UNTIL NOW, no one in Malacañang admits to have had an acquaintance with Maryann Maslog prior to last Jan. 19, when she was accused of having brought a P3-million bribe, arranged neatly in a box, to the Department of Budget and Management (DBM). But while education department suppliers interviewed for this piece said that they also found it strange that she was there, they said it was only because they knew her "turf" to be Congress.

Maslog, they said, was a freelance agent who worked for several publishers in securing lucrative contracts covering textbooks and educational materials. She was known to work the legislative halls to land these deals.

Still, when she went to Malacañang that day, it was at the behest of a "consortium" of suppliers; she may not have been familiar with the venue, but it should have been business as usual. Maslog, said suppliers, was to hand over the "SOP," or kickback, for the DBM's release of a Notice of Allocation (NCA). This NCA, released four days before Maslog turned up in the Palace grounds, was the suppliers' assurance that they would be paid for a contract covered by a P200-million Special Allotment Release Order (SARO).

In separate interviews, suppliers said the consortium had budgeted a "20-all" for DBM, the Office of the President, the fixers and the go-betweens, meaning the bribes made up 20 percent of the contract. With the bungled operation, however, no one will now say who were supposed to receive the SOP. Said one publisher: "Who's gonna tell? I'm not gonna tell."

Although the bribery attempt was a fiasco, it is nevertheless telling of how far corruption has reached when it comes to contracts involving requirements of the Department of Education, Culture and Sports (DECS). The result of such large-scale corruption is tragic: Today millions of Filipino schoolchildren don't have textbooks and those that do are often using substandard texts.

The problem is that multimillion-peso book contracts at DECS have been clinched for years by suppliers who are more interested in the illicit earnings that they can make than they are in providing quality reading for students. In separate interviews these suppliers revealed how they have divided the spoils by forming groups and appropriating specific areas in DECS as their respective "territories."

To the new set of DECS officials, the typical book supplier is a sales agent masquerading as a publisher who operates either at the central office or in the field. Sometimes though, they say, a supplier can also have several agents working to corner contracts for his or her company.

These notions may well hold for smaller contracts. But for those involving millions of pesos in the division, region or central DECS office, it is often not a case of supplier versus supplier. Instead, suppliers—whether agents or publishers—join forces to run after these big contracts.

Suppliers prefer to call their groups "consortia," but DECS insiders use the more derogatory term "syndicates" to refer to these alliances, which they say began in the late 1980s.

The alliances were inevitable, suppliers explained. Most of them had begun as agents trying to supply the needs of DECS offices as much as they could. But as their business grew in the 1980s and they saw how especially lucrative the sale of supplementary materials was, many became publishers themselves and began hiring writers to develop titles for them.

The titles were submitted to DECS for adoption as textbooks for public schools. When they were rejected, the agents-turned-publishers instead got the titles approved as "supplementary materials" so they could still offer them to schools. By 1997, when the government began adopting several titles instead of just one from the private sector for use as textbooks in each grade level subject, many of these agents-turned-publishers successfully got into the list of DECS-approved textbooks.

Because their operations were small, most agents (now publishers) could only produce a limited range of titles, unlike the established publishing houses. The vastness of the DECS market—45,000 public schools in all— also proved too much for each of them to take on alone. By forming themselves into a consortium, suppliers were able offer even more titles and cover more ground in their marketing.

Each consortium has cut up DECS into territories and assigned a group or groups of agents whose full-time job was to woo principals, supervisors, superintendents and regional officials to buy their titles. This arrangement suited field officials because they did not have to deal with too many agents or publishers. The field soon began dealing only with these agents, making it very difficult for a newcomer. "You'd have to say who recommended you," said one publisher. "If you don't drop the right name, you're out."

One big Pasig-based publishing house discovered this harsh truth when it tried getting a share of the huge DECS market in 1997, shortly after it had gotten DECS to approve several of its titles for use as textbooks in the public schools.

The company's general manager recalled her optimism when their in-house sales representatives first tried to offer titles to school principals. Under the procurement guidelines issued that year, principals were to order books from the list of DECS-approved titles and relay their preference to district supervisor, who in turn gave the schools' choices to division superintendents. These superintendents then were supposed to consolidate the lists from the districts and forward the orders to the regional office.

"No one wanted to talk to them," the general manager said of her company's sales reps. "At schools, they were given the runaround by principals. They were also given the runaround by the superintendents. One sales representative tried to see the regional director; but he never got to see him. They (DECS people) just wanted to talk to people they knew."

The publishing house eventually hired agents who belonged to the consortium and paid them 30 percent in commission. Said the firm's marketing executive: "It's a temporary marriage of convenience."

Suppliers explained the system this way: One agent or publisher is armed with authority from several publishers to promote and distribute their titles and collect payment. Each group under the consortium is headed by a "captain ball" who runs after big contracts. It often falls on the captain ball to advance the "padulas" (grease money), which he or she later collects from the rest of the members whose titles got included in the package he or she fashioned for DECS field offices.

Two publishers and one broker said the consortia have their respective contacts in different government offices, all of them well-placed. They include people at both the DBM and DECS who tip them off them about funds that have been requested and funds that were available.

At DECS, the contacts are often with the budget office, a DECS official said. At DBM, they were usually budget analysts assigned to the DECS desk. "They alert the suppliers about what items are in the budget," said the insider.

Every piece of information carries a price. Some government employees even resort to selling advice of allotment (AA) or the SARO for P1,000 apiece.

Suppliers then work for the release of the SARO or the NCA. At the Malacañang compound, the office involved is always the DBM. But when funds need to be realigned or SAROs cover big amounts, approval of the President is needed.

Suppliers said they employ fixers in these offices and strike up agreements with officials. But they also engage the services of powerful go-betweens as their link to the Palace. During the Ramos administration, one consortium often sought the help of the daughter of a high-ranking Malacañang official for the release of SAROs and NCAs.

When a SARO gets released finally to DECS, which can now enter into transactions with suppliers, DECS officials already know to whom the contracts were to be awarded because, one supplier said, "agreements had been forged way back."

The two publishers and the broker said that this was what was supposed to happen with the P200-million SARO that wound up in the headlines weeks ago, along with a very unflattering mug shot of Maslog.

They said the consortium had gotten wind from their usual contacts at DECS and DBM that Education Secretary Andrew Gonzalez and his undersecretary, Antonio Valdes, had written DBM requesting the release of P260 million and P410 million from the 1998 budget for the purchase of textbooks. The consortium then sought the help of two people close to Malacañang to act as go-between to obtain the approval of President Joseph Estrada for the SARO's release.

It had been a common practice of the consortium to hand over the "SOP" when the SARO got released. But although the P200-million SARO was released to DECS on Dec. 15, no payoff was made because the group had wizened up. In the dying months of the Ramos administration, SAROs were released, purchase orders were issued, but many suppliers remain unpaid to this day because NCAs have not been released. This was why the consortium waited until the DBM issued the NCA before sending off Maslog to Malacañang, said the publishers and the broker.

Other suppliers confirmed just how well entrenched the consortia have become at DECS and other government offices. According to an ex-supply officer of a Metro Manila school division, these groups sometimes even carried the sub-allotment advice to the regional offices.

Some regional directors, in turn, have been known to send the sub-allotment advice along with a favored supplier to a division, a publisher said, adding: "The message was clear: Buy from this supplier and split the SOP with the regional director."

The SOPs dangled by suppliers are often huge enough to entice DECS officials to skew decision-making process or flout the rules. A common violation is the purchase of supplementary and reference materials that are not in the list of titles approved by DECS. Surprisingly, violations are committed not only by the field offices, but by the DECS central office itself.

This was so in 1997, the last year when Ricardo Gloria was DECS secretary. The Commission on Audit (COA) estimated that the DECS central office could have saved P7.7 million had it not bought three titles—DECS Today published by Dane Publishing, FVR through the Years by Pacer and Education into the 21st Century by JOER Printing—that had not been approved by the department.

The COA noted that DECS accounting office nevertheless made the payments because of the marginal notes of then President Fidel Ramos and Gloria.

Interestingly, too, Education into the 21st Centuy' was written by then DECS Undersecretary Alejandro Clemente. The title eventually made it to the list of approved reference materials—a month after DECS had already bought and paid the publisher P1.19 million for 6,998 copies.

On many occasions, DECS also bought overpriced supplementary materials, COA said. For example, in 1995, DECS Region II bought drill cards and flash cards from five firms for a whopping P4.423 million. The COA computed the items' total value to be P893,454.

Like basic textbooks, supplementary materials are covered by price ceilings. While many suppliers stick to ceilings, some, with the help of the National Printing Office (NPO), have found a way to jack up the prices.

All that was needed, suppliers said, was to get a school principal or divisions superintendent to request the NPO to quote the price of the book that they were offering using a lower print run of, say, of 500 or 1,000. "In reality, we tell the NPO, 'This is the price I want,' and they accommodate," said one supplier, adding that the helpful NPO personnel usually gets P5,000.

Oversupply of supplementary materials is also commonplace. Metodio M. Gapasin, division superintendent of Negros Oriental, has been charged administratively with buying from Philflex Trading and General Merchandise in 1996 a total of 16,265 flipcharts—thrice the number of teachers in the divisions. The flipcharts were part of the 35,555 flipcharts he had bought for P17 million, a grossly bloated total, according to DECS. Not only that, the purchase was done with no public bidding and no authority, said the department. Gapasin has also been charged with splitting the payment into several checks.

DECS is investigating ghost deliveries of supplementary materials in Muslim Mindanao by another publisher as well. Yet COA reports indicate that in numerous cases, supplementary materials bought by regional directors were not responsive to the needs of schools.

At the close of 1995, the COA found P17.9 million worth of reference materials lying idle in the warehouse of DECS Region XIII. The materials, it said, had been bought without consulting principals and division superintendents, who preferred textbooks and workbooks. The COA also described the materials as being "of poor quality."

That same year, the director in Region V spent P1.89 million to buy 1,000 copies of a dictionary that was not on the list of approved reference materials and was not requisitioned by the schools. It was also not included in the procurement program. The purchase, COA declared, was unnecessary because the division had purchased 20 units of Colliers Dictionary the year before. In addition, the dictionaries were delivered earlier than the preparation of the requisition issue voucher, purchase order and disbursement voucher, and the payment was split into seven.

Meanwhile, most book publishers say even private schools are beginning to act like DECS and are no longer content with the discounts they enjoy.

For years, standard discounts given to private schools averaged 15 percent with an additional five percent given to schools that pay promptly. Many publishers also agree to give schools donation equivalent to five percent of total sales.

In recent years, however, the cutthroat competition in a small market of only 9,000 schools has led some publishers to undercut each other and breach agreements made within their associations. Some offer discounts of as high as 30 to 35 percent. Aggressive publishers donate school buses, even school buildings.

And as private schools witness how publishers spoil the public schools, the word "commission" has already found its way to their vocabulary. An executive of one of the biggest textbooks publishers said an association of private schools has recently asked publishers for commissions of 40 to 45 percent.

"Since the private schools have heard of what some publishers give to public schools, they decided they might as well ask for the same arrangement," she said.

She added that majority of the publishers balked at the request, with one even calling it "blackmail." But two publishers were open to the suggestion, one of whom said he was willing to offer a 50 percent commission, related the executive.

"It's indeed high time," she said, "(that) we come up with a code of ethical standards for the book publishing industry."