Hutchcroft, P. (1998), Booty Capitalism: The Politics of Banking in the Philippines, Cornell University Press, Ithaca, NY. At best, high-ranking officials accused of corruption have been shamed and jailed. This article contextualizes corruption and implementation as it occurs in the Philippine Department of Education (DepEd). Corruption at this level usually involves large sums of financial and state resources. Neri had informed GMA of the Abalos bribe offer to him, to which the president advised non-acceptance (SBRC, 2009, p. 49). Nation. (Eds), Routledge Handbook on the Contemporary Philippines, Chapter 10, Routledge, London, pp. In the BNPP project, the U.S. government was involved directly through the project loan financing provided by the U.S. Export–Import Bank. Last month, the Philippine leader ordered the Department of Justice, which plays the role of public prosecutor, to investigate the “entire government” for corruption until the end of his term in 2022. Corruption at various levels of government is rampant in weak or inferior democracies than in well-developed ones, leading to the belief that having a democracy alone does not guarantee effective control of corruption (UNODC, 2019; Kukutschka, 2018). The analysis should also cover the scandal's resolution or closure. Similarly, the level of corruption varies across authoritarian systems, with monarchies and single-party systems tending to be less corrupt than military and personalistic regimes; in fact, as Kukutschka (2018, p. 4) points out, “a small number of non-democratic countries perform relatively well in international corruption indices.” In either democratic or authoritarian systems, the commission of grand corruption is typically driven by personalistic and patronage-clientelistic motivations that benefit rulers and the dominant political elite, political parties and allies, cronies and friends, as well as families and relatives (David-Barrett and Fazekas, 2019; Chang and Golden, 2010). Both scandals share a number of elements from the process of contracting to their resolution. No. 1989)”, 18 May, available at: https://law.justia.com/cases/federal/district-courts/FSupp/714/1362/2258760/ (accessed 21 September 2019). Thus, instead of simply regime type, it could be argued that it is the continued weakness of governance institutions that allows the culture and agency of corruption to thrive and persist, even at the highest levels of government. The Sandiganbayan and the Supreme Court decided on the Disini case during President Benigno Aquino's term. 1, pp. He is co-editor of the Routledge Handbook of the Contemporary Philippines (2018) and the author of several journal articles and book chapters on regional and Philippine politics, corruption and economic development. The Arroyo government's damage control included the cancellation of the NBN–ZTE contract as well as the suppression of key witnesses (e.g. The House of Representatives impeached Ombudsman Gutierrez and she resigned in April 2011 before the conviction trial at the Senate. 90-91). Batalla, E.V.C., Torneo, A. and Magno, F. (2018a), “A survey of political interference patterns and modalities in national roadworks in the Philippines”, Asia Pacific Social Science Review, Vol. 155 No. However, such measures only fuelled further public suspicions and strengthened the justification for the SBRC's prolonged investigation of the scandal. Disini's profit from the BNPP project was not limited to commissions. 91 No. The U.S. government, through its Export–Import Bank, provided project financing with a US$272.2 million loan and a guarantee of an additional US$367.2 million for NPC bonds. and Rodrigo, K. (2018b), “The judiciary under threat,”, in Thompson, M.R. Scandal, according to Lowi (1988, p. vii) is “corruption revealed;” it is “breach of virtue exposed.” In his analysis of scandals, Lowi (1988, p. viii) argues that the exposé of corruption (the first news break or the substantive scandal) is often followed by a more controversial cover-up phase or the procedural scandal. Senate Blue Ribbon Committee (SBRC) (2009), “NBN-ZTE, committee report no. ZTE's NBN deal with the government was negotiated within the framework of the Philippine–China Economic Partnership, which was established in June 2006 as a result of China's diplomatic offensive in Southeast Asia. On the contrary, in many cases, there is no other way to transact on certain matters. Republic of the Philippines vs. Westinghouse Electric (1989), “U.S. Up to this point, the hearings have collected information that could help the … If you are the exception, you will actually be the target of the ombudsman and, chances are, will be the first to be removed from office. Presidential Commission on Good Government (PCGG) vs. Desierto, Ananiano, Herminio T. Disini, Paciencia Escolin-Disini, Angel E. Disini, Liliana L. Disini, and Lea Disini (2003), “Supreme Court G.R. Our conversations with these respondents have allowed us to develop a diverse and comprehensive picture of how transparency, information communication technology (ICT) and civil society engagemen… Of the revised total project cost, Westinghouse would share US$677.1 million (or 61% of total cost) and NPC US$432.3 million. Bolongaita, E. (2010), An Exception to the Rule? In October 2007, amidst the Senate inquiry, Abalos resigned from his post as the Comelec chair. The persecution of GMA and other government officials began. A week after, newspaper columnist Jarius Bondoc revealed the involvement of an unnamed official of the Commission on Elections (Comelec) in the allegedly overpriced deal (ABS-CBN News, 2009). But though it will be a good solution, its success will still depend on its implementation. It was also during his term that criminal charges were filed against GMA. The TMI accident caused a partial nuclear meltdown, therefore raising alarm worldwide about the safety of nuclear energy. “Given these issues, it comes as no surprise that vibrant economic powers like China (41), Indonesia (40), Vietnam (37), the Philippines (34) and others continue to struggle to tackle corruption,” it added. In 2009, Ombudsman Gutierrez dropped charges against GMA in connection with the NBN–ZTE project because of her immunity from being sued as the president. As much as 85% in the Philippines believe that the government is doing a good job in addressing corruption, better than the Asia average of 61% and third highest among the countries surveyed. So let’s hope that it will be enacted as a law soonest. The former Philippine police chief and Rodrigo Duterte’s chief drug war enforcer, Oscar Albayalde, will be charged with corruption. The final contract revealed three significant changes from the original 1974 proposal. To dismiss the Disini connection in the Westinghouse deal, Marcos explained that the decision was based on an earlier report of foreign consultants. By early 1986, the total project cost had risen to US$2.1 billion, or a billion dollars more than the original contract price in 1976. Aquino was of course against Marcos and his cronies. Sandiganbayan orders Marcos crony to return $50-M loot in nuclear plant deal, Reasons of state: Citicorp report ignored by Philippine government, What is grand corruption and how can we stop it, United Nations Office on Drugs and Crime (UNODC), Anti-Corruption Module 3: Corruption and Comparative Politics, United States Nuclear Regulatory Commission (USNRC), Trailblazing: The Quest for Energy Self-Reliance, Treading the straight and righteous path: curbing corruption in the Philippines, Filipinos say Marcos was given millions for '76 nuclear contract, http://creativecommons.org/licences/by/4.0/legalcode, https://news.abs-cbn.com/nation/02/15/09/after-22-years-govt-ends-presentation-case-vs-marcos-disini, https://news.abs-cbn.com/business/06/16/14/bnpp-broker-herminio-disini-passes-away, https://www.washingtonpost.com/archive/politics/1984/08/16/crony-capitalism -blamed-for-economic-crisis/d99e8760-087d-4d25-ad66-3d324150dc4d/, https://www.treasury.gov.ph/?page_id=4221, https://www.nytimes.com/1978/01/14/archives/marcos-facing-criticism-may-end-1-billion-westinghouse-contract.html, https://www.nytimes.com/1988/12/02/business/westinghouse-jersey-firm-are-sued-by-the-philippines.html, https://old.pcij.org/stories/the- grandmother-of-all-scams-3/, https://archive.fortune.com/magazines/fortune/fortune_archive/1986/09/01/67989/index. Branigin, W. (1984), “Crony capitalism' blamed for economic crisis”, Washington Post, 16 August, available at: https://www.washingtonpost.com/archive/politics/1984/08/16/crony-capitalism -blamed-for-economic-crisis/d99e8760-087d-4d25-ad66-3d324150dc4d/ (accessed 22 July 2019). The following sections provide descriptive accounts of the BNPP and NBN scandals, followed by the comparative analysis and conclusion. Tiglao, R. (1992), “Reasons of state: Citicorp report ignored by Philippine government”, Far Eastern Economic Review, Vol. In 2008 a new election commissioner took over with the brief to clean up the organisation and control the electoral violence, with a focus on the next presidential elections in 2010. The Ombudsman argued that the contract was “grossly and manifestly disadvantageous” to the government because (1) the actual cost of the ZTE proposal was US$130 million and therefore overpriced at the signed contract price of US$329 million; (2) the ZTE project covered only 30% of the country compared to the AHI's proposal of 80% coverage and (3) the project was to be financed by a loan from China versus the AHI's BOT proposal which would not entail any cost to government (People of the Philippines vs. Arroyo et al., 2016, p. 2). Abstract. She was allowed to return to the Philippines in 1991, and in 1993 a Philippine court found her guilty of corruption (the conviction was overturned in 1998). (2018), “Anti-corruption strategies for authoritarian states”, U4 Helpdesk Answer, 2018:7, 20 May, pp. In an earlier court decision, the Supreme Court also acquitted Arroyo for lack of evidence in a plunder case involving the alleged misuse of intelligence funds of the Philippine Charity Sweepstakes Office (Macapagal-Arroyo vs People of the Philippines, 2016). 10, 000.00 to Php. Later, Joey De Venecia led in exposing anomalies in the deal. Republic Act No. United Nations Office on Drugs and Crime (UNODC) (2019), “Corruption and democracy”, Anti-Corruption Module 3: Corruption and Comparative Politics, December, available at: https://www.unodc.org/e4j/en/anti-corruption/module-3/keyissues/corruption-and-democracy.html (accessed 7 January 2020). The weaknesses of Philippine governance institutions to curb grand corruption in government procurement projects during the past half-century could be gathered from a comparison of the two scandals. In case of Major General Carlos Garcia, the first active general to be indicted in court for corruption in the Philippines, his ill-gotten wealth included an expensive condominium unit at Trump Tower in New York City and several dollar deposits in the United States. 3, pp. Associated with the House Speaker was National Economic Development Authority (NEDA) Secretary Romulo Neri (SBRC, 2009, p. 1). 4, pp. Second, the parties agreed to transfer the site from Bagac, which was found to be more vulnerable to tidal waves, to Morong, which was 18 metres above sea-level but nearer a volcano. On 24 June 2016, the Sandiganbayan granted the request and as provided by the rules of criminal procedure, gave Arroyo et al. Westinghouse out-manoevered GE by employing Herminio Disini as its special sales representative. There, he allegedly acquired citizenship and a castle. The OMB cleared GMA and her husband but recommended the filing of administrative and criminal charges against Abalos and Neri. While plant construction was undergoing in March 1979, a nuclear disaster struck in the United States at Three Mile Island (TMI). It took more than 20 years before the Philippines could fully settle the NPC's BNPP financial obligations. However, this system of checks and balances has not guaranteed the absence of grand corruption in the country. 23 No. Their comparison enhances the understanding of grand corruption in government-initiated projects involving foreign government and corporate entities. was for violation of Section 3(g) of the Anti-Graft and Corrupt Practices Act. Estrada, Villar and stock market—something in common? In 2016, the country placed 101st, 95th in 2016, 85th in 2018, 94th in 2013, and 105th in 2012. The BNPP was completed in mid-1985 and was prepared to operate in December. Before the SBRC hearings ended in August 2009, the OMB released the results of its own investigation. Bureau of the Treasury (2020), National Government Debt Service, Historical Series, Manila, available at: https://www.treasury.gov.ph/?page_id=4221 (accessed 6 January 2020). All this constitutes the collective inability of institutional and agency constraints to overpower the forces that create, adapt and maintain the opportunities for corruption. Transparency International (2016), “What is grand corruption and how can we stop it”, 21 September, available at: https://www.transparency.org/news/feature/what_is_grand_corruption_and_ how_can_we_stop_it (accessed 6 January 2020). The cases against Imelda Marcos et al., for example, have been pending since 1986 when the Marcos dictatorship was toppled by angry citizens. That explanation did not stop U.S. media criticisms of corruption and rising crony capitalism, as represented by the BNPP, as well as the spectacular rise of the Disini business empire through presidential influence. Consequently, the new Ombudsman at the time of the Supreme Court decision filed graft charges against the Marcos crony. People who pay 300 pesos to have the written part of their driver's licenses filled up for them are corrupt. Similarly, the two cases raise questions concerning the OMB's competence and behaviour. What obviously contrasts the two projects is that the ZTE contract never pushed through unlike the BNPP, whose liabilities had to be settled for decades. The two proposals bore different implications in terms of ownership and control. Consequently, Disini was arrested but was later released on PhP54,000 bail. ABS-CBN News (2009), “After 22 years, govt ends presentation of case vs Marcos, Disini”, 16 February, available at: https://news.abs-cbn.com/nation/02/15/09/after-22-years-govt-ends-presentation-case-vs-marcos-disini (accessed 3 September 2019). Corruption In The Philippines. A Senate witness identified other brokers particularly Ruben Reyes, a private businessman and alleged close friend of GMA's brother (SBRC, 2009, p. 62; Sabangan, 2008). Consequently, the U.S. Nuclear Regulatory Commission (USNRC) issued guidelines for the upgrading of plant design and equipment requirements as well as other disaster preventive measures (USNRC, 2018, pp. Asian Wall Street Journal (1995), “Westinghouse, Philippines sign settlement on plant”, 16 October, p. 2. One of the issues raised by NPC was that many contract provisions were “onerous, unacceptable, or inconsistent with the turn-key approach to project implementation” (PCGG vs Desierto et al., 2003). At the time of its divestment in 1981, the Herdis group included more than 30 companies under its umbrella. Jacob had claimed that Disini's commissions were deposited in his personal Swiss bank accounts and not to Herdis' accounts. Bribery and corruption have been on the rise in the Philippines in the last two years, a global research group says, pointing out that about a fifth … Favoritism and undue influence are widespread in the courts, leading to time-consuming and unfair dispute resolution, and to an uncertain business environment. November 26, 2020 BY: Daphne Galvez. On 25 August 2016, the Sandiganbayan issued its resolution exonerating the Arroyo spouses, Abalos and Mendoza for lack of evidence to establish allegations of overpricing, the existence of a conspiracy and the disadvantages of the ZTE–NBN contract (Macapagal-Arroyo vs. People of the Philippines and Sandiganbayan, 2016). Foreign media exposed the anomalous BNPP contract, which drummed up local opposition not only for the corruption but also for the nuclear plant's potential harm to public safety and the environment. Motions for dismissal 3 ) types of corruption appears to be massive on the evidence provided by Philippine. 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