Twists and turns of a perfect storm

Twists and turns of a perfect storm

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Posted on November 13, 2014

WHAT HAPPENS when long-whispered allegations of corruption in Makati, a fast-approaching presidential election season where former Makati Mayor (and now Vice-President) Jejomar Binay has declared his intention to run, and so-called standard corporate governance practices come together? The rare and historic combination brings about a perfect governance storm, no less.

This tempest was triggered when Senator Antonio Trillanes filed Senate Resolution 826, asking the Senate Blue Ribbon Committee to investigate the alleged overpricing of government buildings in Makati during the mayorship of now Vice-President Jejomar Binay and subsequently of his wife, Dr. Elenita Binay.

The resolution stated: “The Filipino people have the right to information especially on matters involving alleged graft, corruption and plunder of high officials and at all levels of government. Further, it is the foremost duty of the Philippine legislature to ensure that bidding and procurement procedures contain safeguards against misuse of public funds for illicit personal gain, as well as to ensure that public funds are used to benefit the Filipino people.”

Watching the sub-committee hearings on TV starting in August, presided over by the even-handed Senator Aquilino Pimentel III, I appreciated why citizens bother to support a Senate with their taxes. What’s a faster way for citizens to officially check how public officials carry out their work as stewards of public funds or whether businesses are properly transacting with government agencies? How else can governance rumors and innuendoes be officially confirmed or put to rest? The courts are just too slow.

Nothing prepared me for what was to come. Every hearing took on new twists and turns as, like a real storm surge that dredges up hidden dirt for all to see, each resource person made increasingly troubling claims about the goings on in the premier city of the Philippines. Former Makati Vice-Mayor Ernesto Mercado alleged that the Vice-President had taken a 13% cut for every Makati project. Mercado admitted that he had also received P80 million in kickbacks for the Makati City Building 2 project. Engineer Mario Hechanova, the city’s former head of the General Services Department and vice-chair of the Bids and Awards Committee, claimed that he had been involved in rigging all projects in Makati -- guaranteeing that all contracts went to hand-picked bidders like Hillmarc’s Construction Corporation.

I was aghast when Hechanova narrated how they had trapped a woman would-be bidder inside an elevator to make sure the favored bidder would win! I wasn’t sure whether to direct my seething rage at the supposed mastermind of these schemes or at these two men who had confessed to such crimes. Kickbacks are shameful enough. But trapping a woman in an elevator? What if she had had a heart attack? These men were public servants. I hope that the punishment will suit the crime.

In yet another twist, Mercado has alleged that the buildings in question were overpriced to cover expenses for maintaining a 350-hectare resort property in Rosario, Batangas, which is allegedly owned by the Vice-President. Greenergy Holdings CEO Antonio Tiu, however, attended the hearings to assert his company’s ownership of the property through its Sunchamp subsidiary. The seemingly simple concept of ownership proved to be slippery as the senators demanded a registered title while Tiu, citing “standard practice,” insisted that beneficial control based on a one-page agreement with the previous owner was enough. Since Greenergy is a publicly listed company, Tiu needs to carefully look at the corporate governance implications of his view on ownership.

The Vice-President has vehemently denied any involvement in the alleged anomalies in city hall or in the Rosario property. Unfortunately, he has also decided not to appear before the Blue Ribbon Committee, charging the senators of political harassment. As a citizen, I feel cheated that I will not hear the side of the Vice-President. The people have the democratic right to expect public explanations from their elected officials. Public office is a public trust.

Still, I am not surprised that the Vice-President has cried harassment to justify his no-show. The manner of posing questions could be more civil. I admire Senator Alan Cayetano’s brilliance and preparedness in questioning, but he sometimes lapses into a sarcastic and argumentative tone unworthy of the veteran politician from Taguig and Majority Leader of the Senate. The role of the Blue Ribbon Committee is to ferret out the truth in order to fix systemic loopholes in the law -- not to humiliate anyone or to condition the public to favor any side of an issue.

I don’t know who will remain standing once this governance storm clears. The Vice-President? The implicated businessmen and their businesses? The whistleblowers? Just maybe, if citizens remain vigilant during the whole process, the senators may help achieve a dramatic improvement in Philippine public and corporate governance.

Benito Teehankee is an associate professor at De La Salle University and chair of the Corporate Social Responsibility Committee of the Management Association of the Philippines.

The View From Taft

Benito L. Teehankee