IF THERE is anything that any administration is easily remembered by, it is the big corruption scandals that rocked it, especially if these cases actually involved or simply established plausible links to the President, the First Family, or the associates they are known to trust most.

What makes the term of Gloria Macapagal Arroyo stand out, if we may call it that from past administrations, her critics say, is the boldness and extent of the alleged questionable deals, the manner by which these were committed, and the amounts involved—in so short a time.

NEWSBREAK revisited the biggest corruption cases that have been exposed so far in Arroyo’s six years in office, including one of the earliest, the building of the Ninoy Aquino International Airport Terminal 3 (see special report). None has been resolved, and the major players continue to be free from liabilities.

JUETENGATE

This illegal numbers game helped cause the downfall of deposed President Estrada. His successor, President Arroyo, is also being hounded by this game of chance that preys on the poor.

Rumors of jueteng kickbacks received by the First Family were swirling even before Arroyo assumed office (her senatorial and vice-presidential campaigns were rumored to have been financed partly by jueteng lord Rodolfo “Bong” Pineda, her fellow Capampangan), but it was at the height of the “Hello, Garci” scandal that these rumors were given a face. Three self-confessed bagmen and a former aide of a disgraced poll commissioner gave explosive testimonies connecting members of the First Family to jueteng money.

Sandra Cam first came out, followed by Richard Garcia, and Demosthenes Abraham Riva who separately told a Senate hearing that First Gentleman Mike Arroyo, presidential son Mikey and Mr. Arroyo’s brother, Negros Occidental Rep. Ignacio Arroyo, had been receiving payola from jueteng operations in Bicol. They said they learned of the Arroyos’ kickbacks through their conduits.

But it was Michaelangelo Zuce, an aide of former commissioner Virgilio Garcillano and a former staff member of Presidential Adviser on Political Affairs Joey Rufino, who directly linked the President to jueteng. He said that before the May 2004 elections, the President distributed money to several election officials at her house in La Vista, Quezon City, in the presence of Pineda’s wife.

The Senate hearing went nowhere after Garcia and Riva retracted their statements a few months later. The two said they were merely “coached” by Sen. Panfilo Lacson into linking the Arroyos to jueteng.

Zuce’s testimony also failed to take off after one probable witness who could have corroborated Zuce’s claim did not cooperate. Former Isabela Gov. Faustino Dy Jr. who was also supposedly present at the La Vista meeting, took refuge in the US after his defeat in the polls and has refused to come to Manila to testify, supposedly for fear of his life.

POLL AUTOMATION CONTRACT

One respected political leader insists that the money trail in the botched P1.3-billion poll modernization project of the Commission on Elections (COMELEC) goes all the way up to Malacañang. That’s why there was an urgent need to clear the COMELEC officials involved, in particular chair Benjamin Abalos, before anyone could spill the beans on one of the major beneficiaries of the deal.

Overpriced by P500 million—according to Solicitor General Alfredo Benipayo, who was an ex- COMELEC chair—it was a project that was doomed from the start. The poll body ignored its own bidding rules and changed these to suit one favored bidder, MegaPacific Corp. The Supreme Court (SC) deemed the process flawed and declared the contract null and void.

While it ordered the Office of the Solicitor General to recover the money paid to MegaPacific, the SC directed the Office of the Ombudsman to determine the criminal liability of the COMELEC officials involved in the rigged bidding. A committee created by Ombudsman Merceditas Gutierrez initially indicted Commissioner Resurreccion Borra but cleared him a few months later, after he threatened to drag his colleagues with him.

In a decision that shocked many, Gutierrez declared Abalos and company not liable for the voided contract, finding “no malice” involved in awarding the contract to MegaPacific. The decision bolstered suspicions that Gutierrez, Mr. Arroyo’s classmate at the Ateneo law school, was appointed at the anti-graft body to protect the Arroyos’ interests. Abalos is known to be Mr. Arroyo’s golf buddy in Wack-Wack in Mandaluyong and the First Gentleman was said to have principally backed his appointment to the COMELEC.

POWER PLANT DEAL

Just as everyone had given up on Ombudsman Merceditas Gutierrez, she pulled a surprise by sustaining the recommendation of an Ombudsman committee to indict former Justice Secretary Hernando Perez in connection with the US$2-million bribe case filed by former Manila Rep. Mark Jimenez. But then, the case was supported by documents from the Swiss and Hongkong authorities, which could have prevented another whitewash attempt.

The Perez case appears to have been the first major corruption scandal under the Arroyo administration. It is widely believed that the bribery had to do with the approval of the $470-million power contract with an Argentine firm which former President Estrada had originally approved before he was deposed.

Two days after Arroyo assumed office, among Perez’s first acts was to approve the deal despite claims that it was disadvantageous to the government. Trying to shield himself from allegations that he also profited from the deal as a broker, Jimenez changed tack in his complaint with the Ombudsman, claiming that the $2-million bribe was part of his agreement with Perez not to push for his extradition and inclusion in the criminal charges against Estrada. But he apparently had told Senator Panfilo Lacson earlier that the entire sweetener was actually $14 million, with $2 million going to Perez; $1 million to the National Power Corp. “boys”; $4 million to Malacañang, and $7 million to Jimenez.

The President tried to save Perez by telling Jimenez to back up his claim with evidence. At the height of the scandal, not too subtly, the President bussed Perez on the cheek, to let everyone know that Perez remained in her good graces.

A high-ranking source at the Ombudsman alleged that former Ombudsman Simeon Marcelo received persistent phone calls from Malacañang to drop the case. Before he resigned, however, Marcelo made sure that the case would proceed by docketing it for preliminary investigation.

A NEWSBREAK source claims that the filing of the case against Perez had Malacanang’s blessings in exchange for a compromise with Jimenez. This is not entirely without basis. Jimenez had cleared Malacañang of any involvement in the power contract. Why would he do that for a government that had caused his extradition to the US to face criminal charges leading to his imprisonment?

FERTILIZER SCAM

An ongoing saga first exposed during the 2004 campaign period and which resurfaced at the height of the impeachment attempt against the President, the fertilizer scam has crossed the Pacific with the arrest of its supposed main architect, former agriculture undersecretary Jocelyn “Joc-Joc” Bolante.

Arrested at the Los Angeles International Airport in July last year for a canceled visa, Bolante is now fighting deportation proceedings in a US court, even as he seeks political asylum there, claiming that the opponents of the President wanted him dead. His court troubles began when he snubbed repeated Senate subpoenas for him to shed light on the P728-million fertilizer fund allegedly distributed to Arroyo’s allies during the 2004 election.

A member of the Makati Rotary Club like the First Gentleman, Bolante was Arroyo’s first appointee to the agriculture department, which she headed for a time after she assumed the Presidency in 2001.

It was Bolante who distributed the fertilizer fund to local allies of the President, supposedly to subsidize farmers. But a Senate investigation  showed that the funds were misused for political purposes. The Senate has recommended the filing of plunder charges against Bolante, as well as former Agriculture Secretary Luis Lorenzo.

Farmers have claimed that not one centavo trickled down to them. “The farm inputs and implements program is a premeditated, systematic and grand agricultural theft. In the words of farmers and taxpayers, the fertilizer scam is the rape of the nation,” the Senate finding said.

MACAPAGAL BOULEVARD

Adjustments to one contract caused the cost of the construction of the President Diosdado Macapagal Boulevard in Pasay City to balloon from P731.44 million to P1.1 billion. More than P837 million of this amount went to JD Legaspi Construction, one of the three firms that constructed the project.

Critics claimed that the allegedly overpriced construction unduly cost the government P532.92 million at the very least. The alleged overpricing involved the two portions of the 2.3-km. boulevard: Pacific Avenue and the opposite end of Sen. Gil Puyat Avenue which were assigned to JD Legaspi Construction.

The controversy once again brought to center stage the Public Estates Authority (PEA), the government agency that negotiated the controversial reclamation with Amari Corporation during the Ramos administration.

The PEA officials were accused of entering into a contract with JD Legaspi through simplified bidding despite inadequate funds. They were also accused of approving the variation orders, final bill of quantities, and contract price adjustments worth P252 million allegedly without prior approval from the Office of the President.

Following the Senate’s widely publicized investigation of the issue, President Arroyo in 2002 announced that she would abolish the PEA. The promise never materialized. Instead of abolishing the agency, Arroyo transformed it into the Philippine Reclamation Authority in October 2004 to focus on reclamation activities. The agency’s non-reclamation related assets and liabilities were transferred to the Department of Finance.

In June 2003, the Ombudsman filed a case against 16 top PEA executives and officials of the Commission on Audit who had a hand in the approval of the contract as well as private contractor Jesusito D. Legaspi. Among the accused officials was former PEA chair Ernest Villareal, an incorporator of the Bigkis Pinoy Foundation, which is composed of businessmen and Rotary friends of First Gentleman Mike Arroyo.

The case is currently being tried at the Sandiganbayan.

MILITARY COMPTROLLERS

On Dec. 19, 2003, US Customs officials apprehended the son of Maj. Gen. Carlos F. Garcia at the San Francisco airport. He was carrying US$100,000 in undeclared cash.

The military leadership got wind of the incident as early as January 2004. Instead of investigating Garcia, however, then Armed Forces Chief of Staff Narciso Abaya merely asked him to explain and transferred him to another position.  This went on until, on September 14, US Customs and the Federal Bureau of Investigation transmitted to the office of then Ombudsman Simeon Marcelo a list of the amounts that General Garcia had brought into the US. A report published in NEWSBREAK in October 2004 estimated that Garcia must have taken P71 million to the US from 1993 to 2003.

The Garcia case triggered more investigations into the unexplained wealth of military generals, particularly those belonging to the so-called “comptroller family.” In late 2004, NEWSBREAK published a report on the unexplained wealth of another former comptroller, Jacinto Ligot, who was found to have properties in California, a posh condominium, and farmhouses in Bukidnon.

In October 2004, the Judge Advocate General’s office charged Garcia with violating Articles of War 95 (conduct unbecoming of an officer and gentleman) and 96 (acts prejudicial to good order and military discipline) for failing to declare all his assets in his Statement of Assets, Liabilities and Net Worth and for possessing a US green card. In April 2006, the military court sentenced Garcia to a two-year confinement without pay and allowance and dishonorable discharge.

The Ombudsman also filed forfeiture cases against the two generals before the Sandiganbayan. On top of this, Garcia faces graft charges in the same court. No graft charges were filed against Ligot. His assets, however, have been indefinitely frozen by the Anti-Money Laundering Council since they were not declared in his Statement of Assets, Liabilities, and Net Worth.

NORTH RAIL

On Feb. 26, 2004, Finance Secretary Juanita Amatong entered into a Buyer Credit Loan Agreement with the Export-Import Bank of China, which granted the Philippine government a US$400-million loan facility to finance the construction of the North Rail Project.

The project aims to provide mass transport services between Metro Manila and Central and Northern Luzon and is a major component of the administration’s Strong Republic Mass Transport System.

Critics, however, alleged that the agreement is grossly disadvantageous to the government. The total cost of $503 million for a 32.2-kilometer length of rail line, they pointed out, meant that the average cost of the project is nearly $16 million (around P900 million) per kilometer, exclusive of the costs for clearing, relocation, and resettlement of informal dwellers occupying the railroad right of way. The interest rate on the loan of 3 percent per annum is also much higher than the rate on other loan packages that the Philippines could have availed itself of.

Critics also scored the fact that under the agreement, the China National Machinery and Equipment Corporation (Group), a Chinese corporation, was designated as the prime contractor for the project without public bidding. This, critics claim, violates Philippine laws on public bidding. Malacañang for its part claimed that the negotiated procurement was justified because this was part of an executive agreement between China and the Philippines.

The North Rail issue was eventually included in the list of charges the opposition included in the impeachment complaint filed against President Arroyo in 2005. After the House junked the complaint, the Senate continued hearing the issue. A number of senators led by then Senate President Franklin Drilon called for the scrapping of the project based on a technical study by the University of the Philippines.

Hearings were stalled after Malacañang issued Executive Order 464, which required Cabinet members to seek presidential clearance before they could testify in congressional hearings. A Senate investigating panel later established that the flagship transportation project was full of irregularities. Sen. Rodolfo Biazon, chairman of the Senate committee on housing and urban development, the committee conducting the investigations, was one of the signatories of the report.

After the Supreme Court struck down this EO 464 provision in early 2006, opposition senators vowed to revive the issue.

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