PINOY SOLUTIONS TO

CORRUPTION

By: Prof. Leonor Magtolis Briones, Team Leader

Prof. Danilo R. Reyes, Member

Prof. Ma. Oliva Z. Domingo, Member(With research and administrative assistance from Ms. Ligaya P. Castor and Mr. Nonnie G. Jeruta)

Contracted under Cooperative Agreement 492-A-00-09-00032-00

The Integrity ProjectDISCLAIMERThe author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

TABLE OF CONTENTS

Page

Chapter 1 Why the Filipino Solutions to Graft and Corruption? 1 By: Prof. Leonor Magtolis Briones (Ret.)

2 Gararap and Corarap Pinoy Style 12 By: Prof. Leonor Magtolis Briones (Ret.)

3 Chronicling Corruption in the Philippines: A Brief Historical Background Up to 2004 19By: Prof. Danilo R. Reyes

4 Chronicling Corruption in the Philippines, 2005–May 2011:The Road to Perdition..? 62 By: Prof. Ma. Oliva Z. Domingo

5 Learning from Pinoy Successes 99 By: Prof. Leonor Magtolis Briones (Ret.)

6 Framework for a National Anti-Corruption Program 110 By: Prof. Leonor Magtolis Briones (Ret.)

7 From Pinoys to P’noy: Specific Solutions to Corruption 124 By: Prof. Leonor Magtolis Briones (Ret.)

APPENDICES

BIBLIOGRAPHY

CHAPTER I

WHY FILIPINO SOLUTIONS TO GRAFT AND CORRUPTION?By: Prof. Leonor Magtolis Briones

“Recorded in the history of human sufferings is a cancer of so malignant a character that the least touch irritates it and awakens in it the sharpest pains. Thus, how many times, when in the midst of modern civilizations I have wished to call thee before me, now to accompany me in memories, now to compare thee with other countries, hath thy dear image presented itself showing a social cancer like to that other!

Desiring thy welfare,…. seeking the best treatment, I will dowith thee what the ancients did with their sick, exposing them on the steps of the temple so that every one who came to invoke the Divinity might offer them a remedy.

…I will strive to reproduce thy condition faithfully, without discriminations; I will raise a part of the veil that covers the evil, sacrificing to truth everything…

--Jose P Rizal, from the dedication of “Noli Me Tangere/ The Social Cancer: Charles Derbyshire English translation Europe, 1886

Graft and corruption has been considered endemic in Philippine governance since the Spanish era. National Hero Jose P. Rizal described it as a “social cancer”. A popular TV program during ‘80s, “Sic O’clock News”, derisively referred to graft and corruption as “gararap and korarap.” In the current language of the bureaucrats it is referred to as “S.O.P.” (standard operating procedures), implying that corruption is a built-in feature of government operations. It is also described as ”for the boys” but in these days of gender equality, I prefer to refer to it as “for the boys and the girls.” Academics and students of corruption refer to it as “negative or deviant bureaucratic behavior”. However, cynics counter that it is corruption which is normal and honesty which is deviant.

Graft and corruption has been so ingrained in governance and so embedded in society that words peculiar to Philippine practice have emerged. These were compiled by in a “Corruptionary: Natatanging Diksyonaryo ng mga Salitang Korapsyon” by the Center for People Empowerment and Governance (CenPEG).

Is corruption as Pinoy as adobo and as endemic as dengue?

1

After nearly five centuries, graft and corruption now threatens to be as Pinoy as lechon, adobo, sinigang and paksiw. It seems to be as endemic as dengue, tuberculosis and cholera. The solution to this national blight can only come from Filipinos themselves.

HAS EVERYTHING BEEN DONE?

Considering the fact that efforts to control corruption go all the way from Spanish colonialism to the present, can it be said that everything has been done to cure this social cancer?

Legal and administrative reforms; capacity building, public events

All laws regulating government activities, whether national, agency specific, or local in application inevitably contain provisions penalizing corrupt acts. The Anti-Graft and Corrupt Practices Act (Republic Act 3019) and related laws, the Presidential Decrees creating the Sandiganbayan and the Tanodbayan and subsequent laws, as well as Civil Service Commission rules and regulations are just a few of the range of laws, rules and regulations prohibiting corruption.

As for administrative reforms, the Philippine Administrative System undergoes periodic comprehensive as well as agency reorganization. Former President Gloria Macapagal Arroyo triggered a continuing program of reorganization by executive order which is in effect until now.

When there is a surge of anti-corruption public sentiment, capacity-building activities and workshops, conferences, public hearings and fora profusely bloom like Mato-Tse-Tung’s “hundred flowers.”

Corruption studies

There is no lack of knowledge on why corruption occurs, where it occurs, and what can be done to keep it under control. Corruption is perhaps the most studied phenomenon in Philippine governance- by scholars, journalists, multilaterals, bilaterals, think-tanks and by government itself. All the studies on corruption in the Philippines can easily constitute a specialized library. These studies and analyses always contain recommendations and proposals for eradicating corruption.

Obviously, under the formal system of government, corruption is not tolerated. There is a rule for every public activity. Ironically, these laws, rules and regulations are periodically bypassed, ignored and violated with impunity.

Filipinos cannot profess ignorance of corrupt activities in the Philippines. The most sophisticated explanation and the simplest moral arguments are at their fingertips.

The donor community: only Filipinos can solve corruption

2

For decades, multilateral institutions, bilateral donors, international academic institutions and civil society organizations have expended hundreds of millions of dollars in anti-corruption projects. Ironically, corruption has not abated even as they pour more resources to help clean up the governance system of the country.

Perhaps the most extensive current anti-corruption project is the United States Agency for International Development (USAID)’s “Enhancing Anti-Corruption Efforts at the National and Local Levels,” otherwise known as the Integrity Project, or iPro. This is a two-year project which started in December 2009 and will end by September 2011.iPro works very closely with the Office of the Ombudsman, the Commission on Audit, the DILG and related institutions. Their activities range from reengineering of procedures, intensive capacity building, organizational analyses and extensive consultations. These are enhanced by foreign experts who are brought in from time to time.

After one year of focused and targeted activities, iPro ended with the following observation:

“To date, international and bilateral donors have supported almost everyconceivable activity to fight corruption, yet it has continued to expand exponentially since the time of the Marcos dictatorship…. It is unlikelythat external assistance can do any more to combat corruption in the country

than what has already been done.

We believe that only Filipinos will be able to find a solution to the present corruption eruption. We believe that the present government has a unique heritage-based opportunity to change the path of the country from downward into further corruption to upward in a more wholesome form of governance that gradually acts to diminish the degree of success of corrupt activities and individuals.” (The Integrity Project Final Annual Work Plan for Year 2 October1, 2010 through September 16, 2011)

So there.

The search for Filipino solutions: the U.P.CPA/de Guzman/Carino studies

iPro has stated that only Filipinos will be able to find a solution to corruption. The earliest and probably the most comprehensive search was launched in 1975 by the University of the Philippines College of Public Administration under the leadership of Dean Raul de Guzman, and Ledivina V. Carino.

To be sure, corruption had been studied much earlier but focus was largely on legal and administrative aspects. This is the first comprehensive study which examines corruption

3

as a multidimensional phenomenon—involving not only the legal, administrative and economic aspects but also historical, sociological and cultural dimensions as well.

The study was conducted by Filipino researchers from the U.P. College of Public Administration. The first studies were fully Filipino-funded until the project was made part of a comparative study of corruption in Asia. The Philippine project was entitled, “Negative Bureaucratic Behavior in the Philippines—Consequences and Control Measures.”

Because of the multidimensional character of the project, the study was conducted by a multidisciplinary team consisting of a political scientist, two sociologists, two public administration experts, and a fiscal administration expert.

Pervasive corruption in the Philippine Administrative System was examined in terms of : 1. a definition of graft and corruption by Ledivina V. Carino; 2. historical notes on graft and corruption by Jose N. Endriga; 3. negative bureaucratic behavior in a revenue-raising agency—the Bureau of Internal Revenue by Leonor Magtolis Briones; 4. bureaucratic behavior in a spending agency—the Bureau of Supply Management by Raul de Guzman et.al; and 5. negative bureaucratic behavior in a regulatory agency- the Board of Transportation by Victoria Bautista.

Each agency study detailed how corruption happens, what has been done and what more can be done. The project ended with a review of administrative measures against corruption by Maria Concepcion Alfiler and a final summary report on negative bureaucratic behavior in the Philippines by Ledivina Carino and Raul de Guzman.

This is a project conducted by a Filipino team with minimal external financial support and participation, based on the ground studies at the agency and national levels, leading to successful solutions.

Yes, the Filipino can, if he wishes to.

Corruption in Philippine history

The study entitled “Historical Notes on Graft and Corruption” by historian Jose N. Endriga gives us our first clue that the Filipino can solve the social cancer of corruption. It is part of the U.P. CPA de Guzman/Carino studies and traces the historical roots of corruption in the country.

Endriga looks at three periods: the pre-conquest period by Spain; three centuries of Spanish rule; the American colonial period; and the Commonwealth period under a Filipino president.

The pre-conquest period

4

Technically, it can be said that there was no bureaucratic corruption during the pre-conquest period because the Philippines was composed of small barangays and was not yet under a national bureaucratic system. However, he pointed out to the system of tributes and fines imposed by datus and the classification of inhabitants into maharlikas (nobles), timagwas (commoners) and the alipin (slaves) as possible sources of corruption. Unfortunately, there are no records of such incidents.

The Spanish and American regimes

According to Endriga, “the Spanish regime in the Philippines, which lasted for over three centuries, is generally regarded as a period characterized by the prevalence of graft and corruption. There are those who trace the current culture of corruption to the “reign of greed” during that period.

Among the practices which Endriga detailed was the practice of bidding out positions, especially those concerning the collection of taxes and fees. Even positions like those of judges, which were supposed to be by appointment, were also up for sale. As for compensation, certain positions allowed holders to charge fees for their services; other positions had very little entitlement or none at all; other positions were sought for power and influence.

When one considers that these practices took place under conditions of subjugation and conquest, it is very easy to see that corruption was the norm and honesty the deviant behavior.

To be sure, there were proclamations urging the Spanish officials to “protect” the Indios from harm; there was also the practice of the Visita and the Residencia. In the former, a high official was sent to the colonies to conduct investigations of erring officials and recommend punishment. In the latter, bureaucrats were required to render an accounting of their term of service upon retirement. These mechanisms did not work and became the source of more corruption.

When the Americans conquered the Philippines and installed their regime, they introduced the civil service system—replete with examinations, regular salaries, and penalties for the erring. Nevertheless, Endriga cited a number of cases of graft and corruption, as well carryovers of practices from the Spanish regime.

The Philippine Commonwealth under a Filipino president

Endriga says that it was during the period of the Philippine Commonwealth, under a Filipino president where the civil service system was further strengthened with more innovations, some of which were embedded in the Constitution.

He concludes, “Nor was the bureaucracy clean only on paper. Except for some instances of graft and corruption, the image of the civil service in the Philippines, remained much

5

in accord with the conventional picture: clean and prestigious. It remains for another period in Philippine history to tarnish an image it still has to recover from.”

The Commonwealth period under a Filipino president is proudly and fondly remembered as the cleanest during the colonial period. This is the period Filipinos go back to in their memories, when civil servants were as clean and white as the starched white shirts and pants they wore.

History tells us that corruption was rampant during the time of one foreign conqueror; traces of it remained under another conqueror; it took a Filipino president to bring about a shining moment, no matter how brief, when Filipinos had a clean and honest government.

Surely, history can be repeated by Filipinos!

FILIPINO CULTURE: WHAT IS MORAL IS NOT NECESSARILY LEGITIMATE

Looking back, one of the most significant findings of that study was on the impact of cultural norms and values on corrupt behavior.  Corruption has always been considered as a legal and criminal issue.  The behavioral aspects of corruption were largely ignored. The assumption has always been that what is legally forbidden is likewise morally reprehensible.  It is not necessarily so. Dr. Carino pointed out that certain forms of behavior which are acceptable in terms of cultural norms and values are not allowed by government regulations.

Take nepotism. It is considered admirable for a person to take care not only of his family but also his extended family.  Thus, family members expect their more successful relatives in government to provide jobs, extend favors, award contracts, or share the fruits of corruption with them.  

The culture of strong kinship ties can be extended to classmates, fraternity brods and sorority sisters, townmates, village mates and schoolmates.  In these modern times, it can euphemistically be called “networking.”

Nepotism is forbidden by government regulations because it is not democratic and results in an uneven playing field. Nonetheless, the practice is culturally acceptable and even expected.

Dr. Betty Ventura of the U.P. Psychology Department says that corruption is rooted in group-centeredness. “If something has been done, our tendency is to protect the group.” This is clear in the behavior of family members, and of fraternity brothers who cover up for each other.  “Our family-orientedness can give room for corruption…. It can benefit family members who don’t ask where huge amounts of money are coming from.” She is quick to point out that group orientation is not totally bad but contributes to perpetuating corruption.  

6

Ironically, love and loyalty for family which is enshrined in our culture and values can push people in government to corruptive behavior.

Generally, love of family ranks second only to love of God in the hierarchy of Filipino values. One who abandons and betrays his or her family is considered as belonging to the lowest form of humanity. A non-Filipino observed that he has seen close family ties in many countries but none as strong and binding as that of the Filipino family.

Other cultural norms and values

Another powerful Filipino value is “utang-na-loob” or debt of gratitude. This is a beautiful trait which is cherished by Filipinos. When a favor is granted and assistance is given, gratitude lasts even for generations among families. Usually, there is no mention of expected return of favors but this is assumed.

Utang na loob becomes complicated when the return of favor is not only expected for the giver of the favor but also for his or her family and extended ties. Furthermore, payment of utang na loob for public officials can involve either the breaking of rules, going around the law and granting of special favors or concessions.

Beautiful as it is, utang na loob can be abused to further selfish objectives. The practice of giving away publicly-funded goods and cash during calamities, start of the school year or just before elections can be used to accumulate goodwill which can be collected during election periods. An official can tweak rules or ignore them to give away jobs, public services, contracts and other favors to build up collectible utang na loob.

Wealth as indicator of success; ostentatious lifestyles

Sociologists have identified a whole array of norms and values which might encourage corruption. One value which has direct monetary implications is the Filipino’s love of ostentation and the obsession with wealth as an indicator of success.

The popular belief is that we got our taste for the ostentatious from the Spaniards. After all, they ruled us for over three hundred years. However, social anthropologist Dr. Michael Tan says that even before the Spanish era we were already very fond of jewelry and other visible displays of wealth.

Aspirations for lifestyles way beyond the humble salaries of government functionaries can push them to corruption. Carino/de Guzman state that “since success is conceived in terms of conspicuous consumption and other economic indicators, successful practitioners of corruption find that they are not ostracized, although suspicions about the source of their wealth may be gossipped about. Adulation may even be forthcoming because they now have success on two counts: in amassing wealth, and in not being caught in the process.” (p.363)

7

When does corruption become endemic? Carino/de Guzman answer, “negative bureaucratic behavior appears to be endemic in a society where the profit motive is primary, where political leadership is weak, and where the culture honors economic success more than any other.” (p.368)

WHEN CULTURE, NORMS AND VALUES PREVENT CORRUPTION

The preceding section has shown that certain aspects of our culture, norms and values can encourage corruption. James Fallows considers our culture “damaged.” So, is culture to blame for all corruption troubles?

Tony Kwok, former head of Hongkong’s very successful Independent Commission on Anti-Corruption (ICAC) doesn’t think so. He says that Chinese and other cultures also value the family. Gift-giving is common in Asia but it is strictly regulated.

Filipino social scientists who warn that culture has been damaged and abused also say that it can be utilized and “engineered” to prevent corruption. Betty Ventura has proposed “behavioral reengineering,” as successfully implemented by former Mayor Fernando of Marikina. Among others, Michael Tan advices making anti-corruption as a normative, and not just an organizational tool. Among others, he suggests restoring the original meaning of words which we have corrupted, e.g. salvaging, S.O.P., etc. and making simple lives as the norm and not the deviant.

In one of my columns I have proposed that the concept of “utang na loob” can be expanded to mean “utang na loob” to the community, society and country, which should be larger and broader than utang na loob to individuals.

Early studies of anthropologist F. Landa Jocano indicate that Filipinos can differentiate kinship, friendship and utang na loob to individuals from their duties to the government.

ATTACKING THE ETHICO CULTURAL SYSTEM

Thirty-two years ago, Carino/de Guzman emphasized the need to “disturb the ethico-cultural system as a means to attack systemic corruption.”(Carino/de Guzman p.383). They identify “the church, school, and family as major molders of the child and the adult and the source of their ethical norms and behavior. “ They focus attention on education which is under the direction and control of the government. Thus, they advocated an educational thrust towards ethics which should be manifested at all levels. Their efforts led to policy of emphasizing ethics in the entire public administration curriculum, as well as undergraduate and graduate courses in ethics and accountability.

LEARNING FROM EARLIER SUCCESSES

8

“…no hits, no runs, all expenses, no convictions!” No, these are not the remarks of an exasperated corruption-buster in 2011. These were statements made forty-nine years ago by Cesar Climaco who headed the Presidential Anti-Graft Committee of his time.

On the other hand, a successful effort in reducing graft and corruption in the Bureau of Internal Revenue in 1979 has been the focus of a case study and cited extensively in the landmark book, “Controlling Corruption” by Robert Klitgaard, formerly of Harvard University.

Another favorite success story is that of the 1978 DPWH plunder case which can perhaps be compared in scope and magnitude to that of the current “conversion” scandal in the Armed Forces of the Philippines. The case involved 11 of the 14 Engineering Districts of Region 7, 200 of its officials and employees, as well as central office personnel. It resulted in 130 cases affirmed by the Supreme Court, the incarceration of the master mind, and the downfall of the Minister of Public Highways.

The case traces the discovery of the anomaly, the painstaking and detailed forensic audit, the close cooperation among the affected agencies: the Commission on Audit, Bureau of the Treasury, Tanodbayan and Sandiganbayan, and the bulldog tenacity of the entire team which ended in conviction.

Unlike current cases which hardly go beyond public hearings and newspaper headlines, the DPWH case shows it can be done.

Both the BIR and the DPWH cases will be summarized in Chapter 5 as examples of Filipino-driven anti-corruption initiatives.

While it is true that corruption is now considered “endemic and systemic” there were periods in public administration history when successes were achieved both at the national and agency level. The secrets of these successes can be examined and replicated.

Yes, the Filipino can solve corruption.

COVERAGE OF SUCCEEDING CHAPTERS

This study is divided into seven chapters and is written by a 3-person research team composed of Prof. Leonor Magtolis Briones (Ret.) as team leader, with Prof.Danilo R. Reyes and Prof. Ma. Oliva Domingo as team members. Prof. Briones has been studying corruption since the seventies and has done extensive research as well as given presentations and lectures on the subject. Professors Reyes and Domingo have published researches on the subject as well.

9

This chapter, written by Prof. Briones introduces the study and gives the reason for the study: the search for Filipino solutions to the persistent problem of corruption. Chapter 2, also by Prof. Briones, focuses on the definition of corruption.

Chapter 3, written by Prof. Danilo R. Reyes, examines anti-corruption efforts up to 2004. Prof. Reyes notes that these initiatives “have been anchored on organizational and drawn-out procedures where cases tend to be clogged up in a pattern of long investigations and drawn-out trials marked by slow and tedious processes… He describes these “institutional or classical modes of fighting corruption.” Prof. Reyes identified twenty-three anti-corruption agencies which were created from 1950 – 2001. He also listed sixty-six anti-corruption legislation and issuances in the Philippines from 1932 – 2004.

On the other hand, Chapter 4, written by Prof. Ma. Oliva Domingo seeks to answer the question raised by MSI Chief of Party Jim Wesberry: “After all the resources contributed by bilateral and multilateral partners, why there was a palpable increase in levels of corruption since 2005. Her chapter is aptly titled, “The Road to Perdition,” and ends with the resignation of Ombudsman Merceditas Guttierez on May 6, 2011. Prof. Domingo chronicled the travails of the Office of the Ombudsman from its creation to the present.

Chapter 5 is tackled by Prof. Briones. While Chapters 3 and 4 chronicle long decades spent in tackling corruption, with perhaps more failures than successes, Chapter 5 reminds the reader that there have been periods of success in anticorruption campaigns. This chapter is significant because there is widespread cynicism and belief that like cancer, corruption is incurable. Many Filipinos also believe that corruption is already comprehensive, systemic and built into the warp and woof of Philippine society and public administration.

In Chapter 2, three definitions of corruption were identified: market-centered or supply-demand definition; public office-centered definition and public interest definition. Chapter 5 cites successful strategies viz-a-viz these three types or levels of corruption. Actual agencies are cited for market-centered or “divisoria model” corruption. The public may already have forgotten that we have had dramatic instances where corruption at the agency level was controlled. Finally, we have had successful campaigns against public interest-centered corruption, as exemplified by the case of the Public Highways case in 1978 where an entire region and all of its engineering districts were involved in massive corruption. The Bureau of the Treasury of the Department of Finance would have been drained of resources had the corruption continued. On the other hand, cooperation and coordination between and among the Commission on Audit, the National Bureau of Investigation, the Ministry of the Budget, the Offices of the Tanodbayan and the Sandiganbayan. Furthermore, this case went beyond investigation and ended with conviction of the accused.

Chapter 6 builds on the successes cited by Chapter 5 and proposes a framework for a national anti-corruption campaign. This framework is based on what has worked before, did not rely on foreign funding, and utilizes existing structures of government without creating new organizations.

10

The proposed framework is an expansion of the “Cory Model” which was used successfully. Pres. Cory Aquino utilized the cabinet system to control corruption at market and agency levels. The new framework proposes tight coordination with the other two branches of government, namely the legislature and judiciary. It also recommends more effective coordination with the constitutional bodies involved in corruption control.

The last chapter, written by Prof. Briones, combines suggestions culled together with Prof. Reyes and Prof. Domingo in consultations, focused group discussions and dialogues conducted all over the country. The chapter ends with a brief synthesis reiterating the message of the research study.

11

CHAPTER 2

GARARAP AND CORARAP PINOY STYLEBy: Prof. Leonor Magtolis Briones

Introduction

Because graft and corruption in the Philippines has been extensively studied for nearly four decades, it is assumed that everyone know what it is all about. The tendency is to go directly to solutions.

Because this social cancer is complex and multidimensional, remedies will not necessarily work without identifying the category of corruption targeted. As in medicine, there are medications which are broad-spectrum in nature and can attack multiple diseases; there are also medicines which will only work for specific medical conditions under strict monitoring and regulation.

KNOWING THE ENEMY: DEFINING GRAFT AND CORRUPTION

My own definition of graft and corruption would constitute any act of a government official which unlawfully converts public goods and services into commercial commodities, utilizes public funds and property, violates existing laws, rules and regulations for pecuniary and other personal benefits, to the detriment of public interest . This combines three best known concepts of graft and corruption.

The classic approaches to the concept of graft and corruption

As a long student of negative bureaucratic behavior or corruption, many definitions have emerged. These have been shaped by historical experience, laws and administrative requirements and concepts of what is ethical and moral.

For purposes of this paper, I am utilizing classic approaches to the concept of graft and corruption as formulated by Arnold Heidenhemer and applied to Pinoy Gararap corruption by Carino/de Guzman.*

The market-centered or supply-demand approach

This definition of corruption leans heavily on economic concepts of the market. Simply stated, corruption is a phenomenon which occur when there is an undersupply of publicly funded goods and services which are supposed to be for all, and a heavy demand for such

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ .* Arnold J. Heidenheimer, Political Corruption: Readings in Comparative Analysis, New York, 1970, pp. 4-6, in Carino, Ledivina “Definition of Graft and Corruption”, Philippine Journal of Public Administration, Special Issue on Graft and Corruption, 1979.

12

services. Obviously, when demand exceeds supply, the cost of these services go up. Services which are usually given free but urgently needed can be obtained by paying for them. This is especially true of medical services, enrolment in public schools, rooms in hospitals and so on.

Corruption is exacerbated by the fact that oftentimes, government has a monopoly of services and the public has nowhere else to go. This is particularly true in the case of licenses, permits and clearances, and even copies of official documents. Only the government can issue them; if they are in short supply or not readily available, then the citizen/client willingly pays, whether it is demanded or not.

This definition can apply to specific national and local government agencies, as well as to the public administration system in general.

When publicly funded services are in short supply, the question of legality and ethics hardly comes to mind. The citizen/client pays for a good or service because he or she needs it; there is no guilt and loss of sleep, and that’s that. Public service then becomes a commodity for sale on the market with the customer paying for something that he or she has paid for through taxes, while the financial return goes privately to the public official.

Certain government agencies and local government units have acquired notoriety for converting their agencies into markets. The impact is worse when this type of corruption becomes systemic.

In a country where even the most basic of services such as health, education and social justice are in such short supply, bribery and corruption are market driven. Of course this practice goes against public interest because only those who have money can pay for such services and the many who are impoverished wait in vain. Furthermore, double payment can occur because the client/customer ends up paying.

Under the market-centered definition, corruption is the sale and purchase of public goods and services, including favors, by a public official in exchange for monetary and other personal consideration.

A Pinoy variant of market-centered approach: the divisoria model

So what is so Pinoy about the market-centered definition? It can be argued that it happens in all developing countries, anyway. The law of supply and demand works in all economies although we are applying the definition on public goods and services.

I have reflected on a variant of the market-centered definition which I describe as the “Divisoria Model.” The Divisoria is the largest market in the country, with goods ranging from the smallest button to food, groceries, clothing materials, gift items, animals and the largest machines. In the Divisoria, everything is negotiated and bargained for.

13

The poor Filipinos are not the only ones who go to Divisoria. All who are looking for a bargain and love to negotiate go to Divisoria. For the upper classes, it is considered the height of “chi-chi” to shop in Divisoria which has been described as “La Rue Div”.

How the Divisoria model works

The Philippine public administration system is like a huge flea market where public goods are bought and sold—from food to drugs, medical and hospital services, court decisions, licenses, clearances, admission to public schools, free housing, multi-billion infrastructure and mostly likely, election returns.

Now the Filipinos are incurable bargainers. They can’t accept “fixed prices” especially penalties, fines and punishment already specified by law. The errant car driver negotiates with the policeman; the businessman with the tax assessor; the landowner with the agrarian reform official; the accountant and budget officer with the auditor; and even the criminal with the judge, or horror of horrors the justice himself; the voter with the politician; and the congressmen and senators with the president.

In the Divisoria model of public administration, everything has a price but it is not a fixed price and must be negotiated. In such a situation, corruption is inevitable.

Did the son of a high official run over a child? Easy, just negotiate with the police officials! Did the BIR assess a businessman for several millions? No problem, bring it down to a few hundred thousands! Is an importer slapped with a huge fine? Relax, just falsify the documents and share in the “savings”! Does a contractor need a sponsor or endorser for a huge project? No worry, get a politician or someone close to the head of the agency and negotiate the sharing!

In the Divisoria model, corruption is enhanced because of the drive to negotiate for lesser costs, lower penalties, bigger shares, more favors and more power. Thus, the general market-driven model is exacerbated by a Pinoy bargain-driven culture.

The public office-centered definition of corruption

This definition is the most widely known and used by policy analysts and experts formulating anti-corruption strategies. It is focused on the public office and the norms which are binding on the official.

The constitutional provision that a “public office is a public trust,” emphasizes this concept. It is largely based on law, administrative procedures, rules and regulations and requirements. When a public office is defined, the functions of the official are likewise defined.

Thus, a public official who misuses his power and authority for monetary and other considerations is considered corrupt. In other words, corruption is defined in terms of the

14

functions of a public office, and the norms attached to it. Betrayal of such functions and norms for financial benefit is corruption.

A stricter Pinoy public-centered definition

Most of the provisions of the Anti-Graft and Corrupt Practices Act (R.A. 3019) define corruption from this perspective. It needs to be mentioned, however, that R.A.3019 is considered to be even more strict than the general public office-centered definition. Section 3 (g) explicitly defines as graft “entering on behalf of the government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer prohibited or will profit thereby.”

It is interesting to speculate why such a stringent definition was included in the law. It is perhaps linked to culture and favor corruption. A public official may scrupulously avoid or refuse financial consideration to protect himself or herself if the going gets rough. He or she may not accept money but he will be accumulating utang na loob and favors which in the future may just be as good as money!

It must also be remembered that the author of RA 3019 was no less than Sen. Jovito R. Salonga who is widely known not only for his strict adherence to the law but also for his strong sense of righteousness and morality.

Most instances of public-centered corruption occur at the agency level. This is because the functions of the agency, as well as of the officials are stipulated in detail. Regulations are scrupulously spelled out in manuals and rules of procedure.

Recent spectacular cases of corruption are agency-based, like the fertilizer scam involving the Department of Agriculture; the cash conversion scandals of the Armed Forces of the Philippines; the ZTE contract which dragged into the mud the National Economic Development Authority; and the “hello, Garci” scandal exposing the COMELEC. In all these cases, the mandates of the agencies involved were wantonly ignored and betrayed.

The public interest definition of corruption

Of the three classic definitions of corruption, the “public interest” definition of corruption is the broadest and most comprehensive. While the market-centered and public office definitions focus on the actors—namely, the public official and the citizen/client, public interest focuses on the consequences of the corrupt act.

During the seventies, studies of corruption usually concluded with the impacts and consequences of corruption. When I wrote my case study on the Bureau of Internal Revenue in 1977, I pointed out that:

“It appears that the effect of corruption in the BIR on the tax burden is to encourage the regressive tendencies of the present tax structure.

15

Substantial tax payments that have not reached the government coffers because willful avoidance and malicious evasion were supposed to have been made by people who belong mostly to the middle and upper classes, particularly those of the business sector. This could not have been made possible with their collusion with BIR agents.” (Briones, p. 277)

I also pointed out that inadequacy of revenues compels the government to turn to borrowings to finance the national budget, thus,

“Financial planners admit that the level of borrowings in the country is increasing because locally generated revenue is not enough to finance escalating level of governmental expenditures. Government losses through corruption add to the level of these borrowings.” (Briones, p. 277)

Finally corruption impacts on the citizens’ trust in government,

“As proven in the past, corruption in the BIR, as in other government agencies has bred cynicism and doubts on the sincerity of the government in bringing about promised reforms. Two responses from interviews illustrate this attitude. One respondent has stated: ‘Why should not a BIR man commit graft and corruption? Anyway, much of the money that he collects will just be stolen later by other officials. He might as well get his share of the booty!’ Another has commented: ‘But the corruption in BIR is nothing compared to what goes on in high places and in other agencies!”

“Rampant corruption has contributed to the public alienation from the government and government officials. Such a situation will definitely hamper development efforts because cooperation from the citizenry would be difficult to obtain.” (Briones, p. 278)

These observations which I made 35 years ago still hold true.

Public office and public interest definitions of corruption often flow into each other. As what happened during the past administration, when cases of agency corruption explode one after the other, when public institutions are destroyed with impunity, corruption tramples on public interest. The ordinary citizen becomes the victim of corruption and not just the client.

Is there a distinction between graft and corruption?

I was originally under the impression that graft and corruption were synonymous until I studied the Bureau of Internal Revenue and listened to the language of “practitioners” and fellow researchers.

16

My understanding is that graft can be done as individual or group, without having to deal with a citizen/client. This involves manipulation of accounting records and receipts, for example. A clever accountant can transfer accounts, move monies and falsify documents all by himself or herself. If done over a period of time, a grafter can accumulate a sizeable fortune. Before the advent of electronic bank transfers, just by the mere ploy of delaying remittances and kiting, a BIR collector could accumulate millions.

Graft is akin to stealing directly from the public kitty. A contemporary term would be “pangungupit”. It sounds like loose change but considering the enormity of the national budget (Ph1.6 trillion for 2011), loose change can run to millions.

On the other hand, corruption happens between a public official and a citizen/client, between a politician and a constituent. In other words, there is a buyer and there is a seller; there is a corrupt official and there is a victim.

Corruption involves collusion among one or several officials, one or several offices, and one or several private persons, whether contractors or suppliers. Papers have to pass through several desks, with payoffs along the way. Signatures are required. Sharing is involved.

Other definitions

Other definitions of graft and corruption include individual, agency-wide, comprehensive and systemic. These definitions are self-explanatory. Individual corruption includes demanding bribes—the BIR inspector, the Customs collector, the traffic policeman, the water bill collector, the security guard all the way up to the politician demanding a fee for passing a law or changing a regulation.

Agency-wide corruption combines market-centered and public office corruption with organizational culture. Thus, certain organizations are described as “flagships of corruption.” A practice tolerable in the Bureau of Internal Revenue may be reprehensible for the University of the Philippines; sharing of bribes in another agency might be shocking in other organizations; S.O.P. can be normal in an infrastructure agency and forbidden in a hospital.

Systemic or comprehensive corruption means that the entire public sector is already infected. There might be division of territories, as what happened during the Marcos administration. Sectors of the public administration system were divided into “his and hers,” referring to the president and the First Lady. Government corporations were identified with particular “cronies” of the president. DEVELOPING ANTI-CORRUPTION STRATEGIES

It is clear from the above array of definitions that to be effective, an anti-corruption strategy must be clear as to which type of corruption is addressed.

17

For example, if the market-centered or Divisoria-driven type of corruption is the target, the strategy should be all about increasing and making available more goods and services and raising the supply side. The response here is not legal and administrative as MORE SERVICES made available efficiently—more schools, hospitals, and faster release of licenses, clearances, and documents. The challenge is not only to increase the supply of public goods but also the responsiveness of such goods to the needs of citizens.

If public-office corruption is the issue, the successful initiatives which have been undertaken in government agencies can be replicated. There are good things which are happening in the Bureau of Internal Revenue, Bureau of Customs, the Department of Public Works and Highways, and other agencies.

Public interest corruption tends to be comprehensive or systemic. If the Philippines has reached this level of corruption, then no less than the President himself has to oversee the formulation of strategies because it will not involve only Divisoria-driven and public office strategies but also a massive attack on distorted and abused aspects of culture, norms and values.

Yes, definitions do matter because these will shape strategies and solutions.

18

CHAPTER 3

CHRONICLING CORRUPTION IN THE PHILIPPINES: A BRIEF HISTORICAL BACKGROUND UP TO 2004

By: Prof. Danilo R. Reyes

PROFILING THE CORRUPTION CONUNDRUM

Corruption persists today as a scourge among both developed and developing societies. The issue is a staple challenge that has imposed a remarkable and overpowering impact on the credibility, viability and stability of civilizations spanning from ancient times to the present. Corruption and its various manifestations - bribery, extortion, influence-peddling, nepotism, fraud, smuggling, embezzlement, larceny and other forms of flagrant misuse or abuse of power, office or authority – have exacted severe impact on the growth and development of nations, particularly in the Third World.

To begin with, there are no reliable or conclusive data on the scale and magnitude of corruption across nations in the world today, especially those that can be reasonably quantified in monetary terms. The World Bank Institute maintains however that informed estimates can be made, which it calculate roughly to around US$ 1 trillion in bribes alone; it does not say however how this figure was arrive although it can be assumed that this is the estimate annually (http://www.stopcorruption.eu/en-GB/facts.aspx).

Similar updated World Bank report reinforces this, whereby it is estimated that anywhere from US$ 1 to US$ 1.6 trillion are lost to corruption including tax evasion and other crimes annually, half of which reportedly come from developing countries (http://www.dawn.com/2011/06/22/corruption-costs-poor-states-40bn-a-year.html).

Another study puts an even higher estimate at US$2.6 trillion or the equivalent of 5 per cent of the global gross domestic product or GDP (Prakash, 2009). It was also estimated that approximately US$50 billion of the proceeds or fruits of corrupt activities and similar illegal transactions are deposited annually into Western banks and tax havens and that about US$250 billion are laundered into US banks from both developed and transitional (http://www.stopcorruption.eu/en-GB/facts.aspx).

A fairly recent estimate contained in the 2010 Report of the Asian Development Bank’s Office of Anti-Corruption and Integrity puts world wide loss to corruption in the vicinity of US$ 3.61 trillion annually, noting the cross border flow of proceeds from the fruits of corruption, criminal activities and tax evasion amounts to around 3 to 5 per cent of the world’s gross domestic product.

The Report also added that bribery alone already accounts an estimated $1 trillion a year worldwide and that the proceeds of corruption in bribes received by public

19

officials from developing and transition economies are estimated to be between $20 billion to $40 billion per annum, roughly equivalent to 20 to 40 percent of official development assistance (http://www.philstar.com/Article.aspx?articleId=665555&publicationSub CategoryId=66).

Be that as it may, the estimated losses and cost brought about by corrupt activities

for developing nations are both staggering and disconcerting.

The impact cannot simply be seen or viewed however in simple or specific monetary terms because the spiraling incidences of widespread and endemic corruption among developing societies have been known to have impaired efforts to alleviate poverty conditions while at the same time eroding development, weakening the credibility and effectiveness of public leaders and institutions. A fairly recent World Bank study puts the impact more succinctly:

“Theft of assets by corrupt officials, often at the highest levels of government, weakens confidence in public institutions, damages the private investment climate, and divests needed funding available for core investment in such poverty alleviation measures as public health, education, and infrastructure” (http://www.dawn.com/2011/06/22/corruption-costs-poor-states-40bn-a-year.html).

Developing nations reportedly lose from US$ 20 to US$40 billion each year due to corruption and this may represent a conservative estimate because the magnitude cannot be ascertained conclusively since corrupt dealings are generally shrouded in secrecy. It is thus possible that these estimates can be considered as tentative and conservative because they are based on or limited to cases that have been exposed and somehow quantified.

The estimates of losses are disconcerting especially to poor or poverty-stricken

countries where corruption takes a toll on the delivery of basic services or those programs that are supposed to alleviate poverty conditions. Roughly 25 percent of GDP of African nations or about US$ 148 billion are lost yearly to corruption from those ranging from petty bribes to anomalies discovered in major public transactions.

About 50 percent in allocated health funds are siphoned off from legitimate users such as hospitals, clinics and health centers. Corruption in developing countries has also been reported as having increased the cost of connecting a household to a water network by as much as 30 percent, inflating the cost of water and sanitation by more than US $48 billion or nearly half of the annual global aid outlays according to a Transparency International Study in 2008 (http://www.b-fair.net/?p=1378).

20

Corruption has also been reported to have caused severe damage to the environment and the ecology as well as in jeopardizing the livelihood opportunities of poor communities dependent for their subsistence on natural resources.

A UNDP Report in 2008 on accelerating human development in Asia and the Pacific for instance indicated the deterioration and depletion of natural resources, notably of primary forests and inshore fishing grounds, where many communities rely on for their livelihoods in Indonesia. The Indonesian government has estimated that lost forest revenue costs the nation up to US $4 billion a year or around five times the annual budget for the Indonesian department of health (http://www.stopcorruption.eu/en-GB/facts.aspx).

Much more can certainly be added to this distressing litany of incidences and cases. These brief and revealing accounts and studies and their data merely digest the extent and magnitude of the corruption problem. The more disturbing problem is that cases continue to multiply so as to corrode the sensibilities and the moral fabrics of nation states and their populace. Corruption somehow continues to thrive and seemingly untrammeled by efforts and initiatives by upright leaders of countries and of the international community. What is being done to address the address and minimize corruption? To be sure, there have been many responses among nations and the international community.

THE RESPONSE OF THE GLOBAL COMMUNITY

Over the years, various efforts, movements and institutions have been launched in modern times to combat corruption in all its forms and manifestations. Upright governments and leaders have struggled to contain the evils of corrupt practices in their societies even as various penalties and sanctions have been devised to curb corrupt activities.

For the most part, many governments of nation states today have provided for the enactment of varying statutes and legislations, as well as policies and procedures designed to contain corruption in their respective societies. Public organizations and institutions dedicated to the investigation, prosecution and prevention of corrupt practices, among others, have likewise been established as part of the anti-corruption campaigns.

Anti-corruption measures have not just proliferated among nation states; they have also brought a growing collection of regional and international agreements designed to institutionalize collective action among nation states against corrupt activities. In recent years, international accords, protocols and conventions, both plurilateral and multilateral, have been conceived and initiated by governments, business or civil society organizations. These agreements have multiplied through the years, embodying anti-

21

corruption principles, commitments, advocacies, measures and counter measures characterized by cooperation made among participating member nation states.

Thus, cooperation agreements to fight corruption at the global and regional levels were launched to underscore and reflect the continuing and collective concern among the international community of the untrammeled rise of corruption incidences among nation states.

The more significant ones include: the European Partners Against Corruption (EPAC), 2004; the United Nations Convention Against Corruption (UNCAC, 2003); the Financial Action Task Force on Money Laundering (FATF): The Forty Financial Action Task Force Recommendations, as revised in 2003; the African Union Convention on Preventing and Combating Corruption and Related Offences, 2002; the Global Organization of Parliamentarians Against Corruption (GOPAC) launched in 2000 and supported by its regional networks, namely, the African Parliamentarians Network Against Corruption (APNAC), the Southeast Asian Parliamentarians Against Corruption (SEAPAC) and the Latin American Parliamentarians Against Corruption (LAPAC); the Council of Europe Criminal Law Convention on Corruption, 1999; the Council of Europe Civil Law Convention on Corruption, 1999; the Stability Pact Anti-Corruption Initiative (SPAI) in South Eastern Europe, adopted in 1999; the Anti-Corruption Initiative in the Asia-Pacific organized by the Asian Development Bank in 1999; the Group of States Against Corruption (GRECO), 1999; the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, 1997 and the companion OECD Revised Recommendation on Combating Bribery in International Business Transactions; the European Union Convention on the Fight against Corruption Involving Officials of the European Communities or Officials of Member States, 1997; the Organization of American States (OAS): Inter-American Convention against Corruption, 1996; and the WTO Plurilateral Agreement on Government Procurement, 1994.

If these agreements entered into among member nation states highlighted the growing concern and apprehension about the unabated rise of corruption incidences in many societies today, the rise in the number of international and regional organizations and movements monitoring, observing or reporting on corrupt activities have likewise increased. This growing list of international and regional agreements, conventions, or protocols has somehow spawned an equally growing number of conferences, conventions, meetings, seminars and other similar for a organized by nation-states, regional associations or civil society organizations operating at the national, regional and international levels.

The alarming increase in incidences of corrupt practices has likewise spurred the rise of organizations dedicated to combating corruption. Thus, the proliferation of anti-corruption institutions such as the Transparency International founded in 1993, the International Association of Anti-Corruption Authorities organized in Merida, Mexico in 2003, the Asia-Pacific Economic Cooperation Anti-Corruption Transparency Experts Task Force, organized in 2007, the European Anti-Corruption Contact Points Network set up in 2008 and the International Anti-Corruption Academy based in Luxembourg,

22

Austria established in 2011, among others, reflect the growing concern on the seriousness of the corruption problem in the world today.

Along these initiatives, several international organizations have likewise embarked in anti-corruption projects such as the United Nations and its organizations, the USAID with its Anti-Corruption strategy Program, the World Economic Forum and its Partnering Against the Corruption Initiative (PACI) and the International Chamber of Commerce.

The challenge remains daunting as ever in spite of these initiatives. Transparency International’s Managing Director Cobus de Swardt laments for instance that “only seven of 38 countries signed up to the OECD anti-bribery convention are actively investigating and prosecuting companies for bribing foreign officials,” and that the “situation has shown no signs of improvement for two years.” He adds that “bribery is becoming sophisticated” and that confirms the fact that corruption results in “the denial to public services, to economic opportunity, to a voice and to justice – that it cannot be seen as anything but a criminal act of whom the victim is society at large…” (de Swardt, 2011: 24)

The corruption phenomena and measures to counteract them have also brought

about a rich and fertile stock of country and cross-country researches and studies. Through the years, public administration scholars and academics, researchers and experts, commentators and practitioners, as well as institutions in the public and private sectors have grappled with the mysteries and mystiques of corruption, the problematic of accountability and the issues of inefficiency in government in their respective governments and societies.

The list of these efforts can be long yet not exhaustive for they may cover only certain nationalities where corruption has been acknowledged and accepted.1 In fact,

1The literature discussing, exploring, analyzing and explaining accountability and the problematic of corrupt practices and the measures to contain them is vast and proliferating. The entries indicated here are partial listings and certainly not comprehensive enough because they represent only those studies in the Asia-Pacific Region and does not cover other regions or continents (i.e., Latin America, Europe, Africa and Australia) to which this study did not have access to. The point however is that there are indeed initiatives that have evolved thru the years with a burgeoning mass of literature so much so that the twin issues of accountability and corruption can be treated as a specialized courses or fields of specialization in public administration, political science, management or law degree programs. Thus, some of these studies include: Gonzalez, 2011; Scott, 2011; Kwong, 2011; Beh, 2011; Vichit-Vadakan, 2011; Domingo and Reyes, 2011; Transparency and Accountability Network, 2011; Brillantes and Fernandez, 2009; Co, 2009; Ocampo, 2009; Prakash, 2009); Reyes, V.C., 2009; Reyes, D.R., 2009; 1989; 1987; 1982; UNDP, 2008; Boncodin, 2007; Holmes, 2007; Constantino-David, 2007; Cabo, 2007; Osborne, 2007; AIM, 2006; Ursal, 2006; Fernandez, 2004; Office of the Ombudsman, Republic of the Philippines, 2004; Balogun, 2001; Vinten, 1999; 1994; 1992; WB, 2000; ADB, 1998; Alfiler, 1995; 1979; 1977; 1975; Chua and Gould, 1995; Chee, 1991; Dhungel and Goutam, 1991; Hayllar, 1991; Le Herrisier, 1991; Quah, 1991; Tangcangco, 1991; 1989; Yan, 1991; Richter, Burke and Doig, 1990; Bacani and Cailao, 1990; Lee, 1989; O’uchi, 1989; Pradhan, 1989; Raksasataya, 1989; Ro, 1989; Simms, 1989; Carino, 1986; 1979; 1977; 1975; Carino and de Leon, 1983; Bok, 1980; Carino and de Guzman, 1979; Bautista, 1979; Briones, 1979; Endriga, 1979; Abueva, 1970; Iglesias, 1963).

23

early cross country studies for instance undertaken by academics and scholars in Asia had to use euphemistic labels or “scholarly sounding” terms such as “deviant bureaucratic behavior” or “negative bureaucratic behavior” to study and analyze bureaucratic corruption in Asia and the Pacific.

The use of these terms were resorted to or adopted by academics to disguise their efforts and be able to conduct unimpeded studies on the phenomena of corrupt behavior in participating countries which may not be tolerant in exploring or exposing the presence of corruption in their bureaucracies. They were also resorted to in order to avoid harassment or disapproval by governments of the involvement of their academics in the project (Carino and de Guzman, 1979; Bautista, 1979; Briones, 1979).

CORRUPTION IN THE PHILIPPINES

The Philippines has struggled against the menace of graft and corruption in government since colonial times. Spanning from the colonial periods marked by the occupation of three colonial rulers – Spain, the United States and Japan - and moving up to the independence period in 1946, the country has endured continuing bouts and accounts of corrupt administrations committed by colonial regimes and even by its own leaders.

In 1986 and in 2001, the country’s people power revolutions toppled and ousted two presidents accused of corruption. Impeachment proceedings were likewise filed against the president of the previous administration as well as other officials impeachable under the Constitution.2

In 2010, the Ombudsman, accused of selective prosecution and inability to fairly investigate and charge leaders and personalities associated with the previous administration of Gloria Macapagal Arroyo (2001-2010), chose to resign from office after being threatened with impeachment in Congress.

As pointed previously, corruption seriously impairs the quality of life in Third World settings because the limited resources allotted for the delivery of basic services are compromised when siphoned off from their intended purposes.

The Philippines represents a critical case where corrupt activities have weakened the capacity of government to respond to pressing needs in various functions – from such activities as the build-up of infrastructure facilities such as irrigation, road networks and bridges, airports and marine ports to the delivery of basic services in health, education, social welfare, sanitation, and many others.

2 For background information on the history of the Philippines, its government and bureaucracy, the interested reader may refer to the following materials: Reyes, 2011;2003; Francia, 2010; Abinales and Amoroso, 2005; Corpuz, 1989; 1957; and Agoncillo, 1977.

24

Corruption has also eroded the credibility of leaders and institutions causing for the most part, alienation, disenchantment, disaffection or even outright anger against government. The incidences of corruption has likewise brought about frustration and hopelessness among upright and well-meaning citizens, who in some cases, have chosen to avoid paying taxes “since these will be just stolen, so I might as well be the one to steal the money I earn.”

To be sure, various political leaders, several administrations and their bureaucracies, political parties, civic organizations and society in general have taken initiatives to suppress corruption in the Philippines. Unfortunately, corrupt activities continues to thrive, partly as legacies of the colonial periods following independence and partly as adopted practices by newly installed administrations and their leaders to perpetuate power and enrich themselves.

This perhaps maybe understandable because as in other colonial systems, the periods of colonial regimes had demonstrated that corrupt activities committed by colonial masters were somehow rewarded instead of sanctioned in spite of periodic anti-corruption proclamations, edicts and other issuances, as well as structures intended to fight corruption.

Conceivably however, colonial legacies may only be among the numerous reasons advanced by studies as to the causes of corruption or why they continue to thrive. But these are not the only reason for there have been numerable analyses and explanations as to why corruption persists in third world countries in the post-independence era. Such factors as low salaries and poor working conditions of bureaucrats, poverty, dishonest leadership, the culture of patronage, opportunities to commit graft and the low risk of detection, lack of political will, weak and slow administration of justice have been cited by experts and analysts as among the reasons why corruption in the Philippines continue to thrive (Quah, 2009; 2003; Reyes, V. Jr., 2009; Obejas, 2008; Ursal, 2006; World Bank, 2000).

ESTIMATING THE LOSS TO CORRUPTION IN THE PHILIPPINES

Apparently, as in the global perspective, there are also no reliable and quantified data as to how much is lost to corruption and related anomalies in the Philippines annually. As the Philippine Transparency Reporting Project maintains, an accurate figure is impossible to gauge for obvious reasons (http://www.stopcorruption.eu/en-GB/facts.aspx). As pointed out earlier, exact figures as to annual losses to corruption cannot be accurately gauged because the activities are enshrouded in secrecy and estimates can only be speculative or derived from calculated or informed estimates based on certain assumptions. Information and data sources such as surveys, publications, commentaries, anecdotes and government data can only provide an indication of the prevalence of systematic corruption (World Bank, 2000)

25

The data as to the figures can also vary from time to time when inflation values are factored in over time in the estimates. Data for estimates made two or three decades ago may appear to be not that alarming when compared to current values of whatever currency or denomination is used.

Likewise, the estimates can sometimes be reflected only as part of other crimes (i.e., illegal drug dealing, robberies, kidnap for ransom, etc.) and may not be exactly categorized as “corruption.” But the estimates can be revealing when one views it from the point of view of opportunities lost or of services denied because of leakages in the disbursement of public funds or in the collection of revenues legally accruable to the government.

There is however some certainty that a sizeable amount due the government out of taxes (tax evasion, under-reporting of tax liabilities, corruption in tax collecting agencies, etc.), duties and tariffs (smuggling, under-reporting of tax liabilities) and similar forms of government revenues and income are misappropriated. Likewise, disbursements and expenditure (purchases, contract of services, etc.) are also systematically pilfered. Thus, it could be safely assumed that funds entering the public coffers and those being disbursed are embezzled thru various corrupt activities.

In the 1980s for instance, former Assemblyman Vicente Millora was cited as calculating the Philippines’ annual loss to corruption to about 10 per cent of the country’s gross national product. A Commission on Audit appraisal from 1980 to 1985 claimed that some US$ 117.5 million was lost due to malversation of public funds and cash shortages of accountable officers.

The Sandiganbayan, or the Philippine anti-graft court made operational in 1978 during the martial law period, noted that the government was defrauded by as much as 130.4 million pesos in some 3,395 graft cases filed over a three year period alone from 1979 to 1981 (de Guzman, Brillantes and Pacho, 1988; de Guzman, 1988).

In a 2000 World Bank Report, reports on corruption loss in the country made by the Ombudsman in the Philippines were cited as amounting to as much as US$48 billion over the last 20 years. The figure was reported to be larger than the country’s foreign debt at that time, which was pegged at about US$40.6 billion. The Commission on Audit also estimated around that time that the country’s loss to corruption can roughly be 2 billion pesos annually (WB, 2000).

The World Bank calculates likewise that about 20 per cent of the annual budget of the Philippines is lost to corruption or the equivalent of as much as 3.8 per cent of the country’s gross national product. From 1995 to 2000 alone, the estimated loss to corruption was valued at about 609 billion pesos or about US12 billion (http://bti2006.bertelsmann-transformation-index.de/122.0.html?L=1; Transparency and Accountability Network, 2011).

26

Expanded and extrapolated however for a 20 year period from 1977 to 1997, World Bank estimates reached about US$48 billion or roughly 1.968 trillion pesos (http://www.myreviews101.com/cost-of-corruption-in-the-philippines.html).

The Office of the Ombudsman has also estimated in 1999 that the amount lost to corruption in the Philippines could go as high as US$31.5 billion (at the then prevailing exchange rates) or Ph 1.2 trillion during the last twenty five years (as cited in World Bank, 2000: 35).

Likewise, another estimate made by a Civil Service Commission official in 2004 cited a report of the Department of Budget and Management that claimed that the loss to corruption due to fraudulent practices alone could amount to as much as US$382 million from the previous year alone, and that leakages in road projects transactions could reach to about US$1.3 billion (Fernandez, 2004: 92).

Put in more operational perspectives, based on a claim by Senator Edgardo J. Angara in 2002 in a speech at the Philippine Senate, losses to corruption in the Philippines can amount to an average of 22 billion pesos annually which is twice the budget of the Department of Health that year. The loss could also be translated, claims Senator Angara, to 520 million textbooks for public school children, 63,000 new classrooms or 1,500 kilometers of concrete farm to market roads (Angara, 2002).

On the other hand, former President Fidel Ramos, in his keynote address to the Fletcher School of Law and Diplomacy in 2001 at Tufts University in Massachusetts claimed that 20 per cent of the government budget of the Philippines is “lost to corruption every year” ( as cited in Abinales and Amoroso, 2005: 258).

The Transparency and Accountability Network also cited the Ombudsman in a paper as gauging that 30 per cent of government contracts are diverted to corruption annually (Transparency and Accountability Network, 2011).

As it is, the 2010 Corruption Perceptions Index of the Transparency International, which measures the perceived levels of public sector corruption in 178 countries around the world, has listed the Philippines as no. 134, along with Azerbaijan, Bangladesh, Honduras, Nigeria, Sierra Leone, Togo, Ukraine and Zimbabwe (de Swardt, 2011).

It is perhaps in this light that recent estimates have increased loss to corruption in the Philippines to be reaching to about 30 per cent of the annual budget, which would be about US$11 billion of the US$34 billion national budget for 2010. This would be lost, if not already lost to such corrupt practices as ghost projects and manipulated payrolls, rigged biddings of public contracts, protection money, extortion, tax evasion and bribery, among many other forms or manifestations of corrupt practices (http://www.eon.com.ph/eon-sphere/view/309/newsid/141/slaying-the-beast.html).

As can be seen from these varying calculations, the estimates of losses to corruption have practically grown thru the years, from around 10 percent of GNP in the

27

1980s to 20 percent of the national budget in 2001, and rising to the estimated levels of 30 percent of the budget in the present period. The point is clear and apparent. Corruption has persisted and remains to be a growing industry in the Philippines that has impaired the capacities and credibility of various institutions of government, has also toppled leaders and impoverished the people who have been systematically and habitually denied access to basic services and opportunities.

On top of these, corruption has likewise weakened the government’s capacity to deal decisively with the separatist movements in Mindanao, a rebellion that has been on-going for over thirty years, as well as with communist rebels, which has persisted for over fifty years. Continuing corruption within the Armed Forces of the Philippines has denied those in the front-lines with needed weaponry and supplies because funds have been diverted by unscrupulous ranking military officers and which later would be highlighted and exposed in the so-called “conversion funds,” which are still the subject of a senate investigations. Budget appropriations for the military have been diverted to private accounts so as to compromise the modernization program of the AFP.

There are also unverified comments suggesting that military officials would time and again provoke skirmishes with rebels or with bandits to catch the attention of national officials and justify increases or releases of funds. As such, the Philippines has now engaged in a protracted war of attrition, particularly in the South, that has not just resulted in the killing of civilians, soldiers and rebels, but has dislocated communities, displaced households and likewise discouraged investments that should bring economic activities and provide employment and livelihood opportunities.

This is not however to suggest that corruption as phenomenon can be claimed as the reason for rebellion or for the continuing state of conflict. To be sure, this is attended by various other complex explanations but it cannot be denied however that corruption in the ranks of military and civilian officials is a major contributing factor that exacerbates the already critical situation. As had been pointed out earlier, corruption hinder and undermine the delivery of basic services in subject areas of conflict, and this certainly can be considered as an outstanding reason why alienation and frustration with government are evoked from the populace and foments rebellion.

Likewise, the unabated increase or rise in crime incidences in the country can also somehow be attributed to corruption in the ranks of police officials in the Philippine National Police. Investigations on police corruption and involvement in crime syndicates or in individual criminal cases have become part and parcel of continuing investigations in the Philippines as evidenced by such cases as the purchase of second helicopters passed off and paid for as brand new. Horror stories of police officers caught involved in drug dealing, carjacking and kidnap for ransom cases, as well as bribery and extortion have practically become common.

Corruption in the Philippines is however not entirely a recent phenomenon that has emerged in the independence era. It has been the bane and blight that has afflicted Philippine society since colonial times. Similarly, efforts and initiatives to contain and

28

curb corruption had been a prominent fixture in the colonial story of the country as governors after governors introduced various anti-corruption approaches only to discover that the rapacity continues to grow. If only to highlight the long and hard history that has characterized the country’s experiences with corrupt practices, a discussion is provided here to chronicle at least important though passing accounts of corruption and the measures established in the Philippines to address them.

CORRUPTION DURING THE COLONIAL PERIODS IN THE PHILIPPINES

Corruption and its various manifestations and practices have been prominent fixtures in the development and evolution of the Philippine nation-state. As a colony of three major colonial powers – Spain, the United States and Japan – the country and its people have grappled and endured with corrupt policies and practices instituted by its colonizers during these colonial periods. It is therefore no surprise that these habits spilled over to the period of independence.

It is perhaps a given fact that the subjugation of the islands were not exactly inspired by benign objectives of converting heathen lands into Christianity or of altruistic motives of civilizing backward settlements. These are but part of the justifications of conquest since ultimately, the objectives are dictated by the need to explore opportunities in new territories which can be exploited to support the coffers of the colonizers (Reyes, 2011b; Francia, 2010; Abinales and Amoroso, 2005; Endriga, 2003; Corpuz, 1989; 1957; Veneracion, 1988).

Corrupt practices could just the same be said as part of the legacies of colonial times, transmuted or adjusted in time to suit the ethos of the newly independent states and its leaders. Such practices as bribery, extortion, embezzlement of funds and properties, and similar rent seeking practices marked the colonial periods and carried on to the independence era.

It must be emphasized however that this reasoning only partly explains the prevalence of corruption in the Philippines for corrupt activities have become “a way of life” among corrupt bureaucrats and politicians where new methods and practices of corrupt behavior have evolved freely.

Corruption in the Spanish Era (1521-1896)

Corruption and mismanagement had characterized the more than 300 hundred years of Spanish rule in the Philippines. Spanish colonial objectives and the attendant policies instituted to govern the islands brought about motivations and tendencies that

29

tolerated corrupt practices. While the Spanish conquest was invariably attended by positive and idealistic aims of religious crusades, it was also a colonial venture for “political and private aggrandizement” (Corpuz, 1957: 10).

The noble objectives of converting so-called “heathen lands” into Christianity were counterbalanced by what Endriga asserts as “the practical objective of increasing the royal estate through tributes, monopolies, fees and fines,” bringing about what he refers to as “[a] huge body of laws and a plethora of institutions …built up through the centuries to uphold the economic aims of the colonial enterprise, which nevertheless were not realized, the colonies being consistently losing propositions” (Endriga, 2003: 394).

For one, the philosophy regarding the colonies was based on the belief that they were the Crown’s personal possessions and thus could dispose of as he pleased. Public offices were part of these possessions in the colonies and were regarded either as positions of the King to be dispensed with either as grants or favors (“merced”) to loyal subjects including their heirs who were rewarded for their services, or as merchandise sold to highest bidders. The sale of public offices to claimants helped financed the wars and lavish lifestyle of the king and of the elite (Reyes, 2011b; Endriga, 2003; Veneracion, 1988; Corpuz, 1957).

In these arrangements, public office positions were thus treated as opportunities to earn or as investments for private gain. It was therefore understandable that those appointed in this manner resort to corrupt practices to recoup investments or make the most out of the favor. Corruption was thus the natural consequence in this dynamic.3 Corpuz described the impact of the sale of offices more vividly as follows:

“…What is important is that the moral aims and the Christian responsibility which the colonial regime professed as its foundations were tossed as so much eyewash into the discard by the brazen immorality of bureaucrats and the criminal collaboration of their superiors. Public office became a commodity to be bought and exploited, for the lackey turned alcalde viewed the new position as an investment. He had a limited period of time in which to make the office pay for the expenses he had incurred in the process of securing it, to pay off any official attempts to penalize his frauds and crimes, and to yield him a sizeable fortune at the end of it all…” (Corpuz, 1957: 100-101).

3 Veneracion (1988:39-43), citing Nicolas Cushner, 1971, provides a tabulation of some sold offices in the Philippines during the Spanish era from 1589 to 1826. The listing reflects the records of the buyers, the public offices bought, the prices paid for and the dates of confirmation to the position by the Council of the Indies (Consejo de Indias), which was the highest policy-making office in the colonies during the Spanish regime.

30

This pernicious practice of selling public offices was not only tolerated. It was legitimized because various laws regulated the sale of offices and even advertised every week by the governor with the assistance of the fiscal of the Audiencia, which is an entity to be discussed later.

Once a position was sold by bidding, no “allegation of deceit or misrepresentation” was allowed to be made by either vendor or vendee, whereby a report of the evaluation and sale was to be submitted by the governor (Veneracion, 1988: 37).4

Compounding the situation is the marked corruption in the Church which held sway even with secular officials. The interdependence of secular and clerical religious officials contributed to the mismanagement and corrupt practices were quite prevalent as plunder of the islands were committed to support not only the crown, but religious orders. It was estimated that friar estates owned, according to some accounts, “nearly 40 percent of the surface area in the four Tagalog-speaking provinces” surrounding Manila (Abinales and Amoroso, 2005: 80).

A more specific record provided that “[b]y the end of the nineteenth century, the drive of the friars for the acquisition of land is suggested by the control of 24.3 per cent of arable land in Bulacan, 28.8 per cent in Laguna, 82 per cent in Cavite, and nearly 100 per cent in Rizal” (Abueva, 1988: 27).

During this long period of Spanish colonial rule, several institutions and positions were established to address the problems of corruption, inefficiency and mismanagement, among others, by the Spanish government. Foremost among these was the Audiencia of Manila, which performed the functions of a superior judicial tribunal, assuming the role of what is known in the contemporary period as a supreme court. Originally established by royal decree in 1853, it was abolished six years later in 1589, only to be reconstituted again in 1595, and functioned till the end of the Spanish regime.

The Audiencia was composed of the governor and captain-general, acting as presidente-gobernador; four oidores as members (or a magistrate, although there are rough translations referring to it as “auditor”); a fiscal who served as prosecutor; an alguacil mayor or chief constable; a teniente del gran chanciller or assistant to the grand chancellor; and a roster of subordinate clerks and notaries (Corpuz, 1957).

To monitor the provinces and localities, the Audiencia would name an oidor as a visitador who was tasked to inspect not only local administration but the system of religious instruction, the tributes assessed, the state of the natives, among other functions.

The internal corruption that plagued this body however weakened and impaired its efficiency and its authority. Reports of misconduct in the colony had necessitated the administration in Madrid to introduce reforms by establishing agencies and policies that

4 For the interested reader, Veneracion, 1988 provides a more detailed discussion of the process of sale and furnishes examples or incidences involving the sale of offices during the Spanish regime.

31

would introduce better governance and at the same time check on corruption in the Islands.

As Corpuz accounts, in 1774, in an effort to systematize colonial administration, an executive ministry was established in Spain vested with authority to direct matters involving war, finance, navigation and commerce. In 1790, this new ministry was abolished but restored in 1814 with the name “Ministerio universal de las Indias,” which would again be abolished the following year only to be reestablished again in 1817 with the label “Secretaria del despacho universal de las Indias.”

During the years 1820, 1824, 1832, 1834, 1835, 1836 and 1851, this body would be abolished and restored with different titles and functions, and then to be reconstituted as the “Ministerio de Ultramar” or the Ministry to supervise the colonies (Corpuz, 1957: 129).

Veneracion also reveals in a treatise on the history of the Philippine Civil Service that “[e]xtant documents at the Philippine National Archives are packed into 106 big bundles of 6 to 8 cases, investigated and litigated by various offices throughout the Philippines” and which presumably contained reports and notes of corruption cases during the Spanish period (Veneracion, 1988: 56).

It is instructive to note that the constant changes in establishing and abolishing,

naming and renaming, organizing and reorganizing agencies to effect reforms and fight corruption that characterized the Spanish period continue to be prevalent in the present day, as will be shown in succeeding discussions.

The American Colonial Era and the Commonwealth Period (1900-1941)

The excesses and abuses of the Spanish colonial regime fomented several revolts that began as early as 1574 with the uprisings led by Lakan Dula and Sulayman and followed by several attempts that culminated in the Philippine revolution of 1896, which served as the occasion for the Filipinos to declare independence from Spanish rule and accordingly ratified a constitution and proclaimed the establishment of a Philippine Republic. But this was truncated with the occupation of the Islands by the Americans following a short-lived Spanish-American war in 1898 (Reyes, 2011a; 2011b; Francia, 2010; Abinales and Amoroso, 2005; Corpuz, 1989; Agoncillo and Guerrero, 1977).

The American occupation of the Philippines was swift. While Filipino resistance was manifested itself in a brief Filipino-American war, the Americans were able to effectively contain the rebellion circa 1902. A military government was initially created but this was soon replaced by a civil government which provided for a Philippine Commission in 1900 that assumed legislative and executive functions.

32

In time, the American regime adopted a policy of “Filipinization” of appointments to its colonial government, a clear departure from the Spanish practice of limiting Filipino involvement in administration. The American colonial regime consequently established a civil service system based on merit and fitness patterned after its own and opened up appointments to the bureaucracy its created by way of open competitive examinations (Reyes, 2011a; 2011b; Endriga, 2003; Corpuz, 1957).

It should be pointed out as part of this narrative that the Americans have just gone over a long period of corruption and discontinuities in its own system of government during this period. The American government of the early and mid-nineteenth century was characterized by partisan politics and the dominance of the spoils and patronage system. The policy of appointing partisans of the party in power not based on merit and fitness became a major feature in American public administration beginning with the administration of President Andrew Jackson (1829-1837) and continuing on until the assassination of President James Garfield in 1881 by a disgruntled office seeker.

It was acknowledged that the five decades of what is now known in public administration study as “Jacksonian democracy,” ushered in a period of corrupt practices as office holders, knowing that their stay in office depended on the political party in power, enriched themselves and took advantage of their positions.

As a result, reforms to address patronage politics and the corruption it spawned was consequently instituted, resulting in the enactment of the Pendleton Act of 1883 which established a civil service system in the American federal bureaucracy based on merit and fitness, and promptly insulated it from partisan politics.

It is perhaps within this context that the Americans, upon taking control of the Philippines in 1899, immediately adopted a system of administration patterned after their own. The establishment of a civil service system based on merit and fitness in the Philippines, provided under Act No. 5 in 1900, was one of the early pieces of legislation in the American colonial regime.

The Bureau of Civil Service in the Philippines was established on November 21, 1900 and given the mandate that the “greatest care should be taken in the selection of officials for civil administration” and that all recruits, both American and Filipino, were to be “men of the highest character and fitness” who would perform their functions and duties unaffected by “partisan politics” (Abinales and Amoroso, 2005: 119).

The fight against corruption in the pre-Commonwealth period was however pursued, and one narrative by American Governor-General Dwight Davis reported in 1930 that a total of 150 employees were dismissed or required to resign while disciplinary action was taken against 1, 173 others (as quoted in Veneracion, 1988: 116).

Endriga also pointed out that during this period high ranking American officials were likewise involved such as William Cameron Forbes, who was Secretary of Commerce and Police, and later on Governor-General. Forbes was accused of purchasing

33

choice lots in Baguio City for which it was alleged that a ridiculously low price was paid. In his capacity as Secretary of Commerce and Police, Forbes had jurisdiction over the then Bureau of Public Works which supervised expenditures of public money in Baguio (Endriga, 1979: 252-253).

Two other ranking American officials, Dean C. Worcester, then Secretary of the Interior, and Executive Secretary Frank Carpenter were also reported as having taken advantage of their positions to purchase real property at low prices and at the same time had roads built in these sites to raise their values. These ranking officials were the subject of investigations including other lesser ranking municipal officers such as treasurers, chief clerks, and police chiefs (Endriga, 1979: 253).

Compared however to the Spanish regime, prosecution was swift and sanctions were imposed accordingly. It is perhaps for these reasons that corruption during the early days of the American colonial administration was more or less contained even if there were continuing reports of anomalies.

As Filipinization of the American colonial administration expanded owing primarily to the difficulty and costs of transporting and hiring American citizens, Filipino leaders began to assume important positions in the legislature and executive departments of the regime.

The legislature, according to Abinales and Amoroso (2005) had its share of landed interests derived and sustained into the period from the Spanish era. In time, the menace of spoils and partisan politics attended by corruption began in earnest to creep up into the regime. Abinales and Amoroso provide a telling description:

“…With their control of the colonial state vastly expanded, these leaders began to use it as an instrument of ‘primitive accumulation.’ There were two sources of largesse. First was the state itself. Through the ‘spoils’ system, Filipino politicians distributed offices (and their corresponding budgetary allocations) to relatives and supporters. Political appointment of kin, allies, and cronies became standard practice, with entry into government assured by the backing of a powerful politician. In exchange, an appointee facilitated the business success of his patron and protected other members of his network within the bureaucracy” (Abinales and Amoroso, 2005: 141).

The accounts also suggested that state corporations that were established to promote colonial development were used as vehicles to material enrichment through corrupt acts. As an example, it was claimed that the state owned Philippine National Bank (PNB), which was created then by the Philippine Assembly to finance sugar production and exportation was taken over by a Filipino leader, Sergio Osmena, apparently “in violation of every principle which prudence, intelligence and even honesty

34

could dictate” (Abinales and Amoroso, 2005: 141, citing Golay, 1998: 220). It was alleged that Osmena used appointments to the PNB to repay political debts and that these appointees authorized extravagant loans to companies in which they themselves were investors.

There were accounts that identified Manuel Quezon, who was to become the President of the Philippine Commonwealth in 1935, as controlling the Manila Railroad Company (MRC), another state owned corporation, and using it as a source of employment for supporters, although he chose to hire professionals (Abinales and Amoroso, 2005).

It was also around this time when the evils of spoils and patronage again resurfaced as President Quezon “appropriated and tightened control over such vital executive agencies as the Civil Service Bureau, the Bureau of the Budget, and the Bureau of Audit – critical instruments in the disbursal of patronage because they administered the flow of personnel and use of government monies” (Abinales and Amoroso, 2005: 153).

These remain as scattered incidences of corruption that can be attributed to the leadership, much in the same way as that of Marcos and Arroyo several decades later. There may be other allegations or pockets of corrupt activities during the commonwealth ear which was adopted by the American Colonial administration in 1935 to prepare a ten year period to prepare the Philippines for independence.

The accounts however are not as numerous as they were during the Spanish era, as the initiatives for reforms perhaps placed them in check especially within the bureaucracy where the merit and fitness policy was strictly observed. The Commonwealth era was a time of consolidation with Filipino leaders, inspired with the prospects of delivering an independent nation, sought to prove them as capable, and perhaps, the significant proof would be a government freed of corruption and the prevalence of the spoils practice of partisan politics.

The Japanese Interregnum (1941-1944)

If corrupt practices flourished and were institutionalized during the more than 300 hundred years of Spanish rule, the reforms adopted in the Philippine bureaucracy during the American era practically vanished during the almost five years of Japanese rule. The Japanese launched an air raid on the Philippines in December 8, 1941, barely a day after the attack on American installations in Pearl Harbor in Hawaii.

By then the Japanese invasion of the Philippines was on, forcing the Commonwealth government of Manuel Quezon and its leaders to flee and subsequently go in exile in the United States. An ailing Quezon, along with Vice-President Osmena and a number of their staff were whisked out of the country and brought to Australia where they temporarily sought sanctuary to be able to proceed to the United States to

35

establish a government in exile. American military and civil officials led by Gen. Douglas MacArthur also fled the Philippines and retreated to Australia (Abinales and Amoroso, 2005).

By 1943, the Japanese had instituted a “second republic” in the Philippines and Filipino leaders led by Jose P. Laurel were compelled to serve to show a semblance of legitimacy for the Japanese sponsored puppet regime. In the process of constituting a new government, the civil servants who served in the Commonwealth administration were practically conscripted to assume their functions on the pain of sanctions.

For pragmatic reasons, the members of the bureaucracy cooperated half-heartedly, but saw in it the opportunity to secretly undermine the regime by committing acts that would create discontinuities and inefficiencies in their offices. These involve such habits as tardiness, absenteeism, officiousness, committing red tape to slow down government processes, and more significantly, corrupt activities which were, for all intents and purposes, considered then as heroic or patriotic acts because it reflected disguised resistance to Japanese rule. Unfortunately, the over-all effect of this brief interlude was that these nefarious practices were carried over to the independence period in 1946, and was compounded by a nation in disarray where economic activities were at a standstill (Reyes, 2011b; Corpuz, 1957).

CORRUPTION DURING THE INDEPENDENCE PERIOD

The Post World War II Administrations in the Philippines

Like any other country in the Third World that gained independence in the post World War II era, the Philippines experienced severe dislocation with the granting of independence in July, 1946. Manila, the country’s capital, was declared by American Senator Millard Tydings as the most completely devastated capital city anywhere in the world next only to Warsaw in Poland (Reyes, 2011b; Shalom, 1986). By the time, Philippine bureaucracy suffered in prestige and traumatized by war, prompting Corpuz it as being “characterized mainly by low prestige, incompetence, meager resources, and a large measure of cynical corruption” (Corpuz, 1957: 222). Sub-standard salaries compounded by an economy in shambles resulted in corrupt behavior, even with assistance and grants in aid coming from the United States.

But corruption in post-war and post-independence Philippines was not limited to the bureaucracy. The succeeding administrations of the five Presidents after the war of Presidents Manuel Roxas, Elpidio Quirino, Ramon Magsaysay, Carlos Garcia and

36

Diosdado Macapagal were hounded and plagued by continuing reports of corrupt practices among politicians.5

President Quirino who as Vice President succeeded Manuel Roxas in 1948 when the latter died in office, was described as being controlled and dominated by cacique-landlord interests, and was perceived to be “corrupt and inept” (Abaya, 1967: 56). In this milieu, cronyism and the spoils system again emerged, coupled with perennial allegations of election fraud. For instance, war-damage claims and payment benefited only a small sector of the country, as funds were distributed to “those closest to the regime.” Military “back pay” and related compensation for example raised a “rich source of largesse,” both genuine and fraudulent that went into the hands of well connected personalities (Abinales and Amoroso, 2005: 171).

The succeeding administrations of Magsaysay, Garcia and Macapagal saw a series of anti-corruption agencies that were constituted and re-constituted but did not appear to stem the tide of corrupt practices. It was also during this period that the major legislation against corruption, Republic Act 3019 or the Anti-Graft and Corrupt Practices Act, was enacted. But these were not enough, even if each administration vowed to institute reforms and fight corruption in government.

President Garcia and his administration, which assumed the presidency upon the death of Magsaysay in a plane crash in May 1957, was besieged and tainted by reports and accounts of corrupt practices. As economic growth failed to contain social inequity, state corporations became what Abinales and Amoroso labeled as “havens of corruption, bribery, fraudulent transactions, and favoritism.” Businesses which supported Garcia’s ascendancy to power were accused as “business buccaneers” who “were rewarded with easy access to dollar allocations and credits, import privileges, tax exemptions, and, if they faced bankruptcy, government bailouts” (Abinales and Amoroso, 2005: 183).

Scandals and scams began to pile up such malversation of funds allotted for government owned corporations such as the National Marketing Corporation, favoritism in the disbursement of Japanese reparation funds, the privatization of public lands and the private use of government retirement accounts, among others (Abinales and Amoroso, 2005).

It is interesting to note that even Garcia himself was reported to have candidly remark that when it came to cronyism, his administration had become “a ship that has gathered a lot of barnacles along the way; [and] I cannot shake them off…” (Abinales and Amoroso, 2005: 183).

Thus, by the end of Garcia’s second year in office, Filipinos perceived not much difference between the Garcia and Quirino administrations in terms of corruption (Abinales and Amoroso, 2005: 183). In his run for reelection in 1961, Garcia was

5 For a brief account of the background of the Philippine presidency, the reader may refer to Brillantes, 1988 as well as to Abinales and Amoroso, 2005)

37

defeated by his rival, Diosdado Macapagal, who like him, ran on the platform among others of combating corruption in government.

Macapagal’s term as president can perhaps be credited with being the first administration to have given special attention to national development planning, which was given impetus with the establishment of a Program Implementation Agency tasked with creating and executing a comprehensive national economic development plan.

Macapagal early on vowed to go after tax evaders and corrupt businessmen, targeting specifically the well-entrenched Lopez family which had controlling interests in sugar, media and power utilities. Media exposes of government corruption however stymied Macapagal’s efforts and stories of conspicuous consumption amid growing poverty, presidential vindictiveness, and growing nepotism undermined his presidency. Sweetheart deals in smuggling operations and agricultural interests plagued the administration.

But these issues gained striking significance and attention with the dismissal of Macapagal’s Justice Secretary, the crusading Jose W. Diokno, who investigated dealings of American business kingpin Harry Stonehill that was widely believed as close to the President’s inner circle.

The dismissal of Diokno, who was perceived as a committed and uncompromising official against corruption, was described by the influential publication the Philippine Free Press as a “major setback in the administration’s crusade against graft and corruption” Abinales and Amoroso, 2005: 186, citing the Philippine Free Press, May 26, 1962).

Like Garcia before him, Macapagal’s term ended with the stigma of rampant corruption and paved the way to the administration of Ferdinand Marcos who won the presidential election of 1965.

The Marcos Era and the Martial Law Period (1965-1986)

Any incisive discussion of corruption in the Philippines would have to inevitably give attention to the more than two decades of Marcos rule. Marcos ascended to the presidency mainly through backroom wheeling and dealing, switching from his party, the Liberal Party to the opposing Nacionalista Party when it became evident that Macapagal, who was elected under the aegis of the Liberals, declared his intention to run for reelection.

Marcos was readily “absorbed” as the presidential candidate of the Nacionalista Party in 1965 and run on the slogan that “this nation can be great again.” The corruption that plagued the previous administrations was a prominent issue in the campaign trail and

38

Marcos, even if stories of corruption in his stint at the Senate roundly circulated, promised “to fight corruption and reform the bankrupt political system.”

The early years of the Marcos administration witnessed initiatives towards economic liberalization, the pursuit of productivity based on comprehensive land reform, and the use of executive and military agencies to restructure society. But in the same vein with that of its predecessors, it likewise suffered from a corrupt image although Marcos managed to deflect corruption charges. It was also during his first term that government deficit more than doubled and stories of corruption started to circulate (Abinales and Amoroso, 2005).

In 1969, Marcos became the first President of the Philippines to win reelection which was reported to have reached U.S. $50 million much of which were derived from public funds. Money was spent and was used to finance disbursements to the patronage network streaming down to the level of the barrios while millions were also spent in advertising, billboards, propaganda materials, campaign gifts and the “virtual monopoly of radio and television time” (Abinales and Amoroso, 2005: 198).

The reelection of Marcos practically plunged the country into crisis with the deficit exacerbated and reaching one billion pesos – substantial amount at the time. Inflation reached an all-time high and the value of the peso dropped from two pesos to the dollar to six. These developments brought about increasing militancy and soon protests against the Marcos administration became widespread, as stories of corruption and extravagance of Marcos’ influential wife Imelda continue to be a prominent item of gossip and media accounts (Abinales and Amoroso, 2005).

1n September, 1972, Marcos, barred under the 1935 Philippine Constitution from seeking a third term, declared martial law under Presidential Proclamation 1081 using the guise of growing radicalism and communist insurgency. Marcos abolished Congress, arrested and put to jail his right wing and left-wing critics and opponents and assumed legislative powers under what he termed as “constitutional authoritarianism.” In so doing, Marcos effectively ended the country’s two party system and fashioned out a monolithic political bloc under his “Kilusan ng Bagong Lipunan” (or KBL, roughly translated as New Society Movement).

During this period, Marcos ruled by Presidential Decrees which were issued in unremitting fashion and consolidated wealth and power with the support of his inner circle and trusted aides and supporters. It was during this time that the term “crony capitalism” became a byword in the Philippine economy and which was based not on competition, but on monopoly, special access, manipulation of loans and credits, favoritism, and plunder of the state coffers.

The Marcos martial law era can be termed as having reached among the high point of corruption in the Philippines with crony intervention, involvement or control of industries as diverse as sugar, agriculture, automotive, hotel and entertainment, banking, construction and infrastructure, media and other businesses. While Marcos issued decrees

39

to combat corruption, he abetted and tolerated that of his own and of his family and cronies. Prosecution of corruption was thus selective and applied only to those outside Marcos’ circle or to the enemies of the regime. When the Marcos regime ended with the February, 1986 EDSA people power revolution, it was estimated that around U.S. 10 billion was plundered by the Marcoses and his cronies.

As corruption and extravagance in the Marcos regime continued unabated, poverty in the country became more widespread and endemic. And so did protest and resistance to the regime, highlighted by the growing strength of student protests, left-wing and right-wing opposition and disaffection within segments in the military.

On August 21, 1983, Marcos’ major critic and opponent, Senator Benigno Aquino Jr. was shot at the airport tarmac upon returning from exile in the United States. Surrounded by military escorts, Aquino was shot from behind by what the government claimed as a lone assassin. The incident galvanized the opposition to the Marcos regime which soon collapsed because of serious internal and external factors.

In 1986, following a snap presidential election called by Marcos for the purpose of legitimizing his mandate as President, a peaceful people power revolution, also known as the EDSA (after Epifanio de los Santos Avenue where the revolution started), installed Marcos’ opponent, Benigno Aquino’s widow, Corazon C. Aquino as President. Marcos’ ouster was conditioned by a number of factors, the most prominent of which was the corruption and scandals that marked his regime, and which were deemed unprecedented in the history of the country. Marcos went into exile in Hawaii where he died in 1989.

The Corazon C. Aquino Presidency: Years of Redemocratization

Corazon C. Aquino ascended to the Philippine presidency in the shadow of her late husband. As President, Aquino restored democracy in the country after inheriting a corrupt regime that had been excessively centralized and alienated from the people. In 1987, a Constitution was ratified signaling the return to democratic rule. Aquino also went about dismantling the well-entrenched Marcos apparatus and proceeded to recover ill-gotten wealth of the Marcoses and their cronies. The Corazon Aquino presidency has been recognized as an era of redemocratization in the Philippines which went about restoring democratic institutions that had been eroded during the fourteen years of martial rule.

Businesses believed to have been acquired fraudulently were sequestered and a Presidential Commission on Good Government (PCGG) was created in 1986 by virtue of President Aquino’s Executive Order No. 1 and which were authorized under the legislative powers that were assumed by her following the EDSA Revolution and prior to the ratification of the 1987 Constitution. The PCGG was given the mandate of recovering some U.S. $10 billion which was believed looted during the more than two decades of the Marcos regime. Jovito Salonga, who served as the first Chairman of the

40

PCGG reports that from 1986 to 2000, some 83.13 billion pesos had been recovered, or amounting at that time to about US$2 billion.6

Aquino sought to establish reforms within the framework of the democratic system but was weakened by internal bickering within her allies and compounded by a restive and rebellious military some of whom were remnants and redoubts of the Marcos regime. Aquino inherited pillaged institutions and while her administration was able to bring about some measure of normalcy, political transition and electoral democracy, her administration was saddled with a huge foreign debt that created a vicious cycle of restructuring and heavy borrowing.

While Aquino was generally considered as incorruptible, her term was however also encumbered by charges of corruption from her relatives (labeled condescendingly as “kamag-anak, inc”) as well as corrupt acts committed by her allies. She was accused of turning “a blind eye” to charges of corrupt or improper behavior among relatives, friends and allies (Greenwold, et.al. 1990: 1)

Critics of the administration had often targeted Aquino’s powerful and influential brother, Jose “Peping” Cojuangco Jr. Among the allegations made against her administration included the claim of a U.S. 1 million bribe from an Australian businessmen in exchange for a gambling casino license (Greenwold, Branegan and Sendayen, 1990). No charges were however filed because it was claimed that the Australian was duped by a woman impersonating Cojuangco’s wife.

Another allegation made however were the abuses committed by the PCGG in the sequestration of companies believed to have been acquired fraudulently. An Aquino brother in law, Ricardo “Baby’ Lopa was assailed as having been able to buy back a profitable auto plan and 38 companies seized by the Marcos government in the early 1970s a measly U.S. $227,000 within days from Aquino’s assumption to power. The PCGG re-examined the deal but found no evidence that would suggest improper behavior, to the disappointment of critics. (http://www.time.com/time/magazine/article/0,9171,969186,00.html).

The Ramos Administration

Fidel V. Ramos was Vice Chief of Staff of the Armed Forces of the Philippines when he joined then Defense Secretary Juan Ponce Enrile to rebel against the Marcos regime which resulted into the successful EDSA people power revolution that toppled the Marcos regime in February, 1986. Ramos was the successor anointed by President

6 Salonga, (2000: 42; 256). In his account narrating the process and experiences of recovering illegally gotten wealth of the Marcoses and their cronies, Salonga provides incisive analysis and penetrating details of the plunder committed by the Marcos regime.

41

Aquino to succeed her and was elected by a slim majority in 1992 amidst charges of election cheating and fraud.

Ramos pledged to build a “strong state” committed to the propagation of a strong culture of people empowerment characterized by reform in government. He spearheaded the initiatives towards economic liberalization geared and conditioned to make the Philippines a favored investment destination that promoted a leveled playing field and competitiveness.

As President, Ramos embarked on an ambitious development plan under a program his government labeled as “Philippines 2000,” which among other aspired to deliver a tiger economy by the end of the millennium, a period that goes well beyond his term of office. Pledging a commitment to continue the fight against corruption started by his predecessor, Ramos launched a moral recovery program which sought to mobilize the different sectors of society in reinforcing good moral values and renouncing corruption.

The Ramos administration also pursued a comprehensive privatization program of public enterprises that were absorbed by government during the Marcos era. Ramos intensified the asset privatization program started by his predecessor with the sale of government owned and controlled corporations acquired during the martial law regime crony owned companies defaulted from their obligations, rendering it necessary for government to assume the debts under the terms of the sovereign guarantee provisions.

Ramos was able to somehow restore confidence in the economy, embarked on several public infrastructure projects, and was able to put an end to the crippling power crisis that brought periodic long hour blackouts, which caused severe discontinuities in the industrial and commercial sectors, including ordinary households.

But his administration however was likewise also not free from scandals and charges of corruption. Prominent among these was the PEA-AMARI deal forged in 1995 as part of the Manila Bay Master Development Plan. The transaction involved the acquisition of 158 hectares of reclaimed land in the Manila Bay area, which displaced 3,000 fishing and coastal families. The Public Estates Authority (PEA), which managed the project, allegedly sold the property to a favored buyer, the Amari Coastal Bay Resources and Filinvest Development at a price disadvantageous to the government.

It was claimed that the property was sold for 1.9 billion pesos at the rate of Ph 1,200 per square meter when the market values of properties in the adjacent areas were estimated to be at least Ph90,000 per square meter. It was claimed that certain PEA officials received kickbacks amounting to over one billion pesos. The opposition claimed that the deal cannot push through without the consent of President and which then Senator Ernesto Maceda referred to in a privilege speech in 1996 at the Senate as the “grandmother of all scams.” (http://en.wikipedia.org/wiki/Presidency_of_Fidel_V._Ramos)

42

A report from the Philippine Center for Investigative Journalism (PCIJ) claimed that based on its independent investigation, “as much as P3 billion in bribes and commissions was paid by Amari to a cast of brokers, government bureaucrats and politicians, making this the single biggest scam in memory, dwarfing the amounts made in single transactions by the most avaricious of Marcos's cronies” (Coronel and Tordesillas, 1998: 1).

In 2003, the PEA-AMARI deal was declared null and void by the Supreme Court and Amari on the grounds that Amari, being a Thailand based corporation, is a foreign company and under the Philippine Constitution, foreigners are not allowed to own real estate property in the country. In 2008, the Sandiganbayan ordered the suspension of five PEA officials and 4 auditors involved in the transaction. Graft charges were also filed against the PEA General Manager, as well as the Chairman and members of the PEA Board of Directors including the two PEA Deputy General-Managers.

Another scandal that hounded the Ramos administration was Centennial Expo project which was to be the centerpiece of the celebrations of the centennial anniversary of the Philippine Independence in 1998. Allegations of corruption were hurled at the Ramos administration for extravagance and over-pricing of the project which amounted to Ph9 billion or roughly 1.7 percent of the 1998 national budget. No officials were however convicted and all involved officers in the Centennial Commission were eventually exonerated (http://en.wikipedia.org/wiki/Presidency_of_Fidel_V._Ramos)

A recent Wikileaks expose likewise alleged that Ramos received US$200,000 from the Libyan government of Moaamar Gaddafi as contribution to Ramos’ presidential campaign in the Philippines in 1992.

The Short-Lived Estrada Presidency

Joseph Estrada succeeded President Ramos as President on the platform of a pro-poor agenda and giving distinct attention to the problems of peace and order brought about by criminality, the secessionist movement in Mindanao and the long running communist rebellion.

Estrada, a movie actor by profession who went to politics to become Mayor of the then Municipality of San Juan located in the greater Manila area, Senator, and Vice-President, won handily in the presidential elections of 1998. Estrada’s victory was remarkable in the sense that he garnered a wide and overwhelming majority over his opponents, and which can be recorded at that time as among the cleanest presidential election in the country that had not been marred by allegations or accounts of widespread fraud, intimidation, vote-shaving, vote-buying and other cases of cheating.

43

The Estrada Administration was received with much optimism, especially among the poor who saw in him deliverance from abject poverty conditions. His nickname “Erap,” which is a reverse spelling of the Filipino word “Pare” which roughly is the Filipino equivalent for buddy or pal, identified with the simplicity and camaraderie with ordinary citizens. With his popularity as a movie icon used as political capital, Estrada portrayed the street-smart leader and projected as a college drop-out who mangled the English language, which is the medium of the elite. Estrada readily identified with his mass base, the masses and was cast as a tough, swaggering hero of the poor who are oppressed by the rich.

As promised, Estrada launched a campaign against criminal syndicates which he began in earnest as Vice-President in the Ramos government which assigned him the role of crime-buster under an agency established for that purpose, the Presidential Anti-Crime Commission (PACC). In time, he turned his attention to the separatist movement in the South being waged by the Moro Islamic Liberation Front (MILF), the successor and break-away faction of the Moro National Liberation Front (MNLF).

Estrada activated his peace panels to enter into peace negotiations and agreements with the secessionists. But once broken, Estrada launched an all-out war by ordering a full-scale military action into to rebel controlled areas. By 1999, the Armed Forces of the Philippines under Estrada as Commander-in-Chief had overran 13 major rebel camps and 33 other minor installations including the MILF flagship headquarters Camp Abubakar.

But like the Presidents before him, Estrada was embroiled in a series of corruption scandals that precipitated into his being impeached in 2000 in the House of Congress. In December, 2000 the impeachment charges was forwarded to the Senate, which under the Constitution, is the one vested with authority to try impeachment cases.

Unlike other public officials however, Estrada did not go after public funds with the exception of the charge that he conspired to skim portions of the share of tobacco excise taxes for Ilocos Sur, he was accused of manipulating the stock market and securing protection payoffs from illegal gambling operators. Abinales and Amoroso provide the following description of the corruption scandals in Estrada’s presidency involving corporate deals:

“Corruption under Estrada was distinct in ‘the leveraging of government assets and authority to undertake deals that were ultimately mediated by the market.’ Examples of such innovative, market-oriented corruption include the use of funds from government-controlled financial institutions to support corporate takeovers, to rescue ailing banks and corporations, and to buy into companies coveted by the president and his family” (Abinales and Amoroso, 2005: 273)

44

Estrada’s impeachment trial in the Senate lasted for 2 months until late January, 2001 when the impeachment trial was aborted because the prosecutors walked out when the majority of senator jurors rejected the opening of a sealed document or “the second envelope” alleged to prove Estrada’s ownership of the controversial Jose Velarde bank account. The majority of the senator jurors agreed with the contention of defense lawyer that the second envelope was not in anyway part of the charges against Estrada. As a result, a second people power revolution started again at EDSA which resulted in Estrada vacating Malacanang but vehemently denying that he resigned as President. His Vice-President, Gloria Macapagal Arroyo took her oath of office as “acting President” but soon assumed the presidency officially when the Supreme Court declared that Estrada has resigned by virtue of vacating his office under a principle referred to as “constructive resignation.”

Estrada was then arrested and incarcerated at Camp Crame, later put under hospital arrest at the Veterans’ Memorial Medical Center in Quezon City, and soon transferred to Camp Capinpin in Tanay, Rizal and eventually relocated under house arrest in his estate also in Tanay, Rizal adjacent to Camp Capinpin.

Estrada was tried before the Sandiganbayan for criminal offenses involving a string of charges which the accusers and prosecutors elevated to the crime of plunder as provided under R.A. 7080, which is a non-bailable crime. Estrada was accused of using his office to accumulate what prosecutors contended as an aggregate amount of Ph4 billion that he amassed by himself or with his family and business associates, and thereby “unjustly enriching himself or themselves at the expense and to the damage of the Filipino people and the Republic of the Philippines” (Sandiganbayan, 2007: 5, in People of the Philippines vs. Joseph Ejercito Estrada, et.al.).

These involved Estrada’s alleged links and pay-offs in jueteng operations, an illegal number’s game popular among the poor, whereby Estrada was accused of collecting some Ph545 million from gambling operators; the manipulation of the stock market by ordering two government agencies involved in pension benefits, the Government Service and Insurance System (GSIS) and the Social Security System (SSS), to purchase and buy shares of stock of private company, the Belle Resources Corporation in the aggregate value of one billion pesos and to be able to collect commissions from the transactions in the amount of Ph189 million; by using government funds, the misappropriation of Ph130 million representing a portion of collections from the tobacco excise tax share allocated for the Province of Ilocos Sur; and by unjustly enrich himself in the amount of Ph3 billion comprising unexplained wealth deposited under the name of Jose Velarde.

In the jueteng and tobacco excise tax, Estrada’s long-time friend, Luis “Chavit” Singson, the Governor of the Province of Ilocos Sur, served as the main prosecution witness and whistleblower of corruption in the Estrada administration.

In September, 2007, Estrada was convicted by the Sandiganbayan of the crime of plunder after six years of trial. His co-accused present, his son, Jose “Jinggoy” Estrada

45

and lawyer Edward Serapio were however acquitted. He was however subsequently given pardon by Gloria Macapagal Arroyo.

ANTI-CORRUPTION AGENCIES AND LEGISLATION IN THE PHILIPPINES

Much of the efforts and measures against corruption in the Philippines have been structured within the framework of the establishment of anti-graft institutions based on executive issuances and legislation. These have been revised and amended time and again by a steady stream of new legislation and executive issuances that seek to plug whatever loopholes in the legitimacy and the mandates for the operation of these entities. As such, much of the approaches have been incremental and legalistic. The laws may either have limited application which may cover only certain officials and employees or of a general nature that would apply to both elective and appointive officials.7

Embodied within the framework of these issuances are a veritable collection of complex and legalistic punitive and preventive provisions and measures designed to punish or frustrate identified or defined corrupt officials and employees. In so doing, these issuances at the same time may establish procedures that are intended to prevent or curb corrupt practices. They are also incremental, as can be seen in constant revisions and amendments on their provisions. This present discussion does not capture the many complicated and legal ramifications that accompany these revisions or amendments. These however signify continuing efforts and adjustments to combat corruption, which are, for all intents and purposes, tend to be incremental, piece-meal, desultory and not comprehensive enough so as to capture the many convoluted and often cumbersome nature of corrupt practices.

Like any other government agency, bureau or departments, the actions and operations of anti-corruption agencies in the Philippines are subject to the restraints and constraints of existing laws and judicial processes that begins first and foremost with the guarantees found in the Philippine Constitution, whether one looks at the 1935 Charter which became operational from the Commonwealth period up to 1973, or of the existing 1987 Constitution that was ratified after the collapse of the Marcos dispensation, and brought the assumption to power of Corazon Aquino in 1986.

The basic law that embodies the spirit of an honest government and of accountability is of course reflected in the 1987 Philippine Constitution which provides a set of extended provisions on the accountability of public officers under Art. XI, Sections

7 For an incisive discussion on laws and agencies against corruption, see also Moratalla. n.d. “Graft and Corruption: The Philippine Experience” (http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan019122.pdf).

46

1-18. This section begins under section1 with the oft quoted dictum that has resonated in government since the commonwealth era: “Public office is a public trust.”

The 18 sections enshrined on the Constitution on accountability specifies the accountability of public officials from the President, Vice-President to the legislative and judicial branches, the impeachable officials, and manner of impeachment proceedings, while at the same time reaffirming the establishment of the Sandiganbayan as a specialized graft court and of the Office of the Ombudsman as constitutional bodies. The provisions also included aspects of the qualifications, manner of appointment and removal of the Ombudsman, as well as its powers, duties and functions.

Over the years, various agencies have been established and re-established to fight corruption. The earliest know agency in the post-independence period is that of the Integrity Board which was established in 1950 by the Quirino Administration in a time when bureaucratic corruption has become a major public issue. As described by Alfiler, “[p]ublic uproar and criticism against this practice was so sharp that President Quirino was compelled to start a clean-up campaign” (Alfiler, 1979: 323).

Through the years, several anti-corruption units have been established and functioned to address the corruption issues. These entities were created by various Presidents who had to deal with the issue and resorted to mollifying criticisms by establishing anti-corruption bodies.

As can be gleaned in Table 1, there has been a total of 23 anti-corruption agencies (to include the special anti-graft court, the Sandiganbayan) established by both legislative and executive fiats, as well as by the provisions of the 1987 Constitution in the Philippines from the independence era in 1950 to 2001.8 The list reflects only corruption-specific offices and does not include regular government units that are, directly or indirectly, also involved in the fight against corruption as part of their respective functions and mandates such as the Department of Justice (DOJ), the National Bureau of Investigation (NBI), the Commission on Audit (COA), the Bureau of Internal Revenue(BIR), the Bureau of Customs (BOC), and the Civil Service Commission (CSC).

Like those created during the Spanish era to fight corruption, these entities were constituted and reconstituted to adapt to certain legal or judicial realities and demands. Some of the changes have been in terms of nomenclatures as with the Presidential Complaints and Action Commission (PCAC) which was eventually downgraded to a Presidential Complaints and Action

TABLE 1: ANTI-CORRUPTION AGENCIES IN THE PHILIPPINES1950-2001

Anti-Corruption Agency Philippine Period of

8 This is the list of national anti-corruption agencies established in the Philippines thus far gathered. It is possible that there may be other anti-corruption units that may have been established in local government units such as provinces, cities and municipalities. See also the accounts of Alfiler, 1979 and Quah, 2010).

47

President at Time of Operation

Establishment/Operations

1. Integrity Board Quirino 19502. Presidential Complaints and Action

CommissionMagsaysay 1953-1954

3. Presidential Complaints and Action Committee

Magsaysay 1954-1958

4. Presidential Committee on Administrative Performance Efficiency

Garcia 1958-1961

5. Presidential Fact Finding Committee Garcia 1958-19616. Presidential Anti-Graft Committee Garcia/

D. Macapagal1960-1966

7. Presidential Agency on Reforms and Government Operations

Marcos 1966-1970

8. Presidential Complaints and Action Office

Marcos 1966-1967

9. Complaints and Investigation Office Marcos 1970-198610. Special Committee on Backsliding Marcos 1973-198611. National Prosecution Service,

Department of JusticeMarcos 1978 to present

12. The Sandiganbayan Marcos 1978 to present13. Tanodbayan (Office of the

Ombudsman)Marcos/C. Aquino

1978-1988; Reorganized 1988

14. Presidential Commission on Good Government

C. Aquino 1986 to present

15. Presidential Committee on Ethics and Accountability

C. Aquino 1986-1988

16. Presidential Complaints and Action Office

C. Aquino 1991

17. Presidential Action Center C. Aquino 199118. Presidential Commission Against

Graft and CorruptionRamos 1994-2000

19. Inter-Agency Anti-Graft Coordinating Council

Estrada 1999 to present

20. Presidential Committee on Effective Governance

Estrada 1999 to present

21. National Anti-Corruption Commission

Estrada 2000-2001

22. Presidential Anti-Graft Commission Arroyo 2001 to 201023. Governance Advisory Council Arroyo 2001 to present

_______________Compiled and culled based on data from Quah, 2010; World Bank, 2000; and Alfiler, 1979.

48

Committee during the Magsaysay presidency since commissions perhaps cannot be created by executive action but by legislative enactments.

Other entities were creations of different administrations that did not want to continue with the entity established by its predecessor such as the replacement of the Quirino Integrity Board by Magsaysay’s PCAC, which in turn, was abolished by Magsaysay’s successor, President Garcia, who reincarnated it to become the Presidential Committee on Administrative Performance and Efficiency ((PCAPE). President Garcia also created the Presidential Fact Finding Committee (PFFC) in 1958 with the objective of recommending measures to effect better administration of the Bureau of Customs, and which contributed to the enactment of the country’s major Anti-Graft and Corrupt Practices law under R.A. 3019 which was signed into law in 1960.

Garcia also established on top of these bodies the Presidential Anti-Graft Committee (PAGC) in 1960 with the primary purpose of enforcing and implementing another anti-corruption legislation, R.A. 1379 or the Forfeiture Law on Illegally Acquired Properties enacted in 1955. The PAGC however was replaced during the administration of President Macapagal and reconstituted into becoming the PAGCOM but retaining its name of the Presidential Anti-Graft Committee.

Upon Marcos’ assumption to the presidency, the PAGCOM was abolished and supplanted by the Presidential Agency on Reforms and Government Operations (PARGO) which essentially absorbed the PAGCOM’s personnel, records, properties, equipment and unexpended balance (Alfiler, 1979). When he assumed office, Marcos also established the Presidential Complaints and Action Office (PCAO) which received complaints from citizens on a wide range of problems.

The declaration of Martial Law by Marcos in 1972 provided for the creation of several anti-corruption agencies such as the Complaints and Investigation Office and the Committee on Backsliding. Foremost of these however was the establishment of the Office of the Ombudsman, (also known as the Tanodbayan when it was created in 1978 until 1987 when it was renamed as the Special Prosecutor) and of the special anti-graft court, the Sandiganbayan in 1978.

These two institutions represent today the centerpiece structures of the Philippines’ continuing efforts to curb corruption. They are constitutional bodies that cannot be abolished by any law passed by Congress. As provide by the 1987 Constitution and under R.A. 6770 enacted in 1989, otherwise known as the Ombudsman Act of 1989, and which is the prevailing law governing the functional and structural organization of the Office, the Ombudsman is an independent body that has been enjoys a specified term of seven years without reappointment and can be removed from office only by impeachment for, and conviction of the offenses of culpable violation of the Constitution, treason, bribery, graft and corruption, betrayal of public trust and other high crimes.

The Office of the Ombudsman is also supported an Over-all Deputy Ombudsman, with Deputies for Luzon, the Visayas, Mindanao, and a special deputy for the Armed

49

Forces. A Special Prosecutor which is vested with the power to conduct preliminary investigations and the prosecution of criminal cases within the jurisdiction of the Sandiganbayan, among others, has also been established as a constitutional office under Sec. 6, Art. XI of the 1987 Charter. Under this provision, the position of the Tanodbayan as created in 1978 is now known as the Office of the Special Prosecutor. Like the Ombudsman, the Deputies and the Special Prosecutor are authorized to serve a term of seven years and may be removed from office by the President of the Philippines for any of grounds provided for the removal of the Ombudsman and which must be done with due process.

The Sandiganbayan was established during the Marcos era under Presidential Decree No. 1486 and amended by P.D. No. 1606 in the same year. The Sandiganbayan is a special anti-graft and corruption Court and is at the same level as the Court of Appeals. The Court is headed by a Presiding Justice and eight Associate Justices sitting in five divisions. The Sandiganbayan is mandated to exercise jurisdiction over violations of R.A. 3019 or the Anti-Graft and Corrupt Practices Act, as amended, crimes committed by public officers and employees embraced within the Revised Penal Code, with specific reference to Title VII (Crimes Committed by Public Officers), and other such crimes and offenses committed by public officers and employees in relation to their respective offices.

Over the years, amendments, changes and other revisions were made on the

structure and power of the subsisting agencies. Some changes were also brought about by the clarification of duties and functions, as with the case of the Tanodbayan where amendments were made to fine tune its operations and to become as the Ombudsman or that of the anti-graft court, the Sandiganbayan, where a flurry of amendments were made to clarify coverage, powers, duties and jurisdiction.

On top of these agencies are various executive agencies continue to be constituted and re-constituted such as the Presidential Commission Against Graft and Corruption during the Ramos Administration, the Inter-Agency Anti-Graft Coordinating Council, the Presidential Committee on Effective Governance and the National Anti-Corruption Commission during the Estrada presidency, and Presidential Anti-Graft Commission and the Governance Advisory Council, which were both established upon the assumption to office by Gloria Arroyo in 2001.

In November 2010, President Benigno Aquino III formally abolished the PAGC under Executive Order No. 10 and transferred its investigation, adjudication and other functions to the Office of the Deputy Secretary for Legal Affairs (ODESLA) under the Office of the President. An Investigation and Adjudication Division was subsequently created in the ODESLA by virtue of Executive Order No. 13 (http://www.gmanews.tv/story/206758/aquino-abolishes-presidential-anti-graft-body).

In 1997, an Inter-Agency Anti-Graft Coordinating Council was also formed based on a voluntary alliance and agreement of agencies engaged in the fight against corruption and the promotion of integrity and efficiency in government. The Council, consisting of

50

the Civil Service Commission, the Commission on Audit, the Presidential Commission Against Graft and Corruption and the National Bureau of Investigation. The heads of these Agencies entered into a Memorandum of Agreement at the COA building binding their respective agencies to cooperate by sharing information, setting up measures towards the prevention, detection, investigation and prosecution of graft cases, and creating ad-hoc inter-agency task-forces to investigate cases involving substantial losses of government resources. The Inter-Agency Council organized skills training in fraud investigation and symposia on graft prevention and other capability-building seminars (Ursal, 2006).

In 2004, a joint anti-corruption plan was also forged by the Ombudsman, the CSC and the COA called the Solana Covenant of 2004. The Covenant aspired to engage in a collective effort in establishing a database of the Statement of Assets and Liabilities and Net Worth (SALN) of government officials and employees and the establishment of a joint task force in major investigations, as well as self-cleansing and the setting up of a clearing house on the status of administrative cases and other information relative to corruption within government agencies. A second covenant, the Solana II was forged again in 2005 which outlined the accomplishments and performance of the first covenant (Ursal, 2006).

For all intents and purposes, the Covenant was able to improve the system in asset disclosure by revising the SALN format and in the establishment of a preliminary SALN database by the CSC in the BOC, the BIR and the DPWH.

One major issue that continues to surface in the analysis of the fight against corruption in the Philippines is that of the capacity of anti-corruption agencies in performing its functions (Quah, 2010). Thus, the question arises as to whether the budget appropriated for the Office of the Ombudsman (OMB) and of the Special Prosecutor, as well as for that of the Sandiganbayan are sufficient for them to satisfactorily fulfill their duties. This is one of the causes identified as to why corruption in the Philippines continues to thrive instead of being checked by the establishment of periodic anti-corruption agencies and pertinent legislation.

A comparison of the number of personnel and the budgets appropriated between the OMB and the Independent Commission Against Corruption in Hong Kong shows a gross disparity that indicates severe limitations in terms of resources made available to the Philippine Ombudsman. Table 2 shows this comparison presented first by Marcelo (2005) and later cited by Quah (2010):

51

Table 3: Comparison of Personnel and Budgets of OMB and ICAC, as of 2004

ITEM OMB Philippines Independent Commission Against Corruption (ICAC) Hong Kong

No. of Field Investigators 88 837Total No. of Staff 1,141 1,326Size of the Bureaucracy 1.5 million 174,175Field Investigator-Bureaucracy Ratio

1: 17,045 1:208

Budget 480 million pesos 4.94 billion pesosPopulation of the Country 82 million 7.1 millionPer-capita Expenditure 6 pesos 696 pesosStaff-Population Ratio 1: 71,340 1: 5,354

_______________Adopted from Quah, 2010 and Marcelo, 2005.

The above comparison presents a grim picture of how the anti-corruption campaign in the Philippines is constrained by limitation in funds, facilities and manpower, especially in terms of field investigators who may need to move from one case to another. Thus, data as of 2004, a team of 88 field investigators is suppose to cover a bureaucracy of about 1.5 million in the Philippines, while in the case of Hong Kong, 837 investigators are assigned for a bureaucracy of less than 200,000. The disparity on the budget is likewise glaring for while only 480 million is appropriated for the Philippines, the equivalent of almost 5 billion pesos.

It is not difficult to argue that funding remains an important factor in the fight against corruption. The campaign against corruption is not and cannot be treated simply as a cocktail of good intentions, commitment, skill and patriotism. It needs to be strengthened with capacities and capabilities that will build confidence among those who seek to investigate and prosecute corrupt acts.

The funding appropriation dimension figures considerably in the entire equation, mainly because salaries and other emoluments may be limited because of severe budget

52

limitations, and which, for all intents and purposes, may not motivate investigators, or at worst, allow them to succumb to bribery and such other offenses they are supposed to fight.

The process of establishing a prima facie case so as to file the information in court after investigation creates another hurdle in combating corruption. Investigators may turn in weak cases not supported by evidence and which prosecutors may find inadequate to be able to file them and prosecute them in court. Prosecutors may not be well-equipped with the necessary evidence or may be restrained because of funding limitations in gathering evidence or ensuring that material witnesses would come to testify in court. Evidence gathering can conceivably be a tedious process requiring time, effort and energy, motivation, commitment and dedication, as well as funds.

Another issue that complicates the whole process is that prosecutors may be preoccupied with several on-going cases that they have to attend and prepare for simultaneously mainly because of the lack of manpower. As a result, the tendency to prepare haphazardly in prosecuting cases may be severely impaired, especially when confronted by a battery of well-paid, well-funded and prominent defense counsels of accused officials who may have accumulated much wealth so as to be able to finance a good legal defense.

Complicating the whole process is the reality that even judicial authorities themselves may be the subject of criminal and administrative proceedings. Corruption has also been perceived as having tainted the Judiciary. A Social Weather Station survey released in 2000 revealed that at least 62 percent of respondents were convinced that there are significant levels within the institution with around 65 percent believing that ‘many’ or ‘most’ lawyers could be bribed while 57 percent thought the same for judges (World Bank, 2000)

Corruption in the judiciary has been reported in such cases as the celebrated and controversial impeachment proceedings filed against former Supreme Court Chief Justice Hilario Davide with regards to the use of more than 800 million pesos of the Judiciary Development Fund (JDF) in 2003. The JDF represents collections from legal and other fees litigants paid to the courts including bar examination fees and which was established in 1984 to augment the judiciary’s meager budget.

Davide was accused by then Congressman Felix William Fuentebella of Camarines Sur of misusing the fund instead of the purpose for which it was intended, which is eighty percent for allowances of court employees and twenty percent for facilities. An impeachment complaint was filed against Davide in the House of Representatives but was ruled by the Supreme Court (which Davide headed) in November 2003 as unconstitutional because it was the second impeachment complaint filed against the same official within a year. The first was an impeachment complaint filed by Joseph Estrada against Davide and seven other Associate Justices who ruled that Gloria Macapagal Arroyo was the legitimate President.9

9 For a more detailed discussion on the case, see Danguilan-Vitug, 2010.

53

A fairly recent case involved the scandal in 2008 in the Court of Appeals (CA) involving the Government Service Insurance System and MERALCO where a sitting Justice in the CA alleged that his colleagues removed him from the case in the courts 9 th

Division. He was likewise in turn accused of asking a 50 million peso bribe for a favorable ruling for the GSIS.

Pertinent Legislation and Statutes on Corruption

Similarly, several corruption-specific laws and executive issuances have likewise been enacted to combat corruption. The list on Table 3 presents an inventory of at least 66 such major legislations, executive orders, presidential decrees and proclamations and their respective dates of promulgations. These issuances have been promulgated from the Commonwealth period up to the present time to fight corruption. Not included here are several administrative orders issued by the Office of the Ombudsman on such agency-specific matters such as rules and procedures clarifying and governing handling of complaints, grievances, or requests for assistance in criminal and administrative cases (A.O. Nos. 07 and 08, s. of 1990); the guidelines on the installation of non-organic Resident Ombudsmen in different agencies and offices of the government (A.O. No.10, s. of 2001; and the creation of Internal Affairs Board within the Office of the Ombudsman (A.O. No. 16, s. of 2003), among others.

TABLE 3: SUMMARY OF ANTI-CORRUPTION LEGISLATION AND ISSUANCES

IN THE PHILIPPINES1932-2004

LAWS/PROCLAMATIONS/AOs/Eos/PDs10

TITLE/DESCRIPTION DATE OF PROMULGATION/ ISSUANCE

1. Act No. 3815 The Revised Penal Code of the Philippines, as amended

1932

10 Administrative Orders, Executive Orders and Presidential Decrees. The list is by no means comprehensive but it roughly covers the major anti-corruption or corruption-specific issuances in the form of laws, presidential decrees, and executive orders that have been released to combat corruption.

54

2. Republic Act No. 455 Amending the Revised Administrative Code, Relative to Fraudulent Practices Against Customs Revenues

1950

3. Executive Order No. 1 Creating the Presidential Complaints and Action Commission

1953

4. Executive Order No. 19 Renaming the Presidential Complaints and Action Commission as the Presidential Complaints and Action Committee

1954

5. R. A. No. 1379 An Act declaring Forfeiture in Favor of the State Any Property Found to Have Been Illegally Acquired by Any Public Officer or Employee

1955

6. Executive Order No. 306 Creating the Presidential Committee on Administrative Performance and Efficiency

1958

7. Administrative Order No. 268

Presidential Fact Finding Committee 1958

8. Executive Order No. 378 Creating the Presidential Anti-Graft Committee

1960

9. R.A. No. 3019 Anti-Graft and Corrupt Practices Act 196010. R.A. No. 3456 Internal Auditing Act of 1962 196211. R.A. No. 4177 Amending the Internal Auditing Act of

1962, Relative to the Establishment of Independent Internal Audit Services in all Branches, Subdivisions and Instrumentalities of Government

1965

12. Executive Order No. 4 Presidential Agency on Reforms and Government Operations

1966

13. R.A. No. 6028 The Citizen’s Counselor Act of 1969 196914. Executive Order No. 208 Creating the Complaints and Investigation

Office1970

15. R.A. No. 6583 Liability of Government Employees in Anti-Carnapping Act

1972

16. P.D. No. 611 Amending P.D. No. 1 (Integrated Reorganization Act) on Certain Rules on the Discipline of Government Officials and Employees

1972

17. P. D. No. 46 Making it Punishable for Public Officials to Receive, and for Private Persons to Give Gifts

1972

18. P. D. No. 133 Prescribing a Heavy Penalty for the Theft 1973

11 Upon the declaration of martial law in the Philippines in 1972, then President Marcos arrogated upon himself law-making powers by issuing presidential decrees. These issuances therefore have the force of law until repealed.

55

of Any Material, Spare Part, Product, or Article by Employees and Laborers

19. P.D.No. 677 Amending R.A. No. 3019, The Anti-Graft and Corrupt Practices Act, relative to the Filing of Statements of Assets and Liabilities of Public Officers

1975

20. P.D. No. 749 Granting Immunity from Prosecution in Graft Cases to Givers of Bribes If They Testify Against Public Officials

1975

21. P.D. No. 1275 Reorganizing the Prosecution Staff of the Department of Justice and Creating the National Prosecution Service

1978

22. P.D. No. 1445 The Government Auditing Code of the Philippines

1978

23. P.D. No. 1487 Creating the Office of the Ombudsman, to be Known as the Tanodbayan

1978

24. P.D. No. 1464 The Tariff and Customs Code of the Philippines

1978

25.P.

P.D. No. 1486 Creating a Special Court to be Known as the “Sandiganbayan” (Anti-Graft Court)

1978

26. P.D. No. 1606 Revising Presidential Decree No. 1486Creating a Special Court to be Known as the “Sandiganbayan” (Anti-Graft Court)

1978

27.P.

P.D. No. 1607 Revising Presidential Decree No. 1487 Creating the Office of the Ombudsman, to be Known as Tanodbayan.

1978

28.P.

P.D. No. 1629 Amending Presidential Decree No. 1486, Creating a Special Court to be Known as the “Sandiganbayan,” as Revised by Presidential Decree 1606

1979

29. P.D. No. 1630 Further Revising Presidential Decree No. 1487, as Revised by Presidential Decree No. 1607, Creating the Office of the Tanodbayan

1979

30. Batas Pambansa Blg. 129 The Judiciary Reorganization Act of 1980 198031. P.D. No. 1759 Penalizing Contractors for Violating

Public Works Contracts1981

32. Batas Pambansa Blg. 195 Amending R.A. No. 3019, The Anti-Graft and Corrupt Practices Act, relative to prima Facie Evidence of and Dismissal Due to Unexplained Wealth

1982

33. Batas Pambansa Blg. 242 An Act Prescribing the Period for Public Officers May Bring Action Against False or Malicious Testimony

1982

34. P.D. No. 1860 Amending the Pertinent Provisions of 1983

56

P.D. No. 1606 and Batas Pambansa Blg. 129 Relative to the Jurisdiction of the Sandiganbayan and for Other Purposes

35. P.D. No. 1861 Amending the Pertinent Provisions of P.D. No. 1606 and Batas Pambansa Blg. 129 Relative to the Jurisdiction of the Sandiganbayan and for Other Purposes

1983

36. Executive Order No. 112 Creating the Presidential Commission on Good Government

1986

37. Executive Order No. 2 Regarding the Freezing of Funds, Moneys, Properties and Assets Illegally Acquired or Misappropriated by Former President Ferdinand Marcos, et. al.

1986

38. Executive Order No. 14 Vesting the Sandiganbayan Original and Exclusive Jurisdiction Over All Criminal and Civil Suits Filed by the Presidential Commission on Good Government

1986

39. Executive Order No. 14A Clarifying the Provisions of E.O. No. 14 with Respect to Scope and Meaning

1986

40. Executive Order No. 101 Further Amending P.D. 1486, as Amended by P.D. 1606 Creating a Special Court to be Known as Sandiganbayan

1986

41. Executive Order No. 184 Amending Sec. 3 of P.D. 1606 198742. Executive Order No. 292 The Administrative Code of 1987 198743. R.A. No. 6713 The Code of Conduct and Ethical

Standards for Public Officials and Employees

1989

44. R.A. No. 6770 The Ombudsman Act of 1989 198945. R.A. No. 6713 The Code of Conduct and Ethical

Standards for Public Officials and Employees

1989

46. Executive Order No. 442 Creating the Presidential Complaints and Action Office in the Office of the President

1991

47. Executive Order No. 447 Renaming the Presidential Complaints and Action Office as the Presidential Action Center

1991

48. Executive Order No. 479 Strengthening and Streamlining the Presidential Complaints and Action Office

1991

49. R.A. No. 6981 The Witness Protection, Security and Benefits Act

1991

50. R.A. No. 7080 An Act Defining and Penalizing The 1991

12 With the ouster of Marcos in the now historic EDSA People power revolution in 1986, his successor, President Corazon C. Aquino proclaimed a revolutionary government and issued executive orders deemed to have the force of law. This was until a Constitution was ratified in 1987 and a legislative body was constituted.

57

Crime of Plunder51. R. A. No. 7160 The Local Government Code of 1991 199152. R.A. No. 7659 Imposing the Death Penalty for Certain

Crimes Committed by Public Officers1993

53. R.A. No. 7651 An Act to Revitalize and Strengthen the Bureau of Customs, Amending Certain Sections of the Tariff and Customs Code

1993

54. R.A. No. 7650 An Act Repealing Sec. 1404 and Amending Sections. 1401 and 1403 of the Tariff and Customs Code Relative to the Physical Examination of Imported Articles

1993

55. Executive Order No. 151 Creating a Commission to Investigate Administrative Complaints Involving Graft and Corruption

1994

56. R.A. No. 7975 An Act to Strengthen the Functional and Structural Organization of the Sandiganbayan, Amending P.D. No. 1606

1995

57. R.A. No. 8249 Amending P.D. No. 1606, Creating the Sandiganbayan, Further Defining the Jurisdiction of the Sandiganbayan

1997

58. R.A. No. 8424 The Tax Reform Act of 1997, otherwise known also as The National Internal Revenue Code

1997

59. Proclamation No. 189 Declaring War Against Graft and Corruption and Authorizing the Philippine Jaycees Senate to Institutionalize Public Awareness About a Clean, Efficient and Honest Governance

1999

60. Executive Order No. 317 Prescribing a Code of Conduct for Relatives and Close Personal Relations of the President, Vice-President and Members of the Cabinet

2000

61. Executive Order No. 268 Creating the National Anti-Crime Commission and Abolishing the Presidential Commission Against Graft and Corruption

2000

62. Executive Order No. 12 Creating the Presidential Anti-Graft Commission

2001

63. R.A. No. 8294 The Anti-Money Laundering Act of 2001 200164. R.A. No. 9135 Amending Certain Provisions of P.D. No.

1464 Otherwise Known as the Tariff and Customs Code

2001

65. R.A. No. 9184 The Government Procurement Reform Act

2003

66. Executive Order No. 327 Amending E.O. No. 12, Relative to the 2004

58

Powers, Duties and Functions of the Presidential Anti-Graft Commission

___________As compiled and culled by the study from various sources. See also Quah, 2010; Ursal, 2006; Office of the Ombudsman, 2004.

Again, there may be other provisions in other laws that may not have been included here and may not have been captured in this listing. These laws and issuances provide a bulky and massive collection of pertinent measures that aspire to punish, prevent or contain corruption. The earliest legislation can be found in the Revised Penal Code enacted in 1932 as Act No. 3815. Under Title 7, (Chapters 1-6), the Code stipulates the provisions for crimes committed by public officers such as malfeasance and misfeasance in office, frauds and illegal exactions and transactions, malversation of public funds or property, infidelity of public officers, and such other offenses as disobedience, usurpation of powers and unlawful appointments.

From that period, other significant legislations had been enacted to fight graft and corruption. The most significant of these is Republic Act No. 3019, approved in 1960 when the Garcia Administration was besieged by allegations of corrupt practices and when graft and corruption became a national issue in political campaigns. Prior to this, an earlier piece of legislation was also enacted in 1955 which provided for the forfeiture in favor of the state those properties found to have been unlawfully acquired by any public official and employee.

Since then a flurry of statutes have been passed, either as corruption-specific legislations or those that incorporate provisions that address certain specific acts that are deemed as corrupt. Executive Orders had been issued establishing what appear to be ad-hoc bodies that were intended to fight corruption, as we have discussed earlier. It was in the martial law period when two institutions, the Office of Ombudsman and the anti-graft Court, the Sandiganbayan were created to specifically address the worsening problem of corruption in the country.

As pointed out earlier, this twin agencies were not only established by law or by decrees, but are now constitutional bodies that cannot be abolished or changed by legislation from acts of Congress. The laws against graft and corruption are further enhanced with the enactment of significant statutes such as Republic Act 6713 signed into law in 1989 and which provides for a code of conduct and ethical standards governing public officials and employees including the uniformed service and granting incentives and rewards for exemplary service. Unfortunately, not many have been convicted under this law because of vagueness in certain provisions.

Another significant law is that of Republic Act No. 7080, enacted in 1991, which defines and penalizes the crime of plunder, or big ticket corruption of government officials amounting to an aggregate sum of at least 50 million pesos.

59

These fragmented issuances represent today a bewildering labyrinth of statutes and orders that may now need to be consolidated and codified into one single document or what Ursal calls as an Omnibus Anti-Graft Code. As Ursal decries,

“The multifarious pieces of legislations, including statutes not specifically denominated as anti-graft laws but containing provisions to curb graft, have been enacted separately in a span of nearly seventy-five (75) years starting with the 1930’s. Some of these laws are almost unknown to many, while others contain antiquated provisions that need updating to keep up with new developments in governance. If most recent indictments of graft cases are based almost solely on the Anti-Graft and Corrupt Practices Act (R.A. No. 3019) and the Code of Conduct and Ethical Standards for Public Officials and Employees (R.A. No.6713), it is possible that the provisions of other lesser known anti-graft laws, especially the Revised Penal Code (Act No. 3815, s. of 1932) on crimes against public officers, are not given much attention” (Ursal, 2006: 159-160).

It is important therefore begin codifying anti-corruption laws into an all-embracing statute that can serve as a handbook or a manual not only for lawyers but for government officials and employees who may need a quick reference material on what acts and behavior would constitute graft and corruption, what are the rights of the accused, what action can be taken, administrative or otherwise, what sanctions can be imposed and what charges can be made.

It may also be pertinent to say that there may be a need to now relax the highly focused legalistic approach towards curbing corruption while at the same time rendering measures that can be made compatible with the demands of due process. Under existing laws, the prosecution and trial of an accused for corrupt pacts must be put within the bounds and constraints of a legal framework, where such constitutional guarantees of the rule of law, of due process and of the presumption of innocence unless proven otherwise must prevail and given much weight. In spite of the outpouring of a spate of legislations, decrees, executive and administrative orders and similar issuances to curb corrupt practices, corruption in the Philippines has worsened so as to afflict major institutions, crime-fighting agencies included.

Thus, in recent years, cases of corruption have been uncovered not only in government departments and agencies that implicate politicians and high ranking public officials in the executive branch to include the president, but also in such institutions as the Judiciary, including the Supreme Court and lower trial courts, the Armed Forces of the Philippines, the Philippine National Police, local government units and even constitutional bodies such as the Commission on Elections and the Commission on Audit.

60

DIRECTIONS IN THE FIGHT AGAINST CORRUPTION

From these discussions, it could be cited that the Philippines has not been lacking in the establishment of entities and the enactment of laws to address the menace of corruption. As one commentator candidly remarks, “Philippine anti-graft institutions exist, but integrity is lacking” (Elliot, 2008: 1). This perhaps echoes the sentiment and frustration on corruption in the Philippines expressed by the head of the Presidential Anti-Graft Committee (PAGCOM) under President Macapagal, Cesar Climaco, who said after one year holding office, he had nothing much to offer, saying: “no hits, no runs, all expenses, no convictions!” He lamented “his failure to jail a single crook because of cumbersome procedures, congressional and judicial interferences and the lack of teeth” of the Agency (PAGCOM) he headed (Carino and de Guzman, 1979: 364.

Why then does corruption in its various shades and manifestations continue to bedevil Philippine society? Is the country now in the brink of suffering from a policy burn-out in dealing with corrupt practices? From all indications, the Philippines and its long history of combating corruption reflect today a continuing struggle as incidences and cases of corrupt activities continue to unravel.

Much of the measures taken up have been anchored on organizational and legal procedures where cases tend to clogged up in a pattern of long investigations and drawn-out trials, marked by slow and tedious processes that seek to uphold due process even if evidence have been palpably indicative of guilt. This tedious process can be described for the moment as the traditional or classical modes of fighting corruption. Can a package of “out-of-the-box” measures be designed which will establish a more decisive and resolute response without necessarily violating the due process clause that are guaranteed for citizens?

61

CHAPTER 4

CHRONICLING CORRUPTION IN THE PHILIPPINES: 2005 – MAY 2011THE ROAD TO PERDITION…?

By: Prof. Ma. Oliva Z. Domingo

“I’ve sometimes wondered why corruption is the word used for acts of dishonesty committed by people in positions of trust. Corruption means debasement, decay, deterioration, weakening. These terms are usually applied to metal and, in particular, to living matter. So, what is it that decays, deteriorates, or weakens in corrupt people? . . . I think that what corruption signifies when applied to human behavior is the weakening of instincts—in this case, the instinct for honesty. On this simple instinct depends many of our social institutions. Instincts are sources of energy, and corruption is energy in decline.”

Professor Randolf S. DavidPhilippine Daily Inquirer, 5 December 2004

“Why be honest, when it pays to be dishonest? Why fight for others, when they won’t fight for you?—or even for themselves?...The answer I think lies in what life means to you. If life means having a good time, money, fame, power, security—then you don’t need principles, all you need are techniques. On the other hand, if happiness counts more than a good time, respect more than fame, right more than power, and peace of soul more than security; if death doesn’t end life but transforms it, then you must be true to yourself and to God and to love the truth and justice and freedom that are God’s other names.”

Senator Jose W. Dioknoin a letter written to his son Jose Manuel (Cel), from his prison cell

INTRODUCTION

Why do we often liken corruption to cancer? Could it be because diseased cancer cells within a person’s body destroys the body, just as corrupt behavior in a society where it thrives debases society? Is it because like cancer, the cure for corruption has yet to be found?

There have been many studies on corruption in the Philippines that define the causes, assess or propose solutions, identify the actors involved, and describe the laws and institutions created. This chapter is part of a study that attempts to search for Filipino solutions and remedies that could possibly address the problem of corruption more effectively. It begins by describing the anti-corruption efforts in the country from 2005

62

onwards to find out why these seem not to have met with success so far. Specifically, it takes off from the end of the term of Ombudsman Marcelo and the years thereafter, describing the initiatives pursued the forces at play, and the context within which these occur. It ends with an exploration of possible directions for the future. The preceding years are discussed in a separate chapter.

THE YEARS OF HOPE

It was his first two-and-a-half years of a seven-year term when Ombudsman Simeon V. Marcelo addressed the conference of the Global Organization of Parliamentarians Against Corruption (GOPAC) on 31 March 2005. The fight against corruption in the Philippines was clearly an uphill climb given that anticorruption forces were grossly insufficient and massively underfunded. The immediate need then was for no less than 200 prosecutors to handle the backlog of almost 2,000 cases pending before the Sandiganbayan. To gather evidence for these cases there had to be at least 500 field investigators, and if Hong Kong was used as the standard, the need of the Office of the Ombudsman (OMB) would have ballooned to over 7,000 field investigators (Marcelo, 2005). The resources allocated to the OMB reflect the Philippines’ seriousness, or lack of it, in grappling with the ages-old scourge. When compared with Hong Kong’s Independent Commission Against Corruption (ICAC), one of the most successful anti-corruption agencies in the world, the resources allocated to the OMB seemed miniscule and pathetic. Table 1 compares the resource of these two agencies in 2004, which partly explains why the OMB’s anticorruption efforts never seemed to be enough.

Table 1. Comparison of ICAC and OMB Anti-Corruption Resources (2004)Hong Kong’s ICAC The Philippines’ OMB

Personnel 1,326 for a bureaucracy of 174,175 officials and employees and a population of 6.8 Million

1,141 for a bureaucracy of approximately 1,500,000 officials and employees and an estimated population of 82 Million

Field Investigators

837 for a bureaucracy of 174,175, with a ratio of1:208.

88 for a bureaucracy of approximately 1,500,000 officials and employees: the ratio is 1:17,045

Budget $90 Million or P4.94 Billion for 1,326 personnel, watching 174,175 public sector officials and employees.

P480 Million (2004 Re-enacted budget) for1,141 personnel, watching a bureaucracy of approximately 1,500,000 officials and employees.

(Marcelo, 2005: 7-8; Office of the Ombudsman, 05: 2)

Independent assessments confirmed the OMB’s urgent need for resources. The Feliciano Commission created to investigate the Oakwood mutiny emphasized that the OMB should be “given the budgetary and other support that it needs, with all possible dispatch.” In its evaluation report, the Asia Pacific Group on Money Laundering referred

63

to the OMB as “severely under-resourced.” The Political and Economic Risk Consultancy Ltd. (PERC), a Hong Kong firm specializing in providing strategic business information and analysis for companies doing business in East and Southeast Asia, noted that the OMB was “ill-equipped” and did “not have the financial resources” to do its job effectively (Office of the Ombudsman, 2005: 2-3); http://www.abs-cbnnews.com/business/03/09/10).

In 2004, the United Nations Development Programme (UNDP) estimated that the staggering amount of P100 billion was at risk of being lost to corruption (UNDP Common Country Assessment cited in Marcelo, 2005: 4; also cited in the Office of the Ombudsman, 2005: 21), and yet for that year, only P480 million was allocated to the OMB to prevent this from happening. In 2005, the OMB sought bigger funding and got a boost from Congress, which appropriated P647.5 million, roughly one-third more than its previous year’s budget (http://dbm.gov.ph/gaa2005/omb.txt). The amount was still very much short of the ideal but it was a clear indication that Congress was supportive of the OMB’s anti-corruption drive. The budget increase meant that the OMB could hire 48 more prosecutors, 13 lawyer-investigators, and 187 field investigators (Marcelo, 2005: 14).

The lack of resources did not deter the OMB from pursuing its mandate under Marcelo’s watch. The reforms he introduced included the augmentation of personnel, upgrading of competencies, organizational restructuring, and the implementation of an integrity program, among others. By 2005, Marcelo had added 30more prosecutors to the original 32 at the start of his term in 2002, but the total of 62 prosecutors was a far cry from the minimum of 200 that was urgently needed at that time. Besides not having enough vacancies for the number of staff required, the salary levels for prosecutors could not attract applicants for the job. Many of the cases before the Sandiganbayan were complex and demanded extra effort from senior and experienced lawyers who, however, were receiving only the equivalent of what new lawyers earned from private practice, or perhaps even less (Marcelo 2005: 22). To say then that the prosecutors were overworked and underpaid would be a gross understatement.When Marcelo started his term in 2002, there was no systematic training program for prosecutors, no system of supervision or monitoring of cases and performance of the prosecutors, not even a docketing/case management system. By 2005, regular training programs for prosecutors, field investigators, and other employees of the OMB had been institutionalized. There was a system for monitoring prosecutors, and a docket and records management system was in place (Marcelo 2005). With various partners, including the United States Agency for International Development (USAID), the American Bar Association, the United States Federal Bureau of Investigation (FBI), the United States Department of Homeland Security, and others, including local partners, OMB staff were able to upgrade their skills in financial investigation, forensic accounting, surveillance, corruption detection, entrapment operations, computer literacy, and other programs to enhance performance (Office of the Ombudsman, 2005: 5-7). Accompanying these changes was the adoption of the Integrity Development Review (IDR) Program developed earlier by the Development Academy of the Philippines (DAP). The program focused on measuring the vulnerabilities to corruption of

64

individuals and the organization, and to help foster integrity among OMB officers and employees. The OMB was among the first to pilot the IDR tools and named it Pursuing Reforms through Integrity Development or PRIDE. The program led to the development of a specialized Code of Conduct and the adoption of stricter policies on receiving gifts, whistle-blowing, and internal reporting. (Office of the Ombudsman, 2005: 3-8). PRIDE would later become a standard program for government agencies.The usual criticism against the OMB was that it had failed to successfully prosecute the “big fish” in its 15 years of existence. The OMB thus directed its prosecutors to focus on what it had earlier identified as 50 high-impact cases. These included the President Diosdado Macapagal Boulevard case; the RSBS Pension Fund case; the PEA–AMARI Scam; the Tax Credit Scam cases; the Department of Public Works and Highways ((DPWH) Vehicle Repair Scam case; the PCGG cases; the cases against Major Gen. Carlos F. Garcia for plunder, perjury, and forfeiture of unexplained wealth; the case against Lt. Colonel George A. Rabusa, General Garcia’s former aide, for perjury and for forfeiture of unexplained wealth; and the case against Armed Forces of the Philippines(AFP) Chief of Staff, General Lisandro C. Abadia for forfeiture of unexplained wealth and perjury, among others (Marcelo 2005: 22; Office of the Ombudsman, 2005: 11-13). High-ranking government officials facing charges at the Sandiganbayan are usually represented by the best lawyers that money could buy. Unable to hire more prosecutors, Marcelo turned to private lawyers for help The plan was to have at least two competent volunteer lawyers complementing the OMB prosecutors in handling each of the 50 high-impact cases, or at least 100 volunteer lawyers. This was the model used in the Estrada plunder case, where private prosecutors shared their time and expertise pro bono to help research difficult legal issues, gather evidence, and interview witnesses. To pursue this strategy, the OMB entered into a Memorandum of Agreement with the Philippine Bar Association (PBA) on 15 June 2004, and 16 lawyers volunteered. The OMB further signed an agreement with the Coalition Against Corruption on 25 February 2005, for the latter to assist in recruiting private lawyers for “Project Case Assist” or “Operation Big Fish.” Part of the plan was to ask the Sandiganbayan to have continuous trials as soon as it could muster sufficient legal support from volunteer lawyers (Marcelo 2005: 22; Office of the Ombudsman, 2005: 12-13). Marcelo hired 51 additional field investigators to augment the 37 when he started his term. By 2005,the total of88 field investigators comprised the Field Investigation Office (FIO) of the OMB that was created in 2004(Marcelo 2005; Office of the Ombudsman,2005: 1-2), inspired by the ICAC model. This was still a far cry from the minimum of 500 investigators it needed at that time but the OMB had to make do with whatever was available.In partnership with the private sector and civil society organizations, the OMB embarked on a lifestyle check program to identify corrupt public servants and their ill-gotten wealth and assets. It focused on corrupt-prone agencies such as the Bureau of Customs (BOC), Bureau of Internal Revenue (BIR), and the DPWH. This initiative led to the dismissal of high-ranking officials from these agencies and the filing of charges against others (Office of the Ombudsman, 2005: 10-12).

65

The OMB continued to expand its network of partners by entering into agreements with various private and civil society organizations, including the following, among others (Office of the Ombudsman, 2005: 13-18):

Procurement Watch, Inc. (PWI) - as volunteer observers for government bids and awards committees (BACs)

G-Watch - to monitor the implementation of awarded contracts

Barug! Pilipino - to help in the conduct of lifestyle checksIntegrated Bar of the Philippines - for the prosecution of environment-related

graft casesThe Philippine Province of the Society of Jesus – for the conduct of the Ehem! Aha!,

values formation programs in government agencies

Coalition Against Corruption - to assist in the textbook count at the Department of Education; medicine monitoring at the Department of Health; internal revenue monitoring at the BIR; advocacy on election cases; pork barrel monitoring; lifestyle checks; and support for volunteer lawyers prosecutors, among others.

The powerful Makati Business Club; CODE-NGO, the biggest coalition of civil society federations and organizations in the country; the influential Catholic Bishops’ Conference of the Philippines (CBCP); Transparency and Accountability Network (TAN); and the National Movement for Free Elections (NAMFREL), the government-accredited election watchdog, were among the members of the Coalition. The partnerships with CSOs further snowballed into other anti-corruption initiatives in the regions.The OMB faced formidable challenges not only in the home front but in the international scene as well. In 2004, Transparency International (TI), a Berlin-based politically non-partisan, non-profit organization set up to help curb corruption in international transactions, ranked the Philippines 102 in the Corruption Perception Index (CPI), lagging far behind most of its Asian neighbors, and ahead only of Pakistan, Indonesia, Myanmar, and Bangladesh. Table 2 presents the CPI ratings for selected Asian countries in 2004.In a scale of 1 (“highly corrupt”) to 10 (“highly clean”), the Philippine score of 2.6 was indeed an embarrassment since there were more than enough laws and structures to address the corruption issue. Although largely based on perceptions, the CPI is a measure that cannot simply be brushed aside since it is derived from a number of surveys assessing the country’s performance and expert assessments. For a country to be included in the CPI, a minimum of three surveys is required.

Table 2.Corruption Perception Index,2004 (Selected Countries)

COUNTRY 2004

Rank Rating

Singapore 5 9.3

66

Hong Kong 16 8.0Japan 24 6.9Taiwan 35 5.6Malaysia 39 5.0South Korea 47 4.5Thailand 64 3.6China 71 3.4India 90 2.8Vietnam 102 2.6Philippines 102 2.6Pakistan 129 2.1Indonesia 133 2.0Myanmar 155 1.8Bangladesh 158 1.7(Transparency International)

Despite this negative perception, however, international donor agencies were only too willing to lend their assistance in the fight against corruption. In 2005, the European Commission (EC)/European Union (EU)gave a grant of 2.9 million euros to the OMB spread over two years to boost OMB’s anti-corruption drive (Rufo, 2008). The USAID, UNDP, World Bank-Asia Europe Meeting Trust Fund (WB-ASEM), and The Asia Foundation (TAF)all pitched in to support the reform initiatives of the OMB.It was necessary to join forces with other government agencies as well to fight the growing menace of corruption, thus on 16 March 2004, Guillermo Carague, Chair of the Commission on Audit (COA), Karina Constantino-David, Chair of the Civil Service Commission (CSC), and Marcelo, as Chair of the OMB, signed what is now known as the Solana Covenant I. It embodied the anti-corruption initiatives their institutions would jointly and individually undertake (COA, OMB, and CSC, 2004). As constitutional commissions, the COA, CSC, and OMB endeavored to assert their independence from the executive, legislative, and judicial branches of government and undertake bold anti-corruption measures.The Solana Covenant I resulted in a number of reforms within these three agencies. The OMB and the CSC established their respective Statement of Assets and Liabilities (SALN) database taskforces. The CSC created the preliminary SALN database of the BOC, BIR, and DPWH, and issued a memorandum to all government agencies to all government agencies to ensure that officials and employees strictly comply with the requirement to submit their SALNs each year. The OMB and the COA created joint task forces to investigate, prosecute, and monitor high-profile corruption cases, such as the General Garcia case of four counts of perjury and forfeiture of ill-gotten assets amounting to more than P143 million (Marcelo 2005: 19), the Pestaño case in the Philippine Coast Guard, and the Ninoy Aquino International Airport (NAIA) case (COA, OMB, and CSC, 2005: 2-3). Meanwhile, the COA, OMB, and CSC instituted self-cleansing measures by filing cases and imposing sanctions on their erring personnel. Within a year of the Solana Covenant I, the OMB had dismissed three employees; the COA dismissed 20 employees, and the CSC penalized 19 employees for corruption and integrity violations. Some of those

67

affected were high-ranking officials. The OMB strictly implemented the code of conduct, and policies on whistle-blowing, internal reporting, gifts and benefits, and personnel and financial management. It made it a policy to conduct background investigations on applicants for career positions. Meanwhile, the CSC prepared guidelines for vetting presidential appointees and selected third level officials of the OMB, COA, and CSC. With OMB assistance, a bill on whistle-blowing was filed in Congress to protect whistleblowers, as well as a bill on the waiver of bank secrecy rights of the subjects of corruption investigations (COA, OMB, and CSC, 2005: 3-7).The signatories of the Solana Covenant I subsequently inked a Solana Covenant II during the 2nd Anticorruption Summit of Independent Accountability Institutions on 15 July 2005. Among others, Solana II would continue the commitments of the three agencies in Solana I, such as the monitoring of unliquidated cash advances, joint task forces for investigations, self-cleansing, and integrity vetting prior to the conferment of rank to career executive officers. New initiatives included the sending of a joint letter to the President emphasizing the importance of integrity in the appointment of senior officials and the offer to assist the President in the vetting of proposed appointees in terms of personal reputation and commitment to uphold integrity in the agency they will be appointed to. The three agencies likewise committed to work together towards the rationalization of the compensation structure, the development of a complete performance management system, and other anti-corruption measures (COA, OMB, and CSC, 2005: 2-13).On 25 January 2005, President Arroyo signed into law Republic Act No. 9335 known as the Attrition Act of 2005. The law provides a system of rewards and incentives for personnel of the BIR and the BOC to encourage them to be more efficient in collecting taxes. The Act holds officials, examiners, and employees of these two agencies liable if they violate the Act or “are guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to exercise extraordinary diligence in the performance of their duties” (Section 8, R.A. No. 9335).

HOPE FLICKERS…AND THEN…DIMS?

The record of the Philippines in fighting corruption may have been dismal but the mood was upbeat with Marcelo at the helm of the OMB and the reforms he instituted. Before his appointment as Ombudsman, he caught the public eye for the successful handling of the Marcos ill-gotten wealth case where the Supreme Court rendered a decision forfeiting these in favor of the government. The public must have noticed and appreciated the anti-corruption efforts of the OMB and this was reflected in the gradual but steady climb in its Social Weather Stations (SWS) ratings—from 16% in 2002-2003 to 22% in 2003-2004 to 24% in 2005.

To everybody’s surprise, however, Marcelo unexpectedly resigned from his post as Ombudsman on 30 November 2005, without finishing his seven-year term. It was only eight months since he addressed the GOPAC where he gung-ho about the efforts that were starting to take root in the anti-corruption arena. Commentators expressed concern over the resignation of Marcelo because he was in the midst of efforts to promote lifestyle checks and assessments (http://www.calpers.ca.gov). He cited health reasons

68

but speculations were rife that the real reason for his decision to quit a job he was doing so well was that he got tired of getting too many phone calls from high places in government asking him to keep off the controversial cases involving family and allies of those in power. Arroyo appointed Marcelo but his independence and single-mindedness in pursuing justice and truth must have given her the jitters.

President Arroyo appointed Merceditas N. Gutierrez as the first woman and fourth Ombudsman of the Philippines to serve a seven-year term effective 1 December 2005. She came in with a severe handicap because her appointment did not sit well with the public, which believed that she would not be independent-minded but rather would be protective of Arroyo and her key officials. She also happened to be the classmate of First Gentleman Jose Arroyo in law school. To be fair, Ombudsman Gutierrez rose from the ranks in government service but the public could not shake the thought that she was appointed Ombudsman in order to protect the interests of the Arroyos and their allies. Sectors of society have questioned the legitimacy of Arroyo’s assumption to power in 2001 after Estrada’s ouster. The “Hello Garci” incident and her “I am sorry” admission of indiscretion for calling up Commissioner Garcillano of the Commission on Elections (COMELEC) during the 2004 Presidential elections further dammed her before the public eye, and the public simply could not trust her actions nor her appointees.

As if to bid her critics wrong, within a few months after taking her oath, Ombudsman Gutierrez launched the National Anti-corruption Program of Action (NACPA) during the Anti-Corruption Convergence Summit on 17 March 2006. A mix of representatives from the executive, legislature, judiciary, constitutional bodies, local government units (LGUs), business sector, civil society, academe, youth, interfaith groups, and media signed the Covenant to Support NACPA and vowed to integrate their anti-corruption programs under it. The objectives of the NACPA are 1) to streamline and strengthen anti-corruption commitments of the various sectors under a comprehensive strategic framework, 2) to serve as an avenue for consultations and coordination among them, and to 3) adopt an anti-corruption performance measurement system. Initial funding for this initiative came from the USAID, TAF, and UNDP (Altez, 2007: 8). The OMB and the DAP were going to work with anti-corruption stakeholders to develop clear indicators for tracking and measuring performance in the fight against corruption (ADB/OECD Anticorruption Initiative for Asia and the Pacific, 2006).

The NACPA is guided by the Medium-Term Philippine Development Plan (MTPDP), the Millennium Development Goals (MDGs), and the United Nations Convention Against Corruption (UNCAC). The Senate ratified the UNCAC in November 2006, making the Philippines the second Southeast Asian country to have done so. A Multi-Sectoral Anti-Corruption Council (MSACC) serves as the advisory and consultative arm of the NACPA (Garcia, 2006: 8; OMB Brochure on NACPA). The MSACC went on road shows around the country to promote awareness and generate public support in fighting corruption.

The OMB continued to increase the number of personnel, implement professionalization programs, and sustain and expand its partnerships with government, business, and civil society organizations. For instance, together with the Department of Education (DepEd),

69

the OMB developed the Graft and Corruption Prevention Education Teaching Exemplars to inculcate the values of honesty, integrity, and discipline among students, and the pursuit of the common good (Sanchez, 2007: 7).

Ombudsman Gutierrez introduced innovations at the OMB to bring the OMB closer to the people and promote transparency. There was the “Meet with the Ombudsman” program where she and other OMB officials personally attended to requests from the public for assistance. In August 2006, the OMB launched the “OMB Social Service Caravan” to extend medical and dental assistance in communities around the country, in partnership with the Philippine Air Force, PAGCOR, PCSO, MMDA, DOH and government hospitals, the National Statistics Office, Department of Environment and Natural Resources (DENR), Department of Foreign Affairs (DFA), and other government, business, and civil society organizations (Mañalac-Calderon, 2008: 10). The OMB likewise organized task forces to undertake specific activities. To run after government officials and employees using official vehicles for private purposes there was Task Force Red Plate. To investigate education-related anomalies there was Task Force SAPAK (for Samasamang Pagkilos Laban sa Katiwalian). Task Force Green Lane focused on lifestyle check complains (Sanchez, 2007: 7; Sanchez, 2008: 4).

For the first time, too, the OMB opened its hearings to the public in 2006. The public and media were given the opportunity to observe the preliminary investigation on the highly controversial Mega-Pacific case involving violations of the bidding process in the procurement of the automated counting machines for the 2004 elections (Sanchez, 2007: 7).

Like their predecessors, Ombudsman Gutierrez and her counterparts at the CSC and the COA, Chairpersons Cesar Buenaflor and Reynaldo Villar, respectively, signed a compact similar to the Solana Covenants titled, “Memorandum of Agreement of the Constitutional Integrity Group.” They bound their institutions to actively engage in collaborative projects and activities necessary for institutional reforms, support each other’s respective mandates and collaborate in integrity enhancement efforts, and build on each other’s strengths in developing and implementing programs for good governance (COA, OMB, and CSC, 2009: 1-2). On 2 June 2007, President Arroyo signed into law Republic Act No.9485, or the Anti-Red Tape Act (ARTA) of 2007. The Act requires national agencies and LGUs to set up their respective service standards, or Citizens’ Charters, simplify procedures, expedite transactions, set standard timetable for the completion of transactions, and regularly assess frontline services to improve the service delivery, reduce red tape, and prevent graft and corruption. The law further provides for the imposition of penalties for violations. It requires government front-line services to display prominently their respective Citizens’ Charters, now informally referred to as their “ARTA.” By August 2010, the OMB reported that 4,253 of 5,716 offices, or 74%, had developed and installed their Citizens’ Charters (Office of the Ombudsman, 2010). As part of the EU project the OMB engaged the services of Tony Kwok, former head of Hong Kong’s ICAC, as consultant. Among others, he recommended the hiring of more

70

prosecutors and investigators. He gave advice to the OMB and conducted capacity building activities.

INFUSION OF RESOURCES

Resources for OMB’s anti-corruption operations grew exponentially. Support from Congress came in terms of budgetary allocations. Table 3 presents the total appropriations of the OMB from 2005 to 2011.

The budget for 2005 was almost one-third more than that of 2004, but failure of Congress to pass a new budget for 2006 resulted in a reenactment of the 2005 budget. This was more than made up for in the OMB’s 2007 budget, which was 44% more than the previous year. Personal services grew by more than 46% and MOOE increased by 56%. The total increase from 2007 to 2008 was minimal, but the appropriation for 2009 reflected an increase of almost 40% over the previous year. This was due to the substantial increase for capital outlay, a budget item that was not repeated in succeeding years, thus the dramatic decrease in the 2010 budget, although personal service and MOOE increased. The decline in the OMB budget for 2011 was largely because there no longer is any allocation for capital outlay.

Table 3. Total Appropriations for the Office of the Ombudsman, 2005-2011 (in thousand pesos)2005 2006* 2007 2008 2009 2010 2011

Amount % Amount % Amount % Amount % Amount % Amount % Amount %Personal Services (PS)

455,108 70.28 455,108 70.28 686,619 73.33 689,308 72.28 741,994 55.96 772,604 72.59 843,548 81.75

Maintenance and Other Operating Expenses (MOOE)

102,083 15.76 102,083 15.76 159,427 17.03 169,303 17.75 194,866 14.70 204,866 19.25 188,353 18.25

Capital Outlays (CO)

90,348 13.95 90,348 13.95 90,348 9.65 95,016 9.96 389,095 29.34 86,800 8.16 0 0

TOTAL647,539

100%

647,539100%

936,394100%

953,627100%

1,325,955100%

1,064,270100%

1,031,901100%

* reenacted budget.(Sources: www.dbm.gov.ph/dbm_publications/gaa/omb.txt various years; http://www.dbm.gov.ph/dbm_publications/gaa_2005/omb.txt ;htttp://www.dbm.gov.ph /NEP2008/XXXIII/ OMB.TXT)

In itself, the OMB budget might be considered a drop in the bucket of what it takes to rid the country of corruption, but the international donor agencies flooded the OMB with funds. The general impression is that Ombudsman Gutierrez did not lack for funds but rather “enjoyed access to more money than any of her three predecessors combined. The estimate is that the “OMB received at least P316 million from foreign grants between

71

2005 and 2009, “including funds committed to her predecessor” (Mangahas and Ilagan, 2011: 1-2).

On 26 July 2006, the Philippines signed an agreement with the Millennium Challenge Corporation (MCC) to receive a Threshold Program grant of US$20,685,000, which covers the period 2006 to 2009. The U.S. Congress created the MCC in January 2004, as a mechanism for delivering foreign assistance to developing countries to reduce global poverty and promote sustainable growth. The USAID is the lead implementing agency for the MCC (http://www.mcc.gov/pages/countries/program/philippines-threshold-program.

The Millennium Challenge Account (MCA)—Philippines Threshold Program, like other MCC threshold program, is designed to help improve performance on specific indicators and enable countries to eventually become eligible for Compact status. The Compact is a multi-year agreement between the MCC and an eligible country to fund specific programs to reduce poverty and stimulate economic growth. The Philippines Threshold Program allocated US$6.5 million of thetotal grant, or more than 31% of the account, to enable the OMB to reduce opportunities for corruption throughout the government through capability-enhancement programs for its employees and the establishment of an information management and investigation surveillance capacity. The program provided assistance to the Department of Finance (DOF) to train staff and provide equipment to improve revenue collection, develop stronger incentives to be honest, and to support the DOF’s Revenue Integrity Protection Service (RIPS), the BIR’s Run After Tax Evaders (RATE), and the BOC’s Run After the Smugglers (RATS) programs. The RIPS, RATE, and RATS were organized to increase government resources, expose violators, and increase compliance with the laws by both taxpayers and officials of the revenue collection agencies(http://www.mcc.gov/pages/countries/program/philippines-threshold-program ; http://www.mcc.gov/mcc/bm.doc/ph_soag.pdf).

The DOF established the RIPS unit on 17 December 2003, by virtue of Executive Order 259. The RIPS is the anti-corruption arm of the DOF that is empowered to investigate allegations of corruption in the DOF and its attached agencies—the BIR, BOC, Bureau of Local Government Finance (BLGF), Bureau of Treasury, Central Board of Assessment Appeals (CBAA), Insurance Commission, National Tax Research Center (NTRC), Fiscal Incentives Review Board (FIRB), and the Privatization and Management Office (PMO). If warranted the RIPS files with the OMB the necessary charges against erring officials and employees (http://www.rips.gov.ph/).

The BIR instituted the RATE program to run after delinquent taxpayers and tax cheats and to investigate tax fraud cases. It is mandated to investigate violations of the National Internal Revenue Code of 1997 and assist in the prosecution of criminal cases ftp://ftp.bir.gov.ph/webadmin1/pdf/rate_background_and_organization.pdf. The BOC implements the RATS program to strengthen its capacity to run after smugglers and erring BOC personnel. To strengthen its ability to prosecute customs-related cases, it hired additional lawyers for deployment at the Finance Department of the Office of the Solicitor General (http://www.customs.gov.ph/rats.php).

72

Funds from the MCA, the USAID, and the EU enabled the OMB to print and distribute the Teaching Exemplars to elementary and secondary schools (Sanchez, 2007: 7). Funding for the Center for Asian Integrity (CAI), a joint effort of the OMB, the Australian Institute of Ethics, Governance and Law (IEGL), and other local partners would come from the MCA, through TAF. Besides the $6.5 million from the MCC, the OMB received a US$716,000 grant from the EU, or about P32 million at that time. The fund was managed by the WB-ASEM Trust Fund and was earmarked to help set up the OMB’s case management software system to complement the hardware funded from the MCC Philippines Threshold Program. The software developed for the case management system had significant defects, however, that prevented its use. At the end of the project in 2007, after already spendingUS$521,761.04, the donors cancelled the third tranche of US$194,838 becausethe OMB could not use the software (Quitain, 2007: 13, 18; Mangahas and Ilagan, 2011: 2).

The Philippines-Australia Human Resources Development Facility (PAHRDF), an Australian government-funded initiative, likewise provided support for capability building programs of the OMB (Tatytayon-Padios, 2008: 18).

Executive Order No. 12 issued in 2001 created the Presidential Anti-Graft Commission (PAGC) to investigate violations of anti-graft laws by presidential appointees and recommend their suspension to the President. It superseded the Presidential Commission Against Graft and Corruption (PCAGC) created in 1994, and the National Anti-Corruption Commission (NACC) created in 2000. In 2005, the PAGC launched the Integrity Development Action Plan (IDAP) as its national anti-corruption program. The executive branch adopted the IDAP as the framework for 135 government agencies and LGUs. In 2009, the World Bank approved a US$250,000 grant under its Institutional Development Fund (IDF) to strengthen the capacities of the OMB and the PAGC, specifically to support the IDR of the former and the IDAP of the latter.

In 2008, the EC excluded the OMB from among its beneficiaries. When interviewed, the EC Head of Delegation in the Philippines explained that this was simply a result of the review that the EC conducted on the programs it funded in the past few years. The delisting of the OMB from the list of beneficiaries of the EC, however, could be interpreted as an indication of dissatisfaction over the results of the OMB’S performance in the projects it funded (Rufo, 2008).

In September 2010, President Benigno Aquino signed in New York an agreement with the MCC for a US$484 million MCA-Philippines Contract Program. The OMB failed to qualify for further funding under this program because its performance failed to meet the MCC criteria. The final program report of the Philippines Threshold Program cited various reasons behind the ineffective performance of the OMB, which were mostly internal. The report indicated that the OMB’s weaknesses begin with Ombudsman Gutierrez’ own performance as a leader and manager. Among the weaknesses of the OMB cited in the report were poor evidence security, poor information sharing within the agency, “severe internal tensions” between and among individuals, “turf tensions,” and a

73

leadership that is highly personalized. While the report acknowledged the “dramatic increase in the reported conviction rate” that complies with the project’s indicator, this did not relate to work on the fundamental reforms and institutionalization of sound practices that would really improve the performance of the OMB. The report indicated the continuing slide in controlling corruption from 76% in 2007, to 57% in 2008, and 47% in 2009 (Rufo, 2008; Mangahas and Ilagan, 2011: 2-3).

Sources from within the OMB confirm these observations and consider Ombudsman Gutierrez to be deficient in organizational skills. She is reported to have dispensed with the annual assessment and planning conference that would have provided an opportunity to take stock of the OMB’s performance and institute appropriate measures to address weaknesses. She prohibited all team-building activities to prevent unnecessary expenses. She centralized the review and action on decisions, resolutions, issuances and orders issued by the OMB (OMB Office Order No. 007, 27 January 2006), which resulted in the piling up of pending cases submitted to her office for review and action. There were reported instances when she was not accessible to her staff, including her Deputies, who on occasion had to barge into her office just to have an audience with her. She consulted only a few persons. She was known to entertain or even was perceived to sometimes encourage one-sided reports on officials and employees and to react to these without first verifying the truth, thus developing personal enemies among subordinates. She appeared to be sensitive to criticism and sometimes could not control her emotions in the office.

These notwithstanding, the OMB derived significant benefits from the MCC Threshold Program which include the following (Mangahas and Ilagan, 2011:8:

Wireless connectivity with 12 servers, 253 computers, and peripherals, all networked into a series of local area networks (LANs) and a wide area network (WAN) connecting the main OMB office in Quezon City to its regional offices in Cebu and Davao;

Renovation of server rooms and management information (MIS) rooms;

An integrated capability building program for prosecutors, investigators, and lawyers, here and abroad, or with foreign consultants;

A secured and shared information system used for inter-office communication and case research, with access to a centralized case inventory database developed through the OMB-Department of Justice (DOJ) corruption case study;

Ten surveillance equipment kits for all investigation units, including digital still and video cameras, portable printers, laptops, portable scanners, digital audio recorders, and both covert and overt surveillance equipment; and

74

A set of counter-surveillance equipment, including long-range day-and-night camera, tactical audio surveillance equipment, and a covert handheld mobile phone jammer for the field investigation unit of the main office.

While the OMB engaged in various programs and took pride in its achievements, the public did not seem to appreciate its efforts. At the same time, donor agencies were rethinking their funding support for the country’s anti-corruption efforts through the OMB. Frustration, despair, and cynicism were snuffing out the ray of hope that once sparked over the anti-corruption initiatives of the country. What could have caused the loss of steam and the public’s loss of faith in the country’s anti-corruption efforts?

RATINGS AND RANKINGS

Despite increases in the OMB’s budget and the infusion of funds from donor agencies, the country’s corruption ratings went on a steady decline rather than improve.

The SWS Surveys of Enterprises on Corruption measures, among others, the sincerity of agencies in fighting corruption. It classifies the sincerity ratings as follows:

Over +50 = Very Good -10to -29 = Poor+30 to +49 = Good -30 to -49 = Bad+10 to +29 = Moderate -50 and lower = Very Bad-9 to +9 = Neutral

Table 4 presents the ratings of selected government agencies in fighting corruption from 2005 to 2009. It might partially explain why international donor agencies were becoming more cautious with their financial commitments to the country’s anti-corruption efforts.

Table 4. Sincerity of Agencies in Fighting Corruption, 2005-2008 (Selected Agencies)2005 2006 2007 2008 2009

Score

Rating

Score

Rating

Score

Rating

Score

Rating

Score

Rating

OMB +22 M +5 N +9 N +4 N -8 NSandiganbayan

+19 M +13 M +14 M +5 N +8 N

COA +5 N +5 N +20 M +23 M +8 NDOF +15 M -4 NBIR -59 VB -58 VB -49 B -56 VB -57 VBBOC -75 VB -69 VB -72 VB -69 VBOffice of the President

+10 M -15 P -3 P -27 P -37 B

PAGC -33 BSupreme Court

+48 G +40 G +45 G +37 G +40 G

Senate -13 P -17 P -7 N -6 N -1 N

75

House of Representatives

-28 P -40 B -32 B -41 B -34 B

AFP -38 B -19 B -9 B +6 N +10 MDept. of Justice

P P -5 N

COMELEC -59 VB -36 B -27 P -8 N(various sources and SWS, 2009; SWS, 2008; SWS, 2007)

Table 4 reveals that the best rating that the agencies expected to address the corruption issue— such as the OMB, Sandiganbayan, COA, or the Department of Justice (DOJ)—could get was a Neutral rating. This indicates that these agencies are not perceived to be sincere enough in pursuing anti-corruption efforts. What is worse is that agencies that have been receiving substantial support, both from domestic and international sources, are perceived to be insincere in fighting corruption, such as the BIR, which is consistently getting scores below -50 (except in 2007), and the BOC, which was getting much lower scores. Among the selected agencies included in the table, only the Supreme Court is perceived to be sincere in fighting corruption, while the Department of Justice (DOJ) and the AFP were able to improve their ratings in 2009 to move from Poor to Neutral (for DOJ) and Neutral to Moderate (for the AFP).

Table 5 presents Transparency International’s Corruption Perception Index (CPI) of selected countries in Asia from 2005-2010. The CPI score relates to perception of the degree of corruption as seen by business people and country analysts, and ranges for 0 (highly corrupt) to 10 (highly clean).

Table 5. Corruption Perception Index, 2005-2010 (Selected Countries)

COUNTRY 2005 2006 2007 2008 2009 2010

Rank Rating Rank Rating Rank Rating Rank Rating Rank Rating Rank Rating

Singapore 5 9.4 5 9.4 4 9.3 4 9.2 3 9.2 1 9.3Hong Kong 15 8.3 15 9.3 14 8.3 12 8.1 12 8.2 13 8.4Japan 21 7.3 17 7.6 17 7.5 18 7.3 17 7.7 17 7.8Taiwan 32 5.9 34 5.9 43 5.1 40 5.6 39 5.5 33 5.8Malaysia 39 5.1 44 5.0 43 5.1 47 5.1 56 4.5 56 4.4South Korea 40 5.0 42 5.1 43 5.1 40 5.6 39 5.5 39 5.4Thailand 59 3.8 63 3.6 84 3.3 80 3.5 84 3.4 78 3.5Laos 77 3.3 111 2.6 168 1.9 151 2.0 158 2.0 154 2.1China 78 3.2 70 3.3 72 3.5 72 3.6 79 3.6 78 3.5India 88 2.9 70 3.3 72 3.5 85 3.4 84 3.4 87 3.3Vietnam 107 2.6 111 2.6 123 2.6 121 2.7 120 2.7 116 2.7Philippines 117 2.5 121 2.5 131 2.5 141 2.3 139 2.4 134 2.4Cambodia 130 2.3 151 2.1 162 1.7 166 1.8 158 2.0 154 2.1Indonesia 137 2.2 130 2.2 143 2.3 126 2.6 111 2.8 110 2.8Pakistan 144 2.1 142 2.4 134 2.5 139 2.4 143 2.3Myanmar 155 1.8 160 1.9 179 1.4 178 1.3 178 1.4 176 1.4

76

Bangladesh 158 1.7 156 2.0 162 2.0 147 2.1 139 2.4 134 2.4(Source: Transparency International, various reports, various years)

Table 5 shows that in 2005, the Philippines ranked 11 th among the 17 selected Asian countries, tied with Vietnam and ahead of Cambodia, Indonesia, Pakistan, Myanmar, and Bangladesh. It was then the 5th most corrupt in the APEC region. It moved down to 12th

place in 2006 while Vietnam moved ahead. It remained in 12th place in 2007. It slid down to 14th place in 2008, with Indonesia and Pakistan getting better scores. It tied for 13th place with Pakistan and Bangladesh in 2009, while Indonesia’s rating improved to take the 11th place. In the 2010 CPI ratings, the Philippines tied with Bangladesh for the 13th place, ahead only of Pakistan, Cambodia, Laos, and Myanmar.

Other ratings confirm this negative perception about the Philippines. Table 6 presents the PERC ratings of selected countries from 2005 to 2010.

The PERC ratings are the reverse of the CPI. The score of 10 refers to the most corrupt while the score of 1 refers to the cleanest. The ratings are derived from middle and senior expatriate business executives working in Asia, the US, and Australia who were asked to rate the country/city where they work, their city of origin, and the extent to which their business has been affected (http://www.suite101.com/content/philippine-graft-and-corruption-a44148 ).

Table 6. PERC Corruption Rating, 2005-2010 (Selected Countries)2005 2006 2007 2008 2009 2010

Rank

Grade Rank Grade Rank Grade Rank Grade Rank Grade

Singapore 1 0.65 1 1.30 1 1.20 1 1.13 1 1.07 1 0.99Japan 2 3.46 2 3.01 3 2.10 3 2.25 3 3.99 3 1.75Hong Kong 3 3.50 3 3.13 2 1.87 2 1.87 2 1.89 2 2.63Taiwan 4 6.15 6 5.91 5 6.23 6 6.55 6 6.47 5 5.62South Korea 5 6.50 5 5.44 8 6.30 4 5.65 4 4.64 4 4.88Malaysia 6 6.80 7 6.13 6 6.25 5 6.37 7 6.70 6 6.05Thailand 7 7.20 10 7.64 11 8.03 10 8.00 11 7.63 9 7.33China 8 7.68 9 7.58 7 6.29 9 7.98 5 6.16 7 6.70India 9 8.63 8 6.76 9 6.67 7 7.25 10 7.21 10 8.23Vietnam 10 8.65 12 7.91 10 7.54 8 7.75 9 7.11 8 7.13Philippines 11 8.80 11 7.80 12 9.40 11 9.00 8 7.00 11 8.25Indonesia 12 9.10 13 8.16 11 8.03 9 7.98 12 8.32 12 9.07

(various sources)

Table 6 shows that the Philippines ranked 11th among the 12 selected Asian countries in 2005. Its rating drops to the bottom of the heap in 2007, and again in 2008 (Rood, 2008) and is named the “most corrupt” country in Asia, a label that has been difficult to erase, even when its ratings improved in 2009 and 2010.

Global Integrity is an organization incorporated under 501(c)(3) of the United States Internal Revenue Code, meaning that it is a non-profit, non-stock corporation. It receives support from a mix of charitable foundations, governments, multilateral institutions, and

77

the private sector. It prepares the Global Integrity Report (GIR) as a tool for understanding governance and anti-corruption mechanisms at the national level.

Table 7. Global Integrity Report on the Philippines (2007, 2008, 2010)* INDICATORS 2007 2008 2010

Score Rating Score Rating Score Rating

Overall 67 W 71 M 57 VWLegal Framework 86 S 90 S 84 SActual Implementation 50 VW 53 VW 31 VWCivil Society, Public Information and Media 69 W 68 W 53 VW Civil society organizations / Anti-corruption CSOs 84 S 73 M 59 VW Media/ Media’s ability to report on corruption 68 W 72 M 58 VW Public Access to Information 53 VW 58 VW 42 VWElections 57 VW 59 VW 46 VW Voting, Citizen Participation, Party formation 87 S 79 M 61 W Election Integrity 71 M 74 M 59 VW Political Financing Transparency 14 VW 25 VW 16 VWGovernment Accountability /Government Conflicts of Interest Safeguards, and Checks and Balances

71 M 70 W 53 VW

Executive Accountability/Conflicts of Interest safeguards and checks and balances

75 M 70 M 34 VW

Legislative Accountability/Conflicts of Interest safeguards and checks and balances

75 M 81 S 61 W

Judicial Accountability/Conflicts of Interest safeguards and checks and balances

61 W 58 VW 45 VW

Budget Processes / Budget Process Oversight and Transparency 72 M 69 W 71 MAdministration and Civil Service/Public Administration and Professionalism

73 M 82 S 71 M

Civil Service Regulations/Civil services conflicts of interest safeguards and political independence

73 M 74 M 58 VW

Whistleblowing Measures/Whistleblowing protections 53 VW 79 M 67 W Procurement / Government procurement: Transparency, Fairness, and

Conflicts of Interest safeguards81 S 88 S 95 S

Privatization / Privatization of public functions: Transparency, Fairness, and Conflicts of Interest safeguards

84 S 86 S 63 W

Oversight and Regulation 65 W 76 M 57 VW National Ombudsman 73 M 87 S 45 VW Supreme Audit Institution 93 VS 93 VS 57 VW Taxes and Customs: Fairness and Capacity 60 W 58 VW 50 VWOversight of State-Owned Enterprises 28 VW 83 S 78 M Business Licensing and Regulation 72 M 58 VW 54 VWAnti-corruption and Rule of Law/Anti-corruption Legal Framework, Judicial Impartiality, and Law Enforcement Professionalism

66 W 71 M 64 W

Anti-corruption law 89 S 100 VS 89 S Anti-corruption agency or equivalent mechanism 66 W 73 M 53 VW Rule of law 52 VW 51 VW Law Enforcement : Conflicts of interest safeguards and Professionalism 58 VW 60 W 52 VW

Legend: VS= Very Strong; S = Strong;M = Moderate; W = Weak; VW = Very Weak *The Philippines was not included in the countries rated in 2009.

(http://www.globalintegrity.org/report/Philippines/2010#)

78

The Report evaluates both anti-corruption legal frameworks and the practical implementation and enforcement of those frameworks. Local researchers and journalists participate in writing the Report, which uses an award-winning research methodology. The results are peer-reviewed and the report is characterized by transparency from start to finish (http://www.globalintegrity.org/report/Philippines/2010#).

Table 7 summarizes the GIR on the Philippines for the years 2007, 2008, and 2010. The Philippines was not included among the countries rated in 2009. The descriptions for the indicators of integrity might seem to vary for different years but they are meant more to clarify rather than change what the indicators stand for.

Table 7 confirms what is commonly acknowledged in the country. It shows that while the Philippines consistently gets a Strong rating for Legal Framework its rating for actual implementation is Very Weak, thus its overall integrity assessment for 2007 was Weak and slides to Very Weak in 2010. Indeed, the Philippines has enacted laws, issued executive orders, and other rules and regulations to address graft and corruption but it is in the enforcement of these legal instruments where it fails miserably. It is only under the category “Administration and Civil Service/Public Administration and Professionalism” that the Philippines gets a consistently Moderate rating. Otherwise, the ratings for the other categorise are either Weak or Very Weak.

The CPI, PERC, and GIR ratings almost unanimously reflect the Philippines’ inability to enforce the many laws enacted to address corruption, and the attempts to fight the scourge are perceived to be insincere or ineffective.

One of the indicators measured by the Worldwide Governance Indicators (WGI) is a country’s control of corruption, which captures the perception to which public power is exercised for private gain, including petty and grand forms of corruption, as well as “capture” of the state by elites and private interests.

Table 8 presents the estimated governance score of the Philippines and selected Asian countries from 2004 to 2008, in terms of the indicator “control of corruption” (Kaufmann, David. Aart Kraay, and Massimo Mastruzzi, 2008). The governance score ranges from -2.5to +2.5.

The WGI aggregates the views of a large number of enterprises and expert survey respondents gathered by survey institutes, think tanks, civil society organizations, and international organizations. Although supported by the World Bank, the WGI does not reflect the official views of the World Bank nor its officials (Kaufmann, Kraay, and Mastruzzi, 2010).

The data shows that the Philippines experienced a continuous decline in its control of corruption, from a score of -0.62 in 2004 to a low of -0.79 in 2006 and 2007, recovering only very slightly in 2008 for a score of -0.75. Meanwhile, Indonesia had a much lower score of -0,91 in 2004, as compared with the Philippine score of -0.62, its performance in

79

controlling corruption gradually improves such that the picture is reversed by 2008, that is, it has a better score than the Philippines.

Table 8. World Governance Indicators:Control of Corruption, 2004-2008 (Selected Countries)

2004 2005 2006 2007 2008Singapore 2.31 2.17 2.19 2.22 2.34Japan 1.16 1.23 1.34 1.17 1.25South Korea 0.38 0.63 0.39 0.46 0.45Malaysia 0.42 0.32 0.36 0.23 0.14Thailand -0.21 -0.13 -0.24 -0,41 -0.38Philippines -0.62 -0.64 -0.79 -0.79 -0.75Vietnam -0.80 -0.80 -0.76 -0.68 -0.76Indonesia -0.91 -0.87 -0.77 -0.69 -0.64Bangladesh -1.42 -1.31 -1.32 -1.08 -1.10Cambodia -1.05 -1.18 -1,21 -1.11 -1.14Laos -1.10 -1.16 -1.12 -1.04 -1.23

(Kaufmann, David., Aart Kraay, and Massimo Mastruzzi, 2008)

The ARTA is supposed to speed up frontline services and eliminate red tape. As mentioned earlier, the OMB reported that most government agencies had implemented the ARTA by 2009. Table 9 shows, however, that in 2009 the Philippines ranked 144 out of 183 economies surveyed in terms of Ease of Doing Business (World Bank and International, 2009: 2), lagging behind its neighbors in Asia—Singapore, Thailand, Malaysia, Hong Kong, China, Timor Leste, and Indonesia. Except for “Trading Across Borders” where it gets a score of 68, the Philippines can hardly reach the middle range among the 183 countries surveyed. This is an indication that Philippine government agencies have to further improve procedures and processes to make them faster and easier to navigate and to eliminate red tape. It is only by doing so that the country can increase its comparative advantage and become an attractive investment destination.

Companies usually make their decisions to invest in a country on the basis of economic, political, social, and other data. They look at facts but they consider perceptions as well. They refer to the different perception ratings, such as the CPI, PERC, GIR, WGI, and Ease of Doing Business scores.

Table 9. Philippines’ Ranking in Doing Business 2010 (183 economies surveyed)

RankEase of doing business 144Starting a business 162Dealing with construction permits 111Employing workers 115

80

Registering property 102Getting credit 127Protecting investors 132Paying Taxes 135Trading across borders 68Enforcing contracts 118Closing a business 153

(World Bank and International Financing Corporation, 2009: 2)

While the perceptions and ratings on the state of corruption in the country and the efforts to stamp it out generally paint a negative picture on the one hand, the OMB had been reporting positive accomplishments on the other. What could explain this discrepancy? What is the real picture?

Case Loads and Accomplishments: A Question of Numbers?

The OMB proudly reported that the 55% conviction rate of the Office of the Special Prosecutor (OSP) in 2007, was more than double its conviction rate in previous years (it was only 26% in 2005 and again in 2006).

The Office of the Special Prosecutor (OSP) was gaining ground. For example, it was able to get a plea of guilty from Charlie “Atong” Ang, co-accused with former President Estrada in the plunder case, who agreed to return P25 million to the government. On 12 September 2007, with former Ombudsman Marcelo as part of the prosecuting team, the OSP succeeded in getting Estrada convicted for the crime of plunder involving the return of P569 million to the Philippine government (Funelas, 2008: 5). These are definitely positive accomplishments.

While the OMB enjoyed continuing support from Congress in terms of its budget, however, it was not spared questions about its performance. For instance, Senator Francis Pangilinan once challenged the Ombudsman to be transparent in reporting its conviction rates, citing differences in the reports of the OMB and the Sandiganbayan. He noted that the discrepancies were because the OMB failed to factor in the cases dismissed, withdrawn, or archived when computing the conviction rate (Rufo, 2008).

A closer look at the reports from the OMB about its performance shows why questions are raised about the OMB’s performance data. Table 10 summarizes the reports on case loads and accomplishments of the OMB from 1995 to 2009.

Table 10. OMB Administrative and Criminal Case Loads and Accomplishments, 1995-2009

YEAR Total Number of

Total Number of Case Workload

Number of Cases Disposed

Percentageof Disposition

81

Cases Received

of of Cases Against Total Work load

1995 6,122 19,899 7,864 39.52%1996 8,117 21,337 9,263 46.55%1997 8,150 20,651 11,492 55.64%1998 8,551 17,728 10,816 61.01%1999 9,824 16,802 9,235 54.96%2000 9,739 17,929 12,184 67.95%2001 7,770 13,585 9,324 68.63%2002 8,265 12.923 6,306 48.79%2003 9,310 16,030 7,302 45.55%2004 8,448 17,303 7,556 43.66%2005 8,576 18,859 7,727 40.97%2006 13,602* No data in Annual

Report**“8,000 plus” ***

2007 11,651 No data in Annual Report

3,540

2008 13,223 No data in Annual Report

8,526

2009 12,736 No data in Annual Report

“almost 8,000”

(Data culled from Annual Reports.)*As reflected in the 2008 Annual Report. The “unofficial tally” from the Community Coordination

Bureau (CCB) puts the number at 8,230.** The “unofficial tally” from the CCB puts the number at 19,511.*** The “unofficial tally” from the CCB puts the number at 1,311.

The table shows that during the term of Ombudsman Gutierrez (data included here is only from 2006-2009), information on actual case work load and the number of cases disposed of invite speculation because they are either unavailable in official records or not specific, e.g., in 2006 the data for total number of cases disposed of is“8,000 plus,” and in 2009 the records indicate “almost 8,000.” The percentage of disposition of cases for a given year depends on the total case workload for that year, thus when the total case load is not given or revealed, the percentage of disposition of cases cannot be ascertained or computed.

Table 10 further shows that information on total case workloads was clear and specific for preceding years. It also reveals some discrepancies in the figures reported. For instance, there is a big discrepancy between the data in the official report of the OMB for the total number of cases received in 2006. The “official’ record puts the number at 13,602 while the “unofficial” record of the Community Coordination Bureau (CCB) puts the number at only 8,230. The CCB traditionally generates these statistics but for some reason they were not used in official reports during the term of Ombudsman Gutierrez. The integrity of OMB statistics is a reflection of the seriousness of its integrity campaign.

82

Computing the conviction rate on the basis of the decisions of the Sandiganbayan is likewise not without problems. The OMB reports on conviction rates have in fact been criticized by various sectors. An analysis of the data in Table 11 shows why.

Table 11: Information Filed Before the Sandiganbayan (December 2005-2010)

GUTTIEREZ TERM

Information filed

Decided

Cases

Acquitted

Convictions

Conviction Rate

Dec 2005 1 7 6 1 14.29%

2006 511 121 90 31 25.62%

2007 75 185 82 103 55.68%

2008 416 553 147 406 73.42%

2009 189 250 166 84 33.60%

2010 281 125 83 42 33.60%

TOTAL 1475 1241 574 667 53.75%

Take the year 2007, for instance, the Sandiganbayan decided 185 cases, 103 of which resulted in convictions. It is general knowledge, however, that cases take years before a final decision is made. This means that convictions in a given year may involve many years of effort by the prosecution.

Referring to Table 11, the cases resulting in convictions may have been filed even before the term of Ombudsman Gutierrez but were decided only in a given year. Convictions in a given year do not therefore necessarily reflect the performance of the OMB for the same year. It can also happen that the some of the cases decided involve the same person (for different charges), thus increasing the total number of cases resulting in convictions. Computing the performance of the OMB on the basis of Sandiganbayan convictions for a given year can therefore be problematic. If the reported accomplishments of the OMB indicate positive strides in the fight against corruption, why then is there a lingering perception that anti-corruption efforts are not succeeding?

Dr. Steven Rood (2008) provides two explanations for this seeming contradiction. First reason is that ratings, such as the PERC ratings, he says, are based on the perception of expatriates. It should be noted, however, that the Global Integrity Report is prepared with the participation of local researchers and journalists and the results are peer-reviewed. The process is also transparent and it uses an award-winning research methodology. The second explanation that Dr. Rood proffers is that a permanent feature

83

of assessments on the progress in anti-corruption efforts in the Philippines tends to be highly politicized. This could be the more likely explanation.

Dr. Rood cites the observation of former Chairman Eufemio C. Domingo of the Presidential Commission Against Graft and Corruption (PCAGC) that “every corruption complaint forwarded to his office was politically motivated” thus making the public believe that “all officials are alike and nothing will change.” People want the “big fish” convicted as an indication of the seriousness of anti-corruption efforts, but cases against Undersecretaries, or Deputy Commissioners, or provincial governor do not seem to qualify as “big fish” either, Dr. Rood continues. When anti-corruption agencies conduct hearing or file cases against corrupt officials, the public views this as grandstanding. When their activities are not in the media, the verdict is that the agencies concerned are not doing anything. It is case of damned if you do, damned if you don’t, Dr. Rood concludes (2008).

Similarly, the 2008 PERC assessment attributes the image problem of the Philippines vis-à-vis corruption to its being “politicized” and being “openly discussed in the media, unlike in authoritarian countries like China and Vietnam” where there is no such freedom of the press (Agence France-Presse, 2008).

Given these insights, it is therefore imperative to locate the corruption problem within the context of the political realities of a period in the country’s fight against corruption.

CONTEXT DOES MATTER

Despite the combined efforts of government, business firms, and civil society organizations, as well as the infusion of funds from international donor agencies, it seemed like the scourge of corruption could not be contained. It seemed difficult to turn the tide of public opinion and convince it that the government was sincere in addressing the problem.The Pulse Asia survey on corruption conducted on 20-21 October 2007 included an item that asked respondents which administration had the most intense allegations of corruption. Table 12 shows that in 2007, on the average, 45% of Filipinos perceived the Arroyo administration as having the most intense allegations of corruption while only 31% thought that the Marcos years were worse. When broken down according to location, only the respondents in Mindanao thought that the Marcos administration had more allegations of corruption (45%) than the Arroyo administration (35%). Except for this, however, whether classified by location or economic class, the survey indicates that Filipinos believed that the Arroyo administration had the most intense allegations of corruption.

Table 12. Pulse Asia Survey on Corruption, 20-21 October 2007 (in percent)In your opinion, in which administration has there been the

LOCATION CLASS

84

most intense allegations of corruption?Base: Total interviews, 100% RP NC

RLUZ VIS MIN AB

CD E

Arroyo Administration 45 56 50 39 35 50 47 37 Marcos Administration 31 21 25 38 45 25 29 40 Estrada Administration 14 11 15 19 9 13 14 12 Ramos Administration 7 8 8 3 9 8 6 10 Aquino Administration 1 2 2 0 1 1 1 1 None/refused to say/can’t say 1 2 2 1 1 3 1 0(http://pulseasia.com.ph/resources/photos/table1_Corruption_0710.gif)

The February 2009 Pulse Asia survey further revealed that the number of Filipinos who were critical of the government’s fight against corruption had increased by 4 percentage points from 49% in the October 2008 survey to 53% in the 2009 survey(Pulse Asia, 2009).

Pulse Asia conducts its Ulat ng Bayan surveys “without any party singularly commissioning the research effort” and therefore cannot be accused of promoting the interests of any party or being biased against any party (http://pulseasia.com.ph/resources/photos/table1_Corruption_0710.gif).

The cynicism and desperation in the anti-corruption efforts of the country during the term of Ombudsman Gutierrez should, however, be viewed within the context in which it operated—the circumstances, events, and scandals that seem to have plagued the Arroyo administration.

The 1987 Constitution grants the OMB the power, among others, “to investigate on its own, or on a complaint by any person, any act or omission of any public official, employee, officer or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient.” Meanwhile, Republic Act No. 6770, or the Ombudsman Act of 1989, compels the OMB to “give priority to complaints against high ranking government officials or those occupying supervisory positions, complaints involving grave offenses as well as complaints involving large sums of money and/or properties (Section 15). Thus, when no “big fish” is prosecuted, public perception is that the OMB is not fulfilling its mandate and is ineffective.

The Ombudsman is empowered to take action without need for any complaints from external parties. The public perception, however, is that Ombudsman Gutierrez did not take advantage of these powers. She either did not initiate action or was slow to move on the numerous allegations of corruption linking the President, her family, or her political allies, or the “big fish” that the public was waiting for her to do something about. The public was thus convinced that Ombudsman Gutierrez was protecting the interest of the Arroyos and so did not act in haste to file charges and prosecute them. When asked why she did not respond to the public’s demand to file cases against the Arroyos, she replied

85

that she could not single them out given the many other cases that the OMB faced; otherwise she might be accused of discriminating against them. She further explained that prosecutors and investigators had their hands full with the many cases before the OMB and it takes time to gather evidence to build up a strong case before the OMB files a case before the Sandiganbayan.

Meanwhile, the OMB, law enforcement agencies, the courts, and even Congress seemed to be no match to the large-scale corruption, small-scale bribery, unethical behavior, and misconduct that characterized the Arroyo administration.

The Senate and House of Representatives conducted many hearings on allegations of corruption, but no “big fish” was convicted either. President Estrada was convicted for the charge of plunder after the many years and untiring efforts invested by prosecutors. To the dismay of the prosecutors, President Arroyo granted him pardon even before he could start serving his prison sentence. This was demoralizing for the prosecutors who spent long years pursuing justice and for the public as well who confirmed what they had believed all the time—that nothing positive will ever come out of all the efforts to fight corruption. It should be noted, however, that the decision to pardon was a political act rather than an act of justice.

This made the public more cynical about anti-corruption efforts. The hearings and investigations were “entertaining” but were considered to be just “moro-moro” (play acting). It gave the solons an opportunity for grandstanding. In the end, the people thought, personal interests and political expediency always prevailed. To be sure, there were individuals and groups that filed cases, organized rallies, issued statements, wrote critical opinion columns, or made representations in appropriate forums to denounce corrupt officials and their activities, but there were more who were just fence sitters, merely watching events as they unfolded, and an even greater proportion of the population that seemed to have turned numb or indifferent to corruption and anti-corruption efforts.

In an essay on the cultural dimension of corruption, Caiden noted that scandals have no limit, meaning that it affects “all walks of life” and that “the corrupt rise to the apex, and the higher they go, the more damage they can do.” Citing a 19 th century comment of Lord Acton, Caiden explains that “whenever authorities exercise their power over others, they are often tempted to put their interests first (2011:8-9).

It is therefore helpful to situate the anti-corruption efforts of government in light of the temptation that officials and employees succumbed to during the same period. There were a number of high profile cases involving prominent figures during the Arroyo administration, many of which allegedly led to the Arroyos themselves. Although the public concluded that Ombudsman Gutierrez was reluctant to act on these cases with dispatch because she was protecting the interests of the Arroyos it is likely that the odds were stacked against her as the scope, complexity, and frequency of cases turned out to be. A brief summary of some cases illustrate the temptations and political developments of the Arroyo years, which occurred during Ombudsman Gutierrez’ watch.

86

The IMPSA Case—This case has a relatively long history. In the 1990s, the Ramos administration invited the Argentine firm Industrias Metalurgicas Pescarmona Sociedad Anonima (IMPSA) to invest in the power sector in the Philippines, specifically the rehabilitation of the Caliraya, Botocan, and Kalayaan (CBK) power plants under a build-operate-transfer arrangement. The project could not commence due to legal and financial difficulties. IMPSA requested the government to guarantee the undertaking to enable it to raise funds for the project. Three deadlines had come and come but it could not produce the required security deposit.

Very soon after Arroyo came into power in 2001, then Justice Secretary Hernando Perez signed a ruling in which the government was guaranteeing the financial obligations of the CBK project, something that previous secretaries carefully reviewed and took a long time to do. The ruling removed all legal obstacles for the implementation of the US$470 million contract (Pabico, 2007). Malacañang reporters referred to Perez as the “First Boyfriend” of President Arroyo but in reality he was more of the “First Mentor” who advised her in real politik (PCIJ, 2002). The link between Perez and the President was therefore very close thus people concluded that she was not far behind the IMPSA deal,

On 23 December 2002, Mark Jimenez, broker of the IMPSA project, filed plunder and other cases before the Ombudsman against Perez. He accused Perez of extorting US$2 million so Perez would stop badgering him to execute damaging affidavits against individuals in the Estrada administration. He also claimed that he released US$14 million in kickbacks for the approval of the CBK deal, with US$2 million going to Perez, US$4 million to “residents” of Malacañang, and US$1 million “for the boys. ”What happened to the balance of US$7 million is anybody’s guess. It was only six years later, in April 2008, that Ombudsman Gutierrez filed charges against Perez before the Sandiganbayan for robbery, graft, and other cases (http://www.gmanews.tv/story/26399/research/hernando-nani-b-perez ). Because the alleged bribery was coursed through a Hong Kong bank and First Gentleman Arroyo was reported to have gone to Hong Kong around the time the funds were released, this fanned rumors that the Arroyos were linked to the scandal. Ombudsman Gutierrez’ foot dragging on the case led then Senator Manuel Roxas to say that she “has lost the mantle of judicious impartiality and is perceived as a willing tool of Malacañang to prevent its allies from being brought to justice…Sira na ang Ombudsman sa mata ng taumbayan, at ito'y dahil inupuan ni Ombudsman Gutierrez ang lahat ng mga kaso na sabit ang mga kaibigan at nagging kasama niya sa administrasyong ito” (Ombudsman Gutierrez has lost credibility because she has let known allies of this administration off the hook)," Roxas said (Lazaro, 2008).

The Fertilizer Fund Scam—In 2004, former Solicitor General Frank Chavez filed a plunder case against former Agriculture Undersecretary Jocelyn “Joc-Joc” Bolante for his role in the P728 million fertilizer fund scam. The funds were purportedly intended for distribution to farmers for the purchase of fertilizer but did not reach the intended beneficiaries. In 2005, the PCIJ reported that the Department of Agriculture released nearly P3 billion to political allies of Arroyo during the 2004 campaign. The Senate Blue

87

Ribbon Committee and the Committee on Agriculture and Food reported that testimonies during the hearings they conducted revealed that the fund was used to ensure the election victory of President Arroyo and therefore she should be held accountable. Many farmers claimed that they never received any financial or material support for fertilizers in 2004. The fact that the supposed fertilizer distribution happened during an election year made the transaction all the more suspicious. All allegations and testimonies indicating that Arroyo benefitted from the fund are in legislative records, and they have not been contested nor has a categorical denial been presented (Olarte, 2006). Bolante fled to the United States where he sought political asylum. His request was, however, denied. There has been no final resolution to the case.

Until her resignation from her position, Ombudsman Gutierrez had not been filed before the Sandiganbayan the case against Bolante or others involved in the fertilizer scam. The investigators did not recommend the charge of plunder because plunder has higher evidentiary requirements. There must be “predicate crimes” involved. It seems, however, that Ombudsman Gutierrez had prejudged the case with her statement that Bolante was the mastermind and no higher authority was authorizing the flow of funds. If this argument is pursued then it presupposes that President Arroyo was not involved at all and had nothing to do with the distribution of funds. This is another instance when the public feels certain that the Ombudsman is out to protect the Arroyos (Dizon, 2011). This would later become one of the issues raised in the impeachment charge against Gutierrez.

“Hello Garci”—President Arroyo appointed Virgilio Garcillano as COMELEC Commissioner in February 2004, barely three months before the 2004 presidential elections. A surveillance operation was able to tape a conversation between President Arroyo and Commission Garcillano right before the elections and the tape was later made public. President Arroyo made a public apology to the nation for her indiscretion but she did not admit that the call was to get Commissioner Garcillano to ensure her victory. The tapes of the conversation were repeatedly aired over radio and television programs leading the public to conclude that the election results were rigged in favor of President Arroyo. There was mention of a desired margin of one million votes in the tapes, and when the election results came up with a margin of approximately one million votes over her closest rival, the public was quick to conclude that cheating occurred and that Garcillano masterminded the cheating upon the instructions of Arroyo. This put the legitimacy of her election as President in question.

There were also allegations that First Gentleman Arroyo was distributing large amounts of money in his sorties around the country during the campaign period. The recent scandal involving the discovery by the AFP that two of the three helicopters it purchased were not new but had previous flight records remind the public that the First Gentleman used helicopters during his sorties. Could the choppers used during the campaign and the used choppers sold to the AFP have come from the same source? Witnesses point to First Gentleman Arroyo as the owner of the choppers but his brother, Negros Occidental Representative Ignacio “Iggy” Arroyo, was quick to claim ownership of the helicopters. This is the second time that his brother Iggy has come to the rescue. The first time was

88

the “Jose Pidal” case where Iggy claimed that the bank account belonged to him and not his brother Mike. An expert witness later admitted that he testified to the authenticity of the signature of Iggy Arroyo during the investigation of the Jose Pidal account because the signature was not being compared to any other signature. The Hello Garci case has not been fully investigated and no one has been convicted for involvement in it.

General Garcia plunder case—The plunder case against General Garcia identified as one of the 50 high-impact cases during the term of Ombudsman Marcelo had not progressed during the term of Ombudsman Gutierrez. In 2010, however, the public just woke up one day to learn that the prosecution had entered into a plea bargaining agreement with the accused. The argument was that the case was “weak” and the plea bargain was the best deal for the government. This prompted former COA auditor Heidi Mendoza to come out and testify before Congress that there was sufficient evidence to bolster the case against General Garcia. Mendoza was the COA representative to the multi-agency task force organized during Ombudsman Marcelo term and she poured through the documents and followed the paper trail in connection with the Garcia case.

Lt. Colonel Rabusa, General Garcia’s former aide, likewise later blew the whistle on his former boss. He described in detail, on live television broadcast, how the “pasalubong” (welcome gift) and “pabaon” (sendoff gift) running into millions and millions of government funds was made possible in the AFP. The revelations about the staggering amounts given to AFP top brass when they assume office and upon retirement, and the “conversions” that were taking place within the AFP, shocked the entire nation. It demoralized the soldiers who risk their lives in the battlefront making do only with the barest protective gears, poor quality helmets, the cheapest combat shoes, arms that are no match to the enemy’s firepower, and meager provisions that do not even get delivered to the field on time. As the Commander-in-Chief of the AFP, the President must account for the scandalous breakdown of order and discipline in the AFP and the “creative accounting system” that made the “conversions” possible.

The plea bargaining agreement was forged presumably to enable the government to recover at least half of what was lost to corruption rather than lose everything if the case was not won. The public could not understand this line of argument at all. If Garcia was willing to return one-half of the amounts involved, was this not in effect an admission that he was guilty of taking what did not rightfully belong to him?

In July 2011, President Benigno Simeon C. Aquino appointed retired SC Associate Justice Conchita Carpio-Morales as the fifth Ombudsman of the Philippines. Barely two months in office, she wrote a position paper on 16 September 2011, asking the Sandiganbayan to set aside the plea bargain between General Garcia and her predecessor. Her position paper noted that the prosecution had not yet rested its case therefore it was premature to conclude that the evidence against Garcia was weak. She argued that the Office of the Solicitor General has no authority to intervene in the plunder case in behalf of the AFP. Furthermore, she noted that the Sandiganbayan has not yet rendered a ruling on the prosecution’s June 2009 offer of exhibits, thus the government can still present additional evidence (Calonzo, 2011). The public eagerly awaits the results of this case.

89

The Jueteng Payola—This is an issue founded on rumors that First Gentleman Arroyo, his son Mikey Arroyo, and his brother Iggy have been receiving bribes or “payola” from operators of the numbers game in Bicol. The First Gentleman has vehemently and repeatedly denied this but the rumors have not died down. Accusations about jueteng payolas are tossed every now and then. They are difficult to prove because there is hardly any paper trail. The only successful case about a jueteng payola was the case involving President Estrada. This was only because the courier of the payola, Chavit Singson, admitted his role in the crime. Although hard to prove, however, the suspicions about payola bribes to First Gentleman Arroyo have not died down.

The Mega-Pacific Case—The case involves the bidding of poll automation machines for the 2004 elections. The Supreme Court voided the contract between the COMELEC and Mega-Pacific due to the failure of the COMELEC to observe the bidding process provided by law. The contract involved P1.3 billion. In 2006, the Ombudsman issued a resolution identifying COMELEC officials liable for the case, it but would reverse its own resolution months later for “lack of probable cause.” This would be cited as another ground for impeachment against Ombudsman Gutierrez.

The ZTE-NBN Scandal—In April 2007, the government entered into an agreement with the Zhongxing Telecommunication Equipment Co. (ZTE), a corporation backed by the Chinese government, to set up a nationwide broadband network (NBN). The network would connect all government agencies and offices through a nationwide telecommunications structure of telephones and computers thus facilitating communication among government agencies throughout the country. Within hours after its formal signing in China in April 2007, the media reported that the contract had been “lost,” raising eyebrows on how something like this could happen. Many months later, the media still could not get hold of copies of the contract.

The ZTE-NBN deal was worth US$329.4 million and President Arroyo and her husband were being linked to the scandal surrounding the deal. The testimony of Joey de Venecia, son of House Speaker Jose de Venecia, during the Senate hearing on the deal confirmed speculations that there was indeed something fishy about the ZTE-NBN deal. Besides claiming that the deal was overpriced to the tune of US$197 million, de Venecia also charged COMELEC Chair Benjamin Abalos, a political ally and appointee of President Arroyo, as the broker of the deal and the First Gentleman Mike Arroyo as the “backer.” Abalos was alleged to receive US$120 as commission, while the First Gentleman would get US$70 million. This case added “tongpats” (a play on the Filipino term “patong” referring to overprice) to the growing lexicon on corruption.

In follow-up hearings, Romulo Neri, then the Director-General of the National Economic and Development Authority (NEDA), testified that Abalos tried to bribe him to get the project approved. NEDA approval was required because it had to certify that the project was part of the country’s priority development plans. Neri claimed that he informed President Arroyo about the bribe offer of US$4.8 million and testified in the Senate hearings that the President simply advised him not to accept it. This indicated that the

90

President was aware that the deal involved very sizable “kickbacks” but did not do anything about it except to advise Neri not to accept it.

Months later, another witness would surface, Rolando “Jun” Lozada, technical consultant of the NEDA on the NBN project. He testified that during a meeting where he and Mike Arroyo were present, Abalos assured ZTE officials that the project would be approved. He implicated Neri who approved the agreement in exchange for P200 million. Abalos would later resign from his position as Chairman of the COMELEC as a result of the scandal. President Arroyo cancelled the contract on 3 October 2007, six months after it was signed.

In 2010, or three years later, the OMB ruled that the actuations of Abalos as “power broker” were “highly suspect, reprehensible and should in no manner or measure be countenanced by those in public service” and it recommended the filing of information for violation of Article 212 of the Revised Penal Code. In the case of Neri, the OMB ruled that “the chain of circumstantial evidence linking Neri to the deal between Abalos and the ZTE officials cannot be broken” and that it “cannot close its eyes to the conduct or misconduct” of Neri and likewise recommended the filing of information against him (Manzanero, 2010: 7).

The Pulse Asia survey conducted in October 2007 indicated a very high level of awareness among citizens about the ZTE-NBN deal (68% average), and 70% believed the allegations about bribery. The survey indicated that three out of five (59%) Filipinos thought that the President should resign for merely tolerating corruption among government officials, 22% believed that the President was involved, while 19% thought that members of her family were involved directly or indirectly. Majority (58% average), however, thought that the witnesses were “equally not believable,” but 75% said that the Senate should continue its investigations (http://pulseasia.com.ph/resources/photos/table3b_Corruption_0710.gif).

2007 Malacañang brown bag bribery to buy support vs. GMA impeachment—Local officials belonging to the ruling party were invited for breakfast in Malacañang in 2007 where they were each given brown bags containing P500,000. Although she was not present during the distribution of the brown bags, the solons got the message—and that is to ensure that the impeachment charge against President Arroyo would not prosper. The “pabaon” (or send off gift) was also to solicit support for charter change or Cha-Cha. A few of the congressmen confirmed the brown bag gift of P500,000 while some floated the idea that they contained only P200,000 so that when barangay officials came to them for assistance they could claim that they did not get P500,000. It was also announced during the meeting that pork barrel amounting to P70 million would soon be released (http://tsikot.com/forums/politics-economy-religion-talk-100/200k-p500k-envelopes-given-pro-arroyo-lawmakers-protect-gma-impeachment-43196/).

These are but a few of the scandals that broke out during the Arroyo years. These and other cases reflect the political culture that prevailed during the period, which might have made the task of Ombudsman Gutierrez more difficult. Finding solid evidence and

91

credible witnesses, and conducting preliminary hearings before filing the case before the Sandiganbayan really take time, but the public did not sense that the Ombudsman was keen to pursue these cases.

The maneuverings of the Palace also complicated Congressional investigations. On 26 September 2005, President Arroyo issued Executive Order No. 464, which prevented Cabinet members, police and military generals, senior national security officials, and "such other officers as may be determined by the President" from attending congressional hearings unless the President gives permission to such proceedings. The order was issued during the Hello Garci hearings of the Senate Committee on National Defense and about the time when National Security Adviser Norberto Gonzales was summoned to appear in a Senate hearing in relation with the government’s entering into a contract with a Washington-based lobby group (http://newsinfo.inquirer.net/topstories/topstories/view/20080305-122949/UPDATE-6-EO-464-scrapped). Agriculture Secretary Arthur Yap and other Department of Agriculture (DA) officials invoked E.O. 464 during the Senate hearings on the fertilizer scam.

A number of lawyers and groups challenged the constitutionality of the E.O. and filed cases with the Supreme Court (SC). On 20 April 2006, the SC ruled that Congress could compel the appearance of public officials in inquiries “in aid of legislation” but at the same ruled that E.O. 464 was constitutional insofar as forbidding executive officials from appearing during the “question hour” or when Congress conducts investigations as part of its oversight function over the implementation of laws. The SC also ruled that only the President could revoke the order (http://www.gmanews.tv/story/57366/Executive-Order-464-backgrounder). Under intense pressure from all fronts, Arroyo finally revoked the order on 5 March 2008.

STANDARDIZING COMPENSATION: AN ANTI-CORRUPTION STRATEGY?

The low compensation levels of government workers are sometimes identified as one of the reasons for the vulnerability of individuals to unethical methods to augment their salary, or simply to engage in corruption. The gap between the salaries of government workers and their counterparts in the private sector had widened and inflation had reduced the buying power of the peso. The pay of a government worker was simply not sufficient to cover basic needs. The time for adjustments has long passed.

The Constitution provides for the standardization of salaries for government workers. Before 1987, there were many salary scales existing in the bureaucracy such that government workers occupying similar positions were not receiving the same pay. In 1987, Congress passed Republic Act No. 6748, or the Compensation and Position Classification Rationalization Act, better known as the Salary Standardization Law (SSL-1), which standardized salaries and did away with the different salary scales existing then. Congress amended the law through the passage of Joint Congressional Resolution

92

No. 1, or SSL -2, in 1994, to further adjust government pay levels upward. Although pay in the lowest positions were doubled and higher level positions received increases, these were eventually outpaced by private sector compensation levels and were therefore were not competitive. A case in point was the salaries of OMB prosecutors in relation to their counterparts in the private sector. As mentioned earlier, this was one of the reasons why the OMB had difficulty filling up these positions.

There are three levels in the bureaucracy: the First Level includes the trades and crafts and those positions requiring only a sub-professional eligibility; the Second Level covers professionals and requires a professional eligibility; and the Third Level refers to the executive class, the managerial group of the Philippine bureaucracy.

One of the advocacies of the Solana II signatories was the development of a new pay scale that would reduce the gap between the pay in the private sector and government compensation levels. Towards this direction, the CSC and the Department of Budget and Management (DBM)) worked hard to come up with a revised scale. A survey revealed that compensation in the First Level was comparable with pay in equivalent positions in the private sector. There was a 30% gap between the Second Level compensation levels and equivalent positions in the private sector. The gap was biggest in the Third Level where comparable positions in the private sector received up to 70% more.

SSL-3 responded to the need to make government service more attractive and competitive. Congress passed Joint Resolution No. 4 on 17 June 2009, which introduced a new salary scale that made government pay approximate its private sector counterparts. Not only would this make government workers earn a decent pay commensurate to their work but it could address the temptation to engage in corrupt practices to augment salary. Due to fiscal constraints, SSL-3 had to be implemented over four years and will be fully implemented by 2012. By 2012, the salary of the President of the Republic would be a princely sum of P120,000 a month.

PROFESSIONALIZING THE BUREAUCRACY?

Public personnel administration operates in a very political environment. Appointments to the bureaucracy enable the President to exercise great influence over officials and employees. President Arroyo’s almost ten-year reign provided her the opportunity to fill important positions in the bureaucracy with her chosen people. She not only appointed officials in the non-career service but made appointments to career service positions as well, including appointments to the Third Level.

Third Level positions require Career Executive Service Eligibility. The Career Executive Service Board (CESB) confers eligibility to candidates who pass a four-stage process: passing a written exam, passing the simulation exercises in the assessment center, completing the documentary requirements, including training, and field validation. The CESB then recommends to the President the eligibles for conferment of the rank of Career Executive Service Officer (CESO). The four-stage process is challenging and

93

takes time. Table 13 shows the Career Executive Service (CES) positions as of August 2010.

CESE refers to Career Executive Service Eligible while CSEE refers to Career Service Executive Eligible. The two different eligibilities came about when the CSC administered a career executive eligibility system simultaneous with the one administered by the CESB. Today, however, the two eligibilities have been integrated and only the CESB administers the Third Level eligibility process.

Table 13. Career Executive Service Positions(as of August 2010)

Positions/Eligibility Status Number

Total CES positions 6,613Vacant CES positions 1,850Occupied CES positions 4,763 CESOs 1,535Eligibles: CESEs 508 CSEEs 466 Non-eligibles 2,254CESEs in non-CES positions 1,005CSEEs in non-CES positions 275

(Sartillo, 2010)

Table 13 shows that there were 6,613 Third Level positions in August 2010, but only 4,763 were occupied. Of the occupied positions, only 1,535 positions were occupied by CESOs, or those who are not only eligible but have been conferred the CESO rank by the President. This represents only 32.22% of the occupied positions. They are the only ones who enjoy security of tenure because only those who fulfill all the requirements of the position they occupy can be tenured. The CESE and CSEE eligibles have passed the exams but have not yet been conferred the CESO rank by the President. If the CESEs and the CSEEs are included in the counting of occupants of CES positions then the percentage would go up to 52.67%, still an embarrassing statistic considering that there are 974 who can be conferred the rank, and another 1,280 who can be appointed to CES positions and conferred the CESO rank, or a total of 2,254. This would increase the percentage of CESO occupants to almost 80%. The other occupants of CES positions who are not CESOs were appointed for reasons other than the satisfaction of the qualifications standards for their positions.

The CESB attempted to ask President Arroyo to help professionalize the bureaucracy by refraining from appointing non-eligibles to the Third Level but the advice seems to have fallen on deaf ears given the figures presented in Table 13 above.

The Constitution sets the terms of office of officers of constitutional commissions. Many vacancies occurred during the 10-year administration of President Arroyo so she had the opportunity to appoint many of the members of these commissions. Among those she

94

appointed were Chairperson Abalos and most of the commissioners of the COMELEC. The COMELEC was responsible for the election machinery that was marred by allegations of cheating in the 2004 elections.

At one point, all the 15 members of the Supreme Court were appointees of President Arroyo. Table 14 shows the members of the SC appointed by President Arroyo from 2001 until 2010. It shows that Arroyo appointed three Chief Justices during her term of office: Artemio V. Panganiban, Reynato S. Puno, and the incumbent Chief Justice, Renato C. Corona, whom she appointed after a new president had been elected and was due to take over in less than two months. Why she could not wait for the incoming President to make the appointment raised eyebrows but she went on with it anyway. For that reason, the incoming President chose not to be sworn into office by the Arroyo-appointed Chief Justice but chose an Arroyo appointee, just the same, but someone who had exhibited independent judgment and fair play in her decisions.

Table 14. Appointees of Arroyo to the Supreme CourtCurren

tJustices

Arroyo AppointeesAppointmen

tDate

Retirement Date

Birthday

PANGANIBAN, ARTEMIO V.

As Chief Justice2005 Dec 21 2006 Dec 6

PUNO, REYNATO S As Chief Justice

1993*2006 Dec 7 2010 May 16

1 CARPIO, ANTONIO T 2001 Oct 26

2CORONA, RENATO C.

As Chief Justice2002 April 92010 May 17

CARPIO-MORALES, CONCHITA

2002 Sept 3 2011 June

AZCUNA, ADOLF S. 2002 Oct 17 2009 Feb 15TINGA, DANTE O 2003 July 4 2009 May 11CHICO-NAZARIO, MINITA

2004 Feb 10 2009 Dec

3VELASCO, PRESBITERO, J. JR.

2006 Mar 31 1948 Aug 8

NACHURA, ANTONIO 2007 Jan 1941 June 13

4LEONARDO –DE CASTRO, TERESITA J.

2007 Dec 3

5 BRION, ARTURO D. 2008 Mar 17 1946 Dec 29

6PERALTA, DIOSDADO M.

2009 Jan 14

7 VILLARAMA, MARTIN 2009 Nov 38 BERSAMIN, LUCAS P. 2009

9DEL CASTILLO, MARIANO C.

2009 July

10 ABAD, ROBERTO 2009 Aug

11VILLARAMA, MARTIN S.

2009 1946 April 14

12 PEREZ, JOSE P. 2009 Dec 26 1946 Dec 1413 MENDOZA, JOSE C. 2010 Jan 1947 Aug

95

13*not appointed by Arroyo to the SC butappointed as Chief Justice by Arroyo

Among the, Arroyo appointees, four have retired, including Associate Justice Conchita Carpio-Morales, who has been appointed Ombudsman by President Aquino. Thirteen of the current members of the SC are Arroyo appointees, including Chief Justice Corona. This is why the SC is sometimes referred to as the ‘GMA Court” (Transparency and Accountability Network, 2011: 20). This is also why the public fears the possible outcome of corruption and other cases involving the Arroyos when these reach the high tribunal.

It is of course not fair to conclude that appointees of the President will always decide in favor of Arroyo. For instance, a number of SC justices have shown their independence in their decisions on controversial issues and voted against the administration (see Transparency and Accountability Network, 2011: 20-21 for more details).

Presumably to gain the trust and loyalty of lawyers appointed in government positions, before stepping down from her position, President Arroyo issued on 8 May 2010, Executive Order No. 883 Granting Career Executive Service Officer Rank to Lawyers in the Government Executive Service and Other Purposes. Talk was that Arroyo was just making sure that when cases are filed against her or her allies in any agency of government after her term as President, these would have limited chance of success because the legal officers owe her their CESO rank. President Aquino has revoked this Executive Order.

There are reports that Ombudsman Gutierrez issued her own “midnight appointments.” The OMB plantilla provides for 14 assistant ombudsmen. Before she resigned from her position, insiders say that she appointed eight new assistant ombudsmen (Dizon, 2011).

A SEASON OF IMPEACHMENTS

The first in a series of impeachment cases that the Arroyo administration faced was filed in March 2005, but the House of Representatives was not able to muster enough votes to send the complaint to the Senate. In 2006, opposition leaders and civil society organizations filed eight impeachment complaints against Arroyo accusing her of abuse of power and corruption, among others (Olarte, 2006a). Again, her allies in Congress made sure that the impeachment complaints would not prosper. The impeachment charges did not stop and again in October 2007, lawyer Alan Paguia filed another impeachment complaint against Arroyo for the brown bag bribery in Malacañang.

Ombudsman Gutierrez suffered a similar fate. In March 2009, Senate President Jovito R. Salonga led civil society leaders in filing impeachment charges against her for gross violation of the Constitution and betrayal of public trust when she sat on several graft cases during the Arroyo administration. The House Committee on ___ found the complaint insufficient in form and dismissed it in September 2009 (Torres, 2011;

96

http://www.gmanews.tv/story/173423/ombudsman-hails-dismissal-of-impeach-complaint).

Ombudsman Gutierrez was accused to “inaction, mishandling, or downright dismissal” of high-profile cases, including the P1.3 billion Mega Pacific case; the extortion case against Justice Secretary Hernando Perez related to the IMPSA; the fertilizer scam; and the case of the euro generals

On 22 July 2010, former Akbayan party-list representative Risa Hontiveros, together with former army General Danilo Lim, and spouses Felipe and Evelyn Pestaño filed impeachment charges against Ombudsman Gutierrez for culpable violation of the Constitution and betrayal of public trust for inaction on the alleged murder of Navy Ensign Philip Pestaño, the arrest of Representative Hontiveros during a rally in 2006, and the ZTE-NBN payoffs.

A month later, in August 2010, another impeachment case was filed by various civil society leaders—Renato Reyes of the Bagong Alyansang Makabayan (BAYAN); Sister Mary John Mananzan of PAGBABAGO; Danilo Ramos of the Kapisan ng mga Magbubukid ng Pilipinas; Edre Olalia of the National Union of Peoples’ Lawyers; Ferdinand Gaite of COURAGE, the confederation of government unions; and James Terry Ridon of the League of Filipino Students (LFS). The complainants accused Ombudsman Gutierrez of the following (Torres, 2011):

Failure promptly act on cases filed against former president Gloria Macapagal-Arroyo, her husband Jose Miguel Arroyo, and other officials linked in the botched national broadband network deal;

Inexcusable delay in the investigation on the death of Ensign Philip Pestaño, a case that even the United Nations Commission on Human Rights concluded as homicide;

Failure to look into the P1-million dinner for the presidential entourage at the Le Cirque restaurant in New York;

Repeated failure to take prompt action on various cases involving Arroyo, such as the Mega-Pacific scam, among others; and

Refusal to grant ready access to public records such as the Statement of Assets, Liabilities, and Net Worth of former Pampanga representative Juan Miguel Arroyo; and

failure to act promptly on the anomalous transactions, such as the 2004 fertilizer scam, the Euro Generals case, and other cases of irregularities filed by citizens.

In March 2011, after protracted hearings, the House of Representatives, for the first time in history, voted to impeach the Ombudsman. On 10 March 2011, the Senate Blue Ribbon Committee recommended the impeachment and resignation of Ombudsman Gutierrez and the firing of members of the Office of the Special Prosecutor for “neglecting, weakening and complicating” the plunder case against General Garcia and his family. It recommended the nullification of the agreement that allowed Garcia to plead guilty of lesser offense in exchange for the return of P135 million in assets. Garcia

97

was accused of pocketing P303 million from the military coffers. On 22 March 2011, the House of Representatives voted to impeach Ombudsman Gutierrez with 210 representatives voting for impeachment, 46 against, and 4 abstaining.

Gutierrez submitted her resignation to President Aquino on 29 April 2011, which would be effective 6 May 2011. In view of this development, the Senate cancelled its impeachment trial The resignation of Gutierrez benefits Arroyo because the latter is involved in at least four of the charges filed against the former (http://www.abs-cbnnews.com/nation/03/10/11/blue-ribbon-gutierrez-resign ; http://newsinfo.inquirer.net/ breakingnews/nation/view/20110429-333621/Ombudsman-resigns

98

CHAPTER 5

LEARNING FROM PINOY SUCCESSESBy: Prof. Leonor Magtolis Briones (Ret.)

Introduction

Fighting corruption is a favorite campaign line of many presidential candidates. Most presidential candidates promise to eliminate corruption. The latest to make this promise is President Aquino himself. One year after the euphoria of his election, accusations of corruption among those close to the President are surfacing.

Public attitudes towards corruption range from weary acceptance to outright cynicism. The international donor community has been concerned about corruption for decades. Because they have committed to support the Aquino administration, leading donors like the World Bank, Asian Development Bank and the United States of America have a keen interest on anti-corruption developments in the country.

A bilateral donor has observed, “…favoritism and bribe seeking within the Philippine government has both dissuaded foreign investment and crippled the government’s ability to improve the country’s competitiveness.”(Dialogue on Partnership for Growth between the United States Government and the Philippine Government, June 22, 2011)

However, it has not always been “all misses and no hits.” There have been periods when anti-corruption campaigns succeeded, whether directed towards market-centered, public office, or public interest corruption. Most, of these initiatives are by Filipinos—government officials, civil society organizations, private business and client/citizens.

PREVENTING MARKET-CENTERED CORRUPTION

In Chapter 2, it was pointed out that market-centered corruption occurs because the supply of public goods and services is low, relative to increasing demand. Public goods become commodities which are sold and bargained for.

The practice of giving bribes, “padulas” and making “palusot” while competing for public services is so prevalent and commonplace no one gives a second thought to it. However, small bribes can lead to bigger and bigger bribes. One can start with a security guard or private secretary of an official and go all the way up to the cabinet secretary or head of agency.

Market-centered corruption is clearly undemocratic because only those with money can participate in the Divisoria market which is Philippine public administration. The very poor for whom public services are intended end up being excluded.

99

The Bureau of Quarantine

Since the sixties, the Bureau of Quarantine has been known for its fast and efficient services in giving immunization shots. With globalization and Filipinos going abroad by the hundreds of thousands to “remote” countries, the volume of its clientele has increased. Nonetheless, the Bureau has kept up the high level of efficiency which has been its hallmark.

During my last visit for a trip to Africa, I was delighted to see things had not changed. Queuing was orderly and the staff operated like clockwork. Applicants were quickly vaccinated, assembly line fashion. Instructions were very easy to follow and staff from the nurses to the cashiers and clerks worked with no fuss and idle talk. I completed my shots including forms and receipts in ten minutes!

Because of the speed with which they work, there is no time or opportunity for negotiating, getting ahead of the queue, and demanding special treatment.

Traffic enforcement in Makati City

Makati City has built up a reputation for strict enforcement of traffic rules and regulations. Car owners tend to be extra careful when they go to Makati because they know they can’t get away with violations. Cars which park illegally are towed away within minutes and there are no ifs and buts about it. No negotiation either.

Since the Divisoria mentality doesn’t work and everyone is treated equally, pedestrians and vehicle owners tend to obey traffic rules and regulations.

Bureau of Census and Statistics, and National Bureau of Investigation

Every citizen sooner or later needs a copy of his or her birth certificate. A certificate of clearance from the National Bureau of Investigation is needed by citizens for the purpose of getting employment, travel abroad, court cases and official transactions.

A citizen who goes to the Bureau of Census and Statistics and the National Bureau of Investigation expects to stand in a queue, fill up forms, pay the fees, and be informed what day he or she can expect the birth certificate or clearance.

When government rules and procedures are efficient and predictable, there are lesser chances of corruption.

The National Kidney and Transplant Institute

There are many horror stories about public hospitals. Since it is difficult to avail of public hospital services, medicines and hospital beds, the temptation to demand and accept bribes is always there. The temptation for clients themselves to volunteer and give bribes is even greater.

100

The NKTI is often mistaken as a private hospital because of its reputation as a leader in kidney transplants, its first rate laboratory services and its efficient hospital operations. The NKTI is the first hospital in Asia to perform successful kidney transplants. This was as early as the ’70s. It also pioneered in liver transplants.

At present, many hospitals, both public and private, perform kidney dialysis and transplants. Nonetheless, NKTI remains the leader in this field.

NKTI is ISO-certified and constantly strives to improve its services. Because of the efficiency of its operations, it is hardly associated with graft and corruption.

Public hospitals and clinics are often criticized because of their inability to attend to the basic health needs of citizens. On the other hand, more and more citizens are turning to public health facilities because of high costs of medicine. Such a situation can easily lead to a corruptive situation.

NKTI and other modern public health facilities have shown that public services need not be inefficient and corrupt.

Other efficient agencies

Other agencies which operate efficient public services include the Department of Foreign Affairs’ Passport Division for the issuances of passports, Land Transportation Office for the issuance of drivers’ licenses and car registration permits. These agencies have established procedures which are convenient and fast for the citizens/clients. Again, bribery is not necessary to access these services.

Combating public office corruption

As noted in Chapter 2, market-centered corruption occurs because of the lack public goods and services in relation to increasing demand from the public. On the other hand, public office-centered corruption focuses on the public office itself and the norms which are binding on the public official. This is the best-known definition and is usually the focus of anti-corruption strategies at the level of agencies.

Many anti-corruption strategies have been successfully initiated by heads of government agencies themselves without external assistance. Interestingly, some of the best known success stories occurred during Martial Law. The best known ones are the Bureau of Internal Revenue, and the Commission on Audit. At present, the initiatives of the Department of Public Highways and the Department of Finance are noteworthy.

101

The Bureau of Internal Revenue

The Bureau of Internal Revenue is one of the oldest agencies of the government and goes all the way back to the days of the American occupation and later, the Commonwealth government, and on to the present public administration system For centuries, the function of tax collection has traditionally been associated with bribery and corruption. The Philippine BIR has not been spared from this unflattering image. Nonetheless, thirty-six years ago, reforms initiated in the BIR were documented and hailed as an example of a successful reform program.

The reform program in the BIR was triggered by a “massive purge” of the public administration system initiated on September 21 1975 by then Executive Secretary Alejandro Melchor. This was during the Martial Law period under the late Pres. Ferdinand E. Marcos.

In one fell swoop, the entire governmental system was swept clean—officials and employees with records of corruption were “purged” out of government. In just one day, thousands were summarily removed from government service. Agencies publicly perceived as hotbeds of corruption were reorganized.

Among others, the BIR was one of the agencies which were decimated by the purge. Justice Efren I. Plana was plucked from the Court of Appeals and appointed as Commissioner. Justice Plana then initiated wide-ranging reforms which won international renown. He proved that it is possible for Filipinos to initiate public office-centered corruption.

I had the good fortune to be assigned by Drs. Raul de Guzman and Leddy Carino to look at corruption from the revenue-raising side by writing a case study on BIR reforms. Eventually the BIR experience under Justice Plana was featured in the book,” Fighting Corruption” by Dr. Robert Klitgaard, which is considered a landmark book on corruption.

What Justice Plana did

Most of what Justice Plana did can be done by a determined and committed head of agency. First, he studied the operations of the agency and identified the areas where BIR staff are vulnerable. Second, he reorganized the structure and operations of the Bureau to plug areas of weakness. Third, he developed a system of monitoring BIR personnel and imposed sanctions, even as he strengthened capacity building programs.

In less than two years, Justice Plana fired 88 personnel, with 39 reorganized out; 15 required to resign and 34 were dismissed. At the same time key officials were removed or demoted: 11 regional directors, 5 assistant regional directors, and 9 revenue district officers.

102

The Fiscal Control Division under Justice Plana’s direction developed criteria for selecting employees for audit. In addition to the usual work-related criteria, the following were added: (l) those who engage in high living or lavish consumption;(2) those who gamble regularly; (3) those who frequent nightclubs; (4) those who maintain luxurious houses and accumulate properties; (5) those who maintain queridas or paramours; (6) those who enjoin exclusive clubs with expensive membership dues.

Justice Plana worked very closely with the Commission on Audit in auditing the accountabilities of erring BIR personnel.

Finally, Justice Plana embarked on a massive recruitment program to recruit fresh employees who are not yet tainted with corruption.

The crucial ingredient in the success of the BIR reforms was the quality of leadership and example provided by Justice Plana.

It should be emphasized that the BIR reforms were undertaken totally under Filipino leadership and under Filipino funding.

The Commission on Audit

Like the Bureau of Internal Revenue, the Commission on Audit (COA) was one of the public institutions which was subjected to a thoroughgoing “purge” and shaken from top to bottom in 1975.

Like Justice Plana, Justice Francisco Tantuico Jr. was handpicked from the Court of Appeals and appointed as Chairman of COA.

To this day, the reforms implemented by Chairman Tantuico are considered the most wide-ranging and long-lasting reforms in government accounting and auditing. The present COA owes much of its structure, operations, professionalism and international stature to Chairman Tantuico and his team.

Reforming COA

The process of reforming the Commission on Audit led by Chairman Tantuico can be undertaken by a head of agency. He studied the organization with the help of a group of professionals whom he met outside of COA. With their help, he formulated his reform strategy. Then, he launched simultaneous reform actions: he reorganized the entire Commission on Audit from top to bottom, with the participation of COA officials. At the same time, he organized a group of lawyers to put together all existing laws on auditing and integrate these into an Audit Code. He also launched a massive recruitment campaign which drew to COA young and idealistic lawyers and accountants. These new recruits replaced erring personnel who were purged out of the organization.

103

Chairman Tantuico organized the State Accounting and Audit Center (SAAC) for higher and advanced training for senior auditors to compliment training programs for new auditors. SAAC also handled international training programs for regional and interregional participants.

Another aggressive step which Chairman Tantuico undertook was to initiate the organization of the Asian Organization of Supreme Audit Institutions (ASOSAI) and occupy the highest position in the International Organization of Supreme Audit Institutions (INTOSAI). By bringing COA to the international community of audit institutions, Philippine auditors were exposed to modern techniques of auditing and share their country’s experience in audit reforms.

Among many features of the COA reform experience, the policy of summary dismissal stands out. In certain cases, Chairman Tantuico would confront an erring auditor with the documents and evidence against him or her. He would be given a choice: to resign or to undergo the prolonged and expensive process of being the subject of a case.

The Commission on Audit and the Bureau of Internal Revenue exemplify public office-centered reforms which were successfully implemented. These can be done by determined and committed heads of agencies without foreign funding and assistance.

The Philippine National Police

In the public mind, the Philippine National Police is associated with graft and corruption. Recently when the scandalous web of corruption in the AFP was exposed and reported to the public through newspapers, radio, TV and public hearings, an AFP official reportedly complained “Bakit kami? Mas masahol pa ang PNP!” or “Why us? The PNP is worse!”

There was a time when the PNP was thoroughly swept clean and regained its image of discipline, incorruptibility, as well as protector of the citizens. This was when General, now Senator Lacson was head of the PNP.

When Lacson took over the PNP, he was given a credit card with a limit of up to Ph15 million a month. This was for him to use for his personal expenses. He returned the credit card. Obviously, funds from the PNP budget were skimmed off for the private use of its officials, practice which is also associated with the Armed Forces of the Philippines.

Lacson decentralized the direct release of funds to the regional units. These enabled the regional offices to plan their disbursements and utilize their funds without the usual delays, corruption and bureaucratic red tape associated with overcentralization.

Over the years, the ordinary policeman had acquired the habit of mulcting, or extracting money from people by accusing them of violating the law. This is popularly known as “kotong”. When asked how he put a stop to it, Lacson answered: through strict

104

enforcement of discipline, penalties and shaming incorrigibles by reporting them to the public. Punishment was swift.

Because he put a stop to it, Lacson gained the admiration of the public, especially taxi, jeepney and bus drivers who were the favorite “kotong” victims of policemen.

Rogue policemen were themselves engaged in extortion, thievery and even kidnapping. Because of his training in intelligence, he was able to track the activities of the notoriously undesirable among the policemen and remove them from the service.

The appointment of Lacson as head of PNP was not a lateral one. He started as a young lieutenant and worked his way up. He knew the organization very well and knew what needed to be done. During the early part of his career, the public already knew him for his fearlessness in tracking down kidnapping syndicates and rescuing victims. Two of his well known rescue operations as a young official involved the young son of a mall owner from Cebu and the daughter of one of the richest “taipans” in the Philippines.

Public office-centered reforms are always associated in the public mind with one particular feature. The public associates Lacson with his edict requiring policemen to have 30-inch waistlines. The logic was that policemen have to be fit enough to chase after miscreants and hooligans. He then initiated a series of physical fitness programs which were covered by media and watched avidly by the public.

The above requirement was an “out-of-the-box” solution but it worked and gave a better image of a fit and trim policeman in contrast to the tired image of a pot-bellied officer mulcting citizens and skimming off public funds.

The reform of the PNP caught public imagination and support, eventually catapulting Lacson to the Senate.

Once again, this is one reform program which did not require foreign funding and advice.

The Department of Public Works and Highways

If the BIR is traditionally considered as a flagship of corruption in the revenue-raising side of the public finance equation, the Department of Public Works and Highways is considered as the veritable vipers’ nest of corruption in the expenditure side.

Two years ago, the World Bank Washington disqualified two big contractors in a DPWH road-building program. The move attracted public attention and become the subject of a Senate inquiry. The case highlighted once more the vulnerability of DPWH to corruption, particularly during the bidding and procurement process.

The current DPWH secretary, Rogelio “Babes” Singson, has a reputation for being squeaky clean. He is associated with former secretary of the Department of

105

Transportation and Communications, Jose “Ping” de Jesus whose public career has never been tainted with corruption.

During the DPWH anniversary last June, Singson reported to the President on the reforms he had initiated, especially in bidding and procurement. He has set up a transparent system for the bidding process. The feedback from DPWH, especially the professionals, is favorable. The President himself had nothing but praises for Singson.

What is happening at present in the DPWH is still another example of public office-centered reforms conducted with local financing.

PUBLIC INTEREST-CENTERED CORRUPTION

In Chapter 2, it was explained that while market-centered corruption and public-office corruption focus on the activities of public officials and other participants, public interest-centered corruption looks at the effect or impact of corruption. In other words, it goes beyond individual and agency corruption and examines its implications for national interest.

In the Philippine experience, several cases can be cited which have wide-ranging implications for national interest and public administration in general. Perhaps the most comprehensive of such cases would be the situation of the public administration system in 1975. The extent of corruption was such that it was considered comprehensive, systemic and endemic. It was determined that nothing less than a total purge of the entire government system was required to clean up the bureaucracy. Under the direction of the Executive Secretary Alejandro Melchor, thousands were removed, ranging from ordinary staff to heads of agencies, with just one decree. Newly installed heads of agencies were given blanket authority to institute reforms as necessary.

Then, there was the case of the then Ministry of Public Highways in 1978 where an entire region and all of its engineering districts were discovered to be engaged in massive fraud. If it was not detected in time, the Treasury would have been driven to bankruptcy, according to Chairman Francisco S. Tantuico of the Commission on Audit.

This case can be considered public-interest centered because while the corrupt operations were conducted in the Ministry of Public Highways, it was the Treasury which was systematically drained of cash without corresponding public benefits. Investigation of the case initially involved the Commission on Audit which discovered the preparation of fake vouchers and documents, the Bureau of the Treasury which discovered the fake checks, the National Bureau of Investigation and the Ministry of the budget. Eventually, the Office of the Tanodbayan and the Sandiganbayan entered the picture.

Another case involved the recovery of the late Ferdinand Marcos’ wealth and the utilization of these funds. It is a public-interest centered case because the funds which were recovered were supposed to fund agrarian reform programs, which will in turn benefit the landless rural poor. The case involved the Department of Agriculture, the

106

Department of Agrarian Reform, as well as all other agencies involved in agricultural development. The amount involved over Ph400 million pesos. It was about a major program of government for several administrations from Presidents Corazon Aquino to Fidel V. Ramos, to Joseph Estrada, to Gloria Macapagal-Arroyo, and now Benigno “Noynoy” Aquino. This is the land reform program of the government which is intended to solve agrarian problems which go all the way back to the 1930s.

Still another case which is public-interest and is still fresh in the memory of the public is the fertilizer scam involving more than Ph700 million in public funds. The case involved the release of funds from the Department of Budget and Management which were used to distribute vastly overpriced fertilizers, pesticides and farm implements. This time, involved agencies included the Department of Agriculture, local government units and politicians.

The 1978 Ministry of Public Highways case

Of all the public interest-centered cases mentioned above, I believe that the 1978 Ministry of Public Highways case is perfect. Unlike all the other cases which did not go beyond senate and congressional hearings, the MPH case ended in conviction and imprisonment for the perpetuators, as well as caused the resignation of a ranking and trusted minister.

Fortunately for the present generation, this case was documented and written in a book, “Raiders of the Treasury” by Cesar S. Bacani, Jr. and Bernardino L. Cailao in 1990. It is written in a non-technical style which the average reader can understand. For purposes of this study, I asked Bootes E. Lopos, a lecturer at the U.P. National College of Public Administration to make a summary of the book.

The discovery of the biggest scam of the 1970’s started with an anonymous letter addressed to Sofronio Flores, COA Region VII director reporting “massive anomalies” in the MPH Regional Office. This was in July 1978. It was followed by four more letters describing how fake Letters of Allotments (LAA’S) and fake Sub-advices of Cash Disbursements ceilings resulted in ghost deliveries, non-existent projects and cash drawn out of the Treasury.

Flores organized a Fact-Finding Team which confirmed the tips of the anonymous letter. This triggered a massive investigation which uncovered the entire scheme covering the entire Region VII and all of its engineering districts. COA Chairman Tantuico submitted a report to President Marcos who supported the investigation.

The investigation widened with the discovery in October 1978 of fake checks in the Bureau of the Treasury. On the suggestion of NBI Director Mison, the Bureau of the Treasury and the Commission on Audit joined forces. Basic documents were simultaneously retrieved and brought to the Commission on Audit for examination. The members of the team were cajoled with bribes and later received death threats regularly.

107

The challenge was to make sure that the findings and the charges would stand in court. Thus, NBI agents and the Tanodbayan lawyers had long sessions with the Commission on Audit where they were briefed on the nuances and details of the audit evidence which had to be converted into legal evidence.

The final result: The mastermind of the scam was meted a total sentence of 3,946 years plus fines. Convicted along with him were contractors and MPH personnel.

While there was no evidence directly linking the Minister of Public Highways, Mr. Baltazar Aquino, to the case, the magnitude and scale of the corruption was such that he had to take command responsibility. Mr. Aquino resigned.

Thirty-three years later: lessons for 2011

1. Sustaining a case from investigation, building up the case, to trials and finalconviction. At present, many cases are not sustained up to their logical conclusion. After media hype, headlines, television appearances and politicalmileage, high profile cases don’t go beyond publicity.

The above case shows that it can be done.

2. Unity and cooperation among the concerned government offices. The case showshow teamwork and cooperation can assure victory against corruption. Underthe leadership of the Commission on Audit, the NBI, Bureau of the Treasury,the Ministry of the Budget, and the Tanodbayan, worked as a team.

Countless hours were spent in preparation for the case. COA officials thoroughlybriefed the team on the ramifications of the accounting and auditing system which enabled the crooks to perpetuate their crime.

Intensive preparation for the court trials was crucial in insuring conviction.

3. The role of leadership. The role of leadership cannot be discounted. TheCommission on Audit under the leadership of Chairman Tantuico initiatedthe investigation, gathered and collated the evidence, worked closely withthe other agencies and kept the morale of the team high. The heads of the other agencies were equally committed and determined to see the case through.

One phrase and can be used to describe the determination of the Chairman:“bulldog tenacity.”

4. High morale of the team. The level of professionalism and personal courage ofall the team members is amazing and admirable. No one wavered in spite of death threats, and other risks that the team was exposed to.

According to the authors of “Raiders of the Treasury,” …”the men and women here were heroes in every sense of the word. They, too, lived dangerously and

108

finished their assigned task with valor.

At this time when trust in the government has been diminished and severely eroded, when citizens cynically say that nothing ever happens to corruption cases beyond media hype, the above case proves that big, public-interest cases can be pursued up to conviction.

Can the Filipino fight successfully against corruption? My answer is, whether it is market-centered, public office, or public interest-centered, the Filipino can tackle the challenge.

Can the Filipino solve corruption? YES.

109

CHAPTER 6

FRAMEWORK FOR A NATIONAL ANTI-CORRUPTION PROGRAMBy: Prof. Leonor Magtolis Briones

WHY A NATIONAL ANTI-CORRUPTION PROGRAM?

President Benigno Aquino won the last presidential elections on an anti-corruption platform. The call for action against corruption is a recurring theme in his administration.

At present, government agencies are making their own anti-corruption initiatives. The legislature is attracting much public attention with the public hearings, particularly in the Senate. Civil society organizations and the private business sector are also undertaking their own programs. Media covers these initiatives as they occur, report instances of corruption as these are uncovered, and come out with special reports and documentaries. Academics and analysts continue doing research on corruption and make recommendations on how this intractable scourge on good governance can be stopped.

The results of these initiatives tend to be uneven. Agencies which do not get the attention of media, citizens groups and the private sector tend to be unnoticed, while those with the most dramatic public revelations get the lion’s share of reform efforts.

Thus, the need for a national anti-corruption program to ensure comprehensive coverage of the public administration system.

Corruption is already comprehensive and systemic

Researchers and students of corruption talk about flagships of corruption and agency-specific corruption viz comprehensive and systemic corruption. Yes, there are so-called flagships of corruption like the big revenue agencies and those with huge expenditure allocations.

However, it is now recognized that corruption has become systemic. It has permeated the entire public administration system, namely the three branches of government—the legislature, executive and the judiciary—as well as the three levels of the executive branch—national government, government corporate sector, and local governments.

Corruption is now so pervasive that people accept it as a given; public officials accept it as a must.

Corruption which is comprehensive and systemic needs a response from a national anti-corruption program.Corruption is complex—it has many dimensions and occurs at differentlevels

110

It is generally accepted that corruption is a complex phenomenon and has many dimensions and levels. Sociologists relate it to aspects of our culture and value system which tend to encourage corrupt behavior. Historians blame it on our colonial heritage and our historical experience with different conquerors. Management experts say corruption feeds on .Economists say it is a market phenomenon.

Researchers also write about bureaucratic corruption and political corruption. They also point out to internal corruption as well as external corruption.

All of these dimensions of corruption are interrelated and interconnected. A national anti-corruption program can capture and attack these different aspects.

Government has to take the lead in anti-corruption efforts because of its vast powers

One important question which is frequently raised in conversations about controlling corruption is: which institutions would be most effective in fighting corruption? Researchers like Andy Guth believe that the private sector has the better capacity to fight corruption. He points out to professional associations in particular.

I agree that professional associations are important partners in fighting corruption. Large-scale agency level corruption happens largely because of manipulation of accounting systems and accounting records, falsification of documents, and changing procedures and processes. This can only be done by professionals in government who are members of different professional organizations. At the same time, those who uncover these anomalies are also professionals.

Professional organizations can go a long way in regulating behavior of their members as well as imposing sanctions for unprofessional conduct. They can cooperate with government agencies in ensuring that professionals follow generally accepted standards as well as norms of behavior for professional work.

Nonetheless, I believe that at the end of the day, a national anti corruption program should still be coordinated by the government. In the first place, the primary targets are government agencies and officials. With its vast powers of suasion and coercive might, government can see to it that laws are enforced and sanctions are applied. It can pass laws, reorganize agencies, create new ones and fire erring officials. It also has the enormous resources which are required to conduct such a campaign.

Government has the clout to mobilize, summon and obtain the support of all branches of government and all sectors of society.

Of course, the role of the private sector is indispensable. More so, civil society and media can generate public outrage and push government to take action.

A national anti-corruption campaign will take no less than the president to lead it.

111

Again, there is much debate on this issue. It has been pointed out that while presidents all over the world win on anti-corruption platforms, they end up being accused of corruption themselves. While this is true, we also have historical experiences of anti-corruption campaigns led by Presidents who remain unsullied and uncorrupted during their term.

Obvious examples are the administrations of Pres. Ramon Magsaysay and the president’s mother, Pres. Corazon Aquino. Both presidents ended their terms (untimely in the case of Pres. Magsaysay) without a single whisper of personal corruption. IS THERE A NEED TO CREATE A NEW ANTI-CORRUPTION AGENCY?

This issue has also been debated. My position is that there is no need to create a new anti-corruption agency.

There are more than enough existing institutions and agencies.

The usual practice is for each new administration to reorganize government, abolish some agencies, create new ones -- and end up with a much heavier and overcrowded organizational structure. The result is overlapping of functions, increased problems of coordination and rivalry. This is true for anti-corruption bodies. One can even say there are too many of them. The point is to strengthen and utilize them.

Anti-corruption initiatives can be built in, in every agency, especially in the so-called flagships of corruption.

Aside from national level anti-corruption institutions like the Civil Service Commission, Ombudsman and the Sandiganbayan, each office, department and agency has its own internal system of monitoring, investigating and disciplining employees. All major offices have representatives of the Civil Service Commission and the Ombudsman. Thus, actions can already be undertaken at the level of the office.

At present, the Department of Public Works and Highways and the Bureau of Internal Revenue are undertaking initiatives to clean up their own backyards under the leadership of Secretary Rogelio Singson and Commissioner Kim Henares.

The Cory Model shows that it can be done.

As will be shown later, during the administration of Pres. Corazon Aquino, significant anti-corruption results were attained without creating a new agency. She utilized the existing cabinet structure and government arrangements which were already in place without putting up a new organization, and without creating new items of expenditures.

112

CURBING CORRUPTION UNDER PRES. CORAZON AQUINO

During a round table discussion on corruption in the Philippines, Visiting Researcher Andrew Guth from Harvard University pointed out that in the space of 60 years, more than 40 organizations, institutions and other anticorruption bodies were created in the Philippines. Prof. Danilo R. Reyes who is currently doing research on corruption stated that he identified 19 formal institutions which were created during the same period. Whether it is forty or nineteen –the fact remains that many agencies have been created to fight corruption. Current debates on corruption focus on whether additional government reform is the right path or a more powerful and effective Anti-Corruption Commission. Comparisons are often made with the Hongkong’s Independent Commission Against Corruption in terms of budget, coverage and effectiveness.

After more than thirty years of studying corruption, I have come to the conclusion that it is possible to make substantial inroads against corruption without creating a new agency. It is possible to be work within the existing framework of government institutions. Most important, only Filipinos can solve corruption in the Philippines. This was done during the administration of the current president’s mother, the revered President Corazon “Cory” Aquino.

The environment against corruption in Pres. Cory’s time

In an earlier paper about the Philippine experience in recovering ill-gotten wealth, I wrote that “President Corazon C. Aquino was catapulted to power by overwhelming public revulsion against martial law and rage over the plunder of national wealth.” (Briones: The Unfinished Quest, 2007, page 2)

The mood of the people was totally against corruption. When the magnitude and extent of plunder of the country’s wealth was reported to the public, it triggered shock and indignation. Thus anti-corruption initiatives were welcomed by citizens.

Cory’s Way: Utilizing the Cabinet System

The anti-corruption “strategy” of Pres. Cory Aquino is so simple it does not even have to be called a “strategy”. The only new anti-corruption agency she created was the Presidential Commission on Good Government (PCGG) which was tasked with the mission of recovering ill-gotten wealth. Otherwise, she simply used the cabinet system.

Pres. Cory Aquino could have brought in foreign consultants, especially since she was adored not only by the Filipinos but also by the international community. She could have asked for huge grants to reorganize the government and engage in massive capacity building (it was simply called “training” then). She could have called for Summits, national conferences, and symposia. She could have asked for funding for research to look into the nature of corruption and how to prevent its recurrence. She could have delivered stirring speeches and inspiring statements. She did none of these.

113

It is likely she did not see the need for foreign expertise and assistance because studies and recommendations had already been made about controlling corruption. As noted in a previous chapter, the most comprehensive of these was the pioneering work done by the then U.P. College of Public Administration under the leadership of Dr. Raul P. de Guzman and Dr. Ledivina V. Carino.

How Pres. Cory utilized the cabinet system. Instead of creating a separate campaign, Pres. Aquino integrated anti-corruption initiatives into the regular structure of the Executive branch, particularly the cabinet system. She simply ordered all her cabinet members and heads of agencies to study their own organizations and formulate anti-corruption plans. They were required to report regularly. These reports were compiled and monitored by the Cabinet Secretary, Jose “Ping” de Jesus.

During cabinet meetings, each cabinet member would report on the status of his or her department’s campaigns while their peers gave advice/and or criticism. Those with interrelated or interconnected problems would pool their resources and work jointly. Thus, while the cabinet members were working individually on their organizations, they knew they were also a team under the President herself.

Since each department and agency was different from the others, the Secretaries had different strategies and reported varying results.

At the end of Pres. Cory’s term, the University of the Philippines initiated a series of lectures and reports from the cabinet members on their accomplishments. These self-assessments were critiqued by a panel mainly composed of academics, columnists and other media personalities. The last to deliver a presentation was no less than the president herself.

The assessment of Pres. Cory’s accomplishment was published in four volumes. The first volume is a collection of the lectures of the President and her cabinet. The second volume contained the alternative assessment by the panels assigned to each department. The third volume contained the assessment of the Vice-Presidency, the Senate and House of Representatives, Ombudsman and Sandiganbayan, and the Commission on Human Rights. The fourth volume compiled the assessments of the Civil Service Commission, Commission on Audit, Commission on Elections, and the Presidential Commission on Good Government.

Most of the cabinet reports contained a section on accomplishments in the anti-corruption front. The reports varied. Some reported on officials charged and dismissed. Others reported on organizational changes and improvements in efficiency which limited opportunities for corruption.

A number of departments reported comprehensive reorganization, formulation of new policies, improvement of policies and procedures, creation of new programs, monitoring of personnel, and bringing in qualified, competent personnel. Among these are the

114

Department of Justice, National Economic and Development Authority, and Department of Finance.

Other departments were more explicit. The Department of Budget and Management under Secretary Guillermo Carague reported on promoting transparency and accountability, as well as promoting government productivity and efficiency. On the other hand, the Department of Education, Culture and Sports’ report had a section entitled “Fight Against Corruption,” with the statement, “the DECS has launched a campaign to rid the agency of the grafters and the corrupt. It is a goal to make the DECS the model for other government agencies to emulate.” Dismissals and cases filed were reported in detail. Secretary Isidro Carino stated that the Legal Office reported weekly on the status of all pending cases and investigations.

The Department of Health also had a section in its report entitled, “The Continuing Fight Against Graft and Corruption.” The department proudly cited its improvements in the procurement and warehousing systems in the Visayas and Mindanao as examples of successful battles against corruption. Another strategy adopted was the effective use of public information.

The department also tapped foreign assistance in modernizing its system. Nonetheless, Secretary Alfredo Bengzon noted that “money works where there are capable people and functional systems to utilize it.” On foreign assistance, he said, “you can’t throw money at a problem.”

In its report, “Cleaning Up Corruption,” the Department of Environment and Natural Resources claimed that its campaign against corruption resulted “in the largest number of cases filed and won against undesirable personnel. The creation of a Personnel Investigation Committee resulted in 443 cases filed against erring personnel, reported Secretary Fulgencio Factoran, Jr.

The Department of Public Works and Highways had two secretaries during the term of Pres. Cory Aquino—Jose P. de Jesus and Fiorello R. Estuar. Their report contained a long list of innovations to improve efficiency and limit opportunities for corrupt behavior. One of these was the creation of a technical post-audit system which served as an effective mechanism against field collusion and laxity in the implementation of standards. Their concluding statement, ”On Graft and Corruption” stated that “this malaise has to be attacked on three fronts: at the organizational culture level, at the syndicated and big-scale level, and at the pervasive but low level.” The DPWH campaign was waged on these three fronts.

Cory’s Way: her cabinet and her government’s “fundamental integrity”

The assessment reports on Pres. Cory’s fight against corruption show very clearly that the successes attained were largely due to the integrity of her cabinet members who fought the war in their own departments. Under her leadership, her cabinet members fought graft and corruption, each in his own way. A clear lesson is that the quality of each cabinet

115

member is crucial in an anti-corruption campaign. To quote her own words in her valedictory lecture at the University of the Philippines,

“You may not always agree that I always had the best people in my Cabinet,but I think we can agree that my appointments would have been disasters if they merely reflected the preferences of power groups. I hope you willgrant me this, that my government will exit at least with a sense of pridein its fundamental integrity (italics supplied).” Pres. Corazon C. Aquino and her Cabinet, The Aquino Administration: Record and Legacy, 1986-1992.1992: page 10.

Fundamental integrity. This is what Pres. Cory and her cabinet bequeathed to the country. This is what presidents including the present one, should also bequeath to the future generations, including the present one.

A FRAMEWORK FOR A NATIONAL FOR ANTI-CORRUPTION CAMPAIGN

This study has embarked on a search for Pinoy solutions to corruption. After reviewing our historical experience with corruption; examining corruption in all its forms, dimensions and definitions; and searching for instances of success, however brief, I have come to the conclusion that only the Filipino can solve corruption.

We have studied, we have analyzed, we have launched campaigns; we had successes; we had failures—all these show that the Filipino can do it.

Features of an anti-corruption framework

1. The government shall lead the campaign; all other sectors of society will be mobilized and invited to participate.

As pointed out earlier, only the government has the resources and powers to initiate the campaign and bring it to its successful conclusion.

2. No less than the President will be at the helm of the campaign.

In other countries, a government agency is sufficient. The failure of so many specialized agencies to stem the tide of corruption is the best argument for making the president lead it.

The Constitution grants more powers to the president of the Philippines than mostother countries. Historically and culturally, Filipinos look to the President forleadership and inspiration.

3. All the three levels of the executive branch of government will be coveredby the campaign—national, local government, and the corporate sector.

116

The focus of earlier campaigns was primarily on the national government. Ithas been shown that the magnitude of corruption in local government unitsis just as intense as that of national government. It has also been shown thatthe resources of government corporations all together can even exceed thatof national government.

4. The two other branches of government will be invited to join the campaign—namely Congress and the Judiciary.

While it is true that each of the three branches of government are co-equal andindependent of each other, it cannot be denied that their activities are intercon-nected and interdependent. One reason why earlier efforts were not as effectiveis because anti-corruption efforts were mainly concentrated in the executivebranch. Recent events have shown that the two other branches of governmentare as vulnerable as the Executive.

5. All other sectors will be mobilized –business, professional organizations, civic associations, schools, civil society organizations and faith-based organizations.Academics and academic institutions will also be mobilized, as well as media.

I believe that active participation of the non-government sectors will be a crucialfactor in the anti-corruption campaign. Many of the steps undertaken by government to expose, investigate and to charge corrupt officials were triggeredby non-government institutions and media.

Many civil society organizations have initiated their own anti-corruption programs. On the other hand, only last September 14 more than seven hundredprivate business corporations signed an “Integrity Pledge” during the historicIntegrity Summit. They were joined by heads of government agencies.

It is increasingly recognized that corruption is not a do-it-yourself activity of the government sector. The private business sector and even ordinary citizens are participants—whether reluctant or otherwise.

The organizational structure for the national anti-corruption campaign

There is no need for a sophisticated organizational structure for the national anti-corruption campaign. As President Cory Aquino has shown, the campaign can be built into the existing structure of government itself. Thus, there was no need for massive funding and long debates over organizational structure. The two charts in the following page show that the Executive Branch is the center of the campaign, with the President leading it.

117

CHART 1

PROPOSED FRAMEWORK FOR A NATIONAL ANTI-CORRUPTION PROGRAM

OMBUDSMAN

SANDIGANG BAYAN

CIVIL SERVICE

COMMISSION

COMMISSION ON AUDIT

JUDICIARY

PRESIDENT

EXECUTIVE SECRETARY

DEPARTMENTS/ AGENCIES

PMS CABINET SECRETARY

CIVIL SOCIETY ORGANIZATIONS

SOCIAL & POLITICAL INSTITUTIONS (including family)

LEGISLATURE

MEDIA

PRESIDENT

DEPARTMENTS/ AGENCIES

EXECUTIVE SECRETARY

PMS CABINET SECRETARY

NATIONAL ANTI-CORRUPTION PROGRAM STAFF

CHART 2. PROPOSED FRAMEWORK FOR A NATIONAL ANTI-CORRUPTION PROGRAM, OFFICE OF THE EXECUTIVE SECRETARY

118

The Office of the President as the nerve center of the campaign.

As explained earlier, the Executive Branch headed by the President will lead the campaign. During the time of Pres. Cory Aquino, the Cabinet Secretary served as the Secretariat of the campaign. At this time, it can either be the Cabinet Secretary or the Executive Secretary himself.

Since the Cory campaign was focused on the cabinet members, it was logical for the Cabinet Secretary to assist the President and serve as the Secretariat. However, since the present campaign proposes the involvement of the two other levels of the Executive Branch, as well as the Legislature and the Judiciary, the Executive Secretary might be more appropriate, considering his broad powers and linkages with the different instrumentalities of government.

Furthermore, the Executive Secretary has linkages with the other two levels of the Executive Branch, namely the Local Government Units and the Government Corporate Sector.

A small team can be under the Office of the President or the Executive Secretary can be created to collate anti-corruption plans from Departments and agencies, coordinate with other government instrumentalities, monitor anti-corruption activities and link up with non-government institutions, including media. This will not involve heavy funding and will not disrupt regular activities.

The various departments and other agencies of the Executive Branch will report to the President through the Executive Secretary. As in the Pres. Cory administration, progress of ant-corruption campaigns can be discussed during cabinet meetings.

The Legislature and the Judiciary

While the two other branches of government will be encouraged to initiate their own campaigns, coordination will be crucial. For example, the hearings conducted by the Legislature normally result in recommendations. These can be implemented by the Executive. Also, proposals for the filing of cases can immediately be attended to.

It is said that the wheels of justice are exceedingly slow. Coordination of activities will surely speed up the judicial process and respond to the oft-repeated complaint that nothing happens after fact-finding forays and investigations.

The Constitutional Bodies

Constitutional bodies are also considered autonomous and independent from the other three branches of government. Three of them are directly linked to transparency and accountability. These are the Ombudsman and the Sandiganbayan, the Civil Service Commission and the Commission on Audit.

119

One reason why certain cases which were filed did not result in conviction is due to lack of coordination among the regular agencies of government and the constitutional bodies. The crusade led by then COA Chairman Francisco Tantuico Jr. in the DPWH anomaly would not have prospered without coordination among the Bureau of the Treasury, the Commission on Audit, the Ombudsman and the Sandiganbayan.

The non-government institutions and the private business sector

The Chart shows the non-government institutions and the private sector surrounding and interacting with government instrumentalities. They are engaged in various activities—some deal with the Executive while others deal with the two other branches of government and the constitutional bodies.

The environment of anti-corruption

The environment at this time is somewhat similar to that during Pres. Cory Aquino’s time. There is widespread revulsion against corruption. At the same time, there is also widespread trust in the President, whatever critics might say about his administration.

The environment is shaped by our history, our political institutions, our culture and attitudes toward corruption, as well as our expectations from the President on this dreadful plague. It can be said that now is the time to launch a massive, comprehensive anti-corruption campaign.

FOCI OF A NATIONAL ANTI-CORRUPTION CAMPAIGN

Using the three definitions of corruption as expounded in Chapter 2, and examples of success stories cited in Chapter 5, the anti-corruption campaign can be conducted at three levels: at the level of the individual, based on the Divisoria model; at the level of the agency or the department, based on the public agency definition; and at the national, comprehensive level, based on the public interest definition.

From the “Divisoria model” to the department store

As pointed out in Chapter 2, in the “Divisoria model”, corruption occurs at the individual level. It is also called the “market-centered” definition of corruption because it is a reaction to the availability of goods and services, in relation to demand. At the same time, the culture of bargaining and haggling is very powerful. Thus, government service is subjected to bargaining because supply is low in relation to demand.

Fines and penalties are subjected to haggling; it is customary for many clients to try to squeeze a bargain out of a government service.

The obvious solution to this level of corruption is to move from Divisoria to the department store. In other words, increased efficiency will result in more government goods and services, thereby reducing the pressure to pay a higher price and to haggle.

120

I believe that market-type corruption can be solved by greater efficiency, better systems, clear rules and procedures, as well as strict imposition of fines and penalties. The correlation between efficiency and adequacy of services viz-a-viz reduced corruption is shown in the examples I cited.

A national campaign for greater efficiency and increased delivery of services can be launched parallel to the anti-corruption campaign.

The department head and agency-centered corruption

We have had instances of present and past successful campaigns at the level of the agency. As detailed in Chapter 2, the battle against this type of corruption can be waged by the agency head himself.

Public interest corruption, culture and the President

The third definition of corruption focuses on its impact on the country. This happens when it is already comprehensive and systemic. This is where the national campaign is necessary.

When not only the government sector is infected, but the whole of society, the President should come in, and come in strong.

The highly publicized efforts of a few departments are not enough. Corruption is prevalent at the level of the individual, the agency, and finally the country. The entire government system has to be cleaned up, and not just the so-called flagships.

Public interest corruption has reached a point when it is tolerated by society and becomes embedded in Filipino culture. Thus, aside from strategies aimed at reducing individual and agency corruption, campaigns aimed at enhancing and strengthening positive culture and values while negating those which tolerate corruption need to be launched. This can be attained through formal education as well as through music, literature and the arts.

Some strategies which might work

Aside from the tried and tested approaches which have been used in successful campaigns, what will likely work with Filipinos?

The fear factor

Why is it that drivers who enter Makati or Clark and Subic automatically behave and then revert back to their old habits once they are in Manila or Quezon City? This is because they know they will be penalized if they disobey traffic rules and regulations. It has been repeatedly asked: why is it that Pinoys who go abroad follow the smallest rule while they

121

blithely ignore the biggest laws when they return to the Philippines. This is because they know they can’t get away with it and will be jailed.

The fear factor—fear of fines and penalties, fear of bad publicity, fear of imprisonment just might work! It all boils down to enforcement.

Drama

The average Filipino loves dramatics. Government is show business and entertainment. Campaigns must appeal to the Filipino’s sense of drama in order to have an impact. The recent hearings of the Senate Blue Ribbon Committee are excellent examples. The revelations were not only surprising. They were dramatic, straight out of a Filipino movie, complete with temper tantrums and walkouts, tears and even moments of laughter and hilarity. Nonetheless, these dramas have to result in conviction. The case of Gen. Carlos Garcia is an excellent example.

Sustaining public interest

It has been said that Filipinos have short attention span. One reason why some campaigns have fizzled out is because the public got bored and lost interest. Again, the DPWH anomaly during the 1970s is an example of a huge anti-corruption case which captured the attention of the public from start to finish.

The trick is not to allow cases to drag on and on until the public dozes off from sheer boredom. The asset recovery program for the Marcos wealth is an example. The public had all but forgotten about it until after 18 years when more than $688 million was recovered. There was followed by silence until news broke out that part of it was utilized in the fertilizer scam. Efforts have to be made to ensure that cases end with a bang and not a tired whimper.

TIMING AND IMPLEMENTATION OF THE CAMPAIGN

How should the national anti-corruption campaign be implemented? It can be done with a public event or Summit with all players participating. This will provide the hoopla and the drama which never fails to catch the public’s attention.

The other approach is to do it in stages. The president can start, like his mother, with the cabinet system and the Executive Branch. He can bring in the other players, especially those who are already active, at later stages.

Timing? The timing is NOW! As they say, strike while the iron is hot!

122

CONCLUDING STATEMENT

Are there Pinoy solutions to corruption? Definitely yes. We only have to examine our history and learn from successful anti-corruption campaigns. We have success stories for all types of corruption—from individual corruption to comprehensive venality.

We can add new features. We can move from the Executive Branch to the other instrumentalities of government. We can bring in the other constitutional bodies. Finally, we can bring in non-government organizations and private business. We can try new techniques. YES, THE PINOY CAN!

123

CHAPTER 7

FROM PINOYS TO P’NOY: SPECIFIC SOLUTIONS TO CORRUPTION

By: Prof. Leonor Magtolis Briones (Ret.)

THE SEARCH FOR OUT-OF-THE-BOX SOLUTIONS

When this project was first started, Mr. Jim Wesberry, Chief of Party of MSI/USAID challenged the team to look for “out-of-the-box” solutions to corruption. In the process, the team amassed a vast array of material, interviewed knowledgeables, spoke in numerous for a all over the country. The team members also had long discussions on their findings. All throughout the conduct of the study, the team members were conscious of the challenge. Whenever a strategy was proposed, two questions were always asked: Is it a Pinoy solution? Is it out-of-the-box?

In Chapter 6, a framework for a national anti-corruption program was presented with the President himself leading the campaign. So what is out of the box about this framework? Many of the campaigns conducted by recent administrations were led by specific institutions like the Ombudsman. In other countries, a specialized body leads the campaign. For example, Hongkong’s Independent Commission Against Corruption is much admired for its accomplishments.

However, in the Philippines, the team believes it will take no less than the President to conduct an effective anti-corruption campaign. This is because corruption is believed to have reached the systemic or comprehensive stage. The “Cory Model” has shown that it can be done by simply utilizing the existing government structures and institutions without creating new organizations and expending huge amounts of money. The model also proved that external assistance is not necessary. The Filipinos know best why corruption occurs and how it can be minimized.

While the proposal starts with the “Cory Model”, it is expanded to include the legislature and the judiciary, as well. Furthermore, the three constitutional bodies directly involved in anti-corruption—The Ombudsman and Sandiganbayan, Civil Service Commission and the Commission on Audit are brought in. There is also explicit recognition of the role of civil society organizations, the private business sector, faith-based organizations and professional associations, in the campaign.

Finally, it is recognized that all these efforts take place within the context of our unique history, culture and values, political and social institutions, especially the family. We do not agree that culture is the cause of corruption. We believe that culture is a formidable tool against corruption.

124

Unlike earlier anti-corruption campaigns, this proposal will not require a new organization, excessive funding and external assistance.

FROM PINOYS TO P’NOY: SPECIFIC SOLUTIONS TO CORRUPTION

In their search for “out-of-the-box” solutions, the team went all over the country, gave lectures, made presentations and consulted many groups. These included schools and universities from north to south, as well as symposia, classes, public forums and focus group discussions.

Not surprisingly, the suggestions were very similar, whether coming from students, civil society, academics or ordinary citizens. Prof. Domingo classified them according to the three categories of corruption earlier identified in the previous chapters: solutions which can be implemented nationally to reduce public-interest or comprehensive corruption; solutions which can be implemented by specific departments and agencies to curb agency-centered corruption and third solutions which can be undertaken by individuals. The last solution can be a response to market-centered or Divisoria corruption.

Table 1. From Pinoys to P’noy: Anti-Corruption Strategies

National LevelWhat we need is a leader with the political will. Somebody who is not afraid to do what he thinks is right regardless of what the effects would be to his political careerHighest officials should not appoint friends, families, or those related to them

Penalties/ Sanctions

More strict punishment for the corrupt; more stiff penalties; severe punishment for those caught in corruption;Stiffer punishment to corrupt leadersImpose death penalty; Death penalty to set an example; ibitay lahat ng corrupt; Bring back firing squad for erring politiciansFiring squad as punishmentPut to jail corrupt people/officialsImpose sanctions strictly;Impose penalties properly and not “ningas cogon” onlyPenalize; penalize corrupt officials if proven guiltyDismiss corrupt people from their positionStrengthen the law against briberyPunish not only the government employees but the givers of the bribeThose found guilty of corruption should be able to seek employment in both government and private companies after summary dismissalPublish the offense and the punishment in the agency newsletterLive hearing of drug, murder, and corruption cases

125

Big officials to be sampled/punished as a result of corruptionPublic execution for those who will get caughtServing penalty should be actual and implementation realUse the Malaysian strategy by publicly punishing corrupt officials and employeesExpose through media all those involved in corruption

Rewards Commending honestyCommending offices that run after and convict acts of corruptionGive incentives to those who can identify corrupt waysGuard one another and give reward to the one who will report the crime

Whistleblowers Whistle blowers should be given a share of the corruption money they divulge as an incentive (e.g., 3%), apart from the protection program, on a proven, successful caseGive whistle blower 100,000 pesos the moment one is found guilty

Private sector role

Encourage participation of the private sector in the government’s drive against corrupt practices particularly in allocating funds to sustain campaign activities

Organizational LevelOrganize an anticorruption task force with a special fund from the government but NGO-basedEducate the Filipino people about the pros and cons of corruption. Everyone should be aware how damaging it is to the economy and lives of our countrymen.

School system Inculcate discipline and strict implementation of laws; Teach people to discipline themselvesValue formation; educate the children about core values;Craft teaching modules that could translated to cultivate honesty and advocate anti-corruptionAnti-corruption must be taught in school, maybe include a curriculum for tertiary levelTeach good Filipino values of honesty and Christ-centeredness to the family to have self-awareness to do good in everythingRe-evaluation of valuesAssist in capability-building of teachers/school headsBrainwash children with the values of honesty and integrity to raise a generation that will believe that a corruption-free government is possible

DepEd Include anticorruption lessons in the curriculum from kindergarten up to high schoolInclude in the school curriculum as early as in grade schoolEstablish “Schools of Integrity” where pupils value honesty and trustworthinessInstitutionalize anticorruption awareness in schools (elementary and high school)Include anticorruption laws, prevention measures, and anticorruption

126

activities in the elementary and high school curriculaPrincipals are not prepared to monitor the projects undertaken in their school but knowledgeable persons will be in the system to look into infra projects.

DILG Conduct LGU training by different training providersoFormulation of Capability Development Agenda by LGUs

identifying training needsoDILG audit of training expenditures

Help in the development of learning modules for IPsLeaders Teach ideal Filipino values to our children and make it a way of life

Include Filipino values in the elementary curriculumA good leader is a good follower

Employers/ Offices

Encourage employees to earn additional income after office hours to support their families, rather than ask their clientele for money or things in exchange for their help/servicesValue formation of government officials/leaders/employeesInclude value-enhancement training during the pre-employment recruitments of new recruitsConduct value-formation seminars for all government workers, especially the new entrants. It must be clarified that it is the acceptance not the practice of negative values in the workplace that is wrongGift-giving is common in government institutions, especially when favors have been received. This invites corruption. Post notices like: “Bawal ang Regalo”; “Bawal ang Lagayan”; “Ang mapagsilbihan kayo ay aming kasiyahan.”Self-discipline;Discipline yourself before disciplining your subordinates;Ending corruption should start within an individual’s values and self-discipline

Employees Report/expose the corrupt personBe brave to inform concerned person/agency about corrupt leaders/politicians;Do not be afraid to expose any wrong doing of a government employee/official

Law Enforcers Strict implementation of the law (have political will); implement laws, regulations, ordinances, guidelines; serious implementation of law;Lesser laws but strict implementation of existing lawsFair treatment, justice for everyone; Equal treatment for everyone;Prosecute/Penalize all: No exceptionsStrictly implement laws on prohibited drugs (Attention PNP, NBI, etc.)Drugs that are seized should be disposed of properly and not be sales agents of seized drugsEnforcers must do their job effectively not ningas cogonProper dissemination of existing lawsStrictly enforce the law and sanctions

Procedures/ There must be transparency/be transparent in all

127

Processes transactions/documentsTransparency of accountsTransparency of purchasesOffices should be open (windows) to avoid bribery or padulasGood governanceTransparency—be more transparent in all government dealings by way of publication (e.g., top taxpayers to indicate their declared income as against the taxes they have paid, to check if the taxpayer is paying the correct amount of taxes and avoid graft.Increase transparency of financial transactions in government (committed watchbodies)Reduce the number of signatures needed; shorten number of stepsNo following up of casesMonitoring of associates of employees transacting in the officeCentralize procurement of goods from governmentHave a simple “customer satisfaction” monitoring tool to assess the performance of the office and the agency as a whole. Include questions that will touch on graft and corruption and it will become a deterrent because they know that their performance are being assessed.Minimize requirements for licenses (one-stop-shop) (kulang ang implementation)Simplify the system/process by making sure that services are delivered within the dayAll transactions of the government should be publicly available

Procurement Publication of performance and budget utilization or costs per agency in national dailies in a manner easily understandable to people and to be done by a third party (NGOs, academe, private sector)

Technology Install CCTV cameras even in places/offices where corruption is likely to happen, and the CCTV camera can be seen at random on national television; install camera focused on every table of government employees and every transaction; more CCTV camerasCCTV camera in offices like the accounting office, comptroller, etc.Install hidden cameras in all offices so transactions can be monitored on a daily basisPaperless transactionComputerize agencies, especially GOCCs to avoid under the table transactionsInstall video camera in every officeCashless payments (payment through banks)On-line collection of taxes/collectibles, especially in big establishmentsComputerize financial transactions (kulang ang implementation); computerize all transactions to avoid “extra-curricular” activitiesUpgrade and secure all computer systemsFile on-line—less people interactionMake applications available on-line, in the website, for transparency

128

Buildings Modernize buildings, offices, schools to add prestige and pridePersonnel matters

Increase salary of employees to avoid corruption; increase salaries to reduce graft and corruption; increase compensation and benefits of government workersReduced the number and the salaries of confidential personnel of selective officialsFamiliarity breeds contempt! Avoid familiarity by rotation of assignments;Rotate sensitive positions regularlyStrictly observe hiring by virtue of merit and fitness. Publish vacancies, the minimum requirements so everyone can see for all levels of government positionsRemove from office anyone who is guilty of any crime, instead of suspending them or transferring them to another officeNo padrino systemGovernment should invest in its employees—fewer government employees who are knowledgeable, multi-tasked, dedicated who are given all the resources they need (higher commensurate salaries, scholarships for higher learning, and peripherals like computers (laptops) that will make tasks more efficient and effective)Hiring and promotion of personnel should be based strictly on merit and fitness, not from recommendations of politicians or who are related by affinity or consanguinityAppointment to third level positions should not be based on political recommendations or backingsIncrease in salary; Give reasonable salaries to government officials comparable to the private sectorProfessionalization of the civil serviceSecurity of tenureRemove/do not tolerate fixers in government offices (NSO, LTO, etc.)Have enough appropriations for proper uniform/gear/tools of policemen, traffic enforcers, firefighters

Bidding process

Bidding procedures must be genuine and not only for formality’s sake

Rules/ policies/ guidelines

Have guidelines for all services

Lessen the rules and regulations/be specific so that anyone, even those who do not have good educational background can understandFlexibility begets corruption so just follow procedures/instructions as postedMinimize red tapeTransact business only with officials within the departmentTransactions should be made directly to the office of the approving officerInitiate a “No to corruption” policy and post a sticker in every officeGovernment thrust” “Honesty is the Best Policy”

129

Tough disciplinary rules with corresponding penaltyIntensify check and balance mechanismMonitoringFilipinos are obedient when they are abroad; design strategies that could make them obedient in their own country

Special Court To fast track litigation of corruption casesDOJ/Judicial system

Improve the justice system

Strengthen the moral fiber of the judicial branch and the DOJ to enforce the law

Congress Require liquidation for PDAF utilizationSpend only on what is important to the agencyRemove PDAF of legislatorsRegulate PDAF of legislatorsWhistle blower bill—give protection to people who witness corruption

COA Audit the auditorsThere should be an agency to check the work of COATransparent rules and procedures with timelines for each step, with police power to the auditor or watchdog

DPWH On the DPWH side, the bidders (such as contractors/consultants) should not bribe the employees to do away with corruptionDo not permit single bidding for the projectNon-publication of the ABC for the contractIn the construction of infra projects, to ensure that the output is of quality, the monitoring should include the different sectors of the community where the project is located. Monitoring should include the amount and type of materials used, but first, the monitoring team should be acquainted with the standardsLook into the authentic cost of materials that are used in projects.

Ombudsman The Ombudsman should be more serious in prosecuting those found guilty of corruptionSwift and expeditious prosecution and resolution of cases involving corruptionOpen judgment for corrupt officials—no white wash, no cover-upsLife-style check; checking of assets

MMDA less interaction with traffic violators reduces corruptionMMDA—to install CCTV on the choke points and pedestrian crossing and other crucial parts of the road

DOH DOH has a MOA with NAMFREL to send an observer to the DOH central office during biddings, evaluate the warehouse, how to handle stocking and distribution of medicines. NAMFREL submits its evaluation to the Secretary after presentation to the Integrity Development Committee (of which NAMFREL is also a member), which is in charge of all graft and corruption-related complaints. Other members of the IDC are TAN, TUCP, Procurement Watch,

130

Ombudsman.All officials and employees

Series of campaigns, seminars, retreats to inculcate the true spirit of the concept of Filipino and the concept of nationhood, which means that Filipinos are not really corruptReintegrate in our bureaucracy “values”Retraining on value formation once in a while

NGOs To serve as guardians and whistleblowersMedia To serve as vehicle and partner in society’s fight against corruption

Maximize the use of media to teach values to citizens to become empowered to report irregularities they witness

Individual LevelCitizens Follow rules and regulations; start with oneself—follow rules and

regulations;Filipinos must learn how to follow laws and policiesDo not give any kind of gift to a person in uniform (like police officers)Pay the correct tax to prevent corruptionVote wisely (to elect those who are not corrupt)

Drivers Drivers should allow themselves to be given a ticket when they commit a violation to eradicate “Kotong Cops”

Employees Avoid accepting gifts from suppliersDo not be afraid to speak or talk about corruption cases that you witness.Be a model to others even if the offer is too tempting. Always think of what you want for the future generation to enjoy

Parents Teach children strong Filipino values; Start at home; start them youngBe good parentsParents should teach values of honesty and truthfulness to their children

Self Do not give bribes/ No to bribery/ Never allow yourself to give grease money or “lagay”; Huwag tumanggap ng lagay; huwag magbigay ng lagay sa mga transaction para mapabilis and prosesoGet rid of bad habits and embrace the more positive beliefs and ideals;Change behavior from bad to good, not greedy of power and wealthBe afraid of God/Fear God if you do evil; God fearing attitudesSeek the guidance of the Divine Providence to enlighten the mind and heart (spiritual way)Pray as a nation to end corruptionBe God-centeredDo away with personal desires/greed and learn to be contented with simple way of livingReorient selfSumunod sa batas na walang pag-iimbot at alinlangan (religiously and diligently)The head of the agency should not accept SOP from suppliersEducation and values formation start from the homePre-marriage counseling should include all the Philippine data on competitiveness and corruption and these should be impressed upon

131

them that these will affect their family and their livesFocus on programs geared towards the family

Public Reach out and provide a solid support system for honest, dedicated, and competent public servantsHelp work for the election of good governors, good mayors and even good barangay captains and kagawads so that if we are not satisfied with the people at the top, there are still the local governments to rely onfeel offended and disgusted with the wrong things happening

Cultural LevelShame campaign (publish lahat ng corrupt)Love for the family shall extend to patriotism and nationalism--Reject graft and corrupt practices

[Llaneta, Celeste Ann Castillo. 2011. Whistleblowers and the Culture of Corruption. Forum.(March-April). P.13]

FROM THE EXPERTS TO P’NOY

On the other hand, Prof. Reyes has compiled advice from experts (including himself) on how to minimize corruption. These solutions focus on two of the three categories of corruption: proposals which can have national impacts, and solutions which are prescribed for specific agencies.

Over the years, various anti-corruption measures and proposals have been offered to fight the worsening corruption problem in the Philippines while analytical and comparative studies have likewise been made to uncover or unravel the dynamics of corruption (Quah, 2010; 2003; Brillantes and Fernandez, 2010; Ocampo, 2010; Ursal, 2006; Obejas, 2008; World Bank, 2000).

Much has therefore been written and said on the state of corruption in the country, so much so that analyses and critiques have continued to ebb and flow while incidences of corruption continued to proliferate. For years, the Philippines undertook extensive anti-corruption campaigns; And yet, for years, corruption endured. Is there a “pinoy” solution to corruption or one that is uniquely Filipino in approach and orientation? Perhaps, yes and again, perhaps, no for the fight against corruption transcends culture and country ethos. Invariably, leadership from the top, beginning with the President and his Cabinet would command a major significance in fighting corruption. A corrupt leadership can only spawn corrupt leaders operating within a corrupt bureaucracy and which in turn can likewise lead to the corruption of the moral fabric of society as it begins to spread out to other institutions and sectors.

But then again, there may be some idiosyncratic approaches that can be derived tempered according to the unique needs and demands of Filipino psyche, which can be said

132

responds can respond to the certainty of penalties and sanctions which can be a complex of elements, from the realities of fear of apprehension, outright incarceration and jail time to such aspects of personal shame and guilt, family and social pressures, and such other factors that militate against deviant behavior. Many proposals have been advanced today in the fight against corruption. This study recommends what it considers as “out-of-the-box” anti-corruption recommendations which can be adopted in the present system of measures. It thus outlines a set of national strategies, a localized and agency-specific measures, and individualized approaches to hopefully be added or incorporated into existing measures:

PROPOSED NATIONAL ANTI-CORRUPTION MEASURES

1. Enactment of a comprehensive whistleblower law. The proposal for a law governing the handling and management of whistleblowers or those who expose corrupt practices either as a participant or one who has direct knowledge of corrupt activities has been already filed in the 13 th and the 14th Congress of the Philippines in both the House of Representatives and the Senate. Unfortunately, the bills have not been passed into law in spite of the fact that there had been a number of whistleblower who decided to expose corruption during the Arroyo administration. Whistleblowers have often complained of the lack of support particularly in terms of issues involving their personal safety and of their families as well as of their careers and future (Reyes, 2010). The lack of support for whistleblowers discourages other potential whistleblowers to come out because of the lack of a comprehensive program to protect them. It is thus incumbent for Congress to pass now a law protecting and providing safeguard provisions for whistleblowers.

2. Building of a whistleblower culture in various government departments and agencies with appropriate incentives. Of a law is indeed passed to protect whistleblower, it must not incorporate whistleblower protection only for prominent cases such as those exposed in the media or investigated in the Senate and in the House of Representatives. A whistleblower law must seek to bring down the spirit of a whistleblower law down to every agency of government and local government units, where a mandate specifically requiring all government departments and agencies, as well as local government units (LGU) to adopt and support specific whistleblower programs that will help build a whistleblower culture. In this respect, coordination with civil society organization at the agency and local levels may further strengthen the program so as to inspire and embolden whistleblowers to expose anomalies that they have direct knowledge of.

3. The Enactment of an Omnibus Anti-Corruption Code. As pointed out in earlier discussions, the Philippines today has fragmented laws and orders scattered in various issuances such as executive orders, presidential decrees and other such directives which, fractionalized as they are, may not be readily accessible to anti-

133

corruption units. It may thus compelling to compile and codify these laws into one ready compendium as a resource guidebook in the fight against corruption.

4. Establishment of parameters to determine size of anti-corruption personnel at the national and local levels vis-à-vis totality of the Philippine civil service. As discussed in this study and several other researches on problems in corruption dilemma, there is a prominent gap in the number of anti-corruption personnel vis-à-vis the size of Philippine bureaucracy. It would do well for us to establish parameters governing the mandated size of field investigators and prosecutors tasked with fighting corruption in government.

5. Establish parameters of budget allotted to anti-corruption programs at the local and national levels. In relation to the above, there must be prescribed parameters that must be established in the budget to support anti-corruption agencies and programs so as to strengthen the capabilities of these agencies. This must also be made to support the installation of non-organic Resident Ombudsmen and its staff in the various agencies of government under Administrative Order No. 10, series of 2001, and which reports to the OMB. The non-organic resident Ombudsmen can facilitate a whistleblower program in the agency where they are assigned.

6. Decentralization of anti-corruption investigation and prosecution by building up of anti-corruption units based on sectoral considerations (i.e., public works, local government units, finance, revenue generating agencies, etc.)., As part of the anti-corruption campaign, there is thus a need to further build anti-corruption watchdogs on another level, which would have a sectoral focus. These units, once strengthened can serve as anti-corruption units replicated incarnations of those at the anti-corruption agencies operating at the agency and local levels but transmuted to operate within a sector.

7. Adoption of a “strike 3” policy by way of legislation of removal/dismissal, suspension or ban from government service (determined according to severity of offenses) of government officials and employees who have been involved or charged with corruption cases in at least three cases whether conviction is made or not and as long as an information is filed. This approach would be preventive action against officials and employees deemed to be “recidivists” in corruption activities.

8. Adoption of “strike 3” policy in summary blacklisting of suppliers/contractors (including members of their board and officials) involved or accused as having engaged in corrupt practices (i.e., bribery, bid-rigging, etc.). As in the above, contractors that have continuing records in being involved in corrupt practices should be blacklisted and which Resident Ombudsmen can initiate.

134

9. Stringent review of the Rules of Court and possibly the adoption of corruption-specific rules that would be more stringent while not compromising the due process clause.

10. Periodic evaluation of the performance of Resident Ombudsmen assigned in government agencies by an oversight body based at the OMB.

Specific Prescriptions

11. Enforcement of requirement for resolution of cases in preliminary investigation and before Sandiganbayan within the prescribed period.

12. Fielding of decoys (shills) reporting to the Ombudsman or DOJ to transaction-intensive agencies to undertake transactions to test the integrity of public service employees (similar to the citizens report card except that investigators are fielded secretly to engage in transactions to ferret out or monitor corrupt practices both at the national and the local levels).

13. Strengthening of the powers of the PNP Internal Affairs Unit in investigating corruption in police agencies and placing them under the jurisdiction of the DOJ/Ombudsman or OP instead of the PNP Director-General.

14. Strengthening of an Internal Affairs Unit in the AFP to be under the jurisdiction of the DOJ/Ombudsman or OP.

15. Development of a more sophisticated evidence oriented method of forensic accounting.

16. Installation of CCTV equipment in transaction-intensive areas of the bureaucracy

on a pilot basis, and under monitoring by the unit of the Resident Ombudsman or any other specialized unit that can be created for that purpose.

FROM THE TEAM LEADER TO P’NOY: PUBLIC PARTICIPATION IS CRUCIAL

For months, the team leader had been reflecting on the successes and failures of anti-corruption efforts over the years. Why did most of these initiatives either fail or were not sustained? One reason is because anti-corruption was considered a responsibility of government. The public merely watched, kibitzed and criticized. This explains the number of laws and regulations passed and anti-corruption agencies created. This also explains the never-ending cycle of reorganizations.

135

At present, byword is governance, not government. Governance includes public participation. The battle against the cancer of systemic corruption cannot be resolved by government alone. Corruption is not only the sickness of government; it is a disease which is consuming our entire society, both government and non-government.

In order to curb corruption, the public must participate. They are part of the solution.

Thus, the proposed framework for the national anti-corruption program emphasizes the importance of public participation.

Civil society organizations. In recent times, CSOs have been very active in monitoring corruption in the government. While there are organizations which specifically target corruption like the Transparency and Accountability Network, most issues advocated by CSOs whether economic, social or moral, are related to corruption. While the Alternative Budget Initiative of Social Watch focuses on public finance and the MDGs, governance issues and corruption are directly linked.

An anti-corruption program will not be complete without public participation.

The private business sector. I have often observed that corruption is not a do-it-yourself activity. It involves private citizens and the private sector. Only last September 14, more than seven hundred business companies, organizations and associations signed the Integrity Pledge and committed themselves to maintaining integrity and honesty in their operations. When one party says NO, a corrupt transaction cannot occur.

Academics and academic institutions. The role of academic institutions and academics cannot be gainsaid. Next to training which a child receives from his or her family, the school exerts a major influence from pre-school to university. In the small province of Negros Oriental, many have commented that Silliman University and four other universities have exerted profound influence on the culture and values of the province. Academics and their research work have helped shed light on the phenomenon of corruption and led the search for effective solutions.

Faith-based organizations. These organizations do not trumpet their accomplishments but they are very effective in combating corruption as a moral and religious issue. No religion teaches corruption, whether Christian, Muslim, Buddhist, Indian and all their variations. Because these organizations are driven by moral objects, they are usually very committed, courageous and consistent.

Media. Media has been very effective in chronicling shenanigans in the government. Hearings, trials and investigations have been brought to living rooms by media. The public has faithfully followed congressional hearings with almost the same devotion accorded to telenovelas and teleseryes. Media can also be a powerful weapon in projecting anti-corruption campaigns and sending messages of honesty and integrity.

136

FINALLY, A WORD ABOUT CULTURE AS OUT-OF-THE BOX SOLUTION

During one of the sessions of the Integrity Summit, this question was raised: is integrity determined by culture? The implication is that corruption is cultural. This is a long-standing debate among scholars studying corruption. James Fallows has written a biting article on the Filipinos’ “Flawed Culture.” While some sociologists admit there are certain aspects of Filipino culture which might lead to corruptive behavior, they insist that our culture and value systems do not condone dishonesty and corruption.

I myself do not agree that our culture tolerates corruption. It has been used as an excuse to justify corruptive behavior. The team does not agree with this view. On the contrary, culture is a powerful weapon in combating corruption.

One reason why many of the earlier anti-corruption efforts did not gain ground is because they were focused on laws, organizations, procedures and rules. The matter of inculcating the values of integrity was not given much attention. At this time, using culture as a weapon was not given much attention.

Transmitting anti-corruption values through faith, culture and the arts

During one of the colloquiums on anti-corruption held at the Ateneo University, Chief of Party Jim Wesberry thought of inviting the Manila Concert Choir to sing nationalist songs. The songs were very well received. The colloquium at Silliman University did not only include songs. The main speaker, Sen. TG Guingona invited professional actors to illustrate through skits how corruption works. He also brought Noel Cabangon who brought the house down with his call to the youth to fight corruption.

It is common practice in public events to include a cultural number or two to serve as breather in serious topics. These “breaks” can be used not only to give relief entertain but also to transmit positive messages which enhance the culture of honesty.

I personally believe that music, literature (novels, short story, poems, essays), film, plays and other art forms can be much more effective than a lecture. Remember Noli Me Tangere which sparked a revolution?

Are there Pinoy solutions to corruption?

The research team started this journey to find out if Jim Wesberry’s statement that only the Filipinos can solve corruption in the Philippines, is possible. The journey is not yet complete but the answer is obvious. The solutions are just under our nose but we do not see them. For decades, public participation in anti-corruption was not taken seriously.

137

Culture was considered flawed and contributory to corruption. Now, we see they are part of the solution. As Antoine de Saint-Exupery wrote in The Little Prince, “It is only with the heart that one can see rightly, what is essential is invisible to the eye.”

The heart of the Filipino is against corruption.

138

Appendix 1

Raiders of the Philippine TreasuryBy Bacani and Cailao(Short version by Bootes Esden Lopos)

In June 1978, Sofronio Flores, a 36 year-old CPA-lawyer, was newly assigned as COA Regional Director in Region VII. Starting his first day and throughout his first week in office, he began receiving anonymous letters, albeit vague, denouncing “massive anomalies” in the Ministry of Public Highways (MPH) in Region VII. It was signed by Mr. Concerned Citizen.

The following week, Mr. Concerned Citizen was more specific: the anomalies were being done through fake Letters of Allotments (LAAs) and fake Sub-Advices of Cash Disbursement Ceilings (SACDCs). The latter letters (five in all) gave more details: ghost deliveries, non-existent projects, collusion by COA auditors.

Flores became greatly disturbed and on June 21, 1978, ordered a two-woman team to conduct a fact-finding investigation: Victoria Quejada and Ruth Paredes. Both women were CPAs and intelligent (Quejada graduated magna cum laude from San Carlos University), young and newly recruited from Sycip, Gorres, and Velayo. Paredes has been with COA for 5 months and Quejada barely a month. Upon receiving the order, they conferred with Flores about the assignment and began studying the flow of transactions in the MPH, particularly as it relates to allotment advices and CDCs.

They then went to the different offices to discreetly look for clues. They first found these at the Mandaue City Highways Engineering District’s (HED) file of LAAs. Quejada’s eye was caught by an illegible signature in blue ink. All the LAAs they saw before were signed in black ink, and the name of Finance Officer Escano could be clearly read. Quejada could not decipher the signature in blue ink, and she found other LAAs featuring the illegible signature. These LAAs could not also be traced in Alexander Tan’s (the COA officer assigned to MPH Regional Office VII) file, neither were they recorded in the Journal and Analysis of Obligations (JAO). These LAAs were later found to be signed by Regional Chief Accountant Rolando Mangubat with some being countersigned by Assistant Regional Director Jose Bagasao while others by Regional Highways Engineer Adventor Fernandez.

The obligation number “8-81-400” were written on the faces of the irregular LAAs and the code stands for “Accounts Payable – Unliquidated Prior Years’ Obligations.” This means that although the LAAs were dated 1978, they were used to support payments for obligations of prior years – an irregular transaction.

The pair continued their investigation, looking for more clues, and then presented their initial report to COA Regional Director Flores. It was obvious to them that something

139

irregular was going on. Flores expanded the scope of the investigation, and also directed the team to dig deeper into the records. COA auditor Alexander Tan was assigned to assist Quejada at some point when Paredes was given another special audit. Tan is another magna cum laude graduate, an SGV alumnus, and has been with COA less than two years at the time. He proved a big help since he is familiar with the procedures in the HEDs and the Regional Office.

The pair discovered that in the Trial Balance, Account 8-81-400 as of year end of 1977 totalled P2,735,181.98 – an impossibility given the findings of the team of monthly charges averaging P2 M so that the Trial Balance should show a total of P24M. Upon digging deeper, it came out that Chief Accountant Mangubat has been making adjustments in the entries in the books. The entries taking up payments for accounts Payable-Unliquidated Prior Years’ Obligations (8-81-400) were cancelled through red entries, making it appear that no such payment to accounts payable were made. At the same time, the entries to the Cash – TCAA Account (8-79-790) were also cancelled, making it appear that no such disbursements were made to pay for accounts payable. The account for Obligations Obligated (0-83-000) was then debited, although this is only to be used for payments or liquidations made during the current year of obligations incurred during the same year. The end effect was to understate the reported payments and disbursements to accounts payable in the Trial Balance.

By August 31, 1978, Quejada, Paredes, and Tan were able to finalize an initial report on their two-month fact-finding assignment. Quejada and Tan reported in person to Flores in Manila. The three of them briefed COA Chairman Tantuico of their findings, who also called in Performance Audit Office Manager Athena Flores who is very competent (magna cum laude from FEU, CPA) and has had vast experience in audit work since the 1950s. Being convinced with the evidence that it was possible for such an anomaly to be committed, Chairman Tantuico directed Mngr. Flores to assist Quejada and Tan in preparing a formal report for the President and in carefully gathering the needed supporting documents. Director Flores was directed to retrieve important documents from the MPH Regional VII and its HEDs as soon as possible. The auditors in the implicated districts were put under preventive suspension and administrative charges were filed against those in COA involved in the anomaly.

On September 18, 1978, Chairman Tantuico sent then President Marcos the report prepared by the team, which was a more detailed and documented amplification of the initial report submitted to him earlier, the main highlights being:

1) Doubtful allotments issued as of June 30, 1978 to ten eng’ng districts (HEDs) = P24,052,750.

2) Fictitious accounts payable liquidated as of August 25, 1978 = P32,432,397.36.3) Payments on the doubtful allotments/fictitious obligations = P23,272,999.42.4) Excess of checks issued over cash disbursement ceilings/allotment =

P6,837,971.35.

The Chairman’s memo also mentioned other findings: manipulation of accounts by means of journal vouchers to conceal irregularities, non-recording of LAAs in the

140

logbook, changing to Unliquidated Obligations disbursements made on the basis of doubtful allotments, and making monthly adjustments to conceal the overcharges to the account and to cancel the checks issued in payment thereof, though the checks have actually been issued.

Aside from the President, the Treasurer of the Philippines was also furnished a copy of the report and was requested to update the reconciliation of Treasury Checking Account with Agencies (TCAA), which was highly centralized then, so that disbursements beyond the authorized ceilings could NOT be immediately detected.

On September 29, 1978, Highways Minister Baltazar Aquino issued an administrative order creating a joint MPH and Criminal Investigation Service (CIS) investigating Team to probe the irregularities cited in COA’s first report to the President. COA Chairman Tantuico commented on how “the hare wanted to join the hounds in the hunt.”

October 2 Operation

Manager Flores and Director Flores (not related) planned a very important operation: the retrieval of vouchers and other needed documents from all the engineering districts in region VII. These would be needed to determine signatories and serve as basis for prosecution of the guilty party. They knew that the operation must be carried out with speed and secrecy and with the element of surprise. Otherwise, these might be burned or destroyed.

On September 30 and October 1, 1978 (Saturday and Sunday), the two Floreses met with COA auditors assigned to local governments, organized them into teams and briefed them on their special mission. On October 2, Monday, at 10 AM, the teams simultaneously hit all the district offices and retrieved the documents. Thousands and thousands of vouchers and other records were taken into custody that transportation became a problem. The teams had to use their ingenuity to move these.

Storage was another major problem. Some of the documents were kept in the vault of the Provincial Treasurer, some at the COA Regional Office Staff house, where two guards were posted, and yet others were stored at the PNB Cebu vault (after Chairman Tantuico requested its use from PNB President Domingo).

Working on the documentary evidences was very tedious and laborious. Everything was meticulously checked, counter-checked, and documented in working papers for the evidences must stand up to the close scrutiny of the courts. Security was another problem as strange men was reported prowling in the area where the documents were kept. Death threats were delivered to the members of the team, affecting even their families.

141

NBI-Treasury-BII-COA cooperation

In the meantime, in the early part of October 1978, a special investigator of the Bureau of Treasury, Felicio Aurelia, stumbled on a 200-page computer listing of around 2,000 checks having the uniform amounts of P49,500.00. When told of this unusual discovery, the Bureau’s OIC, Atty. Meliton Reyes, ordered him to get the original copies of these checks. These were then all traced to the various HEDs of the MPH Office in Region VII. Reyes filed a report to then National Treasurer Gregorio Mendoza, who in turn, referred the matter to then Finance Minister Cesar Virata. Shortly after, Reyes and his team went to Cebu and were told to seek the assistance of the Bureau of Intelligence and Investigation (BII) Cebu Office. Atty. Marcelo Guinto of the BII (late 30s and describes himself as “very, very idealistic) was assigned to the case. Together, Reyes and Guinto pored over the checks and established that the signatures were genuine.

They met with PNB Cebu officials and were informed that during a meeting in June 1978, the head of the Treasury Bureau in Region VII informed them that as long as the signatures of the signing and countersigning officers of the TCAA checks were the same as the specimen signatures on file, the bank did not have to bother with the funding of the checks. Seemingly, the documents are all in order.

It was at this point that Reyes, by coincidence, met Mison and the two discussed the cases they are working on and agreed to work together. Mison was quoted to tell Reyes, “Why don’t we work together? You have the checks, COA has the vouchers and other vital documents…” By October 25, Mison met with NBI Acting Director Jose De Los Reyes and COA Chairman Francisco Tantuico, and the NBI-Treasury-BII and COA cooperation began to take shape.

On October 29, Mison met with Reyes and Guinto back in Cebu. They chose the Danao City Highways Engineering District as a pilot case because it has the shortest road span in its jurisdiction – only eleven kilometers of national road, making it easier to gather evidences that can stand in court.

On November 7, Mison met Jun Flores of COA to lend assistance to the investigation. At this stage, the joint team agreed to concentrate on completing the evidence for one engineering district – Danao – in order to file a pilot case. Mison pointed out that with this approach, subsequent cases will become proporma because by then, the procedure has been systematized based on the previous experience.

On November 8, Reyes went to Manila and submitted an Investigation Progress Report from the joint teams’ examination of records, interview of concerned officials and barrio folks, ocular inspections, and affidavits of stakeholders. It gave a general overview of the results throughout Region VII, i.e. total amount of CDCs illegally issued by Mangubat from January to August 2008 is P42,754,216.14 and the total amount disbursed is P16,311,063.03 for only five Engineering Districts in Cebu with the July and August figures not yet included. The Report then focused and gave details of the results of

142

investigation of Danao City HED where P6,273,943.69 were made in payment for NOTHING.

On November 10, COA’s Director Flores, together with Mangubat and Auditor Alexander Tan, were ordered arrested on the strength of an Arrest, Search, and Seizure Order (ASSO) issued by the President! The ASSO was based on a memo sent by MPH Minister Aquino dated October 26, recommending the three to be arrested and detained, “there being probable cause for malversation.”

The investigations had been done discreetly and the national dailies have not yet gotten to it. But the arrest order took the media’s attention and it was headline news. The news had 56 employees of COA Region VII, 40 of them newly recruited, resigning en masse over the ASSO for Flores and Tan.

On November 12, Chairman Tantuico hand carried to Malacanang a letter seeking reconsideration of the inclusion of Flores and Tan in the ASSO. He wrote that the “two were included for the purpose of stunting our investigation… It is ironic that the very man who is responsible for the discovery of this fraud would himself be included in the order.” Within hours, the arrest of Flores was rescinded. This also made the resigning employees change their minds. The President went further. He ordered the dismantling of the MPH-CIS Investigation Committee and directed it to turn over all previously gathered documents and evidences to the NBI.

Special Cabinet Committee and Special Task Force

Prior to this, on November 11, the President issued a directive creating a Special Cabinet Committee that will “conduct an immediate investigation and undertake a review and improvement of the systems and procedures governing the accounting and auditing of special funds.” This is composed of COA Chairman Tantuico, Chief State Prosecutor Juan Sison, National Treasurer Gregorio Mendoza and Deputy Minister of the Budget Juan Agcaoili.

This Committee has a Special Task Force to serve as its technical and investigating arm. The COA Team, headed by Sofronio Flores, was assigned the task of collating and analyzing the evidence, explaining the intricate accounting and auditing procedures, and turning over to the Justice Ministry all documents needed for prosecution. The NBI Team, headed by Director Mariano Mison, and assisted by the Finance Ministry Intelligence Bureau (led by Guinto), was to conduct and coordinate the investigation. The Bureau of Treasury, led by Reyes, was also tasked to assist in the investigation and to turn over to the Ministry of Justice Photostat copies of all paid TCAA checks based on fake CDCs. Four composite teams with 8-12 members from the four agencies were also formed to cover all 14 HEDs scattered in Region VII.

On November 14, Mison was ordered by the Committee to proceed to Cebu and interview people suspected to be involved in the anomaly. He was also directed to get from MPH Region VII Director Manuel de Veyra vital documents which the latter has

143

adamantly refused to turn over, despite various subpoena by COA and NBI. Faced to faced with Mison, de Veyra said he could not turn over the documents because these had already been taken by Avelino Nieto, a representative of Minister Aquino.

De Veyra only handed the documents when Chairman Tantuico went to Cebu (despite warnings by Mison that his life might be in danger if he did) and personally talked to him. It was a confrontational and heated meeting, with Tantuico exploding in rage when de Veyra still refused at first and strongly warning him to cooperate. The Chairman’s actuations, plus the President’s directive personally written and signed on the Chairman’s letter, was convincing.

The toll on those involved was heavy. Aside from the heavy workload, death threats were given the members, including their families. The COA staffhouse where the auditors worked was continuously threatened to be burned. Mison had been receiving death threats since October. Reyes received death threats in his hotel room every five minutes. He would also see his car tires slashed where it was parked. When the harassments got frequent enough, he and his staff moved out of the hotel and transferred to the office of the FMIB, and later on, at the Treasury office in Cebu. Atty. Guinto also received death threats not only for him but for his family. Eventually, his wife suffered a heart ailment because of these.

Other means were also employed to stop the people from effectively doing their job. Aside from the threats, bluffs, rumours, suspicions, offers of bribes, insinuations and black propaganda, were some of the means employed. One example is that Mison’s superiors in Manila received letters claiming Mison received P50,000.00 to stop pursuing some cases.

In all these difficulties, including lack of budgetary support for the team, they continued on with the work. The investigation work proceeded rapidly. The COA representatives prepared working papers from the documents retrieved during the October 2 operation, including lists of names likely to be involved in the anomaly as culled from the signatures in the vouchers, checks, inspection report, etc. Based on these lists and information, the NBI and FMIB representatives invited the suspects for questioning. The teamwork was exemplary. Says Mison, “The organizational set-up facilitated the work. We did not encounter any serious problem. The teams were highly motivated and inspired because they were aware that they enjoyed the full support of higher officials.”

The Courts and the First Cases of the Sandiganbayan and Tanodbayan

By late November, the Special Task Force filed formal charges against 20 persons, involving 126 cases in the Danao City Highways projects anomalies. The Justice Ministry, anticipating the workload, assigned 2 more state prosecutors to assist District State Prosecutor Benicio Arzadon who received the complaints.

144

But there is a problem. The Task Force was also raring to file charges against those involved in the other districts, which they did later, one after another. It was simply too much for the Cebu Court to handle.

In early December, President Marcos named three judges to a graft court called Sandiganbayan. These are Manuel Pamaran as presiding Judge, and Bernardo Fernandez and Romeo Escareal as associate justices. Soon after, former Supreme Court justice Salvador Esguerra was appointed to head the Tanodbayan, the prosecuting arm for erring government officials . Manuel Herrera was appointed as Director of Prosecution in the same office.

Also in December, the Special Cabinet Committee submitted its report to the President, which includes the extent of the fraud, how the irregularities were committed, who were the personalities involved, and the mechanics of the anomalous disbursements. The Committee recommended the arrest and detention of Rolando Mangubat (Chief Accountant), Adventor Fernandez , and Jose Bagasao (Asst. Regional Director of MPH-RO VII) ; the relief or dismissal without prejudice to criminal prosecution of Director de Veyra for gross negligence as head, to say the least; immediate relief or suspension of 11 highway district engineers and the immediate designation of OICs not from Region VII; and the immediate purge without prejudice to criminal prosecution of all employees who participated in the massive fraud.

Early in 1979, the cases were filed in the Sandiganbayan, and the trials began. Since at that time, there were only 3 Tanodbayan prosecutors, Mison, Modina, and Reyes were deputized as Tanodbayan prosecutors.

The Danao City Cases

There were 17 defendants in the Danao City HED cases which included Asst. Regional Director Bagasao, Finance Officer Escano, Chief Accountant Mangubat, assistant chief accountant Preagido, and several district engineers and administrative officers of the HED, COA auditor, and private contractors and suppliers. At the outset, Bagasao et al put up a stiff fight, vehemently denying all charges. The accused maintained that all transactions were regular, that the projects were actually undertaken, and that they did not fake any document for the purpose of defrauding the government.

The prosecutors did their job well so that when the Sandiganbayan handed down its decision on November 29, 1979, Bagasao, Escano, Mangubat, Preagido, Danao City Asst. District Engineer Sucalit, and COA auditor Toledo were found guilty of all 126 cases of estafa. Some of the defendants were only convicted in some of the cases, three were acquitted for insufficiency of evidence, and two were discharged for turning state witnesses. In all, the 12 convicted drew a collective sentence of 10,565 years of imprisonment. A total of around P441,000 was slapped in fines, in addition to the P6.2M in indemnity the convicted were ordered to pay the government.

145

The Tagbilaran City and the Lapu-lapu City Cases

The 6 counts of estafa in the Tagbilaran City HED were almost identical to the Danao City cases, except for some minor details. The main cast was almost identical with Bagasao, Mangubat, and Preagido heading the list, with different supporting characters from the district. The same is true for the 10 estafa cases allegedly committed in the Lapu-Lapu City HED.

Barely two months after the decision on the Danao City cases, on January 4, 1980, the Sandiganbayan handed down its verdict, finding all of the accused, except two, guilty. 9 were sentenced to prison terms of 64 years each while the others serving from 21-32 years. The fines imposed totaled P21,000 and indemnities amounted to P240,958.

Less than a year later, on December 19, 1980, the Sandiganbayan came out with its decision on the Lapu-lapu City cases, finding 14 of the 15 accused guilty and sentencing them to prison terms ranging from 8-80 years, with fines totaling P35,000.00 and ordering them to pay indemnities amounting to P1,53,081.

The speed seemed to have petered out for the rest of the cases, however, notwithstanding that all essentially followed the modus operandi of the decided cases. The snail’s pace has been attributed to budgetary problems and legal maneuvers and delays.

It was on May 30, 1989 when the Sandiganbayan handed its decision on the Siquijor Highways Case, sentencing 14 officials and employees of the Public Works Department and a private contractor to, at least 200 years in prison.

In July 1989, the Sandiganbayan decided the Bais City HED case.

Thus, the tally for disposed cases on these anomalies as of September 1989 is as follows:Total Number of Disposed of Cases = 224Total Number of Cases Filed = 1400Total Number of Pending Cases (including revived cases) = 1184.

All in all, the cases filed with the Tanodbayan involving 11 HEDs in Region VII amounted to P65.7M which covers transactions in 1977 and 1978.

Appeals to the Supreme Court

Decisions of the Sandiganbayan, which is of the same rank as the Court of Appeals, can be appealed only to the Supreme Court, and appealed Mangubat and Escano did, separately.

On January 30, 1987, the Supreme Court handed down its final decision fully adopting the findings of the Sandiganbayan on Mangubat in the Danao City cases. The trial court

146

said, “Mangubat started the whole scheme.” The Supreme Court opined that “Mangubat’s role was indispensable.”

On April 15, 1988, the Supreme Court reversed and set aside the decision of the Sandiganbayan regarding Escano. She was acquitted of the 126 cases of estafa in the Danao City cases, because, said the court, “it was based purely on circumstantial evidence.” Escano may be faulted for negligence of her duties but it is different from connivance. The Court pointed out that these are 2 different things and that connivance cannot arise from negligence. This acquittal laid the thin but clear line between complicity or non-involvement of a finance officer even when his subordinates are in cahoots with others to rob the government. It may have taken 9 years for Ms. Escano to be vindicated but it is not too late because many cases involving the other districts are still pending and the decision here could impact on her inclusion or non-inclusion in the other cases.

A Plea of “Guilty”

On September 21, 1989, having been imprisoned for more than 10 years and shuttling back and forth from prison to court during the hearing of his many other cases, Mangubat, together with convicted private contractors Gabison and Echavez, pleaded guilty to criminal cases 1143 to 1341. It was the first of several pleas of guilty. By November 1989, he has pleaded guilty to a total of 392 cases in the 1978 public highways funds anomaly. One reason he cited for his change of plea is “convenience.”

Mangubat was meted a total sentence of 3,946 years and a fine of P44.96M. He has now a much different lifestyle from the flamboyant life he led in 1978. At that time, he was only in his mid-thirties, smooth-talking, inoffensive-looking, and a well-known “padrino” in Cebu. People talk of his contributions to this or that charity or fiesta celebrations, and they invite him to crown beauty queens or address graduation programs. He allegedly owned a big mansion and many cars. Some said he is a huge tipper to porters, and when he is in Manila, he reserves the entire Eduardo’s Restaurant in Roxas Blvd. for his cronies and drinking buddies. Said one prosecutor, “He was a towering authority, the architect of these anomalies – the biggest swindle in the government in 1978.”

The rest of those convicted are also serving time in jail.

Other Ramifications of the Cases

The loopholes in the Treasury and Budgetary System was highlighted and investigated. This prompted National Treasurer Gregorio Mendoza to put in place measures designed to prevent frauds. Changes in the procedure in the encashment of checks by various agencies were introduced. Strict coordination among the Budget Ministry, Treasury, and various ministries concerned was required in the issuance of CDCs to avoid fake CDCs resulting in the padding of vouchers or illegal disbursements.

147

The scandalous results of the investigations precipitated the downfall of a minister – MPH Minister Baltazar Aquino. The investigators found no strong evidence to link him to the cases but it was well known in the Cabinet that instead of cooperating with the Special Cabinet Committee, Minister Aquino was out there pitching in for the beleaguered engineers and seemingly coddling and even promoting the guilty ones. He resigned and his resignation was accepted.

The fact that there are many government officials who are true to their oath of office was also highlighted in these cases. Despite the many difficulties, death threats, lack of budget, and even lack of support from various quarters, the members of the Special Task Force kept on. They lived dangerously and yet finished their assigned tasks with valor. The foot soldiers were the young professionals in the civil service who, even when misunderstood and maligned, still kept the courage to pursue their mission in office. The commanding officers were the older, more experienced hands in government who have kept away from the maddening malaise of an opportunistic bureaucracy and could distinguish between public duty and private interest. They have proved to the nation that there are still many public officials imbued with a true sense of public service, that they understand and live the precept “public office is a public trust.”

148

Appendix 2

[REPUBLIC ACT NO. 3019]

ANTI-GRAFT AND CORRUPT PRACTICES ACT

Be it enacted by the Senate and House of Representatives of the Philippines inCongress assembled:

Section 1. Statement of policy. — It is the policy of the Philippine Government,in line with the principle that a public office is a public trust, to repress certain acts ofpublic officers and private persons alike which constitute graft or corrupt practices orwhich may lead thereto.

Section 2. Definition of terms. — As used in this Act, the term —(a) "Government" includes the national government, the local governments, the

government-owned and government-controlled corporations, and all otherinstrumentalities or agencies of the Republic of the Philippines and their branches.

(b) "Public officer" includes elective and appointive officials and employees,permanent or temporary, whether in the classified or unclassified or exempt servicereceiving compensation, even nominal, from the government as defined in the precedingsubparagraph.

(c) "Receiving any gift" includes the act of accepting directly or indirectly a giftfrom a person other than a member of the public officer's immediate family, in behalf ofhimself or of any member of his family or relative within the fourth civil degree, eitherby consanguinity or affinity, even on the occasion of a family celebration or nationalfestivity like Christmas, if the value of the gift is under the circumstances manifestlyexcessive.

(d) "Person" includes natural and juridical persons unless the context indicatesotherwise.

Section 3. Corrupt practices of public officers. — In addition to acts oromissions of public officers already penalized by existing law, the following shallconstitute corrupt practices of any public officer and are hereby declared to be unlawful:

(a) Persuading, inducing or influencing another public officer to perform an actconstituting a violation of rules and regulations duly promulgated by competentauthority or an offense in connection with the official duties of the latter, or allowinghimself to be persuaded, induced, or influenced to commit such violation or offense.

(b) Directly or indirectly requesting or receiving any gift, present, share,percentage, or benefit, for himself or for any other person, in connection with anycontract or transaction between the Government and any other party, wherein the publicofficer in his official capacity has to intervene under the law.

(c) Directly or indirectly requesting or receiving any gift, present or otherpecuniary or material benefit, for himself or for another, from any person for whom thepublic officer, in any manner or capacity, has secured or obtained, or will secure orobtain, any Government permit or license, in consideration for the help given or to begiven, without prejudice to Section thirteen of this Act.

(d) Accepting or having any member of his family accept employment in aprivate enterprise which has pending official business with him during the pendencythereof or within one year after its termination.

(e) Causing any undue injury to any party, including the Government, or givingany private party any unwarranted benefits, advantage or preference in the discharge of

149

his official administrative or judicial functions through manifest partiality, evident badfaith or gross inexcusable negligence. This provision shall apply to officers andemployees of offices or government corporations charged with the grant of licenses orpermits or other concessions.

(f) Neglecting or refusing, after due demand or request, without sufficientjustification, to act within a reasonable time on any matter pending before him for thepurpose of obtaining, directly or indirectly, from any person interested in the mattersome pecuniary or material benefit or advantage, or for the purpose of favoring his owninterest or giving undue advantage in favor of or discriminating against any otherinterested party.

(g) Entering, on behalf of the Government, into any contract or transactionmanifestly and grossly disadvantageous to the same, whether or not the public officerprofited or will profit thereby.

(h) Directly or indirectly having financial or pecuniary interest in any business,contract or transaction in connection with which he intervenes or takes part in his officialcapacity, or in which he is prohibited by the Constitution or by any law from having anyinterest.

(i) Directly or indirectly becoming interested, for personal gain, or having amaterial interest in any transaction or act requiring the approval of a board, panel orgroup of which he is a member, and which exercises discretion in such approval, even ifhe votes against the same or does not participate in the action of the board, committee,panel or group.Interest for personal gain shall be presumed against those public officersresponsible for the approval of manifestly unlawful, inequitable, or irregular transactionor acts by the board, panel or group to which they belong.

(j) Knowingly approving or granting any license, permit, privilege or benefit infavor of any person not qualified for or not legally entitled to such license, permit,privilege or advantage, or of a mere representative or dummy of one who is not soqualified or entitled.

(k) Divulging valuable information of a confidential character, acquired by hisoffice or by him on account of his official position to unauthorized persons, or releasingsuch information in advance of its authorized release date.

The person giving the gift, present, share, percentage or benefit referred to insubparagraphs (b) and (c); or offering or giving to the public officer the employmentmentioned in subparagraph (d); or urging the divulging or untimely release of theconfidential information referred to in subparagraph (k) of this section shall, togetherwith the offending public officer, be punished under Section nine of this Act and shall bepermanently or temporarily disqualified in the discretion of the Court, from transactingbusiness in any form with the Government.

Section 4. Prohibition on private individuals. — (a) It shall be unlawful for anyperson having family or close personal relation with any public official to capitalize orexploit or take advantage of such family or close personal relation by directly orindirectly requesting or receiving any present, gift or material or pecuniary advantagefrom any other person having some business, transaction, application, request orcontract with the government, in which such public official has to intervene. Familyrelation shall include the spouse or relatives by consanguinity or affinity in the third civildegree. The word "close personal relation" shall include close personal friendship, socialand fraternal connections, and professional employment all giving rise to intimacywhich assures free access to such public officer.

(b) It shall be unlawful for any person knowingly to induce or cause any publicofficial to commit any of the offenses defined in Section 3 hereof.

150

Section 5. Prohibition on certain relatives. — It shall be unlawful for thespouse or for any relative, by consanguinity or affinity, within the third civil degree, ofthe President of the Philippines, the Vice-President of the Philippines, the President ofthe Senate, or the Speaker of the House of Representatives, to intervene, directly orindirectly, in any business, transaction, contract or application with the Government:Provided, That this section shall not apply to any person who, prior to the assumption of office of any of the above officials to whom he is related, has been already dealing withthe Government along the same line of business, nor to any transaction, contract orapplication already existing or pending at the time of such assumption of public office,nor to any application filed by him the approval of which is not discretionary on the partof the official or officials concerned but depends upon compliance with requisitesprovided by law, or rules or regulations issued pursuant to law, nor to any act lawfullyperformed in an official capacity or in the exercise of a profession.

Section 6. Prohibition on Members of Congress. — It shall be unlawfulhereafter for any Member of the Congress during the term for which he has been elected,to acquire or receive any personal pecuniary interest in any specific business enterprisewhich will be directly and particularly favored or benefited by any law or resolutionauthored by him previously approved or adopted by the Congress during the sameterm.

The provision of this section shall apply to any other public officer whorecommended the initiation in Congress of the enactment or adoption of any law orresolution, and acquires or receives any such interest during his incumbency.

It shall likewise be unlawful for such member of Congress or other public officer,who, having such interest prior to the approval of such law or resolution authored orrecommended by him, continues for thirty days after such approval to retain suchinterest.

Section 7. Statement of assets and liabilities. — Every public officer, withinthirty days after assuming office, thereafter, on or before the fifteenth day of Aprilfollowing the close of every calendar year, as well as upon the expiration of his term ofoffice, or upon his resignation or separation from office, shall prepare and file with theoffice of the corresponding Department Head, or in the case of a Head of department orChief of an independent office, with the Office of the President, a true, detailed swornstatement of assets and liabilities, including a statement of the amounts and sources ofhis income, the amounts of his personal and family expenses and the amount of incometaxes paid for the next preceding calendar year: Provided, That public officers assumingoffice less than two months before the end of the calendar year, may file their firststatement on or before the fifteenth day of April following the close of the said calendaryear. (As amended by RA3047, PD 677, January 24, 1978).

Section 8. Prima facie evidence of and dismissal due to unexplained wealth.— If in accordance with the provisions of Republic Act Numbered One thousand threehundred seventy-nine, a public official has been found to have acquired during hisincumbency, whether in his name or in the name of other persons, an amount ofproperty and/or money manifestly out of proportion to his salary and to his other lawfulincome, that fact shall be a ground for dismissal or removal. Properties in the name ofthe spouse and dependents of such public official may be taken into consideration, whentheir acquisition through legitimate means cannot be satisfactorily shown. Bank depositsin the name of or manifestly excessive expenditures incurred by the public official, his

151

spouse or any of their dependents including but not limited to activities in any club orassociation or any ostentatious display of wealth including frequent travel abroad of anon-official character by any public official when such activities entail expensesevidently out of proportion to legitimate income, shall likewise be taken intoconsideration in the enforcement of this section, notwithstanding any provision of law tothe contrary. The circumstances hereinabove mentioned shall constitute valid ground forthe administrative suspension of the public official concerned for an indefinite perioduntil the investigation wealth is completed. (As amended by BP Blg., 195, March 16,1982).

Section 9. Penalties for violations. — (a) Any public officer or private personcommitting any of the unlawful acts or omissions enumerated in Sections 3, 4, 5 and 6 ofthis Act shall be punished with imprisonment for not less than six years and one monthnor more than fifteen years, perpetual disqualification from public office, andconfiscation or forfeiture in favor of the Government of any prohibited interest andunexplained wealth manifestly out of proportion to his salary and other lawful income.

Any complaining party at whose complaint the criminal prosecution wasinitiated shall, in case of conviction of the accused, be entitled to recover in the criminalaction with priority over the forfeiture in favor of the Government, the amount of moneyor the thing he may have given to the accused, or the fair value of such thing.

(b) Any public officer violating any of the provisions of Section 7 of this Act shallbe punished by a fine of not less than one thousand pesos nor more than five thousandpesos, or by imprisonment not exceeding one year and six months, or by both such fineand imprisonment, at the discretion of the Court.

The violation of said section proven in a proper administrative proceeding shallbe sufficient cause for removal or dismissal of a public officer, even if no criminalprosecution is instituted against him. (Amended by BP Blg. 195, March 16, 1982).

Section 10. Competent court. — Until otherwise provided by law, allprosecutions under this Act shall be within the original jurisdiction of theSandiganbayan. (As amended by BP Blg. 195, March 16, 1982)

Section 11. Prescription of offenses. — All offenses punishable under this Actshall prescribe in fifteen years.

Section 12. Termination of office. — No public officer shall be allowed to resignor retire pending an investigation, criminal or administrative, or pending a prosecutionagainst him, for any offense under this Act or under the provisions of the Revised PenalCode on bribery.

Section 13. Suspension and loss of benefits. — Any incumbent public officeragainst whom any criminal prosecution under a valid information under this Act orunder Title Seven Book II of the Revised Penal Code or for any offense involving fraudupon government or public funds or property whether as a simple or as complex offenseand in whatever stage of execution and mode of participation, is pending in court shallbe suspended from office. Should he be convinced by final judgement, he shall lose allretirement or gratuity benefits under any law, but if he is acquitted, he shall be entitledto reinstatement and to the salaries and benefits which he failed to receive duringsuspension, unless in the meantime administrative proceedings have been filed againsthim.

152

In the event that such convicted officer, who may have been separated from theservice has already received such benefits he shall be liable to restitute the same to thegovernment. (As amended by BP Blg. 195, March 16, 1982).

Section 14. Exception. — Unsolicited gifts or presents of small or insignificantvalue offered or given as a mere ordinary token of gratitude or friendship according tolocal customs or usage, shall be excepted from the provisions of this Act.

Nothing in this Act shall be interpreted to prejudice or prohibit the practice ofany profession, lawful trade or occupation by any private person or by any public officerwho under the law may legitimately practice his profession, trade or occupation, duringhis incumbency, except where the practice of such profession, trade or occupationinvolves conspiracy with any other person or public official to commit any of theviolations penalized in this Act.

Section 15. Separability clause. — If any provision of this Act or the applicationof such provision to any person or circumstances is declared invalid, the remainder ofthe Act or the application of such provision to other persons or circumstances shall notbe affected by such declaration.

Section 16. Effectivity. — This Act shall take effect on its approval, but for thepurpose of determining unexplained wealth, all property acquired by a public officersince he assumed office shall be taken into consideration.

Approved, August 17, 1960.

153

Appendix 3

A Social Contract with the Filipino

People

BENIGNO S. AQUINO IIIPLATFORM of GOVERNMENT

A National Leadership in Need of Transformational Change

Its legitimacy is under question;

It persecutes those who expose the truth about its illegitimacy and corruption;

It stays in power by corrupting individuals and institutions;

It confuses the people with half-truths and outright lies;

It rewards, rather than punishes, wrongdoing;

It offers no lasting solutions for the many problems of the country;

It weakens the democratic institutions that hold our leaders accountable.

It hinders our local governments from delivering basic services;

It has no vision of governance beyond political survival and self-enrichment.

A People Crying out for Change

Corruption robs our children of their protection, nutrition and education.

Corruption destroys our families and communities.

Corruption steals from our farmers and workers.

Corruption deters businessmen from investing in our economy.

154

This has eroded our spirit as individuals, as communities, as a people.

We have lost trust in the democratic institutions we so courageously re-established after the dictatorship.

Our proven capacity for collective outrage and righteous resistance has been weakened.We have ceased to depend on the patriotism and civic engagement that used to animate many of our efforts.

We have become divided and alienated, focusing only on ourselves and on our individual pursuits.

Our moral faculties as a people have been paralyzed.

We have retreated into a dark world of self-absorption and cynicism. Our collective despair has reached its lowest point.

Then finally, the gift of Light

Cory Aquino passed on to the next life. From our sadness, we awakened to a shaft of light cutting through the darkness. She left the Filipinos a legacy of selfless love for country and people. Filipinos’ connection with each other was rekindled. In death, she enabled us to hope again for decent government. The millions who connected with Cory at her funeral represented something more than euphoria, sentiment or transient emotions. They represented the reverent memory of a good leader in the past and the firm hope of having a similarly good leader in the future.

A People’s Campaign of Renewed Hope…

Anchored on Ninoy’s and Cory’s legacy of change through the ways of democracyEmbraces the qualities of integrity, humility and trust-worthiness in public leadershipRecognizes the absence of these qualities in government as a major cause of widespread poverty, misery and despair.

The Vision for the Philippines:

A country with…

1. A re-awakened sense of right and wrong, through the living examples of our highest leaders;

155

2. An organized and widely-shared rapid expansion of our economy through a government dedicated to honing and mobilizing our people’s skills and energies as well as the responsible harnessing of our natural resources;

3. A collective belief that doing the right thing does not only make sense morally, but translates into economic value as well;

4. Public institutions rebuilt on the strong solidarity of our society and its communities.

Our Mission:

We will start to make these changes first in ourselves—by doing the right things, by giving value to excellence and integrity and rejecting mediocrity and dishonesty, and by giving priority to others over ourselves.

We will make these changes across many aspects of our national life.

A Commitment to Transformational Leadership:

1. From a President who tolerates corruption to a President who is the nation’s first and most determined fighter of corruption.

2. From a government that merely conjures economic growth statistics that our people know to be unreal to a government that prioritizes jobs that empower the people and provide them with opportunities to rise above poverty.

3. From relegating education to just one of many concerns to making education the central strategy for investing in our people, reducing poverty and building national competitiveness.

4. From treating health as just another area for political patronage to recognizing the advancement and protection of public health, which includes responsible parenthood, as key measures of good governance.

5. From justice that money and connections can buy to a truly impartial system of institutions that deliver equal justice to rich or poor.

Economy

6. From government policies influenced by well-connected private interests to a leadership that executes all the laws of the land with impartiality and decisiveness.

156

7. From treating the rural economy as just a source of problems to recognizing farms and rural enterprises as vital to achieving food security and more equitable economic growth, worthy of re-investment for sustained productivity.

8. From government antipoverty programs that instill a dole-out mentality to well-considered programs that build capacity and create opportunity among the poor and the marginalized in the country.

9. From a government that dampens private initiative and enterprise to a government that creates conditions conducive to the growth and competitiveness of private businesses, big, medium and small.

10. From a government that treats its people as an export commodity and a means to earn foreign exchange, disregarding the social cost to Filipino families to a government that creates jobs at home, so that working abroad will be a choice rather than a necessity; and when its citizens do choose to become OFWs, their welfare and protection will still be the government’s priority.

Government Service

11. From Presidential appointees chosen mainly out of political accommodation to discerning selection based on integrity, competence and performance in serving the public good.

12. From demoralized but dedicated civil servants, military and police personnel destined for failure and frustration due to inadequate operational support to professional, motivated and energized bureaucracies with adequate means to perform their public service missions.

Gender Equality

13. From a lack of concern for gender disparities and shortfalls, to the promotion of equal gender opportunity in all spheres of public policies and programs.

Peace & Order

14. From a disjointed, short-sighted Mindanao policy that merely reacts to events and incidents to one that seeks a broadlysupported just peace and will redress decades of neglect of the Moro and other peoples of Mindanao.

Environment

15. From allowing environmental blight to spoil our cities, where both the rich and the poor bear with congestion and urban decay to planning alternative,

157

inclusive urban developments where people of varying income levels are integrated in productive, healthy and safe communities.

16. From a government obsessed with exploiting the country for immediate gains to the detriment of its environment to a government that will encourage sustainable use of resources to benefit the present and future generations.

This platform is a commitment to change that Filipinos can depend on.With trust in their leaders, everyone can work and build a greater future together.

158

BIBLIOGRAPHY - Chapters 1, 2, 5, 6, & 7

BOOKS AND JOURNALS

Alejo, Albert, SJ. EHEMPLO. Spirituality of Shared Integrity in Philippine Church and Society. Quezon City: Institute of Spirituality in Asia, 2010

Amorado, Ronnie V. KAKISTOCRACY: Rule of the Unprincipled, unethical and unqualified. Davao City, Philippines: Research and Publication Office, Ateneo de Davao University, 2011

Aquino, Belinda A. Politics of Plunder, The Philippines Under Marcos. Quezon City: College of Public Administration, University of the Philippines, 1987

Abueva, Jose V. and Roman, Emerlinda R. (eds.). Corazon C. Aquino: Early Assessments of Her Presidential Leadership and Administration and Her Place in History. Quezon City: University of the Philippines Press, 1993.

___________________________. The Aquino Presidency and Administration (1986-1992): Contemporary Assessments and “The Judgment of History?” Quezon City: University of the Philippines Press, 1993

____________________________. The Aquino Administration Record and Legacy (1986-1992): President Corazon C. Aquino and Her Cabinet. Quezon City: University of the Philippines Press, 1993

____________________________. The Post-EDSA Vice Presidency, the Senate and House of Representatives, the Judiciary, and the Ombudsman (1986-1992): Self-Assessments and External Views and Assessments. Quezon City: University of the Philippines Press, 1993

____________________________. The Post-EDSA Civil Service Commission, Commission on Elections, Commission on Audit, Commission on Human Rights, and the Presidential Commission on Good Government (1986-1992): Self-Assessments and External Views and Assessments. Quezon City: University of the Philippine Press, 1993

Bacani, Cesar Jr. and Cailao, Bernardino. Raiders of the Philippine Treasury: The Inside Story of the 1978 Cebu Highways Anomaly. Mandaluyong, Philippines: Fiscal Administration Foundation, Inc., 1990.

Briones, Leonor M. “Negative Bureaucratic Behaviour and Development: The Case of the Bureau of Internal Revenue”, Philippine Journal of Public Administration, Vol. XXIII, Nos. 3 & 4, National College of Public Administration and Governance, University of the Philippines, July-October 1979

159

Cariño, Ledivina V. and De Guzman, Raul P. “Negative Bureaucratic Behavior in the Philippines: The Final Report of the IDRC Philippine Team”, Philippine Journal of Public Administration, Vol. XXIII, Nos. 3 & 4, National College of Public Administration and Governance, University of the Philippines, July-October 1979

Commission on Audit. Readings in Philippine State Audit. Quezon City: Asian Graphics Printing, 1999.

Commision on Audit. Utilization of the Forfeited Swiss Deposits for the Implementation of the Comprehensive Agrarian Reform Program (CARP). Management Services Report No. 2006-01, Sectoral Performance Audit. 2006

Coronel, Sheila S. ed. Betrayal of the Public Trust. Quezon City: Philippine Center for Investigative Journalism, 2000.

_________________. Pork and Other Perks. Quezon City: Philippine Center for Investigative Journalism, 1998.

Corpuz, Onofre D. The Bureaucracy in the Philippines. Quezon: Institute of Public Administration, University of the Philippines, 1957.

Endriga, Jose N. “Historical Notes on Graft and Corruption”, Philippine Journal of Public Administration, Vol. XXIII, Nos. 3 & 4, National College of Public Administration and Governance, University of the Philippines, July-October 1979.

Gill, Indermit, Huang, Yukon, and Kharasm Homi, ed. East Asian Visions: Perspectives on Economic Development. The World Bank and the Institute of Policy Studies: 2007.

Guttierez, Noel. The Ties that Bind: A Guide to Family, Business and Other Interests in the Ninth House of Representatives. Quezon City: Philippine Center for Investigative Journalism and the Institute for Popular Democracy, 1994.

Klitgard, Robert. Controlling Corruption. California, USA: University of California Press, 1988.

Kaufmann, Daniel, Pradham, Sanjay & Ryterman, Randi. “New Frontiers in Diagnosing and Combating Corruption,” Public Fund Digest, Vol. X, No. 1, pp. 35-41. Washington, DC: International Consortium on Governmental Financial Management, 1999

Landingin, Roel, ed. The Seven Deadly Deals. Quezon City: Public Trust Media Group, Inc., 2011

160

Manlapat, Ricardo. Some are Smarter Than Others. New York: Aletheia Publications, 1991.

Mendoza, Heidi L. A Guide to Investigation of Common Procurement Fraud and Irregularities.

Office of the Ombudsman. A Compilation of Laws on Graft and Corruption. Revised Edition. Manila, Philippines: 2004.

Khumawala, Saleha B. & Buchheit, Steve. “Costs and Benefits of International Governmental Accounting Standars: The Case of Lesser Developed Countries”, Public Fund Digest, Vol. X, No. 1, pp. 19-33. Washington, DC: International Consortium on Governmental Financial Management, 1999

Schiavo-Campo, Salvatore, ed. Governance, Corruption and Public Financial Management. Manila, Philippines: Asian Development Bank, 1999.

Tantuico, Francisco S. Performance and Accountability: Central Pillars of Democracy. Mandaluyong, Philippines: Fiscal Administration Foundation, Inc., 1994.

United Nations Development Programme. Tackling Corruption, Transforming Lives. Accelerating Human Development in Asia and the Pacific. Asia Pacific Human Development Report. New Delhi, India: Macmillan India Ltd., 2008.

Villaroman, Noel. Laws and Jurisprudence on Graft and Corruption, 3rd edition. Manila: Central Books, 2010.

Woltring, Herman & Zvekic, Ugljesa. “Increased International Action Against Corruption”, Public Fund Digest, Vol. X, No. 1, pp. 43-46. Washington, DC: International Consortium on Governmental Financial Management, 1999

DOCUMENTS

Country Assistance Strategy (CAS) Progress Report for the Republic of the Philippines. April 20, 2011. A document of the World Bank Group – International Bank for Reconstruction and Development, International Finance Corporation, and Multilateral Guarantee Agency.

Philippines Country Procurement Assessment Report. A joint document of the Government of the Philippines, World Bank and Asian Development Bank. 2008.

Utang na Loob (Deeply Indebted): The “MCC Effect” and Culture of Power in the Philippines. A joint research study of four undergraduate and graduate students

161

from the Poverty and Power Research Initiative, The Institute for Global Leadership, Tufts University, 2009

Stolen Asset Recovery (StAR) Initiative : Challenges, Opportunities, and Action Plan. A joint report by the United Nations and the World Bank, 2007

PAPERS

Bacalla, Tess. BIR Officials Amass Unexplained Wealth. A report by the Philippine Center for Investigative Journalism, 2003.

Briones, Leonor. The Unfinished Quest? : The Philippine Experience in Asset Recovery. Paper prepared for the World Bank, 2007.

Cariño, Ledivina V. et al. Initiatives Taken Against Corruption: The Philippine Case. Paper prepared for the Programme for Accountability and Transparency (PACT) of the Management Development and Governance Division, United Nations Development Programme, October 1998.

Johnston, Michael. Political and Social Foundations for Reform: Anti-Corruption Strategies for the Philippines. Manila: Asian Institute of Management, September 2010.

Martinez, Rommel L. Strategies of Corruption Prevention in the Philippines: Mobilising Civil Society. Working Paper. Asia Pacific School of Economics and Management, Australian National University. Asia Pacific Press, 1999.

Transparency and Accountability Network. Corruption and Anti-Corruption in the Philippines. Paper prepared for GTZ Philippines, March 2011.

PHILIPPINE LAWS ON GRAFT AND CORRUPTION

Batas Pambansa

Batas Pambansa Bilang 195. AN ACT AMENDING SECTIONS EIGHT, NINE, TEN, ELEVEN, AND THIRTEEN OF REPUBLIC ACT NUMBERED THIRTY HUNDRED AND NINETEEN, OTHERWISE KNOWN AS THE ANTI-GRAFT AND CORRUPT PRACTICES ACT. March 16, 1982

Batas Pambansa Bilang 242. AN ACT PRESCRIBING THE PERIOD WITHIN WHICH A DENOUNCED PUBLIC OFFICER MAY BRING ACTION AGAINST AN INFORMANT OR WITNESS WHO GAVE FALSE OR MALICIOUS TESTIMONY AMENDING FOR THE PURPOSE SECTION

162

TWO OF PRESIDENTIAL DECREE NUMBERED SEVEN HUNDRED FORTY-NINE, "GRANTING IMMUNITY FROM PROSECUTION TO GIVERS OF BRIBES AND OTHER GIFTS AND TO THEIR ACCOMPLICES IN BRIBERY AND OTHER GRAFT CASES AGAINST PUBLIC OFFICERS." November 11, 1982

Executive Order

Executive Order No. 40.  CONSOLIDATING PROCUREMENT RULES AND PROCEDURES FOR ALL NATIONAL GOVERNMENT AGENCIES, GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS AND GOVERNMENT FINANCIAL INSTITUTIONS, AND REQUIRING THE USE OF THE GOVERNMENT ELECTRONIC PROCUREMENT SYSTEM. October 8, 2001

 Executive Order No. 317. PRESCRIBING A CODE OF CONDUCT FOR

RELATIVES AND CLOSE PERSONAL RELATIONS OF THE PRESIDENT, VICE PRESIDENT AND MEMBERS OF THE CABINET. November 9, 2000.

Executive Order No. 12. CREATING THE PRESIDENTIAL ANTI-GRAFT COMMISSION AND PROVIDING FOR ITS POWERS, DUTIES AND FUNCTIONS AND FOR OTHER PURPOSES. April 16, 2001. NOTE:  Executive Order No. 12 repealed Executive Order No. 268 (below)

Executive Order No. 268. CREATING THE NATIONAL ANTI-CORRUPTION COMMISSION AND ABOLISHING THE PRESIDENTIAL COMMISSION AGAINST GRAFT AND CORRUPTION CREATED UNDER EXECUTIVE ORDER 151, S. 1994, AS AMENDED. July 18, 2000.

Executive Order No. 327 . AMENDING EXECUTIVE ORDER NO. 12 DATED 16 APRIL 2001 ENTITLED "CREATING THE PRESIDENTIAL ANTI-GRAFT COMMISSION AND PROVIDING FOR ITS POWERS, DUTIES, AND FUNCTIONS AND FOR OTHER PURPOSES". July 9, 2004.

Executive Order No. 531-A AMENDING EXECUTIVE ORDER NO. 531, SERIES OF 2006, TO FURTHER STRENGTHEN THE PRESIDENTIAL ANTI-GRAFT COMMISSION. August, 23, 2006.

163

Presidential Decree

Presidential Decree No. 677. AMENDING SECTION 7 OF REPUBLIC ACT NO. 3019, AS AMENDED, OTHERWISE KNOWN AS THE ANTI-GRAFT AND CORRUPT PRACTICES ACT. March,31, 1975.   

Presidential Decree No. 749. GRANTING IMMUNITY FROM PROSECUTION TO GIVERS OF BRIBES AND OTHER GIFTS AND TO THEIR ACCOMPLICES IN BRIBERY AND OTHER GRAFT CASES AGAINST PUBLIC OFFICERS. July18, 1975.   

Presidential Decree No. 6. AMENDING CERTAIN RULES ON DISCIPLINE OF GOVERNMENT OFFICIALS AND EMPLOYEES. September 27, 1972.

Presidential Decree No. 46. MAKING IT PUNISHABLE FOR PUBLIC OFFICIALS

AND EMPLOYEES TO RECEIVE, AND FOR PRIVATE PERSONS TO GIVE GIFTS ON ANY OCCASION, INCLUDING CHRISTMAS. November 10, 1972.

Presidential Decree No. 807. CIVIL SERVICE DECREE OF THE PHILIPPINES. October 6, 1975.

Presidential Decree 1594. PRESCRIBING POLICIES, GUIDELINES, RULES AND REGULATIONS FOR GOVERNMENT INFRASTRUCTURE CONTRACT. June 11, 1978.

Proclamation

Proclamation No. 189. PRESIDENT JOSEPH E. ESTRADA'S DECLARATION OF WAR AGAINST GRAFT AND CORRUPTION. October 1, 1999.  

Republic Act

REPUBLIC ACT NO. 9485. AN ACT TO IMPROVE EFFICIENCY IN THE DELIVERY OF GOVERNMENT SERVICE TO THE PUBLIC BY REDUCING BUREAUCRATIC RED TAPE, PREVENTING GRAFT AND CORRUPTION, AND PROVIDING PENALTIES THEREFOR. June 02, 2007

164

Republic Act No. 9160.  AN ACT DEFINING THE CRIME OF MONEY LAUNDERING, PROVIDING PENALTIES THEREFOR AND FOR OTHER PURPOSES. September 29, 2001

Republic Act No. 9194. AN ACT AMENDING REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE ANTI-MONEY LAUNDERING ACT OF 2001. March 7, 2003.

Republic Act No. 6770. THE OMBUDSMAN ACT OF 1989

Republic Act No. 8249. AN ACT FURTHER DEFINING THE JURISDICTION OF THE SANDIGANBAYAN,     AMENDING FOR THE PURPOSE P. D. NO. 1606, AS AMENDED, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES. February 5, 1997

Republic Act No. 7975. AN ACT TO STRENGTHEN THE FUNCTIONAL AND

STRUCTURAL ORGANIZATION OF THE SANDIGANBAYAN, AMENDING FOR THAT PURPOSE PRESIDENTIAL DECREE NO. 1606, AS AMENDED. March 30, 1995

Republic Act No. 3019. ANTI-GRAFT & CORRUPT PRACTICES ACT. August 17, 1960 Republic Act No. 6713. CODE OF CONDUCT & ETHICAL STANDARDS FOR

PUBLIC OFFICIALS AND EMPLOYEES. February 20, 1989.

Republic Act No. 7080. AN ACT DEFINING AND PENALIZING THE CRIME OF PLUNDER. July 12, 1991

Republic Act No. 1379. AN ACT DECLARING FORFEITURE IN FAVOR OF THE STATE ANY PROPERTY FOUND TO HAVE BEEN UNLAWFULLY ACQUIRED BY ANY PUBLIC OFFICER OR EMPLOYEE AND PROVIDING FOR THE PROCEEDINGS THEREFOR. June 18, 1955

Republic Act No. 6028. CITIZEN'S COUNSELOR ACT OF 1969 AN ACT TO PROMOTE HIGHER STANDARDS OF EFFICIENCY AND JUSTICE IN THE ADMINISTRATION OF LAWS AS WELL AS TO BETTER SECURE THE RIGHT OF THE PEOPLE TO PETITION THE GOVERNMENT FOR REDRESS OF GRIEVANCES, CREATING THEREFOR THE OFFICE OF THE CITIZEN'S COUNSELOR. August 4, 1969

165

INTERVIEWS

April 6, 2011

Dr. Betty VenturaDepartment of PsychologyCollege of Social Sciences and PhilisophyUniversity of the PhilippinesDiliman, Quezon City

April 12, 2011

Dr. Michael TanAnthropologistDean, College of Social Sciences and PhilisophyUniversity of the PhilippinesDiliman, Quezon City

May 2, 2011

Sen. Panfilo Lacson (1st Part)Senate of the PhilippinesPasay City

May 26, 2011

Sen. Panfilo Lacson (2nd Part)Senate of the PhilippinesPasay City

July 11, 2011Sec. Rogelio “Babes” SingsonDepartment of Public Works and TransportationPort Area Manila

166

PERIODICALSNat debt, Nat budget, PPP, CCT etcAs of July 20,11

Agcaoili, Lawrence. BF officers mismanaged 15 bil deposits-BSP. Phil Star, March 28, 2011

Alave, Kristine L. At long last, plunder raps filed vs Cito, Joc-joc. PDI, April 16, 2011.______________. Rice overimported in last 3 years of GMA. PDI, May 18, 2011.Alentajan, Bonifacio A. Glaring crimes call for quick govt action. PDI, April 13, 2011.Alipala, Julie S. 8 LTO men face charges for extortion. PDI, May 10, 2011.Aning, Jerome. BIR files 23M tax case vs ex-GSIS execs. PDI, May 27, 2011. ____________. DOJ calls GMA to probe. PDI, May 27, 2011.Antonie, Raymund F. Customs to probe organized smuggling activities. Manila

Bulletin, March 30, 2011.Avendano, Christine O., Tubeza, Philip C. & Balana, Cynthia D. Top govt Execs slam

Sandigan decision. PDI, May 10, 2011. Balana, Cynthia D. Merci “midnight” order ‘invalid’. PDI, May 13, 2011.Bondoc, Jarius. Arroyo visit to Merci shows ‘dark politics’. Phil Star, March 25, 2011.____________. Govt must recover LWUA’s 5000 million. Phil Star, April 13,2011.____________. Other senate invitees can imitate Ligots. Phil Star, March 23, 2011.Brago, Pia Lee. Drug trafficking, corruption prime sources of criminal activities in Phil-.

Report. Phil Star, March 5, 2011.Burgonio, TJ, Esguerra, Christian V., Dizon, Nikko. Blunders in plunder case. PDI,

April 20, 2011Burgos, Nestor P. Jr, Roxas slams Ombudsman for belated filing of charges in fertilizer

scam. PDI, April 16, 2011.Businessworld. Philippines’ corruption score worsens. March 29, 2011.Cabacungan, Gil C. Jr. Morato: Stop “trial by publicity”. PDI, June 28, 11.Cabacungan, Gil C. Jr., Uy, Jocelyn R., & Morelos, Miko. PCSO checking Reports 7 bishops got Pajeros. PDI, June 28, 2011.Cabacungan, Gil C. Jr., & Salaverria, Leila B.. PCSO bares ad kickbacks. PDI, June 28,

2011.Cabreza, Vincent. Danding upheld on SMC. PDI, April 13, 2011.Calonzo, Andreo C. House oks bill limiting GOCC execs’ salaries, perks. GMA News,

March 24, 2011.De Quiros, Conrado. Can you handle the truth. PDI, May 3, 2011.________________. Target’em. PDI, April 11, 2011.________________. Possible dream. PDI, April 5, 2011.________________. Beyond impeachment. PDI, March 24, 2011.________________. What you wish for. PDI, March 23, 2011________________. Missing Link. PDI, March 8, 2011.Diaz, Jess, & Romero, Paolo. Tupas claims Ombudsman asked her to go easy on impeach

case. Phil Star, March 5, 2011.Dizon, Nikko. Big steel firm faces 3.52 Billion smuggling rap. PDI, Jan 9, 2011.___________. BIR claims Neri owes 18.6M in unpaid taxes. PDI, May 13, 2011.

167

Doronila, Amado. Gutierrez on the dock. PDI, March 11, 2011.Echeminada, Perseus. PCSO scandal just the tip of iceberg, says palace adviser. Phil

Star, July 11, 2011.Editorial. More than money. PDI, May 16, 11.Editorial, Court upside down. PDI, May 13, 11.Editorial. Accountability. PDI, May 3, 2011.Editorial. Overdue charges. PDI, April 16, 2011.Editorial. Twilight Zone. PDI, April 16, 2011.Editorial. Tree of injustice. PDI, April 13, 2011.Editorial. Overwhelming. PDI, March 24, 2011.Editorial. Political, and fair. PDI, March 11, 2011.Editorial. Citizens vs corruption. PDI, March 7, 2011.Esplanada, Jerry E. PH named one of top drug money-laundering countries. PDI, March

23, 2011.Esposo, William M. How a person loses a sense of shame. Phil Star, March 31, 2011.Fernandez, Butch. Food crisis looms -senators. PDI, March 7, 2011. Habito, Cielito. Is corruption really worse? PDI, April 5, 2011.Ho, Abigail L. MAP calls for better anti-corruption measures. PDI, Feb 10, 2011.Mangahas, Mahar. The poor don’t live by bread alone. PDI, March 4, 2011.Mendez, Christina. Senators calls for lifestyle check on Uriarte. Phil Star, July 11, 2011.Mercado, Juan L. Going into the night. PDI, May 3, 2011.______________. A 29 year old question. PDI, April 16, 2011.______________. Go, tell the judge. PDI, April 12,2011.Monsod, Solita C. Who got the facts wrong? PDI, April 16,2011.Montelibano, Jose Ma. Hunger shames us all. PDI, April 14, 2011.__________________. Missions of truth vs tentacles of corruption. PDI, Jan 28, 2011Napallacan, Jhunnex. NFA Central Visayas backs 8 Cebuano rice traders. PDI, May 18,

2011.Nery, John. Crooks in the “daang matuwid”. PDI, April 12, 2011.Osorio, Ma. Elisa P. Lack of transparency deters foreign investment-Report. Phil Star,

April 4, 2011.Pangalangan, Raul C. Faqustian plea bargain. PDI, May 13, 2011._________________. Passion for reason. PDI, March 11, 2011.Pedrosa, Carmen N. What’s behind Merci impeachment: the leftist adviser. Phil Star,

March 27, 2011.Punay, Edu. DOJ forms panel to probe 73 M tax evasion raps vs Mikey, Mikey, wife.

Phil Star, April 26, 2011._________. Banco Filipino files graft complaint vs BSP officials. Phil Star, April 2,

2011.PDI. Globe asiatique used “Ponzi” scam- Pag-Ibig. April 7, 2011. Ramos, Marlon. Mikey, wife seek dismissal of tax evasion case. PDI, June 28, 2011._____________. FVR: 3R’s could lick corruption in AFP. PDI, April 13, 2011._____________. Sandigan asked to reverse self on tax credit scam. PDI, March 24, 2011.Remo, Michelle V. Regulator tightens watch on pawnshops. PDI, Feb 4, 2011.

168

Romero, Paolo. House comm. Okays bill simplifying corporate taxation. Phil Star, April 4, 2011

____________. Lawmaker warns of ‘severe food situation’. Phil Star, March 11, 2011.Romualdez, Babe G. One life, nine passport checks. Phil Star, April 5, 2011.Romulo, Ricardo. People power against corruption. PDI, April 9, 2011.Ronda, Rainier Allan. Fraud recruiter in London uses fake govt job orders-DFA. Phil

Star, April 4, 2011._________________. PCGG audit bares new anomalies. Phil Star, March 7, 2011.Salaverria, Leila B. Lozada: GMA wanted NBN for Abalos. PDI, May 18, 2011._______________. NFA lost 100B in 10 years-COA. PDI, May 18, 2011._______________. Court OKs Garcia dea. PDI, May 10, 2011._______________. Joey de v testifies at Neri trial. PDI, Feb 4, 2011.Santos, Tina G. PCSO voids 42-B deal with Australian firm. PDI, June 9, 2011 Sy, Martin. AMLC wants return of power to freeze assets. Phil Star, March 9, 2011.Tiongson-Mayrina, Karen. PNoy to have 1.2 billion in unedited intel funds. GMA News

Research, Dec 25, 2010.Tubeza, Philip C. Salonga et al. urge SC to overturn its ruling on Danding. PDI, May 3,

2011. Tulfo, Ramon. Office of the Ombudsman a cannibal. PDI, April 4, 2011.Villanueva, Marichu A. Welfare state. Phil Star., July 11, 2011.

169

BIBLIOGRAPHY – Chapter 3

Abaya, Hernando J. 1967. The Untold Philippine Story. Quezon City: Malaya Books.

Abinales, Patricio N. and Donna J. Amoroso. 2005. State and Society in the Philippines. Pasig City: Anvil Publishing, Inc.

Abueva, Jose V. 1988. “Philippine Ideologies and National Development.” In Raul P. de Guzman and Mila A. Reforma (eds.). Government and Politics of the Philippines. Singapore: Oxford University Press and College of Public Administration, University of the Philippines. pp. 18-73.

_____________. 1970. “What Are We in Power For? The Sociology of Graft and Corruption.” Philippine Sociological Review. Vol. 18. (July-October). Pp. 203-210.

Agoncillo, Teodoro A. and Milagros Guerrero. 1977. History of the Filpino People. Quezon City: R.P. Garcia Publishing Co.

Asian Institute of Management and the Hills Governance Center. 2006. Whistleblowing in the Philippines: Awareness, Attitudes and Structures. Makati: RVR Center-Hills Program on Governance and AIM.

Alfiler, Ma. Concepcion. 1995. “The Political-Administrative Accountability Continuum in the Philippine Public Service. 1995. In Ledivina V. Carino (ed.). Conquering Politico-Administrative Frontiers, Essays in Honor of Raul P. de Guzman. Quezon City: UP CPA and the UP Press. pp. 398-409.

____________________. 1979. “Administrative Measures Against Bureaucratic Corruption: The Philippine Experience. Philippine Journal of Public Administration. Vol. 23 (July-October), pp. 321-349.

_____________________. 1977. “Administrative Discipline and the

Implementation of Anti-Graft Policies in the Philippines.” Thai Journal of Development Administration. Vol. 17 (July). pp 406-426.

_____________________. 1975. Kami at Sila: Universalistic Norms in Bureaucrat-Client Interaction in a Service Agency. Occasional Paper no. 2 (November). Padre Faura, Manila: U.P. College of Public Administration.

Angara, Edgardo J. 2002. “Honest Roads to Progress.” A sponsorship speech delivered at the Senate of the Philippines, October 24.

Asian Development Bank. 1998. ANTICORRUPTION: Our Framework Policies and Strategies. Metro Manila: ADB.

170

Bacani, Cesar S. Jr. and Bernardino L. Cailao. 1990. Raiders of the Philippine Treasury. Philippines: Bacani Jr. and Cailao.

Balogun, M. J. 2001. “Tracking Ethical Compliance and Violations in Government: Contemporary Approaches and a Research Proposal.” Asian Review of Public Administration. Vol. 13, No. 3 (July-December). pp. 18-37.

Bautista, Victoria A. 1979. “Negative Bureaucratic Behavior in the Regulation of Taxicab Businesses: The Case of the Board of Transportation.” Philippine Journal of Public Administration. Vol. 23 (July-October), pp. 296-320.

Beh, Loo See. 2011. “Public Ethics and Corruption in Malaysia.” In Evan Berman (ed.). Public Administration in Southeast Asia: Thailand, Philippines, Malaysia, Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group. pp. 171-191.

Berman, Evan M. (ed.) 2011. Public Administration in Southeast Asia: Thailand, Philippines, Malaysia, Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group.

Brillantes, Alex B. Jr. 1988. “The Executive.” In Raul P. de Guzman and Mila A. Reforma (eds.). Government and Politics of the Philippines. Singapore: Oxford University Press and College of Public Administration, University of the Philippines. pp. 113-131.

Brillantes, Alex B., Jr. and Maricel T. Fernandez. 2009. “Toward a Reform Framework for Good Governance: Focus on Anti-Corruption.” A Paper Presented at the Colloquium on “Tackling Corruption, Transforming Lives” at the National College of Public Administration and Governance, University of the Philippines and General Assembly and Conference of the Association of Schools of Public Administration in the Philippines, Inc. (ASPAP) and the Philippine Society for Public Administration (PSPA) in cooperation with the Civil Service Commission with support from the United Nations Development Programme, July 15-16

Briones, Leonor M. 1979. “Negative Bureaucratic Behavior and Development: The Case of the Bureau of Internal Revenue.” Philippine Journal of Public Administration. Vol. 23 (July-October), pp. 225-278.

Bok, S. 1980. “Whistleblowing and Professional Responsibility.” New York University Education Quarterly. (Summer). pp. 2-10

Boncodin, Emilia T. 2007. “Antidote to Corruption.” In Ma. Concepcion P. Alfiler and Eleanor E. Nicolas (eds.). Public Administration Plus Govenance. Diliman, Quezon City: National College of Public Administration and Goverance. pp. 325-333.

171

Cabo, Whilhelmina L. 2007. “Exploring Accountability Initiatives in Philippine Local Governance.” Philippine Journal of Public Administration. Vol. 51, Nos. 1-4 (January-October). pp. 33-50.

Carino, Ledivina V. 1986 (ed.). Bureaucratic Corruption in Asia: Causes Consequences and Controls. Quezon City: JMC Press, Inc. and U.P. College of Public Administration.

________________. 1979. “The Definition of Graft and Corruption and the Conflict of Ethics and Law.” Philippine Journal of Public Administration. Vol. 23 (July-October), pp. 221-240.

_________________. 1977. “Boundary Encounters and Corrupt Behavior.” Philippine Journal of Public Administration. Vol. 21 (April), pp. 141-155.

_________________. 1975. “Bureaucratic Norms, Corruption and Development.” Philippine Journal of Public Administration. Vol. 19 (October), pp. 278-292.

Carino, Ledivina and Josie de Leon. 1983. Final Report for the Study of Graft and Corruption, Red Tape and Inefficiency in Government.

Carino, Ledivina and Raul P. de Guzman. 1979. “Negative Bureaucratic Behavior in the Philippines: The Final Report of the IDRC Philippine Team.” Philippine Journal of Public Administration. Vol. 23 (July-October), pp. 350-385.

Carlos, Clarita R. and Dennis M. Lalata (with Dianne C. Despi and Portia R. Carlos). 2010. Democratic Deficits in the Philippines: What is to be Done? Quezon City and Makati City: Center for Political and Democratic Reform, Inc., Konrad Adenauer Foundation and Centrist democratic Movement.

Chee, Stephen. 1991. “Public Accountability in Malaysia: Form and Substance.” In G.B.N. Pradhan and Mila Reforma (eds.). Public Administration in the 1990s: Challenges and Opportunities. Manila: EROPA. pp. 105-126

Chua, A.C.H. and D.B. Gould. 1995. “Whistleblowing: Public Interest or Personal Interest? The Experience of a Hong Kong Government Pharmacist. Hong Kong Public Administration. pp. 251-264.

Co, Edna E.A. 2009. “The Long and Winding Road to Infrastructure Development and Reform.” A Paper Presented at the Colloquium on “Tackling Corruption, Transforming Lives” at the National College of Public Administration and Governance, University of the Philippines and General Assembly and Conference of the Association of Schools of Public Administration in the Philippines, Inc. (ASPAP) and the Philippine Society for Public Administration (PSPA) in cooperation with the Civil Service Commission with support from the United Nations Development Programme, July 15-16.

172

Constantino-David, Karina. 2007. “Transparency and Accountability.” In Ma. Concepcion Alfiler and Eleanor Nicolas (eds.). Public Administration Plus Governance. Quezon City: UP NCPAG. pp. 335-340.

Coronel, Sheila and Ellen Tordesillias. 1998. “The Grandmother of all Scams.” (http://pcij.org/stories/1998/amari.html)

Corpuz, Onofre D. 1989. The Roots of the Filipino Nation. Vols. 1 and 2. Quezon City: Kalahi Foundation, Inc.

_______________. 1957. The Bureaucracy in the Philippines. Manila: Institute of Public Administration.

Cushner, Nicolas. 1971. Spain in the Philippines. Quezon City: Ateneo de Manila Institute of Philippine Culture.

Danguilan-Vitug, Marites. 2010. Shadow of Doubt: Probing the Supreme Court. Quezon City: Public Trust Media Group, Inc.

De Guzman, Raul P. 1988. “Towards Redemocratization of the Political System.” In Raul P. de Guzman and Mila A. Reforma (eds.). Government and Politics of the Philippines. Singapore: Oxford University Press and College of Public Administration, University of the Philippines. pp. 267-282.

De Guzman, Raul P., Alex B. Brillantes, Jr. and Arturo G. Pacho. 1988. “The Bureaucracy.” In Raul P. de Guzman and Mila A. Reforma (eds.). Government and Politics of the Philippines. Singapore: Oxford University Press and College of Public Administration, University of the Philippines. pp. 180-206.

De Swardt, Cobus. 2011. “Rob a Bank, go to jail; Rob a country, go to a tax haven.” BizNews Asia. August 22-29. pp. 24-26.

Dhungel, Dwarika Nath and Prem Goutam. 1991. “Promoting Public Accountability in Public Management: A Study of Public Accountability at the District Level in Nepal.” In G.B.N. Pradhan and Mila Reforma (eds.). Public Administration in the 1990s: Challenges and Opportunities. Manila: EROPA. pp 187-200.

Domingo, Ma. Oliva Z. and Danilo R. Reyes. 2011. “Performance Management Reforms in the Philippines.” In Evan Berman (ed.). Public Administration in Southeast Asia: Thailand, Philippines, Malaysia, Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group. pp. 397-421.

Elliot, Gary W. 2008. “Philippine Anti-Graft Institutions: Antidote for Philippine Corruption” (http://www.suite101.com/content/antidote-for-philippine-corruption-a46460).

173

Endriga, Jose N. 2003. “Stability and Change: The Civil Service in the Philippines.” In Bautista, et.al. (eds.) Introduction to Public Administration in the Philippines: A Reader (2nd ed.). Q.C.: UP-NCPAG, pp. 393-414.

_________________. 1979. “Historical Notes on Graft and Corruption in the

Philippines.” Philippine Journal of Public Administration. (July-October). Vol. XXIII, nos. 3 & 4. pp. 241-254.

Fernandez, Mary Ann Z. 2004. “Managing the Fight Against Corruption Through Partnerships Among Government Agencies and with Civil Society: The Philippine Experience.” Asian Review of Public Administration. Vol. 16, No. 1 (January-June). pp. 91-99.

Francia, Luis H. 2010. A History of the Philippines, From Indios Bravos to Filipinos. New York: The Overlook Press, Peter Mayer Publishers, Inc.

Golay, Frank. 1998. Face of Empire: United States-Philippine Relations, 1898-1946. Madison: University of Wisconsin, Center of Southeast Asian Studies.

Gonzalez, Eduardo T. 2011. “Public Ethics and Corruption in the Philippines.” In Evan Berman (ed.). Public Administration in Southeast Asia: Thailand, Philippines, Malaysia, Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group. pp. 381-396.

Greenwold, John, Jay Branegan and Nelly Sindayen. 1990. “The Philippines Cory, Coup and Corruption.” Time Magazine. January 15. (http://www.time.com/time/magazine/article/0,9171,969186,00.html

Hayllar, Mark R. 1991. “Promoting Accountability through Education and Training: The Hong Kong Experience.” In G.B.N. Pradhan and Mila Reforma (eds.). Public Administration in the 1990s: Challenges and Opportunities. Manila: EROPA. pp 133-147.

Holmes, Ronald. 2007. “Combating Corruption in the Philippines: The Difficulty and Danger of Organizational Reform/Human Resource Development Initiatives.” In Ma. Concepcion P. Alfiler and Eleanor E. Nicolas (eds.). Public Administration Plus Govenance. Diliman, Quezon City: National College of Public Administration and Goverance. pp. 173-197.

Iglesias, Gabriel U. 1963. “The Passage of the Anti-Graft Law.” In Raul P. de Guzman (ed.). Patterns in Decision-Making: Case Studies in Philippine Public Administration. Manila: College of Public Administration, University of the Philippines.

Kwong, Bruce K.K. 2011. “Public Ethics and Corruption in Macao.” In Evan Berman (ed.). Public Administration in Southeast Asia: Thailand, Philippines,

174

Malaysia, Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group. pp. 501-518.

Le Herrisier, Roy. 1991. “Accountability in the Hong Kong Civil Service: The Implications of Civil Service Reform.” In G.B.N. Pradhan and Mila Reforma (eds.). Public Administration in the 1990s: Challenges and Opportunities. Manila: EROPA. pp. 127-132.

Lee, Peter. 1989. “The State of the Corruption Problem in Hong Kong.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.) Public Administration in a Changing National and International Environment. Manila: EROPA. pp. 115-120.

Marcelo, Simeon V. 2005. “Combating Corruption in the Philippines: Status, Challenges and Prospects.” In Combating Corruption in the Philippines: Are we plundering our chances or doing it better? Quezon City: NCPAG, Working Paper Series No. 2.

Moratalla, Nelson Nogot. n.d. “Graft and Corruption: The Philippine Experience” Philippine Safety College 113 International Training Course Participants’ Resource Material Series No. 56 (http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan019122.pdf).

Obejas, Joselito D.R. 2008. “Wiping Away the Footprints of Corruption in the Philippines.” Resource Material No. 77. A paper presented at the 138 th International Senior Seminar of the United Nations Asia and the Far East Institute for the Prevention of Crime and Treatment of Offenders, 17 January - 15 February, Tokyo, Japan. http://www.unafei.or.jp/english/pdf/PDF_rms_all/no77.pdf

Ocampo, Romeo B. 2009. “Wicked Problems, Government Failures: Corruption

and Lesser Evils.” A Paper Presented at the Colloquium on “Tackling Corruption, Transforming Lives” at the National College of Public Administration and Governance, University of the Philippines and General Assembly and Conference of the Association of Schools of Public Administration in the Philippines, Inc. (ASPAP) and the Philippine Society for Public Administration (PSPA) in cooperation with the Civil Service Commission with support from the United Nations Development Programme, July 15-16

Office of the Ombudsman (Republic of the Philippines). 2004. Compilation of Laws on Graft and Corruption. Manila: Office of the Ombudsman.

Osborne, Denis. 2007. “Social Marketing and Integrity Tests: Pointers to a Research Agenda on Corruption.” In Ma. Concepcion P. Alfiler and Eleanor E. Nicolas (eds.). Public Administration Plus Govenance. Diliman, Quezon City: National College of Public Administration and Goverance. pp. 309-323.

O’uchi, Minoru. 1989. “Public Accountability in Japanese Politics and Administration.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.) Public

175

Administration in a Changing National and International Environment. Manila: EROPA. pp. 105-114.

Pradhan, Prachanda. 1989. “Negative Bureaucratic Behavior and Development in Nepal.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.) Public Administration in a Changing National and International Environment. Manila: EROPA. pp. 157-163.

Prakhash, Indurekha G. 2009. “Role of Civil Society in Managing Anti-Corruption Initiatives in India and the Philippines.” A Paper Prepared for the Colloquium on “Tackling Corruption, Transforming Lives” at the National College of Public Administration and Governance, University of the Philippines and General Assembly and Conference of the Association of Schools of Public Administration in the Philippines, Inc. (ASPAP) and the Philippine Society for Public Administration (PSPA) in cooperation with the Civil Service Commission with support from the United Nations Development Programme, July 15-16.

Quah, Jon S. T. 2009. “Curbing Corruption in the Philippines: Is This an Impossible Dream?” A Paper Prepared for the Colloquium on “Tackling Corruption, Transforming Lives” at the National College of Public Administration and Governance, University of the Philippines and General Assembly and Conference of the Association of Schools of Public Administration in the Philippines, Inc. (ASPAP) and the Philippine Society for Public Administration (PSPA) in cooperation with the Civil Service Commission with support from the United Nations Development Programme, July 15-16.

____________. 2003. “Causes and Consequences of Corruption in Southeast Asia: A Comparative Analysis of Indonesia, the Philippines and Thailand.” Asian Journal of Public Administration. Vol. 25, No. 2. December. pp. 235-266.

____________. 1991. “Promoting Accountability in Public Management: The Singapore Case.” In G.B.N. Pradhan and Mila Reforma (eds.). Public Administration in the 1990s: Challenges and Opportunities. Manila: EROPA. pp. 87-103.

Raksasataya, Amara. 1989. “Anti-Corrupt Measures in Thailand.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.) Public Administration in a Changing National and International Environment. Manila: EROPA. pp. 121-142.

Reyes, Danilo R. 2011a. The American and Philippine Administrative Traditions: Profiling Contexts, Parallelisms and Contrasts. (Working Paper Series No. 11). Diliman, Quezon City: NCPAG.

_____________. 2011b. “History and Context of the Development of Public Administration in the Philippines.” (Chap. 17). In Evan Berman (ed.). Public Administration in Southeast Asia: Thailand, Philippines, Malaysia, Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group. pp. 333-354.

176

_______________. 2009. “Corruption, Conscience and Conscience: A Whistleblower’s Story.” A Paper Presented at the Colloquium on “Tackling Corruption, Transforming Lives” at the National College of Public Administration and Governance, University of the Philippines and General Assembly and Conference of the Association of Schools of Public Administration in the Philippines, Inc. (ASPAP) and the Philippine Society for Public Administration (PSPA) in cooperation with the Civil Service Commission with support from the United Nations Development Programme, July 15-16.

_______________. 2003. “Public Administration in the Philippines: History, Heritage and Hubris.” In Bautista, et.al. (eds.) Introduction to Public Administration in the Philippines: A Reader (2nd ed.) Q.C.: UP-NCPAG, pp. 38-64

_______________. 1989. “An Agenda for Administrative Accountability.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.) Public Administration in a Changing National and International Environment. Manila: EROPA. pp.93-104.

__________________. 1987. "Issues on Administrative Accountability: A Proposed Agenda Towards a Continuing Examination of Negative Bureaucratic Behavior." Public Administration Journal (Nepal), December, pp. 30-38.

__________________. 1982. "Control Processes and Red Tape in Philippine Bureaucracy: Notes on Administrative Inefficiency." Philippine Journal of Public Administration. vol. 26, nos. 2 & 4. (July-October), pp. 271-285.

Reyes, Vicente Chua Jr. 2009. Corruption and Implementation: Case Studies in Philippine Public Administration. Quezon City: UP NCPAG and Philippine Australia Human Resource Development Facility.

Richter, William L., Frances Burke and Jameson W. Doig (eds.). 1990. Combating Corruption, Encouraging Ethics: A Source Book for Public Service Ethics. Washington, D.C.: American Society for Public Administration.

Ro, Chung-Hyun. 1989. “Political Accountability and Democratization in Korea.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.) Public Administration in a Changing National and International Environment. Manila: EROPA. pp. 57-65.

Salonga, Jovito R. 2000. Presidential Plunder: The Quest for the Marcos Ill-Gotten Wealth. Quezon City: UP Center for Leadership, Citizenship and Democracy and Regina Publishing.

Sandiganbayan (Special Division). 2007. Decision: People of the Philippines vs. Joseph Ejercito Estrada, et. al., September 12.

Scott, Ian. 2011. “Public Ethics and Corruption in Hong Kong.” In Evan Berman (ed.). Public Administration in Southeast Asia: Thailand, Philippines, Malaysia,

177

Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group. pp. 283-294.

Shalom, Stephen R. 1986. The United States and the Philippines: A Search for Themes and Directions. New York: St. Martin’s Press.

Simms, Marian J. 1989. “Political Accountability in Australia.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.) Public Administration in a Changing National and International Environment. Manila: EROPA. pp.

Tancangco, Luzviminda G. 1991. “The Notion of Public Accountability in the Philippines.” In G.B.N. Pradhan and Mila Reforma (eds.). Public Administration in the 1990s: Challenges and Opportunities. Manila: EROPA. pp 151-186.

_______________________. 1989. “An Agenda for Political Accountability and Redemocratization.” In Raul P. de Guzman, Mila Reforma and Danilo Reyes (eds.). Public Administration in a Changing National and International Environment. Manila: EROPA. pp. 39-45.

Transparency and Accountability Network (TAN). 2011. “Corruption and Anti-Corruption in the Philippines.” Manila: GTZ Philippines.

United Nations Development Programme. 2008. Tackling Corruption, Transforming Lives: Accelerating Human Development in Asia and the Pacific. Colombo and Delhi: UNDP and Macmillan India Ltd.

Ursal, Sofronio D. 2006. Anti-Graft Guidebook. Quezon City: Good Governance Books.

Veneracion, Jaime B. 1988. Merit or Patronage: A History of the Philippine Civil Service. Quezon City: Great Books Trading.

Vichit-Vadakan, Juree. 2011. “Public Ethics and Corruption in Thailand.” In Evan Berman (ed.). Public Administration in Southeast Asia: Thailand, Philippines, Malaysia, Hong Kong and Macao. Boca Raton: CRC Press and Taylor and Francis Group. pp. 79-94.

Vinten, Gerald. 1999. “Whistleblowing – Hong Kong Style.” Public Administration and Policy. Vol. 8, No. 1. (March). pp. 1-19.

_____________. 1996. “Entry on whistleblowing in International Encyclopaedia of Business & Management. Malcolm Warner: Routledge.

_____________. 1994. Whistleblowing – Subversion or Corporate Citizenship? London: Sage.

178

_____________. 1992. “Whistleblowing Auditors: A Contradiction in Terms?” Research Series. England: Chartered Institute of Certified Accountants.

Yan, Geng. 1991. “Corruption and Clean Government Drive in China.” In G.B.N. Pradhan and Mila Reforma (eds.). Public Administration in the 1990s: Challenges and Opportunities. Manila: EROPA. pp. 201-211.

Westin, A. F. 1981. Whistle Blowing Loyalty and Dissent in the Corporation. New York and London: McGraw-Hill.

World Bank. 2000. Combating Corruption in the Philippines. Washington, DC: The World Bank Philippine Country Management Unit.

Philippine Laws and Other Issuances

Republic Act No. 6770, The Ombdusman Act of 1989. November 17.

Republic Act No. 3019. Anti-Graft and Corrupt Practices Act. Aug. 17, 1960.

Republic Act No. 1379. An Act Declaring Forfeiture in Favor of the State Any Property Found To Have Been Unlawfully Acquired by Any Public Officer or Employee and Providing for the Proceedings Therefor. June 18, 1955.

Republic Act No. 6713. Code of Conduct and Ethical Standards for Public Officials andEmployees. February 20, 1989.

Republic Act No. 7080. An Act Defining and Penalizing the Crime of Plunder. July 12, 1991, as

amended under R.A. 7659.

Republic Act No. 8294. Anti-Money Laundering Act of 2001.

Republic Act No. 6981. Witness Protection and Benefit Program. 1991.

Act No. 3815 The Revised Penal Code of the Philippines. 1932.

Republic Act No. 3456. Internal Auditing Act of 1962

Republic Act No. 6028. Citizen’s Counselor Act of 1969.

Republic Act No. 7659. Imposing Death Penalty for Certain Crimes by Public Officers. 1993.

Presidential Decree 749 Immunity from Prosecution in Graft Cases. 1975.

179

Presidential Decree No. 46. Making it Punishable for Public Officials to Receive and Employees

and for Private Persons to Give Gifts on Any Occasion, Including Christmas. 1972.

Presidential Decree No. 1759. Penalizing Contractors for Violating Public Works Contracts.

1981.

Presidential Decree No. 749. Granting Immunity from Prosecution to Givers of Bribes and Other

Gifts and to Their Accomplices in Bribery and Other Graft Cases Against Public Officers. 1975.

Website Sources:

http://www.stopcorruption.eu/en-GB/facts.aspx . Accessed July 02, 2011.

(http://www.dawn.com/2011/06/22/corruption-costs-poor-states-40bn-a-year.html. Accessed July 02, 2011.

(http://www.b-fair.net/?p=1378. Accessed July 02, 2011.

http://www.philstar.com/Article.aspx?articleId=665555&publicationSubCategoryId=66accessed July 09, 2011.

http://www.stopcorruption.eu/en-GB/facts.aspx accessed July 09, 2011.

http://bti2006.bertelsmann-transformation-index.de/122.0.html?L=1 accessed July 16, 2011

http://www.myreviews101.com/cost-of-corruption-in-the-philippines.html accessed July 16, 2011.

(http://www.eon.com.ph/eon-sphere/view/309/newsid/141/slaying-the-beast.html accessed July 23, 2011

http://www.unafei.or.jp/english/pdf/PDF_rms_all/no77.pdf July 23, 2011

http://www.time.com/time/magazine/article/0,9171,969186,00.html accessed August 08, 2011

http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan019122.pdf accessed August 08, 2011.

180

http://www.suite101.com/content/antidote-for-philippine-corruption-a46460 accessed August 08, 2011.

http://en.wikipedia.org/wiki/Presidency_of_Fidel_V._Ramos accessed August 08, 2011.

http://pcij.org/stories/1998/amari.html accessed August 08, 2011

http://www.gmanews.tv/story/206758/aquino-abolishes-presidential-anti-graft-body accessed August 08, 2011

181

BIBLIOGRAPHY – Chapter 4

ADB/OECD Anticorruption Initiative for Asia and the Pacific. 2006. Anti-Corruption Reform under the Action Plan’s 3rd Implementation Cycle (2006-2008).

Agence France-Presse. 2009. RP Ranking improves in Asian Corruption Survey. ABS-CBN News.http://www.abs-cbnnews.com/nation/04/08/09/rp-ranking-improves-asian-corruption-survey accessed 13 July 2011.

Agence France-Press. 2008. Survey reveals most corrupt Asian nations. The China Post.http://www/chinapost.com.tw/print/14567.htm. (11 March). Accessed 13 July 2011.

Altez, Czarina May C. 2007. The Obdudsman’s Journal. 4 May 2007.Aning, Jerome. 2011. Philippine Daily Inquirer. (13

June) .http://newsinfo.inquirer.net/14401/mike-arroyo-nixes-bet-for-ombudsmanBatalla, Eric C. 2000. De-institutionalizing Corruption in the Philippines: Identifying

Strategic Requirements for Reinventing Institutions. Prepared for the Institutionalizing Strategies to Combat Corruption: Lessons from East Asia Conference. (12-13 August).

Bhargava, Vinay. 1999. Combating Corruption in the Philippines. http://www.worldbank.org/publicsector/anticorrupt accessed 30 March 2011.

Caiden, Gerald E. 2011 (?).Confronting the Cultural Dimension of Corruption: Morality, Leadership and Civil Society. Draft for discussion. http://www.integridad-ph.com/

Calonzo, Andreo C. 2011. Ombudsman asks Sandigan to junk Garcia plea bargain. GMA News.http://www.gmanews.tv/story/232606/nation/ombudsman-asks-sandigan-to-junk-garcia-plea-bargain (16 September).Accessed 17 September 2011.

Commission on Audit, Office of the Ombudsman, and Civil Service Commission. 2009. Memorandum of Agreement of the Constitutional Integrity Group. (18 December).

Commission on Audit, Office of the Ombudsman, and Civil Service Commission. 2005. Solana II: The 2nd Anticorruption Summit of Independent Accountability Institutions. (15 July).

Commission on Audit, Office of the Ombudsman, and Civil Service Commission.2004. Solana I: The 1st Anticorruption Summit of Independent Accountability Institutions. (16 March).

De Dios, Emmanuel S. and Ricardo D. Ferrer. 2000. Corruption in the Philippines: Framework and context. Prepared for the Transparent and Accountable Governance Project (TAG) as Fellows of the Philippine Center for Policy Studies.(August).http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN013133.PDF accessed 11 April 2011.

182

Dedace, Sophia M. 2010. With newest justice, Arroyo SC appointees now 14 of 15. GMANews.TV. (5 January). http://www.gmanews.tv/story/180829/with-newest-justice-arroyos-sc-appointees-now-14-of-15

Dizon, David. 2011. ‘5 witnesses wanted to testify on Mega-Pacific whitewash.’ Abs-cbn-NEWS.com. (2 May). http://www.abs-cbnnews.com/-depth/05/02/11/5-witnesses-wanted-testify-mega-pacific-whitewashaccessed 4 July 2011.

Fonbuena, Carmela. 2009. Impeachment bid vs. Ombudsman is dead. Abs-cbnNEWS.com/Newsbreak. (17 November).

Funelas, Karen E. 2008. The OSP in 2007: Unleashing their Best. Ombudsman’s Journal. Vol. 13, No. 1.20th Anniversary Issue. (12 March).

Garcia, Ma. Amelita.2006. Office of the Ombudsman Marks Eighteen: The Ombudsmen’s thrusts. Ombudsman’s Journal. Vol. 11, No. 1.Eighteenth Anniversary Issue.(12 March).

Hofman, Bert. 2009. Tools for Fighting Corruption in the Public Sector: An International Perspective on Public Sector Reforms. Speech delivered at the Integrity and Human Rights Conference held in Manila on 27-28 January 2009.

Johnson, Ky D. 2007. The Philippines: The Most Corrupt Country in Asia? In In Asia: Weekly Insight and Features from Asia. The Asia Foundation. (28 March). Accessed 8 July 2011.

Kaufmann, David., Aart Kraay, and Massimo Mastruzzi. 2010. The Worldwide Governance Indicators: Methodology and Analytical Issues. The World Bank.http://info.worldbank.org/governance/wgi/pdf/c175.pdf accessed 24 May 2011.

Kaufmann, David.,AartKraay, and Massimo Mastruzzi. 2008. Governance Matters: VIII: Aggregate and Individual Governance Indicators 1996-2008. The World Bank.

Klitgaard, Robert. (1998). Strategies Against Corruption. ForoIberoamericanosobre el Combate a la Corrupcion.(15-16 Jun. Santa Cruz de la Sierra). CLAD; Agencia Espanola de CooperacionInternacional..

Lazaro, D’Jay. 2008. Ombudsman’s inaction on cases erodes democratic stability—Roxas. GMANews.TV. (31 October). http://www8.gmanews.tv/story/130625/ombudsmans-inaction-on-cases-erodes-democratic-stability-roxas accessed 15 September 2011.

Mañalac-Calderon, Julita S. 2008. OMB Social Service Caravan.Ombudsman’s Journal. Vol. 13, No. 1.20th Anniversary Issue. (12 May).

183

Mangahas, Malou, and Karol Anne M. Ilagan. 2011. Ombudsman Failure, despite flood of funds. Philippine Center for Investigative Journalism.http://www.abs-cbnnews.com/print/136510 accessed 4 May 2011.

Marcelo, Simeon V. 2005. The Status of Combatting Corruption in the Philippines. Speech delivered before the Global Organization of Parliamentarians Against Corruption Conference held on 31 March 2005.

Martinez, Rommel L. 1999. Strategies of corruption prevention in the Philippines: mobilizing civil society. Asia Pacific School of Economics and Management Working Papers: Governance. Australia: Asia Pacific Press at the Australian National University.

Manzanero, Doren May F. 2010. Abalos and Neri Charged of NBN-ZTE Deal. Integrity Watch. Volume 3, Number 1. (January-June), pp. 1, 7.

Office of the Ombudsman. 2005. Office of the Ombudsman’s Organizational Reforms and Present Strategies Against Corruption. Ombudsman’s Journal. Vol. 10, No. 1. (12 May). pp. 1-21.

Office of the Ombudsman.2010.Integrity Watch News,,Vol 3, No. 1. (January-June).

Olarte, Avigail. 2006. Senate links Arroyo to fertilizer fund scam. In Arroyo Impeachment, Congress Watch, Investigative Reports. (2 March). http://www.pcij.org/blog/2006/03/02/senate-links-arroyo-to-the-fertilizer-fund-scam accessed 15 September 2011

Olarte, Avigail. 2006a. More Filipinos want impeachment against Arroyo revived—Pulse Asia. (1 August). http://www.pcij.org/blog/2006/08/01/more-filipinos-want-impeachment-case-against-arroyo-revived-pulse-asia accessed 18 September 2011.

Pabico, Alecks P. 2007. “Perez Isn’t Only One Responsible for IMPSA Deal.” In Governance, in the News, Investigative Reports.The PCIJ Blog. (8 January). http://www.pcij.org/blog/2007/01/08/perez-not-only-one-responsible-for-impsa-deal

Philippine Center for Investigative Journalism (PCIJ). 2002. http://pcij.org/imag/latest/justice4.html

Pulse Asia. 2009. Pulse Asia’s February 2009 Nationwide Survey on Corruption. (February).http://pulseasia.com.ph/pulseasia/story.asp?ID=669 accessed 3 May 2011.

184

Quitain, Robert Jay A. 2007. The case monitoring system of the Office of the Special Prosecutor. Ombudsman’s Journal. Vol. 12, No. 1, 19th Anniversary Issue. (4 May).

Republic Act No. 9335.An Act to Improve the Revenue Collection Performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) through the Creation of a Rewards and Incentives Fund and of a Revenue Performance Evaluation Board and for Other Purposes.Approved 25 January 2005.

Republic Act No. 6770.An Act Providing for the Functional and Structural Organization of the Office of the Ombudsman and for Other Purposes.http://www.chanrobles.com/republicactno6770.htm accessed 18 September 2011

Republic of the Philippines. Medium-Term Philippine Development Plan 2004-2010.

Republic of the Philippines.1994. Executive Order No. 151. Creating a Presidential Commission to Investigate Administrative Complaints Involving Graft and Corruption. (11 January)

Republic of the Philippines. Office of the President. 2010. Executive Order No. 883. Granting Career Executive Service Officer Rank to Lawyers in the Government Executive Service and Other Purposes. (8 May).

Republic of the Philippines.Office of the President.2005. Executive Order No. 464. Ensuring Observance of the Principle of Separation of Powers, Adherence to the Rule on Executive Privilege and Respect for the Rights of Public Officials Appearing in Legislative Inquiries in Aid of Legislation Under the Constitution and for Other Purposes. (26 September). http://www.doe.gov.ph/popup/EO%20464.pdf

Republic of the Philippines.Office of the President.2000. Executive Order No. 268. Creating the National Anti-Corruption Commission and Abolishing the Presidential Commission Against Graft and Corruption Created under Executive Order 151, S. 1994, as Amended. (18 July).

Rood, Steven. 2008. Corruption and Cynicism in the Philippines. PinoyPress. (22 March). http://www.pinoypress.net/2008/03/22/in-the-philippines-just-another-week-of-anti-corruption/ accessed 3 May 2011.

Rufo, Aries. 2008. Campaign vs. graft slips as Ombudsman rift worsens. abs-cbnNews.com/Newsletter Posted 20 December 2008, updated 22 December 2008.

Sanchez, Anna Maria S. 2008. Philippines Eligible for MCC Compact.Ombudsman’s Journal. Vol.13, No.1.20th Anniversary Issue. (12 May).

185

Sanchez, Anna Maria S. 2007. A year that was: Bringing the Office of the Ombudsman closer to the people. Ombudsman’s Journal. Vol. 12, No. 1, 19th Anniversary Issue. (4 May).

Sartillo, Glenn Niño M. 2010. The Career Executive Service in Interesting Times: Issues, Challenges and Prospect during Government Transition. Paper submitted in partial fulfillment of the requirements of Public Administration 221, First Semester, Academic year 2010-2011.

Social Weather Stations. 2009. The 2009 SWS Surveys of Enterprises on Corruption.

Social Weather Stations. 2008. 2008 Survey of Enterprises on Corruption. Anti-corruption sincerity ratings improved for only 8 out of 30 agencies. Media Release. (21 November).

Social Weather Stations. 2007. The 2006-2007 SWS Survey of Enterprises on Corruption.

Taytayon-Padios, Maribeth R. 2008. PAHRDF Activity: Strengthening Training and Development in the Office of the Ombudsman. Ombudsman’s Journal. Vol. 13, No. 1, 20th Anniversary Issue. (12 May).

The 1987 Philippine Constitution.

The World Bank Office in Manila. 2001. Strategic Framework for World Bank’s Assistance for Combating Corruption in the Philippines (as of February 2001).

The Civil Service Reporter. 2004. (March). p. 12

Thomas, V., Dailami, M., Dhareshwar, A., Kaufman D., Kishor, N., Lopez, R. and Wang, et al. 2000. The Quality of Growth. New York: The World Bank and Oxford University Press.

Torres, Tetch. 2011. Ombudsman impeach raps get SC green light. INQUIRER.net http://newsinfo.inquirer.net/breakingnews/nation/view/20110215-320401/Ombudsman-impeach-raps-get-SC-green-light (15 February).accessed 2 September 2011.

Torres, Tetch, Marlon Ramos, and JaemieQuinto. 2011. Ombudsman Resigns. http://newsinfo.inquirer.net/breakingnews/nation/view/20110429-333621/Ombudsman-resigns (29 April).Accessed 19 September 2011.

Transparency and Accountability Network (TAN). 2011. Corruption and Anti-Corruption in the Philippines. A Paper prepared for the GTZ Philippines. (March).

186

The World Bank and International Finance Corporation. 2009. Doing Business 2010 Philippines.

Internet Sources:

ftp://ftp.bir.gov.ph/webadmin1/pdf/rate_background_and_organization.pdf accessed 30 August 2011

http://dapmalaysia.org/all-archive/English/2005/mar05/lks/lks3390.htm accessed 12 July 2011

http://dbm.gov.ph/gaa2005/omb.txt accessed 23 August 2011

http://newsinfo.inquirer.net/topstories/topstories/view/20080305-122949/UPDATE-6-EO-464-scrapped

http://newsinfo.inquirer.net/breakingnews/nation/view/20110429-333621/Ombudsman-resigns

http://philippines.usaid.gov/programs/economic-growth/millennium-challenge-account-philippines-thresholdaccessed 30 August 2011

http://pulseasia.com.ph/resources/photos/table1_Corruption_0710.gif accessed 14 April 2011

http://report.globalintegrity.org/Philippines/2008 accessed 2 May 2011

http://report.globalintegrity.org/Philippines/2007 accessed 2 May 2011

http://sc.judiciary.gov.ph/index.php accessed 28 August 2011

http://siteresources.worldbank.org/INTPHILIPPINES/Resources/DB07-CombatingCorruption-June 23.pdf accessed 4 March 2011

http://www.abs-cbnnews.com/nation/03/10/11/blue-ribbon-gutierrez-resign accessed 2 May 2011.

http://www.abs-cbn.com/nation/03/10/11/blue-ribbon-gutierrez-resign http://www.abs- cbnnews.com/business/03/09/10. Investors rank Philippines 4th most corrupt in AsiaPac. accessed 2 May 2011.

http://www.abs-cbnnews.com/nation/12/20/08/campaign-vs-graft. Campaign vs graft slips as Ombudsman rift worsens. accessed 20 March 2011

187

http://www.abs-cbnnews.com/nation/04/08/09/rp-ranking-improves-asian-corruption-survey accessed 13 July 2011

http://www.asiaone.com/print/News/AsiaOne%2BNews/Singapore/Story/A1Story20090408 accessed 8 July 2011

http://www.asiarisk.com/ accessed 28 August 2011

http://www.calpers.ca.govaccessed 25 April 2011

http://www.chanrobles.com/republicactaccessed various dates

http://www.chanrobles.com/republicacts/republicactno9485.htmlaccessed 8 July 2011

http://www.customs.gov.ph/rats.phpaccessed 30 August 2011

http://www.dbm.gov.ph/dbm_publications/gaa_2005/omb.txt accessed 23 August 2011

http://www.dbm.gov.ph/NEP2008/XXXIII/OMB.TXT accessed 23 August 2011

http://www.dbm.gov.ph/NEP2011/OMB.pdf accessed 23 August 2011

http://www.gmanews.tv/story/26399/research/hernando-nani-b-perez accessed 15 September 2011

http://www.gmanews.tv/story/57366/Executive-Order-464-backgrounder accessed 4 July 2011

http://www.gmanews.tv/story/180829/with-newest-justice-arroyos-sc-appointees-now-14-of-15 accessed 28 August 2011

http://www.indonesiamatters.com/800/corruption-index/ accessed 11 April 2011

http://www.integridad-ph.com/http://www.mcc.gov/pages/countries/program/philippines-threshold-program accessed

29 August 2011

http://www.mcc.gov/mcc/bm.doc/ph_soag.pdf accessed 30 August 2011

http://www./newsflash.org/2004/02/be/be003618.htm accessed 13 July 2011.

http://www.pcij.org/blog/2007/01/08/perez-not-only-one-responsible-for-impsa-dealaccessed 4 July 2011

http://www.rips.gov.ph/ accessed 29 August 2011

188

http://www.transparency.org/ accessed 4 March 2011

http://www.worldbank.org.ph accessed 4 March 2011

189