UNLESS THE Anti-Money Laundering Council (AMLC) moves faster than usual, the clan implicated in the Nov. 23, 2009 Maguindanao Massacre might soon retake control of what by all accounts is a scandalously vast estate of money and mansions, and wheels and weapons it had acquired while governing over a dirt-poor province.

Next week, on Dec. 2, a freeze order on 597 bank accounts, 142 firearms, 132 motor vehicles, and 113 houses and lots, recorded in the names of 27 Ampatuan family members and their associates, will lapse.

The bank accounts alone are estimated to be worth more than a billion pesos – multiple times more money than what the Ampatuans who held elective office had declared in their asset disclosure records to be their lawful incomes and net worth.

The AMLC – which is unduly secretive in the country but quite open about its operations in international forums and toward donor agencies – is mum about what it plans to do next.

Unfortunately, it barely inspires confidence, if the last two years since the massacre are any reference.

Indeed, by most indications, the AMLC and monetary and banking officials, along with the banks, have taken largely a series of administrative half-steps and missteps against the Ampatuans, who until the massacre that killed 58 people, including 32 media workers, were the lords of Maguindanao.

In truth, the story of how the Ampatuans managed to move massive amounts of money to and from hundreds of bank accounts is also the story of why regulatory agencies failed to enforce banking laws vis-à-vis the banks.

Too, it is the story of why the banks had acquiesced to keep the financial deals of the Ampatuans secret for so long, in clear violation of their duty to report “suspicious transactions” under banking and AMLC rules.

And whether or not the banks failed to report the Ampatuans’ series of suspicious transactions in the years before the massacre occurred, and in the 18 months that followed, begs the question of whether or not the AMLC had taken action, any action at all, against the banks.

Can’t bare moves?

In fact, it was only last May that the AMLC formally moved to freeze the multibillion assets and hundreds of bank accounts of the Ampatuans.

On Jun. 8, 2011, the Court of Appeals, acting on the AMLC’s 94-page “urgent ex-parte petition for freeze order,” issued a 20-day provisional asset preservation order. This was followed by a six-month freeze order, again on AMLC’s motion, that would lapse on Dec. 2, 2011.

Recent repeated requests by the PCIJ for an interview with AMLC’s senior officials yielded just this email reply: “We cannot disclose to anyone what we plan to do in relation to cases that we have filed or intending to file because this will telegraph our moves to the persons that we are investigating or prosecuting.”

Specific questions about whether or not to banks had filed suspicious transaction reports on the Ampatuan bank accounts prior to the Maguindanao massacre, and what the AMLC had done or plan to do either way, received this curt reply: “We cannot cite particular suspicious or covered transaction reports, specific cases and identify persons subject of our legal action because this will violate the confidentiality provisions of the AMLA (Anti-Money Laundering Act) of 2001, as amended and its Revised Implementing Rules & Regulations.”

But the reply also stated that the AMLC secretariat “investigates suspicious transactions and covered transactions deemed suspicious, money laundering activities and other violations of the AMLA. Hence, it immediately analyzes and investigates suspicious transactions reported to it by banks and other financial institutions. It also analyzes and investigates covered transactions  (a transaction is considered covered where the amount involved exceeds P500 thousand within one banking day), which are deemed suspicious after initial inquiry.”

Yet by filing its urgent ex-parte petition before the Court of Appeals a full 18 months after the massacre, the AMLC had sounded the alarm much too belatedly on the financial deals of the Ampatuans.

This is even though it seemed to appreciate the need for quick action on the clan’s assets, arguing in its motion for a freeze order: “Unless the bank accounts and other properties subject of this petition are frozen and placed under the custody of the law, there is imminent certainty that the funds contained therein and other identified properties will be withdrawn, removed, transferred, concealed or otherwise dispose of, thereby placing them beyond the reach of law enforcers, and would render ineffective government effort to forfeit the subject assets and prevent their use for other unlawful activities.”
A report by the Office of the Ombudsman, which conducted a lifestyle check on the Ampatuans in 2010, said that Ampatuan Sr. alone “has amassed unexplained wealth manifestly and excessively out of proportion to his legitimate income for the years 2000 to 2009 in the aggregate amount of P183,424,326.71.”

Andal Sr. illiquid?

But Sigfrid Fortun, counsel of Andal Sr., takes exception to details asserted in the AMLC petition. “Andal Sr. is illiquid and has no cash to spend for his families’ needs,” Fortun says in an emailed reply to PCIJ’s queries.

He also writes that his client, in his comments on the lifestyle check report, had said, “most of the assets listed as theirs are not owned by them as the Panel made assumptions without factual basis.  Some of their source documents are dated or obsolete.”

“The bank accounts are a listing of all accounts bearing their name whether existing since the ’70s or closed for some reason,” adds Fortun.  “They do maintain bank accounts but most if not all of them had been closed even before any investigation of their supposed ill-gotten wealth commenced.”

According to Fortun, the family of Bai Leila Uy, the first of Andal Sr.’s six wives, “has significant landholdings, which became revenue source for new businesses organized by Andal Sr. before he became a public official.” Most of the properties registered in Andal Sr.’s name “were acquired before he became a public official.”

Old, new accounts

Fortun could be correct in regard to some of the bank accounts being old, such as those enrolled with the Equitable PCIBank, which has since been acquired and networked under Banco de Oro Unibank Inc. In the AMLC documents, 73 bank accounts of the Ampatuans were supposedly opened with Equitable PCIBank, and with Banco de Oro, another 231 accounts, or nearly 40 percent of the 597 total accounts.

Interestingly, though, the 597 bank accounts on the AMLC’s list include 46 with the Land Bank of the Philippines, and another six with the Development Bank of the Philippines – government depository banks that are allowed in law to receive and disburse public funds. These accounts were listed mostly in the names of Zaldy and Andal Jr., who had served as elective officials.

A week after the appellate court froze the accounts, civil servants in the Autonomous Region in Muslim Mindanao (ARMM) had held a rally in Cotabato City to protest the inclusion of their salaries and benefits supposedly deposited in the one of the Land Bank accounts in the name of the Ampatuans.

The court’s freeze order apparently had the uncanny result of also freezing the salaries of the supposedly 30,000 employees of ARMM, including 22,000 public school teachers, as well as funds for the core shelter program that the Aquino administration had planned to roll out for local folk.

Why the account with the Land Bank branch on Magallanes Street in Cotabato City was opened in the name of an Ampatuan, and apparently continued to receive public funds 18 months after the massacre, remains a mystery.

Failed regulators

To be sure the Ampatuans’ intricate web of bank accounts points to two failures: the first, the failure of the banks to comply with clearly established banking and AMLC rules, and the second, the failure of the AMLC and monetary agencies to regulate the banks and enforce the laws.

And yet the AMLC alone – from its birth 10 years ago on Sept. 29, 2001 through Republic Act No. 9160, or the Anti-Money Laundering Act of 2001 – has enjoyed broad powers and command of resources to be able to do its job well.

Under the rules implementing RA 9160, the AMLC is a collegial body composed of Bangko Sentral governor (chairperson) and the heads of the Insurance Commission and the Securities and Exchange Commission as members. The law christened the AMLC with the fancy title of being “the Philippines’ Financial Intelligence Unit.”

The AMLC has embraced a lofty vision: “To be a world-class financial intelligence unit that will help establish and maintain an internationally compliant and effective anti-money laundering regime which will provide the Filipino people with a sound, dynamic and strong financial system in an environment conducive to the promotion of social justice, political stability and sustainable economic growth. Towards this goal, the AMLC shall, without fear or favor, investigate and cause the prosecution of money laundering offenses.”

The AMLC secretariat, headed by its executive director with a five-year fixed term, administers day-to-day operations with a staff complement of undisclosed numbers. Some AMLC personnel are seconded from the Bangko Sentral and other agencies, while others are consultants with fees covered by donor agencies.

In 2011, the AMLC received a P9.7-million budget, down from its so far largest annual allocation of P25.65 million in 2010. This was slightly higher than the P20.65 million that the agency got in 2009, P15.2 million in 2008, and P10 million in 2007 and 2005. This year’s budget allowed the AMLC zero funds for capital outlay and intelligence gathering.

The agency budget has consistently reflected no allocation for personal services. It does not disclose, too, the millions of dollars in grants, technical assistance, and overseas training for personnel that it has received from donor agencies. These include the Asian Development Bank (that gave US$1 million in 2002 for “Strengthening the Anti-Money Laundering Regime,” and US$400,000 more in 2005), and the European Union (that gave EUR 811, 000 or US$ 1,057,245 from September 2005 to September 2008).


Money laundering

RA 9160 criminalized money laundering in the Philippines and introduced “civil forfeiture as an appropriate remedy for the seizure and forfeiture in favor of the State, without the necessity of conviction or prosecution in a criminal case, of monetary instrument, property or proceeds involved in or related to an unlawful activity or money laundering offense as defined in the law.”

The law defined money laundering as “a crime whereby the proceeds of an unlawful activity are transacted thereby making them appear to have originated from legitimate sources.”

It spelled out the “unlawful activities” that are “predicate offenses” to money laundering include “any act or omission or series or combination thereof involving or having direct relation” to kidnapping for ransom; drug trafficking and other violations of the Comprehensive Dangerous Drugs Act of 2002; graft and corruption; plunder; robbery and extortion; jueteng and masiao; piracy on the high seas; qualified theft; smuggling; swindling; hijacking; destructive arson and murder, including those perpetrated by terrorists against non-combatant persons and similar targets; fraudulent practices and other violations under the Securities Regulation Code of 2000; and felonies or offenses of a similar nature punishable under the penal laws of other countries.

Covered institutions

The law allowed the AMLC access to and supervision over a broad range of “covered institutions,” or practically the whole universe of entities under the regulatory command of the Bangko Sentral, the Insurance Commission, and the Securities and Exchange Commission.

These include:

• Offshore banking units, quasi-banks, trust entities, non-stock savings and loan associations, pawnshops, and all other institutions including their subsidiaries and affiliates supervised and/or regulated by the Bangko Sentral.
• Insurance companies, insurance agents, insurance brokers, professional reinsurers, reinsurance brokers, holding companies, holding company systems, and all other persons and entities supervised and/or regulated by the Insurance Commission.
• Securities dealers, brokers, salesmen, associated persons of brokers or dealers, investment houses, investment agents and consultants, trading advisors, and other entities managing securities or rendering similar services, mutual funds or open-end investment companies, close-end investment companies, common trust funds, pre-need companies or issuers and other similar entities; foreign exchange corporations, money changers, money payment, remittance, and transfer companies and other similar entities, and other entities administering or otherwise dealing in currency, commodities or financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary instruments or property supervised and/or regulated by the Securities and Exchange Commission.

Thus, under the AMLC’s rules, all banks and covered institutions are under “mandatory duty and obligation” to file “covered transactions reports” or CTRs and “suspicious transaction reports” or STRs, within five banking days from the date of the transactions.
By all indications, the steady spike in the amounts of money and the number of bank accounts that the Ampatuans had chalked up over the years should not have escaped the notice of their banks and the AMLC.

Suspicious transactions

The AMLC’s rules, as amended in March 2003, specify that “covered transactions” I are “transactions in cash or other equivalent monetary instrument involving a total amount in excess of five hundred thousand pesos (P500,000.00) within one (1) banking day.”
On the other hand, “suspicious transactions” are defined as transactions with covered institutions, “regardless of the amounts involved,” where any of the following circumstances exist:

• “There is no underlying legal or trade obligation, purpose or economic justification;
• “The client is not properly identified;
• “The amount involved is not commensurate with the business or financial capacity of the client;
• “Taking into account all known circumstances, it may be perceived that the client’s transaction is structured in order to avoid being the subject of reporting requirements under the (Anti-Money Laundering) Act;
• “Any circumstance relating to the transaction which is observed to deviate from the profile of the client and/or the client’s past transactions with the covered institution;
• “The transaction is in any way related to an unlawful activity or offense under this Act that is about to be, is being or has been committed; or
• “Any transaction that is similar or analogous to any of the foregoing.”

In its ex-parte report, the AMLC made no specific allegations about big amounts involved in single-day transactions for any of the bank accounts listed in the names of the Ampatuans and their associates. But under two principles that the AMLC has repeatedly exhorted the banks to observe, due diligence by the bankers and their account persons could reasonably be expected.

The first is the KYC or “know your client” rule, and the second, the matter of monitoring PEPs or “politically exposed persons” or politicians, political personalities, and their agents and intermediaries who are known to hold tremendous power and influence, and sometimes “abuse the system, dirty money will continue to end up in banks, often through trusts and corporate vehicles set up by agents and administered by unrelated third parties.”

Silent partners

Why the Ampatuans’ unusual trail of money escaped the notice of the banks and the AMLC is a tragic mystery. It is possibly also a story being repeated many times over across the country where banks and bankers continue to serve as willing vassals and silent partners of crooks in public and private offices.
In the case of the Ampatuans, some banks – all located outside Maguindanao where no single bank exists – had been favored more than others to serve as repositories of the clan’s millions.
The 597 bank accounts listed in the names of the 27 Ampatuans and their associates, according to the AMLC ex-parte report, include:

Table 1. Bank Account Holders and Number of Accounts

Table 2. The Banks and the Ampatuans

The AMLC may have broad and full powers to run after money laundering and all its predicate and related crimes but it offers little proof that it has been as effective in running after grafters and crooks in public office.

Poor to fair record

A July 2009 Mutual Evaluation Report of the AMLC conducted by Asia/Pacific Group on Money Laundering, with assistance from the World Bank, revealed that on its first eight years in office, the AMLC had a poor to fair record, depending on the predicate offenses or cases involved.

From 2003 to January 2007, the AMLC referred to the Department of Justice five complaints of estafa, two of pyramiding/ponzi scheme, and only one case each of qualified theft, kidnapping for ransom, and violation of the Anti-Graft and Corrupt Practices Act. To the Ombudsman, it submitted one case of 105 counts of plunder (against the ‘Euro generals’). The civil forfeiture case of the Ampatuans brings to three the AMLC’s harvest of corruption complaints it has filed in its first decade of life.

In terms of money restituted in favor of the state, the AMLC may be said to have made modest strides, considering its modest budget and small core personnel complement. Excluding the Ampatuans’ estate and bank accounts, as of October 2008 the AMLC has supposedly netted P21.3 million from terminated civil forfeiture cases, apart from a possible P287.8 million that could come from pending cases.

But toward banks defying AMLC rules, the agency is able to show only paltry results. Until October 2008, it reported collecting just P2.1 million in fines of P100,000 each imposed on 21 banks, even as it has yet to collect another P1million in unpaid penalties from 10 other financial institutions.

The latest data on the AMLC’s work are difficult to secure. The latest annual report posted on its official website dates back to 2007. But then again, the reticence of AMLC officials to grant requests for interview and information by Philippine media is the exact opposite of their willingness to open AMLC records and operations to foreign donor agencies and at conferences abroad.

Effete vs corruption

A senior banking regulator says AMLC could only render an effete role in uncovering corruption and plunder cases because of the failure of regulatory agencies, and the indifference, or lack of fear, on the part of banks and bankers toward regulators.

“There is compliance in the breach,” says the banker. “The structures, sanctions, and penalties are not strong enough, and the regulators are not feared or held in awe y bankers.”

Indeed, except for one rural banker, the article of faith that big banks hold is that not any single big banker has been jailed, or may ever see the slammer, for fraud or other violations of banking laws.

The banker notes that all recent big cases of banks going under for corruption or poor management had ended up in the government shelling out billions of pesos in bailout money. Soon after, the banker says, those who had sent their banks to bankruptcy had been recycled and returned to top posts in other banks.

The banker also says that while bank officials tend to strictly follow AMLC’s rules on filing CTRs and STRs in the big cities, in areas where warlords and political clans dominate, “where the rule of law is not there but the rule of the gun, banking rules do not apply.”

Politicians, especially those with virulent tendencies, had and would always intimidate bankers. Says the banker: “If they made deposits at the time they were not notorious at all, the bankers could just say they are valued clients. Now that their reputation is in ruins, as bankers you just hope that their account stays there in your bank.”

“Our monetary policies are okay,” the banker says, “but there’s a hell of a lot to be said in terms of regulatory aspects, legal standards, international standards, personal ties, classmates, and friends getting in the way of the law.” - PCIJ, November 2011

JUST A few weeks after the Nov. 23, 2009 Maguindanao Massacre, where 58 people including 32 journalists were executed in a remote barangay in Ampatuan town, officials of the Firearms and Explosives Division (FED) of the Philippine National Police (PNP) were surprised to receive a deluge of applications for gun amnesty from one particular province in Mindanao.

Every once in a while, the national government offers a gun amnesty to the general public. These amnesty offers are a general pardon of sorts, where people with loose or unlicensed firearms are allowed to have illegal guns licensed and registered in their names.

But this batch of applications raised a red flag among officials of the PNP-FED, the agency tasked with regulating gun ownership and use in the country.

First of all, almost all the new applications originated from Maguindanao province, where the massacre occurred.

Secondly, the applicants were mostly members of the local civilian volunteer organizations, or CVOs, the local militia. Interestingly, members of Maguindanao’s CVOs who owed loyalty to the Ampatuan clan, had been implicated in the massacre.

Third, many of the firearms were the highly-priced Bushmaster M4A3, a variant of the M4 carbine used by many special forces units. Just a few years earlier, the Ampatuan clan, through the Maguindanao provincial government, had purchased 50 Bushmasters through gun trader Crisostomo Aquino, allegedly to fight the terrorist threat in the province. The end users of the Bushmasters, priced at P120,000 each, were supposed to be members of the Maguindanao PNP.

Sr. Superintendent Danilo Maligalig, then operations chief of the PNP-FED, recalls that this batch of amnesty applications, “numbering around a hundred,” immediately caught the attention of firearms regulators.

The gun amnesty, provided for through Executive Order 817 signed by then President Gloria Macapagal Arroyo in June 2009 as part of the National Firearms Control Program (NFCP), had expired on Nov. 30, 2009, or a few days before this batch of amnesty applications swamped the FED.

From cops to CVOs

“Sinubukan nilang ipahabol ang mga ito (They tried to get this past us),” Maligalig recalls.

Maligalig says investigation by the FED later showed that these firearms were the same guns issued to the Maguindanao PNP to fight the rebel Moro Islamic Liberation Front (MILF) and other armed groups in the region.

But police officials were puzzled how these firearms found their way to the CVOs, who then tried to acquire legal possession of them through the firearms amnesty program. What made the applications all the more unusual was the fact that the guns had never even been declared lost by the local PNP in the first place.

To Maligalig and other FED officials, this much was clear: firearms meant for the government arsenals had found their way to armed groups loyal to the Ampatuans.

Too, the clan appeared to be scrambling to save its arsenal and retain its armed might in the wake of the government crackdown against the firepower of the Ampatuans.

But more importantly, it was an sign of how the Ampatuan clan, like other well-armed political families, may have mastered the art of finding and taking advantage of apparent loopholes in firearms laws and amnesty programs in order to build, arm, and maintain a parallel arsenal that rivals even that of the national government’s.

At the same time, it put into question the entire firearms regulation system, including the fact that some state agencies such as the Armed Forces of the Philippines (AFP) deem themselves exempt from such rules.

Alarming findings

Maligalig says that FED officials immediately suspended that batch of firearms amnesty applications while a probe was underway.

The results of the probe were alarming.

Maligalig, who acted as vice chairman of the investigating committee formed by the FED, said they found that many of the firearms bought with government funds supposedly for the local PNP were really meant to be used by the Ampatuan militia.

Under PNP rules, local governments may purchase firearms for the use of the local police force. These purchases are, however, covered by an end-user certificate, which specifies who is the firearm’s real user. In the case of the Bushmaster carbines, the guns were supposed to go straight to police officers assigned in Maguindanao.

“The guns were meant for the local police of Maguindanao, in fact the memorandum receipts (MR) were in the name of the policemen assigned,” says Maligalig. “Pero pirma lang ‘yun (But these were just signatures on paper.) The actual distribution of the guns was made to the militia members.”

He says that a closer scrutiny of the firearms applications showed that some of the CVO members applying for gun amnesty were in fact implicated in the Maguindanao Massacre itself.

Wanted-list pics

“If you look at the pictures on the wanted list,” says Maligalig, “these were the same pictures in the amnesty applications application.”

A number of these CVO members were later arrested and have been included in the Maguindanao Massacre case now pending before the Quezon City Regional Trial Court.

Maligalig says it appeared that the clan had ordered militia members to have these high-powered firearms placed under the amnesty program, in order to spare them from confiscation by the government.

“When things got hairy, they (the Ampatuans) attempted to have their firearms placed under the amnesty program,” Maligalig tells the PCIJ. “Pinangalan lang ang mga baril sa mga militia (They just tried to have the guns registered in the name of their milita members).”

In all, some 1,200 firearms were reported by the AFP to have been unearthed, confiscated, or recovered in Maguindanao province following the Maguindanao Massacre, according to AFP spokesmen in 2010.

Most of these firearms were old and obsolete firearms usually issued to members of the Civilian Armed Forces Geographical Units (CAFGUs) and CVOs, the so-called force multipliers authorized through Executive Order 546 signed by then President Gloria Arroyo in July 2006.

High-powered metal

A number of these recovered firearms, however, are clearly high-powered and high-end. Among the firearms recovered, as listed by the Mindanao-based news cooperative Mindanews, were:

• Four 60-mm mortars with ammunition;
• Two 81mm mortars;
• A 90mm recoilless rifle (actually a misnomer. The recoilless rifle fires a shaped charge that can punch a hole through armored vehicles);
• A 57-mm recoilless rifle;
• One Barrett sniper rifle (a specialized sniper weapon that delivers a half-inch slug with an effective range of 1.8 kilometers. The model recovered was a civilian version, although Barrett sniper rifles are normally not sold to private individuals but only to governments);
• Three M60 light machine guns (the standard machine gun of the AFP and the PNP);
• One .50 caliber heavy machine gun, also capable of punching holes in armored vehicles; and
• Various high-powered rifles and hand guns

Of these firearms, some 300 guns were turned over to the PNP Region 12 crime laboratory in General Santos City on suspicion that they were directly involved in the Maguindanao Massacre. So far, four of these confiscated guns have already been matched with slugs recovered from the victims and the site, according to Task Force Maguindanao head Chief Superintendent Benito Estipona. It is not clear if any of these firearms were part of the batch that CVOs tried to have registered under the amnesty program.

One long, one short

As a general rule, the country’s laws regulating firearms ownership limits the number of firearms owned by private citizens to “one long, one short,” or one rifle and one pistol.

In addition, private citizens are only allowed to own bolt-action or semi-automatic rifles with caliber no larger than .22 of an inch. The usual exemption is for gun club members, who are allowed a maximum of 10 rifles, but only “for sporting use.”

Yet according to the findings of the lifestyle check conducted by Deputy Ombudsman Humphrey Monteroso on the Ampatuan assets and submitted by the Anti-Money Laundering Council (AMLC) to the Court of Appeals, the Ampatuan clan has at least 157 firearms of various calibers registered in the PNP-FED’s Firearms Identification Management System (FIMS) masterfile.

Of these 157 registered firearms, 23 are listed under the name of Andal Salibo Ampatuan Sr., and 26 under the name of Zaldy Uy Ampatuan. Eighteen guns are registered under the name of Andal Uy Ampatuan Jr., while another 15 are registered in the name of his brother Anwar.

(An earlier report by the PCIJ, quoting PNP-FED officials, pegged the number of firearms registered to members of the Ampatuan clan at 271, distributed among 103 persons with the surname Ampatuan.)

How then were the Ampatuans able to register so many firearms under their names?

Big cache of guns

Current officials of the PNP-FED refused repeated requests by the PCIJ for an interview. But Police Chief Superintendent Ricardo Marquez, executive officer of the Directorate for Investigation and Detective Management, says “the only way I can think of” how the clan was able to pull off such a feat is through the numerous amnesty programs offered over the years. This is because under the amnesty program, an applicant can register any number of firearms.

Marquez says even long firearms are included in the amnesty program. “The (limit) of only one-long, one-short is effectively overruled (by the amnesty),” he adds.

Since 1992, the government has offered at least 12 amnesty programs that would enable holders of loose firearms to have them registered and legalized for a fee.

But there is yet one more apparent loophole in the amnesty program that allows gun owners to collect and legally own high-powered firearms. Under the country’s gun laws, private citizens are not allowed to own high-powered rifles of 5.56 mm or 7.62 mm. These are the calibers of the standard M-16 rifle and the M1 Garand or the M14 rifle used by the police and the military.

The various amnesty programs, though, allow applicants to own high-powered rifles so long as they do not exceed 7.62mm. This means an applicant for amnesty can, once approved, legally own his own arsenal of high-powered firearms that are not available to ordinary citizens.

‘Designer guns’

A quick inspection of the list of firearms registered under the names of the Ampatuans, meantime, also reveals a proclivity, not just for high-powered firearms, but for “designer guns,” as described by one security consultant, as well.

Of the 23 firearms listed under his name, Andal Sr. owns an Israeli-made 5.56 Negev light machine gun, a belt-fed or drum-fed machine gun that is hardly for sporting use. The Israel Weapon Industries website describes the Negev as “a small, light weight advanced machine gun” that allows “accurate and fast controlled fire for close quarter battle or an automatic mode that allows maximum firepower.”

In addition, Andal Sr. owns a Heckler and Koch MP7 submachine gun, a new generation of submachine guns whose 4.6mm bullets can punch holes through bulletproof vests. Manufacturer Heckler and Koch’s official website describes the MP7’s ammunition as capable of penetrating a bulletproof vest “comprised of 1.6mm titanium plates and 20 layers of Kevlar, out to 200 meters and beyond.”

Andal Sr. also owns 18 pistols and three other high-powered rifles.

Not to be outdone, Zaldy Ampatuan owns a Negev light machinegun, two HK MP7 submachine guns, an HK UMP40 submachine gun, and two Israeli-made Tavor assault rifles, the same rifle now being issued to the Israeli Defense Forces (IDF). This is aside from the 11 pistols and one shotgun that he owns.

Andal Jr., for his part, has 18 registered firearms, according to PNP records. These range from an OAR 556 rifle to a 5.7 caliber Fabrique Nationale submachine gun.

Expensive buys

A gun expert consulted by the PCIJ calls these “designer guns” that are very expensive, and hard to come by. An MP7 can be purchased in the Philippines for P 700,000 to P900,000 each because it is so rare, the expert says. The Tavor, with its bullpup design and built-in illuminated sights, can fetch anywhere from P600,000 to P700,000. A Negev light machinegun, because of its functionality, would be worth around P 1.2M in the Philippine market, he says.

In an email reply to PCIJ’s written queries, Andal Ampatuan Sr.’s lawyer, Sigfrid Fortun, dismisses suggestions that the Ampatuans had used the amnesty programs to build up their weapons arsenal.

“Whether they used the Amnesty Program to legitimize their possession of these weapons is arguable,” Fortun writes. “One thing is certain, though, when an unlicensed firearm is brought to the fold of the law and the PNP accepts it to license it, is this not far better than having loose firearms where the government does not even know exactly how many firearms one has in his possession? Now how can this submission to the fold of the law be immoral or illegal?”

Indeed, the argument is echoed by some police officials who see no problem with the liberal application of gun amnesty proclamations.

Marquez and Maligalig, for instance, both say it is better to encourage gun owners to have their loose firearms licensed, than to have these floating around unregistered.

Maligalig says the PNP-FED purposely made the amnesty proclamations more liberal “to ferret out” the loose firearms. He notes, “It was needed so that we could account all of those unrecorded.”

“The aim is to get the firearms registered, get their ballistic characteristics, and stencil them so that when they are used in a crime, they can be traced to their owners,” Marquez points out. “What’s the better situation, more guns that aren’t registered or have an amnesty program that has loose guns registered and stenciled?”

But he says there is an aspect of gun control that does need immediate attention. Over the years, he says, only civilians have been strictly following the letter of the law on firearms purchase and ownership. The likes of the AFP, effectively the biggest armed group in the country, apparently do not believe they have to follow such rules on firearms.

For example, Marquez says that firearms acquisitions made by AFP units outside of the regular arms dealers have largely been unregistered and unlicensed. Maligalig also says that AFP arms purchases go “undeclared.”

Floating around

For this reason, there are firearms floating around in the grey area between formal military units and the local government militias that the government has no records of. As such, it is much easier for high-powered firearms supposedly destined for the AFP to disappear into a black hole of sorts.

“When firearms are bought from a dealer, they are automatically registered,” says Marquez. “But when firearms are not acquired through that process, they are not registered. Some of the firearms of the AFP were through foreign military sales, so these were given directly to the AFP.”

“Our suggestion,” he says, “is for everybody’s firearms, especially government firearms, to be registered, and their records kept by the PNP, meaning ballistics records, stencils, etc.”

But the paperwork for such a process would probably have to compete with those from local officials who seem to believe they have to have a formidable arsenal in order to govern.

They fancied guns

Lawyer Fortun, for one, describes that the Ampatuans are “public officials who, during their incumbency, fancied guns (like most Alpha males). This was public knowledge.”

Yet he also defends the large number of firearms registered under the names of the Ampatuan family members by saying that the clan “was used by and had assisted the Government to fight the MILF.”

“Unsay (Andal Jr.) was in the forefront of these armed encounters,” Fortun says in his email reply to PCIJ’s queries. “They were the ‘stay-behind units’ ater the army completed its assault on known MILF territories. They took over and held the ground after the army had returned to their secure camps, and they kept the area they held MILF-free.”

According to Fortun, though, many of exotic firearms listed under the names of the Ampatuans were actually “gifts from constituents and others.”

Curiously, a PCIJ report on the guns of the Ampatuan clan published in 2010 also mentioned the fondness of some Ampatuan family members to give guns as gifts as well. Former Maguindanao Martial Law administrator Lt. Gen. Raymundo Ferrer had told the PCIJ that he had been offered one of the Tavor assault rifles of Zaldy Ampatuan as a gift a few weeks after the Maguindanao Massacre.

“Sir, kunin mo na lang, sa iyo na lang daw ang Tavor ni RG (Sir, just get it, RG’s Tavor is yours),” Ferrer recalls the aide of Zaldy as telling him over the phone.

On another occasion before the massacre, Ferrer recalled having received a brand new M4 assault rifle as a gift after a meeting with Zaldy Ampatuan. Ferrer said the gun was thrust on him by an Ampatuan aide while he was leaving.

A basic M4 assault rifle, without accessories, costs from $2,000 to 2,800 when purchased in bulk. – PCIJ, November 2011

MAGUINDANAO:The Quest for Justice is a documentary produced by the Philippine Center for Investigative Journalism on the second anniversary of the Maguindanao Massacre. After two years, the Ampatuans have allegedly ramped up efforts to reach a settlement with the families of the victims. The families of the victims continue to hold out against the proposed settlement, even as they try to survive from day to day. In the meantime, the Ampatuan clan continues to wield clout in the region with its vast resources and continuing political influence.

This is just the teaser. The entire video will be uploaded next month.

Advocates of the Freedom of Information (FOI) bill raised this question after Malacanang again failed to include the FOI bill in its list of priority measures during the Legislative Executive Development Advisory Council earlier this week.

In a statement sent out to media organizations, the Right to Know, Right Now! Coalition noted with alarm that President Benigno S. Aquino III had raised new concerns over the proposed Freedom of Information Act during the LEDAC meeting in Malacanang. These concerns were apparently added to the list of other reasons that Malacanang had been using to defend its refusal to endorse the bill to Congress.

Media and civil society groups have been pushing for the passage of a Freedom of Information Act for the last 14 years. The measure would give the media and the public easier access to official and public documents. In separate interviews with the media in 2010, then President-elect Aquino had pledged to prioritize the FOI as part of his campaign for more transparency in government.

The Philippine Center for Investigative Journalism is a part of the Right to Know, Right Now! Coalition and the Bantay FOI! Sulong FOI! Campaign.

The full text of the statement follows:

As PNoy defaults on FOI,
Congress must now take the lead

Kung talagang gusto, hahanap ng paraan.
Kung talagang ayaw, hahanap ng dahilan.

This is exactly where President Benigno Simeon C. Aquino III stands on the proposed Freedom of Information bill, which seeks only to enforce a constitutionally guaranteed right of the people to know and secure documents in the custody of government agencies.

The President says he supports the bill in principle, but that he has “specific questions and concerns” that he wants to be settled, before he endorses it as his priority legislation. His concerns, the President says, include his fears that FOI could unlock documents that might expose people to kidnappers, cause government losses in right-of-way cases because of property price speculations, and many other unwanted results.

Yet over the last 14 months in office, he has failed to answer and settle these concerns, and for as long a period, the FOI bill has languished in limbo.

A Malacañang study group on the FOI had told us about other, bigger concerns of the President. Through Deputy Speaker and Quezon Rep. Erin Tañada, chief author of the FOI bill in the House of Representatives, we informally and indirectly engaged the study group in constructive dialogue over the last six months.

Two critical concerns on exceptions were addressed over time in three successive drafts of the FOI bill that the Palace study group crafted – “national security” and the President’s deliberative process. These were in addition to existing exceptions in the FOI bill based on national defense and foreign affairs; military or law enforcement operation; privacy; trade, industrial or commercial secrets; drafts of adjudicatory decisions; privileged information in legal proceedings; executive session of Congress; and exceptions recognized in other statutes or the Constitution.

The legislative process practically ground to a halt, precisely because the President and his study group said they were drafting their own FOI bill. We had hoped that by the opening of the second regular session of Congress, the Palace draft would be done, and the President would have certified it as a priority measure.

We had hoped as much because we still remember: As the presumptive winner of the May 2010 elections, the President had promised to assign first priority to the FOI’s passage into law, and in June 2010, as president, he launched his government on the principles of transparency, accountability, and good governance.

This is the first time we are hearing that the President has new concerns about what he says could be the undesirable results of an FOI law.

The President assures us that he supports the FOI bill “in principle” but that because his concerns linger, he could not act on his own study group’s version of the FOI bill.

What seems like a state of principled indecision in Malacañang makes us wonder: Is the President part of the solution, or part of the problem, in assuring the passage of the FOI bill? Or perhaps neither, because he has chosen to pass up a chance to lead on a strategic policy issue that the Constitution has so clearly mandated him and all public officials to uphold and enforce – the people’s right to know.

The fate of the FOI bill was a leadership call on the President. We had not wished he would default. Yet because he has, we now refocus our efforts on the House of Representatives and the Senate, which should, without need for cue or advice from Malacañang, act now and quickly on the FOI bill.

We do so with eyes wide open that as it was in the 14th Congress under then President Gloria Macapagal Arroyo, the FOI bill could face rough, tough sailing in the 15th Congress. While Mrs. Arroyo and her allies vigorously opposed and killed the bill before it could be ratified, Mr. Aquino and his allies now seem to want to let the bill waste away, and fade in time.

THE RIGHT TO KNOW, RIGHT NOW! COALITION/
BANTAY FOI, SULONG FOI! CAMPAIGN
17 AUGUST 2011

THE apparent inability of majority of Metro Manila local governments to respond quickly and fully to citizen requests for asset disclosure records of local officials, as well as documents on education, health, public safety and other essential services may well be a reflection of the Aquino administration’s own dithering over a Freedom of Information (FOI) law.

Yet while even President Benigno Simeon ‘Noynoy’ Aquino III himself seems unsure just how much he wants his government to be transparent, the World Bank, a solicitous donor of the Aquino administration, recently released a document that explicitly proposed that the government “put forward a Freedom of Information Act for legislative approval.”
At the same time, the latest results of a transparency and accountability drive of the Department of the Interior and Local Governments (DILG) show local governments outside of Metro Manila outperforming those in the National Capital Region.

Not one of the dozens of local governments that has so far been cited by the DILG as being “ehemplo” or good examples in planning, sound fiscal management, transparency and accountability, and valuing performance information came from Metro Manila.

A recent audit conducted by PCIJ revealed poor performance by Metro Manila local governments – more than half of which are headed by Aquino’s partymates and political allies – in fulfilling citizen requests for specific documents on the most basic services.

Most made accessing documents imbued with public interest a serious test of patience, stamina, resources, and will, with many ignoring deadlines for action imposed on them by law.

DILG honor roll

Not surprisingly, not one Metro Manila local government unit (LGU) has made it to the DILG’s latest “Good Housekeeping” honor roll that lists those from Anilao, Iloilo; Balete, Aklan; Balilihan and Catigbian in Bohol; Damulog, Bukidnon; Datu Paglas, Maguindanao; Leon B. Postigo and Tampilisan in Zamboanga del Norte; Pitogo, Quezon; Mobo, Masbate; Naawan, Misamis Oriental; San Agustin, Surigao del Sur; Santol, La Union; and Sto. Domingo, Albay.

Just last March, the DILG also cited 15 high-performing LGUs, mostly from Mindanao, “good housekeeping” such as those in Alilem in Ilocos Sur; Quezon, Isabela and Saguday in Quirino; Mataas na Kahoy in Batangas; Camaligan in Camarines Sur; Banaue and Lagawe in Ifugao; Amlan in Negros Oriental; Maribojoc in Bohol; Kawayan in Biliran; Calamba in Misamis Occidental; Dujali in Davao del Norte; Cagwait and Carrascal in Surigao del Sur, and San Jose in Dinagat Islands.

These LGUs, according to DILG Secretary Jesse Robredo, have had “no adverse” report from the Commission on Audit.

The uneven observance of transparency and accountability across LGUs – and government agencies – lingers apparently because of the absence of uniformed and clear procedures on how public officials should respond to citizen requests for documents vested with public interest that a Freedom of Information Act should have offered.

In fact, just a few weeks before President Aquino delivered his second State of the Nation Address in which FOI was among the most striking omissions, the World Bank had weighed in on the issue that civil-society organizations and some of Aquino’s allies deem of utmost importance for good governance.

The Bank last month put forth in a 349-page “Philippines Discussion Notes: Challenges and Options for 2010 and Beyond” a vigorous recommendation for Aquino to see after the passage of the FOI Act if he so wishes to achieve “inclusive growth,” as well as stamp out corruption and poverty in the land.

Big challenges

The document produced by the Philippines Country Team, World Bank and The International Finance Corporation East Asia and Pacific Department, noted that the Aquino administration “faces significant opportunities as well as considerable challenges: an opportunity for new policy directions and new coalitions to push the development agenda forward with renewed vigor, but a need to overcome the inertial forces that slow down decision making and program implementation during a transition.”

The authors said the document aims “to support the creation of a shared focus among government, civil society, business groups, and development partners on the key elements of a long-term development strategy focused on inclusive growth.”

“Deliberately selective in their coverage, the Notes offer sectoral and thematic analyses to identify key challenges, and recommend a prioritized set of actions for consideration by the new government” yet also “draws on extensive international experience and worldwide best practices, as well as past experience with what works well in the Philippines and what does not,” the authors said.

They then pointed out that in the Philippines, “breaking down the hold that vested interests have over governance requires action on multiple fronts.”

Strong signal

The authors argued: “The Administration could contribute significantly to governance reform by putting up for legislative approval a Freedom of Information (FOI) Act, as neighboring countries such as Thailand, Indonesia and India have done over the last decade. In addition to being an integral part of an open governance system, the Act would also send a strong signal that the government is committed to transparency.”

Nonetheless, even before the law is passed, the World Bank document said, “the President could immediately ensure the highest standards of public disclosure in the Executive branch of government through an Executive Order.”

Aside from stressing the need for the FOI Act to be passed, the Bank also exhorted Aquino to “select a strategic agency widely perceived to be corrupt and launch a comprehensive reform plan” to provide “a credible, though not necessarily easy, starting point for a government’s anti-corruption campaign.”

Obama project

Interestingly, despite its reticence to state clearly its position on the FOI bill, Malacañang has unfurled its efforts to promote greater transparency on the world stage.

Since mid-2010, the Aquino administration, represented by Budget and Management Secretary Florencio “Butch” Abad, has signed on to and, in fact, now sits on the steering committee of the Open Government Partnership (OGP), a multilateral, eight-country initiative launched by US President Barack Obama.

Obama’s project supposedly aims “to secure concrete commitments from governments to promote transparency, empower citizens, fight corruption, and harness new technologies to strengthen governance.”

Under the OGP, the signatory states have committed to produce results along four benchmarks – disclosure of budget documents, disclosure of asset records of public officials, passage of an FOI Act, and engagement between government and civil-society groups.

By the admission of some Cabinet members themselves, the Aquino government may claim to have achieved some progress on the first two OGP benchmarks; on the last two, little or no progress at all.
This has prompted the Bantay FOI! Sulong FOI! network of 157 civil society groups and individuals to remark: “Malacañang must understand: Its desire to assume an honored place on the world stage as one of the leading lights of transparency in the world will not fly, unless it commits to the immediate passage of the FOI Act in the Philippines.”

Practical tips

In the meantime, the seven college student interns who helped conduct PCIJ’s audit of transparency regimes in Metro Manila have drawn up some practical tips for those who may want to access information from LGUs in the absence of an FOI law:

• Put your request in writing. Most local governments require requests for information be put in writing. Many also want the request to contain the name of the person or agency making the request, as well as the purpose for the request. The City of Navotas, for instance, even has a memorandum that explicitly asks for these.
• Verify beforehand which department would be handling your specific request. Otherwise, one may well be passed from office to another, and then from one personnel to another. To save time and spare one of fits of frustration, check the LGU’s website first to see which office or official would be best to handle the request, or call or visit the LGU’s information office before writing and submitting your request letter.
• Note the name and position of the staff member who received the request. Misplaced letters and sudden attack of amnesia abound in LGUs when follow-ups are made regarding requests for information. To avoid being passed around from one staff member to another, one should record right away the name of the personnel who received the request and, if possible, that person’s contact number. It may also be wise to do this in his or her presence, with other staff members as witnesses.
• Check beforehand for dress codes, as well as specific protocols and procedures. Such information is usually available on the LGU’s website. One can also call the LGU prior to submitting the letter of request. Some LGUs do have uniform procedures and processes. Parañaque, for example, requires that all letters of request be addressed to the mayor first for approval. In Marikina, guards bar those in shorts and/or slippers from entering its city hall.
• Be aware of the time limit imposed by law on LGUs to comply with requests for information. Remind LGU personnel as well of such deadlines since they may not be aware of it themselves. Under the law, LGUs are given10 working days to act on requests for Statements of Assets, Liabilities, and Net Worth (SALNs) and 15 working days to act on requests for all other types of documents.
• Do follow-up calls. This will not only alert LGU personnel of your continued interest in your request, but will also remind them constantly of the need for them to act on it. If there is some delay, ask the reason for it; it may well be that the next step requires another letter to another office. Always ask the name of the staff handling the call, so that there is a “personnel trail” established while you track the progress of your request.
• Once the documents are provided, double check if these contain all the information requested. Just because an LGU hands over a hefty volume of paper does not mean those data sets have all that you asked for. Go over the documents before leaving the city or town offices. If there is any information lacking, ask why. It could well be that another office is responsible for a particular piece of data that had been part of your request.
• An incomplete response calls for a follow-up letter. Should there be no response within the period set by law, submit a follow-up letter reminding the LGU of your request – as well as the LGU’s duty to act on it within the legal deadline. (After receiving such a follow-up letter from PCIJ interns, the Office of the Mayor of Muntinlupa called within the day to say that the information could be had from the City Planning and Development Office.)
• Be nice and keep your cool. It may be the LGU’s duty to serve the public, but any transaction is easier to accomplish when the atmosphere is kept pleasant. For sure, a smiling citizen’s request is more likely to be processed quickly while a demand that comes with a snarl is bound to be treated with contempt and left unattended as a result. – With additional research by Anne Jeanette O. Priela, Krystal Kay S. Jimena, David Faustino T. de Castro, Essen Mei M. Miguel, Henor G. Gotis, Eric H. Rivera, and Stephanie Directo, PCIJ, July 2011

POLITICS and government, business and finance, education and culture. In all these and more, the national capital region, Metro Manila, is supposed to lead the rest of the nation. Here, bureaucrats and politicians thrive, mostly schooled and steeled in the art of governance and advisedly, the liberal ramparts of transparency and accountability.

It seems fair for citizens to expect that in Metro Manila, more than anywhere else in the Philippines, the people’s right to know and to access official information and documents would be respected. But that could well be plain wishful thinking for now.

Indeed, while President Benigno ‘Noynoy’ C. Aquino III has once more failed to reiterate a commitment to freedom of information (FOI) in his latest State of the Nation Address, the results of a recent survey by the PCIJ of access to information practices in the 16 cities and sole town of Metro Manila show that majority of the local officials and employees in these Metro Manila local government units (LGUs) continue to linger in the dark ages of closed, opaque government.

Most of the LGUs, in fact, took their sweet time in responding to requests for specific documents, unmindful of deadlines for action set in law. And if they did act at all, they disclosed only some, not all, the documents requested. The city of Caloocan even recorded net zero action, failing to take full action on any of the requests up until the end of the audit. This was even though that city’s officials had approved, orally and in writing, at least a third of the PCIJ’s requests.

Documents for citizens

Beyond simply tracking the transparency regimes obtaining in NCR, the PCIJ audit purposely zeroed in on documents with great and grave impact on the welfare of the citizens. From April to June 2011, the Center deployed seven college student interns who filed requests for six major types of documents, including the asset disclosure records of the LGU officials, as well as the budget and development plans of the LGU. The audit also focused on documents pertaining to education, health, public safety, civil registry and property, and doing business.

Surprisingly, however, the most basic documents regularly produced by LGUs proved the most difficult to get. For instance, among the 17 Metro Manila LGUs, only Makati gave complete documents on education, while a mere four – Quezon City, Parañaque, Navotas, and the San Juan Health Department Unit 1 – provided complete documents on health.

On average, only a fourth of the 17 LGUs provided their development and investment plans, and copies of the proposed and enacted budgets. The rest took no action.

Still, of all the documents requested by the PCIJ, the statements of assets, liabilities, and net worth (SALNs) were easily the most tightly guarded and thus, the hardest to obtain. In the mold and manner of national politicians, the local politicians of Metro Manila apparently hold their asset disclosure records close to their chests.

Only two cities – Marikina and Makati – willingly shared the SALNs of all their local officials. Quezon City and Navotas, meanwhile, gave the SALNs of their respective mayor and vice mayor, but came up short when it came to those of their councilors. San Juan released its vice mayor’s SALN, but not its chief executive’s; it also gave incomplete asset records of its councilors. In the rest of the LGUs, the SALNs remain sub rosa or kept under lock and key by local officials who insist on their confidentiality, in apparent indifference to, or ignorance of, the law.

Most LGUs also required requestors to secure the mayor’s approval before all the requests could be granted. This caused bureaucratic delays and most probably is a major barrier to accessing documents in the NCR.

Least opaque

In the PCIJ audit, not one of the LGUs provided all the requested information. Even Quezon City, which came out as the friendliest to access to information requests, took full action (within the 15 working days’ deadline in law for all the documents requested) on only 75 percent of all requests filed by PCIJ.

Next came Marikina, which scored 57 percent, while Pasay, Parañaque, Navotas, and Makati all granted about half of all of PCIJ’s requests. Ten other LGUs (Las Piñas, Pasig, Mandaluyong, Muntinlupa, Taguig, Valenzuela, San Juan, Malabon, Manila, and Pateros) acted only on 12.5 to 37.5 percent of all requests filed.

On average, the LGU offices that gave documents took about 10 days to do so. But the Business Permits and Licensing Office (BPLO) of Las Piñas stood out by taking only a day to respond and provide complete documents related to doing business in the city.

To do the audit, the PCIJ interns personally filed simultaneous request letters for documents with the 17 LGUs, monitored all related follow-up activities (request letters sent, phone calls and field visits made to the LGU office), and logged all activity details (name and position of responding personnel and officials, speed and nature of action or referrals made; and the type or nature of documents given or withheld).

In addition, the enrolled deadlines set in law for government agencies to act on such requests – 10 working days to act on requests for SALNs and 15 working days to act on requests for all other types of documents – were used as reference for rating the performance of the various LGUs in this audit.

The audit stretched across a two-month period – one month for fieldwork and data gathering, and another for follow-up activities and data collation. In all, the PCIJ interns filed with the 17 LGUs a combined total of 135 request letters, made 437 phone calls, and received 266 referrals for many requests were tossed around two or more offices in the same LGUs.

The requests were filed with the LGU departments and units that are the custodians of the documents, including the Office of the Mayor, the Health Department, the Public Order and Safety Department, the Business Permit and Licensing Office, and the Civil Registry Department.

Public interest

The documents requested are clearly imbued with public interest because they enroll information and data that should benefit public weal and welfare:

• For education, the PCIJ asked for two sets of data: statistics or the number of schools and teachers in each LGU, as well as on plans and projects to construct new school buildings, hire new teachers, and acquire new learning materials and copies of contracts.
• For health, the PCIJ requested information on the actual expenses the LGUs spend on medicines and the volume of medicines distributed per barangay; number of hospitals and medical personnel; and projects undertaken by the health department.
• For public safety, the PCIJ sought data on the number of police officers and other public order personnel, how the police coordinate with barangay officials, how the police or barangay respond to cases, protocols on public-order incidents, and the number and the amount LGUs spend to build and maintain lampposts.
• For civil registry and property, the PCIJ asked about the types of civil registry and property documents, how to obtain these documents, fees and timetable involved in obtaining documents.
• For doing business, the PCIJ requested details on the documentary requirements, request and application process, LGU departments in charge, number of processing days, and fees involved. In addition, the PCIJ sought information on how to locate records of a business establishment, which office tracks records of registered and non-registered businesses in the LGU, and the benefits of registering a business.
• For other basic, premise data on the LGU and its officials, the PCIJ requested five documents: the SALN and personal data sheet (PDS) of the mayor, vice mayor and councilors; local development plan; local investment plan; proposed budget; and enacted budget.

How and why the citizens must be entitled to these documents, and could benefit from them, are matters affirmed in law and validated by the contents of the documents themselves.

The Local Government Code of 1991 mandates each LGU to prepare a local development plan and a public investment program, which would outline a city or a municipality’s development and budget priorities and serve as basis of its programs and projects for the year.

Useful details

These documents would significantly help citizens to understand the local government’s plans for the city and the barangays and how it intends to spend public resources. These documents would clearly enable citizen participation in policymaking and governance.

For instance, the 2011 Annual Investment Program (AIP) provided by Quezon City states that the city’s development priorities are disaster-risk mitigation, environment management, socio-economic services to empower the poor, tourism development, and effective city management.

To achieve these plans, Quezon City’s AIP outlines its budget allocation for each program, project, and activity, as well as the office or agency assigned to implement each sector.

For 2011, Quezon City has allocated P15.75 million for maternal health care for pregnant and post-partum mothers, and routine care for newborn infants. Residents, especially mothers and expectant mothers who do not have enough funds to avail themselves of private health care services, would find this information useful.

Quezon City has also allotted P2.49 million to provide services to physically, mentally, and socially disabled persons 0 to 60 years of age in order to enhance or develop their capabilities for self-reliance and productivity. Families with a disabled member may then inquire about this program and seek assistance from Quezon City’s Social Services Development Department.

In the meantime, citizens may find information pertaining to education useful so that they themselves can assess and audit education projects of their LGUs.

Makati, which was the only LGU that provided complete documents on education services, gave copies of the contracts that the city government signed with contractors to build new school buildings and to improve or maintain existing ones.

The contracts offered details on the amount of the project, project scope and timetable, and the duties and responsibilities of the contractor. With these data on hand, parents of students in a school may actually be able to check if the project had been fully implemented.

And then there are the SALNs, which are considered to be key in monitoring the wealth of public officials and in discouraging corruption. Yet most Metro Manila LGUs found reason to keep SALNs of certain officials away from the public eye.

The officials of Malabon’s Human Resource Department, for one, insisted that SALNs are “confidential” documents. Navotas, for its part, was quick to approve the release of the SALN of the mayor, but uncertainties on the part of the councilors resulted in their failure to hand over their SALNs.

Pasay was as problematic in the release of the SALNs and personal data sheets of its senior officials supposedly because the request letter had been misplaced.

In Pateros, the head of the Municipal Personnel Office said all 14 town councilors would have to unanimously agree first before any of their SALNs could be released to the PCIJ. Some councilors agreed, while the others refused. Because the personnel officer has imposed an all-or-nothing rule, not a single SALN of Pateros’s local executives was released.

(By contrast, Marikina, which ranked second to Quezon City as the most transparent city in NCR, provided the SALNs of its local executives within just five days from receipt of the PCIJ request.)

Most opaque

The four least transparent cities (Malabon, Manila, Pateros, and Caloocan) actually shared one thing in common: Their personnel showed a common tendency to refer requestors to other LGU departments within the same city halls, needlessly prolonging the process of obtaining documents.

In quite a few cases, too, many LGU personnel seemed totally clueless about their obligations in the Constitution and in Republic Act No. 6713 (the Code of Conduct and Ethical Standards for Public Officials and Employees) to be transparent in all their actions involving use of public funds, and in handling documents vested with public interest.

In Caloocan – the least transparent among the Metro Manila LGUs — only the police department and the civil registry office responded to the requests within the 15-day deadline set in law. All the other agencies of Caloocan either ignored or denied the other requests.

Unfortunately, even the offices there that promised to release documents, including those on education and health services, and those pertaining to doing business in the city, have yet to do so as of this writing. The police department in particular said it had misplaced the PCIJ’s request letter, causing interminable delays.

In Pateros, NCR’s lone municipality, the PCIJ filed requests with eight various departments. The town’s civil servants generally had an accommodating demeanor, but this failed to compensate for the insufficient documents they eventually released. Four offices took action but only one gave a complete set of documents requested. Pateros ended up being the second least transparent LGU in NCR.

Manila, NCR’s oldest and premier city, is the third least transparent. While its officials approved action on 57 percent of the PCIJ’s requests, they actually gave complete documents on only 14 percent of all requests filed.

The PCIJ sent request letters to seven offices of Manila City Hall but only four responded within the 15-day deadline set in law – the Mayor’s Office (SALNs), the business department, the City Civil Registry, and the assessor’s department. Manila’s police and health departments have yet to respond to the PCIJ’s requests, while the mayor’s office has yet to act on a separate request for data on education services.

Malabon, the fourth least transparent city, actually approved up to 83.33 percent of the PCIJ’s requests within four to 11 days. But it released the complete documents requested for only 16.67 percent of the requests, within the lawful deadline.

Malabon and Pateros cited the “confidentiality” status of certain documents for refusing the requests.

Among those that performed better than the bottom dwellers, the need for the mayor’s go-signal before certain documents are released was revealed to be a major block for those seeking access to public data. In Parañaque City, Mayor Florencio Bernabe Jr. had even issued a memorandum that in effect gave him sole power to approve all requests for information. The memo was supposedly based on a provision in R.A. No. 6713, which states that public offices are given the discretion not to disclose any information on the grounds of public safety and “undue advantage.” Out of the 10 requests that the PCIJ filed, only five were granted within 15 working days.

Politics & revenues

The practice in Parañaque prevails as well in Taguig, Pasay, Las Piñas, Mandaluyong, and Navotas even as no written memorandum requiring the mayor’s approval has been issued.

In Pasig, basic documents and those pertaining to education services could not be released simply because during the month-long data gathering for this audit, Mayor Bobby Eusebio was often out of the office. His deputies said there was no definite schedule when he would report for work.

Political rivalry also got in the way of accessing documents in Taguig. Majority of the requests were denied there supposedly because the documents had to be kept “confidential” on account of an ongoing court case between Mayor Laarni Cayetano and her losing rival in the May 2010 elections, retired Supreme Court justice Dante Tinga.

Only the documents from Taguig’s BPLO, the Assessor’s Office, and the City Health Department were provided. Requests filed with the Mayor’s Office, the Public Safety and Order Office (POSO), and the City Budget Office were not granted within the 15-working day deadline set in law.

Documents pertaining to civil registry records and on doing business in Metro Manila were the easiest to secure across the metropolis. In fact, all 17 LGUs provided information on various civil registry and property documents, as well as the procedures, fees, and number of days it would take them to process requests.

As for doing business, 14 of the 17 LGUs gave information on the documentary requirements, the process for applying for business permits and registering business establishments, and the fees involved. In many cases, the data were enrolled in brochures and pamphlets published by the LGUs.

These two offices (Civil Registry and BPLO) conduct regular transactions with citizens every day; releasing documents thus seems almost routinary to them. In addition, these transactions are triggers of revenues (processing and permit fees) and take on the nature of business processes beneficial to the LGUs. - With research and reporting by Karol Anne M. Ilagan, Anne Jeanette O. Priela, Krystal Kay S. Jimena, David Faustino T. de Castro, Essen Mei M. Miguel, Henor G. Gotis, Eric H. Rivera, Stephanie Directo, and Jessa Mae B. Jarilla, PCIJ, July 2011.

WEEKS after the May 2010 elections, a question confounded Benigno Simeon ‘Noynoy’ C. Aquino III and his fund-raisers and allies in the Liberal Party: What to do with excess campaign donations that had then reached tens of millions of pesos?

In winner-takes-all fashion, not just votes but also funds had flooded the Aquino camp. This is even as a fund-raiser and a senior campaign staff would later say in separate interviews that Aquino had already served notice that he did not want to accept more donations. In Aquino’s mind, says the senior campaign staff, the last-minute bettors were not true believers but simply people angling to cut deals with the emerging election victor.

Aquino’s sisters had a thought to return the excess campaign funds. But the fund-raiser says that led to questions like: Which donor should get money back? How to assign amounts to return? By then, 96 donors, including about a dozen Aquino relatives, had pitched in donations of several thousand pesos to P100 million. The fund-raiser, a big and respected businessman, says he and his colleagues advised Aquino to just turn over the excess donations to a non-profit charity group such as the Ninoy and Cory Aquino Foundation.

In his Statement of Election Contributions and Expenditures (SECE) that he filed with the Commission on Elections (Comelec) within the first deadline of June 9, 2010, Aquino reported that he had raised a total of P440,050,000 in campaign contributions but incurred only P403,119,981.81 in campaign expenditures. This left Aquino P36,930,018.19 or nearly P37 million in excess campaign funds.

For sure, Aquino demonstrated in his SECE a unitary exemplary act that all other candidates for national office in the May 2010 elections failed to emulate. Unfortunately, the initial honesty showed by Aquino remained just that. Since then, he has not followed it up with a full disclosure of what he did with the money, and nothing more may have been said about it had PCIJ not popped the question to the president in a first letter last Jun. 15.

Apparently, Aquino did not donate the excess funds to charity, as his fund-raisers had advised. And while election laws are silent on what candidates should do with excess campaign funds, the Bureau of Internal Revenue (BIR), in Revenue Regulation No. 7-2011 dated Feb. 16, 2011 settles the impasse: it says that excess campaign funds should be recorded as the candidate’s income during the election year, and thus, subject to income tax.

Taxable income

In its “Policies and Guidelines” clause, the BIR’s new regulation states: “Unutilized/excess campaign funds, that is, campaign contributions net of the candidate’s campaign expenditures, shall be considered as subject to income tax, and as such, must be included in the candidate’s taxable income as stated in his/her Income Tax Return (ITR) filed for the subject taxable year.”

Citing the BIR regulation as basis, recently appointed Comelec Commissioner Christian Robert S. Lim, in response to PCIJ’s query about Aquino’s excess campaign funds, wrote in an email: “Aside from paying the correct income tax, candidates with excess campaign funds must declare the same in their ITR (income tax return).  For the 2010 May elections, candidates who fail to declare in their ITR of 2010, the deadline of which was 15 April 2011, they can be held liable for tax evasion and/or falsification of their ITR.  However, the agency primarily tasked with the prosecution of this offense is the BIR and the Department of Justice.”

Lim, who was among the lawyer-volunteers of Aquino during the 2010 elections campaign, has been designated by the Comelec En Banc as head of the poll body’s Campaign Finance Steering Committee.

Lim also wrote in his email to PCIJ: “While Section 13 of Republic Act No. 7166 (Synchronized Elections Law) exempts contributions from gift tax as long as it has been duly reported to the Commission on Elections, it has always been my position that unutilized contributions form part of the income of the candidate and must be subject to income tax.  One of the thrusts of the Ad Hoc Campaign Finance Steering Committee was to make this a reality.”

Official documents do not show Aquino as having recorded the excess funds in his ITR, and apparently did not pay taxes on these. But his Malacañang deputies say Aquino returned some of the money to donors, and used the rest of the funds to pay withholding taxes on campaign expenses to the BIR, and for the printing of sample ballots.

Used three ways

Edwin Lacierda, who was Aquino’s spokesperson during the campaign and who has kept that role in the Palace, said in a letter to the PCIJ dated Jun. 29, 2011: “(The) President is well aware that electoral contributions were to be used solely for the purpose of supporting his candidacy for President and was never intended to be for his personal benefit.”

Lacierda also said that Aquino spent the excess campaign donations three ways.

First: “Out of the Php36,930,018.19 (excess campaign donations), Php18,356,859.88 was remitted to the Bureau of Internal Revenue representing 5% creditable withholding income tax on election related purchases. Please note that under Revenue Regulations No. 8-2009, all income payments made by political parties and candidates were subjected to 5% creditable withholding tax. Hence, political parties and candidates were under obligation to deduct and withhold 5% from all income payments to their suppliers during the campaign and remit the same to the (BIR).”

Second: “The campaign also spent around Php4,000,000.00 for the printing of sample ballots that were distributed nationwide before the elections. This expenditure was not included in the (SECE) because under Section 101(k) of the Omnibus Election Code, the cost of printing sample ballots shall not be taken into account in determining the amount of expenditures which a candidate may lawfully incur in connection with his candidacy.”

And third: “The rest of the excess campaign funds were actually returned to some of the donors who made substantial contributions to the campaign.”

In short, Lacierda said that of the P36.9 million in excess campaign donations Aquino raised, net of supposed withholding tax paid to the BIR and the printing of sample ballots, what remained was P14.5 million.

Returned or not?

The presidential spokesperson then later asserted that President Aquino returned P14 million to three donors. On Jul. 1, 2011, Lacierda authorized his staff, Kristine Joanne D. Basa, to move a second email to the PCIJ.

It stated: “Further to our email regarding President Aquino’s excess campaign contributions last Wednesday, June 29, 2011, please be informed that the donors to whom we returned a portion of their contributions to are the following:

“1. Atty. Fulgencio Factoran – He donated Php 20 million; We returned Php 10 million;

“2. Mr. Gerry Esquivel – He donated Php 10 million; We returned Php 2 million; and

“3. Dr. Alex Ayco – He donated Php 5 million; We returned Php 2 million.”

Further verification by PCIJ revealed that the claimed return-to-sender acts may have not been consummated at all as of Jul. 3, 2011 or two days after Lacierda’s office sent a second email to PCIJ.

In a phone interview with the PCIJ on Jul. 3, Sunday, Factoran said: “Sinabi sa akin, baka balikan daw ako ng pera. May plano raw silang magbalik ng pera (I was told I may have money returned to me. They said they planned to return money).”

Asked when he was informed that he would be given back part of his P20-million campaign donations, Factoran replied: “Tinawagan nila staff ko, sinabihan na magbabalik daw sila ng pera (They called up my staff, saying they were going to return money).”

Factoran then begged off from answering any more questions about the matter, saying he would call up PCIJ later. He has yet to contact the Center as of press time.

Bigger donors

Yet, why Factoran, Esquivel, and Ayco were singled out as recipients of the campaign funds to be returned – out of the 96 donors who bankrolled Aquino presidential bid – remains a mystery.

After all, there were other donors who contributed more substantial amounts, including Aquino cousin Antonio ‘Tonyboy’ Cojuangco, who topped the list with his P100-million contribution; businessmen Martin Ignacio Lorenzo and Chiong Bu Hong, who gave P20 million each; Aquino’s youngest sister and entertainment celebrity Ma. Kristina Bernadette A.Yap, who gave P15 million; and current Finance Secretary Cesar Purisima, who gave P10 million.

The closeness to Aquino of the three donors handpicked to receive reimbursements is well established, however.

Factoran had served as environment and natural resources secretary of Aquino’s mother, the late President Corazon ‘Cory’ C. Aquino. 

Architect Gerardo ‘Gerry’ Esquivel is Aquino’s friend from high school at the Ateneo de Manila University. The chairman of ASEC Development and Construction Corp. that was contracted to build the Tribeca 3 and 4 Towers, Esquivel was appointed administrator of the Metropolitan Waterworks and Sewerage System (MWSS) by Aquino on Jan. 15, 2011.

Dr. Alexander ‘Alex’ Ayco is a cardiologist who assisted Cory Aquino during her treatment for colon cancer and until her death on Aug. 1, 2009. On Jan. 31, 2011, President Noynoy Aquino appointed Ayco as board member of the Philippine Health Insurance Corp. or Philhealth.

The PCIJ contacted Rafael ‘Rapa’ C. Lopa, Aquino’s cousin and executive director of the Ninoy and Cory Aquino Foundation, who was his most trusted representative to donors – apart from his four sisters – during the campaign. Lopa promised to check what had happened to the excess campaign funds with a group assigned to “post-election issues” that included Aquino’s election lawyer Eloisa De Vera Sy.

On Jun. 30, 2010, Aquino had appointed Sy as deputy presidential legal counsel. Sy passed the bar in 2004 and since then has worked with the law firm MOST (Marcos, Ochoa, Serapio & Tan) of Executive Secretary Paquito N. Ochoa, Jr.

She served as Aquino’s lawyer in the 2007 elections, at about the same time that she also counseled now Sen. Ferdinand ‘Bongbong’ Marcos, Jr. in the Marcoses’ alleged ill-gotten wealth cases before the Presidential Commission on Good Government. Marcos’s wife, Louise Araneta-Marcos, is a founding partner of MOST Law.

More questions

PCIJ sought further explanation in large part because Lacierda’s accounting of how Aquino disbursed his excess campaign donations raises more questions and doubts when assessed against election laws and revenue rules.

Reviewing Lacierda’s explanation on PCIJ’s request, Commissioner Lim himself commented in an interview: “The question is, what happened to the money? Is it there or isn’t it? Did you spend it? Aren’t you accountable?”

Lim said that if the President indeed returned part of the sum to some donors, “then there should be a receipt” of the return. If he did not, said Lim, “then he should have recorded it in his ITR” for the year 2010, when the excess donations were realized.

President Aquino’s options, he reckoned, include filing an amended ITR to recognize the amount, and perhaps donate the same to charity “or to the National Treasury, para mapakinabangan pa ng bansa (so the country can use it).”

2 BIR regulations

To verify the explanation Lacierda gave in his letters to the PCIJ, the PCIJ also interviewed BIR Commissioner Kim Jacinto Henares, who had also volunteered during Aquino’s campaign for the presidency.

Henares said that she would have to verify whether or not Aquino remitted P18.36 million in withholding tax payments for expenses incurred during the campaign. But she also said if it turns out that the BIR had records of such, they would not be able to release the information. “You have to ask the president,” she said.

According to Henares, though, there are two revenue regulations pertinent to the discussion.

The first is BIR Revenue Regulation 8-2009 issued on Nov. 12, 2009, which was issued by Henares’s predecessor, BIR Commissioner Joel Tan-Torres. It requires political parties and candidates to withhold a five-percent creditable withholding tax on their payments to their suppliers of campaign-related goods and services.

A tax on the income of suppliers, parties and candidates were directed to pay suppliers only 95 percent of the actual value of the goods and services purchased, and provide suppliers BIR Form 2307 to indicate the deduction on their payments. Come income-tax payment time, suppliers may then claim from the BIR creditable withholding tax credits.

In their election expense reports to Comelec, candidates and political parties were logically expected to already reflect the withholding tax deductions, as part of their total campaign expenditures. In Aquino’s case, the P403-million total expenditures he reported should have already accounted for the P20.15 million in withholding taxes that he should have remitted to the BIR early on.

And here’s why Lacierda’s claim that Aquino used P18.36 million of his P36.9-million excess campaign donations to remit to the BIR the “5% creditable withholding income tax” muddles more than it clarifies.

Bad implications

According to Commissioner Lim, Aquino should have already included that tax as part of the P403-million total expenditures that he reported to the Comelec. Even if one assumes Lacierda’s recollection is accurate, his computation is not: five percent of Aquino’s P403-million total expenditures comes up to P20.15 million.

The implications are bad: It’s either Aquino had under-reported his expenses in his Comelec report, or he had under-declared the withholding tax he remitted to the BIR.

Lacierda’s explanation also suggests that Aquino paid the withholding tax on his campaign expenditures after he had realized excess campaign donations.

Under BIR’s Revenue Regulation 8-2009, this is wrong, or at the very least, late filing. It states clearly that “the 5% CWT (creditable withholding tax) for a particular month shall be remitted to the BIR within ten (10) days after the end of each month, except for taxes withheld for the month of December of each year, which shall be filed on or before January 15 of the following year.”

But then Lacierda’s computation was odd in another sense: P18.36 million is about 50 percent, not five percent, of Aquino’s P36.9-million excess campaign donations. But, of course, Lacierda said the P18.36 million referred to the “5% creditable withholding tax” on Aquino’s campaign expenditures that totaled P403 million.

Not finder’s keeper

The second pertinent BIR rule, according to Henares, is Revenue Regulation 7-2011, which bears her and Finance Secretary Purisima’s signatures and is dated Feb. 16, 2011. The regulation states that it “shall take effect immediately” even as its text was published in the newspapers only in mid-June 2011.

This is where the BIR ruled that excess campaign contributions “shall be considered as subject to income tax and as such, must be included in the candidate’s taxable income as stated in his/her Income Tax Return (ITR) filed for the subject fiscal year.”

Henares told PCIJ that the ruling seeks only to clarify what should in fact be clear and self-explanatory to all candidates: that their unused excess campaign donations should be recorded as part of their income, and thus, taxed.

She said the BIR issued this regulation to cover “certain types of income that have not been classified as taxable.” In the case of politicians and candidates, these include excess campaign donations. “If you have donations and you spent it (during the campaign), okay, that’s tax-exempt,” said Henares. “But if you did not, then you must pay taxes. There’s no finder’s keeper situation here.”

Before the regulation, she said, revenue laws affirmed that a taxpayer may earn income from generally three sources: his/her earnings or compensation, donations, and inheritance. In all cases, the BIR recognizes a “tax incident” or taxable transaction. Remarked Henares, “We don’t really care, we don’t judge, where you got your money, whether legally or illegally, for as long as you pay taxes.”

Asked if the BIR had known which candidates had reported excess campaign donations when it issued the regulation, Henares replied: “No, we did not. We have heard anecdotal stories but had not seen the reports filed with the Comelec.”

Asked if she or Purisima, who donated P10 million to the Aquino campaign, had known that the President had reported excess campaign donations when the BIR issued the regulation, she said, “Is that so? No, we did not.”

“If they returned the money, okay,” said Henares. “This is not about politics. We apply the law the way it should be applied. We don’t really care who it is.”

Unresolved

Some questions hang still: Did Aquino, in fact, realize P37 million in excess campaign donations or just P18 million? And had he, in truth, returned part of the amount to some donors, even as one of these said he was told it was just a plan for now?

Commissioner Lim of Comelec said that these matters must be clarified, especially since Aquino had himself shown initial honesty when he admitted he had excess campaign donations.

“Maybe the P36.9 million is excess only on paper,” Lim told PCIJ. “Campaign donations are often reported as gross amounts, and expenditures as either gross or net of withholding taxes.”

Nonetheless, Lim said that if Aquino had returned the amount to some donors, then these same donors would have to amend the amount of tax-deductible donations they had reported in their income tax returns for the year 2010.

But Lim admitted that because the rules on excess campaign donations were not as crystal back then during the campaign, “I won’t blame the candidates if they got confused.” Perhaps, he added, the rules should be strictly enforced beginning with the next elections.

“If I were a candidate, I (would) wish there was a law that says I could just return the excess money,” Lim said. For one, he sees Aquino’s decision to return his excess donations to some and not to all of his donors, problematic in itself. Noted Lim: “What standards should we use to return the money to certain donors, and how do you select which donors should get his money back?”

Quasi-public money

Election lawyer Luie Tito F. Guia meanwhile stressed that at core, the issues come down to “a question of disclosure” on the part of the president. Said Guia: “We should be told: Had he or had he not returned the money? If he had, where is the receipt? If he had not, where is the money?”

“All of these details are important,” he said, “because their explanation was given only as a reaction to inquiries from the press.” But he said that it is well and good that “they recognize the fact that they have to account for the money.”

Unless prompt and full disclosure is made by the Palace, Guia says that Lacierda’s explanation could just be dismissed as “mga paliwanag na naghahanap lang ng palusot, at baka di-nag-su-shoot ang mga palusot (excuses that are being passed off as explanations, and maybe the excuses aren’t quite cutting it).”

At day’s end, Guia said that discussing rules on excess campaign donations could have positive outcomes. “Perhaps the Comelec could take up this matter and rule on the issues,” he said.

In Guia’s mind, campaign donations are “quasi-public funds” that citizens give to support “a public good” – the conduct of elections. The funds should not go to lining the pockets of candidates, he said.

But while lawful limits on campaign spending remain unrealistic, and election laws are silent on what candidates should do with excess donations, Guia said that the predominant picture is both candidates and election officials tend to ignore breaches of the law, or even mindless spending by some candidates.

Worst of all, Guia pointed to a situation that recurs across the nation every election period: “’Yung iba kumakandidato bilang hanapbuhay. Hindi na gumagastos ng sariling pera, kumikita pa (There are those who make running for elections as a means of livelihood. They not only don’t spend their own money, they even make money).” - With research by Karol Anne M. Ilagan, PCIJ, July 2011

IF LAWS on campaign finance were enforced to the letter, Senators Juan Ponce Enrile, Jose ‘Jinggoy’ Estrada, and Sergio Osmeña III, along with Ilocos Norte Rep. Imelda R. Marcos and perhaps even Vice President Jejomar Binay should not be occupying their seats right now. That would be because they or the political parties that nominated them have yet to submit to the Commission on Elections (Comelec) a Statement of Election Contributions and Expenditures (SECE), as required by law.

The electoral exercise does not end with the proclamation of winners. Republic Act No. 7166 or the Synchronized Elections Law stipulates that within 30 days after election day, every candidate and political party that participated in the polls must file with the Comelec the full, true, and itemized SECE.

Until they do, the law says they should not be allowed to take their elected posts.

Being remiss in this requirement would also mean a fine, which could run from P1,000 to P30,000 for first offenders, to P2,000 to P60,000 for second offenders.

The SECE is not just a legal requirement for candidates and parties. Comelec Law Department Head Ferdinand Rafanan says the document is essential for the election body to monitor election spending, which is subject to certain lawful limits.

But electoral laws, especially those related to campaign finance, have long been ignored in this country. The Comelec itself seems to have realized the need to enforce the rules regarding campaign funds only lately, a situation that has apparently encouraged impunity among political parties and candidates, including those who eventually emerge as winners in elections.

In fact, Osmeña and the political parties to which Binay, Enrile, Estrada, and Marcos belong make up just a tiny fraction of Comelec’s long list of those who have yet to file their SECEs, even as President Benigno Simeon C. Aquino III marked last week his first year in office.

Long, long list

For the May 2010 elections, the poll body counts at least one candidate for president and another for vice-president, nine senatorial candidates, 36 party-list groups and 70 political parties as having failed to submit their SECEs.
This official list has yet to include those who ran for local elective positions – a roster of names that Comelec says runs 457 pages.

This year, though, Comelec has finally taken steps to address campaign-finance issues through the creation of a Campaign Finance Unit. Yet at most, the poll body would probably try to impose only fines on errant candidates and parties. After all, it is already too late to try prying off their seats the winners who would be proven to have failed to file their SECEs.

Rafanan himself says that the Law Department’ s recommendations to the Commission En Banc would lead to resolutions addressed to the erring candidates and parties that would order them only to pay fines or to explain why their registration should not be revoked.

He admits that Comelec has yet to bar any winning candidate from occupying an elected post until he or she submitted a SECE. This is because, he says, there is no coordination between the Comelec and the Department of Interior and Local Government (DILG) or the House of Representatives and the Senate that could have disallowed erring local officials and lawmakers from assuming office.

Comelec is also usually hardpressed for time to consolidate all the SECEs. In law, the deadline is 30 days after election day or June 9, 2010 for the May 2010 polls. But due to requests of some party-list groups, the original deadline was extended to June 24, 2010.

Rafanan says that by the time officials assume office on June 30, the Law Department had yet to finalize a list of those who filed and did not file. Thus, the lawyer recommends to shorten the period of filing to two weeks. This would allow the Comelec more time to check and prevent those who did not comply from taking office.

In addition, Comelec now plans to sign memoranda of agreement with concerned government units to help it stop winning candidates from taking their posts even if they had not yet submitted their SECEs. But Rafanan says he is stumped on who would enforce such a penalty for a winning vice-presidential or presidential candidate, although he says that the task may fall on whoever is in charge of swearing in these top officials into office.

Binay’s UNO

The Comelec legal department chief is wondering about this now since one of the political parties that nominated Vice President Binay appears in the poll body’s list of SECE non-filers. According to Binay’s own certificate of candidacy or COC, he was nominated by two parties: Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban) and United Opposition (UNO). Yet while Binay and PDP-Laban submitted their respective SECEs to the Comelec before June 24, 2010, UNO did not.

In July 2010, Comelec sent a letter to UNO Chairman Danilo Lacuna at the party’s listed Malate address. It asked Lacuna for a sworn explanation why the party failed to file the SECE and why it should not be penalized. Comelec did not get a response.

PCIJ sent its own query last May to Binay as UNO founder. Last Jun. 23, the Center received a reply from PDP-Laban legal counsel Ma. Donnah Guia C. Lerona-Camitan in which she argued that UNO did not “participate” in the May 2010 elections and therefore need not file a SECE. She cited Section 14 of Comelec Resolution No. 8944 that says, “(Every) treasurer of the political party or party-list group that participated in the election shall file with the Law Department of the Comelec its statement of election contributions and expenditures.”

The last day for filing COCs was Nov. 30, 2009. Camitan said that UNO was unable to issue Certificates of Nomination and Acceptance (CONAs) to any of its candidates because Comelec granted its petition for re-accreditation and re-registration as the consolidated party of PDP-Laban and Pwersa ng Masang Pilipino (PMP) only on Jan. 12, 2010. Camitan said Binay’s CONA was issued by PDP-Laban.

“The operative act by which a political party is considered to have participated in any electoral exercise is their issuance of CONA to any and all their candidates,” wrote Camitan. “In simple terms, UNO, in effect has taken no part in the concluded 2010 elections.”

Rafanan declines to give an official statement on UNO and Binay since he says his department has yet to receive an official response from UNO. But he says that although there is no clear definition of electoral “participation” in the law, it goes beyond the issuance of the CONA. According to Rafanan, “participation” may also cover a party spending for a candidate even if it did not issue his or her CONA.

Election law expert Luie Tito F. Guia also says that in general terms, a political party participates in an election if it conducts a campaign in support of a candidate who may or may not be a party member. Moreover, he says a political party participates when it engages in “partisan political activity.” In Sec. 79 of the Omnibus Election Code, this refers to “an act designed to promote the election or defeat of a particular candidate or candidates to a public office.”

Whether or not UNO did any of these is not yet clear. In any case, Comelec lawyer Nilda C. Concha, who is one of those in charge of the SECEs, says that UNO should have replied to Comelec last year when it sent notices to all SECE non-filers, asking these for explanations why they should not be penalized. She says that the Comelec identified UNO as a non-filer because it was an accredited party and yet had no SECE on file.

JPE, Jinggoy, Serge

It’s an argument that seems to have flown over the head of the PMP party, which had nominated Senators Enrile and Estrada, among others, for the 2010 elections. Enrile and Estrada filed their individual SECEs, but PMP proved to be remiss with this requirement.

Queried about this by PCIJ, Enrile wrote in reply that as the party’s Chairman Emeritus, he is “not knowledgeable of PMP’s administrative affairs.” Enrile’s legal assistant Katherine Faye Darvin-Dizon then advised PCIJ to contact Senator Estrada as he is the party’s executive vice president. As of this writing, however, PCIJ has yet to get an official statement from Senator Estrada’s staff personnel, lawyer Fortune Mayuga.

Senator Osmeña also has yet to reply to PCIJ’s queries regarding his own missing SECE. But Osmeña, who ran as an independent candidate, had submitted a sworn statement to Comelec on Aug. 5, 2010, in which he attributed his failure to file the SECE to a “mix-up of activities” when he acted as coordinator for the Aquino campaign. He also said that he would submit the statement “soonest, hopefully on or around 15 August 2010.” Any SECE from the senator, however, has yet to reach Comelec as of this writing, June 2011.

KBL blames Comelec

Kilusang Bagong Lipunan (KBL), the party that nominated former First Lady Marcos for Congress, for its part chose to point to Comelec itself as the reason why it did not submit a SECE. According to the party’s former chairman, the poll body has never required KBL to do so “probably because Comelec presumes it is a penniless Party.”

In a letter to PCIJ dated May 31, 2011, lawyer Vicente D. Millora said that this had always been the case for KBL, or at least when he was its chairman from 1992 to 2010. But he added that all of the party’s candidates were required to submit their respective SECEs after every election. Millora said that he believes most of their candidates “have complied.”

Election rules, however, do not make an exception even when a political party claims that it is “penniless.” In fact, Comelec Resolution No. 8944 provides that the statement shall reflect such fact “if the candidate or treasurer of the party has received no contribution, made no expenditure, or has no pending obligation.”

The rest of those on Comelec’s official list of SECE non-filers for the May 2010 national elections were non-winners. Obviously, though, losing does not exempt candidates and political parties from filing the required statement – and from paying fines if they fail to do so.

Brother Eddie, too

Among these is the Bangon Pilipinas party of Christian evangelist Brother Eduardo ‘Eddie’ C. Villanueva who ran for president last year. The party itself filed a SECE, which some of its candidates, including Villanueva and senatorial bets Zafrullah Marohombsar Alonto, Adz Ganih Nikabulin, Ramoncito P. Ocampo, Zosimo Jesus M. Paredes II, and Alexander B. Tinsay took as meaning they had fulfilled the requirement.

In a July 5, 2010 letter to Rafanan, Virginia S. Jose, the party’s legal counsel, asserted that Bangon Pilipinas’s SECE “covers all the contributions and expenditures that the candidates (for president, vice president, and senator) have received and incurred for the election period, thereby dispensing the filing of individual reports.”

But Comelec says Bangon Pilipinas’s SECE cannot be taken as being also those of Villanueva and company. Rafanan explains that a party’s SECE is separate from that of a candidate because each is allowed to spend separately. Candidates and parties also have different spending limits such 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.

Bangon Pilipinas’s SECE, which lists a total of P83.44 million in contributions and P96.01 million in expenditures, does not distinguish how much was donated and spent for each candidate. Comelec would thus not find the document useful if it were to, say, check the cost of Villanueva’s presidential campaign because the party SECE supposedly covers donations and expenses of several candidates.

According to Jose, it was agreed within the party that all contributions shall be coursed through and all expenditures shall be made by Bangon Pilipinas. In the event that any of the party’s candidates received individual contributions or incur individual expenses, the lawyer said they were advised to submit a separate report.

Indeed, some of Bangon Pilipinas’s national candidates like Perfecto R. Yasay who ran for vice-president, and Imelda Papin, Reynaldo Princesa, and Israel N. Virgines, who all ran for senator, submitted their own SECEs.

In a more recent letter to PCIJ, Jose acknowledged that Comelec later advised the party’s candidates to submit separate SECEs. But she said she told the Commission that “it will be difficult to specify which of the funds of Bangon Party was intended as contributions for a particular candidate and it will be equally difficult to determine which of the funds of the Party was spent for a particular candidate so that each candidate can have a report of its own (other than those who already filed a separate SECE).”

Bangon’s own way

Jose also pointed out the candidates who were funded wholly by the Party’s funds would not exceed their respective spending limits because they would have to only spend within the allocated Party funds, which was lesser than the limit imposed by law.

Jose said that Comelec then advised the party to have each candidate at least submit the verified one-page form of the SECE (summary page), adopting the SECE filed by Bangon Pilipinas, along with documents submitted by the party and the explanation previously sent. Comelec has since received such submissions from Villanueva and Tinsay.

Jose said that Bangon Pilipinas wholly funding the campaign of its candidates is “quite unusual” but she explains that it is not the first time that the party “has changed the traditional way of doing the election (campaign) practices.”

In the 2004 and 2010 elections, she wrote in her letter to PCIJ, it had been public knowledge that supporters of Bangon Pilipinas and Villanueva in particular were the ones buying election paraphernalia.

“Supporters took it upon themselves to prepare campaign materials to support the candidacy of Bro. Eddie without taking any single centavo from the candidate nor from the Party,” wrote Jose. “Supporters were the ones who prepared the food for the watchers, printed their own t-shirts, printed their own stickers, tarpaulins and others. As such, the Party and even Bro. Eddie (have) no record of those expenditures because the same were not reported to the Party and were plain initiatives of those people who want change in this country.”

Reiterating her party’s “non-traditional” campaign, she continued, “As you can see, we have attempted several times to make known to COMELEC how our system goes. We do not want to invent things just to strictly comply with the rules when in reality we have approached the exercise differently. We rather state the truth and explain until it is fully understood that Bangon Party (is) not a conventional party. We have complied and submit(ted) the SECE to the best of our ability and with transparency.”
 
The law is the law

But Rafanan says the law is clear that separate SECEs must be filed. The party may claim that it has a non-traditional way of participating in the elections, but he says that it “cannot go against the law.”

If indeed Bangon Pilipinas incurred all the expenses for the candidate, Rafanan says, the candidate must still file his individual SECE, indicating there that he had “zero expenditure,” although the contributions he received should reflect how much the party spent for him.

Contributions in cash or kind by supporters of the party or a particular candidate as described by Jose should have also been reported if these were authorized election expenditures, says Rafanan. The candidate or the party treasurer should have issued an express written authority to the person to incur expenses, he says. Otherwise, the person is unauthorized to spend for the elections.

Comelec’s Concha also told PCIJ recently that she advised Jose that the party’s candidates would still need to file separate SECEs. Jose, however, seems to believe otherwise, writing to PCIJ that when she contacted Comelec’s Law Department recently, she was told that it had not issued “further notice/s anymore of the fact that they (Law Department) did not consider our submissions as compliance with the rules.” She was also told that a resolution is being prepared that will cite those who did not submit the SECE.

Still, Jose said that while the party is not submitting anything more since it was not notified to do so, it is willing to comply with any further Comelec directives.

More non-filers

Other candidates for national posts who lost in the last election and did not file SECEs are Jose ‘Jay’ Y. Sonza, Shariff Ibrahim Albani, and Hector L. Villanueva of KBL, and Henry B. Caunan of PDP-Laban, along with political party Abag Promdi, which that nominated Emilio Mario R. Osmeña for senator.

PCIJ sought clarification from these candidates regarding their missing SECEs, sending letters by fax, email, and post. Numerous follow-up calls were also made to no avail.

In a report last year, the PCIJ noted that Comelec’s inability to fully exercise its authority in ensuring compliance with campaign finance rules is due to the lack of resources and skilled personnel, as well as ambiguities in election laws.

While a comprehensive election expense monitoring is too big a task for Comelec at the moment, its Law Department has initiated some measures that would hopefully make candidates and parties more compliant at least with filing the SECE.

In 2008, the department created a database of candidates who submitted and did not submit the SECE from the 1998, 2001, 2004, and 2007 elections to help it monitor compliance and identify second-time offenders. It has since updated this up to the 2010 polls. Under the law, those who do not file SECEs twice would be banned from running for public office.

In the 2007 elections, Comelec found that 11 senatorial candidates either failed to file the SECE or were late in filing the statement. Those who filed late include incumbent Senator Antonio F. Trillanes IV, former Senator Anna Dominique M. Coseteng, then Quezon City Rep. Michael T. Defensor, and former Zambales Governor Vicente P. Magsaysay.

Those who did not submit SECEs were: Martin D. Bautista, Felix C. Cantal, Joselito P. Cayetano, Antonio L. Estrella, Jamalul D. Kiram, Eduardo F. Orpilla, and Victor N. Wood.

More across PH


Comelec also recorded at least 8,147 erring provincial and local candidates in the 2007 elections. Region X or Northern Mindanao had the highest number of SECE non-filers: 1,438. Next were Region XII (SOCCKSARGEN) with 985 non-filers and Region IV-A (CALABARZON) and IV-B (MIMAROPA) with a combined 838 non-filers.

The poll body then required the erring candidates to submit their sworn explanations stating the reasons why they failed to file the SECE and why they should not be administratively fined and/or subjected to perpetual disqualification from holding public office.

For the provincial and local positions, only one in 10 of the SECE non-filers responded to Comelec’s notice. For the senatorial candidates in the 2007 race, only four of the 11 non-filers replied.

Comelec received a myriad of reasons from candidates trying to justify their non-compliance. Some of the more common arguments were that losing candidates are not required to file the statement, the candidates did not spend for the election, or they were not notified by the election officers.

Some candidates said they forgot about the requirement or became too depressed after losing the polls. Others said they became busy after the campaign, or that there were no personnel in the Comelec office when they tried to file their SECEs. Some said they lost the campaign expense receipts or that the person they assigned to file the document failed to do the task.

For disqualification

After reviewing the merits of these affidavits, the Law Department made recommendations to the Commission En Banc for the imposition of appropriate penalties against the erring candidates. As of June 2011, the Law Department has made at least 24 recommendations to the Commission.

This includes the case of Brillante Inciong who failed to file his SECE in 2004 and 2007. In 2010, he ran again and was finally elected Parañaque City councilor. The Law Department recommended Inciong’s disqualification and removal from office because he failed to file the SECE twice.

The case had been referred to Comelec’s Investigation and Prosecution Division for fact-finding. If the Law Department’s recommendations regarding Inciong were carried out, it would be the first time that a winning candidate is disqualified and removed from office for not filing the SECE.

Still and all, there’s plenty of room for improvement in enforcing SECE rules. Among the 10 senatorial candidates in 2007 meted with a P20,000 fine for being late in filing their SECEs, for example, only one – Coseteng – actually paid.

Joselito P. Angeles, who, with Concha, is in charge of the SECEs at Comelec, says that educating voters and candidates of election laws and the consequences of violating them remain key even if the Civil Code provides that ignorance of the law excuses no one from compliance therewith.

Angeles says the Comelec engages voters and candidates through ELECTVOICE or the Election Law Enforcement thru Voters’ Information and Candidates Education program. He points out, “Effective enforcement of election laws can only be achieved with an informed citizenry.” – With additional research by Jessa Mae B. Jarilla, PCIJ, July 2011

This includes all of the 43 organizations that now have nominees sitting in the House of Representatives.

Of the 169 or so party-list groups allowed to participate in the electoral contest, however, at least 26 (or about 15 percent) remain without SECEs filed with Comelec, even though they are subject to the same electoral laws as the ‘mainstream’ political parties.

Unfortunately, Comelec may have a hard time meting out penalties on these errant groups, based on PCIJ’s attempts to track them down. For one, of the 26 party-list organizations that didn’t file SECEs, PCIJ was able to send letters of clarification to only six because whatever contact information they had on record apparently was no longer applicable.

For another, of the six that PCIJ was able to contact successfully, only three so far have replied.

Hassan U. Dalimbang, founding chairman and first nominee of the Filipino Muslim Organization (Fil-Mus), readily admitted to PCIJ that he had not submitted a SECE “(in spite) of the fact that I had known very well the Rules and Regulations governing electoral contributions and expenditures in connection with the May 10, 2010 elections.”

In his letter to the Center, Dalimbang said he had not filed the papers as required by law because he had lost in the elections anyway and his “mind was sidetracked” by his involvement with issues concerning overseas Filipino workers or OFWs, which he considered more “pressing” and needing of his “immediate attention.” But he also said that his non-compliance was because the “receipts of all expenditures…were inadvertently lost during the campaign and election periods.”

Dante Francis M. Ang II, first nominee of Ahon Pinoy (which aims to protect the rights and welfare of OFWs), for his part said that were it not for PCIJ’s letter, the group “would not have known” that it had not filed its SECE.

“All the while,” wrote Ang in a letter dated May 27, 2011, “we assumed that our finance manager had taken care of the reportorial requirements.” He then said Ahon Pinoy would “submit a belated report to the Comelec as soon as (the group has) gathered all relevant documents.”

The Koalisyon ng Katutubong Samahan ng Pilipinas (KASAPI), which represents indigenous peoples, meanwhile said that it had submitted by courier its SECE to Comelec on Aug. 25, 2010. In a written reply to PCIJ’s queries, KASAPI administrative officer Jhon Jeff Tolentino said that this was after the group had received notice from Comelec asking it to submit its SECE.

KASAPI’s Jun. 7, 2011 letter to PCIJ came with a copy of its SECE, along with tracking information provided by the courier company. The tracking information showed that the parcel was received by a certain Trifona Root at Comelec.

When PCIJ last looked at Comelec’s files last April, though, it failed to find any copy of KASAPI’s SECE. Then again, this is the same government body that up until recently had conflicting lists of accredited party-list organizations, leading to confusion over which should be included in its roster of SECE non-filers.

In fact, Comelec had as much as 187 party-list groups on the official ballot. But when PCIJ tried checking on the supposed 36 non-filers based on a list drawn up by the Comelec’s Law Department, it found that a number of these had already been disqualified by the Commission way before the elections.

Among these groups was the United Filipino Seafarers (UFS), which had its registration as a sectoral party dismissed on Dec. 11, 2009. Its motion for reconsideration was denied by Comelec on Feb. 2, 2010. It was thus a perceivably irate Nelson Ramirez – president of UFS – who wrote to PCIJ last May that its being on the Comelec SECE non-filer list was “ridiculous.”

The Comelec Law Department has since cleaned up its SECE non-filer list. Whether it can get non-compliant party-list organizations to clean up their acts is another matter. – With research by Jessa Mae Jarilla, PCIJ, Julys 2011

We have compiled our reports on the Office of the Ombudsman to look back at the tenure of Merceditas Gutierrez.

Merci’s SALNs a big secret?

• Ombudsman mocks law on disclosure of wealth – March 15, 2011
• Sidebar: More barriers to access
• Blog: Ombudsman responds to PCIJ SALNs report

Blackmail’ raps spook impeach plaint

• Gutierrez has sued only 4 members of 15th Congress – March 14, 2011

Four-part series on the Office of the Ombudsman

• Part 1: Ombudsman a failure despite flood of funds – February 6, 2011
• Sidebar: Ombudsman goes easy on generals – February 6, 2011
• Part 2: Barangay captains top crooks in jail; majority skirt slammer – February 7, 2011
• Part 3: Mercy high profile on media, Ombudsman stingy with data – February 8, 2011
• Sidebar: Sanctum sanctorum? – February 8, 2011
• Part 4: 4 Ombudsmen, 4 failed crusades vs corruption – February 9, 2011
• Sidebar: COA quizzes Ombudsman – February 9, 2011

The role of the Office of the Ombudsman in the Rolando Mendoza case

• Part 1: IIRC blames Ombudsman, hints at extortion attempt – October 13, 2010
• Part 2: Broken police, broken legal system broke hostage-taker? – October 14, 2010
• Blog: Deputy Ombudsman fired over Mendoza case – April 1, 2011