Last of Three Parts

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

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

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

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

Can’t, won’t audit

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

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

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

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

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

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

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

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

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

Obscure definitions

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

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

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

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

Source: Statement of Electoral Contribution and Expenditure (SECE),
Comelec Law Department, as of July 20, 2010

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

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

Source: Statement of Electoral Contribution and Expenditure (SECE), Comelec
Law Department, as of July 20, 2010

Media in breach, too

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

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

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

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

Everybody happy?

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

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

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

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

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

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

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

Political investment

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

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

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

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

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

Task too huge

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

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

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

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

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

He repeats that existing campaign-finance laws need to be revisited. After all, he says, “Unrealistic laws encourage violations, and violations promote a ‘culture of disregard for the law.’”