filipino contractor and 17 construction companies that joined the three rounds of project biddings.

(A separate 230-page Part II of the Department of Institutional Integrity report enrols the “Record of Interviews” that the investigators conducted with 54 named witnesses from April 2003 to November 2006, in the Philippines, Japan and South Korea.)

‘Affirmative deception’

Thirteen of the 17 firms were put under the category of respondents who “either refused to cooperate with the Bank’s investigation or affirmatively misled the INT.”

Such “affirmative deception” of the Bank and “obstruction of its investigative mission should be an a priori disqualifying circumstance from doing future business with the Bank.”

These 13 companies are:

Cavite Ideal International Construction and Development Corp., based in Pasay City;

China Road & Bridge Corp, a state-owned firm based in Hong Kong;

China State Construction Engineering Corp., a state-owned firm based in Beijing;

China Wu Yi Co. Ltd., a state-owned firm based in Fuzhou City;

CM Pancho Construction Inc. in Quezon City;

Daewoo Engineering & Construction Co. Ltd., based in Seoul, South Korea;

Dongsung Construction Co. Ltd., based in Gyeongham, South Korea;

EC de Luna Construction Corp. and Eduardo de Luna, San Juan City;

EEI Corp., Quezon City;

Hanjin Heavy Industries & Construction Corp., based in Seoul, South Korea;

Italian-Thai Development Public Co. Inc., based in Bangkok, Thailand;

Sammi Construction Co. Ltd., based in Busan, South Korea; and

Shinsung Corporation General Contractors and Engineers, based in Kangnam-Gu, South Korea

Five of the 17 respondents were judged to be “affiliated with the organizers of the cartel also [and] should receive enhanced sanctions as they are the perpetrators of fraudulent and corrupt practices.” These five respondents, the department asserted, “had the greatest extent of corrupt relationships with government officials, directed the submission of fraudulent bids, and controlled the fraudulent distribution of contract awards.” The five are:

China Geo-Engineering Corp. based in Beijing;

China Road & Bridge Corp.;

China State Construction Engineering Corp.;

China Wu Yi Co. Ltd.;

EC de Luna Construction Corp. and Eduardo de Luna.

Open secret

The witnesses who spoke with the Department of Institutional Integrity, including “multiple cartel participants and government officials,” described the “collusive and corrupt practices surrounding these contracts as an ‘open secret’ and said the bribery the cartel managed was known in the Philippines as ‘standard operating procedure.’”

The report exposed the modus operandi of the cartel:

“The cartel was aided by officials within the Project Implementation Unit, the Philippine DPWH, which disqualified uncooperative bidders without basis before formal bids could be placed.”

“Cartel managers would anoint contract winners in advance of bid submission and would designate losing bidders, who were compensated to cover their costs in bidding.”

“Cartel managers told bribers what to bid, days before the bid submission date, down ‘to the last peso.’”

“Cartel backers thereafter redrafted their unit bid prices to comport with cartel-mandated total bid amounts, frequently 20 [percent to] 30 percent in excess of estimates.”

“The prearranged bidding was made all the more evident when, to the final round of bidding in 2006, an anonymous informant provided investigators with advance notice of the correct outcome of the third round of bidding before the bid opening had occurred.”

Besides interviewing 60 witnesses, the Department of Institutional Integrity said it conducted “in-depth analysis of the three rounds of bidding” and established that “bids in all rounds showed abnormally high and unexplained unit and total costs.”

This bids analysis yielded, the department said, the following findings:

“Bids bore lockstep relations to engineer’s estimates [i.e., one round’s bids were 31 percent, 32 percent, 33 percent and 34 percent above the estimate].”

“Bids contained numerous, large calculation errors suggesting last-minute revisions pursuant to cartel instructions—one bid contained an error in excess of US$3.6 million.”

“Two bids on a US$26 million total contract, with widely disparate subtotals, totalled to values only US$31 apart.”

The lowest bids investigated, the report continued, “were routinely 20 [percent to] 30 percent above cost estimates, threatening the Bank’s borrower with tens of millions of wasted dollars had the cartel not been exposed.”

Sanctions vs. 7 firms

The World Bank’s Evaluation and Suspension Officer, who evaluated the evidence gathered by the Department of Institutional Integrity, later issued in May 2008 a Notice of Sanctions Proceedings to the respondent bidders.

But on January 12, 2009, the World Bank sanctions board decided to impose penalties on only seven companies:

EC de Luna and Eduardo de Luna, debarred indefinitely from participating in World Bank-funded projects.

China Road, debarred for five years. China State and China Wu Yi, debarred for four years. Cavite Ideal and CM Pancho, debarred for four years.

In August 2008, the Korean firm Dongsung was separately debarred for four years, “for fraudulent and corrupt practices in relation to the NRIMP-1 case.”

According to the Bank’s sanctions board, the Department of Institutional Integrity had not presented sufficient evidence that the respondents may have engaged in “fraudulent practices separate from collusion.”

In its report, however, the department said it had “direct evidence of fraudulent or corrupt practices such as the submission of fraudulent documents or the payment of bribes derived from admissions of participants or the direct testimony of witnesses,” and “circumstantial proof of collusion detected through an analysis of the fraudulent bids the cartel submitted.”

“At a minimum, the totality of the evidence reflects that each of the bidders on the contract packages at issue had knowledge of the cartel’s practices and willingly participated in the systemic fraud and corruption,” the department said.

The “evidence accumulated in this case,” it said, “is sufficient for a determination that the respondents violated Bank procurement guidelines.”

Still, it admitted that the evidence collected “does not reveal any exculpatory factors” or “any further mitigating factors” to be considered in the case, in favor of any of the respondents.

The department said, it determined that “among the aggravating factors to be considered are: the egregiousness of the misconduct, including multiple instances of misconduct; the degree of involvement of the respondents in the misconduct; damage caused by the respondents to the credibility of the procurement process; and harm caused to the borrowers.”

Thus, it said, “without exception, it is the INT’s contention that all of the respondents . . . acted in a manner that permits the charge of engaging in corrupt practice to be levelled against them as a principle or, in the alternative, as a secondary party.”(ManilaTimes)

Workers picket DOLE, SSS P12-B fund release, lay offs protested

February 11, 2009

By Marjorie Gorospe
First Posted 12:21:00 02/11/2009

Filed Under: Protest

MANILA, Philippines – (UPDATE) Some 100 workers from the provinces of Cavite and Laguna picketed the Department of Labor and Employment Wednesday against the massive lay-offs, which employers have blamed on the global financial crisis.

Earlier in the day, a smaller number of protesters went to the Social Security System office in Quezon City to protest the decision of its president Romulo Neri to release P12.5 billion of SSS funds as aid to the government to ease the impact of the economic crunch.

Hermy Marasigan, spokesman of the Pagkakaisa ng Manggagawa sa Timog Katagalugan (United Workers of Southern Tagalog, Pamatnig-KMU), said that multinational companies in the region have been using the “financial crisis” as an excuse to fire their employees without due process.

Marasigan said there would be upcoming movements from the workers of Southern Tagalog against the unjust lay offs by these companies and the continuous corruption in government.

“This is a loss of job security for workers in the region,” Marasigan said in Filipino during the protest in DOLE.

Meanwhile, Joel Palacios, SSS spokesman, said that the protesters’ accusation was “speculative” since the release of the P12.5 billion has not yet been approved.

Palacio said certain criteria have to be met before the money could be released and used as potential investment.

“It is our duty to protect that [money] and make it grow,” Palacio added.

Sanhi’t lunas sa katiwalian

February 6, 2009

Jeffrey Ocampo

Sayaw kontra sa katiwalian

Sayaw nina Lito Kamahalan at Marili Ilagan ng Tag-ani Performing Arts Society na sumisimbolo ng panata laban sa kultura ng korupsiyon ng mga nagsipaglahok sa kumperensiyang CenPEG. (Photo Courtesy of CenPEG)

HINDI na nga marahil kalabisan na sabihing talamak ang katiwalian sa pamahalaan. Sa mga pag-aaral, lumalabas na ang pamahalaang Arroyo ang pinakatiwali sa Silangang Asya at isa sa pinakatiwali sa buong mundo. Kabi-kabila ang pagsisiwalat ng iba’t ibang indibiduwal at puwersa ng oposisyon ng mga kaso ng katiwalian ng pamahalaan. Laman din ng balita sa telebisyon, radyo at mga pahayagan ang mga pagbubunyag na ito.

Kaya hindi nakapagtataka na kung saan mang dako o sulok mayroong Pilipino, mayroong huntahan hinggil sa katiwalian sa pamahalaan. Andiyan nang pinag-uusapan ang fertilizer scam sa sabungan; Cyber Education Project bago, habang at pagkatapos ng klase; North Rail Rehabilitation Project sa inuman ng mga negosyante; ang National Broadband Deal sa lingguhang tipunan ng mga migrante sa Hong Kong.

Sa National Study Conference on Corruptionary: An Innovative Cultural Tool for Good Governance na ginanap noon lamang Disyembre 2008, inugat ang sanhi ng katiwalian, sinuri ang sistema kung saan ito namumugad, at ang mungkahing mga programa na maaaring magwakas sa kalakarang ito.

Proyekto ng Center for People’s Empowerment in Governance (CenPeg), sa pakikipagtulungan sa National Commmission for Culture and the Arts, tagumpay itong nailunsad at nakapagbalangkas ng mga hakbang para malutas ang problema ng katiwalian sa bansa. Kabilang sa mga tagapagsalita si dating Bise Presidente Teofisto Guingona Jr., sina Prop. Alice Guillermo at Prop. Roland Tolentino, si Jun Lozada at marami pang iba mula sa iba’t ibang makabayang mga organisasyon, mga grupo at miyembro ng simbahang Katoliko.

Kultura ng katiwalian’

Tila bahagi na ng panlipunang kalakaran ang katiwalian.

Ayon kay Temario Rivera ng CenPeg, ang katiwalian sa bansa ay isa nang suliranin na maiuugat sa mismong sistema at istruktura ng pamahalaan at “mauunawaan lamang at matutugunan kung titingnan sa konteksto ng panlipunan, pang-ekonomiko at pulitikal na mga kalakaran at institusyon na nagsusustina nito.” Ibig sabihin, sa mismong uri ng panlipunang kaayusan – noon at hanggang ngayon – namumugad at umaalagwa ang katiwalian.

Itinukoy naman ni Prop. Guillermo ang kalakarang ito bilang “burukrata kapitalismo” o ang “paggamit ng katayuan sa pamahalaan para sa ilegal na pagkamal ng salapi at masiguro ang pananatili sa kapangyarihan.” Aniya, itinuturing na pagpapatakbo ng isang korporasyon ang pagpapalakad sa pamahalaan na ang pangunahing layunin ay ang “personal na ganansiya.”

Ang mas nakapangngangalit umano ay habang walang patumangga sa paggastos ang pamahalaan at “pangungulimbat” ang mga opisyal nito, wala namang inilalaan para sa batayang mga pangangailangan ng mga mamamayan tulad ng pagkain, damit at tahanan at mga serbisyong panlipunan tulad ng edukasyon at kalusugan.

Pinakatiwali sa lahat ng tiwali?

Sa pag-aaral ng kilalang mga institusyon, lumalabas na malala ang rekord ng administrasyon ng pangulo sa katiwalian. Ayon sa United Nations Development Program o UNDP noong 2004, umabot sa P100 Bilyon mula sa pambansang badyet para sa unang taon ng pangulo sa puwesto ang nauwi sa bulsa ng matataas na opisyal ng pamahalaan. Batay naman sa pag-aaral ng Tranparency International na nakabase sa London, Great Britain, isa ang Pilipinas sa may pinakatiwaling pamahalaan sa rehiyon ng Asya-Pasipiko samantalang ayon sa World Bank, ito ang may pinakatiwali sa Silangang Asya.

Sa sarbey ng Pulse Asia noong Disyembre 2008, lumabas na si Pang. Arroyo ang pinakatiwali sa naging mga pangulo ng bansa. Binanggit ni Prop. Tolentino na mas masahol pa si Arroyo kay Marcos at Joseph Estrada na pawang napatalsik dahil sa popular na pag-aalsa ng mamamayan na may kaugnayan sa mga kaso ng katiwalian.

Gayundin, mismong ang Office of the Ombudsman ay nagsasabing halos P200-B ang nawawala sa kaban ng bayan taun-taon dahil sa katiwalian.

Laman ng mga reklamong impeachment laban sa pangulo ang mga kaso ng katiwalian na direkta umano siyang sangkot. Nakahanay sa kategoryang graft and corruption at betrayal of public trust, ilan sa mga kaso ng katiwalian na nakasaad sa mga reklamong impeachment ang maanomalyang mga transaksiyon ng pamahalaan sa kompanyang Tsino na Zhong Xing Telecommunications Equipment Corporation (ZTE Corp.) gaya ng National Broadband Network deal (NBN) at Mt. Diwalwal Project. May malaki umanong kickback mula sa overpricing ang napasakamay ng Unang Pamilya at iba pang malalapit na mga opisyal sa pangulo dahil sa mga proyektong ito. Para sa NBN deal, $130 Milyon umano ang pinaghatian ng Unang Ginoo, dating tagapangulo ng Commision on Elections na si Benjamin Abalos at iba pang kaalyado ng pangulo. Samantala, ang $1-B naman mula sa mining deal sa Diwalwal ay ibibigay umano sa iba pang kaalyado ng pangulo na di naambuan ng pera mula sa naunang nabanggit na proyekto.

Niyanig ang administrasyong Arroyo ng kabi-kabilang pagkakabunyag ng mga kaso ng katiwalian. Isa na dito ang pagsisiwalat nina Jose de Venecia III at Lozada dahil sa NBN-ZTE deal.

Nito namang nakaraang Disyembre, sumalang ang dating undersecretary ng Kagawaran ng Agrikultura na si Jocelyn “Joc Joc” Bolante sa pagdinig sa Senado dahil sa P728-M fertilizer scam.

Samantala, nakikita ng mga kritiko ng pangulo na ang maniobra sa Mababang Kapulungan para mailusot ang panukalang pagbabago sa Saligang Batas o charter change ay isang hakbangin upang pahabain ang termino ng pangulo. Sa ganitong paraan, maililigtas niya ang kanyang sarili sa mga kasong magkukulong sa kanya sa bilanguan sa oras na wala na siya sa kapangyarihan.

May magagawa pa ba?

Ayon sa statement ng nasabing kumperensiya: “Sumasahol ang katiwalian hindi lamang dahil sa kawalan ng sistema ng transparency at accountability para sa mga tiwali ngunit sa dahilan ding ang pangunahing mga institusyon na dapat tupdin ang kanilang tungkuling maging mapagbantay (gaya ng Kongreso at mga saray ng Hudikatura) ay nabigo o naging tiwali na rin.”

Gayundin, ayon kay Rivera, ang mahabang kasaysayan ng dominasyon ng mga “elite” sa “pang-ekomikong istruktura” at “pulitikal na institusyon” ay nagbigay-daan upang maligtas ang mga ito sa kanilang mga pananagutan gaano man kalaki o kabigat ang mga kasong kinasangkutan nila.

Marami ding nagsasabi na bagamat may mga batas para sugpuin ang katiwalian gaya ng Republic Act (RA) 3019 o Anti Graft and Corrupt Practices Law at RA 7080 o Anti-Plunder Law, hindi mapagpasyang naipatutupad ang mga ito at nagagamit laban sa mga tiwaling opisyal sa “iba’t ibang kadahilanan.”

Ayon pa rin na nasabing pahayag: “Sa napakahabang panahon, binaluktot ng katiwalian ng ating moral at nakapaglikha ng isang subculture na nagawang malaganap at katanggap-tangap ang katiwalian.”

Bagamat ganito na kasahol ang kalagayan, hindi pa huli ang lahat. Ayon kay Guingona: “Kailangan natin ng pagbabago, isang pagbabago para sa nakabubuti. Kailangan nating magkaroon ng mabubuti at matatapat na mga mamamayan at tagapamuno.”

Anila, ang katiwalian ay isang “panlipunan at pulitikal na kanser” na kailangan sugpuin sa kagyat ng mga mamamayan.

Tungkulin ng bawat sektor

Para naman kay Prop. Bobby Tuazon, Director for Policy ng CenPeg, kailangan ng “kultura ng pagtugon at pakikisangkot” upang tapatan, tungaliin at wakasan ang kultura ng katiwalian.

Dagdag pa, bawat “susing sektor” ng lipunan ay may kani-kaniyang tungkulin sa paglutas sa problema ng katiwalian.

Ang sektor ng edukasyon umano ay kailangang maging institusyong sinusuportahan ng pamahalaan para sa pag-unlad na kabataan at muling pagpapatibay ng patriyotismo. Samantala, ang sektor ng midya ay may malaki umanong tungkulin sa “pagbubunyag ng katotohanan, pag-iimbestiga sa mga kaso ng katiwalian at iba pang iregularidad sa pamahalaan at pagpapalaganap ng konsepto ng makabayang pamamahala.”

Ang kultural na sektor naman ay dapat magpatimo sa taumbayan ng “pangkulturang kamalayan sa laban sa katiwalian.”

Maging ang mga malalaking negosyante at mga abogado ay may magagawa rin.

Sa pamamagitan ng pananawagan para sa mabuting pamamahala at “pagtatakwil sa katiwalian bilang pamamaraan para magkamal ng kita” makakatulong ang malalaking negosyante. Hinikayat din ng pahayag na gamitin ang kanilang negosyo para sa “tunay na paglago ng ekonomiya at sa kagalingan ng taumbayan.”

Ang mga abogado, sa kabilang banda, ay makakatulong sa “pagpapatibay ng rule of law habang isinusulong ang panlipunan, pang-ekonomya, kultural at demokratikong mga karapatan ng mga tao na magtitiyak ng isang pantay at makatarungang lipunan.”

Pinakahuli, anila, ay ang tungkuling gagampanan ng makabayang mga organisasyon at ng buong sambayanan sa “pag-uugnay ng kampanya laban sa katiwalian sa pagtatayo ng mahusay na pamahalaan” kung saan taumbayan ang laging inaalala sa paggawa at pagpapatupad ng mga batas at polisiya.

Sa ganitong paraan umano maaaring tugunan ng mga mamamayan ang problema sa katiwalian sa bansa. Kailangan din umano, higit sa lahat, ng kolektibo, malawakan at mapagpasyang mga pagkilos laban dito.

Ngunit sa huli, dahil sa mismong sistema nabubuhay ang katiwalian, maaaring sabihin na kailangang na ngang palitan ang buong istruktura nito. Pagpapalalim ni Propesor Guillermo, naabot na ng katiwalian sa bansa ang “isang kritikal na yugto” na sa kasalukuyan ay kailangan na ng “panlipunang pagbabago” upang lunasan ito.

At mismong taumbayan ang magsasakatuparan nito.(PinoyWeekly)

Pinoy Weekly Editorial: Si Arroyo at ang kanyang mga guwardiyang berdugo

February 4, 2009

HINDI nakapagtataka kung bakit tinutulan ng marami ang pagtalaga ni Pangulong Arroyo sa kontrobersiyal na retiradong mga heneral sa burukrasya.

Isang bukas na lihim kung bakit sa kabila ng matitinding kritisismo sa pagtalaga niya – pinakahuli sina Ret. Vice Admiral Tirso Danga sa National Printing Office, dating AFP Chief of Staff Hermogenes Esperon bilang hepe ng Presidential Management Staff at posibilidad na pagtalaga kay Ret. Maj. Gen. Jovito Palparan sa Dangerous Drugs Board – ay nagkikibit-balikat lamang ang pangulo.

Unang dahilan ang kredibilidad ng naturang mga heneral. Nasangkot si Danga sa eskandalong “Hello Garci” at pandaraya sa eleksiyong 2004. Ngayo’y inilagay siya sa NPO na siyang nag-iimprenta ng mga balota para nalalapit na eleksiyong 2010.

Ang kredensiyal naman ni Esperon ay panggigiyera sa mga Moro at rebeldeng komunista. Bago italaga bilang PMS, ipinuwesto muna siya bilang presidential adviser on the peace process. Nagresulta ito sa lalong pagsiklab ng antigong digmaan sa Mindanao nang dahil sa panukalang Memorandum of Agreement on Ancestral Domain.

Samantala, itinuturong sangkot si Palparan sa napakaraming ekstra-hudisyal na pamamaslang sa mga kritiko ni Pangulong Arroyo. Kahit ang Melo Commission na binuo mismo ng gobyerno para imbestigahan ang malaganap na pamamaslang noon, ay nagsabing may pananagutan si Palparan. Pero hindi ito binalak na panagutin ng gobyerno. Sa halip, pinasalamatan pa ito ni Pangulong Arroyo sa isa nitong state of the nation address. At ngayo’y bibigyan pa ng pwesto sa kanyang gabinete.

Sa bilang ng progresibong mga grupo, mahigit 25 dating militar o pulis ang nasa gabinete ng pangulo kabilang na ang Executive Secretary. Idagdag pa ang mga retiradong opisyal na itinalaga naman bilang mga embahador.

Hindi tuloy maiwasang isipin na ang pagtatalagang ito ay dulot ng pagkatakot ni Pangulong Arroyo na mapatalsik o mawala sa puwesto. Dahil sa pagiging di popular na pangulo, mukhang kailangang lagi siyang guwardiyado.

Subalit gaano man yatang kritisismo ang tanggapin ni Pangulong Arroyo ay tatanggapin nito, maitalaga lamang ang matatapat niyang opisyal. Sukdulang lalong sumadsad ang kanyang lupagi nang popularidad.

Ang masama, baka ang buntot ang nagwawagwag sa aso.

Nagbabayad pa ng utang sa kanila ang Pangulo o naghahanda ng militar na pamumuno? Alinman sa dalawa, tiyak ang mga mamamayan ang talo. (SAS)(PinoyWeekly)

Nuclear Myths Used to Hurry Bataan Operation — Greenpeace

February 3, 2009

Greenpeace today warned that Congress is off to speed up the passage of the Bataan Nuclear Plant revival bill regardless of serious social and environmental costs, and are using myths and abusing scientific data to support their bid.

In a press conference in Quezon City, Greenpeace Southeast Asia Executive Director Von Hernandez and geologist Dr. Kelvin Rodolfo, Professor Emeritus at the University of Illinois at Chicago and Adjunct Professor at the University of the Philippines’ National Institute for Geological Sciences disproved claims by Congressmen Mark Cojuangco and Mikee Arroyo that the mothballed 30 year old Bataan Nuclear Power Plant will yield, clean, safe and inexpensive energy. Cong. Mark Cojuangco, whose family’s business interests include energy, is the author of a House Bill filed July last year seeking to revive the BNPP. House Bill 4631 has already hurdled the House Committee on Energy headed by Cong. Mikee Arroyo, and is currently in the Committee on Appropriations, whose report, according to Arroyo, is expected by mid-February.

“Nuclear energy is not clean, not safe and not cheap. In fact, it is probably the most dangerous and expensive power source there is. To say otherwise is to endorse patent falsehoods for the benefit of the nuclear industry. Greenpeace finds the intent of the bill, as well as the seeming haste with which it is being pushed in Congress highly questionable,” said Hernandez.

“The one billion USD [1] eyed to fund this project which will come from the pockets of ordinary Filipinos will be better spent on safe and cheap renewable energy. And if there must be haste, it should be for the finalization of the Implementing Rules and Regulations of the Renewable Energy Act, the real solution to energy security and climate change, which in contrast, sat in the Congress for more than a decade before it was passed,” he added.

Greenpeace asserts that nuclear plants are grotesquely capital intensive and expensive at almost all stages of its development. Historically, nuclear construction projects consistently run over budget, so even the 1 Billion USD projected cost for BNPP’s rehabilitation can be exceeded. The plant will also make the country dependent on imported uranium, a resource found only in a few countries. There are further costs for spent fuel storage and security, and should an accident occur, massive costs for evacuation, relocation of communities, health costs, aside from the repair of the plant and the rehabilitation of surroundings. From previous experience of nuclear disasters, these costs amount to hundreds of billions of dollars for a period of decades.

Dr. Kelvin Rodolfo whose study on fault lines and volcanic activity in the area was cited by Cojuangco in the Bill also refuted claims by the congressman that the location of the BNPP is safe. According to Rodolfo, the BNPP is situated on Mt. Natib, a dormant volcano which constitutes the entire northern half of the Bataan peninsula. “People who are eager to reactivate the BNPP are dangerously misrepresenting scientific data. Given the burden the revival of the BNPP poses to all Filipinos, the government owes it to its citizens to vigorously, openly, and thoroughly explore all the ramifications of such a risky energy source,” said Dr. Rodolfo.(PinoyPress)

Green Groups Wary of Atienza’s Landfill Probe; Fear of Moro-Moro Investigation

February 3, 2009

Fears of a Moro-moro investigation worry citizens and environmental groups opposing the San Mateo dumpsite regarding the directive of DENR Sec. Lito Atienza to probe on the controversial landfill project.

“Sec. Atienza should put action into his words. Many times he issued statements to investigate anomalous landfill projects but ends up exonerating its proponents and allowing the projects to resume,” remarks Clemente Bautista Jr., national coordinator of Kalikasan People’s Network for the Environment.

Bautista was referring to the case of Rizal Provincial Sanitary Landfill located in Rodriguez. Last September 2008, contractor International Solid Waste Integrated Management Service Inc (SWIMS Inc.) was caught red-handed in video, dumping garbage leachate into adjacent river. Sec. Atienza ordered an inquiry but later the findings of the investigative team headed by the DENR absolved SWIMS and allowed the sanitary landfill to continue.

“We could not give our confidence to an investigation, which we believe is intended only to appease the contesting public, worse, has been used to shroud facts that shows clear violations, as the Montalban case exhibits, commented Bautista.

Another reason for the group’s apprehension involves the fact that the people behind Montalban dump were the same proponents of the San Mateo project. In particular, Abelardo Salazar associated with SWIMS is president of San Mateo Landfill and Development Corp.

“It seems that contractor Salazar is in close links with the provincial government, that after trashing the place in Montalban, he managed to get away with it, and even got himself a new deal with the San Mateo project”, comments Tony Balute of Coalition for Garbage-Free San Mateo.

Ka Tony also recommends that “a thorough investigation involving environmental and people’s organizations and not just the usual government-dominated team, should be composed, if Atienza is sincere about his orders of probe”.

He also urge that “the ECC be canceled, and the project be totally stopped”.(PinoyPress)

Palace deletes transparency clause in budget

January 31, 2009

By Christina Mendez Updated January 31, 2009 12:00 AM

Malacañang has deleted the transparency clause in the proposed P1.415-trillion national budget, according to Sen. Francis Pangilinan.

Pangilinan said he was shocked to learn of Malacanang’s move to exclude the Right to Information section in the proposed budget.

“It is not clear whether this was a devious desire or just an oversight,” he said.

The “right to information” clause was included in the 2009 general appropriations bill to ensure transparency and accountability in government, he said.

Pangilinan said the section was first approved by Congress for the 2007 budget but it was eventually vetoed by the Office of the President. It was not proposed for the 2008 budget.

Pangilinan said the section stipulates “the right of the people to information on matters of public concern” but “subject to limitations as may be provided by law.”

“These budgets did not provide for transparency, and could therefore not be monitored effectively by the private sector,” Pangilinan said.

“This is perhaps a key reason why corruption has become increasingly worse. Less transparency means less accountability and more corruption,” he said.

“This is alarming. The newly approved P1.4-trillion budget has several provisions that should be made transparent to minimize corruption,” Pangilinan said.

Pangilinan, citing a CODE-NGO January 2009 report “Of Scams and Lump Sums,” said the lump sum appropriation of P9.4 billion for rice, P6.0 billion for irrigation and P3.7 billion for farm-to-market roads in the Department of Agriculture budget cannot be monitored without the Right to Information section.

“How are we going to monitor now how the DA will utilize the funds? We don’t want another scam similar to the fertilizer scam to happen,” he said.

The senator also cited an ABS-CBN News report dated Jan. 30, 2008 which said that the worsening corruption in the country was hampering the flow of millions of dollars in additional aid.

Ambassador John Danilovich, chief executive officer of the Millennium Challenge Corp. (MCC), earlier voiced “serious concerns over corruption indicators for the Philippines.”

In December last year, Danilovich announced that the Philippines failed to qualify for a large-scale grant under the US government foreign assistance program because of corruption.

Pangilinan cited Danilovich’s warning that the MCC would not sign a compact until the country passes the indicator criteria on corruption.

“Isn’t it shameful that rampant corruption in our country is being exposed?”

He also mentioned the Political and Economic Risk Consultancy (PERC) survey of 13 Asian countries in which the Philippines was perceived as the most corrupt. “Our country received an alarmingly high 9.0 on a 10-point scale, where 10 is the worst possible score.  That’s how bad corruption is today in our country,” Pangilinan said.(PhilippineStar)

House panel ends probe on World Bank accusations

January 29, 2009


The House of Representatives yesterday cleared three Filipino-owned construction firms from accusations of collusion in cornering multi-million peso infrastructure contracts bidded out by the World Bank.

The House Committee on Public Works, chaired by Southern Leyte Rep. Roger Mercado, concluded its probe into the controversy amid suspicion among opposition solons that the investigation merely provided a smokescreen for anomalies in biddings being conducted by the Department of Public Works and Highways.

Opposition Rep. Teodoro Casino of Bayan Muna said Sen. Miriam Defensor-Santiago’s accusation of a House coverup of erring Filipino contractors was not sufficiently addressed by the committee.

Another opposition congressman cited a complaint aired by the China- based Guandong Engineering Inc. against E.C. De Luna Construction Co. and key DPWH officials of allegedly unfairly disqualifying the Chinese group from a P2.3 billion project in Samar in 2006.

“In 2006, collusion was alleged between De Luna and DPWH officials,” said the opposition solon who requested anonymity.

The E. C. De Luna Construction Co. has been indefinitely disqualified from participating in WB projects after it was tagged as “ringleader” in an alleged conspiracy with five other Filipino and Chinese contractors to corner juicy public works contracts funded by the bank.

During yesterday’s hearing, DPWH Undersecretary Manuel Bonoan denied that De Luna and the two other Filipino contractors, Cavite Ideal International Construction and Development Corp. and CM Pancho Inc., have ever been involved in bidding irregularities in government projects.

Casino expressed disappointment that the House Committee on Public Works terminated its inquiry on the supposed collusion between the WB- blacklisted contractors, saying the probe proved nothing.

“Right from the start of the hearing, we were not hopeful the World Bank would be attending the hearing,” Casino said.

“But as were informed that the World Bank had furnished copies of its confidential report to the Department of Finance and the Ombudsman, I had requested that representatives from the two agencies be invited. However, the committee failed to invite them and terminated the inquiry without giving the members of the committee the chance to ask them regarding the WB report,” Casino said.

The opposition solon said the House committee on good government or on oversight may be asked to revive the investigation.

In an interview after the hearing, committee chair Mercado said the documents submitted by the WB did not provide concrete evidence that the firms were guilty of irregularities.

“There’s no collusion. We do not have the evidence to support the criminal act of collusion. Under our rules, we have to present real evidence that is factual and we need witnesses to support these allegations. Unless those are acquired, we cannot prosecute,” said Mercado.

He justified the termination of the probe after only two hearings because he believed the committee has “properly ventilated the issue,” adding that the panel will issue its report soon.

“The DPWH is playing blind on this issue because the contractors involved are close to politicians,” Casino said, adding that First Gentleman Jose Miguel Arroyo was alleged to have met several times with one of the blacklisted firm’s owners, Eduardo de Luna, in 2002.

Enrile discounts Lacson’s allegations on FG’s role in projects


Senate President Juan Ponce Enrile yesterday said the allegation of Sen. Panfilo M. Lacson linking First Gentleman Jose Miguel Arroyo to the reported rigging of biddings for World Bank-funded road contracts is ‘’hearsay, for the moment.’’

He said the basis of Lacson’s allegations linking the First Gentleman were notations on the presidential spouse’s 2002 appointments book but these could not be considered solid evidence yet.

Enrile said that there is a need for Lacson to produce a witness linking Mr. Arroyo to the bid-rigging anomaly to substantiate his claim of bribery.

Lacson said the First Gentleman and Eduardo de Luna, owner of one of three Filipino companies blacklisted by the WB in connection with the alleged bid rigging, met 20 times based on the appointments book given to him on the sly by Dodong Mahusay, a witness in the earlier ‘’Jose Pidal’’ expose of Lacson.

One location where the First Gentleman and de Luna allegedly met was the LTA building in Makati City owned by the Arroyo family, Lacson said.

The senator alleged that during one of the meetings, de Luna carried P70 million in cash but the money fell off a carton, causing the cash to spill out at a ‘’wrong’’ floor at the LTA building.

Administration Sen. Miriam Defensor Santiago, chairperson of the Senate economic affairs committee that conducted a hearing last Tuesday on the road project scandal, shared Enrile’s view that the P70 million ‘’up front’’ money to link Mr. Arroyo to the questionable road project was hearsay.

‘’It has no probative value as of the moment,’’ Santiago, a former University of the Philippines law professor, said. She said she is giving Lacson time to produce a witness ‘’then we will submit a report to the plenary session.’’

Lacson had alleged that the money represented five percent of the more than P1 billion WB-funded project as upfront’ commission for the eventual awarding of the road contract.

‘’Wala pa naman ebidensya na the money was for the First Gentleman. It was denied by de Luna. We will see in the due course what will happen,’’ Enrile said.

Asked whether it was possible to ask the First Gentleman to appear in the next public hearing of the Santiago committee, Enrile said Lacson must first present his witness before the Senate calls Mr. Arroyo to appear.

On Malacanang’s observation that the Senate was quick to link the First Gentleman to the P70 million bribery, Enrile said that he respects the position of Malacanang.

‘’Let the committees do their work. But I would like to caution them to finalize investigation according to the original purpose and finish without expanding too widely,’’ Enrile said. ‘’The main thrust of the investigation is the problem of the World Bank.

“The chairperson of the committee made this point even as Senator Lacson raised his point. I’m not against investigation about any person by the Senate, even if the person being investigated is the husband of the President. But I think we’ll have to be circumspect in the handling of the investigation so that it will not go into any direction, not necessarily expanding from what it originally was,’’ he added.

Santiago reiterated yesterday her call that Public Works Secretary Hermogenes Ebdane be removed from the Cabinet for stonewalling the WB findings. Santiago was peeved by Ebdane’s testimony that the DPWH allowed the three local construction firms blacklisted by the WB to bid for other government projects.

Santiago likewise said Ombudsman Merceditas Gutierrez should be impeached for her inaction on the WB recommendations submitted to the Philippine government way back in late 2007.

Sen. Loren Legarda also stood on the Senate floor yesterday to refute the claim of Sen. Joker Arroyo that the Senate did not act on three Senate resolutions filed in November 2007 seeking a public hearing, in aid of legislation, on the controversial bidding of WB-funded projects.

Legarda, then chairperson of the Senate economic affairs committee, maintained that she conducted two public hearings but deferred further action after sending to the National Economic Development Authority the Senate resolutions for comment. The NEDA reply is still being awaited, she said.

Also yesterday, opposition Sen. Panfilo Lacson said he has forgiven First Gentleman Jose Miguel Arroyo for the personal assaults on his character and reputation in the past.

However, implicating President Arroyo’s husband in the World Bank’s accusation of rigged bidding on WB-funded road projects is another matter, Lacson said, saying that the controversy is once again about corruption.

“But as I indicated yesterday tanggapin niya man o hindi, pinapatawad ko na siya sa kanyang kasalanan na ginawa sa akin dahil masakit ang ginawa niya sa akin….only because of his health condition na wala na akong galit sa kanya,” Lacson said.

Lacson accused Mr. Arroyo of interfering in government transactions particularly in road projects.

“Kaya ang dare ko sa Malacanang, sa mga nagde-defend kay FG (Mike Arroyo), I-deny nila entries. Madali naman makita kailan birthday ni PGMA (President Arroyo’s initial). Kailan ang birthday ng individuals na kailangan pumunta siya. Kailan siya nag-golf. Kailan punta Hawaii, kailan punta Japan?” Lacson said.

“These entries are easily verifiable. So kung sinasabi nilang di authentic o validated, that’s their own opinion. Unfortunately for them my own opinion is, that’s valid. That’s authentic. The entries will speak for themselves.” (with a report by Hannah Torregoza)(MB)

Palace acts on cooking gas : Reyes given 2 weeks to solve LPG problem Supplies have started arriving, says DoE official

January 29, 2009


Malacañang has given Department of Energy (DoE) Secretary Angelo Reyes a two-week deadline to solve the shortage in the supply of liquefied petroleum gas (LPG) nationwide.

Executive Secretary Eduardo Ermita said Reyes should solve the shortage in the supply of LPG within two weeks or he would be admonished for failure to solve the energy problem.

Ermita said Department of Energy (DoE) Undersecretary Roy Kyamco has denied reports that the LPG shortage would last until March, citing supplies are starting to arrive.

“According to Undersecretary Roy Kyamco, starting a week ago, the delivery of LPG started to come in and this delivery will continue until March. He said it’s not true that there will be a shortage up to March,” Ermita said.

The Executive Secretary said the arrival of the deliveries would ensure that the LPG shortage would be solved within two weeks.

“He asked me to give them two weeks, then if the problem has not abated, then we will call the Department of Energy to task,” Ermita said.

Kyamco explained that the LPG shortage was caused by delays in the delivery to replenish the supplies that have dwindled due to the high demand for LPG during the Christmas season.

Ermita said he could only admonish Reyes for the LPG shortage if the two-week deadline lapses without solving the LPG shortage, and that the decision on whether to dismiss him for the prolonged and unexplained LPG shortage lies with President Arroyo.

“I will have to call him to task if his promises are not realized, then he would be able to give us some explanations,” Ermita said.

VP De Castro warns hoarders of cooking gas

Attributing the shortage of cooking gas or liquefied petroleum gas (LPG) to illegal acts of hoarding and profiteering, Vice President Noli “Kabayan” De Castro warned that these unscrupulous refillers and dealers will be dealt with under full force of the law.

De Castro made the warning amid reports of shortage and unusually high prices of LPG despite the statement of the Department of Energy that there is enough LPG supply.

“I believe that there is an artificial LPG shortage created by unscrupulous hoarders and profiteers who want to rake in profits to the disadvantage of our consumers. I warn those who are manipulating the market…we will definitely go after you and have you liable under the law,” De Castro said.

De Castro said that the Departments of Energy and Justice have already created a task force in order to investigate and prosecute cases against traders who are storing large volumes of the cooking gas.

He called on the DOEDOJ task force to step up its campaign against LPG hoarders after prices of cooking gas reportedly rose to as high as R80 per kilo as against the R45-50-price mandated by the Department of Trade and Industry.

“I also exhort the people and media to report to us those they know are hoarding and creating this artificial LPG shortage. I just want to assure the public that the government is doing everything to normalize the situation and protect the interest of the buying public. The people should not resort to panic buying as this will just worsen the situation,” De Castro said.(MB)


My Take:

Clearly, there is gas hoarding.  And happening under the very nose of the DOE.  Judging by how Reyes deals with the power problem in the country today, and his agency’s seemingly favorable eye to the coal plant proponents nationwide, his agency has knowledge about the behind the scenes of the present gas crisis in the country today.

Plunder evidence vs ‘Joc Joc’ readied for Ombudsman

January 28, 2009


THE Senate is readying the transmittal of testimonial and documentary evidence to help the Office of the Ombudsman in filing plunder charges against former agriculture undersecretary Jocelyn “Joc Joc” Bolante and other key personalities implicated in the P728 million fertilizer fund mess.

“We have enough (evidence) to bring this (case) to the Ombudsman. There is a ton of evidence, and we have heard testimony among witnesses that was presented by way of checks and reports. We warn the Ombudsman that there is enough evidence,” Sen. Richard Gordon, chair of the Blue Ribbon Committee, said.

The Blue Ribbon panel is expected to come out with a preliminary report recommending the filing of plunder and other charges against Bolante, alleged Malacañang liaison Jaime Paule, alleged runner Marites Aytona, and others for defrauding the government of an estimated P620 million.

Gordon said money laundering, falsification of documents, and other offenses were committed but these would all be absorbed by plunder which is a capital offense.

Gordon lamented the lackadaisical attitude of the Ombudsman on the findings and recommendations of the Blue Ribbon and the food and agriculture committee in December of 2005 for the prosecution of Bolante whom they tagged as mastermind of the 2004 fund mess.

“It has been 1,056 days since the (Joker) Arroyo and (Ramon) Magsaysay (Jr.) committee submitted its report on its investigation into the fertilizer project but the Ombudsman has yet to file graft charges or take action against any individual in connection with the controversy,” he said.

Gordon said if the Ombudsman does not want the public to lump it together with the evasive, if not downright, lying witnesses, the Ombudsman should take action and stop putting off the filing of appropriate charges.

“I advise the Ombudsman not to tarry any longer because this will just open more questions that demand answers, and above all, demand what we call justice. Indeed, the people’s frustration is evident. People have become cynical and frustrated,” he added.

The Catholic Bishops Conference of the Philippines and a group of farmers tilling lands owned by the Arroyo family in Negros Occidental backed the possibility of plunder charges against Bolante and company.

CBCP spokesman Msgr. Pedro Quitorio and Task Force Mapalad president Jose Rhodito Angeles said the move of the Blue Ribbon committee is justified considering that it involves public funds. – With Gerard Naval(Malaya)

What P2.6M bank deposit? asks DOJ undersecretary

January 28, 2009

JUSTICE Undersecretary Ricardo Blancaflor yesterday denied allegations he received a P2.6-million to push for the release of the so-called Alabang boys from detention.

Reports coming from the Philippine Drug Enforcement Agency earlier said there was a second bribery at the Department of Justice, apart from the P800,000 allegedly deposited in the bank account of state prosecutor John Resado, investigating fiscal who dismissed the drug charges against Richard Brodett, Joseph Tecson and Jorge Joseph on Dec. 2, 2008.

Reports said a ranking DOJ official on December 19 took out a loan of P2,642,187.23 from the head office of Metrobank in Makati. On the same day, another person paid for the loan with P2,644,438.92, including fee and day interest of P2,251.70.

In a phone patch interview over dzMM, Blancaflor said he felt alluded to by the reports and denied that he has a bank account at Metrobank in Makati. What he got, he said, was just a housing loan, which he said he could not have gotten without a bank account.

“Absolutely none. Wala akong tinanggap na deposito at wala akong binayad na P2.6 million. Mali ‘yun. Kaya nagtataka ako. Walang pumasok na P2.6 million, wala ring binayad na P2.6 million on Dec. 19 or in any other time. Kahit kalian, walang pumasok sa account ko,” he said.

Blancaflor said the bank account being identified by unidentified sources was actually the serial number of his promissory note for his housing loan.

Blancaflor, who is still on forced leave pending investigation, got caught in the bribery scandal following the revelation of Maj. Ferdinand Marcelino, chief of the Special Enforcement Service of the PDEA, that Blancaflor called him up on December 19.

Blancaflor has admitted making the call, but said he only inquired about the continuing detention of the suspects when a resolution has already been issued dismissing the charges.

The suspects were arrested in separate buy-bust operations in September last year Quezon City and Muntinlupa. PDEA agents found Ecstasy, marijuana and cocaine in their possession. – Evangeline de Vera(Malaya)

‘Sack Ebdane, Teves’ Ping links Mike A. to construction ‘cartel’

January 28, 2009


SEN. Miriam Defensor Santiago yesterday called for the impeachment of Ombudsman Merceditas Gutierrez and the dismissal of Public Works Secretary Hermogenes Ebdane and Finance Secretary Margarito Teves for “gross negligence” on the “road contract cartel.”

Santiago, chair of the committee on economic affairs investigating the alleged cartel, said that as early as November 2007, the World Bank had informed the DPWH, DOF and Office of the Ombudsman that it was looking into possible collusion of three local construction firms on the bidding for the first phase of the National Road Improvement and Management Program, but the three officials failed to act on it with dispatch.

“Sa report ng aking committee ay imumungkahi ko na irekomenda kay President Arroyo na tanggalin si Teves, i-impeach ang Ombudsman at tanggalin ang public works secretary para madisiplina sila,” Santiago said after the hearing.

“If you make heads roll, that will certainly serve as a deterrent… it sends a very clear message that (the) President will not countenance corruption in her administration,” Santiago said.

Ebdane was present during the hearing but Teves and Gutierrez did not show up.

Santiago said Teves, in a letter, said he had a prior commitment. She said the reason given was “unacceptable.”

“He didn’t even bother to send an undersecretary with a proper document when he already knows that it is about the blacklisting of three Filipino companies,” Santiago said.

Gutierrez, in a letter, said a preliminary investigation on the issue is ongoing and there is an Ombudsman rule banning disclosure of the personalities or the events that are under investigation.

“Is she claiming that the Ombudsman is higher than the Philippine Senate? Is that her claim?” Santiago asked.

Santiago argued the preliminary investigation by the Ombudsman is already past the prescribed period required by the Department of Justice.

“The Justice department requires prosecutors to finish the preliminary investigation in three months time. The report was given to the Ombudsman in November 2007. Until now she is still investigating?” Santiago said.

The World Bank last week disqualified and blacklisted Cavite Ideal International Construction and Development Corp. and CM Pancho Construction Inc. (both for four years), and E.C. de Luna Construction Corp. (barred permanently) and four other Chinese construction firms from engaging in projects being funded by the agency for acting as a cartel to rig the biddings on the road project.

The WB also suspended the release of some $33 million for road projects in the Philippines.

During the hearing, Sen. Panfilo Lacson dragged First Gentleman into the controversy, saying Juan Miguel Arroyo met with Eduardo de Luna, owner of the EC de Luna Construction, at least 20 times in 2002 alone.

Lacson cited information from an appointments book of Arroyo in 2002 which allegedly reflected the meetings that took place from March 1, 2002 to December.

Lacson said it was De Luna who delivered the P70 million “advance payment” to the “powerful person” holding office at LTA Bldg. on Perea street, Makati City last 2003.

Among other tenants, Mike Arroyo holds office in that building which is family-owned. The building is named after his mother, Lourdes Tuason Arroyo.

De Luna said he was not close to the First Gentleman but had met him several times.

He also denied dealing with the First Gentleman but admitted that he met with him in his office in Makati at least once.

De Luna dared Lacson to produce evidence.

Lacson said he is talking to witnesses to come out in the open, “but they are very much afraid to come out for obvious reasons.”

Ebdane said the construction firms could still participate in biddings on government projects that are not funded by the World Bank, citing DPWH rules on blacklisting of companies.

Santiago said: “That is an outlandish provision. It does not make any sense.”

Santiago asked Ebdane to change the guidelines and furnish the Senate copies within 30 days.(Malaya)

Gonzalez: Marcelino’s acts not valid

January 16, 2009

By Dona Pazzibugan, Tarra Quismundo
Philippine Daily Inquirer
First Posted 01:49:00 01/15/2009

Filed Under: PDEA-DOJ bribery issue, Illegal drugs, Government offices & agencies, Military

MANILA, Philippines—Marine Maj. Ferdinand Marcelino’s drug-bust operations for the Philippine Drug Enforcement Agency (PDEA) could be considered “unconstitutional” since active duty military officers like him are barred from holding position in a government agency, according to Justice Secretary Raul Gonzalez.

“As far as I’m concerned the acts done when you’re not authorized should not have any bearing whatsoever (because) you have no authority,” Gonzalez told reporters Wednesday.

He quoted Article XVI Sec. 5 paragraph 4 of the Constitution that provides that no active military officer may be appointed to any capacity in any civilian office including government agencies.

Marcelino said he was appointed to the post by Malacañang when the PDEA was beginning to build an organic staff and rise from an agency of borrowed personnel.

Marcelino said he was only following orders when assigned to the agency in 2007.

“Marines just go where we are told,” Marcelino told the Philippine Daily Inquirer Wednesday.

The soldier, who had seen action in Mindanao, said he got the assignment on the request of the PDEA and that his detail went through the hierarchy of approving offices: The Armed Forces of the Philippines headquarters, the Department of National Defense, and finally, Malacañang.

“It’s not up to us where we will be assigned. We can’t choose where we will be assigned,” he said.

Besides heading the agency’s Special Enforcement Service, Marcelino is also chief of the International Cooperation and Foreign Affairs Service and the Interagency Counternarcotics Operations Network.

Two other military officers, both Marcelino’s “mistahs” (classmates) in the Philippine Military Academy’s Bantay Laya class of 1994, hold key positions at the PDEA—one is acting director of PDEA’s Plans and Operations Service and the other, an army major, handles intelligence.

The soldiers also handle training of recruited agents.

Teodoro brought up question

Gonzalez said Defense Secretary Gilbert Teodoro brought up the question over Marcelino’s authority to work in the PDEA at the Cabinet meeting Tuesday in which the controversy was discussed.

“Secretary Teodoro mentioned that he (Marcelino) is an active military officer (and) he is covered by the Constitution. That is a specific provision of the law. So if you would analyze that, all his acts are illegal. Unconstitutional and illegal,” Gonzalez said.

It was the PDEA Special Enforcement Service headed by Marcelino that arrested Richard Brodett Jr., Jorge Joseph and Joseph Tecson—the so-called Alabang Boys—in separate buy-bust operations in September last year.

Marcelino disclosed that he was offered bribes ranging from P3 million to P20 million for the release of the suspects. He said he rejected the offers.

Independent probe

The PDEA also claimed that a P50-million bribe led to the dismissal of the drug possession charges against the suspects, prompting a word war between the PDEA and the Department of Justice (DOJ).

Even as the prosecutors vehemently denied the allegation, President Gloria Macapagal-Arroyo ordered five justice officials and prosecutors to go on leave pending an “independent” investigation.

“I never raised this to the President because if it came from me it would be colored. It came about in the course of the (Cabinet) discussion. It was Secretary Teodoro who reacted,” Gonzalez said.

Asked if the arrest of the Alabang Boys could be considered void because Marcelino was the lead agent, Gonzalez said the matter could be questioned in court by the suspects.

“That’s now the subject of investigation and it has been raised before the Court of Appeals,” he said.

“I’m just saying that under the Constitution, he’s disqualified (from working in PDEA) because he’s an active duty (military) officer,” Gonzalez added.


“If he wants to stay in the PDEA, he should resign from the Armed Forces,” Gonzalez said.

“All the operations handled by Major Marcelino (in PDEA) could be considered invalid, unconstitutional unless you can consider that as a de facto act,” the justice secretary added.

“I don’t think the President can refuse to accept that because that is the Constitution,” Gonzalez added.

Told that active duty military officers were serving in other government offices, Gonzalez said this was the lookout of the heads of the government agencies involved.

Gonzalez said PDEA Director General Dionisio Santiago, a former military chief of staff, could enlist the assistance of anyone except an active duty military officer.

“He can enlist under him (exiled communist party founder) Joma Sison,” Gonzalez quipped.

He said that at the Cabinet meeting, he confronted Santiago for failing to substantiate his claim that a P50-million bribery took place after the arrest of the Alabang Boys.

Charges of bribery have become a major point of debate after Santiago himself admitted at a hearing in the House of Representatives last week that the PDEA floated the P50-million alleged bribe in the media as part of its “psy-war” tactics against the DOJ prosecutors.

Study procedures

“That’s why they have to be properly educated on all procedures required under the (anti-illegal drugs) law,” the justice secretary said.

Right at the inquest, State Prosecutor John Resado already dismissed the drug possession charges against the three suspects due to lapses in the PDEA’s arrest procedure.

Reveal classmate’s name

The dismissal of the charges was upheld upon review by two more state prosecutors and ultimately by Chief State Prosecutor Jovencito Zuño, who has strongly denied any wrongdoing in the process.

In the House of Representatives, the committee on dangerous drugs is urging Marcelino to expose in public his mistah who offered him “tatlong manok (three chickens)” or P3 million to drop the charges against the Alabang Boys.

“He (Marcelino) has to eventually grapple with his gut in revealing who is this classmate of his who made the proposal. This is the gap in his otherwise brilliant testimony. His continued refusal will crack his credibility,” Parañaque Rep. Roilo Golez said at Wednesday’s committee meeting.

Golez’s proposal for Marcelino to reveal his mistah’s identity to the Office of the Ombudsman was adopted by the committee.

Golez said that it would be better that the Ombudsman take over the bribery probe because Marcelino might have qualms about cooperating with the National Bureau of Investigation, which is under the DOJ.

Marcelino revealed to Golez and other committee members the identity of his classmate in PMA Class of 1994 during an executive session last week.

Senior State Prosecutor Phillip Kimpo, vice chair of the DOJ’s Task Force on Anti-Illegal Drugs, accused Marcelino of “covering up” for his mistah, saying his refusal to name him was “suspicious.” With a report from Gil C. Cabacungan Jr.

Puno: Keep off judiciary Kampi solons may back impeachment

January 12, 2009

By Norman Bordadora, Gil C. Cabacungan Jr., Christine Avendaño
Philippine Daily Inquirer
First Posted 01:01:00 01/12/2009

MANILA, Philippines—Chief Justice Reynato Puno wants politicians to spare the Supreme Court from partisan manipulation, the court’s spokesperson told the Philippine Daily Inquirer Sunday amid reports of a brewing threat to impeach him.

“The court and its magistrates as dispensers of justice should be shielded, if not totally excluded from political maneuverings,” lawyer Midas Marquez said in a text message that he said he sent “in behalf of the Chief Justice.”

The threat to remove Puno from his post is reportedly tied to the Supreme Court’s alleged non-promulgation of a decision disqualifying an incumbent House member despite the concurrence in mid-2008 of 14 justices.

An impeachment complaint against the Chief Justice could come from the political party of President Gloria Macapagal-Arroyo, the Kabalikat ng Malayang Pilipino (Kampi).

Kampi is set to hear out details of the disqualification case against Negros Oriental Rep. Jocelyn Limkaichong, who is accused of not being a natural-born Filipino citizen.

“We will give Jing (former Negros Oriental Rep. Jacinto Paras) the time of day in Kampi. He will transmit to the party what transpired in the case involving his wife (who was defeated by Limkaichong in 2007),” said Quezon Rep. Danilo Suarez. Both Suarez and Paras are ranking members of Kampi.

“If it is impeachable, we will support it,” Suarez said.

Justices of the Supreme Court, like the Ombudsman and top officials of the Commission on Elections, can be removed from office only through impeachment, which requires the vote of one-third of the 235-member House of Representatives. Once approved by the House, the articles of impeachment go to the Senate for trial.

Charter change

A retired justice said there were reports that moves were afoot to impeach Puno to pave the way for a Supreme Court that would allow Charter change (Cha-cha).

The President will appoint seven new justices to the 15-member Supreme Court to take the place of those set to retire this year, a development that will leave only Puno as the only member of the tribunal not appointed by Ms Arroyo.

Allies of Ms Arroyo in the House, especially Kampi stalwarts like the President’s son Rep. Juan Miguel Arroyo, are pushing for Cha-cha through a constitutional assembly (Con-Ass) in which Congress votes as one body and not as two separate chambers.

Kampi’s claim that Congress could vote as one body on Cha-cha, an interpretation rejected by senators, who believe that the House and the Senate should vote separately on the issue, is expected to be elevated to the Supreme Court.

Threat real

Former Senate President Franklin Drilon Sunday said that Malacañang or its allies pushing for Cha-cha could be behind moves to oust Puno.

Drilon said Jacinto Paras did not have the clout to mount such a move all by himself. Malacañang said it had no hand in moves to oust Puno.

Sen. Francis Pangilinan, a member of the Liberal Party (LP) like Drilon, said he was told by his sources in the Supreme Court that the threat to oust Puno was “real” and “serious.”

Pangilinan said he and Bantay Korte Suprema would divulge “at a later and proper time” those behind the plot.

“We are warning those behind this move that we will not stop until they are exposed and their devious scheme defeated,” he said in a text message.

Bantay Korte Suprema is a coalition of legal luminaries from the academe, law groups and the Makati Business Club that is calling for “transparency” in the selection and appointment of seven members to the Supreme Court.


Pangilinan said he would take up the matter when Bantay Korte Suprema, of which he is a convenor, meets on Monday for a general assembly “and see if the legal community can come up with a united response against this latest attack on the Supreme Court and the rule of law.”

“In the meantime, we urge the greatest vigilance from the public at this time to protect the office of the Chief Justice of the Supreme Court from the said attack,” he said.

Like Pangilinan, Drilon said he heard from “legal circles” more than a week ago that there would be an impeachment case to be filed against Puno.

Drilon, LP chair and former justice secretary, said Paras, whose wife may benefit from the promulgation of the supposed high court resolution, “doesn’t have the clout to be able to mount a credible impeachment complaint against the Chief Justice.”

“Only Malacañang has that clout and it fits perfectly into their plans on the consultative assembly (Con-ass),” he said.

Part of grand scheme

Saying the ouster move was “part of a grand scheme,” Drilon said the Palace saw the opportunity to “keep (Puno) off balance because of the expectation he will not toe the line insofar as Charter change is concerned.”

Drilon said “reliable sources” told him the Palace would push for Cha-cha by getting first the House to get the signatures of 197 lawmakers to propose amendments to the 1987 Constitution “to precipitate a case in the Supreme Court on the issue of joint or separate voting of Congress.”

“That is why the Supreme Court becomes a critical judge in the next 12 to 18 months because they will determine the political history of the country,” he said.

Bayan Muna party-list Rep. Satur Ocampo said an impeachment case against Puno would be a serious blow to the independence of the three branches of government and the separation of powers between the executive and the judiciary.

But Ocampo said he didn’t think Malacañang would succeed in a venture tied to Cha-cha because strong public opinion would frustrate it.

Playing with fire

Makati Mayor Jejomar Binay, president of the United Opposition, said administration allies would be “playing with fire” if they pushed through with removing Puno to extend the term of Ms Arroyo, who is set to step down in 2010.

Those conniving to impeach Puno were in “big trouble” if they unseated someone “beyond reproach in his value system and conduct,” said Lingayen-Dagupan Archbishop Oscar Cruz.

In a statement, Cruz said: “Filipinos are, by and large, patient and forgiving. But even long sleeping volcanoes can and do erupt. This is a fair warning.”

The Supreme Court spokesperson said the ouster move “is really totally baseless and achieves nothing but the degradation of the integrity of the court.”

“So fundamental is the societal value that the integrity and orderly functioning of the administration of justice should be maintained at all times,” Marquez said in his text message. With reports from Allison W. Lopez in Manila and Yolanda Sotelo, Inquirer Northern Luzon

The Arroyo Government: Struggling to Survive till 2010 and Beyond

December 28, 2008

The probability that the Arroyo government would survive another year and complete a six-year term may be getting higher as we approach 2009; but its concern is no longer limited to staying in power till 2010. With the numerous unresolved issues hounding it, it could not help but try to keep itself in power beyond 2010 to prolong its immunity from suit and to continue accumulating wealth; or at the very least to influence the results of the 2010 elections, which would be very difficult for it to do because of its unpopularity. Thus, the renewed attempts at Cha Cha.


Pres. Gloria Macapagal-Arroyo has survived another year after potentially explosive corruption scandals -both old and new- have again hugged the headlines. The year had just begun when Rodolfo Lozada returned to the country – after earlier trying to elude a Senate hearing – and was kidnapped by government agents after sending feelers that he would be telling what he knows about the National Broadband Network (NBN) deal with ZTE of China. Government officials failed to convince him to keep his mouth shut and the kidnapping only bolstered accusations that the Arroyo family is involved in the shady deal. The removal of Rep. Jose de Venecia as House Speaker made things worse for the government. Even as de Venecia has not sufficiently spilled the beans on the Arroyo government up to now, his sudden removal from the speakership – which was orchestrated by no less than Mikey Arroyo, the President’s son – further tainted the hands of the Arroyo family. The reason for de Venecia’s ouster was clear: he was removed for failing to stop his own son Joey from testifying about the involvement of Jose Miguel “Mike” Arroyo, the President’s husband, in the NBN-ZTE deal.

What seemed like a stroke of luck for the Arroyo government, but a series of unfortunate events for the Filipino people, came in March when spikes in the prices of rice, flour and bread, and oil distracted the public’s attention from the NBN-ZTE scandal. Prices only began to go down by mid-July. However, by August, the Arroyo government was again embroiled in a controversy when it agreed to sign a Memorandum of Agreement on Ancestral Domain (MOA-AD) with the Moro Islamic Liberation Front (MILF) without consulting all those who would be affected by the agreement. Instead of explaining the MOA-AD to the Filipino people, the Arroyo government even attempted to again invoke ‘executive privilege’, thereby fueling controversy and raising suspicions that there was something more to the planned agreement than the desire to forge peace with the MILF. Then the Arroyo government began raising the need for Charter Change (Cha Cha).

The controversy over Cha Cha was just picking up when high ranking officials of the Philippine National Police (PNP), starring retired PNP Director for comptrollership Eliseo de la Paz, were caught by Russian customs officials carrying 106,000 Euros as they were about to leave Russia. While the scandal dubbed as ‘Euro generals scam’ did not involve the President, it nevertheless exemplified the corruption prevalent under the current administration. The ‘Euro generals scam’ was still in the focus of the public’s attention when former Agriculture Undersecretary Jocelyn “Joc Joc” Bolante was deported from the US after four years of trying to evade the Senate investigation on the P728 million fertilizer fund scam, an issue in which he was the alleged operator of the Arroyo government. Thus, the P728 million fertilizer fund scam, which was never resolved, was thrust in the limelight again.

This bolstered another impeachment complaint against President Arroyo. Again the Arroyo government had to employ the power of its numbers and money to summarily junk the complaint. The public furor over the junking of the impeachment complaint was just starting to build up when the Arroyo government intensified its Cha Cha offensive, with Mikey Arroyo leading the charge. They were only stopped in their tracks when a broad array of forces converged in Makati to express opposition to Cha Cha.

Before the year ended, the Washington-based Millennium Challenge Corporation (MCC) announced last December 15 that it is withholding financial assistance to the Philippines until the government undertakes more measures to curb corruption.

Established in 2004, the MCC provides financial assistance to reduce poverty in developing countries. In 2006, it provided $21 million to the Philippines. Another grant could have gone a long way in addressing poverty, which is expected to worsen further in 2009. However, the impact of the punitive measure undertaken by the MCC goes beyond being merely a lost funding opportunity. The withholding of financial assistance by the MCC demonstrated the concern of international agencies over the worsening corruption in the country. The concern over corruption in the Arroyo government was also expressed by business groups earlier. The Arroyo government merely brushed these aside claiming that measures to curb corruption are already in place.

During the past years, the Arroyo government has been parrying the issues hurled against it by claiming credit for its supposed ‘good economic management’, and dismissed these as ‘politicking’, which it said was hurting the economy. However, the rice crisis that unravelled in March and its subsequent over-importation of the country’s staple, the suffering caused by the unprecedented spikes in oil prices from February to July this year, the continuing free fall of the stock market and the value of the peso, the worsening unemployment, hunger and poverty, and the onset of a worse crisis in 2009 because of the lay offs of overseas Filipinos, which would affect the economy’s lifeline – dollar remittances- the slowdown in exports and foreign investments, reveal the fundamental weaknesses of the economy and the folly of the liberalization, deregulation, and privatization polices of the Arroyo government.

The Arroyo government – the most unpopular, the most impeached, and widely perceived as the most corrupt administration in the country’s history – has survived another issue-filled year. President Arroyo is the longest-serving president after Marcos, totaling eight years. However, it has been confronted by corruption scandals, human rights issues, and attempts to unseat it from power for most, if not all, of the past eight years.

The probability that the Arroyo government would survive another year and complete a six-year term – in addition to the three years it was in Malacañang for the un-expired term of the Estrada administration – may be getting higher as we approach 2009; but its concern is no longer limited to staying in power till 2010. With the numerous unresolved issues hounding it, it could not help but try to keep itself in power beyond 2010 to prolong its immunity from suit and to continue accumulating wealth; or at the very least to influence the results of the 2010 elections, which would be very difficult for it to do because of its unpopularity.

However, its efforts at paving the way for prolonging its hold to power through Cha Cha is confronting opposition from a broad array of forces. The most recent powerful group to add its voice in the opposition against Cha Cha is the Catholic Bishops’ Conference of the Philippines (CBCP). For, perhaps, the first time, the CBCP is united in opposing a move of the Arroyo government. The CBCP did not even issue a unified statement during the height of political killings and enforced disappearances from 2005 to 2007. Only its president Archbishop Angel Lagdameo, as well as the vocal critics of the Arroyo government within the CBCP – Archbishop Oscar Cruz, Bishops Julio Labayen, Deogracias Yñiguez,and Antonio Tobias – did. This time against Cha Cha it did, manifesting its strong unity on the matter.

The Arroyo government and its allies made a tactical retreat in its push for Cha Cha, saying that it shelved Cha Cha for the moment because the Senate was against it. However, Kampi stalwarts have expressed that the fight for Cha Cha isn’t over. It seems that the tactic of the Arroyo government now is to just let the steam cool down then spring a surprise next year perhaps around January, when the protest movement has still to regain momentum after the Christmas break.

It would therefore be prudent for the Filipino people to remain vigilant.(

ROXAS SAYS Agri funds misuse continues post-Bolante Roxas urges probe post-harvest funds

December 27, 2008
First Posted 16:47:00 12/27/2008

Filed Under: Graft & Corruption, Agriculture, Joc-joc Bolante

MANILA, Philippines — The alleged misuse of agriculture funds continues in the Department of Agriculture even after its former undersecretary Jocelyn “Joc-joc” Bolante left the agency, Senator Manuel “Mar” Roxas said Saturday.

“Hindi nagtapos ang pangungurakot noong umalis si Joc-Joc sa DA. Itinuloy ng administrasyon ni Pangulong Arroyo ang maling paggamit ng pera ng taumbayan at nakita sa imbesigasyon na umabot ang kalokohan sa NABCOR (The corrupt practices didn’t end with Joc-Joc’s departure from the DA. The administration of President Arroyo continued its misuse of the people’s money and investigation showed it spread to NABCOR),” the Liberal Party president said in a press statement.

Bolante is linked to the P728-million fertilizer fund scam; the money intended for farmers’ fertilizer allegedly went instead into the campaign of President Gloria Macapagal-Arroyo in 2004.

Citing the 2007 report of the Commission on Audit, Roxas said some P300 million was disbursed by the DA for acquisition of post-harvest facilities, but these could not be validated by the auditing agency.

On top of this, he said, P95.167 million of post-harvest projects purchased by Nabcor were not used by farmers for being inapplicable and outmoded.

The 2007 CoA report also showed that P734.255 million was transferred from the DA to Nabcor, which in turn charged a 10-percent administrative fee when handing these to nongovernmental organizations and people’s organizations, thus reducing the amount benefiting these groups.

Aside from these alleged anomalies, the DA had taken P225.22 million from the Agricultural Competitiveness Enhancement Fund and transferred this to the Nabcor for the implementation of a “Competitive Food Processing and Cold Chain Operation” project, despite Nabcor’s insufficient capability and manpower to carry this out.

“Hindi pwede na basta-basta ang ganitong paglipat ng pondo mula sa DA papuntang Nabcor at mga iba’t ibang grupo. Kailangan natin ng accountability at transparency dito (We can’t simply allow these fund transfers from the DA to Nabcor and other groups. We need accountability and transparency here),” he said.

Roxas said he has filed Senate Resolution 824 to look into the transactions of Nabcor which the Commission on Audit had found to be anomalous.

“Kung gusto nating gumanda ang buhay ng ating mga magsasaka at pakainin ang bawat Pilipino, siguraduhin muna natin na wasto ang paggamit ng pondo ng gobyerno (If we want to raise our agriculture sector and feed every Filipino, we have to ensure the proper use of government funds),” he said.

Aquino hit, defended for ‘sorry’ remark

December 24, 2008

By Maila Ager, Thea Alberto
First Posted 13:56:00 12/23/2008

MANILA, Philippines – (UPDATE) A day after saying “sorry” to former president Joseph Estrada, ex-president Corazon “Cory” Aquino has been getting the flak from some supporters and militants although her spokesperson insists that the former leader made the remark “in jest.”

“To tell you frankly, maraming tumatawag sa aking mga kaibigan ko [a lot of my friends have been calling me]. They were so disappointed with Cory. Ang tawag sa kanya ngayon ay [they now call her] sorry Aquino,” Senator Richard Gordon told a press conference Tuesday.

Gordon admitted that he was equally disappointed and saddened by Aquino’s apology.

“I don’t agree with the fact that she [Cory] had to say to say sorry to him. Mr. Estrada has committed wrong in our country, he has already been forgiven. But I’m part of that [group] that removed him and I have no regrets about that,” he said.

While he was also disappointed by the present administration, Gordon said he would never use that as an excuse to condone what had happened in the past.

“I should not say but I really feel for Cory because she’s sick right now. But I think she overstated the point. Maybe what she really meant is I forgive you but to say you’re sorry for having removed him, we can’t do that. You have to stand by just as [what Trillanes] did, he stood by it,” he further said.

Gordon was referring to Senator Antonio “Sonny” Trillanes IV, who has been detained for mounting two failed coup attempts against President Gloria Macapagal-Arroyo.

Being a leader, the senator said, Aquino should have stood by her decision to participate in the ouster of Estrada.

“I have nothing against the former president [Aquino]. I have something against the fact that when we are leaders, we must be called upon to teach our people. Leaders teach. Leaders must form a face for our country, what we stand for,” he said.

“We must be upright and we must be able not to be afraid to say in front of other people what we think of them if they had done wrong. I don’t want to confuse the public where we must stand. Malilito ang tao, malilito ang bata [The people will get confused, so with the children]. We must stand for the right thing,” he further said.

Meanwhile, Bayan Muna and Gabriela partylist Representatives Satur Ocampo and Liza Maza said they were standing by EDSA 2 and that the problem was Arroyo and not the event itself.

On Monday, Aquino said during the book launching of former Speaker Jose De Venecia: “I am one of those who plead guilty for the 2001 [uprising]. Lahat naman tayo nagkakamali. Patawarin mo na lang ako [All of us make mistakes. Forgive me].”

Aquino’s apology was regarded by Estrada as his “best Christmas gift.”

But Deedee Sytangco, Aquino spokesperson told in a phone interview that the former president said it “in jest in the context of Estrada joking.”

She described Monday’s event as a “lighthearted affair… where even Estrada was being very lighthearted.”

In a text message, Aquino’s son and Senator Benigno “Noynoy” Aquino III also clarified the former leader’s statement.

“I asked my mom about it and her reply is that her comment should be taken in the context of and in the same vein as President Estrada’s humorous quip directed at Speaker JDV,” said the younger Aquino.

But Senate Minority Leader Aquilino Pimentel Jr. doubts the comment had been meant as a joke.

“No, I don’t think so. Cory naman [of course] will not do that. The subject matter is not one for joking,” Pimentel said over the phone.

“Knowing Cory, she will not say a thing without meaning it,” he further said.


My Take:

These “sorry” events manifest clearly our sorry situation.

Tsk!  Sorry my ass.

COA: NV purchase of P24-M cement, farm inputs ‘defective’

December 24, 2008

BAYOMBONG, Nueva Vizcaya – The Commission on Audit said the provincial government’s purchase of P24 million worth of construction materials and farm inputs was “defective” and did not conform to normal procurement procedures.

But Gov. Luisa Lloren Cuaresma denied irregularities in last year’s procurement of P24,247,439 worth of cement and farm inputs, saying the transactions were “aboveboard.”

The provincial government said the COA findings and recommendations would guide it to implement stricter measures in its procurement system.

According to COA, the purchase did not conform with Republic Act 9184, which governs the government’s procurement and bidding regulations, resulting in the “failure of attaining a more transparent system of procurement.”

In its report, the COA said the provincial government resorted to “direct contracting as an alternative method” in procuring the construction materials from Norma’s General Merchandise and agriculture inputs from Igorot Buying Station, “although these did not conform with any one of the conditions provided in RA 9184.”

The provincial government’s justification in procuring the items, it said, “may be applicable to certain very urgent conditions but could not be taken as a basis to circumvent the real intent of the law.”

But Cuaresma said the two dealers were also the sources of other local contractors and suppliers, and that they offered the cheapest cement and farm inputs at the time of the purchase.

She added the transactions were advantageous to the government in terms of prompt delivery.

Provincial administrator Manuel Taborra said the dealers were the only ones capable of delivering the required volume then. — CL(NorthernPhilippineTimes)

Solon wants Marcos bust repaired to show respect for late prexy

December 24, 2008

BAGUIO CITY – The congressman of this lone district, while admitting he is not a Marcos loyalist, said Filipinos should accept the fact that the former strongman did a lot of good things that must be treasured by the people.

To show appreciation, Rep. Mauricio G. Domogan said government agencies must work for immediate rehabilitation of the damaged bust of former President Ferdinand E. Marcos located in Taloy Sur, Tuba, Benguet to serve as another tourist attraction in the Cordillera and to appreciate his good deeds during his administration.

His intention, he said, is to show respect to the former ruler who had undeniably done many good things for the country.

“Let us try to adopt the good deeds of former leaders, learn from their mistakes, and see to it that these will not be repeated again,” Domogan said.

The Baguio lawmaker said what is happening in the country today in the event of change of administration is that all programs and projects of the outgoing leader, even if these are good for the people, are scrapped and changed by his or her successor.

Because of this system, he said, there is no continuity in the implementation of good programs and projects, and as a result, the interest of the people is compromised in favor of the interest of cronies or dummies.

He said it is high time for the Filipinos to become politically mature so that development could flourish in the rural areas and poor people would be given a decent sources of livelihood.

What is disgusting about Philippine politics, Domogan said, is that “we are sore losers and use our loss as a vehicle to attack personally the ones who prevailed in a political exercise.”

Domogan said this unhealthy political situation in the country is jeopardizing the efforts of national and local leaders to institute reforms that could bring the country to greater heights.

He criticized the opposition for being a fault finder.

Domogan said instead of collaborating with the administration in the efforts to come out with realistic government programs for the benefit of the people, the opposition is creating unrest and anxiety. – Dexter A See(NorthernPhilippineTimes)


My Take:

Nauubusan na bang mga proyektong makukurap at pati ang letseng rebulto ng diktador ay nais ipa-repair?

Nagtatanong lang…

Rice mill anomaly: Ex-Ilocos mayor convicted of graft

December 24, 2008

BACARRA, Ilocos Norte — The Sandiganbayan has convicted a former mayor of this town for graft over an anomalous rice mill project during his term nine years ago.

The anti-graft court’s third division sentenced former mayor Pacifico Velasco to a jail term of up to eight years and perpetually disqualified him from holding public office.

This, after he was found guilty of violating Section 3 (e) of Republic Act 3019 (Anti-Graft and Corrupt Practices Act) when he granted the P3.3-million project to a cooperative that he partly owned.

In a nine-page decision promulgated Dec. 10, the Sandiganbayan ruled Velasco “gave unwarranted benefits, advantage or preference to Zanjera Cooperative because he had shares in the said cooperative and that his son, Michael Velasco, was appointed manager thereto.”

It said Velasco’s move also showed “manifest partiality, evident bad faith and gross inexcusable negligence” that had caused undue injury to the government.

Out of 32 consumer cooperatives registered in Bacarra town, it said Velasco “singled out” the Zanjera Cooperative “to administer, manage and operate the multi-pass rice mill” on October 1999.

The Sandiganbayan also found out that the required ordinance or resolution from the municipal council of Bacarra prior to the purchase of the rice mill was absent.

During the trial, Velasco admitted that he was a member of the Zanjera Cooperative.

But he said he believed there was no need to secure a municipal council resolution in granting the operations and management of the rice mill to the cooperative since no transfer of funds was involved.

But the anti-graft court said Velasco “failed to comply with the basic rules of governance embodied in the Local Government Code. As local executive, accused Velasco ought to know the law and he was duty-bound to obey the same.”

The defense presented as witness Maximo Agustin Jr., chairman of the board of Zanjera, who only affirmed that Velasco was among the incorporators of the cooperative and that his son Michael had been its manager since July 1998.

It was learned during the trial that Velasco owned 520 shares in the cooperative.

The prosecution, led by prosecutor Mario Quinit, presented as witnesses former vice mayor Philip Velasco, Zanjera officer Ardelino Galicinao, Commission on Audit regional director for Ilocos Norte Alejandro Que, and municipal accountant Lydia Mann.

The former vice mayor, a nephew of the accused, was gunned down in May last year. — EP(NorthernPhilippineTimes)

Asbestos dump hit anew as Lepanto fails to haul out its waste

December 20, 2008

BAGUIO CITY—Residents of Sapid, Mankayan, Benguet filed a second petition that pushed town officials to act on the asbestos wastes earlier dumped by the Lepanto Consolidated Mining Company (LCMCo), after the company failed to fulfill its promise to haul out the toxic materials.

Acting on an earlier petition, town officials contemplated on filing charges against the company. This prompted the said mining firm to haul out said wastes, which turned out to have come from its Makati office.

Community vigilance

Some 115 residents of the said barangay in a petition, asked Mankayan Mayor Manalo B. Galuten and the town council to look into the asbestos wastes left by LCMCo despite the mining company’s commitment to haul out all the said wastes. The petition was dated October 29.

In a report, Sapid barangay council quoted witnesses as saying the wastes were dumped by Shipside Trucking, an LCMCo subsidiary, on April 10 and in 2007 in Sitio Tagumbao, Upper Tram in Barangay Sapid.

Alleging then that the wastes were asbestos materials illegally dumped by the mining company, the Sapid council through Barangay Resolution No. 34-2008 dated April 12, requested LCMCo to “cease unloading or dumping of the waste (asbestos)” in their barangay and to relocate the said wastes to other sites.

Informed about the alleged dumping of asbestos wastes, the Sanguniang Bayan (SB) of Mankayan led by Vice-mayor Paterno Dacanay invited representatives of the mining company to its regular session to shed light on the concern.


Based on the minutes of the Mankayan SB session on May 6, LCMCo environmentalist Rolando C. Reyes, denied that the wastes dumped were asbestos but materials used for acidic pads and cushions. Reyes assured the members of the SB the wastes are not hazardous in nature. He appeared with Vice-president and resident Manager Magellan G. Bagayao and a certain Edgar Ebiong at the council session.

The pads and cushions came from the company’s Makati City office that was renovated, according to Reyes.

Company representatives also assured the council they complied with policies set by the Department of Environment and Natural Resources (DENR), adding these are properly covered , thus making it safe for the environment.

In a May 7 letter submitted to the SB, the company committed not to repeat the said dumping and should an area be considered as future waste dump, LCMCo would coordinate with town officials concerned before it would begin operating.


Meanwhile, samples taken from the dumpsite were tested by the Environmental and Urban Planning Laboratory of the Saint Louis University Engineering and Architecture department, which later found out that the wastes had an asbestos content of 50.385%.

Asbestos is a fibrous mineral usually used for fire proofing and insulation in buildings, pipes, walls, ceilings, floors and others. It is a serious health hazard if inhaled that could cause asbestosis, lung cancer and mesothelioma, which is a rare type of cancer that most often occur in the thin membrane lining of the lungs, chest, abdomen and heart, according to Dr. Ana Leung of the Community Health Education Services and Training in the Cordillera Region (Chestcore).

Asbestos has been internationally banned because of its toxicity.


Upon learning of the result of the tests, the Mankayan SB through Resolution No. 289-2008, authorized Galuten to file appropriate charges against the mining firm for illegally dumping toxic waste materials in Upper Tram.

Through a series of meetings with the barangay officials and residents, town officials and representatives from the Environmental Management Bureau of the DENR, LCMCo volunteered to haul out the asbestos waste materials and to relocate outside the municipality. # Cye Reyes(NorDis)

US pyramid scheme hits European banks

December 17, 2008

WASHINGTON, D.C.: Europe’s biggest bank, HSBC, joined a list of top names in world finance admitting huge potential losses in a suspected pyramid fraud scam run by ex-Wall Street heavyweight Bernard Madoff, whose brokerage was to be sold off.

The Securities Investor Protection Corp. (SIPC), which helps investors at failed brokerage firms, said Monday (Tuesday in Manila) it was liquidating Bernard Madoff Investment Securities LLC.

“It is clear that the customers of the Madoff firm need the protections available under federal law,” said SIPC President and CEO Stephen Harbeck in a statement.

But, he warned, “It is unlikely that SIPC and the trustee will be able to transfer the customer accounts of the firm to a solvent brokerage firm” because of the state of the firm’s records.

Shares in Santander, the biggest bank in Spain and the second largest in Europe after HSBC, plunged after the lender said it had exposed more than $3 billion to Madoff Investment Securities in New York.

Fortis Bank Netherlands said it stood to lose up to $1.37 billion in the suspected scam, despite lacking direct exposure to the Madoff firm.

“If, as a result of the alleged fraud, the value of the assets of these funds is nil and the respective clients cannot meet their obligations, Fortis Bank Nederland [Holding] N.V.’s loss could amount to around 850 million euros to one billion euros [$1.17 billion to $1.37 billion],” the bank said in a statement.

Billions lost

British, French, Japanese and Spanish banks and funds said investments totaling billions of dollars could be wiped off their balance sheets in a scandal set to affect some of the world’s richest people.

“The potential exposure under these financing transactions is in the region of one billion US dollars,” the London-based HSBC said.

Royal Bank of Scotland said it could lose about $612 million.

France’s Natixis investment bank, already brought low by subprime losses, put its maximum exposure at $616 million. Retail banking giant BNP Paribas revealed potential losses of $480 million.

Japanese financial giant Nomura said it could lose up to $303 million and officials in South Korea said financial institutions there had a total exposure of some $95 million.

Madoff arrested

Madoff, a 70-year-old Wall Street veteran, was arrested on Thursday, and allegedly confessed to defrauding investors of $50 billion in a scam that collapsed after clients asked for their money back because of the global financial crisis.

International Monetary Fund chief Dominique Strauss-Kahn said he was shocked that US regulators had failed to identify and prevent the fraud.

“The surprise is not that there are some thieves in the system. The question is where were the police? It’s very surprising to find you’re living in a system where a failure of the regulatory system was so big,” he told a news conference in Madrid.

Banks have rushed to disclose potential losses in an apparent bid to avert any deepening of the suspicion that has frozen credit markets.

US authorities alleged that Madoff delivered consistently strong returns to clients by secretly using the principal investment from new investors to pay out other investors in what is known as a “pyramid fraud.”

US Vice President Dick Cheney said in a radio interview that the alleged scam by the former Nasdaq chairman was “very disturbing” but blamed a few “bad apples.”

The unraveling

The scheme apparently worked as long as Madoff could attract new investors but seems to have unraveled when some of his clients asked to withdraw their investment – only to discover that his seemingly brimming coffers were empty.

British investment fund Bramdean Alternatives Limited, which revealed it had invested about $31.2 million in Madoff’s company, said the scandal raised “fundamental questions” about the US financial regulatory system.

“It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades, while investors have continued to invest more money into the Madoff funds in good faith,” the firm said in a statement.

More European banks

Spain’s El Pais newspaper reported the country’s second-biggest bank, BBVA, could lose around $686 million in the scam.

Italy’s biggest bank, UniCredit, said its exposure was around $103 million and one of its investment units may also have been indirectly affected.

Geneva’s private banks could lose up to $5 billion, Swiss newspaper Le Temps reported.
— AFP(ManilaTimes)

Arroyo’s approval rating drops anew: survey

December 16, 2008

PRESIDENT Gloria Macapagal-Arroyo’s net satisfaction rating for 2008 is at its lowest of -30 points, the November 28-December 1 survey of the Social Weather Stations (SWS) showed.

Arroyo’s net rating in 2007 was -9, net -16 in 2006, and net -25 in 2005.

Based on the SWS terminology of ratings, a net rating of -30 to -49 is considered “bad.” The criteria is as follows: +50 and above, “very good;” +30 to +49, “good;” +10 to +29, “moderate;” +9 to -9, “neutral;” -10 to -29, “poor;” -30 to -49, “bad;” and -50 or lower, “very bad.”

Deputy presidential spokesman Anthony Golez said popularity ratings are not important to Arroyo and that she continues to focus on her job, particularly on the anti-poverty programs especially in the light of the global economic crisis.

Arroyo’s rating in the fourth quarter survey was 29 percent satisfied and 53 percent dissatisfied, for a net rating of -24 percent.

It was at -27 (27 percent satisfied and 54 percent dissatisfied) in the September 2008 or the third quarter survey.

SWS placed Arroyo’s net rating in the second quarter at -44 points, by averaging her net scores in the June 27-30 survey (-38 points or 22 percent satisfied and 60 percent dissatisfied) and the July 13-17 commissioned survey of Quezon Representative Danilo Suarez (-50 points or 17 percent satisfied and 67 percent dissatisfied).

The President’s net rating in the March 28-31 survey was -26 points (correctly rounded) or 27 percent satisfied and 54 percent dissatisfied.

The SWS fourth quarter survey, which had 1,200 respondents, showed that dissatisfaction with Arroyo worsened in Metro Manila at -45 (19 percent satisfied and 65 percent dissatisfied, correctly rounded) from -36 (21 percent satisfied and 58 percent dissatisfied, correctly rounded) in September.

Dissatisfaction dropped in the case of Luzon, from net -32 (24 percent satisfied, 57 percent dissatisfied, correctly rounded) in September to net -23 (27 percent satisfied and 50 percent dissatisfied) in December.

Arroyo’s net satisfaction rating was stable in the Visayas at net -14 (38 percent satisfied and 52 percent dissatisfied) from net -14 (34 percent satisfied and 48 percent dissatisfied) in September.

It was also stable in Mindanao at net -22 in December (31 percent satisfied and 53 percent dissatisfied), from net -21 (30 percent satisfied and 50 percent dissatisfied, correctly rounded) in September.

Arroyo’s ratings were stable based her scores by socioeconomic classes.

It went down a little among the rich ABC class, from -27 in September to -28 in December; from -24 to -21 among the Class D or the masa group; and from -32 to -31 in the poor Class E. (JMR/Sunnex)

Too much corruption in RP, says Ombudsman

December 10, 2008

By Edu Punay Updated December 10, 2008 12:00 AM

Ombudsman Ma. Merceditas Gutierrez has admitted that corruption in the Philippines is worsening, in an apparent affirmation of foreign surveys that had tagged the country as among the most corrupt in Asia.

“I can say based on cases reaching my desk that corruption in our country has become too much already,” she told thousands of government employees during the celebration of International Anti-Corruption Day held in Pasig City.

For this reason, Gutierrez appealed to civil servants and the public as well to trust her office amid criticisms and allegations of bias and impropriety in the handling of controversial cases, including those against former agriculture undersecretary Jocelyn “Jocjoc” Bolante over the P728-million fertilizer fund scam and former justice secretary Hernando “Nani” Perez over the alleged $2-million extortion involving former Manila congressman Mark Jimenez.

Yesterday, several groups including the Makati Business Club (MBC), the Integrated Bar of the Philippines, and the two social arms of the Catholic Bishops’ Conference of the Philippines (CBCP) belonging to the umbrella organization Coalition Against Corruption (CAC), again accused the Office of the Ombudsman of not doing enough to fight corruption in the Philippine government.

“I would like to ask for your trust. Many people criticize and throw allegations at our office – and even at myself. I just hope that you would first await our answer to any charge before believing it. Most of the time, our critics talk about cases that we have not even decided upon,” Gutierrez lamented.

“There is now a need to stage an all-out war against graft and corruption in all levels of our government and society. And this could only be done if we all work together in this war,” she added.

Gutierrez has been accused of favoring allies of the administration of President Arroyo who are facing graft charges before her office allegedly through inordinate delays in investigation and the filing of weak cases that result in dismissals or acquittals.

In an open letter to Gutierrez, a copy of which was sent to The STAR, the groups said they are dismayed over how the Ombudsman’s track record reflects “inaction or downright mishandling of high-profile cases involving large-scale corruption.”

Cases cited by the CAC include the Nani Perez-IMPSA kickbacks, the Comelec-Megapacific computerization deal, the Bolante fertilizer fund scam, and the case of overpriced Cebu lampposts.

They also accused the Office of the Ombudsman of failure to improve its organizational capacity to efficiently perform its investigative and prosecutorial functions.

The CAC further criticized the Office of the Ombudsman for the supposed downtrend in the control of corruption indicators and its sincerity rating in international and local surveys.

MBC executive director Alberto Lim said the CAC’s letter to Gutierrez is a notice or a call for her to improve.

“We’re not happy with her performance and the Office of the Ombudsman,” he told The STAR.

But Gutierrez again scored her critics, saying they have been accusing her without factual proof.

In her Ulat sa Bayan, the Ombudsman revealed that over 16,000 cases have already been resolved since she was appointed by President Arroyo in December 2005 out of a total of 21,000 cases filed before the anti-graft office.

She added that her office would release its findings on the P728-million fertilizer fund mess implicating Bolante next month.

Gutierrez also appealed to government employees not to instantly believe in allegations against their fellow civil servants. She specifically cited the case of officials of the Government Service Insurance System (GSIS).

Employees of GSIS were booed by fellow government workers when they were recognized during the event. Their head, Winston Garcia, and other officials are facing several graft charges before the Ombudsman over allegedly questionable investments.

A survey on expatriate businessmen conducted by the Political and Economic Risk Consultancy (PERC) earlier this year had placed the Philippines as one of the four most corrupt Asian economies.

The Ombudsman also led yesterday an “integrity march” of some 5,000 government and business and civil society groups.

The group marched from the Rizal Provincial Capitol compound to the Philsports Arena (formerly Ultra) for a short program before noon.

Campaign vs fixers

In a related development, the Office of the Ombudsman and the Civil Service Commission (CSC) have intensified their joint campaign against fixers in government agencies by tapping public participation through text and call hotlines.

In line with yesterday’s celebration of International Anti-Corruption Day, the Ombudsman and CSC launched “Fix the Fixers campaign” that would gather information on fixers from their victims and concerned civil servants.

Under the program, which is established through the Anti-Red Tape Act of 2007, citizens can report fixers by text or phone to the Ombudsman or CSC, which would then investigate and prosecute the offenders.

Complainants may send the details to hotline numbers 927-4102 and 927-4204 or 0926-6994703 for the Ombudsman, and 932-0111 or 0917-8398272 for the CSC.

The key details needed are the alleged fixer’s name, the name and location of the government office where he or she operates, and the date and type of transactions he offers to “fix.”

The Anti-Red Tape Law (RA 9485) imposes stiff penalties on fixers: imprisonment of as long as six years, or a fine of up to P200,000, or both.

Government employees who engage in fixing or collude with fixers are subject to dismissal and perpetual disqualification from public service, on top of the criminal penalties.

The two agencies also affirmed their support to efforts of Congress to raise the salaries of public sector personnel under the Salaries Standardization Law Phase 3 resolution: “With higher government pay especially in the tough economic environment, there will be less incentive and pressure for public servants to engage in corruption.” — With Michael Punongbayan, Jose Rodel Clapano(PStar)


My Take:

Nagpapa-awa para makakuha ng simpatya.  Old trick.  Pwede bang magtrabaho ka na lang at huwag nang magpa-ganda pa sa media?

Just asking.

Cha-Cha Proposal to Legalize Foreign Plunder of Philippines’ Resources

December 4, 2008

The proposed amendment in the Constitution seeking to allow the foreign corporations to own land will legitimize the all-out and ongoing exploitation and plunder by foreign corporations of the country’s natural resources.

Posted by Bulatlat

The proposed amendment in the Constitution seeking to allow the foreign corporations to own land will legitimize the all-out and ongoing exploitation and plunder by foreign corporations of the country’s natural resources.

Among the various amendments that Charter change (Cha-cha) proponents are pushing for is the removal of so-called restrictive provisions in the constitution, including the proposal to dismantle the 40-percent foreign ownership restriction of public lands.

This proposal aims to amend Art. XII, Secs. 2 and 3 which say that the state should fully control public land and natural resources and may enter into production sharing agreements as long as Filipinos own 60 percent of the capital.

As it is, this constitutional provision has not effectively restricted full foreign control over the Philippines’ strategic natural resources like minerals and petroleum. For example, mining agreements as of January 2008 have reached a total of 294, covering approximately 600,000 hectares of highly mineralized lands around the country.

Another case is the Malampaya oil field, which is under a service contract with oil giants Shell and Chevron. Instead of Filipinos benefiting from its crude reserves, Malampaya has been exporting billions of dollars worth of crude oil since 2001, bringing immense profits for these giant oil firms.

This provision in the Constitution is important since it protects the state from entering into arrangements that would allow the abuse of resources by foreign corporations. Amending this provision and dismantling the restriction of foreign ownership of lands will only worsen the foreign plunder of our national resources and further undermine national interest.

Land, as well as our other natural resources, plays a strategic role in national economic development, environment, and way of life – and these resources should be effectively controlled by the state. Ultimately, the country’s economic sovereignty and potential for industrialization are at stake with Cha-cha. Posted

Arroyo’s House allies bury impeach rap

December 3, 2008

By Leila Salaverria, Gil C. Cabacungan Jr., Lira Dalangin-Fernandez, Philippine Daily Inquirer
First Posted 02:18:00 12/03/2008

MANILA, Philippines—Allies of President Gloria Macapagal-Arroyo saved her anew from an attempt by opposition forces to impeach her, finally sealing the fate of the complaint with an overwhelming vote at the House of Representatives early Wednesday which the minority described as a funeral done with “indecent haste.”

Through nominal voting that started at 9 p.m. Tuesday, 183 were in favor, 21 against, and three abstained from voting on the report of the justice committee that last week dismissed for lack of substance the fourth impeachment complaint against Arroyo.

The lawmakers argued not only on the causes of action filed against the President by a group led by businessman Jose de Venecia III, namesake son of the ousted House Speaker, but also on what was excluded—a deal on an expanded Bangsamoro homeland.

The committee had rejected a last-minute intervention by a group of bloggers to include as a ground for impeachment the memorandum of agreement (MOA) on ancestral domain with the Moro Islamic Liberation Front (MILF) calling for the establishment of a Bangsamoro Juridical Entity (BJE) to govern an expanded Moro territory.

Minority Leader Ronaldo Zamora cast the vote for the minority who decided to no longer speak on the floor to explain their vote.

“Is this the way to treat a serious impeachment complaint?” he said.

In dismissing the complaint, Bukidnon Rep. Teofisto Guingona III said the administration lawmakers have caused “damage on the faith of the Filipino people and political and government institutions.”

“So what, President Gloria Macapagal-Arroyo does not care as long as she remains n power through whatever means, even through the barrel of a gun,” Guingona said.

Former Speaker Jose de Venecia Jr., one of the seven endorsers of the complaint, was not present during the voting.

Nueva Ecija Rep. Rodolfo Antonino said the Constitution has made it easy for the pro-impeachment advocates to send the complaint to the Senate for trial with just one-third vote of the House membership.

Eleven members of the opposition bloc left the session hall after registering their “no” vote.

Zamora and South Cotabato Representative Darlene Antonino-Custodio said they saw no reason to still explain their vote.

“It is the administration allies who should explain to the people their vote, why they are killing the impeachment,” Custodio said. “The people know our stand.”

But the endorsers of the complaint, mostly party-list lawmakers, remained in the hall to defend their position against junking the complaint.

Leaving the hall with Zamora and Custodio were Representatives Rufus Rodriguez, Roilo Golez, Joel Villanueva, Cinchona Gonzales, Justin Marc Chipeco, Mujiv Hataman, Mar-len Abigail Binay, Maria Laarni Cayetano, and Benjamin Asilo.

Earlier, Bayan Muna party-list Representative Satur Ocampo, interpellating Quezon City Representative Matias Defensor, protested the impeachment complaint’s dismissal.

Ocampo said the charge of human rights violations could not be labeled an old issue because there have been new cases added in this year’s complaint that were not in previous cases.

Makati Representative Teodoro “Teddyboy” Locsin Jr. said the Memorandum on Agreement on Ancestral Domain between the government and the Moro Islamic Liberation Front should have been included in the charges against the President.

Loscin said the MOA-AD could have easily been the “one viable” charge that could send the President into trial.

Locsin said that “the firm exclusion as an article of impeachment of the MOA carving the BJE from the body of our sovereign nation in violation of our Constitution and the Bill of Rights, makes everyone who subscribes to this impeachment an accessory to high treason.”

“The BJE would be an independent, anti-Christian, Islamic, fundamentalist, antidemocratic, misogynist but pro-American sultanate,” Locsin said.

“That is a pity because even if this train contains the corpses of an unviable complaint, it will still look like a victim of assassination given a funeral with indecent haste.”

The group of bloggers, led by Philippine Daily Inquirer columnist and television host Manuel Quezon III, had filed the motion for intervention to include the MOA-AD in the dismissed complaint.

Accept defeat

In his opening statement as chair of the justice committee, Defensor presented his panel’s report at the start of plenary debate at 5:30 p.m. and asked his colleagues to accept the decision of the House “without rancor or misgivings” if they fail to get the numbers in the chamber.

Defensor said the Constitution has been “liberal” in requiring only a one-third vote of the total membership of Congress to impeach the President.

“It is but right, therefore, that if the one-third vote of all members of the House is not garnered despite this liberal Constitutional concession, those for impeachment must accept the result without rancor or misgivings,” Defensor said in his sponsorship speech of the justice committee report 1551 dismissing the complaint for lack of substance.

“Impeachment, as many would say, is a question of numbers. True. Nonetheless, a more relevant question is ‘how do you achieve the numbers?’ To say that personal and partisan considerations are the bases to achieve the numbers is to simplify the issue beyond recognition.”

Defensor said the complaint failed to prove the grounds of impeachment that would merit a trial for the President. He said the committee has been transparent in determining the sufficiency in form and substance of the complaint.

“Culpable violation of the Constitution as a ground to impeach a President contemplates a wrongful intention or willful disregard of, or scornful remarks against the fundamental law. It must be deliberate and motivated by bad faith. A mere mistake in the proper construction or application is not tantamount to a culpable violation of the Constitution,” Defensor said.

“Other grounds such as bribery, graft and corruption, and other high crimes or betrayal of public trust must be at the level of treason and culpable violation of the Constitution and go beyond the ambit of ordinary crimes,” he said.

Defensor dismissed as evidence a photograph presented during the committee hearing last week by De Venecia. It showed the former Speaker with the First Couple and ZTE officials in the Chinese firm’s headquarters which secured the scuttled $329-million contract to set up National Broadband Network (NBN) to link digitally the country’s bureaucracy.

“The President went to Shenzhen, China, played golf and had lunch with Shenzhen executives. No culpable overt or personal acts were alleged with only a picture to show. It is not a criminal pose or a mug shot and does not portray a criminal act,” Defensor said.

De Venecia cleared the President

Defensor said that in effect De Venecia cleared the President when he said that only former Commission on Elections Chair Benjamin Abalos spoke during the meeting with ZTE executives.

Committee report 1551 was submitted earlier on Tuesday by the justice committee.

The justice committee earlier voted 42-8 to dismiss the complaint as “grossly insufficient” in substance. This could have been reversed had the pro-impeachment lawmakers gathered one-third vote or at least 80 members of the House.

Laguna Rep. Maria Evita Arago, who voted to dismiss the complaint, said the President should be allowed to finish her term with just 17 months to go.

Ms Arroyo was in Hong Kong attending the annual Clinton Global Initiative, a two-day conference on education, climate change and energy. She is to return Wednesday.

President firmly in saddle

Secretary Cerge Remonde, Presidential Management Staff chief, conceded that the dismissal would augur well for the country’s political stability and economy.

“It will show the world that democracy and democratic processes are working in the Philippines. And that the administration is firmly on the saddle, and therefore we can continue the important business of governance,” he said.

Bayan Muna party-list Rep. Teodoro Casiño warned that the decision to dismiss the complaint bode ill for future attempts to hold the President accountable for her actions.

He said the committee’s ruling that the issues could not be tackled because they were already ruled upon in previous impeachment cases was dangerous.

“The problem here is you will forever insulate the PGMA from the charges. Now, even if the complaint is meaty, you will just say [the charges] were already dismissed last year,” Casiño said.

“Doesn’t this interpretation of the rules set a bad precedent?” he added.

Enough is enough

Shortly before the plenary, Bacolod Rep. Monico Puentevella accused De Venecia of being behind the government’s projects with China, including the Northrail project and the NBN-ZTE deal.

“Enough is enough. To many Filipinos, PGMA may not be the best President ever but to blame her for everything is just something I cannot swallow anymore, especially when her trust was exploited by the highest official of this House for seven long years,” Puentevella said.

He said it was De Venecia who should be charged because he helped his son try to acquire the NBN deal. The former Speaker had alleged that Ms Arroyo decided to make the NBN project a government-to-government undertaking after a golf game with officials of China’s ZTE.

As for De Venecia’s allegations that he was bribed P500,000 to kill the sham impeachment complaint last year, Puentevella said it was the former Speaker who masterminded it. He also taunted De Venecia for failing to return the money in a year.

Wrong culprit

“Do not throw stones if you live in a glass house. And to all my friends in the minority, well done for your effort but you chose the wrong culprit and the wrong witness,” Puentevella said.

Saying the integrity of the House is at stake, Gabriela party-list Representatives Liza Maza and Luzviminda Ilagan Tuesday filed a resolution calling for an investigation into alleged bribes given in 2007 and 2008 to kill the impeachment attempts.

Maza pointed out that De Venecia, erstwhile ally of Ms Arroyo, had alleged that Malacañang spent about P100 million to kill the 2007 “sham” complaint to afford her a year of political immunity.

Ilagan said her colleagues could take this investigation as the chance to speak up.

Ilagan and Maza also said the alleged bribery of lawmakers to junk the 2008 complaint, as reported in another newspaper, should be looked into as well.

Earlier, running priest Fr. Robert Reyes visited the House of Representatives to pray that the lawmakers see the truth in the impeachment case against the President and to not fool the people.

“What the people need is not a Congress of numbers but a Congress of truth,” Reyes said in his prayer in Filipino.

The complaint was filed on October 13 by De Venecia’s businessman son and namesake, Joey de Venecia III, Iloilo Vice Governor Rolex Suplico; Leah Navarro of the Black and White Movement; the mother of three victims of enforced disappearance, and human rights victims.

The complainants raised the national broadband network agreement with China’s ZTE Corp., human rights violations, the Northrail project, the Mt. Diwalwal project, fertilizer fund scam, alleged bribery of members of the House, the swine scam under the Rural Credit Guarantee Corporation, and electoral fraud in the 2004 election as among the impeachable offenses committed by Ms Arroyo.

The committee earlier junked two other complaints filed by lawyers Oliver Lozano and Guillermo Sotto, and the motion for intervention filed by a group of bloggers to include the MOA-AD. With a report from TJ Burgonio

Survey Reveals Most Filipinos Reject Cha-Cha

November 26, 2008

Majority of Filipinos continue to reject moves to amend the Constitution or charter change (Cha-cha), according to the results of the latest IBON nationwide survey.

Posted by Bulatlat

Majority of Filipinos continue to reject moves to amend the Constitution or charter change (Cha-cha), according to the results of the latest IBON nationwide survey.

Of the 72.4 percent of respondents who answered that they were aware of the Arroyo administration’s moves to amend or change the 1987 Constitution, 77.4 percent said they were not in favor of such proposals. This is a significant increase from the April 2008 survey round where 68 percent said they were not in favor of Cha-cha, and from the 74 percent in October 2007.

Meanwhile, 18.4 percent said they were in favor of Cha-cha, down from 25.7 percent in April 2008.
The latest IBON survey was conducted nationwide from October 1 to 10 with 1,494 respondents from various sectors. The survey used a multi-stage probability sampling scheme with a margin of error of plus or minus three percent.

Below is the tabulation of results of people’s perception on Charter change.

Do you know that the Arroyo Administration has a proposal to amend or change the 1987 Philippine Constitution?

Are you in favor of the proposal of the current administration to change the constitution?


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(Editorial Cartoon) Joc-Joc Bolante: Janitor

November 23, 2008


He’s real busy cleaning…

(Editorial Cartoon) Joc-joc Bolante: Piece-A-Pie

November 23, 2008



Public school teachers in rural areas lash at GSIS

November 17, 2008

VIRAC, Catanduanes: Public school teachers in far-flung villages here scored the Government Service Insurance System (GSIS) for harassment, cheating and negligence over their perceived accountabilities.

At least five Government Service Insurance System members who have recently retired or in the process of retiring complained that the government insurance agency has been warning them to settle their unpaid salary loans while others said they were not being paid their matured policies after the proceeds due them had been paid to cover unpaid loans, even when they do not have any loans.

Oscar Uchi, a high school teacher at the Tambogñon national High School in a coastal village in Viga town, who had retired recently said the GSIS database indicated that a salary loan of P84, 200 that he made in 2003 has not been paid when records of his pay slips including that from the Department of Education for salary deductions, had appropriately been submitted to the GSIS.

Another GSIS member-teacher from the same school, Gregorio Villaray, lamented that he is retiring by January next year but the GSIS is forcing him to pay his salary loan of P74, 500 when his records showed it was already paid in full.

Maria Salome Tosic and Maria Filipina Liveta, also teachers of the said school claimed they have not obtained loans from the agency but when their policies matured, the agency would not pay them alleging the proceeds due their policies were made to cover for loans they made.

Avelino Tumala, also a teacher said his P60, 000 GSIS insurance policy have already matured but he was informed by the agency its proceed was paid to his unsettled loans. “I don’t have a single unpaid loan,” Tumala said.

The teachers said the mounting problems confronted by public school teachers was never experienced under the old GSIS setup. If there was, these were minor the teachers added.

Salvador Manlangit, a retired agriculture technician at the coastal Gigmoto Municipal office said he was required by the GSIS to fill up forms for his e-card in Virac town in June. Then he was assured the e-card would be received in 15 days. As it were, he has not received until now the e-card that is the instrument for the withdrawal of his monthly pension.

GSIS members here also complained that even educational policies for their children could not be collected when their children reach college. They said some beneficiary-students have already graduated and their GSIS policy still remains uncollected.

The teachers appealed to the government and the GSIS to save teachers from this kind of mess saying they are retiring poor only to become victims of injustices from the state-owned firm. This is double jeopardy, the teachers said adding that their counterpart in the private sector never encountered similar injustices from the Social Security System.
— Manny T. Ugalde

“No P14M cash for fertilizer”

November 17, 2008

If figures based on documents of the Department of Budget and Management (DBM) and the Commission on Audit (COA) are accurate, the province received P14 million in fertilizer funds at the height of the 2004 elections.

However, Gov. Erico Aumentado, Representatives Edgar Chatto (First District), Roberto Cajes (Second

District) and former Third District congressman Eladio Jala all denied they actually received the fertilizer allocations in cash.Aumentado said he did not receive a single centavo out of the P5 million reportedly given to the provincial government as reflected in the DBM records of fund releases.

Chatto, Cajes and Jala also explained that they did not personally receive the farm inputs or any fund for the purpose.

The DBM and COA documents revealed the three solons as recipients of P3 million each.

The two incumbent solons and Jala, who is now assistant secretary of the Department of Transportation and Communications (DOTC), all welcomed the Senate probe into the P728 million fertilizer subsidy that were allegedly diverted to bankroll the 2004 campaign of Arroyo and administration candidates.

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During Friday’s “The Governor Reports”, Aumentado said that he was only informed that fertilizers were delivered to the Provincial Agriculture Office. The farm inputs were purportedly purchased by the regional office of the Department of Agriculture (DA).

Provincial Agriculturist Liza Quirog, in a separate interview, confirmed that no less than 40 towns were beneficiaries of the fertilizers distributed by the DA but could not give the amount of the farm inputs.

Quirog recalled having received and distributed the liquid (foliar) fertilizers to the towns sometime in July 2004.

The delivery of the fertilizers was done all at the same time with all the boxes brought to the provincial DA office.

The governor assigned Assistant Provincial Agriculturist Bebot Pinat to handle the distribution of the fertilizers to the municipal agriculture officers in the towns.


The three solons said they all want to clear their names and welcomes the ongoing Senate inquiry with the testimony of former agriculture undersecretary Jocelyn “Jocjoc” Bolante.

Rep. Chatto disclosed that it was then DA Regional Director Eduardo Lecciones who facilitated the fertilizer support program funneled directly to the local government units.

In his district, Chatto said it was Balilihan town that became the recipient since the interior town is known for enhancing agricultural productivity.

Vice Mayor Dominisio Chatto, who was then town mayor, was the one who implemented and audited in accordance with the procurement rules and procedures with full documentation.

Full liquidation of fund disbursements was done with the DA regional office, according to Balilihan municipal treasurer Lina Banac.

For his part, Rep. Cajes said he was asked by the regional DA to identify two towns that need fertilizers the most.

Cajes said he recommended San Isidro and Dagohoy towns. After recommending the towns, he never heard again what happened to the fertilizer support.

Then Dagohoy Mayor Sofronio Apat and then San Isidro Mayor Boy Samoya, both were not able to give him updates on the distribution of the fertilizers as he was already in the thick of the campaign for the 2004 elections.

Meanwhile, ASec. Jala said that when asked by Regional Director Eduardo Lecciones what town he wanted to receive fertilizers, he recommended the town of Bilar being one of the top rice producing towns in the province.

He was able to confirm from Bilar Mayor Fanuel Cadelina that organic fertilizers, granules, and not liquid, were distributed in his town.

Cajes, who used to chair the House committee on ethics recalled that Task Force Abuno, created by the Office of the Ombudsman, visited the town when the fertilizer scam erupted in the media.

In fact, he learned that a team from COA visited the town. He was informed by Mayor Cadelina that the team found no irregularity on the distribution of the fertilizers.

“Even before, I already favored the investigation of the fertilizer fund because my district will be affected by this mess when in fact it is really an agricultural district unlike Makati and Quezon City that were also listed to be recipients of farm inputs,” Cajes said.

“I’m sure there are available official records that would help in the investigations,” he added.


According to a report of the Ombudsman, 53 governors, 105 congressmen and 23 municipal and city mayors received different amounts out of the fertilizer fund.

Bagong Alyansang Makabayan (Bayan) Bohol chair John Ruiz III said while not all solons and local officials got the farm subsidy, most of those included in the list of recipients were identified either as partymates or pro-Arroyo.

According to Ruiz, the three Bohol solons and the governor are just as responsible as the Arroyo administration on the fertilizer scam.

“Being the privileged few of supposed “trusted” government officials to implement such multi-million national program, it entails a sense of responsibility of the individual “public servants” to ensure that his/her poor farmer constituents would not be short change.”

Bayan made this statement as Ruiz claims that farmers under the Hugpong sa mga Mag-uumang Bol-anon (Humabol) “never heard of the actual distribution process of the fertilizers.”

In a survey conducted over dyRD, 95-percent of respondents do not believe that Pres. Arroyo is not involved in the supposed P728 million anomaly. (TheBoholChronicle)

Bishops hit for encouraging revolt

November 16, 2008

By Jeannette Andrade
Philippine Daily Inquirer
First Posted 19:11:00 11/16/2008

MANILA — Some 50 youngsters, clad in black shirts, marched from the Manila Cathedral to the Catholic Bishops’ Conference of the Philippines’ office in Intramuros, Manila on Sunday, to denounce what they considered as calls by some bishops for a revolt against the Arroyo government.

In black shirts and veils, the protesters, who said they belonged to the Coalition against Destabilization, portrayed CBCP president and Jaro Archbishop Angel Lagdameo, Lingayan-Dagupan Archbishop Oscar Cruz and Bishops Joel Baylon, Socrates Villegas and Jose Sorra as devils.

They likened the prelates to the four horsemen of the apocalypse for allegedly encouraging a bloody revolt against the government.

The young protesters dared the bishops to leave the safe confines of the pulpit before meddling in the affairs of government and calling for a revolt.

Earlier, the bishops issued a joint statement calling on the people to prepare for the setting up of a new government now, saying the Arroyo government was hopelessly corrupt.


My Take:

Historically, the church has launched some witchhunt campaign against individuals who profess progressive ideas.  Some of them victims were literally burned to ashes.

Now, the Philippine Catholic Church leaders are the ones under attack.  And the perpetrators are using youngsters now to advnce their devilish act.

It’s sad to note however that corrupt church leaders and lay members is too many for the five good bishops.  They are now being isolated by the modern Fray Botods of the Philippines.

November 15, 2008


Dela Paz takes blame for Moscow mess

November 15, 2008

PNP exec admits irregularity in release of funds

By Abigail Kwok, Maila Ager
First Posted 11:27:00 11/15/2008

MANILA, Philippines — (UPDATE 2) Retired police comptroller Eliseo Dela Paz admitted Saturday sole responsibility for the alleged unauthorized release of the P6.9 million from the Philippine National Police (PNP) intelligence fund.

But Senator Miriam Defensor-Santiago refused to believe Dela Paz’s claim, which she called “heroic.”

“Your own office, Mr. Dela Paz, is saying that you are guilty of violating applicable laws when you ordered, and verbally at that, the release of P7 million. Do you agree or not?” Santiago said.

“I agree your honor,” Dela Paz said.

Santiago was citing the results of the PNP initial investigation into the Moscow incident, which stated that “The only basis for the release of P7 million from the confidential intelligence fund from the PNP was the verbal instruction of Police Director Dela Paz. Therefore it could not be denied that irregularity attended the use of government funds.”

“Do you agree that your superior official, such as the PNP chief [Director General Jesus Verzosa] and the DILG [Department of Interior and Local Government] secretary [Ronaldo Puno] should be absolved, and instead, all blame and guilt should be pinned on you? Do you agree with this situation? Because in effect that is the consequence of this statement in the PNP report” Santiago asked.

“The release of the P10 million for the travel expenses for the supposedly contingency fund is based on my instructions,” Dela Paz said.

“That’s very heroic. You are assuming all guilt. But I have to tell you as a lawyer and a formal trial judge that you are facing a regular sentence of 20 years or more than that. Are you ready to do that? Go to jail 20 years, leave your wife your child, your vision impaired child, just so other people can be free? Because I refuse to believe, Mr. Dela Paz, that you are the sole perpetrator of the crime or offenses stated in these two reports. I believe you are part of a bigger conspiracy and that…you are willing to assume responsibility for others. That seems for me to be the most humanitarian view of the situation,” Santiago said.

Despite of this, Dela Paz still insisted that the release of the P6.9 million was “on my own behalf.”

To which Santiago answered, “Let me just say this for the record as chair of this committee [Committee on Foreign Relations]…very often we find cases where a middle-level official tries to cover up for his superiors. That is the problem of corruption in this country and that is the reason why the culture of corruption is endemic and seems to be permanent in our country because only the little fish go to jail and the big fish never, in fact they continue and prosper.”

Later on in the hearing, Superintendent Samuel Rodriguez, disbursing officer for directorate for intelligence, admitted that it was “unusual” that the retired comptroller requested around P10 million from the PNP intelligence funds to be used for the PNP delegation to the Interpol conference.

Rodriguez told Senators that he was told by Senior Superintendent Tomas Rentoy, chief of the budget division of the directorate for comptrollership, to “reserve” P10 million for the use of the PNP delegation.

But Rodriguez said he was unaware of the 105,000 euros carried by Dela Paz when he and his wife were accosted by Russian customs officials.

“With regards to the 105,000 euros, sir, I do not have any knowledge sir. But I was only told to reserve P10 million for the delegation, which I immediately informed my immediate officer, [Chief Superintendent Orlando Pestaño, chief of the PNP finance services],” Rodriguez said.

“Initially sir, with the request of directorate for comptrollership, through Rentoy, told me to have the money, I immediately informed my immediate officer Pestaño that Rentoy is requesting for the P10 million fund to be sourced from the intelligence and confidential fund,” he added.

Admitting that there was something “unusual” with the request, Rodriguez said he wrote a letter to both Pestaño and Dela Paz.

“Before I complied sir, I immediately told my superior [Pestaño] that the amount of P10 million was being requested by the directorate for comptrollership. I made a notification addressed to my immediate officer that there will be a violation of some auditing rules so I made it a point to notify him through a memo and then I also made a memo and I submitted to Rentoy informing Dela Paz that there’s a violation with regards to release of funds from the intelligence fund,” Rodriguez said.

A copy of the memo, read by Senator Aquilino Pimentel Jr., cited Presidential Decree 1445 (Government Auditing Code of the Philippines) Section 106, which read, “No accountable officer shall be relieved from liability by reason of his having acted under the direction of a superior officer in paying out, applying, or disposing of the funds or property with which he is chargeable, unless prior to that act, he notified the superior officer in writing of the illegality of the payment, application, or disposition. The officer directing any illegal payment or disposition of the funds or property shall be primarily liable for the loss, while the accountable officer who fails to serve the required notice shall be secondarily liable.”

The memo also said that the money requested by Dela Paz through Rentoy was supposedly allocated for the directorate for intelligence to “support their approved projects in carrying out their intelligence/confidential activities for the month of September.”

Answering questions of Senator Rodolfo Biazon, Dela Paz said he requested and approved the release of about P10 million in contingent fund for the PNP delegates to the 77th Interpol general assembly held in Moscow last month and should therefore be held responsible for it.

“There’s no scapegoat dito (here), our honor,” he said, “May pangangailangan po yung magta-travel so being the comptroller kelangang hanapan ng solution yung pangangailangan na yan. Dun na nakita na may pondo sa intelligence fund (There’s a need for those who are traveling so being the comptroller I had to find a solution for that need. That’s when the intelligence fund was noticed),” he said.

He said the money was used for plane tickets, hotels, and other expenses.

But Biazon noted that the money was seized by airport authorities in Moscow while the delegation was returning to the country.

The senator could not understand why the money was still intact when it was supposed to have been used by the delegates.

Sometime during the hearing, Dela Paz repeatedly invoked his right against incrimination when asked why he did not declare the euros he was carrying.

Dela Paz first invoked this right when asked by Senator Loren Legarda if he was aware of a Bangko Sentral ng Pilipinas circular stating that a person carrying more than $10,000 should declare the money when going in and out of the country.

“Your honor, I would like to invoke my privilege against self-incrimination,” he told senators investigating the issue.

“My question, Mr. Dela Paz, is very simple whether you actually knew that v there was a BSP circular or whether you just refused to comply. Napaka simple po. I’m not here to try to pin you down. I’m here simply to seek out the truth,” Legarda said.

When pressed, the retired officer, after consulting his lawyers, corrected himself and said he was aware of the circular.

“If I may correct myself your honor, na alam ko yung (I know about the) more than 10,000,” Dela Paz said.

But he again invoked n his right b against self-incrimination when the senator asked why he did not declare the money he was carrying in Moscow.

“Your honor, as I said earlier, I would like to invoke my privilege (against) self-incrimination as advised by my counsel,” he said.

“Your question, if answered, will incriminate me,” he said, pointing out that the subject matter was already part of the Ombudsman’s own investigation on the same issue.

(Running Account) Senate Investigation on Euro Generals

November 15, 2008

Senator Roxas: Ang certification ay resulta na lang ng “pakiusapan”.

Senator Gordon: Ang certification ay lumabas dahil nahuli na ng Russia ang pera.  Parang nililinis nyo lang ang rekord.

Defensor-Santiago: Nakakaduda rin ang pagtingi-tingi ni Tyrone Ng Arejola ng pagbili ng “euro”.  Dahil sa regulasyon ng Central Bank na pag umabot sa maximum na $10,000 ang transaksyon sa Money Changer ay kailangan itong ireport sa Central Bank.

Versoza asked for Executive session dahil ipapaliwanag daw niya na ang pera ay pambili daw pala ng military equipment.

Pero may agreement tayo with US na makakabili lang tayo ng military equipment kung hindi manggagalaing ang mga gamit sa US! (She side-commented na sbra pala ang pagkakatali natin sa US)

Bottom Question: Is it really a contingency fund o pambili ng militarye quipments?

dela Paz: Part of it is emergency fund.  And part of it is possibly pambili ng prototype arms.

Defensor-Santiago: O e bakit ito magiging emerency fund samantalang kinuha pala ito sa Intelligence Fund?

Biazon to PNP: Kung galing sa intel ang fund, bakit walang intel officer ang delegasyon?

(Editorial Cartoon) Ceasefire

November 14, 2008


FERTILIZER FUND PROBE Bolante clears Arroyo

November 13, 2008

Fund disbursement ‘not a scam’

By Maila Ager
First Posted 05:59:00 11/13/2008

MANILA, Philippines — (UPDATE 14) Former agriculture undersecretary Jocelyn “Joc-Joc” Bolante has cleared President Gloria Macapagal-Arroyo of any involvement in the P728 million fertilizer fund scam.

At the same time, Bolante denied the disbursement of the money, which he is accused of diverting to Arroyo’s 2004 campaign kitty, was a scam.

Bolante was grilled for almost eight hours during the hearing, which ended a little past 7 p.m. and showed little signs of flagging, prompting Senator Panfilo Lacson to comment that the former agriculture official “is not sick.”

“As far as I know, the P728-million farm input and implement program funding of the Department of Agriculture was not a scam,” but a legal, valid and proper use of government money, Bolante said in response to questioning from Senator Loren Legarda.

“Your Honor, President Arroyo was not involved in this particular project of the Department of Agriculture. The implementation of the P728 million farm input-farm implement program was approved by the DBM [Department of Budget and Management] without the approval of President Arroyo,” Bolante said in response to a question by Senator Manuel “Mar” Roxas at the start of the Senate investigation into the scandal Thursday.

But Roxas countered that Bolante’s answer was hard to believe.

“That’s hard to believe, Mr. Bolante because we know the President as a micromanager, she dips her hands into everything in government. For you to say that she did not approve this is hard to believe,” Roxas said in Filipino.

Pressed by Senator Jose “Jinggoy” Estrada, Bolante reiterated that the President had nothing to do with the release of the fertilizer fund.

“Wala po [Nothing],” he said. “We did not have to [get the President’s approval because it’s a regular activity of the Department of Agriculture.”

“It’s part of the budget of the Department of Agriculture. The source of the fund is the regular budget of the Department of Agriculture,” he added.

“It was legal, valid and proper funding,” he told Legarda.

Bolante said there are records to prove this, including a memorandum of agreement indicating the recipients of the money and how it was used.

He also cited a report to the Commission on Audit that 91 percent of the fund had been liquidated.

Bolante said the project had been approved by the DA and did not require the approval of the President.

He also admitted that it was his office that prepared the list of project proponents of the fertilizer fund.

“The list was prepared by my office, tasked by the DA to put together all pending request from different units,” he said.

At the same time, Bolante described as “very unfair” and “railroaded” the Senate’s move to arrest him.

“In all honesty, I really feel that the decision to cite me for contempt and the consequent warrant of arrest was very unfair and railroaded,” he said.

He said the Senate, during the 13th Congress, had indicted him and branded him as the “architect” of the fertilizer fund scam.

Bolante said, “No,” when asked by Estrada whether the money was meant for administration candidates in the 2004 elections.

He said the records of the DA would show that most of these projects were implemented in June and July 2004 or long after the election.

Before this, Bolante has said that he has nothing to hide and apologized to the Senate for “whatever inconvenience” his absence has caused in the course of its investigation into the multimillion-peso fertilizer fund scam.

“I would like to apologize for whatever inconveniences my non-appearance to this august body has caused… I assure you, it’s not out of respect [to the Senate as a whole]” … nor I have something to hide,” said Bolante.

Bolante faced the upper chamber for the first time since he was implicated in the controversy in which he has been tagged as the alleged mastermind.

“It’s not our duty here to prove your guilt but to find the truth,” said Senator Alan Peter Cayetano, chairman of the blue ribbon committee that is presiding over the case.

At the same time, Cayetano said that while Bolante was “fit” to testify, the Senate medical doctor informed him that the former government official was suffering from chronic ulcer and therefore, should be allowed periodic snacks.

Bolante arrived at the Senate Thursday more than an hour before the hearing that started at 9:51 a.m.

Students from the Pasay North High School carried white and red roses for the senators as they sat at the gallery of the session hall to listen to the hearing.

Bolante has been accused of being the brains behind the alleged transfer of P728 million in fertilizer funds to the campaign kitty of President Gloria Macapagal-Arroyo for the 2004 election.

He has not issued a statement since his arrival from the United States where he fled shortly after the expose and tried but failed to seek political asylum.

Bolante arrived in the country last October 27 but before an arrest order could be served by the Senate was brought immediately to the St. Luke’s Medical Center in Quezon City where he stayed for more than two weeks until this Thursday.

Editrial Cartoon: (Bolante Case) Guarding Jocjoc

November 12, 2008