1 million depending on the nature of the case and the personality involved while a person wanting to leave the Philippines will pay a price ranging from Php. 13 No. Steffen Jensen. ABS-CBN News (2014), âBNPP broker Herminio Disini passes away,â 16 June, available at: https://news.abs-cbn.com/business/06/16/14/bnpp-broker-herminio-disini-passes-away (accessed 20 August 2019). 2-3). 50-51; Salaverria, 2012). Before the scandal, Speaker JDV was allied to GMA. Marcos and his wife were subsequently indicted by the U.S. government on racketeering charges, but in 1990 (after Marcos’s death) Imelda was acquitted of all charges by a federal court. He is co-editor of the Routledge Handbook of the Contemporary Philippines (2018) and the author of several journal articles and book chapters on regional and Philippine politics, corruption and economic development. That rules could be changed and broadly interpreted to favour particularistic interests does not bode well for the promotion of a culture of accountability and integrity in government in the Philippines. Hi, I was looking for a good post that would provide factual cases that would avail information on the corruption in the Philippines. 18 No. In general, corruption means the practice of obtaining power, influence, or other personal gains through illegitimate means, often at others' expense. Nation. Legal tactics and jurisdictional conflict among the PCGG and Office of the Ombudsman (OMB) delayed settlement by the Sandiganbayan, the country's anti-graft court. The PCGG was able to gather voluminous evidence against the Marcoses and their cronies. Both Abalos and Arroyo, as a private individual though married to the president, had no official capacity to intervene in the deal. Subsequent reports citing bankers and former Disini associates indicated varying amounts, ranging from a few million dollars to more than US$50 million. It has many different shapes as well as many various effects, both on the economy and the society at large. The SBRC report also found it improper for the president to be playing golf and having lunch at ZTE's Shenzhen headquarters in November 2006 since the company was lobbying for a contract. Described as a national agency suffering from ’systemic corruption’, an in-depth qualitative case study analysis of one of its programmes is imperative. Safety considerations for the site transfer raised the cost of the original contract. Republic of the Philippines (1980), Letter of Instructions No. (2012). 13 (Republic of the Philippines vs. Disini et al., 2012; PCGG vs Desierto et al., 2003). The scale of corruption appears to be massive on the basis of the cases and issues discussed. The Sandiganbayan and the Supreme Court decided on the Disini case during President Benigno Aquino's term. and Batalla, E.V.C. Eric V.C. Lowi, T. (1988), âForewordâ, in Markovits, A.S. and Silverstein, M. (Eds), The Politics of Scandal: Power and Process in Liberal Democracies, Holmes and Meier, New York, NY, pp. Bolongaita, E. (2010), An Exception to the Rule? It took 25 years before the court could resolve Civil Case No. The Philippines suffers from widespread corruption. Following the theme of this special issue of Public Administration and Policy, this article examines and compares two corruption scandals involving large infrastructure projects of government, namely, the Bataan Nuclear Power Plant (BNPP) of the Marcos era and the National Broadband Network (NBN) project of the Arroyo presidency. In an interview with the Washington Post in December 1977, Marcos reportedly said that the decision to buy the Westinghouse plant was made based on a report by foreign technical consultants and that was before Disini's involvement with Westinghouse. To be sure, authoritarian rule prevented the discovery of other incriminating evidence on the legal improprieties of the BNPP contract. The former chief police enforcer of Philippine President Rodrigo Duterte's deadly war on drugs will be charged with corruption for allegedly protecting officers linked to the narcotics trade, the justice department said Thursday. Philippines is the 113 least corrupt nation out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International. The government demanded US$6.6 billion in compensation from the two firms. Published by Emerald Publishing Limited. It should be noted that, contrary to tradition, it was the retiring Carpio-Morales who swore in Aquino as president and not then Supreme Court Chief Justice Renato Corona. The Philippines is an archipelago (group of islands) of more than 7,100 islands just north of the Equator in the Pacific Ocean. Later that year, the Aquino government sued Westinghouse and its engineering subcontractor, Burns and Roe, for bribery, fraud and racketeering before a federal district court in New Jersey (Butterfield, 1988). As such, the ZTE was the only proposal left for consideration in the NBN project. 178830â, 14 July. Republic Act No. In 1981, in the midst of an international recession and piling debt, many crony empires, including Herdis, collapsed. Some senators including Juan Ponce Enrile, Ramon Revilla Jr. and Jose Ejercito Jr. were jailed in connection with the Napoles pork barrel scam but have been either released on bail or acquitted of plunder charges. One group was ZTE, backed by top government officials identified with President Gloria Macapagal-Arroyo (GMA) and her husband, First Gentleman (FG) Mike Arroyo (SBRC, 2009, p. 1). Public Administration and Policy: An Asia-Pacific Journal. Later, Joey De Venecia led in exposing anomalies in the deal. The site transfer led the parties to design a facility that could withstand an earthquake with a magnitude of 7.9 on the Richter scale. Mathews, J. and Wideman, B. Sixth, both projects contained the element of foreign government participation, therefore entailing diplomatic considerations. MANILA - The police force is widely regarded as one of the Philippines' most corrupt institutions, a reputation reinforced by accusations three officers were involved in abducting and killing a South Korean businessman. Visit emeraldpublishing.com/platformupdate to discover the latest news and updates, Answers to the most commonly asked questions here, After 22 years, govt ends presentation of case vs Marcos, Disini, Westinghouse, Philippines sign settlement on plant, A survey of political interference patterns and modalities in national roadworks in the Philippines, Routledge Handbook on the Contemporary Philippines, An Exception to the Rule? 1, pp. Based on this agreement, the Philippine government signed an memorandum of understanding with ZTE, allowing the latter to invest in information technology projects in the Philippines, including the NBN project (SBRC, 2009, pp. “Governments must urgently address the corrupting role of big money in political party financing and the undue influence it exerts on our political systems,” said Transparency International chair Delia Ferreira Rubio. Metro Manila (CNN Philippines, January 23) — Corruption worsened in the Philippine government in 2019 as it ranked 113th of 180 countries studied on their perceived political integrity. File cases or shut up. It was there that JDV introduced Mendoza to his son, Joey and informed Mendoza of Joey's DOTC project (SBRC, 2009, p. 48). Westinghouse out-manoevered GE by employing Herminio Disini as its special sales representative. A Senate witness identified other brokers particularly Ruben Reyes, a private businessman and alleged close friend of GMA's brother (SBRC, 2009, p. 62; Sabangan, 2008). While the Philippines also got a score of 34 in 2017, it only ranked 111th out of 180 countries. But de Venecia's insistence to pursue his proposal later led Mike Arroyo to demand that he withdrew from the project (SBRC, 2009, pp. It was an Expropriation suit initiated in October 1999 by the Philippine Ports Authority (PPA) in Civil Case No. Sabangan, A.R. In 1991, the Swiss arbitration panel cleared Westinghouse of bribery charges (United Press International, 1991). The fight against corruption – along with the war on drugs and against the communist insurgency – is a central part of Duterte’s policies. On 14 June 1974, GE presented a 200-page prospectus to the NPC and Presidential Executive Secretary Alejandro Melchor, Jr. who also served as the NPC director. The index noted that of the 31 countries assessed in the Asia Pacific, the regional average was at 45, illustrating “general stagnation” in control of corruption in the region. No. No. ABS-CBN News (2009), âAfter 22 years, govt ends presentation of case vs Marcos, Disiniâ, 16 February, available at: https://news.abs-cbn.com/nation/02/15/09/after-22-years-govt-ends-presentation-case-vs-marcos-disini (accessed 3 September 2019). Corruption Rank in Philippines is expected to reach 117.00 by the end of 2020, according to Trading Economics global macro models and analysts expectations. Most people in the government are there to find ways to line their pockets through unethical means, from the lowest clerk all the way to the president. Corruption Rank in Philippines averaged 93.96 from 1995 until 2019, reaching an all time high of 141 in 2008 and a record low of 36 in 1995. Corruption at this level usually involves large sums of financial and state resources. In her 9 July 2019 farewell dinner speech as Congress representative and House Speaker, GMA thanked Duterte, whose presidency âprovided the atmosphere in which the Court had the freedom to acquitâ her of the âtrumped-up chargesâ of his predecessor (Panganiban, 2019). The Sandiganbayan's ruling on the ZTE case, issued in the early days of the Duterte presidency, favoured the Arroyos and other co-accused. The failure of closure of past scandals encourages corrupt practices by top officials, who regard government as a lucrative source of private wealth and power. 0013â, 11 April. Based on that agreement, the Philippine government would receive US$40 million in cash and two combustion engines worth US$30 million each. However, despite establishing the fact that Marcos and Disini were close associates (and relatives by affinity) and that Marcos acted in favour of Disini as Westinghouse's special agent, the court could not find preponderant evidence that the Marcoses received any commissions from the deal. no. ... through mediation or if the transgression carries fines above PHP 5,000 or more than one year in prison will the case be referred to the Philippine … The analysis should also cover the scandal's resolution or closure. It is the cause of many problems between the government and the public. Upon the suggestion of financing institutions such as the World Bank and the Asian Development Bank, corruption has taken centre stage in policy discourse, making corruption the locus of many re-engineering efforts in Philippine governance (Transparency and Accountability Network, internal documents, 2005). Corruption is a constant in the society and occurs in all civilizations; however, it has only been in the past 20 years that this phenomenon has begun being seriously explored. He also directed the government takeover of three Disini firms, in which the government had substantial financial exposure. Corruption is a constant in the society and occurs in all civilizations; however, it has only been in the past 20 years that this phenomenon has begun being seriously explored. If you are the exception, you will actually be the target of the ombudsman and, chances are, will be the first to be removed from office. 50,000.00 to Php. 1, pp. 1362 (D.N.J. The TMI accident caused a partial nuclear meltdown, therefore raising alarm worldwide about the safety of nuclear energy. In November 1975, the final negotiated contract was transmitted to Solicitor General Estelito Mendoza for review. (1978), âMarcos orders seizure of wealthy friends' companiesâ, Washington Post, 18 January, available at: https://www.washingtonpost.com/archive/politics/1978/01/18/marcos-orders-seizure-of-wealthy-friends-companies/5cec6171-4a3f-bba3-bef235c90eb2/ (accessed 21 August 2019). and Rodrigo, K. (2018b), âThe judiciary under threat,â, in Thompson, M.R. Thus, instead of simply regime type, it could be argued that it is the continued weakness of governance institutions that allows the culture and agency of corruption to thrive and persist, even at the highest levels of government. 1362 (D.N.J. Her remark was suggestive of the political malleability of the courts. DAVAO CITY, Philippines — At least 50 government officials are being investigated by the Presidential Anti-Corruption Commission (PACC) for alleged involvement in graft and corruption … NPC general manager Ramon Ravanzo claimed that during the meeting Westinghouse only provided standard advertising brochures without any detailed costs and specifications (Butterfield, 1978). 3019, 1960). David-Barrett, E. and Fazekas, M. (2019), âGrand corruption and government change: an analysis of partisan favouritism in public procurementâ, European Journal of Criminal Policy and Research, 16 June, doi: 10.1007/s10610-019-09416-4 (accessed 6 January 2020). 155 No. The full terms of this license may be seen at http://creativecommons.org/licences/by/4.0/legalcode. The SBRC report suggested several improprieties committed by government officials and private individuals in the deal. In December 2011, on the basis of a formal complaint by representatives of certain left-wing groups, the Ombudsman filed charges against the Arroyo spouses, Comelec Chair Abalos and former DOTC Secretary Mendoza for conspiring to commit illegal acts that culminated in the signing of the NBNâZTE contract. What obviously contrasts the two projects is that the ZTE contract never pushed through unlike the BNPP, whose liabilities had to be settled for decades. These two projects are amongst the most controversial political corruption scandals during the last 50 years. In contrast, the ZTE proposal meant that the broadband network would be owned and operated by the Philippine government while the procurement of equipment, services, and financing would come from China (People of the Philippines vs. Arroyo et al., 2016, p. 15). Curbing Corruption in Asian Countries: An Impossible Dream? vii-xii. 539, he established a presidential commission to enquire into the safety of the BNPP. His friend and technical adviser, Rodolfo Lozada, was sent to Hong Kong to avoid testifying before the Senate. Soon after the announcement, the National Power Corporation (NPC), as the main implementing agency, began the work of undertaking the necessary technical studies as well as negotiate with vendor and financing institutions. Top-level executive agreements that do not require competitive public bidding provide an opportunity for grand corruption. Aquino was of course against Marcos and his cronies. Before the SBRC hearings ended in August 2009, the OMB released the results of its own investigation. Similarly, the level of corruption varies across authoritarian systems, with monarchies and single-party systems tending to be less corrupt than military and personalistic regimes; in fact, as Kukutschka (2018, p. 4) points out, âa small number of non-democratic countries perform relatively well in international corruption indices.â In either democratic or authoritarian systems, the commission of grand corruption is typically driven by personalistic and patronage-clientelistic motivations that benefit rulers and the dominant political elite, political parties and allies, cronies and friends, as well as families and relatives (David-Barrett and Fazekas, 2019; Chang and Golden, 2010). In the ZTE case, the media exposÃ© alerted the public of allegations of over-pricing due to huge commissions. A week later, the Senate Committee on Accountability of Public Officers and Investigations Committee (or the Senate Blue Ribbon Committee [SBRC]) began a two-year investigation of possible ethical violations. A week after, newspaper columnist Jarius Bondoc revealed the involvement of an unnamed official of the Commission on Elections (Comelec) in the allegedly overpriced deal (ABS-CBN News, 2009). Panganiban, A.V. Batalla, E.V.C., Torneo, A. and Magno, F. (2018a), âA survey of political interference patterns and modalities in national roadworks in the Philippinesâ, Asia Pacific Social Science Review, Vol. In 2008 a new election commissioner took over with the brief to clean up the organisation and control the electoral violence, with a focus on the next presidential elections in 2010. Corruption Rank. Prior to her appointment as Ombudsman, she was GMA's former justice secretary. On 7 August, ZTE formally submitted to the Commission on Information and Communications Technology (CICT) its proposal to supply equipment and services for the NBN. A case which I assisted in my NGO years demonstrates how corruption is tolerated from Lower Court to Higher Court. The BNPP and NBNâZTE scandals illustrate cases of corrupt relationships formed at the highest levels of government in contracting large infrastructure projects in the Philippines. This point raised contrasting legal opinions yet to be resolved (Suplico vs NEDA, 2008). In the BNPP project, the U.S. government was involved directly through the project loan financing provided by the U.S. ExportâImport Bank. 1, creating the Presidential Commission on Good Government (PCGG) to recover the ill-gotten wealth of the Marcos family and associates. Corruption is a significant obstacle to good governance in the Philippines. In 2012, the Sandiganbayan ruled in favour of the government. In case of Major General Carlos Garcia, the first active general to be indicted in court for corruption in the Philippines, his ill-gotten wealth included an expensive condominium unit at Trump Tower in New York City and several dollar deposits in the United States. Testimonial evidence established Abalos' lobbying and bribery attempts. The former Philippine police chief and Rodrigo Duterte’s chief drug war enforcer, Oscar Albayalde, will be charged with corruption. People who cut in lines are corrupt. At the time of the scandal, the unpopular GMA administration was already beleaguered by other election-related controversies, such as the Hello Garci scandal and the Fertilizer Fund Scam. Speaker JDV tried to distance his involvement from the project by telling the SBRC that his presence in Shenzhen was due to the invitation of the president (SBRC Report, 2009, p. 76). Clearly, there is a reason for a strong and different anti-corruption initiative. United Nations Office on Drugs and Crime (UNODC) (2019), âCorruption and democracyâ, Anti-Corruption Module 3: Corruption and Comparative Politics, December, available at: https://www.unodc.org/e4j/en/anti-corruption/module-3/keyissues/corruption-and-democracy.html (accessed 7 January 2020). In the NBN project, direct Chinese government participation came through the ZTE, a state-controlled firm, and the China ExportâImport Bank for loan financing. In July 1987, it filed a civil complaint against Disini, Ferdinand and Imelda Marcos, and former Herdis group president, Rodolfo Jacob. With the exception of the conviction of President Estrada for plunder (though later pardoned by Arroyo), no other high-ranking official above the position of provincial governor has ever been convicted of corruption (Bolongaita, 2010). Consequently, the accused individuals separately filed their motions for dismissal. 3019 (1960), âAnti-graft and corrupt practices actâ, Official Gazette, available at: https://www.officialgazette.gov.ph/1960/08/17/republic-act-no-3019/ (accessed 4 September 2019). 51-75. Initially, it was understood that Westinghouse would only provide design engineering and project construction management services. The Philippines’ score indicates that it “continue[s] to struggle to tackle corruption,” along with other countries in the Asia Pacific region, the report read. In May 1993, the federal court jury in New Jersey also reached a verdict exonerating the two American companies. Scandal, according to Lowi (1988, p. vii) is âcorruption revealed;â it is âbreach of virtue exposed.â In his analysis of scandals, Lowi (1988, p. viii) argues that the exposÃ© of corruption (the first news break or the substantive scandal) is often followed by a more controversial cover-up phase or the procedural scandal. Transparency International, a nonprofit watchdog monitoring the status of global corruption in the public sector, has issued the Corruption Perceptions Index (CPI) for 2019, showing that the Philippines dropped 14 notches from 99th in year 2018. Closure of cases of grand corruption is a serious problem that involves an incoherent and politically vulnerable prosecutorial and justice system. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. National Power Corporation-Philippine Nuclear Power Plant interest payments and principal amortization, 1986â2007 (in million pesos), Note(s): Data on government payments for the BNPP prior to 1986 not available, Source(s): The author's calculations are based on the online statistics on national government debt service provided in the Bureau of the Treasury (2020). Branigin, W. (1984), âCrony capitalism' blamed for economic crisisâ, Washington Post, 16 August, available at: https://www.washingtonpost.com/archive/politics/1984/08/16/crony-capitalism -blamed-for-economic-crisis/d99e8760-087d-4d25-ad66-3d324150dc4d/ (accessed 22 July 2019). Means of corruption include graft, bribery, embezzlement, backdoor deals, nepotism, and patronage. At best, high-ranking officials accused of corruption have been shamed and jailed. However, important pieces of evidence were not properly handled as attested by the testimonies of PCGG personnel in Republic of the Philippines versus Disini et al. The Philippines is the 113 least corrupt nation out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International. Going above the practical matters, the huge lost of the government due to corruption might have served better purposes if only handled well. The Philippines suffers from widespread corruption. Beaver, W. (1994), âNuclear nightmares in the Philippinesâ, Journal of Business Ethics, Vol. In 1997, Ombudsman Desierto dropped the graft charges against Disini for lack of prima facie evidence, despite the PCGG evidence. General Electric (GE) was the first to respond and worked with NPC for months to secure the contract. htm (accessed19 August 2019). First, an opportunity for corruption existed based on executive agreements that did not undergo competitive public bidding. Particularly, they were crucial to easing out the competition and successfully closing deals between the rent-seeking firm and the government. Despite governance reforms through decades of restored democracy, many government institutions are still easily influenced by powerful vested interests. This article is published under the Creative Commons Attribution (CC BY 4.0) license. Through his close presidential connection, Disini was able to build a vast business empire in a short span of time after the imposition of martial rule. Constantly, been the dominant issue of the country. Kukutschka, R.M.B. Hutchcroft, P. (2008), âThe Arroyo imbroglio in the Philippinesâ, Journal of Democracy, Vol. The charge against GMA et al. By early 1986, the total project cost had risen to US$2.1 billion, or a billion dollars more than the original contract price in 1976. That explanation did not stop U.S. media criticisms of corruption and rising crony capitalism, as represented by the BNPP, as well as the spectacular rise of the Disini business empire through presidential influence. Thus, in 2004, then Ombudsman Simeon Marcelo filed two criminal cases against Disini, one for bribery and the other for violation of Section 4(a) of the Anti-Graft and Corrupt Practices Act, which prohibits a private individual from exploiting close personal ties with a public official in order to gain some pecuniary or material advantage. 1027 Words5 Pages. The purpose of this article is to analyse the weaknesses of governance institutions in constraining grand corruption arising from the government procurement of large foreign-funded infrastructure projects in the Philippines. 220598â, 19 July. 10, 12 March, p. 47. In hindsight, the claims advanced by the Ombudsman in its case reflected the bias favouring the previous Senate testimonies of de Venecia and others in the opposition. (2013), Curbing Corruption in Asian Countries: An Impossible Dream?, ISEAS Publishing, Singapore. Corruption is a word that Filipinos do not want to hear. 130-143. Mydans, S. (1988), âIn post-Marcos Philippines, corruption still a way of lifeâ, New York Times, 17 October, available at: https://www.nytimes.com/1988/10/17/world/in-post-marcos-philippines -corruption-still-a-way-of-life.html (accessed 11 November 2019). Disini's cousin, Jesus, also testified that Marcos owned two-thirds of Herdis (ABS-CBN News, 2009). It examines allegations of improprieties in government project contracting and the politics of resolving corruption scandals through the justice system. The SBRC believed that Speaker JDV and his son likewise committed unethical practices (SBRC, 2009, pp. Yet, the fact remains that the Philippines ranks 101 st in the current Corruption Perceptions Index (CPI); well behind China, India and Indonesia. Primary and secondary data sources including court decisions, congressional records, journal articles and newspaper reports are used to construct the narratives for each case. The following sections provide descriptive accounts of the BNPP and NBN scandals, followed by the comparative analysis and conclusion. 32, 57). Notwithstanding Mendoza's objections, Marcos ordered the NPC to sign the contract with Westinghouse (PCCG vs Desierto et al., 2003). corruption Nation. Second, strong incentives to commit graft persist. The SBRC argued that both he and his son attempted to commit graft since by law, relatives of the House Speaker up to the third civil degree, were not supposed to intervene or engage in a business, transaction or contract with the government. Government Response Our government enacted approaches to combat this corruption, which are divided into three, namely: It has many different shapes as well as many various effects, both on the economy and the society at large. Rimando, L. (2000), âEstrada, Villar and stock marketâsomething in common?â, ABS-CBN News, 24 April, available at: https://news.abs-cbn.com/nation/04/24/10/estrada-villar-and-stock-market%E2%80%94something-common (accessed 11 November 2019). These developments arising from the TMI accident ultimately resulted in a sharp spike in project cost mainly due to interest charges, inflation, foreign exchange losses and costs of additional safety requirements. However, contract negotiations dragged on for more than a year. Hence, the unpacking of a corruption scandal could be guided by an examination of its substantive and procedural stages. Associated with the House Speaker was National Economic Development Authority (NEDA) Secretary Romulo Neri (SBRC, 2009, p. 1). It aims to document the Philippine experience in addressing corruption and draw out lessons that could be … graft and corruption cases in the Philippines Regions. December 02, 2016 BY: Vince F. Nonato. Neri had informed GMA of the Abalos bribe offer to him, to which the president advised non-acceptance (SBRC, 2009, p. 49). 743â, Senate of the Philippines, 11 November, available at: https://www.senate.gov.ph/lisdata/1293411633!.pdf (accessed 4 September 2019). (1977), âMartial law benefits Marcos' friendsâ, Washington Post, 19 December, available at: https://www.washingtonpost.com/archive/politics/1977/12/19/martial-law-benefits-marcos-friends/38bfac37-6c3d-4b5c-9e50-6864629680ef/ (accessed 21 August 2019). Both men were freed after posting bail on the day of their arrest. The purported final contract price signed in April 2007 by DOTC and ZTE was US$329 million. In April 1974, Westinghouse sent a turn-key proposal to Marcos. The OMB cleared GMA and her husband but recommended the filing of administrative and criminal charges against Abalos and Neri. Westinghouse, however, convinced the court that the case should stay pending arbitration by the International Chamber of Commerce in Switzerland, as provided in the BNPP contract (Republic of the Philippines vs. Westinghouse Electric Corporation, 1989). The weaknesses of Philippine governance institutions to curb grand corruption in government procurement projects during the past half-century could be gathered from a comparison of the two scandals. In the late 1980’s, the Philippines entered the Guinness Book of World Records for allegedly the biggest corruption of all time, referring to the period of the dictatorship of the former President, 2Ibid, “Initiatives Taken Against Corruption: The Philippines Case”; p.4 502 RESOURCE MATERIAL SERIES No. Extensive bribery within the public administration and vague and complex laws make foreign companies vulnerable to extortion and manipulation by public officials. 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