Shame and Scandal in the First Family

THE FIRST FAMILY
Shame and Scandal in The Family
The Arroyos have weathered allegations that range from keeping secret bank accounts to getting money from illegal gambling.


FROM overpriced highways to secret bank accounts, to gambling lords and thoroughbred horses, controversies have hounded the Arroyo administration long before wiretapped conversations implying election fraud hogged the headlines. And it is not only the president who has more than once been asked to account for charges of improper behavior; so too have husband Mike, eldest child Mikey, and brother-in-law Ignacio Arroyo.

IMPSA

Four days after it assumed office, the Arroyo administration approved the awarding of a controversial $470-million contract to the Argentine firm IMPSA (Industrias Metalurgicas Pescarmona Sociedad Anonima) to rehabilitate a hydroelectric plant in Laguna. Justice Secretary Hernando Perez was later accused of demanding and receiving $2 million dollars from ex-Rep. Mark Jimenez, who brokered the deal. Jimenez said he wired the amount to the account of Ernest Escaler in Hong Kong on Feb. 23, 2001 from his bank in Uruguay. The former congressman was later extradited to the United States, where he had to serve a two-year jail term for federal election fraud and tax evasion.

SAN FRANCISCO

From the time she was first elected senator in 1992 up to 2004, Gloria Macapagal Arroyo had failed to declare in her sworn Statements of Assets, Liabilities and Net Worth the properties her husband, Jose Miguel ‘Mike’ Arroyo, bought in San Francisco through his California-based LTA Realty Corp. In 2003, Newsbreak reported that Mr. Arroyo acquired, resold, and managed at least five properties with a total value of at least $7.1 million in the Bay City from 1992 to 2000. The First Couple said they bought the properties in trust for Mike Arroyo’s younger brother, Ignacio or Iggy, now a congressman.

BONG PINEDA

President Arroyo has been questioned about her personal connection with alleged jueteng boss Bong Pineda: She is godmother to one of Pineda’s sons. She has denied any impropriety, saying she doesn’t associate with Pineda or his crowd. In an interview with Time magazine in 2001, she said that when she was asked to be ninang, she sought and received counsel from Manila Archbishop Jaime Cardinal Sin. Recalled Arroyo: “Cardinal Sin said, as a Christian, if I am asked to be a godmother, it is my Christian duty, because the sins of the father are not the sins of the son.”

MACAPAGAL BOULEVARD

In the middle of 2002, Sulpicio Tagud Jr., then board director of the Public Estates Authority (PEA), blew the whistle on what he said was the overpricing by over P600 million of the construction of the 5.1-kilometer President Diosdado Macapagal Boulevard at the Manila Bay reclamation area. First approved during the Estrada administration, contracts for constructing the highway were allocated to three companies: Shoemart Inc. (one portion), DM Wenceslao (one portion), and Jesusito D. Legaspi Construction (JDLC for the remaining three portions). A series of supplemental contracts with JDLC were later approved by the PEA board under the Arroyo administration, increasing the original approved cost of their section of the highway. Tagud did his investigations and found that while the SM group of companies constructed its part of the boulevard at a cost of P54,000 per lineal meter, JDLC built its section at P302,000 per lineal meter.

PIATCO

The construction of the 1.1-km-long, four-storey Terminal 3 of the Ninoy Aquino International Airport (NAIA) by the Philippine International Air Terminals Co. (Piatco) has been riddled with controversies. Some of these were inherited by the Arroyo administration, while others were allegedly of its own doing. In May 2003 opposition Sen. Edgardo Angara accused Malacañang of trying to extort, through the Villaraza law office, some $20 million from Fraport, the German firm with a 30-percent stake in Piatco, in exchange for legal favor.

But the Piatco scandal is a long running one. It figured prominently during the confirmation hearings for Arroyo-appointed Transportation Secretary Pantaleon Alvarez in 2002. Alvarez was alleged to have obtained an overpriced subcontract for one of the public works projects related to the airport terminal. In exchange, Alvarez, while transportation secretary, was reported to have given the firm “onerous” advantages. Piatco was also accused of paying since June 2001 huge sums of money to a public relations consultant, Alfonso S. Liongson, an associate of the First Gentleman, for getting signatures of officials for either permits or supplementary agreements to its contract with the government. Liongson reportedly used part of the money to bribe officials for their signatures. The terminal was finally mothballed in 2003 when President Arroyo revoked Piatco’s build-operate-transfer contract. In December 2004 the government took over the airport, after the Supreme Court affirmed the contract’s revocation. It remains unopened.

MIKEY’S HORSES

Newsbreak in August 2003 broke the news on a plan of presidential son Juan Miguel “Mikey” Arroyo to import 32 thoroughbred horses from Melbourne, Australia. The then Pampanga vice governor, now a congressman, denied the allegation. He admitted, though, that he was in the horse-trade business. The young Arroyo owns Franchino Farms along with cousin Franchino Pamintuan and friend Ralph Mondragon.

JOSE PIDAL

On Aug. 18, 2003, opposition senator Panfilo Lacson accused First Gentleman Jose Miguel Arroyo of money laundering for supposedly siphoning off at least P321 million in campaign funds and contributions and putting these in a secret bank account under the fictitious name Jose Pidal and in three other accounts using the names of his aides. Among the “donors,” Lacson said, was then Rep. Mark Jimenez who contributed a total of P8 million. Lacson also accused Mr. Arroyo of having an affair with his accountant, Victoria Toh. Following Lacson’s allegations, Mr. Arroyo’s younger brother, now congressman Ignacio or Iggy, came forward to say he is Jose Pidal.

AGRI FUND

The First Gentleman was linked in May 2004 to the alleged diversion of P728 million from the Ginintuang Masaganang Ani program to President Arroyo’s campaign war chest in the form of development assistance funds to local government units. Then Agriculture Undersecretary Jocelyn I. Bolante, Mr. Arroyo’s classmate at the Ateneo de Manila University and a colleague at the Rotary Club District 3830, cleared the First Gentleman of involvement. Bolante was tasked to oversee the implementation of the Ginintuang Masaganang Ani program at the time.

PHILHEALTH CARDS

Six weeks before the May 2004 elections, two lawyers from PRO-CON(stitution) filed a disqualification case against President Arroyo before the Comelec, saying she was behind the enhanced Philippine Charity Sweepstakes Office’s Greater Medicare Access or GMA program, which they claimed was meant to prop up her candidacy. Earlier, another PRO-CON lawyer filed a criminal suit, also before the Comelec, against then PCSO chief Maria Livia “Honeygirl” de Leon and PhilHealth president (now Health Secretary) Francisco T. Duque III for vote buying, intervention of a public officer, using public funds for election purposes and using banned election propaganda. Public funds were allegedly spent to enroll families in PhilHealth for one year to induce the enrollees to vote for President Arroyo. The premium cost of P1,200 for each family member was chargeable to PhilHealth and the PCSO.?The PhilHealth identification cards bore the President’s picture and the name. Their distribution coincided with the start of the election campaign.

LAS VEGAS SUITE

The First Gentleman was the subject of another controversy over his alleged use of a $20,000-a-night suite at the MGM Grand Hotel in Las Vegas, Nevada during the boxing match between Manny Pacquiao and Mexico’s Erick Morales last March 19. The story first appeared as a blind item in the March 23 column of Inquirer sports columnist Recah Trinidad, who wrote that a “heavyweight backer” of Pacquiao had stayed in a $20,000-suite at the MGM Grand. Mr. Arroyo would later say he did not see anything corrupt about accepting the generous offer of a free luxury suite from the hotel, arguing that his stature as the husband of a head of state entitled him to such perks.

JUETENG (AGAIN)

In Senate hearings on the illegal numbers game that began in May 2005, jueteng operators and bagmen said the President’s husband Mike, her son Mikey, and her brother-in-law Ignacio or Iggy were among those who received monthly payoffs from gambling lords. The payoffs supposedly ranged from P500,000 to P1 million. One of the witnesses, businesswoman Sandra Cam, testified that in December 2004, she personally delivered the cash to Mikey (in a gift-wrapped package) and Iggy (in an envelope) at the House of Representatives. The deliveries were supposedly made on the instructions of retired Chief Supt. Restituto Mosqueda, former police director for Bicol and alleged protector of jueteng operations in Luzon. On June 8, the President ordered the Department of Justice to investigate her son and brother-in-law, saying, “Nobody in my family or kin are above the law and no investigator or prosecutor could fear to uphold the law against them. I will stand for justice no matter who gets hurt.” The Office of the Ombudsman has since taken over the DOJ investigation. Both Mikey and Iggy, meanwhile, have sued Cam for libel.

The Unmaking of the President

THE PRESIDENT
The Unmaking of the President
Mrs. Arroyo is reaping the consequences of the damage she has wrought on key institutions.
by SHEILA S. CORONEL


UNTIL last month, the heavens seemed to have favored Gloria Macapagal-Arroyo. The economy was picking up, the stock market was trading briskly, and Congress had just passed a new tax measure. For sure, the budget deficit and rising oil prices were something to worry about. At the same time, the opposition seemed bent on raking the jueteng muck. But all these were part of life — and politics — as usual.

After all, the president had won by a convincing margin in 2004, and although doubts about the integrity of the balloting lingered, the main opposition contender in last year's elections, the actor Fernando Poe Jr., was dead and buried. Joseph Estrada was safely languishing in the ennui of luxurious house arrest. And the rest of the opposition, while strident and noisy, was also fractured, discredited, and somewhat dispirited. President Arroyo's popularity may have dipped because of the hard times, but she was clearly, unmistakably in command.

And then came The Tapes. Suddenly, it seemed that the President had lost favor with the stars.

And yet, the stars are not solely to blame. The crisis that has paralyzed the presidency is as much of Arroyo's making as it is of the confluence of circumstances that brought us to where we are now: on the brink, possibly, of another political upheaval.

Blaming the opposition for the current mess gives it too much credit and endows its members with more cunning than they have. Neither the opposition nor the stellar Susan Roces can lay claim to the unraveling of the Arroyo presidency. Gloria Arroyo did that largely on her own. She is reaping the consequences of the damage she and her predecessors have wrought on the electoral process and on key institutions, among them, the Commission on Elections, the military, and the police.

AN INSECURE PRESIDENT

Much more than Fidel Ramos and Joseph Estrada, Arroyo has politicized these and other agencies of government, stunting their professionalism and turning them into puerile props for a president insecure about her mandate and the affections of her people. She has reasons to be insecure. She became president in 2001 only because Estrada fell and she was second in line to occupy Malacañang. Even those who voted for her in 2004 did so mainly because she was the safest bet, not because they believed in her, much less loved her, She was the lesser evil, not the principled choice.

The president's insecurity is also partly due to Edsa 3. Arroyo was traumatized by Labor Day 2001, when thousands of slum dwellers protesting Estrada's arrest came close to breaching the defenses of Malacañang. Even as angry masses were storming the Palace gates, the President remained isolated, unsure of .the loyalty of the military and the police. Edsa 3 defined her presidency and made her acutely aware of her vulnerabilities and perpetually anxious about the stability of her rule.

Since then, Arroyo has exerted every effort to win the allegiance of the military and the police by buying their loyalty through promotions, perks, and special access to her. She used these institutions to quell legitimate threats to her government, like the 2003 Oakwood Mutiny. Nothing wrong with that. But having courted the favor of strategic officers, these agencies were also used for more partisan purposes, including keeping tab of the president's political opponents and, if the conversations in the "Garci" tapes are to be believed, also to ensure her victory in 2004.

The Tapes that have set off the current crisis exist only because the head of Mrs. Arroyo's favorite military agency, the Intelligence Service of the Armed Forces of the Philippines or ISAFP, ordered the wiretapping of presidential phone pal Virgilio Garcillano. President Arroyo called the elections commissioner 15 times in the span of three weeks in May and June 2004.

The wiretapping, according to military and intelligence sources, was instructed by Malacañang political operatives, who wanted to keep track of the commissioner's movements, for fear that he would favor the opposition instead. "This is because the administration party, as we've learned, considered Garcillano as a vulnerable target of the political opposition for them to be able to cheat in the last elections," a military officer told the Philippine Star a few days after the tape scandal broke.

THE WIRETAPPERS

Since she assumed power, the President has turned ISAFP into a sniffing dog against her enemies, most notably Sen. Panfilo Lacson but also an assortment of other "bad" guys (ex-RAM, ex-Erap, ex- and current communists). ISAFP officers could go straight to President Arroyo and to the First Gentleman, bypassing the chain of command. The president, as Newsbreak reported, also personally handpicked all the ISAFP commanders during her time, starting with the controversial Victor Corpus, who led the charges of "narcopolitics" against Lacson.

But that is a digression. Suffice it to say that Garcillano was wiretapped by ISAFP operatives on orders of their superiors, who in turn got their orders from the Palace.

The wiretaps would not have been made at all had President Arroyo left ISAFP alone and allowed it to operate as an independent, professional intelligence agency free from partisan politics. But even if for some reason ISAFP on its own had made the recordings, these would not have fallen into opposition hands had the morale of ISAFP personnel been high and their commander-in-chief commanded their respect and loyalty.

Intelligence sources say one of the ISAFP agents linked to the release of the tapes, the ill-starred T/Sgt. Vidal Doble, is a "loyal soldier" who would probably not have succumbed to opposition inducements to be part of the plot if ISAFP were a more disciplined and tightly run organization.

The problem is that President Arroyo's sense of institutions is overwhelmed by her inherent insecurity and instincts for survival. She has put her own partisan political interests over the long-term development of the institutions of government. The scandal over The Tapes shows the 'pitfalls of this approach: rather than bolstering her rule, the weakened institutions only further heightened her vulnerability.

CORRUPTING INSTITUTIONS

Take the Comelec: Arroyo went farther than either Ramos or Estrada ever dared. Ramos, who had ambitions to hang on to the presidency, named his trusted knaves — the autocratic and mercurial Bernardo Pardo and the "kissing lolo" Manolo Gorospe to the commission. Estrada got the controversial professor Luz Tangcangco, who used the Comelec to settle old academic scores and ended up being so powerful that she single-handedly delayed automation of the counting.

Instead of rebuilding the Comelec's shattered credibility by naming respectable commissioners, Arroyo handpicked a political ally, Benjamin Abalos, to head the commission. Just as the 2004 presidential campaign was kicking off, she also named Garcillano, a known dagdag-bawas (vote padding and shaving) expert, and Manuel Barcelona Jr., her campaign contributor, as commissioners. These appointments contributed to the further weakening of the Comelec's institutional capabilities and effectiveness, thereby only contributing to the general unease about the count. Thus, even if she really and truly won in 2004, the Comelec's bad performance darkened the shadow of doubt that hung over the results of the voting.

After The Tapes, that shadow is now a huge, ominous cloud. Comelec's credibility is now completely shattered. Thanks to President Arroyo's phone calls, it's one key institution now wallowing in the muck.

As this whole affair unravels, one wonders which agency of government will next be covered in slime. The revelations in The Tapes of the collusion of the military and the police in election fraud will likely take on a life of its own. As the opposition gets the upper hand, it is more than possible that insiders in the police and the armed forces who were part of that conspiracy will talk.

THE POLITICS OF DIRTY TRICKS

Apart from these, the staff and resources of civilian agencies of government were also used for the campaign. There's Philhealth, the state insurance company that issued millions of health cards that Arroyo gave away as largesse during the campaign. Part of the funding for those health cards came from the medicare program of the Overseas Workers' Welfare Administration or OWWA, which authorized the possibly illegal fund diversion. The Philhealth chief then, Francisco Duque III, is a neighbor of the Arroyos at La Vista and has been rewarded for his role in the elections by being named health secretary, replacing the more professional Manuel Dayrit.

There's the Department of Agriculture (DA), headed until last week by lawyer Arthur Yap, Arroyo's former student and a known crony of the First Gentleman. The DA released millions of pesos in fertilizer subsidies to win the support of local officials. During the campaign, Yap headed the National Food Authority, which was reported to be giving out free rice as part of the effort to win votes for Arroyo in the May 2004 polls.

There's the Department of Public Works and Highways, which implemented the road-repair programs that oiled the administration's patronage machine. The current chief of that department, former police top gun Gen. Hermogenes Ebdane, is another officer known to be close to the First Gentleman.

There's of course the Philippine Amusements and Gaming Corp. or Pagcor, headed by yet another close buddy of the First Gentleman, Ephraim Genuino. Pagcor has been accused of releasing millions to fund various doleout projects associated with the presidential campaign. Genuino was also reported to have handed money to fund Garcillano's postelection manipulation of the count (see the article, "Master Operator," in this issue).

In her desire to be elected president, Gloria Arroyo (with the more than ample help of her husband) mobilized the whole machinery of govemment for her campaign, in the process wreaking havoc on key institutions. Having so used the police in the elections, even mobilizing them to do a parallel count, how can she now discipline them over such matters as jueteng, for example? Having played favorites with the generals, how can she now punish them for the corruption that is ravaging the armed forces? Having owed so much to the Garcias of Cebu for her landslide win in the province, how can she now get rid of Winston Garcia, who has been accused of messing around with state pension funds?

THE PRICE OF VICTORY

Her victory (if she really won) was exacted at a very high price: the effectiveness and credibility of the most important office of all — the Office of the President. The conduct of the elections and the use of state resources for the campaign took the luster out of Gloria Macapagal-Arroyo's electoral triumph. Even without The Tapes, the long count and the blatant use of government resources did little to shore up the Office of the President.

The cynical public response, first to Press Secretary Ignacio Bunye's two tapes and later, to President Arroyo's apology and her banishment of the First Gentleman, shows how little trust and respect is left in the office. The distrust is reflected not so much in street protests, but in the ring tones, the jokes, and the blogs. These are not just forms of entertainment, they are cries of anger and disapproval. Malacañang's belated recognition of the extent of public disaffection only shows how unfeeling of the pulse of the people it has become.

It is doubtful that the public can now be appeased by such actions as Big Mike's disappearing act. The First Gentleman's voluntary exile is the belated acknowledgment of the damage he has wrought on the presidency. The "FG's" parallel power structure and his intervention in government appointments and contracts has so diminished the Office of the President, his banishment is unlikely to revive a mortally wounded presidency.

UNFINISHED BUSINESS

Finally, and most importantly, there is the unfinished business of Edsa 2, Edsa 3, and Elections 2004. The poor were left out of Edsa 2, when they felt that the Manila elite and middle class deprived them of their president. Edsa 3 was their response, but that went largely unheeded. In 2004, they voted in droves for Fernando Poe Jr. If they were indeed robbed of their vote, then they had been, in the span of just three years, twice denied their president.

The last elections showed the class divide, with the middle class and the business community supporting the "safe choice." They applauded Gloria Arroyo's victory and paid little heed to the charges of fraud, reasoning that all sides cheat in Philippine elections anyway, and besides, the incumbent's margin was significant enough, even discounting the margin of fraud. Thus, the pollwatch groups, the survey agencies, the Roman Catholic Church, and the majority in Congress took what they deemed was the prudent stance: despite some doubt, the lesser evil seemed to have won, so there was no point in rocking the boat.

Now that The Tapes have shaken the boat, they are in a real dilemma. Accustomed in Edsa 1 and Edsa 2 to taking the high ground and marching in the streets against discredited presidents, they are now the ones calling for calm and sobriety. In 1986 and 2001, they advocated "people power" over constitutional and legal processes, but today they are the ones arguing for stability and "the rule of law." The shoe is on the other foot. Other forces now claim the high ground.

The businessmen and the middle class can, if they wish, blame President Arroyo for making their safe choice now seem like an unprincipled one. While they ponder, the political initiative is being wrested away from them.

If this crisis is drawn out, then the very system that put Gloria Macapagal-Arroyo in power will be put in question. This did not happen in Edsa 2: Erap's transgressions were seen as the excesses of an individual, not the product of a political system that is rotten to the core. Yet it should be clear by now that our woes cannot be blamed solely on the wrongdoings of individuals; they are systemic and structural. That was why, even with Erap gone, it was business as usual — jueteng, relatives dipping their fingers in the public coffers, corrupt politicians taking cuts from government contracts. The scandals that have rocked the Arroyo presidency, like those that booted Estrada out of power, are all signs that the system remains fundamentally unchanged even if it is fundamentally unsound.

It is a system that is made for scandal and crisis. Even if President Arroyo weathers this one, another crisis is likely in the offing. And even if she were replaced, as long as the system remains the way it is, we will remain trapped in the politics of perpetual scandal and recurring crisis.