Pork is Political, Not a Developmental Tool

6-7 SEPTEMBER 2004
Pork is Political, Not a Developmental Tool
by YVONNE T. CHUA and BOOMA B. CRUZ

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As the country debates the best ways of managing the current "fiscal crisis," the focus once again has shifted to pork-barrel funds, the discretionary funds allocated to members of Congress. While some legislators have agreed to a cut in their pork, many others defend pork and justify its usefulness as a developmental tool.
The PCIJ's investigation, however, proves otherwise. This two-part series says that pork is primarily a vote-getting vehicle and a source of political patronage. It is also a tool wielded by the executive to buy the support of Congress for the bills Malacañang wants passed. Pork, moreover, provides an opportunity for lawmakers to rake in bribes and commissions from contractors of pork-funded projects.

The series explains how pork allocations grew from P12.5 million per representative in 1990, when the practice of giving legislators pork barrel was reinstated, to the current P65 million per congressman. The first part of the series shows how pork is used to keep legislators in power. The second part examines more closely corruption in pork-funded projects.
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IN 2001, 108 congressmen gave P162 million of their Priority Development Assistance Fund (PDAF) — considered as the "main" pork-barrel allocation — for medical assistance to their constituents through the Department of Health and various government hospitals. The Philippine General Hospital, the country's biggest state hospital, received P30.8 million.

The amounts are significant, and this example is often used by legislators to show that despite criticism, pork-barrel funds are actually used for the public good. In a recent TV interview, Senator Manuel Villar cited the case of government hospitals, which he said would suffer from a proposed cut in pork.

It is true that pork subsidizes underfunded state hospitals. But it is also true that lawmakers often make sure that only their constituents benefit from their allocations. Thus, even while state hospitals are strapped of funds to buy equipment or medicines, they can seldom use pork unless it is to directly benefit a legislator's constituents even if these are not necessarily the ones who needed help the most.

This example illustrates the dilemmas of pork. As the country debates how to deal with the current "fiscal crisis," pork-barrel funds are again in the eye of the storm. Legislators insist that pork is a developmental tool and cutting it as a means to address the budget deficit would have a negative impact on the countryside, which has traditionally been neglected by the national government.

The reality, however, is that pork is primarily a vote-getting vehicle and a source of political patronage. It is a tool wielded by the executive to buy the support of Congress for the bills Malacañang wants passed. Pork also provides an opportunity for lawmakers to rake in bribes and commissions from contractors of pork-funded projects.

Pork barrel, or simply, pork, refers to appropriations and favors obtained by a representative for his or her district. These funds are discretionary in nature, meaning it is up to each congressman or senator to identify the projects that will be funded by their pork-barrel allocation and the beneficiaries of the spending. Senators now get pork-barrel allocations of P200 million each, while congressmen are allotted some P65 million each.

Pork allocations have grown over the years-they were only P12.5 million per representative when pork barrel was reinstituted in 1990-as congressional leaders wangled bigger and bigger amounts from the executive.

Members of Congress say that pork fills a gap, as it addresses the needs of areas that are too remote or of social sectors that are too powerless, their plight is not heeded by the national government. They cite the sorry state of government hospitals as a case in point.

It is true that congressmen set aside chunks of their pork money for health care, but these sums are sometimes not used at all — despite the long queues of indigent patients at public hospitals and the stark lack of medicines and equipment in most of these facilities. The beneficiaries of legislators' largesse may be needy, but they are also politically well-connected. Those who have no access to their congressmen do not qualify for help.

The pork appropriation that a government hospital gets is stipulated as a "subsidy for indigent patients in the district" of a congressman, and cannot be used for other purposes, including the purchase of medicine or equipment that nearly all government hospitals need badly.

A state auditor assigned to the DOH recalls how the director of a big Quezon City-based specialty hospital, seeing that no one had availed himself of a congressman's fund, tried to persuade the lawmaker to allow the hospital to give the unused pork to patients other than those from his district. The year was fast drawing to a close and the unused money would soon revert to the National Treasury. But the congressman refused and instead asked the hospital director to transfer the amount to a trust fund so he could still use it the following year. This time, it was the hospital director's turn to refuse.

Some congressmen have made it a point to instruct government hospitals to use their pork only for patients bearing a "political ID" issued by their offices, says the auditor. Often, though, state hospitals are informed which patients are entitled to the pork funds through a letter of recommendation personally signed by the legislator.

The letter, which identifies the beneficiary and specifies the amount he or she is entitled to, is either submitted by the patient or sent by the legislator's office to the hospital. It's not only the poor who get a slice of pork, though. Because the congressman can nominate anyone, even nonindigents sometimes get into the list of beneficiaries.

But legislators want to please as many people as possible, so they dispense medical assistance of as little as P2,000 to P5,000 per patient. Considering the high cost of medicine, patients — especially those with serious or chronic illnesses — soon learn the pittance barely helps them get better. In government hospitals, pharmacies are so inadequately stocked they do not even carry paracetamol and other basic medicines. Patients are advised to use their own money and buy the medicine from private drugstores. In instances like this, the pork they get serves little use.

Congressmen, however, rarely see anything wrong with their role as patrons of their districts and implementers of projects. "Take that away, ano pang gagawin namin (what else would we do)?" asks Compostela Rep. 'Way Kurat' Zamora. "Of course, there's the national budget, naming of streets, but saturated na rin ang laws. And I think without that (pork), no one will run."

The practice, however, inevitably leads to patronage, where the challenge to incumbent congressmen becomes twofold: to raise funds for projects for his district and to ensure that a patron-client relationship between him and his constituents is sustained. Congressmen always make sure their constituents know exactly who a project's sponsors are. In the case of infrastructure, billboards prominently naming them as proponents are mounted at the project sites. Many legislators also have their names printed on medical kits or textbooks, or painted on service vehicles.

"We're prisoners of the game," says a congressman. "People are kept dependent and poor because that's how you want to keep them. You don't empower them, so they stay poor. You just buy people with project money."

The political fates of representatives are tied more tightly to pork barrel compared to those of senators. Unlike senators who are elected to national office on the basis of national issues and name recall, congressmen are voted by constituents due to the projects and other benefits they deliver to their districts.

"You see this in nearly all campaigns," says a veteran legislative hand who has served as chief of staff of several representatives. "The mayor or governor endorses the congressional candidate and keeps reminding voters that the candidate is the most qualified because he or she can bring back projects from Manila. The local officials don't even bother with the person's ability to make laws."

Senate President Franklin Drilon himself acknowledges the importance of the pork barrel for someone aiming for a House seat. This is why senators appear to be more open to a pork cut than their colleagues in the Lower House.

"I can still win (in a place where I do not have a pork-barrel project) if I am a champion of this or a champion of that," says Drilon. "But to a congressman, blighted 'yan. Kahit anong isyu sa Maynila, even if he runs naked in a hotel, that's nothing as long as he brings a project to his district. You let a senator run naked in a hotel lobby, do you think he can win in the next election?"

Even party-list representatives concede that they need pork for political survival. "We can't fight pork because it's institutionalized," said one who served in the previous Congress. "Hinahanap 'yan ng tao (People look for it). What we can do is just to look for projects that address the needs of our constituents."

But a congressman's constituents expect him to deliver more than just jobs or basic infrastructure like artesian wells, farm-to-market roads, barangay or social halls, basketball courts, classrooms or schoolbuildings, and health centers. Writes Lynda Jumilla, a senior reporter assigned to Congress: "The role of provider extends to, or overlaps with, that of a sympathetic friend or patron. A congressman is often asked to stand as wedding sponsor or baptismal godfather, and to do the rounds of wakes and burials. In political parlance, this is referred to as KBL — kasal (wedding), binyag (baptism), libing (burial). In most cases, the congressman is even expected to shoulder some of the expenses — a wedding or baptismal reception here, a coffin or a tomb there."

Assuming the role of patron thus entails a lot of money, and many legislators have conveniently parlayed their pork barrel into a steady source of funding for their patronage machine. "Ordinary people consider the congressman as the 'DSWD' — if someone is sick or dies, they run to him," a legislative officer says, likening lawmakers to the Department of Social Welfare and Development. "Some congressmen have limited means or nowhere to get the money for these extras so they put their pork in hospitals and save on out-of-pocket expenses except probably for the transportation."

There is, however, a limit on how pork barrel can be spent. Using public money for weddings and baptisms is definitely out of the question. The Commission on Audit (COA) also frowns on the use of pork to help defray the placement fees of constituents seeking jobs overseas.

COA, however, has no problem with pork being forked over for the sick, needy, or dead in a congressman's district. Thus, each year, the national government allows a substantial amount of pork barrel to be channeled to scholarships in state colleges and universities, subsidies to indigent patients in government hospitals, and funeral assistance to the poor.

Pork as a tool for political patronage, however, can extend as far as the executive branch. It is no accident, for instance, that the release of the allocations often coincides with the passage of a Palace-sponsored bill.

That pork funds have grown by leaps and bounds in the last decade can be traced to presidents in need of Congress support. The rise in pork was particularly notable during the Ramos administration, when the president and House Speaker Jose de Venecia Jr. used generous fund releases to convince congressmen to support Malacañang-initiated legislation. The Ramos era, in fact, became known as the "golden age of pork."

Through the years, though, congressmen have also taken care to look after their very own. More often than not, pork-barrel funds are funneled to projects in towns and cities where the lawmakers' own relatives have been elected to public office; thus, pork is a tool for building family power as well. COA has come across many instances where pork-funded projects ended up directly benefiting no less than the lawmaker or his or her relatives.

In Central Luzon, for example, money that ought to have gone to the purchase of a utility vehicle for rescue operations, disaster preparedness, and district operations of the provincial government was diverted instead to the purchase of a Nissan Patrol. The luxury vehicle also became the service vehicle of the congressman whose pork was used to buy it.

Down south, an engineering district never benefited from the motorcycle and photocopying machine acquired through a congresswoman's CDF supposedly for its use. These were transferred to the field office of the proponent right after their purchase.

But in the last three years, a new thinking on pork-funded projects and its capability to secure votes has emerged. As one congressman tells it, an increasing number of his colleagues now believe that more than government-funded projects, money spent to buy votes actually dictates their political fates. "At the start of the 1998 Congress, the talk was, what's your strategy, how are you going to win?" he says. "In 2001, there was no more talk of strategy. The question was, what's the going rate in your district?"

He says that in one of these tête-á-têtes, a congressman from an impoverished province claimed the going rate in his jurisdiction went as high as P1,500 to P3,000 per voter. "They don't just buy votes, they pay the antis so they will not vote," the legislator says.

Another congressman traces the irresistible lure of money to voters to the depths of poverty in the country. "During the final hour, the one who is going to give them P50, which they can use for their needs, is one they're going to vote for," he says. "What you did prior to that is glossed over. It is the immediacy of the need."

Vote buying as a tool to clinch an election victory is likely to change the way legislators use their pork barrel, says the legislator. "In our conversations, they say, 'you know, it's useless to have projects. Let's just save the money and then use it at the 11th hour… If you don't do that, when well-funded candidates come in, our projects will be forgotten. Don't count on utang na loob (debt of gratitude) from those you helped. They'll sell you out because it's the present that's important. Those projects, people don't see it as something they should thank you for personally.'"

A few months before the 2004 elections, a publicist of several members of the House estimated that more than half of all congressmen had not touched their pork for projects, saving it instead for reelection purposes. A legislator from Mindanao also describes politicians as having turned "desperate," with first-termers sweating the most in fear of losing their seats.

The problem with this new thinking is that the desperation among politicians can only breed and spread more desperation to the populace. As one lawmaker notes, "You have just one flashflood of money, you keep your people poor. It's like a time bomb and it's scary."



Part Two
Legislators Feed On Pork
by YVONNE T. CHUA and BOOMA B. CRUZ

IN THEORY and in law, the legislators' role in pork-barrel allocations remains limited to "consultation" to enable them to recommend priority projects. In practice, however, they have the final word on what projects should be funded.

The release of pork is based on the lawmakers' request to the Department of Budget Management (DBM), detailing the nature and location of the project they want, the implementing agency, and the funds required. This setup makes legislators the lords of pork-barrel funds. It also makes them natural magnets to contractors and suppliers who offer bribes so they can sell their goods and services.

No one knows exactly how much is lost to corruption in pork-funded projects. A long-time politician from the North who admits to accepting "small commissions" says that in a year, corruption in pork-barrel projects translates to about P12 billion in losses for the government.

In May 2002, Camarines Sur Rep. Rolando Andaya Jr. gave his own estimate of how much the government loses to wrongdoing. In a speech seeking to rally his colleagues' support for the procurement reform bill, Andaya, chairman of the House appropriations committee, said P21 billion or a fifth of the government's P104-billion procurement budget in 2001 went to the pockets of legislators, officials, and contractors alone.

The amount lost is about half of the 2002 budget of the Department of Public Works and Highways (DPWH), and bigger than the budgets of state universities and colleges (P16.8 billion), the Department of Transportation and Communication (P13.3 billion), and the Department of Health (P11.8 billion).

The procurement budget includes the pork barrel of senators and congressional representatives. Going by Andaya's estimate, about P4 billion or a fifth of the P20 billion allocated for pork this year was likely lost to corruption.

But this may be an understatement. In 1998, former finance and budget secretary Salvador Enriquez estimated that as much 45 percent of pork funds went to "commissions," particularly transactions involving medical supplies and educational materials. The kickbacks from infrastructure projects, which are traditionally more expensive, ran up to 30 percent of the total project cost, he said.

In 2001, Enriquez asserted that only about 60 percent of government funds goes to the implementation of development projects and activities. The balance lines the pockets of a "web of conspirators" that he said were "difficult to pinpoint." Following Enriquez's estimate, the bribes paid from pork funds this year would be in the range of P8 billion of P20 billion earmarked for pork.

One veteran legislator says that congressmen tend to be more tempted to accept commissions from pork-barrel projects than senators. That's because they have to worry about pleasing their constituents, he says.

"Contractors give me money, around five percent of the project cost, because they know I need it," says the congressman. "I don't demand, but I accept what they give me. I need it to help my constituents. This is common practice. It will be difficult to name a colleague who does not benefit from these projects."

As a rule, contractors are careful in dealing with senators. Senator Panfilo Lacson himself says many contractors have approached him to ask how big a cut he wants from his pork-barrel projects. But that may not have been a wise move, since Lacson, who has made a study of the pork-barrel system, has filed charges with the Ombudsman against people who, he says, had hands that were greasy with pork money.

In 2002, Lacson spent P147 million of his P150-million pork funds for projects that included building farm-to-market roads and supplying water to some towns. At least two of those projects, however, led him to file graft cases against two members of his own staff, as well as against a DPWH regional director, a district engineer, and a municipal mayor. According to Lacson, these people made money from the transactions, which made the government lose millions of pesos in the process.

Last year, the senator announced that he was giving up his P200-million pork barrel. He not only urged his colleagues at the Senate to do the same, but also called for the abolition of pork.

By his own estimates, Lacson says only less than half of the taxpayers' money actually goes to projects. He figures the breakdown of the kickbacks of the project proponents and implementers is something like this: 20 percent, or the lion's share, to the legislator who identified the project; 14 percent to the contractor; 10 percent to the district engineer and other DPWH officials; five to 10 percent to the governor or mayor; two percent to the barangay captain; and two percent goes to the Commission on Audit (COA) official who is supposed to be the watchdog of the people's money.

Even the billboards that advertise the projects and their proponents are overpriced, says Lacson.

A big-time contractor who handles public works projects of senators and congressmen confirms the continuing practice of legislators drawing kickbacks from pork. But he gives a different kickback breakdown: legislator, five to 10 percent; DPWH, five to 10 percent; DBM, one percent; COA, 0.5 percent. The contractor says the amounts have gone down slightly because the payment of VAT or valued added tax, a stipulation of the Bureau of Internal Revenue, has eaten into the usual share of legislators and DPWH personnel from pork. VAT accounts for 10 percent of the project cost.

A senator points to dredging, asphalt overlays, and farm-to-market roads as the most corruption-riddled infrastructure projects. "There is simply no way to monitor how well these are implemented," says the senator. "If they tell you they will dredge x cubic meters who will check where the hell that number of cubic meters went? The same with asphalt overlay. Whether it is one centimeter or 10 inches, nobody knows."

Another contractor adds that the public will never even know how many times a certain project has been approved for repair by how many agencies.

A COA insider confirms auditors partake of payoffs, but clarifies that the state auditing agency's total share is bigger than many assume. "Decisions (of auditors) are really for sale," says the insider. "You have the inspector who does the after-project report and gets 0.5 percent of the pork. You have the director who gives his opinion or approves the report. And you go up the ladder. For COA, that must be about 10 percent to 15 percent of the pork all in all. It's a small price to pay for politicians when you think of the possibility of going to court."

A 1998 PCIJ study showed that the biggest kickbacks of legislators come from the purchase of medical supplies and educational materials funded by the Countrywide Development Fund and the Congressional Initiative Allocation. With such purchases, grease money can take up from 40 to 65 percent of project cost. In comparison, commissions from infrastructure projects ranged from 12 percent to 20 percent.

Lawmakers get half of the cut as soon as the deal is struck; the balance, upon the issuance by the DBM of the Special Allotment Release Order (SARO) and/or the Notice of Cash Allocation (NCA). The SARO gives the implementing agency the authority to contract goods and services, while the NCA is an assurance that funds for the project are already available in the implementing agency's bank account.

Legislators, however, do not have a monopoly on the largesse from pork-barrel projects. One PCIJ study tracing the flow of pork, for instance, indicates that heads of implementing agencies get 10 to 12 percent of total project cost upon issuance of the SARO/NCA. Budget personnel are allotted one to two percent "to expedite the release" of funds to the implementing agency.

After the bidding and during the execution of projects by the contractors, local officials are given their share, too: seven percent to the mayor and three percent to the barangay captain, all paid after the issuance of the necessary permits.

During the Estrada administration, kickbacks from various items due to overprice, nondistribution, or cash conversion (in the case of National Food Authority or NFA rice for distribution) reached as high as 50 percent of total pork funding. A congressional staff member also recalls, "The rice subsidy was the favorite of many congressmen because they could give away just a few and then the rest they would then sell to rice traders. That became rampant until finally it was stopped because too many legislators could no longer explain where much of the rice was going."

Before the practice was halted, congressmen had poured P636.5 million of their pork into the rice subsidy programs in 2001. The amount accounted for 40 percent or the biggest share of the first tranche-amounting to P1.62 billion-of the Priority Development Assistance Fund or PDAF released that year.

But another congressional staff member says legislators found a way to go around this. Soon, the favorite pork project of wily lawmakers became funding "local government unit capability building"-which could be "almost anything," says the staff member. From 33 percent of the first tranche of the PDAF in 2001, the share of these types of projects leapt to 60 percent of the second tranche of the facility that very year.

Often, the project involved the distribution of educational materials, which, with the help of local government officials, could easily be faked. "The money could look used up even if there wasn't anything distributed," the congressional employee says. "All you need is the cooperation of the local executive."

This scheme remains popular. But lawmakers, contractors, and government regulators talk of different percentages and parameters, and give varying justifications for the practice.

Allegations of anomalies attending pork-barrel projects have prompted the DBM to limit the funds' use to areas that are less prone to corruption like scholarships and medical assistance. The DBM under the Arroyo administration has thus prohibited the use of pork funds to buy NFA rice, medicines, and textbooks and supplementary materials.

In 2003, Congress appended a special provision in the General Appropriations Act (GAA) allowing its members to use a maximum of 10 percent of their PDAF to procure rice and other basic commodities from the NFA. Such authority was included by President Arroyo among the items for conditional implementation in her veto message. Although spared from direct veto, the disbursement of funds to buy NFA rice required that appropriate guidelines first be drawn up.

Meanwhile, contractors say that while they are now wary of approaching Lacson, not all senators are above cutting deals with them. Unlike their colleagues in the House, members of the Senate are more discreet, say contractors and Senate insiders.

After a brief casual meeting, negotiations for commissions are coursed through coordinators, usually the senator's children, sibling, chief of staff, or project manager, says a contractor. Some congressmen adopt the same modus operandi.

The children of a former senator were said to be part of their father's multimillion-peso gravy train. According to some contractors, they committed projects and accepted the commissions on behalf of the senator. One contractor recalls advancing P5 million to the ex-senator's son for a P50-million project. When the project didn't push through, the contractor asked for either a refund of his "earnest money" or another project. The senator's son kept the money and the contractor was given another project.

The contractor says there are also cases where a legislator's close aide would cut a deal for himself without his boss's knowledge. The chief of staff of a senator known for turning down commissions, for example, once asked a contractor for a sports utility vehicle. But the aide failed to deliver the promised contract. The contractor, who had made sure the vehicle remained registered in his name, took back the P1.3-million car.

A Congress insider says some contractors are asked for commissions by the legislator's staff who assist them. In some instances, the contractors voluntary hand the staff "tips." And sometimes the liquidation of funds is padded. The insider says a few chiefs of staff band together and share tips on how to make commissions.

Contractors say they make up for the bribes by ensuring that these are covered by the overprice in project estimates. Some contractors also ignore project specifications to ensure bigger profit margins.

Once an understanding about a project is reached, the lawmaker instructs a member of his staff to write the head of the Senate finance committee or the House appropriations committee to identify the projects. The letter is forwarded to the DBM and the implementing agency.

For public works projects, the contractor then goes to the DPWH regional director with the legislator's letter. He proceeds to the engineering group, which prepares the specifications of the projects based on the contractor's requirement. After this, a bidding notice is announced through the newspapers and the contractor with the legislator's letter is expected to "win" the award.

Except for the amount of funds at the senators' disposal, transactions involving the pork barrel of congressmen follow almost the same pattern. Unlike in the Senate, though, suppliers and contractors openly trawl the Batasan complex, especially when the SAROs and NCAs are issued. Some of them seem to feel so at home at the House that they can be seen cooling their heels in the session hall or bantering with Congress personnel.

The same suppliers and contractors also visited the congressman's office carrying bulky bags or envelopes. Says the staffer: "You'd know right away if it was payoff time. The money would be inside an envelope or bag. Once the (supplier or contractor) came out, the envelope would be gone or the bag would suddenly look flat. And then we'd suddenly have free merienda."


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