FROM overpriced highways to secret bank accounts, to gambling lords and thoroughbred horses, controversies have hounded the Arroyo administration long before wiretapped conversations implying election fraud hogged the headlines. And it is not only the president who has more than once been asked to account for charges of improper behavior; so too have husband Mike, eldest child Mikey, and brother-in-law Ignacio Arroyo.
Four days after it assumed office, the Arroyo administration approved the awarding of a controversial $470-million contract to the Argentine firm IMPSA (Industrias Metalurgicas Pescarmona Sociedad Anonima) to rehabilitate a hydroelectric plant in Laguna. Justice Secretary Hernando Perez was later accused of demanding and receiving $2 million dollars from ex-Rep. Mark Jimenez, who brokered the deal. Jimenez said he wired the amount to the account of Ernest Escaler in Hong Kong on Feb. 23, 2001 from his bank in Uruguay. The former congressman was later extradited to the United States, where he had to serve a two-year jail term for federal election fraud and tax evasion.
From the time she was first elected senator in 1992 up to 2004, Gloria Macapagal Arroyo had failed to declare in her sworn Statements of Assets, Liabilities and Net Worth the properties her husband, Jose Miguel ‘Mike’ Arroyo, bought in San Francisco through his California-based LTA Realty Corp. In 2003, Newsbreak reported that Mr. Arroyo acquired, resold, and managed at least five properties with a total value of at least $7.1 million in the Bay City from 1992 to 2000. The First Couple said they bought the properties in trust for Mike Arroyo’s younger brother, Ignacio or Iggy, now a congressman.
President Arroyo has been questioned about her personal connection with alleged jueteng boss Bong Pineda: She is godmother to one of Pineda’s sons. She has denied any impropriety, saying she doesn’t associate with Pineda or his crowd. In an interview with Time magazine in 2001, she said that when she was asked to be ninang, she sought and received counsel from Manila Archbishop Jaime Cardinal Sin. Recalled Arroyo: “Cardinal Sin said, as a Christian, if I am asked to be a godmother, it is my Christian duty, because the sins of the father are not the sins of the son.”
In the middle of 2002, Sulpicio Tagud Jr., then board director of the Public Estates Authority (PEA), blew the whistle on what he said was the overpricing by over P600 million of the construction of the 5.1-kilometer President Diosdado Macapagal Boulevard at the Manila Bay reclamation area. First approved during the Estrada administration, contracts for constructing the highway were allocated to three companies: Shoemart Inc. (one portion), DM Wenceslao (one portion), and Jesusito D. Legaspi Construction (JDLC for the remaining three portions). A series of supplemental contracts with JDLC were later approved by the PEA board under the Arroyo administration, increasing the original approved cost of their section of the highway. Tagud did his investigations and found that while the SM group of companies constructed its part of the boulevard at a cost of P54,000 per lineal meter, JDLC built its section at P302,000 per lineal meter.
The construction of the 1.1-km-long, four-storey Terminal 3 of the Ninoy Aquino International Airport (NAIA) by the Philippine International Air Terminals Co. (Piatco) has been riddled with controversies. Some of these were inherited by the Arroyo administration, while others were allegedly of its own doing. In May 2003 opposition Sen. Edgardo Angara accused Malacañang of trying to extort, through the Villaraza law office, some $20 million from Fraport, the German firm with a 30-percent stake in Piatco, in exchange for legal favor.
But the Piatco scandal is a long running one. It figured prominently during the confirmation hearings for Arroyo-appointed Transportation Secretary Pantaleon Alvarez in 2002. Alvarez was alleged to have obtained an overpriced subcontract for one of the public works projects related to the airport terminal. In exchange, Alvarez, while transportation secretary, was reported to have given the firm “onerous” advantages. Piatco was also accused of paying since June 2001 huge sums of money to a public relations consultant, Alfonso S. Liongson, an associate of the First Gentleman, for getting signatures of officials for either permits or supplementary agreements to its contract with the government. Liongson reportedly used part of the money to bribe officials for their signatures. The terminal was finally mothballed in 2003 when President Arroyo revoked Piatco’s build-operate-transfer contract. In December 2004 the government took over the airport, after the Supreme Court affirmed the contract’s revocation. It remains unopened.
Newsbreak in August 2003 broke the news on a plan of presidential son Juan Miguel “Mikey” Arroyo to import 32 thoroughbred horses from Melbourne, Australia. The then Pampanga vice governor, now a congressman, denied the allegation. He admitted, though, that he was in the horse-trade business. The young Arroyo owns Franchino Farms along with cousin Franchino Pamintuan and friend Ralph Mondragon.
On Aug. 18, 2003, opposition senator Panfilo Lacson accused First Gentleman Jose Miguel Arroyo of money laundering for supposedly siphoning off at least P321 million in campaign funds and contributions and putting these in a secret bank account under the fictitious name Jose Pidal and in three other accounts using the names of his aides. Among the “donors,” Lacson said, was then Rep. Mark Jimenez who contributed a total of P8 million. Lacson also accused Mr. Arroyo of having an affair with his accountant, Victoria Toh. Following Lacson’s allegations, Mr. Arroyo’s younger brother, now congressman Ignacio or Iggy, came forward to say he is Jose Pidal.
The First Gentleman was linked in May 2004 to the alleged diversion of P728 million from the Ginintuang Masaganang Ani program to President Arroyo’s campaign war chest in the form of development assistance funds to local government units. Then Agriculture Undersecretary Jocelyn I. Bolante, Mr. Arroyo’s classmate at the Ateneo de Manila University and a colleague at the Rotary Club District 3830, cleared the First Gentleman of involvement. Bolante was tasked to oversee the implementation of the Ginintuang Masaganang Ani program at the time.
Six weeks before the May 2004 elections, two lawyers from PRO-CON(stitution) filed a disqualification case against President Arroyo before the Comelec, saying she was behind the enhanced Philippine Charity Sweepstakes Office’s Greater Medicare Access or GMA program, which they claimed was meant to prop up her candidacy. Earlier, another PRO-CON lawyer filed a criminal suit, also before the Comelec, against then PCSO chief Maria Livia “Honeygirl” de Leon and PhilHealth president (now Health Secretary) Francisco T. Duque III for vote buying, intervention of a public officer, using public funds for election purposes and using banned election propaganda. Public funds were allegedly spent to enroll families in PhilHealth for one year to induce the enrollees to vote for President Arroyo. The premium cost of P1,200 for each family member was chargeable to PhilHealth and the PCSO.?The PhilHealth identification cards bore the President’s picture and the name. Their distribution coincided with the start of the election campaign.
Las Vegas suite
The First Gentleman was the subject of another controversy over his alleged use of a $20,000-a-night suite at the MGM Grand Hotel in Las Vegas, Nevada during the boxing match between Manny Pacquiao and Mexico’s Erick Morales last March 19. The story first appeared as a blind item in the March 23 column of Inquirer sports columnist Recah Trinidad, who wrote that a “heavyweight backer” of Pacquiao had stayed in a $20,000-suite at the MGM Grand. Mr. Arroyo would later say he did not see anything corrupt about accepting the generous offer of a free luxury suite from the hotel, arguing that his stature as the husband of a head of state entitled him to such perks.
In Senate hearings on the illegal numbers game that began in May 2005, jueteng operators and bagmen said the President’s husband Mike, her son Mikey, and her brother-in-law Ignacio or Iggy were among those who received monthly payoffs from gambling lords. The payoffs supposedly ranged from P500,000 to P1 million. One of the witnesses, businesswoman Sandra Cam, testified that in December 2004, she personally delivered the cash to Mikey (in a gift-wrapped package) and Iggy (in an envelope) at the House of Representatives. The deliveries were supposedly made on the instructions of retired Chief Supt. Restituto Mosqueda, former police director for Bicol and alleged protector of jueteng operations in Luzon. On June 8, the President ordered the Department of Justice to investigate her son and brother-in-law, saying, “Nobody in my family or kin are above the law and no investigator or prosecutor could fear to uphold the law against them. I will stand for justice no matter who gets hurt.” The Office of the Ombudsman has since taken over the DOJ investigation. Both Mikey and Iggy, meanwhile, have sued Cam for libel.