charity fund

Can pork really be abolished, legally or otherwise?

Whether pork should be abolished is a different question from can it be abolished.

Following the successful Rizal Park protests on August 26 spontaneously organised by netizens through social media against the abuse of pork barrel, the question now has to do with next steps. The president sought to pre-empt the rally on Friday, the 23rd by abolishing the Priority Development Assistance Fund, only to reinstate with the same breath congressional earmarks through a different mechanism.

It became apparent from his remarks that pork barrelling would remain, albeit with more stringent constraints placed on the identification of projects and awarding of contracts to suppliers. With three years remaining in the presidency of Mr Aquino, doubts regarding the effectiveness and durability of his reforms began to sink in.

Twitter hashtags #ScrapPork and #MillionPeopleMarch were soon brimming with suggestions on how to name pork’s new incarnation. Interesting acronyms such as BABOY, LIEMPO, NACAW and KUPIT bubbled up across the ether, expressing the cynicism people felt towards the president’s determined effort to re-insert pork in line agency budgets. Many were calling for the abolition of the president’s special purpose and discretionary funds, which are seen as no different from congressional pork.

Like the EDSA uprisings which relied on mass media as in 1986 and SMS text as in 2001, this uprising relied heavily on social media, which is how the original idea was conceived and spread. Unlike the EDSA revolts, this one does not seem to be calling for regime change but instead seeks changes in policy to be made.

It can be characterised as a taxpayer’s revolt against the politics of patronage and privilege that the country is so prone to. Although leaderless and inchoate, the message from the masses seemed clear: (1) they want pork abusers to be investigated and prosecuted, (2) they want greater transparency and accountability in the use of their taxes from their leaders, and (3) they are for the total abolition of pork, including the president’s own special purpose and lump sum funds,

With regards to the first point, the investigations into abuse are nearing completion. The Department of Justice will be filing cases soon, Sec De Lima says, although the prosecution of cases will take some time to culminate (Clarification: this refers to the Janet Napoles scandal; the Interagency Anti-Graft Coordinating Council is about to commence a separate investigation into the anomalies uncovered by the COA special audit of PDAF from 2007-09). On the second point, the administration has already been providing information regarding PDAF releases on the Department of Budget and Management’s website.

With these funds being abolished and new pork being reinserted into line agency budgets, a freedom of information law will be needed to facilitate greater access to information, and a whistle blower protection law would encourage whistle blowers to come forward without fear. The third and final point on the abolition of pork is perhaps the stickiest of them all. Let me explain…

Policy questions crystallised

What to do with pork?

There are several policy questions, which the PDAF scam has crystalised. The main policy question is: what to do with pork? The palace wants to keep it. Legislators sensing the changing political winds are saying they are willing to give it up, so long as the president does the same. A principled few point out that pork does have its uses in a representative democracy. The people on the street, as previously mentioned, want it abolished completely.

To be legally enforceable, however, the abolition of pork would have to be enshrined in law. The enabling legislation would have to prohibit congressmen and senators from lobbying for certain projects. This might be deemed unconstitutional by the Supreme Court given the powers of congress, the lower house in particular, over the budget. Abolishing the president’s slush fund on the other hand can be done legally by amending the charters of the PCSO and PAGCOR and overriding EO 683 covering Malampaya royalties.

The abolition of congressional pork can only be achieved if congressmen, senators and the president voluntarily abstain from it. That is the crux of the problem. Those who want to abolish pork would either have to create a radical, moral transformation in our leaders. Barring that they will have to call for constitutional change, and that is probably not in the offing.

But with proper prudential measures in place, pork can at least be scrutinised and evaluated more closely. The only problem is that without a legal mandate to bind successive administrations, such measures could be easily reversed. And even if such procedures were codified in law, nothing prevents the next congress from relaxing them later on when public anger has subsided.

This leads us to two supplementary policy questions. The first one has to do with how to improve the calibre of politicians running for public office. The second question has to do with development planning, on how it should proceed so that local needs are appropriately identified, prioritised and met.

How do we improve the calibre of our politicians?

The abuse of pork is really a symptom of a much deeper problem in our state: the weakness of our political parties, making elected members of congress extremely vulnerable to the patronage of Malacañang and consequently more compliant to its wishes. Conceptually, pork was a way for congress to exert the power of the purse through the budget. It has not worked out that way in practice. The palace still has a way of withholding pork from specific congressmen unless they kowtow to its preferred line.

A weak president suffering from illegitimacy can use pork to stave off an impeachment complaint and other embarrassing congressional investigations. The executive then becomes hostage to the whims of a rent-seeking congress. A strong president on the other hand can use pork to railroad legislation through congress and produce poor public policy, as a result. Congress becomes compliant, addicted to Malacañang’s patronage in that situation.

The question on how to maintain the integrity of both branches in the face of patronage from Malacañang and rent-seeking from congress can be answered if we were to look at electoral campaign finance and political party reform measures as well as compensation for elected officials. I have written extensively on this already.

If we were to follow the pattern set by many modern democracies, the Commission on Elections would be given the task of administering election campaign funds. The distribution of these funds could be based on a prescribed formula, for example, pro-rata based on the votes received by each accredited party at the last election. This would mean that if an elected official switches parties, the funds that his party is entitled to at the next election would not transfer to the new party. They would remain with the former party.

This reduces the incentives for turncoats. It also prevents the administration from withholding the funding of opposition parties, since the budget of Comelec would include the state subsidies for all political parties, which would guarantee that all of them receive the state funds that they are entitled to based on law. The compliance unit of Comelec would need to be beefed up to conduct proper audits of election campaigns.

Making the provision of taxpayer funds to accredited parties conditional on their adherence to equal opportunity in the selection of candidates, as evidenced by a low threshold for political dynasties would also promote a merit-based selection of candidates for public office. Political dynasties will not be sanctioned through state funding. If political dynasties want to compete in elections, they would have to do so outside the state funded system. This would provide the electorate with a real choice through viable alternatives. Raising their pay and providing allowances to deal with their work in their electorates would keep them honest.

How do we improve the identification and prioritisation of development projects?

If the calibre of our politicians is improved and their integrity protected through campaign finance, political party reform and better pay, it follows that the formulation of public policy would be improved. Consequently, the identification and prioritisation of development projects would have a better chance of following a more rational process. This is essentially what taxpayers get in return for supporting their politicians and their parties adequately. In a representative democracy such as ours, it is the right of congresspersons to press for the interest of their constituents. Whether local projects can then be characterised as pork depends on the basis for their approval.

If funded by the administration to buy votes, with less of a consideration for economic and social benefits relative to other alternatives, then yes, they could be considered pork. If on the other hand, these projects are properly scrutinised for their economic and social returns and productivity dividends, then they would be considered good public policy. The bottom-up budgeting approach which the administration is currently pursuing may lend itself to both pork barreling and rational planning.

In the end, no system however well-designed will withstand the pressure to conform to established norms of behaviour unless the people that manage it are of exceptional character and skill. To promote an inclusive, participative budget process when our political process is exclusive and favours only the connected and powerful few would simply guarantee that the process is rigged from within.

Policy tools need sharpening

In the final analysis, both the government and the people it represents and hopes to govern will have to come to some kind of new arrangement. The August 26 movement has signalled that the old status quo cannot hold. The question now on everyone’s minds is what the new state of affairs will look like. What policy tools are best suited to address the problem presenting itself through the PDAF scam?

The measures announced by the president last Friday fell short of the mark. They failed to measure up to the expectations that the public rightly held regarding what to do with PDAF in the first instance, and with pork more broadly. Prosecuting abusers and increasing transparency, two of the demands of protesters are arguably happening, but abolishing pork altogether is a bit more challenging.

For one, the constitution gives congress the power of the purse. Within a representative democracy, this gives legislators the right to pursue the interests of their constituents in setting the budget. They might voluntarily abstain from pork, but they cannot be prohibited from it. The abolition of the president’s discretionary funds on the other hand can be achieved legally. New legislation could require the proceeds of gambling revenues and mining royalties to go to the national treasury to fund general appropriations submitted to Congress for approval.

An alternative I would suggest is to create two trust funds: one from the Malampaya account of the Department of Energy to pay for climate change mitigation and adaptation programs in the island of Palawan and other vulnerable communities, and another from the president’s social and charity fund from the PAGCOR and PCSO respectively to provide deferred loans to tertiary students and fund universal health care through the National Health Insurance Fund.

With regard to congressional pork, the measures announced by the president last Friday need augmentation. An FOI law will equip the citizenry with the necessary tools to examine the way their taxes are spent. Beefing up the capacity of the Commission on Audit, Department of Justice and Ombudsman to undertake forensic accounting and electronic surveillance will help preserve the integrity of the system. Codifying the new administrative budget measures in law will tie the hands of successive administrations to conduct budget processes above board.

Finally, to transform our politics, we need campaign finance and political party reform measures. You can keep fiddling with the system. But if the people running it are selected and then compensated in such a way that makes them susceptible to rigging the system, all this reform will come to nothing in the end. To improve the process, one needs to improve the people, through better selection and compensation.

To use an analogy in business. You hire someone to run the shop for you, but you don’t really monitor that person’s performance properly, you don’t pay him adequately, and you give him unlimited discretion to make decisions. After a while you suspect that person of robbing the firm, blind. You conduct an audit and find out that he has been charging his personal expenses to the firm.

You are upset, you withdraw all his expense accounts and limit discretion. Do you really think that having had a taste for easy living, this will stop the shenanigans? The answer, is no, so you fire him. But replacing the person won’t deal with the problem unless you change the way the firm handles employee selection, pay, performance and decision rights. The government is currently focused on improving performance monitoring and limiting discretion, but it also needs to address the way we select and elect our politicians and the way we pay them.

Abolishing all forms of pork through legal mandate is close to impossible, but improving our political system to prevent the abuse and misuse of pork is actually quite do-able.