August 2013

The Complex Story of Janet Napoles

The allegations of the “rags to riches” of Janet Nqpoles filled the media in recent weeks. The story Rappler is on, for example is her decades long involvement with scam after scam. Rappler also talked about “Janet Napoles’ tragic past” It seemed from the Rappler work that the rise of Napoles involved series of scam after scam after scam with the PDAF case just the latest and perhaps greatest of the crimes allegedly committed. It culminated with the arrest warrant filed against Napoles and her brother, Reynald Lim. The arrest warrant is for the illegal detention of whistleblower Benhur Luy. And that alleged crime led to Napoles being implicated in a series of pork barrel scam of fake Non-governmental organizations, and the signatures of government officials allegedly also being faked. On a side note, Janet Napoles in an interview with the Philippine Daily Inquirer says Benhur has another boss higher than her. Now, when the news broke out people have been screaming left and right that this is yet another example of how idiotic the administration is. Napoles is being charged with illegal detention— not about her alleged involvedment with the Priority Development Assistance Fund.

It would seem that whistleblower Benhur Luy deserves justice, does he not? He came out because Napoles allegedly detained him. That friction brought about him running and fighting back. If people believe the Napoles scam, then one ought to believe that Luy was a victim. How can you not expect justice to be served for that person?

There is much to go on. The Bureau of Internal Revenue’s involvement with the case is a welcome one. The Department of Justice released a list of 30 vehicles owned by JNL Corporation, with a request to call the NBI hotline if they see any. Rappler on the other hand published documents that they got from the Securities and Exchanged Commission on how much Napoles’ business dealings made. This after, Napoles argued, when she took to the floor over at the Philippine Daily Inquirer that her businesses are legitimate and are earning for her and her family. It also comes after the disclosure of mulit-million dollar properties owned by Napoles’ daughter at posh Ritz-Carlton Residences in Los Angeles, and an estimated 400 million pesos worth of properties in the United States. That incident, Luis Teodoro aptly described as “Napoles loses it.”

Another angle being looked into is the allegation of that Janet Napoles tricked officials or falsified documents to get government funds. If Napoles stole government funds, or tricked officials then her wealth would definitely be astronomical. Did she pay taxes? One article from Interaksyon was on the BiR looking into this from that perspective. Could the government “get her” by proving tax evasion? This strategy is similar to the one employed by the United States Government against mobster Al Capone. They didnt get him for other crimes, they got him for tax evasion.

The Napoles story of course is even more complex. The involvement of politicians— Rappler implies that at least one Senator or his kin is involved. So the Napoles story doesn’t stop at the monies she claim was stolen from the public coffers.

The Janet Napoles story is a complex one. It means unravelling years of the Napoles life and putting the pieces together. It irks some people for example that the first charge against Mrs. Napoles and her brother was illegal detention. Far from the crimes she has allegedly perpetuated. They forget that a crime was claim to have been committed against a Benhur Luy and that deserves its day in court. They also forget that this perhaps, is the easiest of the cases. And it does make Napoles a fugitive while the government builds on its case with respect to the other asserted crimes. They are not building a case to write on media, they are building a case for reasonable doubt. After all, doesn’t Janet Napoles (while a fugitive at the time of this writing) remain innocent until proven otherwise has the right to face the law to clear her name. The second thing the warrant of arrest does is to send a message to the public that the weeks of silence from the government is paying out. That they are doing something with respect to the Napoles scam. At the end of the day, how this plays out in the weeks to come brings a strong message that Daang Matuwid is on the right track, or it is not.

“Beg your indulgence”

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How the Catholic Church eliminated its own version of pork barrel and how the Philippines can too

Back in the Middle Ages, the Catholic Church was undergoing its developmental phase. It was not the huge global entity that it has become today. It was heavily dependent on the patronage of the landed aristocracy. As a result, the Pope did not have much clout and could not exert central authority to appoint priests and bishops to the parishes of feudal lords who would place their relatives in these prestigious positions.

Faced with limited means to address the missionary role of the Church, priests decided to engage in the practice of selling indulgence, “the remission of temporal punishment due to sin, the guilt of which has been forgiven.” Although the sale of forgiveness, which is what this amounted to was not really sanctioned by the church, it was nevertheless widely practised out of necessity. The funds raised went to pay for monasteries, schools and even Crusades to recover the Holy Land.

Despite the noble causes it supported, the practice undermined the legitimacy of church teachings. The abuse of indulgence eventually contributed to the Protestant Reformation which weakened the Church by splitting it in two. If such an organisation devoted to otherworldly spiritual endeavours can fall for such malpractice, what more a government not meant to be run by angels, solely devoted to temporal affairs?

The Philippine state is in a position much like what the early Roman church faced. You have the president of the republic resorting to the bully pulpit of his office, engaging in mini temper tantrums, to complain before the nation that he cannot even get lowly bureaucrats to comply with his orders to do their job and follow the rules set out by the law of the land. These bureaucrats are purportedly protected by wealthy elites who placed them there.

For the same reason, the Priority Development Assistance Funds (PDAF) or pork barrel, though it may go to some noble programs, actually corrodes and weakens our democracy by perpetuating many corrupt politicians in power. This limits inclusiveness in our politics as dominant clans have ruled many places since the time of the late-Spanish or early-American colonial period. Their exclusive control over most jurisdictions has been directly correlated with the severity of poverty across the nation.

The dominance of aristocratic political dynasties, undisturbed by the upheavals of the Pacific war or Marcos’s New Society, is actually facilitated by taxpayer’s money through the institution of pork barrel. These elites have also weakened the state by appointing friends and allies into strategic posts within key agencies and business units such as the Bureau of Customs which provide a revenue stream not for the government, but for the “padrinos” who have cornered it through such appointments.

When appointees are recommended by power brokers acting as “padrinos” and subsequently underperform, we know it is for a reason. Their appointments undermine the very rules that they as officers are meant to uphold. It is clear that the rules within these agencies are not set by the central government, but by power brokers who benefit from illegal activities. This weakens the very integrity of our state, as in the case of the customs agency since it erodes our ability to enforce our borders and puts this power in the hands of crime bosses.

According to Francis Fukuyama in the Origins of Political Order, the Church was able to gain financial independence from its patrons when it undermined the very notion of kinship and family. How did it do that? By refusing to sanction cross-cousin marriages, and recognising the rights of women to own and bequeath property. Previously, childless widows married back into the clan of their deceased spouses which allowed his land and other property to revert back to his family.

By changing this custom, the church encouraged childless widows and spinsters to convey their inheritance to itself. The church profited immensely from this. By undermining the family, the Church was able to wean itself off of the corrupt practice of selling indulgences to fund its missionary projects.

In the same way, the Philippine government needs to wean itself off the system of patronage. Banning PDAF won’t solve the problem, just as banning the sale of indulgences did not prevent corruption from continuing in some shape or form. It takes more than idealistic moral crusading to get rid of it. Apart from eliminating pork, state resources must be used to shore up political reforms that would make elections more inclusive and contestable.

The irony is that the large sum of money devoted to pork demonstrates that the state now has the capacity to directly finance political institutions and decouple our democracy from the “anarchy of families” as Alfred McCoy put it.

If we promoted meritocratic institutions within our political system through state funded electoral campaigns, political parties and better pay for elected officials, we would be able to remove the perverse incentives currently at play that motivate the abuse of PDAF and other appointive and recommendatory powers.

Let’s face it, political dynasties have begged the indulgence of their constituents (we the people) for far too long and gotten away with “patrimonial plunder” (hat tip: Paul Hutchcroft) – which is using the very money they have stolen from the public purse to pander to the needs of the very same people they are keeping impoverished by that act.

Big sticks, chopsticks, and a cake

In World War II Franklin Roosevelt, Winston Churchill, and Josef Stalin forged an alliance to defeat Adolf Hitler. It was a reality sandwich they had to eat – as distasteful to the capitalist leaders as it was to the communist leader – because there was nothing else on the table.

Defense Secretary Voltaire Gazmin served a similar sandwich last week. Thank God it was nowhere near as foul-tasting as the sandwich that those three WWII musketeers ate.

Gazmin said, “At this point in time, we can’t stand alone. We need an ally. If we do not do this, we will be belittled by bigger forces. That’s what’s happening now. China is already there, they are sitting on our territory. They are not leaving. What will we do? Will we just wait until they are already by our doorsteps? Right now, they are already at our garage…While we are filing cases and at the same time building up our capability to address our security concerns, it’s important that we collaborate with other countries friendly and sympathetic to us.”

That was a warning to China’s leadership, reminding them that although we may not carry a big stick, we have friends who do and are just dying for an excuse to bash Chinese heads. It’s about time, isn’t it?

Unfortunately, some Filipinos with a weakness for chopsticks believe that the administration’s policy of “speak softly but ride with friends who carry big sticks” is unpatriotic and should be opposed at every turn.

The Communist Party of the Philippines claimed we are “provoking China to be more aggressive in its defense of its territories and push beyond its sea borders”. So China’s behavior is our fault

Bayan Muna’s Renato Reyes tried to scare us, “Is the Philippines really prepared to face a confrontation of that scale? Or will be be dragged into a war between two competing superpowers?” We’re shaking in our boots, Sherlock.

Party-lister Neri Colmenares went jingo-ballistic, “While we should strongly assert our territory against China we should not allow a bully to replace another bully. It also serves the imperialist agenda of the US making its pivot to Asia to reinforce its hegemony and promote the US war industry. We denounce President Benigno Aquino III’s subservience, undermining of our sovereignty and the peaceful resolution of the dispute.The U.S. troops should be pulled out and we will file a resolution to junk the Visiting Forces Agreement.”

He also used Gazmin’s statement to distract us, “This is an insult to our veterans and comfort women who suffered under the Japanese during World War II.” As if scars deserved more attention than the thousand cuts China is inflicting on us even as he speaks.

Gabriela’s Luzviminda Ilagan, thinking she was among pre-schoolers, played show and tell, “What’s in a name? Access arrangements, military exercises or routine port calls – they all mean the same thing, translating into unhampered use of facilities and structures in Philippine territory for foreign military use.”

KMP’s Antonio Flores turned constitutionalist and warned, “The President is courting an impeachment complaint for culpable violation of the Constitution and betrayal of public trust for trampling our sovereignty and rabid puppetry to the US.” Seriously, dude, a puppet capable of betrayal and rabidity? I hate to be the guy to break the news to you but Pinnochio was not a real person.

However in fairness to the CPP-NDF there is some bite behind their bark. Yes, there are potential downsides for the weakest member in a partnership where each party has to mind its selfish national interest even in the face of a common threat. Yes, the partnership with Japan and the US could leave us with the short stick.

But we are not going into the partnership with our eyes closed. We know the greater risk is not to do anything, specially in the face of threats from a country that lives by Erap’s code, “A hungry stomach knows no law.”

China will eat us up if we remain defenseless and alone. We need backup for now. Backup that carries bigger sticks than our adversary. That is why Sec. Gazmin enunciated the policy of partnering with bigsticks who also see China as a threat to their national interest.

An alliance with Japan and the US against China may not be the ideal policy but it is the only one on the table. The CPP-NDF has not presented an alternate plan. All it has done so far is to tell us what we must not do and who we must not offend.

I suspect it is because a nationalistic CPP-NDF security plan will simply mirror the administration’s “subservient” plan. Once in power they will find that the Philippines is still the same defenseless little country at the mercy of big powers. It will still be unable to defend itself by itself.

Consequently, all that the CPP-NDF will be able to do is rearrange seating arrangements. Japan and the US will become the threat and the “friendly and sympathetic” country will be China. Sorry but musical chairs is a parlor game, it is not a solution to our national security deficiencies.

I favor a plan that addresses the cause rather than the symptoms of a problem. Let’s stop the flag-waving for a minute and look for the root cause of the territorial disputes. It’s money. There is a lot of money beneath that sea, enough for all of us to live comfortably.

So let’s walk away from the “over our dead bodies” mentality. That insanity only leads to a lot of dead bodies and no money. Let’s all sit-down and agree on an equal-sharing arrangement. Because a slice of the cake is better than nothing at all.

Mahimbing na natutulog sa pancitan o kasali sa pagnanakaw?

It seems the strategy of those involved in the PDAF (Priority Development Assistance Fund) scam is to finger-point until our heads spin. I guess we have to break some fingers to get to the truth.

The annual pork barrel for Congress is in the billions, P200-M each for 24 senators and P70-M each for 288 congressmen.

What does it take to get that money flowing?

1. The lawmaker informs the Department of Budget and Management (DBM) that he wants to avail himself of his pork allotment. He identifies “the beneficiaries and submits nominations for the DBM’s approval.”*

2. The DBM, in turn, “vets the items, approves, releases the money to the implementing agency.”*

3. The implementing agency then vets the NGOs (non-governmental organizations) that seek funding for the projects that the lawmaker identified.*

4. Finally, NGOs submit papers to the implementing agency and the lawmakers to show the projects were implemented.*

Sa madaling salita, ang mga mambabatas ang nagbubukas ng gripo at ang mismong mga mambabatas din ang pumipili kung sino ang babalde sa pinaagos nilang PDAF.

Wala sanang problema sa kalakaran na ganyan kung umaabot ang lahat ng goods and services na pinopondohan ng PDAF sa mga lehitimong benepisyario. Pero hindi ganun ang nangyayari.

Marami dun sa mga lehitimong benepisiaryo ay walang natatanggap o, kung meron man, iyon ay kulang-kulang. Kaya naman marami sa kanila ay galit at nagtatanong, “bakit wala o ganito lang ang laman ng aming balde, Ginoong Mambabatas? Sino ang bumalde nung PDAF na para sa amin?”

Nakalulungkot at nakagagalit ang naging paliwanag ng mga mambabatas. They cried foul and postured like they were victims of politics or unscrupulous NGOs and bureaucrats.

They said, it’s a demolition job meant to destroy my political career”…”why investigate only the opposition?”… “I only met Napoles through a common friend”… “I never met Napoles”… “I only allocate my pork, it’s the COA (Commission on Audit) and the implementing agency’s job to scrutinize how my PDAF was spent”… “my staff takes care of everything, I trust them”… at kung ano-kano pa. At kung sino-sino pa ang tinuturo.

Compare those replies with the statement of Rep. Sid Ungab, one of the lawmakers named in the scam. It was alleged that he coursed his PDAF through an NGO identified with the Napoles group.

He said,

“My office always ensures that all the projects we undertake are fully implemented and executed, as in this case, we were in close coordination with the DA (Department of Agriculture) when each phase of the project [such as delivery of materials; inspection of the said materials and distribution] was being executed. The appropriation was fully liquidated, documented by the DA as the implementing agency, and the project was fully implemented and delivered to its intended and actual beneficiaries. I personally attended the distribution of the farming implements and materials to the actual beneficiaries so I am shocked and quite upset by this news.”

Ungab’s statement is unequivocal. Straight to the point. No side-stepping. No excuses. No finger-pointing. It takes balls to do that because it is easy enough to check if he is telling the truth. His beneficiaries were identified by the whistleblower so anybody can go and ask them if they got the goods and services he claims they got. I hope, for his sake, that he is telling the truth.

But my point is, bakit walang mambabatas ang nakasagot ng diretso tulad ni Sid Ungab? Nagpaikot-ikot at nag-tuturo sila; natakot ba sila na baka meron mag-check kung nagsasabi sila ng katotohanan?

Marami pang tanong ang bumabagabag sa aking isip nung humiga ako para magpahinga kaya siguro napanaginipan ko na na-interview ko ang isa sa mga senador na pinaghihinalaang nagbulsa ng PDAF.

Sa aking panaginip tinanong ko siya ng diretsahan.

“Paano nangyari na ninakaw ang milyun-milyong piso na ipinagkatiwala sa iyo ng taong bayan, nakatulog ka ba sa pancitan o kasali ka sa pagnanakaw?”

Parang nabigla siya sa tanong ko kasi ang sagot niya ay, “Who me?”

Sumagot naman ako ng “Yes you, Your Horror” bago ko ipinagpatuloy ang pagdiin sa kanya.

“Meron bang maglalakas loob na mag-scam ng PDAF kung kayong mga mambabatas ay marangal, tapat sa katungkulan, at mahigpit magbantay sa pag-gamit ng PDAF?”

Parang napikon siya sa sinabi ko. Sinumbatan niya ako.

“Are you calling me a thief and my colleagues thieves?”

Lalo ko pa siyang diniin.

“Bossing, walang pork barrel scam kung walang mambabatas na katulad mo.”

Tuluyan na siyang nagalit.

“That’s an insult! That’s not fair! Why single me out, why put the blame solely on us legislators, aren’t the NGOs, the bureaucrats, and the local government officials also guilty?”

“Opo, Ginoong Senador, guilting-guilty rin sila, kaya kailangan bunutin natin mula sa ugat ang korapsyon.”

Mukhang napahinahon siya sa sinabi ko.

“I agree,” sagot niya, “We must pull out the roots, that’s the only way to solve the problem. I will call for a congressional hearing so we can identify the roots.”

Napailing ako.

“Bossing, bakit ka pa magpapa-congressional hearing? Manalaming ka na lang, makikita mo na ‘yung ugat na kailangan bunutin.”

*Information on the PDAF process came from a report.