Bong Revilla

PDAF, BUB, August 26 and 2016

President Benigno S. Aquino III calls for the abolition of the Priority Development Assistance Fund at the President’s Hall of Malacanang Palace on Friday, (August 23). The announcement was made in the aftermath of the alleged Php10B pork barrel scam. (Photo by Gil Nartea/ Lauro Montellano Jr./ Malacanang Photo Bureau)

Just as he did with the RH Bill, the president came late to the party and led from behind in the scandal  involving the Priority Development Assistance Fund (PDAF) of Congress by belatedly bowing to public calls for its abolition.  Although as Winnie Monsod noted he did not indicate this meant the abolition of all forms of pork barrel. With nationwide protests slated for August 26, his administration could not afford to be seen on the wrong side of history, not after mouthing anti-corruption slogans like Daang Matuwid and Kung Walang Kurap, Walang Mahirap in the 2010 and 2013 elections.

This is perhaps his only out, after a former treasury chief showed how large his own discretionary funds are, dwarfing that of Congress. His initial tone deaf and dismissive response to public calls for PDAF abolition threatened to turn it into his “Flor Contemplacion moment”. This is a reference to the hanging of a domestic helper in Singapore by that name accused and convicted of killing her ward. The Ramos government’s lethargic response at the time to seek a commutation of her death sentence and vigorously raise a diplomatic protest with the Singaporean government was judged inadequate and subsequently led to virulent protests.

What the angry twittering masses behind the August 26 rally fail to grasp, however, and this I believe should be credited to the president, is that the scale of congressional pork barrel would not have even been known if he had not taken the decision to make it more transparent in the budget. Secondly, the Commission on Audit special report conducted under the tearful eye of Ms Grace Pullido-Tan, its chair, would not have even been possible without President Aquino’s leadership.

The problem was the Palace’s foot-dragging made it seem part of the problem rather than the solution. At first it responded to the concerns of the masses over the alleged Php 10 billion scam involving Janet Napoles’s syndicate of NGOs by window dressing, making the DSWD the accrediting agency for NGOs receiving PDAF allocations. This was wrong since as the COA report revealed, releasing public funds to NGOs without an appropriations law or ordinance violates the government’s own procurement policy.

The COA report, incomplete as it was gave an indication as to the scale and scope of corruption and abuse. About 75 per cent of audited PDAF went to NGOs. Thus, the 192 members of the 14th Congress that were found to have engaged in the practice are in fact liable. The DOJ does not even have to prove that the funds were diverted back to them.

The senators and congressmen who want to wash their hands clean by either saying the money was liquidated appropriately or that monitoring of funds is the sole function of the executive branch don’t have a leg to stand on. The only defence they can mount is that their signatures in authorising the allocation of PDAF to those NGOs were forged as 22 of them have done.

Even assuming their signatures were forged, why would it have taken them so long to protest against it? It stands to reason that anyone who had P70 to P200M allocated to them would be adamant in getting it released for their use. Why has it taken them 3-5 years to denounce the siphoning off of their PDAF? If anything, they would be negligible for allowing it to go on for so long.

So any which way you look at it, the legislators in question have something to answer for. True, the DBM’s record-keeping has been found wanting. In fact the COA report only covered a mere 39 per cent of the total P115 billion worth of PDAF released from 2007 to 2009 because DBM could not even identify correctly the legislators who approved the majority of funds amounting to some P70.4 billion.

Even so, the legislators that have been rightly identified need to apologise to the public for allocating their PDAF to NGOs and take leave from their party if they are currently in public office or loose whatever committee chairmanships and privileges they have enjoyed as such.

British and Canadian examples

In the UK parliamentary allowance scandal of 2009, both PM Gordon Brown and Opposition Leader David Cameron issued apologies to the British public for the excesses committed by members of their parties who used housing allowances to invest in the property market. Subsequently, an independent body was set up to determine the compensation and allowances for MPs, and the disbursement of the same was made more available to the public.

In the current scandal in the Canadian senate, PM Harper’s chief of staff resigned after being implicated, a number of senators were suspended from their party and issued public apologies for their abuse of privileges. In both the UK and Canadian cases, a Freedom of Information request led to uncovering the facts and those that had been found to have abused their privileges were ordered to repay every last penny they had unlawfully charged to the public purse.

The amounts in question ran only in the hundreds of thousands of pounds or dollars per representative or senator. In the Philippine case, the amounts run into the billions of pesos (which amounts to millions of dollars!). And yet the legislators in question do not seem to be ashamed in the least. Some of them in fact have the gall to now champion the scrapping of pork, when they in fact have been identified by the COA for certain anomalies in their use of pork, such as Majority Senate Leader Peter Cayetano whose release of P2.7 million to baranggays in Taguig were found to be deficient, and whose wife exceeded her PDAF by P8.5 million.

BUB, another acronym for pork masquerading as reform

The protesters heading for the Rizal Park on August 26 would probably say that there needs to be an investigation and prosecution of those involved in the PDAF scam. The DOJ has said that it will be issuing indictments soon. The case could easily drag on beyond 2016, after the president steps down. The senate and the house seem poised to investigate their use and abuse of PDAF. Senator Cayetano has endorsed former Senator Panfilo Lacson to head an independent body to investigate it, which found support from the President. This was ridiculed by many including Senator Miriam Santiago who questions Lacson’s ability to impartially run the investigation.

The politicisation of the investigations and reform process is becoming a problem. This is precisely what shouldn’t be happening as abuses cut across party-lines. Take the unveiling of a fund associated with the Department of Budget and Management’s Bottom Up Budgeting approach or BUB. This is a fund amounting to P20 billion to be allocated by Interior and Local Government Secretary Mar Roxas to local governments. It is no secret that Mr Roxas is the Liberal Party’s presidential nominee to succeed Pres Aquino in 2016. Budget Secretary Abad is the party’s chief ideologue.

The fund’s existence was apparently leaked by congressmen from within the LP. It was reported that many of them were dissatisfied with the manner in which this fund has been set up: to give Mr Roxas the role of a padrino in handing it out. This charge was denied of course by Messrs Roxas and Abad who do not deny the existence of BUB funds but instead say that legislators were supportive of it.

If we needed a reminder for why PDAF and its predecessor CDF (countrywide development funds) came into being, this is it. Pork barrel has evolved through the years from a means for the executive to control congress and get it on its side, to a means by which the legislators can wrest control of patronage from Malacañang by limiting its ability to withhold pork to congress. BUB seems like an attempt by the Palace to retake control, at a time when congressional pork has been abolished.

Just as an aside, what the reaction of local LP stalwarts shows is that party discipline is weak. These legislators probably do not plan to endorse Mr Roxas in 2016. They are probably planning to jump ship again just like they did in 2010 when President Aquino’s lead in the polls was evident. Given the lead Vice President Binay now has in public polls, it would seem they might be hedging their bets both ways, or in the very least, they want to hand out the BUB funds themselves to local officials, to be the sole padrinos in their districts.

On the other hand, it can be argued that Mr Binay has been receiving pork with the president’s blessing, worth P200 million a year, so that this is simply a way of evening up the playing field for Mr Roxas and the Liberal Party. Given that the president has abolished pork (which presumably includes the vice president’s), shouldn’t his heir apparent refuse to use it too? By politicising the bottom-up budgeting approach, a key reform of President Aquino’s administration, Abad and Roxas could be tarnishing their reformist credentials and weakening the very institutions they seek to build.

To 2016 and beyond

A number of prospective presidential and vice presidential contenders could be ruined by this scandal. Senators Bong Bong Marcos, Bong Revilla and Jinggoy Estrada all have plans to run for higher office. All were tagged as part of the original PDAF scam. Senator Peter Cayetano may also have plans to run for higher office in 2016 and was also given special mention in the COA report for irregular PDAF releases. Mar Roxas could sully himself if BUB is perceived to be used for political motives.

You might think this is the end of the road for pork, but don’t count pork out, just yet. As Manolo Quezon points out, pork has a funny way of resurfacing under a different guise. Winnie Monsod believes it will revert back to the old way of being hidden, inserted in line agency budgets, as was the practice before President Aquino made it more transparent. This could be an unintended consequence of abolishing PDAF.

What the inchoate masses gathering on August 26 fail to understand is that unless PDAF is replaced with something more suited to a modern democracy, it will be reincarnated in some other shape or form even if the current set of PDAF abusers are put behind bars. The real answer in my view is for the state to provide campaign finance to accredited political parties.

Without such state support, congressmen and senators will find a way to access state funds anyway through some form of pork barrel or worse, they could go underground and raise money through illegal means. Of course they may harass legitimate businesses and rich individuals for donations with adverse consequences for policy making if they win. The piso-piso campaign to raise money has very limited impact in a country with very large disparities in income.

Perhaps the president who until now has been so focused on proving he can make government work, as in he wanted to prove that PDAF could be used properly for good, can now lift his gaze towards undertaking real reform that would not only restore systems to the way they were under some imagined golden age, but transform them above and beyond what they are currently capable of becoming.

To use an automotive analogy, which I am sure the motoring enthusiast in him would appreciate, imagine that you have an old 1950s engine which you have worked so hard to restore, but is still leaking fuel and is inefficient. You can choose to keep fiddling with the old system by adding dashboards with indicators that tell you if fuel is leaking (i.e. making expenditure more transparent) or you might decide to overhaul the engine completely with a new up to date model that injects fuel well and does not leak with indicators that tell you what is happening under the hood.

Having a modern democracy entails campaign finance and political party reform combined with beefed up integrity measures as well as an adequate level of compensation for elective officials to remove the incentive that lead to the plunder of public funds. That is the reality that neither the president, nor the people massing at Rizal park on Monday, have yet realised needs to be confronted if we are to have a sound democracy in the lead up to 2016 and beyond.

Pork to the parties, not the polies!

Why giving money to political parties not politicians is a better idea than scrapping their pork.

It’s been in the headlines for over a week, after the Inquirer broke the story of a scam allegedly involving 23 congressmen and 5 senators and Php10 billion of Philippine Development Assistance funds (aka pork barrel) being siphoned off over more than ten years by a syndicate known as JLN which stands for the initials of the lady accused of heading it.

A member of the syndicate, a close relative, blew the whistle on the boss after a row between them turned ugly. It blew the lid off the issue whether we as a nation still want to maintain the practice of pork barrelling in Congress. If these allegations are proven, it would simply confirm what a lot of Filipinos intuitively know, and that is that these funds or a significant proportion of them, which are meant to benefit local constituents of politicians simply go into their re-election kitty.

Some efforts through the years have been made to make it harder for or limit the amount of corruption or kickbacks from contractors to solons in exchange for awarding projects to them from taking place. The alleged conspirators have been able to defraud Filipino taxpayers by setting up ghost projects involving dummy recipient NGOs issuing fake receipts to help fulfil audit requirements and make everything seem above board with the imprimatur of the legislator who endorses the so-called “development” project.

The Palace, which understandably is concerned, given its reputation for clean and honest government has ordered a full and exhaustive probe through the Department of Justice spearheaded by the National Bureau of Investigation. This would inform and provide evidence to the Ombudsman which has started looking into it. The person accused by the whistle blower appears ready to front the enquiry.

As this developed, public support for abolishing PDAF has mounted. Senator Franklin Drilon, the man expected to assume leadership of the upper house has appeared to welcome the idea. The question will be whether the budget to be approved by Congress will still contain these allotments to its members or not, and whether Malacañang would be able to control the legislative agenda without them.

The opposition for its part considers the investigation a political ploy designed to bash it in the lead up to the 2016 elections.  Three of the five senators linked to the scam, Senators Jinggoy Estrada, Bong Bong Marcos and Bong Revilla seem set to run for higher office. Prior to the 2013 midterm elections, a number of senators from the opposition bloc were engulfed in a similar scandal. The results of the elections seem to indicate that the issue swayed voters not to vote for their kin who were running to join them.

To be fair, the issue is not just about Congress and pork. It involves funds from the Malampaya project which along with the proceeds of the PCSO and PAGCOR Prof Benjamin Diokno describes as “shadowy funds” that are not subject to the usual process of budget scrutiny and deliberations by Congress. For as long as they are hidden, Diokno believes they will always be prone to corruption and a source of patronage and rent-seeking.

Here is how Prof Winnie Monsod weighs the pros and the cons behind the issue of pork:

In sum, what are the benefits of the pork barrel system in the Philippines? One, it gives the executive branch tremendous leverage over the legislature, which is supposed to provide checks and balances (the executive branch can withhold the pork). Two, it gives incumbent legislators an unfair advantage over their electoral opponents, because of the projects (if successfully implemented) they bring, or the money (if pocketed) they can use to buy votes. And what are the costs? At least P21 billion a year of taxpayers’ money that arguably could have been more efficiently and equitably used for the welfare of the Filipino people.

The problem with the abolishing pork is that you need the endorsement of the very people who benefit from it to succeed. This is exactly the same impediment to getting Congress to abolish political dynasties. Pork may be seen as the vehicle for the network of patronage emanating from the Palace to Congress to the people. In the past it has been indispensable in getting significant bills involving painful economic reform to pass. Some say even the impeachment of the Chief Justice would not have taken place without it.

Pork is then used to help solons get re-elected either through the projects they fund or through amassing some form of rents that then get used for their campaign. What’s more, this tacit arrangement seems to exist with the grudging consent of the public who don’t believe that public servants can afford to live on their salaries and run for office based on them alone. There is therefore a trade-off or deal with the devil being made here. Economic reforms are not costless to produce–they require some form of corruption in a developing economy.

The problem with that is it perpetuates a system of patrimonialism which many say lies at the heart of our problem of underdevelopment, i.e. we would not have to resort to this form of “transactions costs” if we had a strong party system in which policies mattered, where elected members toed the line or faced the consequences from their own caucus.

The problem with our system is that political dynasties control the parties, or stated in another way, parties are merely a front for the family franchise, and they are financed largely through a system of patronage that emanates from the presidency, who requires their support to push his agenda through. It is a co-dependent arrangement of patronage and rent-seeking that perpetuates itself.

How then do we untangle this web? Do we simply abolish pork? That presents a number of challenges as well. How will Malacañang push its legislative agenda? What forms of illegal activities would congressmen resort to to raise campaign funds?  But we are getting ahead of ourselves here. How would we get congressmen and senators to act against their own self-interest in the first place?

The answer lies in campaign finance reform: by using the PDAF to finance political parties. The amount involved, Php21 billion a year or Php63 billion per term, is a lot of money. With that kind of money parties could become professionally run organisations that would endorse candidates and provide seed money for their campaign. This system would still favour incumbents who presumably would still be high ranking members of their parties. It would still be subject to the audit and accountability rules of the Comelec and the Commission on Audit, since they are public funds.

The good thing about giving money to the political parties not the elected politician to disburse is that it gives their executive committees greater power to influence and discipline their members who will be relying on their endorsement to seek re-election. It will still be rife with influence peddling, factionalism and perhaps patronage, but that is the nature of politics. Some parties will do a better job of managing their affairs and that will be their selling point to the electorate.

The downside of this proposal is that rather than the money or at least a good proportion of it going to fund development projects that benefit constituents, all of it would now go to the political parties. Of course the way in which parties use these funds would be up to them. They could presumably still engage in development projects, but that would be a matter for them to decide. They may decide to keep all of it to manage their affairs and fund election campaigns of their members.

My answer to that objection would be to say that although shifting pork to parties does come with a cost to the constituent community, it does bring some benefits as well in the form of better policies and programs, with less padding for corruption, as parties are strengthened and get weaned off the system of patronage and rent-seeking. This would not happen if we simply abolished pork. These benefits would accrue to society and presumably outweigh the costs.

Some might say this is too risky. Even if we give money to parties, they will still be run by politicians, and every time you hand money to a politician you are courting disaster. Well, perhaps it does involve some risk, but it is a risk we should be prepared to take if we are to develop a different set of political institutions in our country, one that provides incentives to stronger parties, rather than the current arrangement which degrades them.

The next step after that would be to allow equal access to non-dynastic members of the party through legislation that would allow campaign funds to be disbursed by the state to political parties subject to their meeting certain requirements that allow greater access and participation to party members that do not belong to any established political family. That will be the subject of a subsequent post.

Clef two-factor authentication