by CHAY FLORENTINO-HOFILEÑA and IAN SAYSON

MONTHS BEFORE the May 1998 presidential elections, the Lakas party, through campaign manager Cesar Sarino, opened a discreet, fund-raising office at the Manila Hotel where contributions to the then ruling party’s campaign were accepted.

Among those who visited Sarino’s office were representatives of the Bases Conversion Development Authority (BCDA) and the Clark Development Corporation (CDC), two government agencies involved in the construction of the Centennial Exposition in Clark.

Joseph Ocol, then head executive assistant to CDC president and chief executive officer Romeo David, recounted that during those visits, BCDA and CDC representatives delivered millions of pesos stashed in envelopes. The deliveries, he said in a recent interview, were made mostly in the afternoons when Sarino was present to accept contributions.

In an affidavit issued just last week, Ocol described how contractors working on the project were asked to make substantial donations to Lakas. Such contributions violate the Election Code, which bans direct or indirect contributions from companies or individuals with contracts or subcontracts with government agencies.

In his affidavit, Ocol said, “I witnessed the delivery of money by CDC and BCDA officials, as well as contractors and duty-free shop owners to a political office at the Manila Hotel.” He recalled going to the hotel at least “six times” either for meetings or deliveries.

In a statement submitted to the Senate blue ribbon committee early this year, Ocol – whose position made him privy to CDC biddings and transactions involving contracts, procurements and lease arrangements in Clark – described how “everybody in BCDA and CDC then at that time was desperate in (sic) coming up with all means and money to prevent Erap from winning in the elections.”

“That is why ‘Centennial’ was an overused word then,” he added. “It was the best alibi to shortcut rules and regulations to raise money from contractors, suppliers and businessmen in order to support the candidates for the May elections.”

One year after the centennial celebrations, controversy still hounds the sprawling 60-hectare Centennial Expo project, which cost the government more than P9 billion, according to investigations of the Senate blue ribbon committee. This amount is 1.7 percent of the 1998 national budget, almost equivalent to the allocation for a medium-sized government department.

After months of investigation, the blue ribbon committee discovered substandard work on some projects in the Expo site and irregularities in the disbursement of funds, but it was unable to trace where the money went and who should be held accountable. It also failed to pursue the leads provided by witnesses like Ocol who gave clues to the money trail, particularly in infrastructure projects.

Our own investigation shows that the centennial projects, which involved either support infrastructure or services for the Expo site, became a convenient vehicle for election fund-raising at the expense of the Filipino taxpayer.

Originally intended to catalyze development in both Clark and Central Luzon, the project has so far brought little tangible gains to the region. Instead, it reveals the inefficiency and extravagance of the Ramos government, which poured in billions into a project of dubious worth, while scrimping on other projects – roads, housing, etc. – that were sorely needed.

Government financing institutions were also pressured to bail out the Expo at the expense of other priorities like agriculture and housing because, officials involved in the centennial preparations reasoned, the country could ill-afford a sullied image during its first centennial.

Over 30 people involved with the Expo in some way were interviewed for this report. We examined the transcripts of the blue ribbon committee hearings and close to 30 folders containing documents submitted to the committee. Documents obtained from other sources were also used to piece together a story about government officials who were leading celebrations for the centennial while at the same time raising funds for a presidential campaign.

FUNDRAISING
Contractors and duty-free shop owners in Clark were among those tapped to help oil the Lakas campaign machine, according to Clark insiders. They were convenient targets because they had business interests to protect or were eager to make investments they could collect from in the future.

Lakas fundraisers, however, were torn between supporting Jose de Venecia Jr., Ramos’s preferred candidate, and former defense chief Renato de Villa, a long-time Ramos ally.

Torn between their loyalty to Lakas and their own personal preferences, some Ramos loyalists based in Clark were forced to work doubly hard to be able to contribute to both the de Venecia and the de Villa camps. Because they had quotas to meet in such a short time, some of these Lakas supporters, according to BCDA and CDC officials, turned to the multibillion-peso centennial and other related projects inside Clark.

At the helm of both the CDC and the BCDA were former military officials with known close ties to Ramos, and who were said to be rivals for the latter’s attention. CDC chief David, a retired Air Force general, belongs to the class of 1956, the same Philippine Military Academy class as then Ramos security adviser Jose T. Almonte. BCDA chairman Victorino Basco, a retired Navy captain, was in class 1957, the same class as presidential candidate de Villa.

Sometime in late December 1997, Basco and Nestor Mangio, a CDC board director who is also a Ramos ally, called for a meeting at the CDC conference room, Ocol recounted in his June 8, 1999 affidavit certified by an Ombudsman graft investigating officer.

“The purpose of the meeting was to find means of funding and helping certain presidential candidates in the coming May elections,” Ocol said. “Among those who attended the meeting were CDC/BCDA director Roberto Flores, vice president (Francis) Elum, vice president Angelino Medina, manager Monina Pineda, and manager Carmelo Villacete.” Ocol said he was present in that meeting. So was David, Ocol’s boss, said a CDC official who was also there.

“It was agreed that money was to be raised from contractors, smugglers, duty-free shop owners, importers, lessees and buyers of disposed equipment and materials,” Ocol added in his sworn statement. “The beneficiaries of the money raised from the aforementioned people were presidential candidates Jose de Venecia and Renato de Villa.”

Basco denies the meeting took place or that Ramos asked him to help raise funds for the campaign. “Mahihiya siya sa akin eh (He would be embarrassed to ask me),” Basco said. Besides, he added, Ramos knew he was for de Villa.

But two other CDC officials named by Ocol did not categorically deny that a meeting was called. Elum said he had “heard about it” but that he was not invited, while Pineda said she could not recall it and that she could not have been invited as well because she did not belong to David’s “inner circle.”

Ocol however countered that Pineda was CDC’s direct link to Malacañang because her husband was a “law partner” of Alexander Aguirre, who became acting executive secretary, and deputy executive secretary Renato Corona was a ninong in her wedding.

MONEY FROM CONTRACTORS
A month before the December 1997 meeting, Ocol said he had already learned about plans to raise money from Clark contractors for the elections.

Philippine National Construction Corporation (PNCC) vice president Ibarra Paulino, Ocol said in his affidavit, came to Clark to ask for David’s help in speeding up payments to build the 14-kilometer Mabalacat-Clark spur road. The PNCC got the contract to build that road although it in turn subcontracted the project to three other firms.

Because David was not around, Ocol said he entertained Paulino who came to Clark with his family. In the course of their drinking session, Ocol said, “I came to know about the plan of PNCC and BCDA to raise money from the contractors to support certain candidates in the coming May 1998 presidential elections.”

In his affidavit, Ocol said that Paulino admitted he brought “P2 million as initial ‘SOP’” which he was handing over to a CDC official to ensure his cooperation. “Paulino and I had some drinks at the Holiday Inn coffee shop” where he was to meet (that) official, Ocol said in his affidavit.

When the official arrived and talked with Paulino, Ocol said he sat at another table. “I saw (with) my own eyes” a long, brown, expandable envelope being handed to the CDC official, Ocol recounted in his sworn statement. When the official left, Ocol said Paulino told him that he got assurance from the CDC official that “he will not be a hindrance to the PNCC projects in Clark.”

The official denied he “ever asked Paulino for any amount whatsoever.” He also dared his accusers, “Kung totoo yang mga iyan, i-file niyo sa Ombudsman (If that’s true, file a case against me at the Ombudsman’s office).”

Paulino, too, denied the incident took place. “That’s ridiculous. That’s untrue because everything we do is audited by the Commission on Audit. We never engaged in such deals. What would we get from that when we are both government corporations?”

Also in November 1997, another former CDC senior official said contractors went to the Manila Hotel to attend informal meetings with Basco. The official said there were “not less than 10” people in one meeting held at noon, with two contractors present. One contractor handed over a P1-million check, the CDC official added.

BIG TICKET ITEM
All in all, there are about 18 centennial-related projects funded mostly by BCDA in Clark. Contract costs total some P3.67 billion, according to the CDC and BCDA. The biggest among these projects – about a third of the total – is the Mabalacat-Clark spur road.

The project was originally packaged as a joint venture between the PNCC and a subsidiary of Benpres Holdings Corp. But because of delays in securing government approval for the project, four government firms (BCDA, CDC, CIACOR and PNCC) took over, supposedly to speed up the project in time for the Expo. BCDA and PNCC took charge of contracts and implementation, while CDC and CIACOR or the Clark International Air Corp. also chaired by David handled administration.

Signing the documents for the project were David, BCDA’s Basco, who had just moved from his post as chairman of PNCC, and another retired military officer, Col. Rogelio Luis, who assumed Basco’s position at the PNCC.

Estimated by the Senate blue ribbon committee at P1.071 billion, the project was supposed to consist of two sections: the Mabalacat-Clark spur road, a four-lane 5.6-kilometer expressway from the Dau interchange to Clark; and the 8.7-kilometer Clark perimeter road that connects the spur road to Gil Puyat Ave. inside Clark and to the Centennial Expo site.

Early this year, the current BCDA chairman Rogelio Singson stopped the construction of the spur road after it was found to be of “substandard” quality and the performance of the contractor, PNCC, was found to be unsatisfactory. By then the government had already spent more than P200 million on the project.

The suspension of the work, Singson said, was by mutual agreement since the urgency was no longer there as the centennial year was over. “BCDA would have been in the red if we had not stopped. There is no way PNCC could have finished on schedule,” he added.

The Senate blue ribbon committee found that the project was tainted with irregularities, among them, illegal subcontracting by the PNCC and the absence of public bidding.

Referring to the spur road project, Willy Castor, national president of the National Constructors Association of the Philippines Inc., said, “Malakas ang lagayan diyan (there were big payoffs there).”

PNCC was given the P1.2 billion-contract but acted like a “broker,” according to Castor, because it subcontracted the project for some P628 million to three firms: R.D. Policarpio and Co., New Sampaguita Builders Construction, Inc., and Unicorn Construction Co., Inc.

Sampaguita, in turn, subcontracted four other contractors to do its work, providing a third layer of contractors. This is “disadvantageous” to the government because the “contract price is jacked up with the entry of each contractor or subcontractor who will factor in his mark-up,” the Senate report said.

In a letter to blue ribbon committee chairman Aquilino Pimentel last February, Basco defended the lack of public bidding in the spur road project, saying that “where time is of the essence,” projects may be undertaken by negotiated contract “subject to the approval of the President.”

He added that since PNCC is the “sole legislative franchisee to own, operate and maintain the tollways and their extensions,” subcontracting was its “prerogative.” BCDA, he said in a counter-affidavit submitted to the Office of the Ombudsman in October 1998, “had no participation whatsoever” in the selection and engagement of subcontractors.

On Dec. 15, 1997, Basco wrote Luis, giving him the “notice to proceed” or NTP for the project’s second section, the Clark perimeter road. Days later, Basco would be in that meeting where he supposedly talked of the need to produce campaign money for Lakas.

Castor said that after the NTP is issued, contractors get their initial downpayment to begin work. It is from this downpayment that commissions given out to officials are usually taken, he added.

MORE MONEY
In December 1997, the president of Leadway Construction, a contractor for at least two centennial-related projects worth over P50 million “turned over P1 million” to a BCDA and CDC director at Woodland Resort Hotel in Mabalacat, Pampanga, Ocol said in his affidavit. The money was in exchange for the official’s signature on the check payment for Leadway, Ocol said.

The official, according to other CDC officials, was said to be a close associate of then executive secretary Ruben Torres.

The official “wanted to hand me P100,000 to help him follow up the papers of Leadway,” Ocol said in his affidavit. “When I refused to accept the amount, he told me, “Kung ganoon, I’ll just donate this amount to the campaign fund of Lakas and Sec. Torres.”

Besides contractors, fund-raisers also eyed duty-free shop owners who were bold enough to smuggle items out of Clark. As part of the “fund-raising” effort, Clark officials agreed to tighten security and squeeze money “from those who made money at the expense of government,” Ocol said.

On Feb. 3, 1998, police operatives intercepted frozen duty free goods worth P800,000 that were about to be smuggled out of Clark via the Sapang Bato gate at noontime.

The goods were inside an Isuzu van with plate USG-273, according to an “After Operation Report” submitted by Clark security and fire department manager Carmelo Villacete to David.

“Further investigation revealed that the goods are owned by one Edgar Ti,” the report said, a “locator” or investor in Clark who is also president of ELT Enterprises and director of Gloria Maris restaurant.

Ti offered to settle. In his affidavit, Ocol said, “Although the goods smuggled cost only P1 million, Ti agreed to pay Villacete the P2 million because he did not want a scandal of a smuggling case against him. I personally witnessed Ti (give) the P2 million to Villacete because it was done inside my residence. He then took P100,000 from the envelope and tried to hand it to me. I refused to accept it and told him that it was against my religion.” The following day, Ocol said, the money was forwarded to CDC higher-ups.

Ti’s case, listed under violations of the tariff and customs code, was described as an “ongoing case” in an April 10, 1999 report of the Clark security and fire department. In another report the following month, the case was no longer part of the list.

Part of the campaign money raised by the Clark officials was eventually turned over to the Manila Hotel office, two former CDC officials confirmed. Some contractors went straight to their “solicitors,” said Castor. The contributions, he said, ranged from P500,000 to P10 million, with the average donation at about P1.2 million.

It is difficult to ascertain how much was raised all in all from these operations since the transactions were made mostly in cash and left behind no paper trail. Official Comelec records of contributors to the de Venecia campaign do not show the names of these contractors either.

Only de Villa’s list of campaign contributors revealed familiar names – Mangio, who contributed P1 million, businesswoman Nora Bitong who gave the same amount, and contractor Edgardo Angeles of Asia Construction & Development Corporation who shelled out P5 million.

The latter two would figure prominently in another facet of the centennial scam involving a much grander and more expensive project.