i Report Issue No. 3 2005 - Philippine Center for Investigative ...

the Office of the President. Those
town hall meetings would have
been part of the normal discharge
of the president’s functions,
except they also became automatic
public relations events that
upped Arroyo’s visibility.
In the scheme of things, however,
the DSWD was not that vital
to the campaign. For fund-raising
purposes, the agencies that mattered
were those awash with cash
and could serve as channels of patronage
from Malacañang to local
officials who could be called upon
to marshal the votes for the president.
In fact, early in the Arroyo
presidency, some government
officials were already saying that
Gloria and Mike Arroyo were strategically
placing their most trusted
lieutenants in the most cash-rich
and well-positioned government
agencies in preparation for a 2004
campaign.
AGRICULTURE FUNDS
Among the first of the Arroyo
couple’s friends given a crucial
government position was Jocelyn
Bolante, friend and confidante of
First Gentleman Mike, who was
named undersecretary for finance
of the Department of Agriculture
soon after the government came to
power in 2001. In October 2002,
the president appointed her former
student, Arthur Yap, administrator
of the National Food Authority, an
agency under the DA.
In July 2004, DA whistleblower
Marlene Esperat filed charges
against Yap and Bolante for allegedly
conniving to defraud the
government of P428 million. The
amount was to be used to purchase
fertilizers under the 2003
GMA Rice Program. Esperat questioned
the huge amount that had
been released, considering that the
program’s officer in charge had requested
only P28 million. The contract
was also given to a favored
company to purchase fertilizers at
a cost Esperat said was bloated.
Esperat did not live long enough
to see the case prosper. She was
gunned down in her home in
Sultan Kudarat last March.
The fertilizer fund was not the
only questionable transaction at that
time at the DA, a huge organization
with huge allocations, regional offices
and decentralized operations,
and a variety of programs and
projects whose expenditures were
difficult to account for.
Some of those expenditures
include allocations for the use
of congressional districts, towns,
and cities. According to former
solicitor general Frank Chavez,
there were two huge amounts
funneled to local governments
just as the election campaign
was getting underway. One was
the P728-million-fund supposedly
intended for farm inputs,
while the other was the P1.1 billion
fund for the GMA Rice and
Corn and Livestock programs.
The two amounts were released
within eight days of each
other, the smaller amount on
February 3, 2004, and the bigger
one on February 11.
Chavez said that the P728
million was disbursed to 105
congressmen, 53 governors, and
23 city and municipal mayors.
He also revealed that some of
these recipients received actual
cash and not the farm inputs
they were intended for.
“It appears that the modus
operandi is this: there is a ranking
official in the DA who is linked
to Ms. Macapagal-Arroyo’s husband,
Jose Miguel Arroyo. This
DA official has ‘runners’ who approach
local government officials
who will extract a commitment
from the local officials that they
should get these ‘fertilizers’ in
liquid state from them,” Chavez
said in the plunder case he filed
against the president last year.
Chavez added that the amount
is shared among the DA officials,
Mike Arroyo, farm input suppliers,
and runners. The Arroyos
and the DA denied these allegations
last year.
In response to the plunder
charges, the Ombudsman has
asked the Commission on Audit
Praying for victory. El
Shaddai leader Mike Velarde
(in checked skirt) supported
the Arroyo campaign,
which was oiled by massive
infusions of state funds.
(COA) to report on how the DA
funds were spent. COA sources
say they are still tracing the flow
of money and are trying to determine
which officials did get
their shares and how. COA’s 2004
annual audit of the DA, however,
was already peppered with comments
of undocumented expenses
and unliquidated cash advances.
“Disbursements out of (Priority
Development Assistance Fund allocated
to members of Congress)
and GMA Rice Program totaling
P41.2 million and P6.250 million,
respectively, were irregular and
excessive,” said COA.
When she started her new term
of office in July 2004, Arroyo promoted
Yap first as undersecretary;
in 2004, he became agriculture
secretary. Bolante, meanwhile, was
named to the board of the Government
Service Insurance System. In
July, Yap quit his post after the Bureau
of Internal Revenue charged
his family with tax evasion.
MARCOS WEALTH
The Department of Agrarian
Reform was another agency
with money that made disbursements
during the campaign
period. DAR is the lead agency
implementing the Comprehensive
Agrarian Reform Program
(CARP), and money for this
program comes from portions of
the Marcos wealth that had been
returned to the government.
On January 30, 2004, the Philippine
National Bank remitted
to the National Treasury $624
million, equivalent to P35 billion,
representing the biggest amount
recovered so far from the Marcoses’
wealth. Just days earlier, the
Supreme Court had declared with
finality that the amount belonged
to the government, denying an appeal
from the Marcos family. Under
the law, this money is to be used
only for CARP and specifically for
land acquisition and other activities
to help farmer beneficiaries. Part of
it eventually went to the DA.
A hearing conducted by the
House Oversight Committee
earlier this year found that as of
October 2004, nearly P9 billion
of the Marcos money had already
been spent. The bulk of this went
to buying land from landowners,
while the rest went to program
beneficiaries and expenses under
the nebulous DAR-Fund 101.
Farmers’ groups, however,
say there were two questionable
disbursements made from the
Marcos wealth.
On March 8, 2004, then DAR
officer-in-charge Jose Mari Ponce
signed a Memorandum of Agreement
with Agriculture Secretary
Lorenzo allowing the DA to use
P544 million from the Marcos
wealth supposedly for “seed assistance”
to agrarian reform beneficiaries,
again under the Ginintuang
Masaganang Ani (GMA) Hybrid
Rice Commercialization Component.
On April 28, the amount was
released by the DBM.
14 PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM I REPORT