Arroyo sons, friends, foes get big public works deals

BEFORE SHE — bids good-bye as president — an event that is supposed to happen next year — Gloria Macapagal Arroyo had planned to spend P2.03 trillion ($42.7 billion) on infrastructure projects between 2007 and 2010. By all accounts, she is hoping that these projects would earn her the legacy she so covets, as well as the gratitude of a people she would have served for nine years.

Political allies and foes alike of President Gloria Macapagal Arroyo have secured comparatively bigger volumes and values of civil-works contracts. Photo by Tita Valderama.

Political allies and foes alike of President Gloria Macapagal Arroyo have secured comparatively bigger volumes and values of civil-works contracts. Photo by Tita Valderama.

Yet before she could spend a single centavo, Arroyo has had to muster the numbers in Congress, which wields the illusory “power of the purse,” and have her budget approved.

This means going through a favors-trading routine with lawmakers, who guard their budget power so jealously that they demand to be consulted on any projects planned for their respective legislative districts.

Indeed, the legislators approved the 2007 budget only after imputing P17.40-billion worth of their own pet projects or congressional insertions, and the 2008 budget, with another P11.50 billion.

At her government’s launch in 2001, a political analyst has christened Arroyo as “the transactional president,” owing mainly to her predilection for striking deals with friends and foes alike, supposedly for as long as these could bolster her command of and hold on power. A visible pattern of deal-making in the public-works sector over the last seven years affirms this judgment.

Under the Arroyo administration, infrastructure development has been consistently receiving a hefty share of the annual national budget.

For 2009, the Department of Public Works and Highways (DPWH) got P130 billion, the second biggest portion out of the P1.41-trillion budget. This was more than a quarter higher than its share in 2008 despite recent World Bank reports of corruption in road projects.

Viral kind of politics

At first glance, it would seem that such generous allotments have finally made it possible for projects to be spread more evenly across the country, with less weight given to politics.

The PCIJ’s study of 27,535 public-works contracts awarded by the DPWH from 2000 to 2008 in fact indicates that even areas identified with Arroyo’s political foes had more civil-works projects compared to other places. Among the cellar-dwellers in the DPWH civil-works registry posted on its website, meanwhile, are districts held by Arroyo allies.

Further investigation, however, reveals that politics remains the deciding factor on where the money goes and how it is spent.

Worse, it is a viral kind of politics that serves individual interests instead of communal needs and national concerns, and which has opened up the system to even more corruption and abuse.

For decades, funds have been held hostage to politics, with many projects dying at conception stage as other less urgent, poorly studied projects pitched by politicians overtook them.

Dato and Mikey

Ties to the Palace have also been taken as another guarantee of loads of projects, which is why it is no longer a shock to learn that the Camarines Sur district represented by the president’s younger son, neophyte congressman Diosdado ‘Dato’ Arroyo, has gotten 86 public-works contracts worth P342.65 million in just 15 months, or since he sat in Congress in July 2007.

This amount is more than what had been implemented in the last eight years by the regional engineering offices in Western Visayas (Region 6), Zamboanga Peninsula (Region 9), and Soccsksargen (Region 12), and 72 district engineering offices across the country.

It is also already more than 40 percent the total value of the contracts received since 2004 by the second district of Pampanga, which is represented by the president’s elder son, two-term congressman Juan Miguel ‘Mikey’ Arroyo.

Mikey Arroyo’s district has bagged projects worth a total of P808.79 million in the last four years.

But while districts held by Palace enemies used to be severely deprived of public-works projects, a former congressman who held a key House position says that the allocation of funds for public-works projects no longer follows partisan lines.

In part, this is why some districts held by opposition politicians sometimes appear to have received more projects and funding from agencies than those who have stayed on with the administration.

Erin and Neric

Lorenzo ‘Erin’ Tañada III, for instance, says that before he was told about it by PCIJ, he had no inkling that the fourth district of Quezon, which he represents, received a total of P2.68 billion worth of projects from the DPWH from contracts awarded between July 2004 and September 2008. He says he has had difficulty getting his pork barrel released since he joined efforts in Congress to impeach President Arroyo.

Tañada said he even approached Michael Defensor, then Arroyo’s chief of staff, before the 2007 polls to help him get funds for his district. Tañada recalls: “When Mike came back to me, he said he talked to the president and that she said ‘na kung gusto nating tulungan ‘yung distrito (if we want to help the district), Erin should not benefit.’ Maybe they were thinking that I might use it for re-election purposes.”

Jessica Cantos, Tañada’s chief of staff, says the DPWH projects in Quezon’s fourth district were all implemented by the national government through the district engineering office. She says the engineering office at times asks for their help in following up matters with the Palace. “But sometimes it doesn’t help when we do the asking,” says Cantos.

In Bukidnon, the district once represented by J. Nereus ‘Neric’ Acosta at the House received more projects — both in value and in number — than that held by Arroyo’s allies, the Zubiris.

Acosta represented the first district of Bukidnon for three terms. He lost in his 2007 gubernatorial bid to veteran politician Jose Zubiri. Acosta has been identified with the opposition since joining the impeachment moves against Arroyo in 2005. Yet DPWH records show that his district received 77 contracts valued at P247.13 million from April 2004 to September 2008 while that held by the Zubiris had only two contracts worth P1.68 million awarded in March 2005 and February 2007.

At least 37 of the contracts for Acosta’s district — worth P161.94 million — were awarded between April 2004 and June 2007 while he was still in Congress.

‘Parti-parihan lang yan’

Wala nang party sa ganyan, puro partihan na lang (Party affiliation does not count anymore, it’s all about dividing the spoils),” the ex-legislator says, making it clear that this is not a positive development at all.

Yet, it’s not as if the opposition politicians are meant to benefit from any windfall their districts get. “Sometimes they (the administration) prefer to put more money in opposition areas, especially where the politician does not interfere in biddings, because that’s where they can manipulate the process,” explains the former congressman. “Mas malaki ang kita kasi hindi na kasali ‘yung congressman sa hatian (The kickback is bigger because the congressman does not get a share).”

More often than not, opposition lawmakers are surprised when told their districts had received a considerable number of public-works projects.

Candido and Garci

It could well be that some of those contracts were part of the Palace’s attempts to win votes for its candidates in the 2007 polls, in which Acosta’s sister vied for his old Congress seat. Candido P. Pancrudo Jr., one of the Palace’s two bets in the district, eventually won the right to take Acosta’s slot in the House.

The other contender was Virgilio Garcillano Jr., the former election commissioner in the ‘Hello, Garci’ wiretapped tapes on alleged cheating in the 2004 elections in favor of Arroyo.

Interestingly enough, between July 2007 and August 2008 alone, the district racked up about 40 civic-works contracts, most of them for road resurfacing projects.

Acosta himself had sought an explanation for the other “mysterious” projects in his district. In August 2006, he delivered a privilege speech in Congress seeking an investigation of the district engineer in his area for “gross anomalies or irregularities” in the implementation of projects in 2005 and 2006. The anomalies included alleged payroll-padding and non-delivery of materials to project sites despite full payments for such. The result: incomplete projects, or completed projects with unpaid laborers.

Acosta says he had been overseas on a six-month study leave and had come home “bombarded” with complaints about the projects. He adds, “I felt that they took advantage of my absence and they played around the projects in my district.”

He says he held accountable in particular District Engineer Lota Gamboa, who never showed up in public hearings at the House but resigned a few months later, and the head of the construction section, Engineer Roger Balboa.

Acosta admits, though, that contractors had also told him they had assumed he had received the money they said they gave to his representatives. In all probability, the contractors believed they were doing business as usual, Congress-style.

From 30% to 50%
After all, contractors and procurement officials have long offered a common narrative: From budgeting to construction of projects, particularly during the bidding of contracts, politicians exploit the weaknesses of the system to solicit and accept bribes.

Contractors and congressmen alike affirm kickback figures quoted in previous PCIJ reports, including the 2003 book The Rulemakers. “Easily 30 percent,” says one contractor, referring to the percentage of kickbacks from the total project cost. He says the number could even go as high as 50 percent if the contractor is a politician in the project area.

Asked who get to share the kickback, the contractor hesitates before responding: “Well, who else but the politicians — not just the congressman, but the governor, mayor, and sometimes down to the level of barangay officials. And of course those from the DPWH.”

The participation of DPWH personnel in what many have described as collusion in the awarding of civic-work contracts could also help explain why some opposition-held areas appear to have bucked the odds and received more projects than other places. A senior congressional staff member quips that “some district engineers are smarter than others” and manage to get more contracts for their districts.

At the same time, says the Congress staffer, other projects could have been implemented by the regional engineering offices. The engineering districts thus appear to have fewer number or smaller value of contracts appearing on the DPWH list.

District engineers are authorized to bid out and implement projects worth up to P50 million. Contracts valued above P50 million up to P200 million fall under the jurisdiction of regional directors. The DPWH head office is in charge of projects worth in excess of P200 million.

Pork for pols

More notably, the DPWH database online does not enroll projects supported by the Priority Development Assistance Fund (PDAF). Otherwise known as ‘pork barrel,’ PDAF is the fund legislators have practically institutionalized in the budget so that at whim or whenever they please, they would have something into which they could dip their fingers.

The country’s 24 senators get P200 million each, and 238 House members, P70 million each in pork barrel, for an aggregate total of P21.46 billion a year. More than half of each lawmaker’s PDAF allotment is meant to go to infrastructure projects.

With the additional 32 party-list representatives at the House, the allocation for PDAF should increase by P2.24 billion a year. That is, if they will also all be given their fair share.

Called the ‘countrywide development fund’ or CDF during the Ramos administration, PDAF was intended to be the ‘fund equalizer’ so that all congressional districts could get equal access to public funds, regardless of economic status and needs. In practice, however, Palace critics consider themselves lucky if they get anything from PDAF at all.

One congressman says when it comes to PDAF, party affiliation matters. “Neither the DPWH nor other politicians can meddle (with releases from it),” says the lawmaker. “Malacanang controls it.”

Like Tañada, Acosta says he stopped receiving his PDAF share after he became among the pro-impeachment legislators in July 2005.

Tañada, though, wants to believe that some senators, particularly those who were aware that funds for areas held by opposition members of the House were being withheld, may have included his district in their congressional insertions.

But what Tañada apparently considers a boon given his circumstances has been used by legislators to hold the DPWH budget hostage – a tactic that has gained more impact given the current administration’s fascination for infrastructure projects.

Insertions aplenty

According to a member of the House’s powerful appropriations committee, the DPWH budget is “always one of the last agencies to hurdle plenary deliberations because of so many parochial concerns known as congressional insertions.”

Budget Assistant Secretary Evelyn Guerrero, however, insists that contrary to popular perception, these insertions do not always dislodge more important projects backed by feasibility studies.

“To avoid wastage, we give priority to ongoing projects,” she says. “If a project is new, then we study the impact of the project and look at the implication on the budget. We are not releasing right away because if we do we would have a ballooning deficit.”

She also says that while lawmakers do identify projects in their districts, these still pass through a “rigid” process of assessment. “By the way,” says Guerrero, “we don’t release the money to politicians. They may have a copy of the SARO (Special Allotment Release Order) or NCA (Notice of Cash Allocation), but they don’t get the money.” The money goes directly to the DPWH as the implementing agency of the projects.

SARO is a document that signals the process of bidding to start, an assurance that funding for the project is available. The NCA guarantees the availability of money, a signal for the construction phase to commence.

Separate from the PDAF and “insertions” in the DPWH infrastructure budget, senators and congressmen also get funding for their pet projects from other agencies such as the departments of transportation and communications, education (including the Commission on Higher Education), agriculture, agrarian reform, and science and technology.

Interestingly, Guerrero says that many of these projects are transferred to DPWH for actual construction, “because it has the manpower needed to do the projects.”

Anti-insurgency fund?

In the meantime, Tañada says he talked to his area’s district engineer after PCIJ told him about the many public-works projects undertaken there.

The district engineer, Ronnel Tan, had declined PCIJ’s request for an interview, but according to Tañada, Tan thought the funds used for most of the projects “were anti-insurgency related or part of the so called KALAHI funds for areas identified as ‘NPA-infested.’” (Quezon is known for having areas where the communist New People’s Army has a significant presence.)

Tañada also says that he doesn’t know the contractors who were awarded contracts for the projects in his district. “I don’t get involved because that is not part of my work as a legislator,” he says. “I don’t know their track records. The DPWH will be in a better position to answer this point.”