Calling a spade
Business World, 17 July 2013


How could a scam go on for 10 years with no one the wiser? How could 10 billion of the taxpayers’ money vanish into thin air — strike that out: it wasn’t thin air — how could 10 billion find its way allegedly into pockets of private individuals and bank accounts of legislators, under the noses of other government employees/officials, and in spite of what appear to be the strictest and most painstaking of procedures and safeguards?

The only reason that it was discovered was that someone blew the whistle on his boss, just like then Ilocos Sur Governor Chavit Singson blew the whistle on then President Joseph Estrada’s involvement in jueteng, and Jun Lozada blew the whistle in the NBN-ZTE scandal. I mention these last two cases, because like in the present one, the whistle-blowers’ lives had been endangered (or they thought so, anyway). In other words, there was no altruism involved — merely self-defense.

In the present case, the whistle-blower was a distant cousin and personal assistant of the alleged scam operator — hereinafter referred to as JLN. He had been caught by his boss with a hand in the till, and it is not clear whether he tried to use his knowledge of the scam as leverage, but he ended up being kidnapped. A real cliffhanger, with a rescue being arranged at the behest of his lawyer, who wrote DoJ Secretary Leila de Lima and asked for help. And of course, when he was rescued, he sang like a canary.

Thus did the Filipino taxpayers find out that their hard-earned taxes, allocated to the so-called Priory Development Assistance Fund (otherwise known as the pork barrel), were lining the pockets of undeserving individuals, in spite of all the strict procedures and safeguards that supposedly are in place to prevent such occurrences.

I got the skinny on these procedures and safeguards from an unnamed but unimpeachable source, and share it with the Reader.

First of all — the first line of defense, supposedly, to make sure the projects are on the up and up — the legislators must submit the list of the projects they want funded under the PDAF, to the appropriate congressional committee (Appropriations for the House, Finance for the Senate), whose role is to ensure that the projects recommended comply with the “menu” of projects that qualify for PDAF funding, per DBM rules. What proportion of these lists “pass” and what “fail?” I asked my source. Well, they don’t pass all the time, but they do pass in the vast majority of cases.

Once the Appropriations and Finance committees respectively, give their imprimatur, then the lists have to go through the same test, a second time — now with the DBM, whose Bureau G is in charge of making sure that indeed the projects are part of the “menu” of allowable PDAF projects. This time, my informant says, many more projects fall by the roadside.

It is well for the Reader to remember at this point that these tests are not a test of the quality of the projects, but merely a determination of whether the projects fall within the menu of allowed PDAF projects.

Once the DBM Bureau G gives its imprimatur on the projects, they are then endorsed for a Special Allotment Release Order (SARO), which on approval is released to the appropriate government agency (e.g., DA for agricultural projects, CHEd for higher education projects, etc.).

The budget release having been accomplished, the next phase kicks in: implementation, which now becomes the domain of the government agency to which the SARO has been released. The government agency now has two choices: It can either implement the project itself, or it can have the project implemented, through a memorandum of agreement (MOA), by either a local government unit (LGU) or a nongovernmental organization/people’s organization (NGO/PO). The alleged JLN scam occurred under the latter arrangement.

It is not as if any MOA would do. The Commission on Audit (CoA) has imposed guidelines for governing the “granting, utilization, accounting and auditing of funds” released to NGOs/POs, contained in various circulars, the latest of which, Circular 2007-001, is dated Oct. 25, 2007. It is all of 10 and one-half pages long, and reading it, one wonders how on earth the JLN scam could even start, much less succeed.

Only consider: first, the NGO/PO can only be selected by through a bidding process to be conducted by the implementing government agency (GO). Then the NGO/PO has to submit, with its proposal or application for funding, eight separate sets of documents, including the certification of registration either with the SEC, the CDA, or the DoLE (as the case may be), plus an authenticated copy of its latest Articles of Incorporation/Cooperation as the case may be, plus audited financial reports by a CPA for the past three years, etc. etc.

Then there is a very detailed produce for the availment, release and utilization of funds which “shall be strictly complied with” by the GO. Also, a provision for close monitoring and inspection by the signing officials of the GO to the MOA. And then, of course, the “CoA shall audit the grant and utilization of the funds.”

The bottom line here, folks is that if the scam indeed took place (and I am morally, if not legally certain that it did), the GOs and the CoA must have fallen on their faces — again and again and again.

Nobody can be that dumb. So it must have been indifference, or fear, or greed. Take your choice.