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

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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
C A M P A I G N F U N D S On March 18, the Presidential Agrarian Reform Council (PARC) asked the DBM to again draw from the Marcos wealth, again for the DA. The amount was P541 million and the ultimate beneficiary was supposed to be the DA agency, the National Irrigation Administration. “The amount shall finance various on-going and new CARP irrigation projects,” said the Presidential Agrarian Reform Council. Although Ponce’s name appears as signatory, being DAR officer-in-charge and PARC vice chairman, the letter did not bear his signature. It had only that of Jeffrey Galang, a PARC secretariat member Ponce supposedly authorized to seek the release of P500 million in CARP funds. Farmers’ groups say strange things seem to be happening with the Marcos wealth and they even fear the money might already have disappeared. But they suspect that both amounts, totaling over P1 billion, were spent for the campaign. The P544 million was meant for buying seeds for 600,000 hectares of land for 2004. Yet when the money arrived, the target coverage was slashed to 300,000 hectares. As of March 2005, says Manuel Quiambao of the farmers’ group Peace Foundation, only 162,000 hectares had received the GMA seeds. As for the P541-million fund meant to benefit small, communal irrigation projects, Quiambao says that to this day, the NIA has been unable to furnish them with a list of farmers who benefited from the project. “We’re reviving the ‘Bantay Marcos Wealth’,” he says. “Stolen money has been stolen again.” OVERSEAS WORKERS’ FUND Early in the presidential campaign, Sto. Tomas, with OWWA’s Angelo, signed a resolution transferring P530 milllion from the OWWA medicare fund to the Philippine Health Insurance Corporation. The amount came from the OWWA Medical Health Insurance Fund or OM-HIF, a fund built from contributions of overseas workers. What made this possible was an executive order signed by President Arroyo on February 14, 2003, transferring OWWA’s medicare functions to Philhealth. Dr. Francisco Duque, a close friend of the Macapagal family and neighbor of the Arroyos at La Vista in Quezon City, was Philhealth head at the time. He is now the health secretary. That P530 million was, according to Philhealth, just 15 percent of the entire OM-HIF. As of June 2004, the remaining OM- HIF fund stood at P3.5 billion. During her campaign sorties, President Arroyo gave away Philhealth cards valid for a year to people in the places she visited. What riled migrant groups was that at that same time, the OWWA was turning down the health claims of hundreds of overseas workers, ostensibly because the OWWA medical program was put on hold. According to the Migrante party-list group, 461 overseas workers who either had medical reimbursements pending or checks for pick up at OWWA were told the agency was not going to process the claims. The group says OWWA stopped all medical reimbursements in a meeting on January 16. This was just one of the many complaints migrant groups had against OWWA. In 2002, Sto. Tomas issued a resolution changing the guidelines for the use of the OWWA fund, limiting it only to overseas workers who had valid contracts. Before that, any overseas worker who had made contributions to the fund could avail himself of it, even without a valid contract. ROAD PROJECTS In November 2003, just three months before the presidential campaign began, Arroyo launched her “Kalsada Natin, Alagaan Natin” project in which she involved the barangays in the task of maintaining and protecting national roads. With her during the launch was then Public Works Secretary Soriquez. An Office of the President press release said that project funds would come from the Motor Vehicle Users’ Charge (MVUC), or the road users’ tax. The MVUC is the tax imposed on vehicle owners by Republic Act 8794. The law specifies that the money can be used for only three purposes: for road improvement and drainage repairs, for traffic lights and safety devices, and to control air pollution. Vehicle owners pay the fee each time they register with the Land Transportation Office (LTO). How the fund is used is up to the National Road Board, where the public works secretary sits as ex-oficio Farmers’ funds. Large amounts of money used in the 2004 campaign came from the Departments of Agriculture and Agrarian Reform. member. Sen. Sergio Osmeña estimates the total amount collected from motorists since 2001 has reached P16 billion. At the height of the presidential campaign, former LTO chairman Mariano Santiago filed a case before the Commission on Elections seeking President Arroyo’s disqualification. He argued that she used government money to fund her campaign and cited the “Kalsada Natin” program funded with P1.4 billion drawn from the MVUC. Santiago and members of the opposition said they noticed the program had morphed into a vehicle to promote Arroyo’s candidacy. Billboards announcing the project bore Arroyo’s face and name, while street sweepers hired under it wore uniforms touting it as the president’s employment project. In March 2004, newspapers reported that Soriquez had signed Memoranda of Agreement (MOA) with barangay captains all over the country allowing them to hire street sweepers for the “Kalsada Natin” program. These sweepers were to be provided with two T- shirts and a hat. When the uniforms were delivered, they bore the text: “Programang Pantrabaho ni GMA.” In effect, the MOA between the Department of Public Works Department of Public Works and Highways (DPWH) and barangay captains turned the fund for road repair into a job-generating program. The Philippine Information Agency defended the president by saying, “The present brouhaha of allegations that revenues were spent for the thousands of blue-shirted road laborers along with the ‘Kalsada Natin, Alagaan Natin’ signage which appear to be campaign propaganda can be explained by the fact that the Road Board has decided to shift to community-based road maintenance rather than contracting the road maintenance works.” As it turned out, the DPWH by April 2004 had installed some 44,325 portable signages and 682 billboards. The figures excluded 4,963 billboards put up in school buildings. All of these signs carried the president’s name and face. Carlos Mutuc, then acting director of the DPWH’s Bureau of Maintenance said the department had agreed to include the phrase “Project ni Pangulong Gloria Macapagal Arroyo” on these signs. No audit of the MVUC has been done for 2004. The DP- WH’s internal audit office says the department has been administering the fund for only two years, and is the responsibility of the National Road Board. In 2003, however, COA already passed judgment on the MVUC used by the DPWH that year. Using the fund for purposes other than those specified in the law is illegal, COA said. It noted that the DPWH had used P9 million from the fund to pay casual employees and to fund the operations of various DPWH offices, violating Republic Act 8794. “We recommend that management should stop the practice of charging expenditures of other DPWH offices to the MVUC fund, which is tantamount to juggling of funds,” COA said. COA’s audit of the DPWH for 2004 remains unfinished. PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM I REPORT 15
Page 1: i REPORT July-September 2005 P75 Ph
Page 4 and 5: SHEILA S. CORONEL NO TWO presidents
Page 6 and 7: Tobacco, the country’s biggest ci
Page 8 and 9: THE TWO FACES OF GMA. Aides say tha
Page 10 and 11: likewise rebutted Zuce’s charges.
Page 12: T H E C A M P A I G N Presidential
Page 15: C A M P A I G N F U N D S Buying vo
Page 19 and 20: T H E V I C E P R E S I D E N T WHO
Page 22 and 23: HAPPY DAYS ARE HERE AGAIN? In 1998,
Page 24 and 25: legislators have given themselves p
Page 26 and 27: LIGHTS, CAMERA, IMPEACHMENT! ALECKS
Page 28 and 29: For Visayans, the center does not h
Page 30 and 31: The Moro people can be part of a pl
Page 32 and 33: TWO AT EDSA ‘When the wheels of h
Page 34 and 35: FOCUS ON FILIPINO YOUTH DEFYING THE
Page 36: T H E L O S T G E N E R A T I O N d
Page 39 and 40: T H E L O S T G E N E R A T I O N K
Page 41 and 42: T H E L O S T G E N E R A T I O N s
Page 43 and 44: T H E L O S T G E N E R A T I O N d
Page 45 and 46: Stay, serve poor first, Stay, serve
Page 47 and 48: T H E L O S T G E N E R A T I O N l
Page 49 and 50: T H E L O S T G E N E R A T I O N W
Page 51 and 52: T H E L O S T G E N E R A T I O N m
Page 53 and 54: T H E L O S T G E N E R A T I O N a
Page 55 and 56: le Up le lim CHANGING FACE. Muslim
Page 58 and 59: FOCUS ON FILIPINO YOUTH ALECKS P. P
Page 60: T H E L O S T G E N E R A T I O N a
Page 64: GRASSROOTS GAME Jueteng has deep ro

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