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

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Tobacco, the country’s biggest cigarette manufacturer, and is more than half the total sales that year of the country’s two biggest mobile-phone-services companies, Globe and Smart, which are roughly in the P50-billion range and are among the top 10 companies in the country. Unlike the corporate Top 1000, however, jueteng lords have low overheads, don’t pay taxes, and get cash collections on the spot, thanks to a network of cobradores. Jueteng is also a low-capital, low-tech operation; little investment in product innovation and research and development is needed. No advertising is required. Aside from its collectors, all it needs is the protection of officials. Although it had fallen into the pits of disrepute after Estrada, JUETENG WHISTLEBLOWER. Chavit Singson exposed Estrada’s jueteng links in 2001, but the numbers game (below) still flourishes in many parts of the country. jueteng thrived in the post-Edsa 2 period, when a few gambling lords, most notably the Pampangueño jueteng boss Rodolfo ‘Bong’ Pineda, expanded and consolidated their operations. The complicity of the police and of local officials is partly to blame, because jueteng cannot operate without the tacit cooperation of law enforcers. But, police sources say, Pineda and the others were able to operate freely because of the perception that they were close to Malacañang and that the Palace was giving its blessings to their operations. Until the recent police crackdown in the wake of the Senate hearings, the signal being sent down the line was apparently that the present administration was okay with jueteng. JUETENG AND LOCAL POWER Jueteng’s intimate relationship with local power stems from its decentralized operations. The activities of a jueteng lord are confined to a town or a province; gambling operators do not cross jurisdictions, where they risk incurring the ire of rivals who have already been operating there for years. Moreover, jueteng is based on local knowledge: operators rely on a long-established network of cabos, usually respected local people whom they personally know and trust. It is hard to do that if one is an outsider or unable to speak the local language. Jueteng operators also invest in relationships with local officials and other local influentials, including parish priests and journalists. Outsiders would find it difficult to penetrate these local networks of trust. Unsurprisingly, the two presidents who have been linked to jueteng—Estrada and Arroyo— are also those with firm roots in small-town politics. Estrada was a longtime mayor of San Juan. He was mayor in the sense of a small-town boss, who took cuts from the illicit trades in his municipality, jueteng included. For Estrada, the presidency was the mayoralty writ large. This was why, according to Singson, just barely two months into his presidency, Erap already arranged to get a three-percent share from the collections of jueteng operators throughout the country. He apparently did the same for smuggling, according to his former finance secretary, Edgardo Espiritu. Estrada looked, and played, the part of gangster-president, and it was this that caused his ouster. While Arroyo herself did not spring from local politics as Estrada did, she has roots in Lubao, Pampanga, her father’s hometown and also the home base of jueteng uberlord Pineda, whose wife Lilia, a former Lubao mayor, is said to be a close presidential friend. No one can spend time in Lubao and not be aware of the tremendous hold that the Pinedas have there. Estrada’s relationship with jueteng operators was more like that of a mafia lord. It was a relationship motivated by pure greed: Estrada apparently thought that since jueteng bosses were making tons of easy money, there was no reason the president should not share in the loot. From the testimonies so far presented against her, Gloria Arroyo appears to have related to jueteng more like a politician than a godfather like Erap. Determined to contest the presidency in 2004 and anxious about her popularity, Arroyo, like many other politicians, apparently saw jueteng as a hard fact of Philippine political life—and that it could be used for electoral purposes. Unlike Estrada, who insisted on a share of gambling collections being delivered to him regularly, the testimonies so far given in the Senate hearings on jueteng point to presidential relatives—not President Arroyo herself—receiving far smaller (P500,000 monthly), but still regular, shares of jueteng collections from selected areas. Moreover, the collections were not aggregated nationally like they were during the Erap era (Estrada was alleged to have amassed P500 million in jueteng funds over a two-year period). There is therefore a difference in scale as well as purpose. To Arroyo, there is a difference in style as well. In 2001, after she assumed the presidency, she famously insisted in interviews that she was different from Estrada because she didn’t socialize with gamblers. “Is my social life entwined with their social life?” she asked in an Asiaweek inter- view. “Do I play mahjong with them, travel with them, drink with them? I am a godmother of one of (Pineda’s) children, but that is the custom, to have the highest official in the town be a sponsor. And I even asked Cardinal Sin about the propriety of accepting being godmother of a child of somebody with a dubious reputation. Cardinal Sin told me it is my obligation to accept because the sin of the father is not the sin of the child.” Despite her religious denials, the association with Pineda persists. The most damning accusation against the president so far is that she allowed jueteng money to be used for her campaign and to bribe elections officials. This was the gist of the testimony given on August 1 by political operative Michaelangelo Zuce, who said he witnessed payoffs to elections officials made in the Arroyo home by Lilia Pineda. Not only that, Zuce said that the Pinedas bankrolled other expenses of elections officials. Before that, Lingayen Archbishop Oscar Cruz had accused the president of receiving support “in kind” from the Lubao jueteng lord. Much earlier, when she ran for the Senate in 1995, politicians like Senator Aquilino Pimentel Jr. already accused Arroyo of having her famous Nora Aunor look-alike posters printed by Pineda. Some senatorial candidates also said that Pineda’s jueteng network were mobilized for the Arroyo campaign that year. THE PROBLEM WITH PINEDA What rouses the suspicions of jueteng watchers is that Bong Pineda has done exceedingly well during the Arroyo presidency, faring much better than he did during the Estrada era, when he had the president in his pocket, in a manner of speaking, being one of the main contributors listed in Chavit Singson’s famous ledger. Ex-cop and avid gambling watcher Sombero reckons that Pineda probably nets close to P2 billion a year from jueteng operations in 10 areas. These include his home base Pampanga, Pangasinan, Isabela, Bulacan, Bataan, Zambales, Camarines 4 PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM I REPORT
O V E R V I E W Sur, Camarines Norte, Albay, and parts of Metro Manila, a lucrative territory that Pineda reportedly shares with his former boss and mentor, the now aging jueteng lord Tony Santos. No one else in the history of jueteng in the country has been able to expand and consolidate illegal gambling operations as Pineda supposedly has. He is a jueteng franchisee, the Jollibee of jueteng according to Sombero, who was also vice president of the gambling firm BW Resources during the Estrada period. There are maybe half a dozen jueteng franchise operators in the country. These are the entrepreneurs and financiers who link up with a local jueteng operator, paying for the costs of protection to provincial, regional and national government and police officials, thereby allowing local gambling networks to operate free from official harassment. Sombero says local operators pay a one-time franchise fee of about P500,000 to P1 million each, and also shoulder the payoffs to the winning bettors. In a fairly large province, total bet collections would amount to about P5 million a day or P150 million a month. By Sombero’s calculations, which jibe with testimonies made by several witnesses in the Senate investigation on jueteng, the national operator or franchise holder shoulders the following: • the salaries of cabos (average 15 per town) and cobradores (15 per cabo) - 12 percent of total collections or about P18 million monthly (in a province with 30 towns, this is about P2,500 monthly per person); • the payoffs to local officials - eight percent or about P12 million monthly, including payments to the mayor, vice mayor, and sometimes councilors as well as chief of police; also includes contributions to the church and other charities as well as bribes to local media; and • the payoffs to higher-level officials and the media—10 percent or about P15 million a month, including the governor (P1 million to 3 million), congressman (P1 million or less), board members, the head of the PNP regional (P1.5 million) and provincial commands (P2 million), the CIDG in the region and in the province and CIDG headquarters. The national franchise holder nets about five percent of the total collections, about P7.5 million monthly per province, and it is from these that payoffs to presidential relatives are made, if needed. But he could earn more if, like Pineda, he finances the local operations himself. The local operator, according to Sombero, gets 65 percent of the total collections, but has to pay the winners from this amount as well as personnel and other expenses, which could add up to about five percent of the collections. Local operators are dispersed; one working in just one town like Senate witness Wilfredo ‘Boy’ Mayor who operated in Daraga, Albay, would net P100,000 to P300,000 a month. Someone who operates in an entire congressional district or province could net P1 million to P2 million monthly. The operators earn more if they cheat the winners and rig the bola, or the raffle where the winning numbers are picked. BULGING CASH COW In other words, jueteng is as big a cash cow as they come. And since the Estrada era, officials have wizened up to how much they can actually squeeze from gambling operators. Ten years ago, according to Mayor, the payoff to a congressman was only P25,000 a month; to a governor, just P100,000. Today Mayor says a governor would ask for at least P1 million. The amounts of bribes vary, though, and some officials do refuse to accept jueteng payoffs. But the trend throughout the country is that of ballooning payoffs. The increased demand is driven by the fact that elections—and the day-to-day doleouts that are required of patronage politics—are now more expensive. Because government finances are tight, there are fewer opportunities to make money out of public works and other contracts. The private sector, too, is feeling the pinch, and therefore not inclined to top up political contributions. At the same time, the demands for patronage are rising, as constricting economic opportunities leave more and more voters with few options left except relying on the tender mercies of politicians. For all these reasons, including the fact that politicians now have a clearer idea of how much gambling operators make, jueteng has emerged as a stable source of political funding at the local level, on top of traditional sources like Chinese-Filipino businessmen and government contractors. There is also now an evident phenomenon of jueteng operators running for local office. Apart from Pineda’s son (and the president’s godson) Dennis, who is now mayor of Lubao, there’s Armand Sanchez, who was elected Batangas governor in 2004. Liberal Party officials say that Arroyo herself interceded with the LP to adopt Sanchez a few months before the elections, so he could contest the governorship as a member of the party. At the national level, jueteng funds were supposedly mobilized for at least one particularly favored senatorial candidate in 2004. And if the testimonies of the likes of Zuce are to be believed, jueteng funds were also used for “special operations” linked to Arroyo’s 2004 presidential campaign. As a source of campaign contributions, however, jueteng lords are still dwarfed by the Chinoy tycoons, among them the likes of Lucio Tan, who supposedly gave Estrada P1.5 billion in 1998. While Pineda is swimming in cash, it is unlikely he can cough up that much even for a favorite president. Capt. Marlon Mendoza, the ex-security aide of former election commissioner Virgilio Garcillano, alleges that DEATH BY EXPOSÉ. Arroyo beams as Estrada’s vice president at a public function before jueteng brought about his fall. he heard the official saying that Pineda had given P300 million to the Arroyo campaign. If these charges are true, then it is clear that the one danger of accepting that kind of money is discovery. The expansion of the Pineda jueteng empire was achieved by crushing rival operators. Apparently, these rivals were only biding their time. “He (Pineda) edged out everyone else,” Senator Panfilo Lacson told reporters in June. “He is the reason cited by many operators who have offered to be witnesses in the (Senate) investigation.” If this plot sounds familiar, it’s because we’ve heard and seen this before. In 2001, Chavit Singson revealed all about Erap because he felt edged out of the gambling racket. Now the small jueteng operators are ganging up against Pineda by surfacing witnesses attesting to the possible involvement of the president and her kin in the illegal numbers game. In 2001, we wrote of Estrada, “Death by exposé: this is the danger of treating presidency as a protection racket.” For sure, Estrada is suffering the consequences of his jueteng misdeeds. But everyone else, including Pineda and the two dozen or so jueteng operators who made Estrada rich, remain in business. Today is another day, another presidency. Jueteng is still going strong, and not only because it is a lifeline for politicians. It persists because of the failure of state and society to enforce the law, deliver services, and provide for the needy. All of us are anak ng jueteng. PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM I REPORT 5
Page 1: i REPORT July-September 2005 P75 Ph
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Page 8 and 9: THE TWO FACES OF GMA. Aides say tha
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