Money & politics: The truth (not) well told

Poll expense reports of Erap, Arroyo,
wanna-be presidents shot full of holes

THE LAW on campaign finance is firm and clear.  It sets firm caps on how much a candidate may spend, who may donate and receive money on his or her behalf, and what types of expenses may be allowed, and what are disallowed.

The limits are easy to remember: a candidate for president, vice president and senator may spend at most P10 per voter, and his or her political party, an additional P5 per voter.

With about 50 million registered voters as base figure, this means that for those running for national positions, the spending limit is P500 million for the candidate, and P250 million for his or her political party. Combined, the maximum spending limit for national candidates is P750 million for the May 10, 2010 elections.

Each election year sees candidates go into a spending frenzy on campaign paraphernalia that range from flyers to fans, to T-shirts, umbrellas, and bags, as well as on advertisements that flood TV, radio and newspapers week after week. There are also all sorts of handlers, staff, and volunteers to look after, all the more ensuring that candidates need every centavo they can sweep for their campaign.

The popular perception is that running an election campaign has the potential of reducing a candidate to penury. Yet none of those who had served or today want to serve as president and vice president has come close to breaching the spending limit – or even to going shirtless and hungry – according to the separate “Statements of Electoral Contributions and Expenses” they had filed with the Commission on Elections (Comelec) over the last 12 years.

The PCIJ reviewed hundreds of pages of such statements that the candidates for president, vice president and senator had filed since 1998. Our findings reveal that thus far, most candidates for national office comply with the law perfunctorily, with their statements of election contributions and expenses shot full of holes and gaps.

Mostly secretive

Indeed, most candidates seem inclined to understate and deflate their expenses, hide or shield the full details of donations they received and the identities of the donors, and offer only a list of their expense items by general categories.

The most secretive are those who had run, and are running still, for the top rung of public office. They seemingly just filed the statements for filing’s sake, with little regard for the completeness and integrity of their reports.

One could count by the fingers those who did well and resorted to nearly full disclosure of details, notably Vice President Noli de Castro and Senators Benigno S. Aquino III, Joker Arroyo, Richard Gordon, Miriam Defensor-Santiago, Jose ‘Jinggoy’ Ejercito, Francis Pangilinan,  Jose Miguel Zubiri, Francis Escudero,  and defeated senatorial candidates Luis ‘Chavit’ Singson, John Osmena and Francisco Tatad.

Those who disclosed the donations they received but were stingy with details of their campaign expenditures include those who had captured the presidency – Gloria Macapagal Arroyo and Joseph Estrada – as well as those who seek it now – Senators Manuel B. Villar Jr. and Ma. Consuelo ‘Jamby’ Madrigal, and Brother Eddie Villanueva.

Across party lines

Two current candidates for vice president, Senators Manuel Roxas II and Loren Legarda, were open about their donors’ identities but rather secretive about how they spent their campaign money.

From the statements they filed, it is apparent that minimal or token disclosure of campaign money that gets in and out is a pattern true for candidates across party lines.

Most candidates for senator in 2004 and 2007 of Arroyo’s coalition slate that now include some aspirants for re-election offered few details about their campaign expenses, raising more questions than answers: the victors Manuel ‘Lito’ Lapid, Ramon ‘Bong’ Revilla Jr., Pilar Juliana ‘Pia’ S. Cayetano, and Edgardo Angara, and the defeated Prospero Pichay Jr., Teresita Aquino Oreta, Ralph Recto, and Vicente Sotto III.

Likewise, some of those who ran and won for the Genuine Opposition slate gave little or scant details of their campaign expenses: Rodolfo Biazon, Alan Peter Cayetano, Antonio F. Trillanes IV, and Gregorio Honasan.

The law requires all candidates to submit their Statement of Electoral Contributions and Expenses within 30 days after election day; otherwise, the winners may not be allowed to take their oath of office. In a recent resolution, the Comelec en banc sought to put teeth to the law: win or lose, candidates who fail to file the statement for two consecutive elections will now be disqualified from running ever again.

Notarized, these statements have the weight of an affidavit or any other legal documents. In it, the candidate and his designated party or personal campaign treasurer, as well as his donors, sign and swear by the integrity of the data reported.

Paid media

One of the more forthright candidates, De Castro submitted to the Comelec in 2004 what looked like a bookkeeper’s journal of his campaign expenses by the day. The details so rich, he even disclosed the millions of pesos he paid certain “media representatives” apparently moonlighting as his PRs, some radio reporters and stations, two editors in one tabloid, reporters who attended his press conference, and a TV anchor in whose program he was invited as a guest.

Like De Castro, Osmena and Pangilinan made reference in their separate reports to big amounts given lump-sum to what public-relations experts call “media shepherds,” or reporters hired to serve as media handlers of the candidates.

In Pangilinan’s report, the names of several reporters were listed as having been paid from February to May 2007 from “Headquarters Payroll” twice a month almost.

In Osmena’s report, a media person was listed as having received “Professional Fee as Media Liaison/Campaign Staff” from March 6 to May 15 seven times worth P1.14 million in all.

In Singson’s report, huge sums were enrolled monthly to cover “Media Allowance” and “Payroll-Media Bureau” and issued in the names of two persons only. For the period May 1-15, 2007, for instance, P102,741.55 was paid out, and for one week in April, O177,812.

Aquino’s report to the Comelec is as detailed, but this time with numerous entries for “foods and groceries,” gasoline, freight charges, and P10.89 million in “unpaid obligations incurred” even after he had won. This included P4.8 million he owed GMA Network, P3.2 million the Associated Broadcast Management Corporation, and P2.8 million the LSA Printing Press Inc.

But the candor and diligence that a few candidates showed in their election spending reports are lacking in the case of Joseph Estrada and Gloria Macapagal Arroyo when they ran for president in 1998 and 2004, respectively.

Villar a puzzle

The wealthiest of the candidates now running for president, Manuel B. Villar Jr., is another interesting case worthy of scrutiny.

On his second run for a seat in the House of Representatives in 1998, Villar reported to the Comelec that he incurred campaign expenses of P550,000 only, and all paid out of his own personal funds.

In 2001, as an independent candidate for the Senate, he said he incurred total campaign expenses of only P38.56 million, again all paid out of his personal funds.

In 2007, he ran for reelection and nearly tripled his campaign spending. He reported it at P84.53 million, and said he used P62.53 million of his personal funds and P22 million in “contributions received from other persons.” The donated amount, he said, came from the following: Virgilio B. Villar, P10 million; Rowena S. Reclosado, P5 million; Michael G. Regino, P5 million; and Marcelino C. Mendoza, P2 million.

Of his P84.53-million campaign expenses in 2007, Villar said 85 percent or P72.52 million went to “media” expenses.

Regino is president of the Golden Haven Memorial Parks Inc. that is building columbariums in Cebu. The company is owned by the Villars.

Reclosado, meanwhile, is president of Althorp Holdings Inc. that has an 11-percent interest in Polar Properties Holdings Corp., which in turn has significant investments in Vista Land & Lifescapes Inc.

Mendoza is the current chairman of the board of Vista Land, a publicly listed company in which Villar and his family-owned real estate firms have controlling interest.

Villar’s son Manuel Paolo is treasurer and board director of Vista Land, together with brother Mark. Both sons are also stockholders “care of Vista” of Althorp Holdings.

Bigger net worth

Despite his claims that he spent his own money in the 2001 elections (P38.56 million) and again in 2007 (P62.53 million), Villar is nowhere close to sliding back to poverty. In fact, even as he spent his own money in the two elections, Villar’s net worth grew even fatter and bigger.

The December 2000 statement of assets, liabilities and net worth (SALN) Villar filed six months before election day listed his net worth at P330.01 million.

If he did spend P38 million of his own money for his election campaign, this did not reflect much in June 2001, when he reported  a net-worth slide by only P4 million to P326.85 million. Six months later, in December 2001, his net worth rose by 21 percent to P405.52 million.

In December 2006, Villar reported a net worth of P915.65 million. Even after spending P62 million of his own money for his reelection bid, in June 2007, Villar declared a net worth of P921.39 million; six months later, this surged further to P1.04 billion.

To be sure, Aquino’s net worth in 2007 also showed an increase. By comparison, however, this was a slight P652,845. From its June 2007 level of P13.28 million, his net worth rose to P13.94 million in December 2007.

Yet this is even as Aquino told the Comelec that for his Senate campaign that year, he spent P1.57 million of his personal funds, and received P66.56 million in “contributions from other sources” that included P20 million from movie star sister, Kristina Bernadette, P10 million from the late President Corazon C. Aquino, and smaller amounts from other sisters and relatives.

In 2004,when he ran for his third and last term as Tarlac congressman, Aquino’s net worth likewise increased slightly from P12.63 million in June, to P13.46 million in December.

Villar’s running mate, Senator Lorna Regina ‘Loren’ B. Legarda has filed election spending reports (2004 as candidate for vice president, and 2007 as candidate for senator) that are as distinct for their lack of details on how she spent donations she had received.

For instance, in 2004 as candidate for vice president of action king, the late Fernando Poe Jr., Legarda said she spent P64.88 million, and received donations worth P65 million. The funds went mostly to media expenses, P52.7 million, and campaign materials, P10.4 million.

In 2007, as candidate for senator under the Nationalist People’s Coalition party, Legarda said she spent P86.19 million, raised the same absolute amount of donations, and used the money mostly for media expenses, P76.46 million, and campaign materials, P6.09 million.

While Legarda submitted affidavits of her donors attesting to the amounts they each gave her relative and treasurer, Edgardo B. Legarda, she did not submit her schedule of expenses in both election years.

Congressmen donors

One interesting point: In 2004, Legarda said she received from Rep. Aurelio D. Gonzales Jr. of Pampanga P5 million in cash donation, in apparent breach of the law’s ban on government officials, employees, teachers and uniformed personnel donating to candidates.

In 2007, Panfilo Lacson received P200,000 in cash donation from then Rep. Rolex Suplico of Iloilo. In 2004, De Castro said he paid Rep. Exequiel Javier of Antique P100,000 in “honorarium” for reasons not disclosed.

Legarda and her closest rival for the vice presidency, Roxas, are like peas plucked from the same pod. Like her, Roxas was scant about details of his election expenses.

In his run for the House of Representatives for his home province of Capiz in 1998 and 2001, Roxas declared spending only P236,830 and P330,645, respectively. But when he splurged on his “Mr. Palengke” ads to get to the Senate in 2004, Roxas’s election expense bill shot up to P94.73 million.

This amount, he told the Comelec, included P52 million given by various donors led by his mother, Judy Roxas Araneta, who forked out P30 million. Other Araneta and Roxas kin chipped in as well.

Roxas, however, said he funded the balance of P42.73 million of his campaign expenses with his personal money.

And yet neither the small amounts he spent in 1995 and 1998 nor the P42.73 million he spent in 2004 – avowedly out of his own pocket – made a dent on Roxas’s net worth.

In December 1995, he reported a net worth of P26.27 million, grew this to P55.83 million by December 1998, raised it more to P76.82 million in December 2002, cut it by a third and closed December 2004 at P50.54 million. That means a net decline in his wealth by just a fraction of the P42.73 million he said he spent in the 2004 election. In time, Roxas recovered quickly; by December 2006 his net worth stood at P140.25 million.

Bets win, donors rule

But there is more context and subtext to the story of how and by whose money candidates bankroll their way to power. Two presidents had been there and done that, and if their election spending reports with the Comelec are a reference, the story moves on to how their campaign donors could have influenced them after victory.

Joseph Estrada won in 1998 with the largest margin of victory ever recorded for a presidential candidate. At his inaugural address on June 30, 1998, nearly all Filipinos broke in cheers and applause when he declared, “Walang kai-kaibigan, walang kama-kamag-anak… huwag ninyo akong subukan! (There are no friends, there are no relatives, don’t test me!)

Little did people know that a week later, on July 9, 1998, he would file his election spending report with the Comelec and there enrolled the patrons of his presidency who he would mostly exempt from his bold, verbal edict against friends and kin.

To win the 1998 race, Estrada said he incurred total expenses of P118, 484,632.31 in all. Of this amount, he said he shelled out his own money (P2 million) and raised the huge balance of P116.4 million from various donors.

Positions, contracts

Interestingly enough, of the 60 individuals and seven organizations that he said donated to his presidential campaign, Estrada lost no time at all to award Cabinet portfolio, appointments to government corporations and financial institutions, and contracts and other favors to more than half during his 18-month reign in Malacanang.

Estrada named his biggest cash donors as Ramon Lee, Luis Coson, Elsie Chua, Jesus Fernando, Manuel Sta. Cruz, who all gave P4 million each; Luis Juan Virata, Alfredo Ching Jr., Dante Tan, Mariano Bondoc Jr., Harry Tan, Edgardo B. Espiritu, Rufo Colayco, Bienvenido Santos, Roberto Anonuevo, and George Go of Equitable Bank, who all gave P3 million each.

The other Estrada donors who gave from P500,000 to P2.5 million in cash were Ramon Ang of San Miguel Corporation, Henry Cojuangco, Enrique Razon Jr., Antonio A. Razon, Jose Ma. L. Razon,  Federico Pascual, Carlos Arellano, Antonio Abacan Jr., Jose Pardo, Ramon Cardenas, Jose P. Lotilla Jr., Benny Brizuela, Carmelo Santiago, Jack Ng Sr., Henry Go, Alfonso Yuchengco III, Cesar E. A. Virata, Elizabeth Virata, and Solomon Cua.

Of his P118.48-million expenses,  Estrada said he used P24.43 million for salaries, allowances, and talent fees; P27 million for “ricorida,” posters and streamers; P12 million for campaign materials; and only P1.03 million in advertising.

‘The Firm’ tops list

Gloria Arroyo, in her 2004 campaign for a full six-year mandate as president, reported spending P152,613,397.54.

This is apart from the P180,746,831.33 that Antonio T. Vilar, designated treasurer of her party, 4K or the Koalisyon ng Katapatan at Karanasan para sa Kaunlaran, spent during the same campaign.

Arroyo, for her part, splurged on “Airtime and Ads” – P101 million in all, or two-thirds of her total expense budget. She also used P15.26 million on campaign materials; P10.87 million on salaries, fees and allowances; P8.62 million on transportation; P4.45 million on representation expenses; and P3.28 million on census and survey services.

Of the combined P333.36 million donated to Arroyo’s candidacy and to the 4K coalition, at least 12 donors stand out for the huge cash sums they gave that altogether made up for two-thirds or P185 million of the 4K campaign kitty.

The list is topped by Pancho Villaraza, who gave P30 million in cash to get Arroyo elected. Villaraza is a co-founder of the Carpio Villaraza Cruz Law Firm, whose senior partners romped the beltway of Arroyo’s Malacanang and occupied Cabinet and senior government positions from 2001 to 2007. Another partner in the so-called ‘The Firm,’ Raoul R. Angangco, donated P8 million.

Other big-ticket donors of Arroyo are: Antonio Vilar, P40 million, including P10 million cash and P30 million on a loan secured from Metro Bank; Catalino Tan. Jose Perez and Jose Antonio,  who gave P20 million each; Alfredo Ramos,  Francisco Dizon, Pedro O. Tan, and Raymund Moreno, who gave P10 million each; and Benito Araneta, P7 million. – PCIJ, February 2010