Sunday, October 6, 2013


Money politics & the May 2013 elections:
Top execs of barred firms funded Senate bets, parties
By Ed Lingao, Cong Corrales  and Edz V. dela Cruz, Philippine Center for Investigative Journalism
First Three Parts
IN THEORY, elections are supposed to be the great leveler or equalizer of democracy. The vote of any ordinary man scraping a living off the streets is supposed to have the same clout as that of a tycoon living it up in his penthouse.

But in our rather imperfect world, even way before voters get their hands on ballots, things take place that tend to ensure that the wealthy and powerful will have influence on those poised to set policy and law.

For instance, a review of the documents available from the Statements of Election Contributions and Expenditures (SOCE) submitted by the candidates and their parties to the Commission on Elections (Comelec) show that, aside from contributions by political clans keen on keeping their foothold in politics, some of the biggest donors in the May 2013 senatorial elections are personalities from the mining and extractive industries sector, as well as public works contractors who have major pending government contracts.

These are followed by big businessmen with interests in public utilities, transportation, ports and shipping, energy, and even the legalized gambling industry.

All these sectors are covered by the list of prohibited donors as defined by the Omnibus Election Code.

Section 5 of Comelec Resolution No. 9476, which was issued in June 2012, also revisits many of the earlier bans on contributions spelled out in the Omnibus Election Code. These include the ban on donations by persons operating public utilities, exploiting or possessing natural resources of the nation, those who hold contracts or subcontracts with any government agency, and those who have been given franchises, incentives, exemptions, allocations, “or similar privileges or concessions” by a government entity.

Across all parties

The apparent violations on prohibited campaign donors cut across all party lines and affiliations, with candidates, parties, and political alliances from both the administration and the opposition blocks accepting donations from personalities identified with sectors that are listed by the Election Code as banned donors.

The violations also involve both neophyte politicians, senators who are just now beginning their first term in the Senate, and senators who are already serving their second and final term in the upper chamber.

The violations seem to show that, regardless of party affiliation and experience in public service, many candidates and political parties are still to take campaign finance laws seriously.

At worst, the violations may be seen as the flouting of the laws on campaign donations in a country where the Comelec has long been seen as nothing more than an administrator and a ballot counter than an enforcer of election laws. At the very least, it would show just how unfamiliar many candidates and parties are of the laws that govern their election, laws that have been in force, albeit largely unenforced, for almost three decades now.

But Comelec has since warned both candidates and political parties that it is now taking campaign finance laws more seriously, beginning with the creation of the commission’s Campaign Finance Unit (CFU) in 2012. Comelec started tightening the screws on election contributions and expenditures beginning with the 2013 midterm elections, with the idea of full implementation of the campaign finance laws by the time the 2016 presidential elections come around.

Vested interest groups

“If you receive a contribution from these prohibited donors, it is not only ground for disqualification, it is also a criminal offense,” says Comelec Commissioner Christian Robert Lim, who is also ad hoc CFU Steering Committee head.

The reason behind the prohibitions on donations from certain sectors is quite simple: to prevent special interest groups already vested with significant political and economic influence from exercising even more disproportionate influence over elected government officials.

“It is as if they are buying the politicians,” Lim says. “It’s an investment.”

“The drafters of the law saw the importance of regulating campaign donations in order to prevent a conflict of interest,” says Comelec Commissioner Luie Tito Guia. “We want the donations to be given to a campaign to be based on very personal decisions, that you want a candidate to win because he is good for the country, and not because he is good for your business.”

Yet both opposition and administration coalitions appear unconcerned with the possibility of violating the Omnibus Election Code with regard to donor prohibitions. At best, both sides appear to have turned a blind eye to the possibility of conflict of interest between the donor and his donee.

Government contractors

PCIJ found at least P75 million in donations made to both opposition and administration senatorial candidates made by contractors with pending government projects. While the amount may appear small compared to the P1.6 billion in donations that flowed into the campaign kitties of the winning senators (or four percent of the total), the stakes are enormous – some of the pending contracts held by the donors run from half a billion to a billion pesos per project.

Rona Ann Caritos, acting executive director of the lawyers’ election watchdog group LENTE, or the Legal Network for Truthful Elections, says this practice was banned by the Election Code because of the danger that should they win, candidates would favor such contributors in terms of policy or awards of contracts.

“If they have an existing contract and they gave huge amounts to a candidate who eventually won, that candidate may favor that corporation in future dealings,” explains Caritos. “There are many construction companies that give to politicians and political parties, and they expect that if they give large amounts and the candidate wins, they expect to get contracts in return. That is the danger if you do not ban construction companies from donating to candidates.”

Mining money

Comelec data also show that at least P70 million in mining-associated donations were made by private individuals to both administration and opposition senatorial candidates. Officers or owners of public transport utilities such as airlines and bus companies come in third with P62.5 million in donations.

Caritos says the same logic is exercised in the ban against donors who get franchises or permits from the government, whether these are public utilities or exploiters of natural resources.

“Those covered by the prohibition on the exploitation and possession of natural resources are mining companies or those engaged in oil and gold exploration,” she says. “It is prohibited (in order) to prevent undue influence on the officers of the government, because they get their permits from the government. Ang mga mining permits, permits to explore or exploit (resources) are given by the government.”

Among the political parties, the Nationalist People’s Coalition (NPC) of former Ambassador Eduardo ‘Danding’ Cojuangco Jr. received the largest of these questionable campaign donations for the 2013 elections.

NPC tried to play both sides of the coin in last May’s polls, with various officers and members joining campaign sorties with both the administration and the opposition coalitions. In the end, NPC fielded senatorial candidates in both the administration and the opposition coalitions: Senator Loren Legarda ran and won under President Benigno Simeon C. Aquino III’s Team PNoy, while Juan ‘Jack’ Ponce Enrile Jr. ran and lost under the opposition United Nationalist Alliance or UNA.

Big deal for Sta. Elena

Comelec records show that among the donations accepted by NPC was one amounting to P25 million from Alice Galang Eduardo. A check with the Securities and Exchange Commission (SEC) showed that Eduardo is president and board member of Sta. Elena Construction and Development Corporation, a company registered in 2006 to “engage in general construction business, including the enlarging, repairing, developing, or engaging in any work upon buildings, houses, and condominium, roads, plants, bridges, airfields, piers, waterworks, railroads and other structures.”

Sta. Elena Construction currently has several projects with the government, the biggest costing more than P1 billion. In its own website, the company proudly announces its involvement in the third phase for the design and construction of a breakwater for the Cagayan Economic Zone Authority (CEZA) in Port Irene, Sta. Ana, Cagayan province to the tune of P1.07 billion.

The project is listed as involving pre-casting, pile-driving, and construction of the breakwater.
Sta. Elena also did the Phases 1 and 2 of the CEZA project. Phase 1 cost P840 million while Phase 2 had a P1.375-billion price tag.

Sta. Elena has a current P234- million contract as well with the Department of Transportation and Communication (DOTC) for a Coast Guard buoy project in Punta Engano, Mactan, Cebu.

More, more deals

Among Sta. Elena’s concluded government projects of significant value, meanwhile, are:
  • Pantal Bridge Project in Dagupan City, for P890 million;
  • Sarrat bridge project in Ilocos Norte, for P890 million;
  • Leyte wharf expansion project at the Subic Bay Metropolitan Authority, for P400 million;
  • Laoag-Bongo River improvement work in Ilocos Norte, for P193.5 million;
  • Widening of causeway for the San Vicente Fish Port Terminal of the Cagayan Economic Zone Authority, for P52 million;
  • Sabang bridge project, Batangas City, P32 million;
  • Piela bridge project in Dasmariñas, Cavite, for P35 million;
  • Bacao bridge project in Taysan, Batangas, for P50 million; and
  • Salitran bridge project in Dasmariñas, Cavite, for P60 million.
On its website, the company boasts of having “played an instrumental role in the completion of many private projects as well as the fulfillment of the government’s countrywide development goals.”

But because the donation was made under the name of Alice Galang Eduardo, not Sta. Elena Construction and Development, it may benefit from a legal loophole. Indeed, most of the questionable donations looked at more closely by PCIJ were made by owners, officers, incorporators, directors, or shareholders of these companies in their private capacity.

In other words, except for a few of the more glaring cases, it was the owner or the controlling officer who made the donation, and not the company in the barred sector itself.

Touchy point

Comelec Commissioner Luie Guia concedes that this is still a touchy point of the law, one that is largely untested. “The personality of the officer or controlling stockholder is separate from the corporation itself.” Guia says. If only for this, he says, it is yet unclear what action the Comelec will take on these cases.

He even says that they expect that the donors would make this argument in the event they are hauled off to court for violating campaign contribution laws. But Guia says that one interpretation of the law is that a corporation is just an artificial entity, and it may be the decisions of the officers that may be more critical than the action of the firm.

Yet if the company is barred from making a donation, why is the owner of the company or the officers who control it still allowed to make donations?

“We have what we call corporate fiction,” Lim quips. But he adds, “We do not want to go into a situation where we file cases that we will just lose. We want things clear. But we know that this is one loophole that needs to be plugged.”

Guia, for his part, acknowledges that it would be unrealistic to separate the interests of a company and its officers, especially if the officer in question happens to own the company, or is the major or controlling stockholder.

Loophole in law

“In the ideal world, you should be able to connect them, because the corporation is just an artificial entity,” he says. “In the end, it is the stockholder who will be profiting, or whoever is in charge or has the most interest in the corporation.”

“Unfortunately,” Guia says, “the law is not yet clear. It is a grey area, maybe it is a loophole, if you may call it that.”

“It would be good if the Comelec tries to determine if the private donor is also the controlling stockholder of the corporation,” he says.

In the case of Alice Eduardo, documents show her as having controlling shares of Sta. Elena. In fact, almost the entire board of the company appears to be made up of her direct family.

In the latest General Information Sheet submitted by Sta. Elena Construction and Development Corporation in May this year, Eduardo was listed as president, stockholder, and board member of the company. Three of the other four members of the board belong to the Eduardo family: Andres A. Eduardo, who sits as vice president, and Elisa G. Eduardo and Joel G. Eduardo as treasurer and secretary respectively. All four Eduardos share the same address in ritzy Dasmariñas Village, Makati City.

SEC records show that the Eduardo family owns 99 percent of the company, with Alice Eduardo having the biggest share at 34 percent. Andres and Elisa own 25 percent each, and Joel Eduardo controls 15 percent.

Alice Eduardo is also listed in SEC records as an incorporator, stockholder, and board member of Philsite Gaming Inc., whose main purpose is “to engage in the business of computer gaming and other entertainment activities.” The company was registered with the SEC in June 2010. Eduardo owns 80 percent of the subscribed shares of stock of the company.

PCIJ tried to get a spokesman of the NPC to comment on the matter. The matter is now with NPC legal counsel and former Comelec Commissioner Gregorio Larrazabal.

PCIJ also sent letters and made follow-up calls to the office of Alice Eduardo for comment. As of this writing, however, Eduardo’s office has yet to issue a response.

GMA7 ‘donation’

Falling in a grey area as well is the P440,774 donation by GMA Network, Inc., one of the largest television networks in the country, to the campaign of Loren Legarda, as revealed by the schedule of campaign ads her office submitted to Comelec. GMA holds a broadcast franchise granted by Congress, and as such could be included in the list of banned donors.

The donation apparently came in the form of four ad spots, which are exclusive of the P21 million worth of television ads that Legarda purchased from GMA Network during the campaign period. The document was signed by Antonio B. Legarda Jr., identified as Legarda’s disbursing officer.

Far clearer, however, is the case of bus firm Victory Liner, which donated P 500,000 to the campaign of Bagumbayan Volunteers for a New Philippines Movement, Inc. of former Senator Richard Gordon. The amount is quite small compared to the other donations received by other political parties. Then again, Victory Liner, as a public utility, is prohibited from making campaign donations.

Oro East Mining Co. Inc, meanwhile, donated P100,000 to the campaign coffers of the opposition coalition United Nationalist Alliance (UNA). SEC records show that Oro East’s business is “to carry on the business of operating coal mines, and of prospecting, exploration and of mining, milling, concentrating, converting, smelting, treating, refining, preparing for market, manufacturing, buying, selling, exchanging and otherwise producing and dealing in all other kinds of ores, metals, and minerals…”

Donor now city engineer

Another mining firm, International Global Mining Exchange (IGME), donated P5 million to the campaign kitty of the Pwersa ng Masang Pilipino (PMP) of former President and now Manila Mayor Joseph Estrada.

Estrada would later appoint IGME’s former president as city engineer of Manila.

For these cases, Lim says, Comelec will “move up to the next stage of the audit.”

This involves holding hearings where donors and their political parties and candidates are given the chance to explain their side. Lim says that while on the surface some of these parties, candidates, or donors may have already incriminated themselves or each other in their official reports to Comelec, the other side may always contest the facts of the report.

“For example,” he says, “if Loren Legarda says that GMA Network contributed to me, and then GMA says it did not contribute, we have to investigate both parties and hear all the sides, and then proceed from there.”

In the meantime, Lim is proposing new rules that would bar not just owners and controlling shareholders, but all officers of a prohibited corporation from making donations in an election campaign. The proposal will be included in a new campaign finance bill that is being drafted by lawyers’ groups that are cooperating with Comelec in fine tuning campaign finance regulations. – PCIJ, September 2013

Poll laws in limbo:
Firms can’t donate but owners bankroll bets
Second of Three Parts

Lawyers are taught early on to make the distinction between companies and their officers and shareholders. But Rona Ann Caritos, acting Executive Director of the lawyers’ election watchdog group Legal Network for Truthful Elections (LENTE), indicates that this may not be true when it comes to the law on banned donors to election campaigns.

“It is the position of LENTE that the officers, the board of directors, the board of trustees of these corporations are also covered by the prohibition,” Caritos says. “It is not just the corporation that is banned from donating, but the officers as well. Why? Because what you cannot do directly, you also cannot do indirectly.”

Caritos says it does not make sense to ban a corporation from donating when the officers who have control of the corporation are allowed to make the donation on a private capacity. In the first place, she says, it is the officers or the owners of the corporation who call the shots in the company. Thus, the interests of the owner or major stockholder are married or at least heavily intertwined with the interest of the company.

“A corporation is just a cloth of legal personality, but in reality it is the officers and the directors who are calling the shots,” adds Caritos. “If you look at the spirit and the intention of the law, it is to prohibit undue influence, and you cannot prohibit and prevent undue influence if the officers and directors of the corporation are allowed to give contributions to these candidates. If they are allowed, e di ang prohibition on corporations will be useless because there is a loophole that they can use.”

Caritos said that if candidates and political parties balk at this interpretation of the Omnibus Election Code, it is only for one reason: that the campaign finance rules had been left unimplemented for so long that they have been taken for granted, or at least interpreted in the most liberal manner.

She says if the rules are implemented strictly, many political parties and candidates would have already committed an election offense punishable with six years imprisonment.

Firms banned, not execs?

In the last midterm elections alone, campaign donors apparently included those who have considerable interests in sectors that are prohibited from making campaign contributions to candidates and parties by the Omnibus Election Code.

Several of these election campaign donors, in fact, are owners and incorporators of companies with pending major contracts with various government agencies; businessmen with controlling shares in mining, power, and other industries that are extractive in nature or use natural resources of the country.

Take plastics king William T. Gatchalian, a businessman who learned to invest in politics as well during the time of President Joseph Estrada, who donated P20.9 million to the opposition coalition, the United Nationalist Alliance (UNA). He also donated P10 million to Estrada’s party, Pwersa ng Masang Pilipino (PMP).

But then Gatchalian and his plastics empire are also major players in the mining sector, which is banned from making campaign donations by the Omnibus Election Code.

SEC records show that Gatchalian is incorporator and director of Wellex Mining Corporation, which registered with the SEC in 2008 “to search for, prospect, explore for ores and minerals and to locate mining claims.”

SEC records also reveal that the Wellex Group, which Gatchalian owns and controls, owns 124 million of the 125 million shares of stock of Wellex Mining Corporation, or 99.2 percent of the company. Gatchalian owns roughly 60 percent of the shares of Wellex Group, the plastics empire he started building in 1994.

Gatchalian and yet another major UNA donor, Eric R. Tagle, are also incorporators and board members of another mining firm: Aureus 74 Mining Corporation. Tagle had donated P10 million to UNA’s campaign kitty.

Aureus 74 Mining, registered with the SEC in March 2013, is engaged in gold ore and coal mining. The company lists as incorporators Gatchalian, Tagle, and former Armed Forces chiefs of staff Hermogenes Esperon Jr. and Efren Abu. As far as ownership of the mining firm is concerned, Gatchalian and Tagle control 79 percent of Aureus, through Tagle’s ERT Holdings and Gatchalian’s Wellex Group.

(PCIJ has yet to receive a response to letters it sent to Gatchalian’s office at Wellex Group.)

Big contractors

Another contributor to the UNA’s campaign coffers was Danilo V. Roleda, who gave P8 million to UNA, and another P2 million to the senatorial candidacy of Ma. Lourdes Nancy Binay.

PCIJ found at least two notices of award sent to Roleda by the Department of Public Works and Highways (DPWH) in March this year, informing him that his construction company, B. Vicencio Construction, had won in bids for government projects.

The DPWH Samar First District Engineering Office awarded the firm an P11.5- million contract to build three school buildings in Gandara, Samar. The Notice of Award for Contract ID 131J-0040 was signed by District Engineer Virgilio Eduardo, and the conforme signed by Roleda himself as the owner-proprietor of B. Vicencio Construction.

In addition, the Iloilo 2nd for a P10.2-million project to upgrade a gravel road to a paved road in Lambunao, Iloilo. The notice, sent in March 2013, was signed by district engineer Nilo Gavia.

Roleda is also listed in SEC records as an incorporator and director of International Gold Mountain Mining Inc. in August 2005. The company is engaged in mining, concentrating, smelting and trading gold, silver, copper, iron, oils and gas. Roleda owns 59 percent of the company.

Utilities, construction

Another Binay campaign donor was Emmanuel A. Atienza (P5 million), president of the Philippine LPG Bus and Taxi Company (PLBT), a public utility also banned from making contributions by the election code. The transportation company was registered with the SEC in September 2006.

Binay’s spokesman, Rex Hirang, has told PCIJ that the neophyte senator – the eldest daughter of Vice President Jejomar Binay – is still too busy to respond to its queries.

In the meantime, another high roller who also belongs in the list of questionable donors is Jose G. Ranola, who gave P20 million to the campaign of Senator Joseph Victor ‘JV’ G. Ejercito.

Ranola is president of Legazpi Premium Development Corporation, an Albay-based company engaged in public construction.

Curiously, SEC records have no listing for Legazpi Premium Development Corporation, although PCIJ found notices of awards from several local government agencies to Ranola as the head of the company. These include a notice of award from the Negros Oriental provincial government of a P200-million contract to rehabilitate and deepen the Tanjay River in Tanjay City Negros Oriental; a P48.5- million project to rehabilitate the protection dike along the Ajong River in the same province; and a notice of award from the provincial government of Sorsogon for a P98.4-million project to expand and improve the Dr. Fernando B Duran Sr. Memorial Hospital.

Senator Ejercito had two more contributors who appear to qualify for the Omnibus Election Code’s list of banned donors. One is Inigo Urquijo Zobel, son of the late tycoon Enrique Zobel of the Zobel de Ayala clan.

In 2012, Iñigo Zobel was introduced to the public by Air Philippines Express as its new President and Chief Executive Officer. Air Philippines Express, a low-cost airline, was later rebranded as PAL Express, with Zobel staying on as President and CEO. In the past, Zobel had also been involved in All Asia Airlines, whose registration was revoked by the SEC in 1993.

The Omnibus Election Code prohibits public utilities from making donations to election campaigns. But airlines are not just simple public utilities; they also need congressional franchises to be able to operate in the country.

Mining concerns, too

Zobel is involved as well in the extraction of natural resources, another prohibited activity for campaign donors. He is listed in SEC records as a director and incorporator of A Blackstone Energy Corporation, registered with the Commission in February 2007. Blackstone’s incorporation papers state that the company is engaged in extracting, exploiting, buying and selling of coal, oil, gas, and hydro. The controlling shares, however, are held by Filipinas Prefab Building Systems of the F.F. Cruz construction family.

Yet another donor to Ejercito’s campaign may be in the list of banned donors. Michael L. Romero, who gave P7 million to Ejercito’s kitty, is also the Chairman and Chief Executive Officer of 168 Ferrum Pacific Corporation, a firm engaged in metallic core mining, according to SEC registration papers filed in January 2007. Romero is the owner of Ferrum Pacific, owning 99 percent of the company, according to the SEC.

Romero is also heavily invested in two more mining companies, as major shareholder, incorporator, and director of both Radtech Mining Corporation and Rednickel Mining Corporation.

SEC incorporation papers for Rednickel Mining Corporation, filed in March 2008, showed that Romero owned 96 percent of the firm and other documents show Romero owned 28 percent of Radtech Mining Corporation.

In an interview with the PCIJ, Ejercito defended Zobel’s contribution, saying Zobel stood as his best man in his 2007 marriage to Hyacinth Lotuaco at the Pinaglabanan Church in San Juan. “He is my best man, he is my best friend, and whatever his business is, I don’t care,” Ejercito said.

Ejercito added that he does not see any problem with Zobel’s donation, since it was made in his personal capacity. “Before he became chair or was involved in Air Philippines, he was already my best man,” Ejercito said.

‘No strings attached’

As for Michael Romero’s P7-million donation, Ejercito said: “Oh I never thought he gave me that much. But I don’t think (it is wrong)… as long as there are no strings attached.”

“I made it clear to my finance people during the campaign, no strings attached,” he also said.

According to Ejercito, there should be no issue so long as the candidate does not make any commitments to the donor. Moreover, Ejercito said, the campaign finance rules are impractical and skewed against those running under the opposition.

 “If you put all these restrictions, no one will donate to us except for the small and medium-scale businessmen,” he said. “And what can they give us? One or two thousand pesos each?”

In this sense, Ejercito said, administration candidates have an advantage because they can tap government resources while opposition candidates need to scrounge funds.

“My position is basta there are no commitments of taking positions on issues, and not to expect any protection,” he said. “Then there is no problem with that.”

To be sure, though, even the administration’s coalition Team PNoy, with its candidates and guest candidates mouthing the Tunay na Tuwid na Daan slogan, appears to have violated the laws against banned campaign donors.

For example, Senator Paolo Benigno ‘Bam’ Aquino IV, first cousin of President Benigno Simeon C. Aquino III, accepted donations from Vicente Tan Lao and Michael Allan Sicat who each gave P5 million to his campaign. Lao is the proprietor of Vicente T. Lao Construction, listed in the DPWH database of registered contractors for public works projects.

A month before the 2013 elections, President Aquino himself led the groundbreaking ceremony for the rehabilitation of the 14-kilometer Punta-Dansullan-Sergio Osmeña Road in Zamboanga del Norte. Phase 1 of the road project is being undertaken by Vicente T. Lao Construction at a cost of P69 million.

In late July this year, Vicente T. Lao Construction also submitted technical and financial proposals to the Department of Education for an P8-billion project to build school buildings under the government’s public-private partnership (PPP) program.

Michael Allan Sicat owns M.E. Sicat Construction, which is currently engaged in the design and construction of the Balara Sludge Treatment Plant for the Metropolitan Waterworks and Sewerage System, and the structural design and retrofitting of the Balara Waste Treatment Plant in the MWSS compound in Quezon City.

On its website, M.E. Sicat Construction also boasts of being “a contracting and service-based company serving both government and private institutions. The group’s principal activities are engineering, resource management, supply chain solutions, building, pipeline services, civil construction, and utilities.”

Bam’s dad

Aquino received as well a campaign contribution of P 10.2 million from his father Paul Aquino, who had been heavily engaged in the extractive industries, particularly in geothermal energy extraction, until his retirement in 2010.

Prior to his retirement, Paul Aquino had been president and Chief Executive Officer of Energy Development Corporation, in 2004, when it was still a government-owned and -controlled company under the Philippine National Oil Company, and carrying over the position well past the EDC’s privatization and sale to the Lopez group in 2007.

After 2007, Paul Aquino also became president of Green Core Geothermal Incorporated, a generation, distribution, and transmission company owned by the Lopez group.

Replying to inquiries sent by PCIJ, Paul Aquino stressed that he is no longer connected with the EDC or any of its subsidiaries.

“I have retired as an officer and director of Energy Development Corporation and its operating subsidiaries as of July 2010,” the older Aquino said in an email.

Senator Bam Aquino also responded via email to questions sent by the PCIJ. Bam Aquino said that “our basic policy was not to accept from individuals alleged or connected to illegal gambling, drug trafficking and other illegal activities, aside from, of course, following the law.”

He added that “to my knowledge, we are compliant with all regulations specified in the Election Code.”

But when PCIJ sent another email raising concerns over the business links of Sicat, Lao, and his father, Senator Aquino said his staff would have to study the matter further.

“Thank you for pointing this out,” he said. “Again, all contributions were accepted in good faith. In any case, let me check this with our campaign accountants and finance team.”

Asked if the Liberal Party under whose wing he ran in 2013 had any specific policy on the acceptance of campaign donations, Aquino said the party may have worked within the same lines as his staff.

“I am sure the LP (Liberal Party) has similar policies,” he said, “but you will have to ask the party officers for these.”

Millions for LP

It appears, however, that President Aquino’s Liberal Party accepted donations from personalities who may belong to the prohibited list.

Documents submitted by the LP to the Comelec for instance showed that the Liberal Party had accepted donations of P5 million each from Willy Ng Ocier and Alfredo Macam Yao. Ocier is principal executive officer of property, leisure, and gaming firm Belle Corporation, and had a stint in the limelight in 2001 when he testified against former President Joseph Estrada in the graft and plunder charges against him.

The charges stemmed, in part, from allegations that Estrada obtained P189.7 million in commissions from the purchase of Belle shares by the Social Security System and the Government Service Insurance System.

Ocier is also chairman of Aragorn Power and Energy Corporation, a firm set up in 2005 “to prospect, explore, exploit, extract, produce, purchase or otherwise acquire, store, transport, use, market, distribute, exchange, sell… any and all kinds of petroleum and petroleum products, oil, gas and other volatile substances.”

SEC records appear to show that Ocier only has a nominal share of one in the company, with almost total ownership belonging to the APC Group. But further research in the SEC showed that Ocier is also chairman of the APC Group, and in fact owns 36 percent of the APC Group.

As well, he owns 79 percent of the Kalinga Apayao Geothermal Resources Inc., an electricity distributor registered with the SEC in July 2010.

Yao, for his part, is president and chief executive officer of Asiawide Airways Incorporated, registered with the SEC in 2008. Asiawide is an aircraft transport and charter company, of which Alfredo owns 20 percent. Sixty percent of Asiawide is owned by AMY Holdings, which, incidentally, is 54.8 percent owned by Alfredo Yao as well.

PCIJ has been trying to schedule an interview with LP Secretary General Mel Senen Sarmiento. But Sarmiento’s staff said the matter has already been referred to LP general counsel Raul Daza.

Team PNoy kitty

There were other problematic donations made to senators who ran and won under the administration’s Team PNoy.

For instance:

• Team PNoy guest candidate Senator Francis Escudero received P10 million from Reynaldo Manalansan, owner, president, and chairman of Tokwing Construction. Tokwing is heavily engaged with the DPWH, with at least 15 pending projects ranging from P4 million to P429 million mainly for flood control.

• Escudero also received P10 million from Jose D. Acuzar of New San Jose Builders. Years earlier, Acuzar had been involved in the building of the P2.8-billion mass housing project in Rodriguez, Rizal called ‘Erap City.’ Acuzar’s firm was also responsible for renovating the famed Boracay mansion along 11th reportedly as a gift to then President Estrada in exchange for the contract.

• Senator Juan Edgardo ‘Sonny’ Angara of the Laban ng Demokratikong Pilipino received P5 million from his cousin, Riza Angara Moises, owner of the bus firm Genesis Transport Services. Moises is also the treasurer of the Sierra Madre Pacific Renewable Energy Corporation.

• Angara also received P7.5 million from Jaime E. Chua, owner of JAC Transportation Systems, operator of the bus firm JAC Liner. A search of SEC records also showed that Chua is involved in Auto Bus Transport Industries Incorporated, and Metro Manila Bus Company Incorporated. Chua also donated P2.5 million to the LDP campaign.

• Nacionalista Party Senator Alan Peter Cayetano received P7 million from Jose B. Baylon, vice president for corporate affairs of Nickel Asia, one of the biggest nickel mining firms in the country.

• Senator Grace Poe Llamanzares received P10 million from Thomas Tan, who is connected with MG8 Terminal Incorporated; Mactan Shipyard Corporation; Baseco Shipyard Corporation; Maple Tanker Corporation; Molave Tanker Corporation; and Narra Tanker Corporation.

• Too, Poe received P10 million from Michael de Leon Escaler, treasurer of the Mazzaraty Energy Corporation, which is involved in the generation, collection, and distribution of electricity. Escaler also owns 60 percent of Andrew and Gray Transport Incorporated, and Whitelands Express Inc.

PCIJ sent letters of inquiry and letters requesting an interview with these senators and donors. Most of them did not reply to the PCIJ’s requests for interview or comment.

Jaime Chua, who acknowledged making a donation to the campaign of Senator Angara, sent a written reply to the PCIJ where he stressed that he “made the donation in my personal capacity, but of my own income/savings.”

Chua wrote, “The public utility company of which I am one of the stockholders, and of which (sic) a grantee of a franchise from the LTFRB, is NOT the donor for the campaign of now Senator Angara.”

“The main consideration of my donation is my close friendship with a relative of Senator Angara,” he added. “It has nothing to do with the corporation to which I am a stockholder.”

Personal not corporate?

Another Angara campaign donor, Riza Moises, had a similar response. “I made a personal donation,” she said in a letter to the PCIJ. “It was distinct and separate from the company’s expenditures.”

Moises also said that she and other relatives donated to Angara’s campaign because he is kin.

She wrote, “We are low profile supporters who were in the campaign because of one inextinguishable link – blood. No other reason. The donation was an obligation to family. And I believe it was legal.”

“Were it not for the legal bar,” she noted, “our company would have donated to Sonny’s campaign in a major way.”

“Unfortunately,” comments LENTE’s Caritos, “if you look at our electoral history, no one is ever sent to jail, no one is even charged among the corporations or the officers of the corporations. We have not yet really enforced our campaign finance laws and regulations.”

But she seems to be hoping that may yet change. With Comelec’s newly created Campaign Finance Unit, Caritos says LENTE and other lawyers groups are hoping that donors, candidates, and political parties will finally take campaign finance more seriously, as a first step toward taking elections, and the principles of democracy, more seriously as well. – PCIJ, October 2013

‘High rollers’ rule Senate donors, give P795-M in campaign funds
Last of Three Parts

While most of the tycoons who bankrolled candidates and political parties in the 2010 Presidential elections were curiously absent, the 2013 midterm elections still had high-roller donors who accounted for the bulk of the campaign donations made to the 12 winning senatorial candidates and their political parties.

Only 2,368 donors – 2,174 persons and 194 corporations – contributed the P1.69 billion that went to the campaign purses of the 12 winning senatorial candidates and their political parties, according to the Statements of Election Contributions and Expenditures (SOCEs) submitted to the Commission on Elections (Comelec).

Of the total contributors, only 421 comprise what could be called the “Millionaires Club” who gave P1 million to P4.9 million each.

At the top rung of the money pyramid, however, is the “High Rollers Club” of only 90 donors. They contributed at least P5 million to at most P63.2 million to their favored candidates and political parties.

In contrast, what might be called the “Taumbayan” category, or those who donated from P500 to less than a million constituted 78.4 percent of total donors. This large group, however, accounted for less than 13 percent of total donations, or only P223.9 million.

This situation indicates that while elections are supposed to be an exercise in representative democracy, only a select few really bother to gamble – and gamble big – in those who offer themselves in elections. More importantly, this also means that those who run and win in the elections now tend to owe more and more to fewer and fewer people.

Granting that the SOCEs filed by the winning senatorial candidates are accurate, it appears that only a handful of the 52,745,861 registered voters believed in their candidates enough to make a donation to the campaign.

In fact, only 10 individual donors account for P315.8 M or 18.6 percent of the total contributions the winning senatorial candidates and their political parties received in May 2013.

“A donation to a political campaign is really a bet on a candidate that you think is deserving of that position,” says Comelec Commissioner Luie Tito Guia. Unfortunately, he says, many Filipinos are averse to the idea of donating to a candidate’s political campaign. This leaves the door wide open for other political or economic interests to take over in the competition to be heard and represented.

“People here see elections differently, they have such a cynical view of the elections and the political process,” Guia says. “That view is that politics is only for the politician. They do not see the relationship of the elections to their daily lives.”

Millionaires and others

For purposes of this research, and to better illustrate the profile of those who gave money and services to the campaign, PCIJ classified the individuals who donated P1 million up to P4.9 million under The Millionaires’ Club, while the High Rollers gave P5 million and higher. The Taumbayan category is composed of those who gave less than a million.

Interestingly, the Millionaires’ Club, or those who gave from P1 million to P4.9 million, makes up 17 percent or 421 of the total donors.

This small percentage -- only around one out of every six donors -- gave 39.7 percent or P671.4 million of all the donations to the political parties and the winning candidates.

The even more elite group of High Rollers, or those who could afford to give P5 million or more, shows the disparity in even starker relief. The High Rollers are composed of 90 individuals or entities, or just 3.8 percent of the total donors. But this tiny group donated almost half or P795.2 million of the total amount given to the winners and their parties.

In contrast, those in the Taumbayan category, or donors who could afford to give less than a million, account for eight out of every 10 campaign fund contributors, or 78.4 percent of the total. Yet this large group raised only P223.9 million, or roughly P13 out of every P100 donated in 2013.

“Of course,” says Guia, “the ideal is that small donations are made by more people. The best concept of donations is the piso-piso or pass-the-hat donation, where you see a broader support for one candidate. An election is basically one person, one vote. Theoretically, the boss of the winner is the voter, and all their votes are equal. But the money upsets the balance.”

“It is not farfetched to think that many of those who donate large amounts, the high rollers, want to protect their investments,” he continues. “And conversely, as a candidate, you will have second thoughts about questioning a contributor who gave you a large donation in the elections.”

“That,” says Guia, “is the prevailing perspective of those who donate in elections -- that there is a large expectation of a return of investment.”

Few big, many small donors

Broken down by individual donations to candidates, the numbers show the disparity between the millionaires who gave so much, and the ordinary folk who gave so little.

• Of the 79 individuals who contributed P80 million to the campaign of Joseph Victor Ejercito, seven belonged to the Millionaires’ Club or the High Rollers, while 72 belonged to the Taumbayan. Yet, these seven donors, while constituting just eight percent of the number of individual donors to Ejercito, gave eight out of every 10 pesos (82 percent) of the contributions.

• Of the 58 individual donors who gave P81.6 million to the campaign of Francis Escudero, 32 gave a million pesos or more, making up 55 percent or more than half of his donors. This 55 percent gave up to nine out of every 10 pesos (91 percent) or P74.2 million of his total individual donations.

• Of the 58 individuals who gave P125.4 million to the campaign of Paolo Benigno A. Aquino IV's campaign, 39 donors or 67 percent gave P1 million or higher. These members of the Millionaires’ Club and the High Rollers donated 88.6 percent of the funds reported to have been received by Aquino.

• Of the 35 individual donors who gave P104.5 million to the campaign of Grace Poe-
Llamanzares, 32 (or 91 percent) belonged to the Millionaires’ Club and the High Rollers, with their donations totaling P99.2 million or 95 percent of her kitty.

• Alan Peter Cayetano's SOCE recorded 79 donors, with 51 or 64 percent belonging to the Millionaires’ Club or the High Rollers. These 51 donors gave his campaign a total of P110.5 million, or roughly 92 percent of the total donations he received.

• For the campaign of Aquilino Pimentel III, 130 individual donors gave a total of P54.8 million, 74 percent of which was donated by the Millionaires’ Club and the High Rollers, which constituted 17 percent of the donors.

• Loren Legarda’s campaign benefitted from P42.1 million from 17 individual donors, with 13 of the donors, or 76 percent of them, giving P40.6 million or 96 percent of the donations.

• Gregorio Honasan II received P23 million in donations from 29 contributors, 44 percent of them belonging to the Millionaires’ Club, which gave 91 percent, or P21 million of the total.

• Antonio Trillanes IV received P29.5 million in contributions from 73 donors, only 8 of whom belong to the Millionaires’ Club. The Club, making up 11 percent of the Trillanes’s donors, gave 40 percent of the total donations.

• For Juan Edgardo Angara, there were 66 individual donors who gave P92 million. Some 28 percent of the donors belonged to the Millionaires’ Club and the High Rollers, giving 90 percent or P84 million of the total.

• Interestingly, there was only one individual donor who gave to the campaign of Cynthia Villar, in the person of Alex Syfu, who gave P2 million.

• In contrast, 1,225 individuals donated a total of P136.87 million to the campaign of Nancy Binay. Of this number, only 30 individuals gave a million pesos or more, or just two percent of the donors. These 30 individuals gave a total of P58.5 million to the campaign, meaning Binay's millionaires donated 42 percent of her campaign kitty.

Nancy’s small donors

Binay's profile of donors is also of note because of the number of small donations that were recorded in her SOCE, especially when compared to those of other senatorial candidates. While she received one donation of P7 million and two donations of P5 million, she also claimed in her SOCE to have received 25 donations of P500 each, as well as 63 donations of P1,000 each.

By comparison, the smallest donation received by Angara and Pimentel were P5,000 each while the smallest received by Aquino and Cayetano were P10,000 each. The smallest donation received by Ejercito was P50,000. Senator Grace Poe-Llamanzares's smallest donation, meanwhile, was P1,000.

What the numbers show is the preponderance of large donations from the Millionaires’ Club and the High Rollers to the candidates – in some cases constituting up to 100 percent of the total donations received by some of the candidates. While the amounts of money and services donated are not in any way illegal as the country does not have a donation cap, it illustrates how much of the campaign kitties spent by the candidates in the last elections have been cornered by the big donors.

Political party spread

In the United States, the contribution limit set by the U.S. Federal Election Commission in 2013 for individual donations was only $2,600, or roughly P106,600. Furthermore, the U.S. Federal Elections Campaign Act prohibits donations by corporations, labor organizations, federal government contractors, and foreign nationals.

In the Philippines, individuals may donate to either the candidates or the political parties, according to the same election rules. The major political parties that manage to get bigger numbers of their candidates elected tend to attract bigger donations.

A total of 398 individual donors contributed P634,615,606 to the national political parties in May 2013. At least 148 of them, or 69 percent of the donors, donated P1 million and above, earning them a berth in either the Millionaires’ Club or the High Rollers Club. These elite groups gave 96.5 percent of the total contributions to the political parties.

But the bigger political parties got bigger amounts of donations, and mostly from donors who gave P1 million or more.

The donations to the Pwersa ng Masang Pilipino (PMP) of deposed President and now Manila Mayor Joseph ‘Erap’ Estrada – who has projected a pro-poor image of himself since his days as a movie action star – came entirely from donors belonging to the Millionaires’ Club and the High Rollers. The P40.5 million in individual donations to the PMP came from just 15 donors who each gave P1 million or more to Estrada’s party.

Not to be outdone, 99 percent of the individual donations to the Nationalist People’s Coalition (NPC) of businessman Eduardo ‘Danding’ Cojuangco Jr. came from the Millionaires’ Club and the High Rollers, too. In fact, NPC had only four individual donors who contributed a total of P31.6 million of the P31.8 million that the party received in May 2013.

UNA, LP: Same, same

The opposition United Nationalist Alliance (UNA), meanwhile, received P72.75 million in donations from 57 contributors. Twenty-two donors who gave P1 million or more account for 97.5 percent of the total contributions.

The administration Liberal Party was not far behind, with 71 individual donors giving a total of P177.2 million to it. Of these 71 donors, 51 gave P1 million or more each, or a total P169.7 million – 95 percent of the total donations received by the party.

The Laban ng Demokratikong Pilipino (LDP), allied with the administration in the last elections, received P34.79 million from 31 donors, with 12 donors giving at least P1 million each or 91 percent of the total donation.

In stark contrast, former President Gloria Macapagal Arroyo’s Lakas-Christian Muslim Democrats (Lakas-CMD) party, which used to lord it over Congress when she was still in power, said it received only P395,000 in donations, a startling claim for a party that held the reins of power for nine years. Interestingly, too, the party’s SOCE identified the donors only as “Lakas-
CMD members” instead of identifying them by name as required by law.

Other political parties also reported little or no donations: the Kilusang Bagong Lipunan, the old party of deposed President Ferdinand Marcos, said it got no donations at all, as did the PDP-
Laban and the Social Justice Society. The Partido Lakas ng Masa said it received P820,000 from senatorial candidate Ricardo Penson (who ran as an independent candidate), while the Centrist Democratic Party and Ang Kapatiran claimed they received only P305,000 and P290,000 respectively.

Manny’s millions

When it comes to individual donors, by far the biggest donation made by a private person to any of the senatorial candidates or parties was by Manuel Villar Jr. to his Nacionalista Party: P63.2 million. Villar also contributed an additional P10 million to the campaign of Alan Peter Cayetano.

Other high rollers include:

• Former Senator Edgardo J. Angara, who donated P40 million to the campaign of his son Juan Edgardo ‘Sonny’ M. Angara.

• Alice G. Eduardo, who donated P25 million to the NPC. Eduardo is also head and chief executive officer of the construction firm Sta. Elena Development Corporation.

• Jorge I. Araneta, chairperson of the Araneta Group of Companies, who gave P25 million to the Liberal Party.

• Plastics tycoon William T. Gatchalian, who contributed P20.9 million to the campaign of UNA. Gatchalian also contributed another P10 million to Estrada’s PMP party.

• Jose Go Ranola, of Legazpi Premium Development Corp. based in Albay, who donated P20 million to the campaign of Joseph Victor Gomez Ejercito. His mother Guia Gomez also contributed another P20 million to Ejercito’s campaign.

• Judy Araneta Roxas, mother of Liberal Party stalwart Manuel ‘Mar’ Roxas II, who gave P20 million to the Liberal Party.

• Business tycoon Iñigo Urquijo Zobel, who donated P15 million to the campaign of JV Ejercito. Zobel is also the president of AirPhil Express, a budget airline company.

Grace Poe-Llamanzares also received P18.2 million from the movie production outfit of her late father Fernando Poe Jr., FPJ Productions. Another P17.3 million came from her mother Jesusa Poe, also known as Susan Roces. In addition, Poe-Llamanzares received P10 million each from businessmen John Paul Ang, Edwin Lee Luy, Michael de Leon Escaler, and Thomas Ang Tan.

Paolo Benigno ‘Bam’ Aguirre Aquino received donations of P10 million each from his father Paul Aquino, uncle Agapito Aquino, and mother-in-law Consuelo Gomez.

Francis Escudero received P10 million each from Reynaldo Manalansan, president of Tokwing Construction, and Jose Rizalino Acuzar, head of New San Jose Builders.

UNA received P10 million each from businessmen Eric Ramos Tagle and Juan Tan Ng.

Curiously, none of the top 10 high rollers figure in the top 500 individual taxpayers of the Bureau of Internal Revenue (BIR) from 2008 up to 2011, the latest list available.

“People need to see that they also need to support their candidate, and not leave that candidate to rely on those who have businesses and other interests,” comments Guia. “This way, there is not as much temptation for the politician to favor a businessman.”

Commissioner Christian Robert Lim, head of Comelec’s Campaign Finance Unit Steering Committee, says the fact that big donors have cornered the list of campaign contributions is just a reflection of the kind of patronage politics the country has – that voters do not see politicians as needing their support. Rather, they see politicians as a source of benefits.

“This goes hand in hand with the reason for vote-buying,” Lim says. “Why do many sell their votes? Because vote-buying is getting institutionalized in our culture. The masses feel that it is only during election season that we can get something back from the politician.”

Lawyer Rona Ann Caritos, acting executive director of the Legal Network for Truthful Elections, or LENTE, sees the same problems. She notes, “In patronage politics, you expect the politician to give to you. It is not you the voter who will be giving to the candidate. So the candidate should give you everything, for burial expenses, for school, for roads, for covered courts.”

The ideal, she says, is to democratize the contributions by broadening the support base. For example, she says, one of the techniques used by U.S. President Barack Obama when he ran for reelection was to raise money from ordinary Americans through mobile phone credits. U.S. citizens could simply transfer or donate money to his campaign using their cellphones.

Given the consistent trend of campaign financing in Philippine elections, that idea would almost seem preposterous – even laughable – to Filipinos who, ironically, are already quite familiar with the concept of the pasa-load.

Indeed, it’s hard to imagine having a local candidate ask his supporters for cellphone load – not if the candidate is seen more as a patron and a source of largesse, than a candidate who needs popular and financial support.

Lim, however, offers another scenario: “To me, if you are able to raise contributions in a way that you do not really identify who your contributor is, there would no debt of gratitude on the part of the candidate when he is discharging his functions.” – PCIJ, October 2013

Source: GMA News Online


I am a Responsible and Principled Citizen.

I will educate myself and others about the issues at hand so that my vote is a meaningful and relevant exercise of my right of suffrage.

I pledge to vote for candidates who will abide by the duly constituted rules on campaigning because I understand that those who refuse to obey the law in the little things are not likely to obey the law in the more important things;

I pledge to vote for candidates who, by word and action, renounce violence, coercion, vote-buying, and corruption as means for getting elected;

I pledge to vote for the candidates who listen to their constituents and are responsive to the needs and aspirations of those they seek to represent;

I pledge to vote as my conscience dictates in all elections.

I make these promises freely and upon my honor.

(This Voter Pledge was read at the Unity Walk of 13 January 2013, by COMELEC Commissioner Elias R. Yusoph)