The poll body has hardly enforced its rules, giving candidates and political parties free pass to circumvent and mock these, get away with patent violations, and even run again in the next elections. To date, no candidate for national office has been penalized for any violations, despite evidence that the rules have been played around with, and not so innocently.

This means that in practice, campaign finance laws are deadwood, even as they supposedly lay down the rules of engagement such as the following for candidates, political parties, party-list groups, and campaign donors:

• Within 30 days after the elections, candidates should report the amount of donations they had received and spent for their campaign in their Statement of Election Contributions and Expenditures (SECEs).
• Campaign contributors or donors must report in individually signed affidavits the respective amounts they had contributed to candidates and political parties.
• Comelec would then countercheck the accuracy of these reports against various documents that it had also required from media entities, contractors, and firms that rendered campaign-related services.
• No person, except the candidate, the treasurer of a political party, or any person authorized by such candidate or treasurer, shall make any expenditure in support of or in opposition to any candidate or political party.
• For donations to be lawfully made and accepted, the candidate or the party treasurer must issue a letter of acceptance or a statement authorizing the donor to incur expenses on his or her behalf. Incurring expenditures for a candidate without the letter of acceptance or authorization is an election offense.
• Media entities must submit to the Comelec advertising contracts, broadcast logs, and certificates of performance within five days from signing of the contracts and before the airing/publication of the political ads.
• Contractors and business firms must submit reports on services and goods they provided the candidates and political parties.
• Statements of expenses on a public rally must be submitted by the candidates and political parties within 10 days after the conduct of the rally.
• Comelec Resolution No. 8758 or the implementing rules and regulations of the Fair Election Practices Act states that the “political advertisement paid for” clause must be followed by the “true and correct name and address of the candidate or party whose benefit the election propaganda was printed or aired.”
• The “political advertisement paid by” clause, meanwhile, must be followed by the “true and correct name and address of the payor.”
• Comelec Resolution No. 8944 or the rules and regulations governing electoral contributions and expenditures for the May 10, 2010 elections states, “No person elected to any public office shall enter upon the duties of his office until he has filed the statement of contributions and expenditures.”
• The same prohibition applies if the political party, which nominated the winning candidates, fails to file the statement required.
• Candidates for national office are authorized to spend only P10 per voter or about P507 million. Spending beyond the expenditure limit set in law and the rules and regulations of the Commission is considered an election offense and is punishable under Section 264 of the Omnibus Election Code of the Philippines.
• A registered political party is authorized to spend only P5 per voter or about P254 million for the 50.7 million registered voters as of the May 2010 elections.
• Anyone found guilty of any election offense shall be punished with imprisonment of one to six years and shall not be subject to probation. In addition, the guilty party shall be sentenced to suffer disqualification from holding public office and deprivation of the right of suffrage.
• Any political party found guilty shall be sentenced to pay a fine of not less than P10,000, which shall be imposed upon such party after criminal action has been instituted in which their corresponding officials have been found guilty.  –  PCIJ, August 2010

IT WAS 1992; Fidel V. Ramos had just been voted as president, and Joseph ‘Erap’ Estrada as vice president. Presidential bet Miriam Defensor Santiago was crying foul, saying she had been cheated. She would later file an electoral protest, but the Commission on Elections (Comelec) was apparently more interested in something else: conducting its first ever audit of the campaign contributions and expenses of candidates for president, vice president, and senators for the then recently concluded polls.

The Comelec, then headed by Christian Monsod, seemed serious, and even formed a committee to examine the books of account of candidates, political parties, donors, and media entities. Lawyer Josefina de la Cruz, who became part of that committee, also recalls that the Bureau of Internal Revenue (BIR), Commission on Audit (COA), and the National Bureau of Investigation served as Comelec’s “counterparts” in the initiative.

De la Cruz says Comelec issued subpoenas to the parties concerned and that teams were assigned to visit the offices of candidates, parties, and even TV and radio networks. The teams examined the books of account of the candidates and parties, as well as the broadcast logs of the TV networks, to discern possible violations such as unlawful expenditures and overspending.

Unfortunately, De la Cruz – now Comelec secretary – can no longer recall the committee’s findings, including if there were candidates who overspent or violated certain provisions in the law. She also says whatever documents there were in connection with the audit were burnt in the fire that razed the old Comelec building three years ago.

Can’t, won’t audit

Eighteen years after that attempt to check up on campaign contributions and expenses, Comelec is first to admit it has no idea how to carry out a competent audit on these despite the volumes of documents it requires candidates, political parties, and media entities to submit.

Its inability to fully exercise its authority in ensuring compliance with campaign finance laws, however, may not only be due to a lack of resources and skilled personnel, but also because ambiguities in the laws themselves have led to confusion within and outside of Comelec.

Elections lawyer Luie Guia observes, “The gray areas in the rules and guidelines on campaign finance give candidates leeway (to circumvent the law). So even if what they’re doing is wrong, it’s hard to go after them.”

On the surface, the rules seem simple enough. Campaign expenditure limits, for example, are defined in Republic Act No. 7166 or the Synchronized Election Law, which states that candidates for president and vice president are allowed to spend only a maximum of P10 per registered voter. Political parties, meanwhile, are allowed to spend a maximum of P5 per registered voter.

For the May 10, 2010 elections, the number of registered voters reportedly reached 50.7 million. This means then that candidates for president and vice president could spend only up to P507 million each while political parties would have to stop spending once they each reached P253.5 million. In theory, a candidate for president may spend up to a total of P760.5 million – that is, if the political party decided to spend all its campaign funds solely for its bet’s benefit.

At least that is how several political parties and candidates interpreted the rules. Comelec Law Department director Ferdinand Rafanan, however, says that the amount that a political party could spend for its candidate should not be considered as an “additional” spending limit to be computed “on top” of that candidate’s P507-million limit.

That, says Guia, is a “strict interpretation” of the law. To the officer of the civic group Libertas (Lawyers’ League for Liberty),the issue is about how candidates and political parties “book” the spending.

He argues that a political party, being a political entity, has its “own allowable spending limit.” A party may thus spend its money to promote the candidacy of its members running in the elections, he says. Guia also says that while the amount spent needs to be reflected in the party’s SECE, it does not necessarily need to be included in those of the beneficiary candidates.

He concedes, though, that there might indeed be something amiss when a political party spends all its funds to promote only one candidate, as in the case of the Nacionalista Party (NP) donating all its political-ad airtime to its standard bearer, Senator Manuel Villar Jr.  Still, says Guia, the practice is “not automatically illegal.”

Obscure definitions

“The problem really stems from a lack of clear definition in the law on what it means for a political party to campaign,” he says.

A party’s decision to spend all of its money for one candidate, continues Guia, could then be interpreted to mean that “the party is campaigning for its own victory,” as in the case of NP and Villar. In truth, NP candidates for senator and other posts came out with solo political ads or had joint ads with other fellow NP members running for office. These, however, were booked in the name of the individual candidates.

This legal gray area has been exploited by candidates for “practical” campaign considerations, says Guia. But he says the bigger cause for concern is how to trace where political parties are getting their campaign funds.

The SECEs of candidates, political parties, and party-list groups that the law requires them to submit 30 days after the polls are supposed to help Comelec do this. After all, the SECE even comes with 10 annex forms to enable a candidate or party to make full and extensively detailed disclosure of the contributions received and expenditures incurred.

PCIJ’s review of the SECEs of candidates for president, vice president, political parties, and party-list groups, however, reveals that most candidates and parties filed only summary reports. Many even missed including the “minimum details” required by law, such as the date and official receipt numbers of expenditures incurred; the full name of contributors and their addresses; the nature and amount of contribution; and the contributor’s taxpayer ID number.

Some political parties and several candidates did not submit SECEs at all.

Media in breach, too

The same blatant disregard for the law was evident as well among media outfits, which are required to submit advertising contracts, broadcast logs, and certificates of performance to Comelec. These documents are supposed to help the election body check the veracity of the campaign spending claims of candidates and political parties.

But many media entities failed to submit any of the required documents at all. Those that did meanwhile had incomplete papers, with letters of acceptance from candidates who received donated political ads among the usual missing documents.

Then there were broadcast outfits that submitted broadcast orders in lieu of advertising contracts, saying that using contracts “in long form” is generally not practiced in the industry. This particular issue has become the subject of a petition filed by the Kapisanan ng mga Brodkaster ng Pilipinas (KBP) with Comelec.

At the very least, the KBP can expect no sympathy from Comelec Law Department head Rafanan, who says these orders, which are not signed by candidates, would not exactly be useful for the electoral body’s campaign-expense monitoring.

Everybody happy?

By now, however, everyone has caught on to the fact that Comelec does not really scrutinize the papers it requires candidates, political parties, and media institutions to submit in compliance with campaign-finance laws. Rafanan himself seems to have given up on the task, even as he describes the general attitude of those being required by Comelec to submit documents this way: “It’s the old kind of thinking. Nobody cares. Everybody’s happy. Why disturb it?”

Guia says part of the problem could also be because penalties for “serious” election-law violations are indistinguishable from those for “less serious” ones.

For instance, candidates who overspend, falsify reports, and receive contributions from prohibited sources can be meted jail terms of one to six years – just like those found guilty of exceeding the prescribed campaign poster size of two feet by three feet.

Then there are the relatively light punishments for such things as the failure to submit the SECE, which carries an administrative fine ranging from P1,000 to P30,000, at the discretion of the Commission.

Even Comelec spokesperson James Jimenez points out: “They’re spending more than a million. More than a hundred million. Tapos P30,000 matatakot sila? (Why would they be afraid of P30,000?)”

Comments Guia: “The corresponding penalties should be clearly identified for each offense, depending on the policy principle (that one wishes to uphold).” Yet even the most painful of punishments will fail to deter would-be law violators if it is plain to everyone that it is all threat and no action.

Worse, existing laws leave out equally important issues that need to be addressed. Among these is the absence of caps on the amount of donations that a candidate or political party may receive.

Political investment

In the May 2010 elections, six candidates for president (Aquino, Villar, Estrada, Teodoro, Perlas, Madrigal) alone raised combined total donations of P1.5 billion, based on the SECEs they submitted to Comelec. This amount came from only 238 donors, of whom about half, or only123 donors, gave P1 million or more.

If the amount of money that a candidate may receive from a single entity – whether a corporation or a person – would be limited, a candidate would be forced to raise money from more people, says Guia. This, in effect, would spread the “political investment” in the campaign, making it more grassroots based, he says. This would also prevent a winning candidate from “favoring” a limited number of groups or individuals that have donated huge sums to his campaign.

Guidelines on what candidates should do with unspent campaign contributions are lacking as well. Last year, then Pampanga representative and presidential son Juan Miguel ‘Mikey’ Arroyo  (now representative of a party-list group of security guards and tricycle drivers) created a stir when he attributed a jump in his wealth partly to campaign contributions that he received while still a candidate.

It has been suggested that since political parties enter into various transactions and operate much like corporate entities, they should be required to register with the Securities and Exchange Commission (SEC). This would then force them to open their books of account to the public, thereby promoting transparency.

At present, political parties are required to register only with Comelec, which hasn’t been much help to anyone – even those within the commission itself – to look at the financial dealings of these groups more closely.

Task too huge

For sure, no one doubts the sheer enormity of the task involved in campaign finance monitoring. It’s a responsibility that currently belongs to Comelec’s Law Department – the same unit whose long to-do list already includes investigating criminal offenses, providing legal opinion to the commission, accrediting political parties and party-list groups.

“I think the task is too huge,” says Rafanan of monitoring possible violations of campaign-finance laws. He adds that he doesn’t think his department can do it “on its own.”

“I can only see the entire Comelec doing it,” he says.

Guia, for his part, says a better option may be to set up a separate unit within Comelec that would focus on campaign finance monitoring and regulation. He also says improving campaign finance laws would be done either through statutory reform — by amending existing legislation – or through regulatory reform, to be implemented by Comelec.

“If the government had been able to set aside P11 billion for the automated elections,” says Guia, “this is also an important aspect of the elections that should be given attention.”

He repeats that existing campaign-finance laws need to be revisited. After all, he says, “Unrealistic laws encourage violations, and violations promote a ‘culture of disregard for the law.’”  - With additional research and reporting by JC Cordon, PCIJ, August 2010

THEY are avowed representatives of the poor and the marginalized, but in the May 10, 2010 elections, 12 party-list groups allied with two candidates for president, one for vice president, and one for senator splurged a staggering P426.16 million on television ads that aired in the last two weeks of the campaign period.

Where they got the millions to burn for these candidates, despite their claimed poverty, is the ambiguity. But why they burned millions on political ads that featured the four candidates, not their party-list groups, is the absurdity.

To be sure, these presumed defenders of the powerless and voiceless seem to have allowed themselves to be used as front and proxy of the powerful in band — a first time in Philippine political history. But did the party-list groups use the candidates for money or other, or did the candidates, the party-list groups?

It was a quirky exchange to say the least, although there appears to be an attempt to defy election laws on campaign spending limits.

The party-list groups got some exposure when their names were flashed for a fleeting second in the last frame of the ads of Liberal Party candidates Benigno Simeon C. Aquino III and Manuel Roxas II, Nacionalista Party’s Manuel B. Villar Jr., and re-electionist senator Juan Ponce Enrile.

By then, these candidates had nearly maxed out their campaign airtime limits. But with the party-list groups as surrogates, they managed to lodge more ads on television.

Yet it seemed like an unfair exchange for the party-list groups. It was like having two riders on a bicycle, one positioned behind the other – the front rider (politician) basked in the glory of the limelight, and the back-rider (party-list group) wallowed in his shadow.

The advertising contracts and booking orders that media agencies submitted to the Commission on Elections (Comelec) enrolled these party-list groups as both the buyers and the products of millions of pesos worth of political ads with ABS-CBN Corp., GMA 7 Network, and TAPE Inc., producer of the popular noontime variety show, “Eat Bulaga.”

A number of the parties declared these advertisements as part of the costs they incurred in the Statement of Electoral Contributions and Expenditures (SECE) that they filed with the Comelec.

The actual TV ad clips and documents support the fact or irony that the supposed “marginalized” party-list groups spent millions to support well-funded national candidates.

Aquino’s party-list groups

In mid-April, Aquino began winding down his TV ads because he was about to breach his airtime limits. Suddenly, however, six party-list groups endorsing his candidacy ramped up their ad buys on TV – with Aquino and his running mate Roxas as their veritable poster boys.

The ads by these party-list groups increased progressively in volume until the campaign period’s last day, May 8.

These six pro-Aquino party-list groups are the Agricultural Sector Alliance of the Philippines (AGAP), Akbayan! Citizen’s Action Party (Akbayan), An Waray, Katipunan ng mga Anak ng Bayan (Kaakbay), Parents Enabling Parents (PEP), and Bagong Bayan na Nagtataguyod ng Demokratikong Ideolohiya at Layunin (BANDILA).

Akbayan, Kaakbay, and PEP booked similar versions of ads that had Aquino and Roxas as talking heads.

Devoid of any hints to the platforms and identities of the party-list groups, but full of motherhood statements, the ads, with end tags that alternately named the three groups, showed Aquino and Roxas promoting their candidacies.

In the first ad, Aquino was shown endorsing Roxas, saying his running mate was already with him when he started his campaign toward the “daang matuwid” (straight path). It ended with Aquino urging viewers to help him further strengthen his partnership with Roxas through voting for the latter.

The second ad showed Aquino and Roxas both clad in barong with the image of “daang matuwid” as their background. The ad ended with the candidates saying, “Kayo ang aming lakas (You all are our strength).”

Akbayan even had a separate ad that featured Aquino being endorsed by a taxi driver, an aguador (water-carrier), a student, and a housewife. The ad ended with another motherhood statement saying, “Noynoy Aquino at Akbayan Partylist, Ipapanalo ang Mamamayan.”

Meanwhile, AGAP and An Waray promoted the candidacy of Aquino in their ads that used Batangas Governor Vilma Santos-Recto and Senator Francis Escudero as endorsers.

In AGAP’s ad, Recto said, “Noy, ang sabi mo kami ang iyong lakas. Ang sagot namin, ikaw ang aming pag-asa (Noy, you said we are your strength. Our answer, you are our hope).”

In An Waray’s ad, Escudero was shown talking about his kind of president (“Ang Presidente Ko”). Photos of Aquino with his family and while at work were also shown on TV.

Meanwhile, BANDILA’s ad of Aquino with then vice presidential candidate Jejomar Binay of the Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban), was shown on TV from May 6 to 8, the last three days of the campaign period.

Villar’s party-list groups

To Aquino’s six, Villar, the lone billionaire among the nine candidates for president, also marshaled six party-list groups behind his candidacy.

The groups bought TV ad spots that invariably featured the candidacy, image, and message of Villar, who finished only third in the race.

These are the Association of Administrators, Professionals and Seniors (AAPS); Alyansa ng mga Grupong Haligi ng Agham at Teknolohiya Para sa Mamamayan (AGHAM); Alay Buhay Community Foundation (Alay Buhay); Buhay Hayaan Yumabong (Buhay); Butil Farmers Party (Butil); and Pwersa ng Bayaning Atleta (PBA).

One version of the ads was that of Butil, which featured Villar’s mother, Curita ‘Nanay Curing’ Bamba Villar. Butil got token mention in the ad’s tagline, “Manny Villar at Butil Party List, Galing sa mahirap, tumutulong sa mahihirap (From the poor, helping the poor).”

Another was AGHAM’s ad that extolled Villar’s record in providing poor sectors housing, jobs, and education. But the exposure that AGHAM got from its own ad was a mere mention of its name in the last frame with this tagline: “Manny Villar at AGHAM Party List, Karanasan, Kakayahan, Kontra Kahirapan (Experience, Capability, Anti-Poverty).”

Other ads from AAPS, Alay Buhay, Buhay, and PBA had the same contents that centered on Villar. In fairness, Buhay and PBA also had TV ads that talked only about their own respective advocacies minus Villar. These ads, however, were rendered almost irrelevant by the sheer frequency of their ‘tandem ads’ with Villar.

Dangerous benevolence

Yet if party-list groups think these supposed acts of selflessness and generosity in favor of their candidates is not bad, they have another think coming. Such benevolence, according to Comelec Law department head Ferdinand Rafanan, could actually put them in possible penalty of campaign finance laws.

Rafanan explains that the ads are considered donations of the party-list groups to Aquino and Villar because it was the two candidates who were the main beneficiaries of the aired election propagandas.

Rafanan says the candidate or the party treasurer must issue a letter of acceptance or a statement authorizing the donor to incur expenses on his or her behalf. Otherwise, the donor is unauthorized to incur election expenditure, which is in violation of Section 103 of the Omnibus Election Code of the Philippines.

The provision states: “No person, except the candidate, the treasurer of a political party or any person authorized by such candidate or treasurer shall make any expenditure in support of or in opposition to any candidate or political party.”

Incurring expenditures for a candidate without the letter of acceptance or authorization as proof of campaign donation is an election offense, says Rafanan.

Any person found guilty of the offense shall be punished with up to six years of imprisonment and will be disqualified to hold public office.

Meanwhile, a political party found guilty shall pay a fine of P10,000, which shall be imposed upon such party after criminal action has been instituted in which their corresponding officials have been found guilty.

After going through the piles of documents submitted by media entities and the candidates to the Comelec, the PCIJ found out that not one of the 12 party-list groups had a letter of acceptance authorizing them as donors of either Aquino or Villar.

The PCIJ sent a letter to the Liberal Party asking if Aquino or Roxas issued letters of acceptance to party-list groups.

The brief reply of lawyer Doris G. Ramirez, LP’s deputy director general for finance and legal affairs, through a text message was, “With regard to the ads of other partylists, those were not donations to Liberal Party nor is LP in any manner involved in it.”

For its part, Kaakbay said that Rafanan’s opinion did not represent that of Comelec. Its first nominee, Alain Pascua, also said that Kaakbay did not receive any resolution or communication from Comelec saying that its ads were considered as donations to Aquino and Roxas.

Akbayan treasurer Arlene Santos, meanwhile, maintained that all of “Akbayan’s ads were paid for by Akbayan, and thus they are ads of the party, and were not donated to any other candidate.”

Santos argued that the Comelec’s position during the campaign period was that all ads “would be considered as being for a particular party or candidate based on the official record of the station/publication as to which candidate or party paid for it.”

Through several calls and letters, the PCIJ tried but failed to get the side of An Waray, PEP, and Bandila on the issue.

Villar ‘buys’ Butil airtime

Interestingly, the PCIJ found one document attached to the advertising contract of Butil that authorized Villar to pay for the campaign ads of the group.

The undated letter signed by Butil Party chairman Agapito H. Guanlao and submitted to the Comelec states that the signatory is “authorizing SEN. MANNY VILLAR to place in behalf of the Party, One Hundred Twenty (120) minutes of television airtime for advertising for the 2010 National Elections in accordance with R.A. 9906,” or the Fair Election Practices Act.

The letter also authorized Villar to spend money in the party’s name. The letter states that Villar’s authority “shall include the right to incur expenses in the name of the Party up to One Hundred Million Pesos (P100,000,000)” as well as “the right to contract with STARCOM PHILIPPINES to make the said placements.”

In a phone interview with the PCIJ, Guanlao explained that his party agreed to the arrangement because Villar would “subsidize” Butil’s ads. “Sila ang maghahanap ng contribution (They will seek contributions).”

Paolo, Villar’s son, together with a representative of Starcom, was the one who coordinated the agreement with Butil, according to Guanlao.

Pioneer in pol ads

Apart from these party-list groups, there was Akap-Bata, which started the forays into expensive political ads by marginalized groups when it aired TV ads on February 26 using Villar’s at the time very popular “Dagat ng Basura” jingle.

Unlike the “tandem ads” of other party-list groups however, Akap-Bata’s ads did not show Villar’s face or name. In interviews, Akap-Bata first nominee Joy V. Alcantara vehemently denied any association by her group to Villar, but admitted that both her group and Villar “benefited” from their use of the jingle.

Based on the ad contracts signed by Alcantara and telecast orders issued by her group’s media agency PHD Media Network 2006 Inc, Akap Bata bought ads on ABS-CBN and Tape Inc. worth about P40 million.

Following a deluge of negative reports on Akap-Bata’s ties with Villar, the group’s media agency issued a memo on March 11 cancelling a number of these ad spots. Despite this, Akap-Bata’s ads that actually aired amounted to about P39 million.

In its SECE, however, the group reported a much lower spending on campaign ads of P30.19 million, and receiving donations of P30.47 million. The group had said it raised money “from donations, pledges and contributions from members, fellow child advocates and well-off allies.”

First in party-list history

It could very well be the first time in the history of the 15-year-old party-list system introduced in the May 1998 polls that party-list groups used costly TV ads for their campaigns.

The supposedly poor party-list groups representing marginalized sectors, used to campaign on the ground and win the polls through their mass base of supporters from the grassroots level.

Like in the case of old-timers Butil, Akbayan, Buhay, Agap, and An Waray, party-list groups previously won in the polls without allying themselves with any traditional politicians.

But this year’s elections differed from the previous ones, with party-list groups now having millions of pesos and a willingness to be identified with so-called ‘trapos’ or traditional politicians, whom they used to disassociate with.

This unusual set-up prompts the question: If the groups still claim that they are representing the marginalized sectors and thus have members who are poor, where could the multimillion-peso funds that they used to pay for their TV ads come from?

When queried by PCIJ, most of the groups denied that the funds for the costly TV ads came from the camps of Aquino and Villar. Most of them also denied that the money solely came from them.

The rather vague explanation offered was that the funds were either pulled from “common” resources or were donated by common supporters of their groups and that of Aquino and Villar.

“Not a single centavo came from Villar,” AGHAM Rep. Angelo Palmones recently told the PCIJ in a phone interview. He said that his personal friends, who also happened to be Villar’s friends, helped AGHAM raise campaign funds.

This was also the claim of Butil’s Guanlao in denying that Villar put money into the group’s pocket. “Walang dumaang pera sa amin (No amount of money was coursed through us).”

Akbayan’s Santos, a signatory in the advertising contracts of her group, also said that the money that was used to pay for the ads came from “contributions made by those who supported the partnership of Akbayan and Noy.”

“It’s a case of sharing of resources to advance shared advocacies made possible by our common friends and supporters who contributed and financed the TV ads,” Kaakbay’s Pascua said in a statement.

AGAP’s legal counsel Erwin L. Aguilera said the money used to place the ads came from the group’s donors who were mostly farmers and those who were into agri-business. “Galing ito sa mga tao ng naniniwala sa programa ng AGAP (This came from people who believe in AGAP’s program).”

He even said that the Lipa City-based party-list group, which helps poor farmers, “has a working relationship” with re-elected Governor Santos-Recto and that their alliance with her greatly helped AGAP’s campaign. The TV ads complemented their campaign on the ground, he added.

Asserted Aguilera: “Sa tingin namin, makakatulong ang pag-alyado ng AGAP kay incumbent Governor (Santos-Recto) at Aquino. Naniniwala kami na makakatulong sila sa magsasaka (In our view, AGAP’s alliance with the incumbent governor and Aquino would greatly help us. We believe that they can help farmers).”

By comparison, AAPS’s party president and first nominee Dr. Edna Azurin sounded clueless when asked by PCIJ how her group booked its political ads. This is despite the fact that her signature was affixed in all of AAPS’s advertising contracts - PCIJ, August 2010

Lawyer Doris G. Ramirez, deputy director general for finance and legal affairs of the LP replied by SMS that read in part: “(Our) report to Comelec is the true representation of what the Liberal Party as political party spent. With regards to the ads of other party-lists, those were not donations to Liberal Party nor is LP in any manner involved in it.”

For Pwersa ng Masang Pilipino (PMP), Senate President Juan Ponce Enrile sent a letter to PCIJ by post, saying that “as Chairman Emeritus of the PMP, I am not involved in the administrative and financial affairs of the Party, my position being honorary in nature. I have, therefore, endorsed your letter to PMP’s treasurer, Mr. Jesse M. Ejercito, who can better give you the information that you need.”

Ejercito has yet to respond to PCIJ’s queries. PMP’s office could not also be reached because its listed number is “not yet assigned.”

In the meantime, a written query to Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban) regarding the discrepancy between its ad expenditure based on the network contracts and what it declared in its SECE yielded two letters of apology — one addressed to PDP-Laban president Aquilino ‘Koko’ Pimentel III, and the other, to Comelec. The letters were signed by Mando Cosio, media director of Media Force Vizeum, the accredited media buyer for PDP-Laban and Jejomar Binay.

The letters state:

“We deeply apologize to the PDP-Laban and the Commission on Elections for the error committed by our agency with respect to the broadcast orders and placement of end tags for the television advertisements during the campaign period.”

“Because of an oversight, some broadcast orders and end tags were incorrectly credited to PDP-Laban.”

“However, we attest that the total airtime credited to Jejomar C. Binay are within the total airtime allowed by law for national candidates.”

Nothing in the letters explained why PDP-Laban did not declare any TV ad expenditure in its SECE. In fact, what they seemed to indicate was that there were still other TV ads credited to PDP Laban, which it did not declare in its SECE.

Quezon Representative and Lakas-Kampi-CMD treasurer Danilo E. Suarez, when asked about the absence of any political ad expenditure in Teodoro’s SECE, said he could not answer for the former defense secretary, who was still in the United States. But Suarez said that it was the party that raised funds and paid for Teodoro’s ads and his other election expenses, i.e., printing of election materials. Aside from Teodoro, Lakas also shouldered expenses of its senatorial candidates, he said.

Suarez , however, acknowledged that the money spent by the party for its presidential bet is considered as “donation” to Teodoro. – PCIJ, August 2010

BY ALL ACCOUNTS, the May 10, 2010 polls was the costliest ever in Philippine electoral history.

The top candidates for president and vice president alone spent P4.3 billion on political ads during the official 90-day campaign period, and another billion 90 days before the campaign commenced, according to Nielsen Media’s monitoring of tens of thousands of political ad clips.

But for various reasons, the May 10, 2010 elections could also go down in the country’s annals as a grand spectacle of lies, half-truths, and concealed truths foisted on the Filipino voters.

These reasons include:

• Porous campaign-finance laws and inconsistent interpretation of the specific provisions by the Commission on Elections (Comelec);
• The negligence and inability  of the Comelec to enforce these laws for reported lack of trained manpower, time and resources;
• An apparent pattern among most candidates, political parties, and their representatives to circumvent the laws in a “knowing and willful” manner;
• A patent conspiracy among candidates, political parties, party-list groups, and donors to defy the laws; and
• Uneven compliance by media agencies and service contractors with their reporting duties.

Overspending, misreporting, concealment of facts by the top candidates for president, vice president, and their political parties and associated party-list groups – these are among the findings of the PCIJ’s audit of the Statements of Electoral Contributions and Expenditures (SECEs) that the candidates and parties submitted to the Comelec, along with related documents.

Nacionalista Party presidential candidate Manuel B. Villar Jr. and the Pwersa ng Masang Pilipino (PMP) party of former president Joseph Estrada, for example, had clearly spent beyond lawful limits, if the Comelec were to enforce campaign finance rules strictly and audit advertising contracts they signed with media agencies. PMP had not filed its report on election expenses and donations as of Comelec’s extended deadline last June 25.

Four candidates for president (Villar, Estrada, Lakas-Kampi-CMD’s Gilberto Teodoro Jr., and President Benigno Simeon C. Aquino III of the Liberal Party) and three candidates for vice president (Vice President Jejomar Binay of PMP/PDP Laban, LP’s Manuel Roxas II, and NP/Nationalist People’s Coalition’s Loren Legarda), as well as their political parties, failed to fully document and submit consistent reports about their receipt and acceptance of donations from various sources.

In addition, Aquino, Villar, Roxas, and Senate President Juan Ponce Enrile had separate deals with about a dozen party-list groups on tandem TV ads that essentially had their personal ads piggybacking on these groups’ allowed airtime. These ads, which aired in the last two weeks of the campaign, were not counted as part of the four candidates’ respective airtime limits.

To verify the data enrolled in the SECEs, PCIJ reviewed all available advertising contracts and telecast orders that the media agencies had submitted to the Comelec, Nielsen Media’s database on its monitoring of political ads, and other public records on the country’s top taxpayers and the corporate assets of the top campaign donors.

PCIJ also interviewed the treasurers and official representatives of the candidates and the parties, as well as some donors and fund raisers from the business community.

PCIJ’s audit, however, was hindered by the incomplete data supplied by candidates and political parties in their SECEs, as well as the absence of any or most of the required documents by many media outfits, especially those from print.

In part, that may be because no one has ever been prosecuted by the Comelec for non-submission of the required documents or for filing SECEs or other papers that are incomplete.

Comelec spokesperson James Jimenez also admitted to PCIJ that the SECE itself is “not a sharp instrument,” although the commission assumes that the candidates exert “all efforts to be as transparent in the statement as possible.”

Then again, it’s not as if Comelec has the means to verify the data on most of the documents it receives. Asked if Comelec had an auditing system, the body’s Legal Department head Ferdinand Rafanan said, “You know, I’m not even prepared to answer that because there simply is none. There is no auditing system.”

He also said that they have no time to go over the documents submitted by candidates, political parties, media outfits, and other entities. His own department, he pointed out, has only 30 people. “How can these…30 people examine tens of thousands…submitted to us?” asked Rafanan. “We do not simply have the time.”

“(We) have no capability to do that by training,” he added. “And we have never done it.”

Last month, the PCIJ presented the results of its own audit attempts to the Comelec en banc, partly in response to the poll body’s request for the PCIJ and the Pera’t Pulitika 2010 Consortium to help monitor the election spending reports of the candidates and the political parties. Some of the highlights of the PCIJ presentation include:

For the Aquino-Roxas slate, the Liberal Party, and the five party-list groups allied with them

In their separate SECEs, Aquino and Roxas said they spent P403.12 million and P279.35 million in campaign expenses, respectively. Both figures are within lawful limits.

Documents filed by both candidates with Comelec, however, did not reflect the barrage of ads that featured them but were supposedly purchased by their allied party-list groups Akbayan! Citizen’s Action Party (Akbayan), Katipunan ng mga Anak ng Bayan (Kaakbay) and Parents Enabling Parents (PEP). Aquino was also featured in ads placed by Agricultural Sector Alliance of the Philippines (AGAP) and An Waray.

The PCIJ found no evidence that Aquino or Roxas accepted or authorized these groups to buy ads to help promote their candidacies. Yet if it weren’t for the end tags that flashed the names of the party-list groups for a mere second, viewers would have no way of identifying the ads with the party-list groups that are listed as “advertisers,” since the focus was on the LP bets.

Interestingly, these party-list groups emerged as ad buyers in the country’s top leading networks only beginning in late April. And in just eight days, Aquino and Roxas were endorsed in 1,193 and 869 ads, respectively, of these five groups, based on Nielsen data.

If the cost of these ads were counted as his own expenditures, Aquino would have gone beyond his P507-million authorized expenditure limit for national candidates. But with no deed of donation of ads or even letters of acceptance of the donations filed with the Comelec by the groups and Aquino, the ad expenses were not declared nor counted in his name.

In his 267-page SECE, Aquino listed expenses on “political advertisements” in 16 companies worth P370.96 million, or 92 percent of his declared total campaign spending.

The ad booking orders for Aquino, issued by his ad agency and valued at P169.50 million, were signed by relatives Jaime C. Lopa and Maria V. Montelibano, who were both authorized by Aquino to incur expenses on his behalf. The Liberal Party also signed contracts with ABS-CBN Corp. worth P69.74 million for Aquino’s ads.

A letter issued by LP chairman Roxas on March 8, 2010, authorized Aquino to avail himself of half the party’s allowable air time – 60 minutes of TV airtime and 90 minutes of radio airtime per station. The letter further states that “this authority shall include the right to incur expenses chargeable to, and in the name of, the Liberal Party up to the amount of One Hundred Twenty-Five Million Pesos (Php125,000,000.00).”

Meanwhile, in his 38-page SECE, Roxas reported spending P232.06 million on “media,” which represents 83 percent of his total campaign expenses.

Ad contracts between Roxas and ABS-CBN Corp., and media purchase orders issued by Roxas’s ad agency to GMA Network, Inc. and TV5, come up to P195.44 million in total, or much less than what he declared in his expenditure report.

Yet in addition, LP bought P21.24 million worth of ads for Roxas, according to advertising contracts with ABS-CBN Corp. (P20.64 million) and a media purchase order issued by Image Dimensions to TV5 on LP’s behalf (P592,704).

The PCIJ found no letter of acceptance from Roxas for the expenditures LP had incurred in his name.

For the Villar-Legarda slate, the Nacionalista Party, Nationalist People’s Coalition, and party-list groups allied with them

The ad contracts signed by Senator Villar’s brother and authorized representative, Virgilio Villar, with the TV networks show that the presidential candidate’s ad buys amount to much less – P152.2 million – than what Villar himself declared to the Comelec for the duration of the official campaign period. Villar’s SECE says he spent P285.4 million in “campaign ads.” The discrepancy may be due to the “missing” contracts or those that a number of big radio networks and newspapers failed to submit to Comelec.

Yet in addition to his personal ad buys, Villar’s Nacionalista Party bought P150.4 million worth of ads on ABS-CBN, TV 5, Solar, and GMA 7. These contracts were signed by either NP executive vice president Jerry Navarrete – a long-time senior officer in Villar-owned companies – or NP treasurer Juan Pablo Bondoc.  These ad contracts listed either “Manny Villar” or the “Nacionalista Party” as “candidate” but were all paid by NP.

Meanwhile, the telecast orders that NP’s media agency Starcom Philippines issued to GMA 7 and its blocktimer TAPE Inc. listed the Nacionalista Party as both the “client” and the “brand.”

However they are booked or credited, though, all NP ads should have been billed to the account of Villar himself, documents from the Villar camp show.  These papers include the deed of donation of all the NP’s allowable advertising credits to Villar and the acceptance of the donation by Villar and his brother Virgilio.

Attached to the advertising contracts that the Villar camp signed with the networks were:

• A letter signed by Navarrete stating that NP “is availing (itself) of its allowable airtime under RA 9006 to promote the candidacy of Manuel B. Villar, Jr as follows: 1) Television ad placements for the candidate: 120 minutes; 2) Radio placements for the candidate: 180 minutes.”
• A letter signed by Virgilio Villar, “duly authorized representative of Manuel B. Villar, Jr.,” accepting the “donation of political ad placements in radio and television from Nacionalista Party.” (No amount, however, is indicated in the letter.)
• A Special Power of Attorney signed by Manuel B. Villar, Jr. appointing Virgilio B. Villar as his “true and lawful attorney-in-fact” allowing the latter to “sign, execute and deliver all contracts, agreements and/or documents related to all political advertisements and placements in television, radio, and print for the entire duration of the 2010 Election Period, within the limits allowed by law.”

A review of the TV commercials involved reveals as well that not only is Villar featured in the ads “paid by” the Nacionalista Party ‘”for Manny Villar,” but also in ads “paid for Nacionalista Party.” This means NP’s declared campaign ad expenditure of P152.8 million should have appeared in Villar’s statement to the Comelec as “contribution received” and “expenditure incurred.”

Villar’s statement however, does not indicate any contribution at all from any entity. Comelec lawyers say that such an omission in the SECE, if proven, could be a case of falsification or perjury.

Moreover, the amount would raise Villar’s actual expenditures to P584 million – or P77 million more than the P507 million a presidential candidate was allowed to spend (P10 per voter for an estimated 50.7 million registered voters in the May 2010 elections).

But then six party-list groups had also bought TV ad spots that invariably featured the candidacy, image, and message of Villar: Association of Administrators, Professionals and Seniors (AAPS); Alyansa ng mga Grupong Haligi ng Agham at Teknolohiya Para sa Mamamayan (AGHAM); Alay Buhay Community Foundation (Alay Buhay); Buhay Hayaan Yumabong (Buhay); Butil Farmers Party (Butil); and Pwersa ng Bayaning Atleta (PBA).

These party-list groups entered into contracts with ABS-CBN Broadcasting Corporation, GMA Network Inc., Solar Entertainment Corporation, and TAPE Inc. for the airing of political ads that altogether were worth P417.6 million.

The media agencies that placed Villar’s ads — Starcom Philippines and PHD Media Network 2006, Inc. – also happen to be the same ones that handled the ad placement of all six party-list groups.

In addition, Starcom Philippines issued a number of telecast orders to GMA Network and Tape Inc. that listed “Friends of 2010” as the “client” that paid for P10.5-million worth of ads for Villar, as well as P14.8 million for the Nacionalista Party.

If the P14.8 million were added to NP’s advertising contracts worth P150.4 million, NP’s campaign ad spending would amount to P165.2 million. In its SECE, the NP declared total spending of only P152.8 million for “campaign ads,” or an understatement of about P12.4 million.

Compared to the Villar camp’s rather complex booking of ad expenses, that of the senator/real-estate tycoon’s running mate was straightforward.  Not only were all of Legarda’s unique ads booked by her political party Nationalist People’s Coalition (NPC), Legarda and the NPC also correctly reflected these in their respective SECEs.

The NPC, through its president, Frisco San Juan, entered into contracts with ABS-CBN 2 and Solar Entertainment for several ads featuring Legarda. NPC’s ad agency OMD Philippines likewise issued media purchase orders to GMA 7 naming the NPC as the “advertiser” and either its vice presidential candidate Loren Legarda or NPC as the “product.”

A letter signed by San Juan saying that the NPC is “availing (itself) of its allowable airtime … to promote the candidacy of Loren Legarda,” is also attached to a number of these contracts.

In its SECE, the NPC reported expenditures of P173.9 related to “Advertising/Media.” Under this category is listed the amount of P162.5 million paid to Antonio B. Legarda, Sen. Legarda’s authorized representative.

The amount of P162.5 million also appears in Legarda’s SECE under contributions received, with “NPC (Frisco San Juan)” listed as the contributor. Legarda’s summary of expenditures, however, showed a higher amount of P175 million spent for “Advertising/Media.”

If the P254.5-million cumulative worth of all the ad contracts signed by the NPC on Legarda’s behalf were to be considered though, it would appear that NPC overshot its spending limit and did considerable underreporting in its SECE.

For the Estrada-Binay slate, and the Pwersa ng Masang Pilipino and Partido Demokratiko Pilipino-Lakas ng Bayan

As of press time, the PMP had not submitted its SECE to Comelec. This puts its winning candidates, Senator Enrile and Estrada’s son, Senator Jose ‘Jinggoy’ Ejercito Estrada, in clear peril of Comelec Resolution No. 8944, which states, “No person elected to any public office shall enter upon the duties of his office until he has filed the statement of contributions and expenditures.”

The same prohibition applies if the political party which nominated the winning candidates fails to file the required statement.

Estrada himself, however, submitted his SECE, in which he says he spent P112.50 million on “radio and TV advertisements.” Advertising contracts submitted by various broadcast networks meanwhile show that the PMP had ad buys worth at least a total of P261.18 million. This figure is already about P7 million over the allowed expenditure for political parties.

Not all of the ads paid for by PMP were for the party, however. About 75 percent (P193.71 million) of the P261.18 million went to ad spots for Estrada, or P81.21 million more than what Estrada declared as having spent for radio and TV ads in his SECE.

Documents show, though, that only P107.07 million worth of PMP ad contracts carried the line “Donation Accepted By: Joseph Ejercito Estrada (Donee)” or “Donation Accepted By: Jesse M. Ejercito (Donee) – Finance, Pwersa ng Masang Pilipino,” affixed with the donees’ respective signatures. (Ejercito is Estrada’s brother.)

In other words, only these ads would appear to have been accepted by Estrada and were authorized party expenditures for him. Media purchase orders issued by PMP’s agency MediaVest Philippines to the other networks do not have any similar note or attachment to indicate Estrada’s acceptance of the ads bought for him by PMP.

Estrada’s running mate Binay also had ads placed by his own party, PDP-Laban. According to ad contracts entered with ABS-CBN Corp. and telecast orders issued to GMA Network, Inc., the party bought ads for Binay worth P35.31 million and P26.72 million, respectively.

Binay, however, seems to have accepted only P24.99-million worth of ads PDP-Laban placed  for him in ABS-CBN Corp. based on  two contracts with the network that bear the line “Donation Accepted By: Jejomar ‘Jojo’ C. Binay (Donee)” affixed with Binay’s signature. Had he accepted the rest, the combined value of his ads in just ABS-CBN and GMA Network would reach P205.75 million, which would already be P4 million more than what he declared in his SECE as his total ad expenditure.

Indeed, the present vice president and his party also seem to have done some juggling of ad airtime and expenditure credit especially at the campaign homestretch, as a series of memos pertaining to a contract that PDP-Laban (through Media Force Vizeum) had signed with ABS-CBN illustrates.

The contract covered 68 30-second ad spots, worth a total of P20.6 million, that were to run from April 8 to May 8 on ABS-CBN. While the document identified PDP-Laban as “advertiser,” no name was indicated as PDP-Laban’s representative. Instead, the same signature appeared for PDP-Laban and its ad agency, Media Force Vizeum. Below the signatory line was the phrase “Donation accepted by: Jejomar ‘Jojo’ Binay (Donee),” which was signed by Binay.

But on April 29, ABS-CBN Corp. account executive Asela Tagarao sent a memo to Comelec, saying the old contract would be “superseded” by a new contract naming Binay as the “advertiser” instead of PDP-Laban. The contract amount and coverage remained the same.

On May 5, however, Tagarao issued another memo to Comelec, this time asking the commission to “disregard the contract … with advertiser detail: Jejomar ‘Jojo’ Binay” and “revert” to the “old contract with advertiser detail: PDP-Laban.”

The value of PDP-Laban’s ad contracts with ABS-CBN Corp. and telecast orders with GMA Network, Inc. alone amounted to P98.84 million. But in its election expense report to Comelec, the party listed a very modest P4.99 million as its total campaign expenditure.

PDP-Laban’s expenditure report was likewise lacking in detail, as it listed only P457,030 for political ad expenses, all of them in print media.  The party also failed to account for the donors of the multimillion-peso TV ad spots it purchased; it declared receiving contributions of only P5 million.

For Teodoro and Lakas-KAMPI-CMD

The former ruling coalition Lakas-Kampi-CMD says in its SECE that it received contributions totaling P130.68 million while it spent about 81 percent or P105.68 million of its total expenditures for “newspaper, radio, television and other public advertisements.”

Contracts and telecast orders from networks show that the party’s ad expenditures in these reached at least P86.02 million. Of this amount, P60 million worth of ads were aired in ABS-CBN, although it is not specified for whom these were bought. But those placed in GMA Network, worth P25.48 million, were for its standard bearer Teodoro, while P530,000 worth of ads in People’s Television Network, Inc. were for senatorial candidate Silvestre Bello III.

Only a contract entered with ABS-CBN Corp. by Lakas, dated April 13, 2010, carries the line “Donation Accepted By:” along with the signature of the donee. The donee’s signature is very similar to Teodoro’s signature that appears in his old statements of assets, liabilities, and net worth (SALN) filed before the House of Representatives.

If this contract is indeed signed by Teodoro, the ad cost of P1.70 million as indicated in the document should have been reported in his SECE, but it was not.

In his SECE, the former national defense secretary said his total campaign expenditures came to only P3.46 million, which was spent on concert, food, accommodation, transportation, and miscellaneous items. No ad expenditure was listed.

The SECE also lists Teodoro’s contributions received as P64,688.88 only. – With additional research and reporting by JC Cordon and Annie Ruth Sabangan, PCIJ, August 2010

Recalling one such meeting ahead of the recent May 10 polls, the fund-raiser says that what actually lasted a fleeting 15 minutes seemed to take forever. “They talked about everything else except the money,” the moneyman tells the Philippine Center for Investigative Journalism (PCIJ) on condition of anonymity. “At the end, when there was nothing else to talk about, the donor just said ‘By the way, here’s something for the campaign.’”

Aiming for the presidency costs a lot, so it is rather odd for candidates and their donors to avoid talking more frankly about funding, and whether it is ever enough for the endless needs of a nationwide campaign.

Any open discussion on money, however, seems to be taboo in Philippine political culture. Former banker Antonio Gatmaitan, recalling an episode from the 1960s, says he witnessed a meeting where the donor did not mention or refer to the money at all. After engaging in casual talk with the candidate, he recounts, the donor stood up and headed for the door, leaving behind an attaché case full of cash.

If large donors are shy talking about money with candidates, many if not most are even more hesitant to publicly acknowledge their donations to candidates’ election campaigns. Not surprisingly, business leaders find the official list of campaign donors submitted by the presidential candidates and political parties to the Commission on Elections (Comelec) to be “incomplete.”

Based on what they have seen, they say the records do not include the names of fellow businessmen known to be big sources of campaign donations. They also suspect that some of the donors listed were just “fronts” for other, wealthier people who did not want their names in the list.

A scrutiny of the financial reports filed by the presidential candidates and political parties alone yields many reasons for skepticism that these present a full picture of how the May 10 presidential campaigns were funded.

Circle of 308

If the candidates and parties’ submissions are to be believed, just 308 people out of a total 50.7 million registered voters funded what is considered as the country’s costliest presidential campaign yet. The number is smaller still – 48 – if only the donors who gave P10 million and above are counted.

Yet, these four dozen donors account for almost 80 percent of total funds of P1.58 billion raised for the campaign, including the candidates’ own money. (In contrast, US president Barack Obama had 690,199 individual donors in 2008, according to the US Federal Election Commission)

The figures were added up from reports submitted by seven presidential candidates – then Senator Benigno ‘Noynoy’ Aquino III, former President Joseph Estrada, Senator Manuel B. Villar Jr., former defense secretary Gilberto Teodoro Jr., environmentalist Nicanor Perlas, former Senator Richard Gordon, and former Senator Maria Ana Consuelo ‘Jamby’ Madrigal – and the three major political parties – Liberal Party, Nacionalista Party, and Lakas-CMD/Kampi Party.

Villar and Madrigal claimed they had no donors, and used only personal funds for their campaigns.

The other candidates and parties did not submit their reports even after Comelec had extended the deadline to last June 25. As of this writing, the Comelec had issued notices to Bangon Pilipinas Movement standard bearer Brother Eddie Villanueva and Ang Kapatiran Party’s John Carlos de los Reyes, asking them to explain their failure to submit their election expenses reports.

Grossly understated

While it is generally presumed that big-time political donations are mainly the realm of wealthy people, the extremely low number of campaign donors suggests that the record of donations submitted to the Comelec may be grossly understated.

“We easily get more than 300 donors for our fund-raisings for books and computer donations to public schools,” says Ayala Foundation executive vice president and National Movement for Free Elections (Namfrel) stalwart Bill Luz, who like many in the business community harbors doubts that candidates and political parties submitted complete donors’ lists to the Comelec. “In the case of Typhoon Ondoy and Pepeng and other calamities, we (had) thousands of donors.”

Wealthy Filipinos certainly outnumber the pithy list of the 308 combined campaign donors of the seven presidential candidates and three political parties.

According to the National Statistical Coordination Board, there were 19,738 households that earned at least P2 million in 2006, the minimum annual income for a family to be counted “rich.” Adjusted for inflation, the cut-off point is P2.4 million in 2010.

Neither does the composition of the donors’ lists square with the popular registers of the wealthiest such as Forbes magazine’s list of 40 richest Filipinos or the Bureau of Internal Revenue (BIR)’s table of top individual income taxpayers.

Only two of the Forbes’s “40 richest Filipinos” in 2010 – Andrew Tan and Enrique Razon Jr. – are among the campaign donors.

Only three of the country’s 500 top taxpayers in 2008 – showbiz celebrity and presidential sister Kris Aquino-Yap, Philippine Long Distance and Telephone Co. chairman Manuel Pangilinan, and Jose Ma. Lopez of the Negros Occidental-based Lopez family, which owns one of the island’s leading sugar mills — are listed as having donated to presidential candidates.

Narrow base

In fact, if the donors’ lists are to be believed, the bulk of campaign donations come from a very narrow base composed mainly of the candidate himself, his family and friends, and a handful of business supporters.

Though Aquino had 96 donors who gave a total of P440 million for his campaign, about 40 percent of the amount came from just five of the biggest contributors, including an uncle who accounted for almost a quarter of the donations.

Estrada, who landed far second to Aquino in the presidential race, had 24 contributors who donated P227.5 million. But only five of these accounted for 35 percent of the total amount.

The third placer, Villar, claims to have singlehandedly funded his campaign with P431.6 million of his own money, making him the single-biggest source of campaign money in the recently concluded polls.

Madrigal also spent P55.2 million of her own money for her campaign.

Gordon, for his part, got 30 percent of his P59.3 million contributions from just seven donors, while the other candidates reported negligible donations.

The other candidates reported negligible donations.

Parties, too

The same pattern holds for the main political parties. About 50 percent of the P157.9 million contributed to the Liberal Party came from only 10 donors while the Nacionalista Party raised all of its funds of P80 million from just six people. The Lakas-CMD/Kampi party got P110 million from just two people, one of whom gave P100 million. It reported expenses of P130.7 million, adding that the extra P20.7 million was “contribution from political party,” implying internal funds.

For sure, any perceived lack of credibility of the candidates and political parties’ election donation reports makes a mockery of the country’s election laws and undermines faith in the Comelec, which lacks resources and capacity to enforce the provisions of the law on politicians and their wealthy donors.

And so long as candidates do not report fully and candidly how they are raising campaign money, the suspicion will linger that they are beholden to wealthy (and secret) donors, reinforcing suspicion and cynicism about politicians.

A small group of donors, for instance, could be seen as having the potential to gain undue influence if their candidates win because their pool of contributions accounts for a big chunk of the candidates’ campaign funds.

Why donate?

According to fund-raisers and business leaders interviewed by the PCIJ, many donors contribute money in the hope of getting introduced to the candidate and gaining possible access later. Some are happy with just having a photo with the candidate, says a Chinese-Filipino property developer. “You won’t believe how important these photos are when the police or the BIR (Bureau of Internal Revenue) come knocking on your door,” he says.

“A big contribution helps build access to the official though that is no assurance that your request will be acted upon favorably,” another business leader says. “Maybe, you’ll be invited to be part of the president’s visits to other countries, but that’s all.”

In part, though, the problem with coming up with a complete campaign donors’ lists could be traced to the candidates and the political parties’ failure to exercise enough diligence to properly record the donations.

Fund-raisers and campaign insiders admit that the documentation of major donations are often done close to the deadline for filing of election expenses, which is a month after voting day. Some, including a longtime fund raiser for three presidential candidates, act under the mistaken assumption that donors have the option whether or not to report the donation to the Comelec.

Section 99 of the Omnibus Election Code is very clear: “Every person giving contribution to any candidate, treasurer of the party, or authorized representative of such candidate or treasurer shall, not later than thirty days after the day of the election, file with the Commission a report under oath stating the amount of each contribution, agent of the candidate or political party receiving the contribution, and the date of the contribution.”

According to election lawyer Luie Tito F. Guia, however, the impression that reporting is optional persists because no donor, candidate, or party treasurer has ever been investigated or prosecuted for not following this provision of law.

Secret, unlisted donors

Speaking on condition of anonymity, a businessman admits to making a donation to a presidential candidate but not seeing his name on that candidate’s donors’ list. “I was asked if I was willing to submit an affidavit,” says the businessman. “I said okay, but I was out of the country at that time and it was close to the deadline for filing. I don’t know how they reported my donation.”

A fund-raiser for one of the candidates also says that he did not see the name of a prominent business family who had promised to give a donation even though he was sure the family made good on its promise.

In another case that could throw doubts on the veracity of the amounts being reported, a local government supplier was shocked to discover that her donation of P50,000 was misreported to be a few hundreds of pesos.

The best global practice in managing campaign contributions is for candidates or political parties to designate a single treasurer or agent to record and report all receipts and expenditures. But candidates in the Philippines tend to have multiple fund-raisers operating more or less independently of each other. Admits a presidential-campaign fund-raiser: “I wasn’t aware of all the money coming in.”

Bags full of cash

Donations also come mostly in the form of cash, contrary to the international best practice of conducting all transactions through one banking account, especially in countries where banking is pervasive. “People come here to my office with bags full of cash that they leave here,” says a fund-raiser, pointing to a corner of his office.

But the bigger reason why the donor lists are incomplete is that wealthy, big-time contributors are loathe to publicly disclose their role in funding candidates’ campaigns. One explanation for this is that many simply want to avoid the glare of public attention that accompanies a big contribution, which could bring in more requests for donations not only from politicians, but also from charities and other parties.

Fear of harassment by winning rival candidates is another reason why businessmen, especially those whose enterprises are heavily regulated or taxed by the state, refuse to publicly acknowledge their campaign donations.

Lucio Tan, the tobacco magnate and the country’s second richest man, is seen by some members of the Chinese-Filipino business community as the perfect example of somebody who got into trouble for backing a losing candidate.

In the 1992 polls, Tan came out rather strongly and publicly in his support for Ramon Mitra, the frontrunner in pre-election surveys but who eventually lost to the former defense secretary Fidel V. Ramos. A year into the Ramos term, the government amended tax laws to cover loopholes that supposedly benefited Tan’s cigarette and liquor companies, and the BIR filed a P25-billion tax evasion court suit against Tan.

Ramos-era officials continue to assert that Tan deserved to be prosecuted; in the Philippines, however, that may be a necessary and yet insufficient condition for actually going ahead with a case.

At any rate, Tan’s fortunes turned for the better under the next administration of President Joseph Estrada, whose candidacy in 1998 also benefited from the tobacco magnate’s support. As Estrada himself admitted recently, the tobacco magnate had gained such influence that he heeded Tan’s suggestion on who to appoint as the next chief justice of the Supreme Court, which later upheld the dismissal of the tax case against Tan and his tobacco companies.

Political bribery?

Political donors also suffer from negative perception from the public and their peers. Contributions, especially big amounts in the tens or hundreds of millions of pesos, are often seen as attempts to buy future government favors or posts.

“Donations are seen in the same light as bribery” says a prominent business leader, who laments how recent media reports seem to have focused more on a Cabinet appointee’s donation to Aquino rather than on his qualifications. The trouble is that these perceptions have been proven right a number of times that they taint well-meaning donors who are giving money out of conviction rather than expectation of future gain.

Lawyer Guia meanwhile says that this donors’ reluctance to disclose contributions is matched by the candidates’ tendency to understate campaign expenditures as well as donations because of unrealistically low level of election spending caps that were set more than a decade ago.

Though there are no limits on donations, the candidate is not likely to report all the donations if these are way above the legal spending caps. Neither will candidates disclose donations if made by ineligible parties such as foreigners or government suppliers, or if some of the funds were used in unethical or patently unlawful activities, such as intimidation or bribery of voters and election officials.

Experts say that more disclosures in campaign donations are the most effective way to address the public’s misgivings and concerns about the role of large donors in funding election campaigns.

Sunshine & caps

Magnus Öhman and Hani Zainulbhai, editors of the 2009 book Political Finance Regulation: The Global Experience, write, “While undue influence is difficult to detect and even harder to prevent, enhancing transparency can be a useful way of reducing the problems. Disclosure laws can minimize them by providing voters with information as to who contributes to political parties and election campaigns.”

Another way is to impose reasonable caps on individual and total donations to match limits on election spending, according to Namfrel’s Luz. He adds that the ceilings on election spending should be updated to more realistic levels to encourage more compliance with the law.

Luz says that ceilings on donations will “democratize campaign finance” by compelling candidates to seek contributions from more people rather than just a handful.

“With donation caps, perhaps more businessmen will be willing to contribute because there is a limit to what can be asked from them,” he argues. “This will also encourage more disclosure and reporting because the amounts are no longer embarrassingly huge.”

Limits on donations may also help check the tendency of some politicians to pocket campaign funds and spend freely. Former congressman Juan Miguel ‘Mikey’ Arroyo, former President Gloria Macapagal Arroyo’s son, himself had pointed to excess campaign contributions to help explain a sudden increase in his personal wealth.

Comments Luz: “Having caps on spending but not on donations allow the politicians to walk away with so much money from donations.”

One positive sign, however, is the rising media and public attention on campaign finance. In the run-up to the recently concluded elections, voters frequently asked candidates: “How are you planning to recoup all that money you’re spending?” Allegations of overspending diminished the electorate’s support for some presidential candidates.

Still, there’s a long way to go in getting donors and candidates to set their records straight. Apart from new or better campaign finance rules, the institutional capacity of Comelec to enforce regulations needs beefing up.

At present, there are just a handful of staffers at the commission’s law department that handles campaign finance reports, leaving the election body virtually incapable to examine veracity of the documents submitted by the candidates and political parties.

“Nongovernment organizations are subject to stricter corporate governance regulation than political parties,” says Luz, noting that NGOs’ financial statements are audited by external accountants and could be examined by the Securities and Exchange Commission (SEC). – With research by Karol Anne Ilagan and JC Cordon, PCIJ, July 2010



Money comes mostly from personal funds, family members, and friends rather than a wide network of supporters of the political party, organization, or movement. In business, these private-equity sources of funding are ideal for ventures with low success rates but high pay-offs that are usually shunned by banks and the capital markets.

There is also the political equivalent of the venture capitalist: the wealthy individual who is unrelated to the candidate but who makes a big bet on his or her candidacy either because of genuine conviction or shrewd calculation. But the names of these donors and their contributions, which could run to hundreds of millions of pesos, do not usually appear in the official lists, according to campaign fund raisers.

In the last elections, the biggest source of campaign money was none other than Nacionalista Party standard bearer Senator Manuel B. Villar Jr., who reported that he coughed up P431 million of his considerable personal wealth and did not receive a single donation for his presidential bid. Another was former Senator Ma. Ana Consuelo ‘Jamby’ Madrigal, who reported spending P55.2 million of her own money for her presidential bid.

Newly sworn-in President Benigno Simeon C. Aquino III, meanwhile, raised P440 million, with mainly family members and friends as his top donors. They include Antonio ‘Tonyboy’ Cojuangco, an uncle and former head of the Philippine Long Distance Telephone Co., who gave P100 million; and Kris Aquino-Yap, his famous kid sister, who gave P15 million.

Aquino’s other big donors include Chiong Bu Hong, said to be Mizamis City’s biggest hardware owner, Martin Lorenzo of Pancake House and brother of Luis Lorenzo (former agriculture secretary who had been implicated in the “fertilizer funds scam”), and Fulgencio Factoran Jr., the environment secretary of President Noynoy Aquino’s mother, the late President Corazon C. Aquino.

Of former President Estrada’s P227.5 million in total donations, P20 million came from members of the Ejercito family, the biggest contribution to his campaign to regain the presidency. They are joined by close personal friends such as Jaimy Dy, Enrique Razon Jr., Antonio Evangelista, and Jorge Antonio. Current PLDT .chairman Manuel Pangilinan also made a P10-million donation.

Teodoro, the administration party’s presidential candidate, reported the lowest amount of total donations of only P64,000, which was even much less than the P2.2 million raised by environmentalist and independent candidate Nicanor Perlas.

Donations for Teodoro were even less than a tenth of the $20,000 (P920,000) worth of food and drinks consumed by then President Gloria Macapagal Arroyo and her party in Le Cirque restaurant in New York last year.

According to documents submitted to the Comelec, Teodoro’s party, Lakas-CMD/Kampi, raised P110 million in donations. Of the amount, P100 million came from Emmanuel ‘Noel’ Oñate, one of former President Fidel Ramos’s fund-raisers and operators who struck it big when he sold a budget airline he founded in 1995 for P1.4 billion in 2003.

Similarly, the Liberal Party raised a fourth of its P157-million total donations from its party chief and vice presidential candidate, Manuel Roxas II. Other top donors of the LP include Aquino’s uncle Ramon Cojuangco Jr. and again, Aquino’s kid sister Kris Aquino-Yap.

The Nacionalista Party raised P80 million from just six generous donors:  Charlie Gorayeb, Rolando Evangelista, Ibrahim Nuño, Luis Pastor, Vincent Miranda, and Teresita Medina.

Gorayeb is former national president of the Chamber of Real Estate and Builders’ Association or CREBA, and chairman of the board of four entities, namely, the construction firm Goram Development Corporation, Dolores Industrial Park Corporation, (a special ecozone owner/developer in Malvar, Batangas) Alta-Agri Corporation (engaged in agricultural production); and Red Sea Construction & Realty Corporation (engaged in mining and quarrying of aggregates). He is also the honorary consul-general of the Republic of Djibouti.

Nuño is president of the Metro Stonerich Corporation that supplies construction materials.

Like business start-ups that prove themselves viable, election campaigns also begin to get money from an increasingly wider circle of funders if the candidate does well in the pre-election surveys.

“Surveys are a very important consideration for donors in deciding where to put their money,” said a campaign fund raiser. “Donors may give you a small amount at the beginning but the big money comes in only if you do well in the surveys.”

Many donors also hedge. Some play it safe by donating to several candidates vying for the same position. Few can afford not to give any donation at all.

Remarks one Filipino-Chinese business leader: “If you see your business competitor becoming unduly close to the likely winner, you tend to worry and begin to look for ways to get to know the candidate, too.”  - PCIJ, July 2010

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