(First published on Aug. 11, 2005)

SOME members of the political opposition say they would be happily surprised if former Isabela governor Faustino Dy, Jr. would decide to spill the beans on what he witnessed during the many times that he was with Gloria Arroyo during the 2004 elections campaign.

That’s because despite the fact that Dy has been vocal about his resentment towards Arroyo, they know that Malacañang knows Dy’s vulnerabilities. “Given Malacañang’s desperation, I would not be surprised if they have already started the pressure,” said a politician who knows the Dys.

A source who had talked with Dy said there were two cases in the last election where the former governor felt betrayed by Arroyo: his defeat to radio announcer Grace Padaca and the startling loss of Angelo Roncal Montilla, gubernatorial candidate of the Nationalist People’s Coalition in Sultan Kudarat.

Dy, whose family has controlled Isabela politics for decades, believes that GMA’s husband, Mike Arroyo, operated against him with the help of Isabela Rep. Edwin Uy (Lakas-2nd district). Padaca was the gubernatorial candidate of Raul Roco’s Aksyon Demokratiko.

As NPC chairman, Dy took up the cudgels for Montilla who found himself in the losing end after posting what was seemingly a formidable lead of more than 28,000 over Lakas candidate Pax Mangudadatu.

Yvonne Chua of the Philippine Center for Investigative Journalism, in her article on Lintang Bedol, provincial election supervisor for Sultan Kudarat in the last election, said “There was problem (too) at the canvassing for the gubernatorial election. Opposition candidate Angelo Roncal Montilla was leading Pax Mangudadatu until the votes from the last three of the province’s 12 towns came in. Mangudadatu had gotten nearly all the votes cast in Palimbang, Lutayan and Lambayong Mariano Marcos towns. Montilla at first filed a poll protest with the Bedol-led board of canvassers, but later elevated his case to the Comelec office in Manila (SPC No. 04-132) after the board dismissed it outright.”

In the Hello, Garci tapes, there was a conversation between former Comelec Chairman Virgilio Garcillano and someone believed to be Dy. In their talk, Dy said not to bother about his own case and all that he was asking was to help Montilla. But there was something intriguing about Garcillano’s replies.

Excerpts of the Garcillano-Dy conversation (May 28, 2004, 12:58):

Dy: Hello, hi Commissioner, si Dy ‘to. Ito ang kwan Gil…

Garcillano: Sultan Kudarat?

Dy: Oo, si…Montilla.. tulungan natin yan.

Garcillano: Pro-forma lang yan, kung ano ang posisyon. Kasi nag-usap din kami ni Ma’am diyan, tinawagan niya ako pero di yan.

Dy: Tinawagan ka ni Presidente tungkol dyan?

Garcillano: Hindi naman tungkol dyan pero kakausapin ko din siya tungkol dyan.

Dy: Sabihin mo, yan lang naman ang hihilingin ko naman eh, yan lang ang hihilingin ko sa ‘yo, alam mo naman hindi ako humihiling sa ‘yo.

Garcillano: Hindi. Naipit na nga ako dun sa kaso…

Dy: Yung tungkol dun sa ‘kin pabayaan mo na yan. Ok lang ako.

The above conversation shows that Montilla’s case was so important as to be discussed by the Comelec commissioner with the President. Garcillano said that he was being caught in the middle.

A source said Montilla, confident that he won overwhelmingly over Mangudadatu , moved heaven and earth to prevent his opponent from stealing the election from him. Aside from Dy, he contacted his uncle in Negros Occidental who was one of the campaign leaders of Rep. Ignacio “Iggy” Arroyo, brother of Mike. Montilla’s uncle advised him to forget about his protest. He was told that Malacañang was offering him a government position.

Montilla didn’t bite the government job offer. Instead he found a connection to Comelec Chairman Benjamin Abalos. His wife happens to be related to Abalos’ wife. Through their wives, Abalos sent a message to Montilla: Don’t pursue your protest.

At that time, Montilla and Dy were perplexed about Abalos’ advice. They got their answers in the “Hello Garci” tapes. Montilla’s protest, if pushed through, would have revealed the vote-padding done in favor of Arroyo. That’s why Garcillano, even if he was sympathetic to Dy’s request, had to clear the request with “Ma’am”.

In the same PCIJ article, Chua said, “According to the congressional tally, President Arroyo beat Fernando Poe Jr. in Sultan Kudarat, 126,622 to 40,714. Congressional records showed that opposition senators Aquilino Pimentel, Tessie Aquino-Oreta and Sergio Osmeña III objected to the certificates of canvass (COCs) and demanded a return to the election returns (ERs) amid charges that massive “dagdag bawas” (vote padding and shaving) took place in the province.

“The minority said in a report that the President got an additional 53,158 votes in eight towns, while Poe’s votes were reduced by 60,014. The “dagdag-bawas” in the towns involved a swing of 113,172 votes, it said. The eight towns: Palimbang, Kalamansig, Lambayong, Lebak, Bagumbayan, Esperanza, Sen. Ninoy Aquino and President Quirino.”

As shown in a conversation between Arroyo and Garcillano (May 26, 2004, 11:04) on the threat of Sen. Biazon to have ballot boxes in Tawi-Tawi opened, she didn’t care if her partymates were adversely affected. What was important to her was, her padded votes wouldn’t be reversed.

The source said Dy, who is known to be a cunning politician, had been outsmarted by the wily Arroyos.” That makes him furious.”

In the 2004 elections, the NPC made a policy that members could make their own individual decisions on whom to support in the presidential race. Although Dy had pledged support for Arroyo, a source said she was not sure of his loyalty.

FPJ won in Isabela. “At least Dy, didn’t do some hard-selling of GMA. Probably because he was also protecting himself. He didn’t want to turn off voters,” an opposition politician said.

GMA’s distrust of Dy made her keep him close to her throughout the campaign. In his Aug. 6 statement read by his lawyer in Los Angeles, where he has been staying since last year, Dy said, “I have openly and actively campaigned for her (Arroyo) not only in my province but in other parts of the country as well.”

A government official who was Dy’s occasional golfing buddy said he would complain during the campaign that he had no more time to play golf because GMA was always summoning him to attend meetings.

“That is called ‘protective surveillance,’” a retired military official said.

That was how Dy became a witness to a number of meetings of Arroyo with different groups in connection with the 2004 elections. One of those meetings was with Comelec regional directors and provincial election supervisors at the Arroyos’ La Vista home.

Michaelangelo “Louie” Zuce, a liaison officer in Malacañang’s Office for Political Affairs said that in that meeting, Lilia Pineda, wife of alleged jueteng lord Rodolfo “Bong” Pineda gave envelopes containing P30,000 each to the Comelec officials.

A confirmation by Dy of Zuce’s testimony would deal a further blow to Arroyo’s beleaguered presidency.

In his statement, he said “only the truth and national interest are my guide.”

The Filipino people are waiting with bated breath.

(VERA Files trustee EllenTordesillas wrote this for her column in Ang Pahayang Malaya.)

(First published on Aug. 11, 2005)

PRESIDENT Gloria Macapagal-Arroyo allegedly met Commission on Elections (Comelec) field officials not once, but twice, at her home in La Vista, Quezon City in January of 2004. On both occasions, the president asked for the support of Comelec officials for her candidacy.

And, in the first of those meetings, it was “impossible” for the President not to have seen Lubao, Pampanga Mayor Lilia Pineda, wife of jueteng lord Rodolfo “Bong” Pineda, hand over to a Comelec official a brown envelope filled with small white envelopes, each containing P30,000-bribe money for the election officials who had been invited to the presidential home.

All these were disclosed today to PCIJ and ABS-CBN by former presidential staff officer Michaelangelo “Louie” Zuce, a nephew of controversial ex-Comelec Commissioner Virgilio Garcillano. The Malacañang staffer went public Monday with charges that the Arroyo administration had bribed election officials to support the president’s candidacy in last year’s elections.

Zuce, who was present in both meetings, made no reference to the second dinner at the Arroyo residence in his Aug. 1 sworn statement. He also clarified that while his earlier statement did say that the white envelopes containing the cash were distributed when the president was no longer around, the bigger envelope stuffed with smaller envelopes of cash was given out in Mrs. Arroyo’s presence.

Zuce explained that although he was indeed a “minor functionary,” as Palace spokesmen asserted, his kinship with Garcillano and the trust his uncle gave him made him privy to confidential matters, including the meetings with the president and the arrangements with Comelec personnel. He was a trusted gofer, someone who could be relied on to arrange meeting sites, deliver and distribute cash, and other logistical requirements.

The former Palace staffmember recounted details of a second meeting arranged for a number of Comelec field officials, especially from the Visayas, who had failed to make it to the first one. A few officials from Mindanao who were in the first meeting were also in the second group, he said.

There were less than 20 Comelec officials in the second dinner, compared to the 27 (all of them from Mindanao) in the first, according to Zuce. All of them, including Zuce himself, received the P30,000-handout from Mrs. Pineda.

Unlike in the first meeting, Garcillano and former Isabela Gov. Faustino Dy Jr. were not present at the dinner that Arroyo hosted for the second group of Comelec officials. Only the president and Mrs. Pineda were there.

Comelec personnel also did not ask for photocopiers or vehicles like their colleagues did the first time. But as the group was making its way to the main door, Pineda handed Comelec Region 4 Director Juanito “Johnny” Icaro a brown envelope.

Back in the vehicle, Icaro took out from the brown envelope small white envelopes, each containing P30,000, and distributed these to his colleagues. “Nakatanggap ako uli (I got one again),” Zuce said.

That second meeting was rather memorable for Zuce because, he said, they were served “pansit na kulay violet (violet-colored noodles).” He said the Comelec officials found it a strange dish.

Zuce, 30, a native of Bukidnon who is related to Garcillano by marriage, said he was not certain if the president noticed Pineda handing the envelope to Icaro during the second meeting.

But in the first meeting, Arroyo was with them going up the stairs when Icaro took the envelope from Pineda. “Kasabay namin lumabas si Ma’am. It was impossible for her not to see it,” he said. He added there was no reaction from the president.

Zuce recalled thanking the president for appointing Garcillano during the first meeting at La Vista.

Reacting to charges that bribe money was given out during a meeting at her home before the elections, the president earlier told ABC-5, “Ang masasabi ko walang nagbibigay ng suhol sa harap ko (All I can say is no one gives out bribes in front of me).”

This morning, Romulo Makalintal, her lawyer in the last elections, said in a radio interview that nowhere in Zuce’s statement does he say the president witnessed money changing hands.

So far, though, there has been no categorical denial from the Palace and Mrs. Arroyo’s supporters that such a meeting took place at her La Vista residence.

The interview with Zuce took place at a location we were told not to disclose. All the journalists present there were driven around Metro Manila for over an hour before finally being taken to the interview site. After the interview, Zuce was whisked away by the security men assigned to him. Only then were the journalists allowed to leave.

During the interview, Zuce described the president’s house as old but clean. The entrance led to a corridor. The receiving area was one level down. The meeting was held at a lower level which opened out to the pool. Zuce said his group spent two hours smoking and killing time near the pool until the president arrived at 9 p.m.

Asked whether the president meant that the officials should help protect her vote or make sure she won the election, Zuce said, “Nandun na lahat.ang kaharap mo, e (She meant all of those. She was talking to Comelec officials).”

Comelec

Zuce barely knew Pineda then but immediately got the impression that she was very close to the president. Seated at the head of the table during that first meeting were Dy, the President, Pineda and then Garcillano.

“May binubulong si Mrs. Pineda kay Ma’am (Baby was whispering something to GMA),” he said. It seemed like they’ve been friends for a long time, he added.

Zuce said the president immediately called someone on the phone when the Comelec officials in Mindanao asked for photocopiers and then passed her phone to Francisco Pobe, Agusan del Sur provincial election supervisor.

It was Pineda who volunteered to take care of the request of the election officials for vehicles. Zuce said Toyota Delicas were considered but were found insufficient. It was then agreed that the Philippine Amusement and Gaming Corp. or Pagcor would send the vehicles, he said.

In his statement, Zuce said a breakfast meeting between Garcillano and Pagcor Chair Ephraim Genuino at the Makati Shangrila Hotel did not push through. Genuino was late and Garcillano, who was upset at the Pagcor chair’s tardiness, had to rush off to a Comelec en banc meeting.

Zuce said he has been a Lakas member since 1994 when he joined its youth arm as a volunteer. He was to transfer to the National Youth Commission but returned to the party years later. He also joined Lakas’ Muslim Christian Democrats, particularly the Erap Resign Movement.

After EDSA 2, Jose Ma. A. Rufino, presidential liaison officer for political affairs, asked him to work in Malacañang. Zuce said he has known Rufino even before the Erap Resign Movement.

Zuce admits he is “an ordinary staff” but said his work allowed him to get to know a lot of politicians, especially during electoral campaigns, because Rufino’s office attended to their needs.

He said he also helped in the elections of leagues, referring to the organizations of governors, mayors and other public officials. He added he was often sent to Comelec to get electoral data.

Zuce said he introduced Garcillano to Rufino because his uncle had dreamt of becoming a Comelec commissioner since the time of President Fidel Ramos.

Enjoying his uncle’s trust, Zuce said he became the “link” between the elections commissioner and Rufino for the 2004 elections.

Garcillano took him along to meetings, including those with the Pinedas, while Zuce helped arrange the consultations meetings with Comelec field personnel. That, he said, explained Rufino’s absence in some of the meetings. “Rufino didn’t have to be there because I was there,” he said.

Reacting to Comelec Chairman Benjamin Abalos’s statement that the attendance sheet he had annexed to his statement was the list of Comelec officials who attended the Comelec sportsfest in Lanao del Norte, Zuce pointed out the consultations meetings in Mindanao and in Metro Manila were precisely timed with official activities when elections personnel would have their travel orders.

Zuce said he had no intention of coming out in the open when he quit his job last May, but changed his mind when he began receiving threats and got word that former police chief and now public works secretary Hermogenes Ebdane has been looking for him since the “Hello, Garci” controversy broke. He said he doesn’t know Ebdane and feared for his and his family’s safety.

Zuce said he has lost touch with Garcillano since Gloriagate. “Hawak nila. Sila ang nagpaalis doon (He’s in their control; they made him leave),” he said.

But he expressed the hope that his uncle would eventually come out of hiding. “Sana ilabas niya ang katotohohan (I hope he tells the truth),” he says.

(VERA Files trustee Yvonne Chua posted this entry in the blog of the Philippine Center for Investigative Journalism. She was then the center’s training director.)

(First published in July 2005)

WHEN the official canvassing of votes ended on June 20, 2004, those who were monitoring the count already thought that the results from the Autonomous Region of Muslim Mindanao (ARMM) looked suspicious. Even Mahar Mangahas of the Social Weather Stations (SWS) could not help but notice the huge disparity between the Namfrel tally for ARMM and the results of the Social Weather Stations exit poll there on one hand and the congressional count on the other.

“ARMM to me from the very beginning is the place where people should look,” Mangahas said.

A year ago, though, only a few bothered to do so, and their concerns were not given much attention. Then came the “Garci” tapes, which have put the spotlight back on the Mindanao votes of 2004, and how these were key to the president’s winning margin. In fact, the five ARMM provinces – Basilan, Sulu, Tawi-Tawi, Lanao del Sur and Maguindanao – as well as the predominantly Muslim Cotabato City and Sultan Kudarat province in Region 12 were at the core of the conversations between President Gloria Macapagal Arroyo and elections commissioner Virgilio Garcillano.

The Garci tapes do not give an indication of the extent of the election fraud in Mindanao, but they provide clues on the different types of manipulation of the voting and counting in several provinces there. It can even be said that the recorded conversations could enable one to write a field manual on how to rig elections through the infamous dagdag-bawas (vote-padding/shaving), and use of field personnel of the Commission on Elections (Comelec), as well as the military and police.

The ARMM votes were crucial to ensuring the president’s 1.1 million lead over main opposition candidate Fernando Poe Jr. A quarter of that winning margin – 277,729 – came from ARMM alone. Overall, Arroyo’s lead over Poe in Mindanao was 496,116, of which ARMM was responsible for more than 56 percent. ARMM contributed 17 percent to the president’s total Mindanao vote.

Arroyo won in Caraga (the Agusan and Surigao provinces) and Regions 9 and 10 (Western and Northern Mindanao) and lost in Regions 11 and 12 (Southern Mindanao and Soccsksargen – South Cotabato, Cotabato City, Sultan Kudarat, Sarangani, and General Santos). Her lead over Poe in those five regions was 218,887, but still insufficient to guarantee a margin of more than one million—until the ARMM votes came in.

In her apology to the nation on June 27, the president asserted that her conversations with an unnamed Comelec official could not have influenced the outcome of the 2004 polls because “the election results were already in and the votes had been counted.” In fact, when she was talking to Garcillano from May 26 to June 10, 2004, the counting of the votes in seven of 39 Lanao del Sur towns was far from over.

Special elections were held in 200 precincts in Lanao del Sur and five barangays in Lanao del Norte on May 22 and the counting was not yet done when the president was making the calls. On May 29, the president even pointedly asked Garcillano: “So will I still lead by more than one million (votes)?” The reply: “Mataas ho siya [Poe] pero mag-compensate po sa Lanao ‘yan (His count is high, but that will be compensated in Lanao).”

The Cotabato count, meanwhile, was moved to Manila, and was finished only on June 1. The national canvassing began on June 7.

Discrepancies in the tallies

In Congress’s final tally, Arroyo won over Poe in ARMM, 549,944 to 272,715—62 percent to 31 percent. In Namfrel’s June 30, 2004 terminal report, however, the ratio was almost the exact opposite: Poe led Arroyo, 228,567 to 161,067, or 53 percent to 37 percent.

In Sulu, where Namfrel reported 100-percent coverage, the elections watchdog tabulated 74,511 election returns, 32 percent (23,896 votes) of which went to Arroyo and 61 percent (45,740) to Poe. Congress canvassed nearly double the votes—146,652, of which 53 percent (78,429) were Arroyo’s and 41 percent (60,807) were Poe’s.

SWS’s exit poll was a near mirror of Namfrel’s count. Half of its respondents in ARMM said they elected Poe and 44 percent said they picked Arroyo.

Computer expert and engineer Roberto Verzola, who had volunteered with the poll-fraud watchdog Coalition for Hope, had pointed out right after last year’s elections the “huge discrepancies” between the Congress and Namfrel counts in ARMM, Western Mindanao and Northern Mindanao. “FPJ wins (were) turned into GMA wins,” he said.

Extrapolating from the Namfrel and congressional tallies, Verzola estimated that the dag-dag bawas in ARM resulted in 252 of every 1,000 Poe votes, or 25 percent, being change to Arroyo votes. This would be 68,178 of the 272,715 votes Poe had garnered in the region.

Following the national canvassing, the opposition in its own report said cheating took place in all the five provinces of the ARMM, listing 20 towns where, it claimed, the President’s votes were padded by 76,455 and Poe’s shaved by 41,313.

Yet despite allegations of cheating and discrepancies in the count, Namfrel has said it is still confident the 2004 presidential and national elections were credible. “Absolutely,” Namfrel secretary general Guillermo Luz said when asked recently by the television channel ANC if he thought the results of the elections were credible. “The results of the elections reflect the actual votes.”

Padding and shaving votes

That, however, doesn’t necessarily rule out man-made miracles in the Mindanao votes. For instance, Lanao del Sur, the votes of which where supposed to “compensate” the President’s votes to help ensure her one-million lead over Poe, was the center of massive dagdag-bawas in Mindanao. The charge was made last year by no less than Namfrel provincial chair Abdullah Dalidig.

The final congressional tally shows Arroyo winning in Lanao del Sur, garnering 128,301 votes to Poe’s 43,302. The President got another 30,447 and Poe 6,805 in the special elections that were subsequently held in Lanao del Sur towns where failure of elections had been declared. But the Namfrel tally shows Poe leading Arroyo, 42,374 to 32,389, and the opposition’s Loren Legarda beating Noli de Castro, 56,568 to 23,242, in the province. (Namfrel said it canvassed less than 50 percent of the returns from Lanao del Sur.)

Documents from Namfrel’s chapter in Lanao del Sur illustrate the extent of the alleged vote-padding and shaving. The most interesting involved Poona Bayabao, about 37 kilometers from Marawi City. The town merited special mention in Garcillano’s May 30 conversation with a certain Rey, who reported to the commissioner that an en banc order had been issued: He was “to continue with the canvassing but suspend the proclamation.” According to Comelec and ARMM sources, Rey’s voice sounds much like that of election supervisor Rey Sumalipao.

The fourth copy of the certificate of canvass (COC) that Namfrel obtained of the voting in Poona Bayabao shows President Arroyo and Legarda leading their main opponents 4,700 to zero. But the election returns that the poll monitor was furnished (Namfrel gets the sixth copy) reveal a big discrepancy: neither Poe nor de Castro obtained zero votes. In two tables prepared later by the Namfrel chapter summarizing the election returns (ERs) in 13 precincts in Poona Bayabao, Poe got 767 and Arroyo 964, while Legarda obtained 1,252 and de Castro, 350.

Dalidig’s chapter also prepared tables comparing the ERs and COCs in seven other towns: Lambayanague, Taraka, Saguiaran, Marantao, Mulondo, Binidayan, and Balindong. Dalidig counted 10,077 more votes in the COC. [Some tables contain computation errors.] According to the Namfrel chapter, the President’s votes were padded by 21,217 votes while Poe’s were shaved by 9,174.

More mismatches and multiple voting

But other calls made by the president hinted on something afoot in other provinces. Her May 26 call to Garcillano, for example, centered on Tawi-Tawi, where Sen. Rodolfo Biazon was threatening to have the ballot boxes opened if he were cheated. ““Eh baka raw ako ang madale doon (It might affect me),” said the president. Garcillano replied, “Baka nga ho (It might).”

The next day, Arroyo called the commissioner to ask if the election returns from Sulu were complete and corresponded to what could either be the provincial- and municipal-level (COCs) and their accompanying statement of votes (SOVs). Garcillano replied, “Oo ma’am. Lahat ho meron, hindi po naming ika-count kung (Yes, ma’am. We would not count them if)…”

On June 2, the President is heard asking Garcillano about the reported mismatch between the COCs and SOVs in Basilan and Lanao. She was assured, “Yung ginawa nilang magpataas sa inyo, maayos naman ang paggawa eh (The upward adjustment they did for you was all right).”

Four days later, she placed another call to seek assurance that the election forms in Maguindanao were consistent. “Hindi naman ho masyadong problema sa Maguindanao (Maguindanao isn’t much of a problem),” Garcillano said.

Official results would show Arroyo winning convincingly in Maguindanao. On May 28, 2004, however, losing Maguindanao gubernatorial candidate Guimid Matalam filed a petition before the Comelec seeking a declaration of failure of elections in 25 of the province’s 27 towns because of alleged electoral fraud there. According to Matalam, the fraud included having election returns prepared even before voting began at 7 a.m. on May 10, 2004 and ballot boxes never being brought to precincts.

At least 37,000 residents of Maguindanao are also being investigated by the local Comelec office on charges of double registration.

Annexes to Matalam’s latest petition explain how multiple voting occurred: Comelec had approved the clustering of precincts before May 10. But on election day, some of the clustered precincts were unclustered, resulting in extra precincts. The voters’ lists in the original and extra precincts contained a number of similar names. In addition, the extra precincts were issued a separate election return and certificate of canvass at the municipal level. After election day, the unclustered precincts were reclustered and the election returns combined and certified by election officers.

This apparently took place not only in Maguindanao, but also elsewhere in ARMM. The duplicate votes ranged from a little as two percent to as much as 21 percent in various precincts of the region’s five provinces.

Once the dust had settled, even Namfrel’s terminal report that showed Arroyo losing to Poe in ARMM revealed her as clinching at least Maguindanao. The official Congress tally of course showed the president beating Poe in ARMM – but then it had her losing in Tawi-Tawi, the subject of her May 26 call to Garcillano.

Fielding – and hiding – Comelec personnel

To carry out electoral fraud, however, an elaborate network of “friendly forces” on the ground is needed. The controversial recordings bear out the importance of mobilizing such forces to either perpetrate cheating or “protecting” votes – as well as ensuring that they will keep silent about the secret goings-on.

A June 5, 2004 conversation between Garcillano and a certain Boy, for instance, even brought out the possibility of having a “missing” election officer kidnapped to ensure she would not talk. The opposition had floated the information that Rashma Hali, election officer in Tipo-Tipo, Basilan, had voluntarily made an affidavit on June 4 before a Makati prosecutor on poll fraud allegedly perpetrated in the town.

Boy informed Garcillano that Hali had done some work for them, “pero limpio ang trabaho nila (but they did a clean job).” Then Boy added, “”Baka ang sabihin niyan na binaligtad ni Kang Patangan sa itaas sa provincial level (They might say Kang Patangan reversed it at the provincial level).” Borromeo Patangan chaired the provincial board of canvassers in last year’s elections.

PCIJ sources in the ARMM and Comelec are split on who Boy is. Two Comelec personnel in Mindanao say Boy could be Comelec regional director for ARMM Renato Magbutay. Contacted by the PCIJ, Magbutay says, “It’s not me. Why don’t we wait for the proper agency to determine if it’s the original or altered tape? Malay mo pinagdugtong-dugtong lang ‘yan to make it appear na original (It may have been spliced to make it appear that it’s the original).”

Two other ARMM and Comelec sources, though, say Boy sounds like Renault ‘Boy’ Macarambon, a Comelec lawyer detailed at the time to Garcillano’s office and whom the elections commissioner was said to have sent to the ARMM areas to help him monitor the elections. Macarambon is mentioned in another conversation as having been sent by Garcillano to Lanao del Sur to check the canvassing there. He did not respond to PCIJ’s phone calls.

On June 7, 2004, President Arroyo herself called Garcillano twice to ask where Hali was. Garcillano assured her they were looking for the Tipo-Tipo election officer, stressing to the president the importance of locating Hali before she said anything. “That’s what I’m being fearful about,” the commissioner said. “That’s why we’re asking people to look for her so that we can control her.”

Assigned to ensure that had apparently been Boy, to whom Garcillano also passed on the president’s concern, relayed in her June 2 phone call, about a teacher from Languyan town in Tawi-Tawi supposedly in the opposition’s “Witness Protection Program.” The elections commissioner said he had already advised (Michael) Mike Abbas, the provincial election supervisor, about the teacher.

Cipriano Ebron, election officer of Pangutaran, Sulu, also figured prominently in Garcillano’s talks with a certain Ruben, as well as in a conversation with the President. During a May 29 phone call, Arroyo referred to the opposition’s claim that it had affidavits from teachers and the board of canvassers in Pangutaran. Four days later, Garcillano reported to the President, “Patataguin ko muna ang EO ng Pangutaran na para hindi sila makatestigo ho (I will ask the Panguntaran election officer to go into hiding so he wouldn’t be able to testify).”

In a conversation on June 10 with Ruben about opposition lawyer Rufus Rodriguez’s threat to present Pangutaran’s election officer to testify on the alleged cheating, the commissioner said, “’Di nila makukuha si Ebron…Akin ‘yang tao na ‘yan eh, taga-Batangas ‘yan eh… Kaya kahit pakainin mo ng bala ‘ yun, ‘di na magpapakita (They won’t get Ebron. He’s my man; he’s from Batangas. Even if you made him eat bullets, he wouldn’t show up).”

Personnel reassignments and vote realignments

Many other conversations have Garcillano instructing Comelec field officers how to address problems that dealt with either the canvassing or threats by the opposition to present witnesses on electoral fraud. Other calls have him receiving reports from Comelec personnel regarding activities in a region that should not have been his concern as Region 4 Comelec commissioner.

On June 6, for instance, Garcillano was told by Comelec lawyer Wynne Asdala, “Itong Talitay tsaka Columbio (a town in Sultan Kudarat), gusto nilang magsubmit ng bagong COC at tsaka SOV para mahabol yung si Barbers (They want to submit new COCs and SOVs in Talitay and Columbio so Barbers can catch up).”

Asdala, who had been sent from the national office to serve as provincial election supervisor of Maguindanao during the elections, seems to have been the recipient of calls from Governor Pax Mangugudata and his son, Rep. Suharto Tan ‘Teng’ Mangungudatu, regarding efforts to help K-4 senatorial bet Robert Barbers garner more votes.

Asdala confirms talking with Garcillano about the votes in Talitay town, Maguindanao, but denied they ever talked about Barbers and any attempt to pad the senator’s votes. He says Garcillano wanted to know who was leading in Talitay, although he says he does not remember which candidate the commissioner was interested in. Asdala also says he could not have intervened in Columbio, a town in Sultan Kudarat.

On June 8, meanwhile, the president made yet another call to Garcillano, shortly after Namfrel’s Abdullah Dalidig appeared that day in a press conference at a Quezon City restaurant alleging “dagdag-bawas” in Lanao del Sur. Garcillano offered to get Sumalipao, provincial election supervisor of Lanao del Sur, to help. “…Rey Sumalipao, the supervisor, is coming, and we will also try to make him say something after this. Pagsasalitahin ko sila ho (I will make him talk) without letting the people know that I am the one who will address it ho,” he told the president.

Sumalipao is now Comelec’s assistant regional director for ARMM, a position once held by Magbutay. But just four days before the May 10 polls, Magbutay had been booted upstairs.

The Comelec national office had decided to pull out its regional director for ARMM, Helen Flores, on May 6, replacing her with Magbutay. The move took Flores, who was transferred to Western Mindanao (Region 9), and other election personnel by surprise. But according to a Comelec official in Mindanao, Flores was perceived to be “hardheaded” and “’di nila mapasunod (they can’t make her follow).” This was despite her closeness to Garcillano, with whom she served in the task force that supervised the 1995 Sulu special voters’ registration.

Magbutay, meanwhile, is also described as a “Garcillano protégé.” He had worked for Garcillano when the latter was the provincial election supervisor of Misamis Occidental.” Most of the election supervisors whose names cropped up in the wiretapped conversations are also said to be close to Garcillano.

New uses for military and police might

Based on the recorded conversations, it obviously did not escape President Arroyo’s knowledge that the police and military had done extra tasks in the elections and its aftermath in Mindanao.

When Garcillano’s attention was called about the affidavits supposedly from teachers and the board of canvassers in Pangutaran, Sulu of how they were made to cheat, the commissioner told Arroyo in their May 29 conversation: “Kasi sila General Habacon ba, hindi masyadong marunong pa diyan, medyo sila ang umano n’un (It’s General Habacon, they don’t know that much).”

He also lay the blame on the problems that followed the elections in Basilan on the military. “Hindi masyadong marunong kasi silang gumawa eh. Katulad ho doon sa Sulu, si General Habacon (They don’t know what to do, like in Sulu with General Habacon).”

He was referring to Maj. Gen. Gabriel Habacon, commanding general of the Army’s 1st Infantry Division, whose area of operation covers Basilan, Sulu, and the Zamboanga peninsula.

The elections commissioner also complained to President Arroyo about problems in Marawi because of Brig. Gen. Francisco Gudani, the Marine commander in charge of the Lanao provinces. But he reported that Gudani was no longer at his post. (See “Master Operator”).

Garcillano spoke too soon. Days later, Gudani returned to his command, triggering an angry reaction from a certain Gene who called Garcillano on June 8: “Boss, nakatanggap ako ng certification ngayon dito galing sa mga bata natin sa Lanao, nag failure na naman pala dahil kay Gudani (Boss, I received the certification from our boys in Lanao; there’s been a failure of elections again because of Gudani).”

Yet another conversation indicates that a more helpful military had beaten the opposition in getting its hands on Pangutaran election officer (EO) Ebron. But that may not have been pleasant for the hapless EO, as a frustrated Garcillano is heard requesting Ruben to tell the military, one of whose members had apparently slapped Ebron, to lay off.

Meanwhile, the help of the Intelligence Armed Forces of the Philippines (ISAFP) was sought in locating Tipo-Tipo election officer Hali. Boy reported to Garcillano that he had gotten in touch with a Col. Undug, said to be Col. Aminkadra Salahuddin Undug of ISAFP’s MIG9 based in Zamboanga.

Garcillano was apparently also coordinating with the police, telling. Arroyo that his people in Zamboanga were already cooperating with Arturo Lomibao, then head of the PNP’s Criminal Investigation and Detection Group and now PNP chief.

In a June 5 conversation with Garcillano, Boy was also told that Lomibao and PNP Chief Hermogenes Ebdane would be calling him about the teacher in Languyan who was expected to testify on the cheating in the elections.

All these may not be news to Guimid Matalam, who says that in Sulu, cheating was supposedly carried out during the canvassing done in military camps. But the 67-year-old veteran politician is not giving up. On August 8, the former three-term congressman from Maguindanao will be trying his luck as the opposition bet in the ARMM gubernatorial election. He thinks the election process can still work. But he has submitted a list of proposal for electoral reforms to the Commission on Elections.

(VERA Files trustee Yvonne Chua wrote this report for I Report of the Philippine Center for Investigative Journalism.  She was then the center’s training director.)

(First published in September 2005)

IN THE May 2004 elections, President Gloria Macapagal Arroyo maintained a campaign organization so elaborate it even included a group dubbed “Special Ops,” an infamous abbreviation for “special operations” that many equate with “dirty tricks,” or cruder still, poll cheating.

What the “Special Ops” group under then presidential liaison officer for political affairs Jose Ma. ‘Joey’ Rufino was tasked to do—or did exactly—was not known to the president’s official campaign advisers. Up to now, many of them are still clueless about that group’s tasks.

Former presidential peace adviser Teresita ‘Ging’ Deles can only say that Rufino’s activities were never taken up in the meetings of the executive council Arroyo convened to take charge of plotting and directing her campaign. Deles was part of that council, also referred to as the advisory council.

“We thought we were running the campaign,” says another council member, former social welfare secretary Corazon ‘Dinky’ Soliman. “We thought we were in the inner circle of the box.”

But since the wiretapped conversations between Arroyo and Commission on Elections (Comelec) commissioner Virgilio Garcillano became public on June 6, and the subsequent sworn statement issued on August 1 by Garcillano nephew and Rufino subaltern Michaelangelo ‘Louie’ Zuce, Deles and Soliman now know better. Quips Soliman: “Inside the box was a smaller box.”

Apparently working alongside Arroyo’s official campaign team was an informal network that included Garcillano, Comelec field personnel, the police and the military, freelance political operators, and perhaps a banana-chips processor and assorted businesspeople in Mindanao and elsewhere. Said to be on top of it all was First Gentleman Mike Arroyo, ably assisted by now Antipolo Rep. Ronaldo ‘Ronnie Puno, a veteran campaign strategist who was part of the Marcos, Ramos, and Estrada campaigns.

These “backroom operators,” as one ex-Palace insider describes the motley team, made up several groups whose functions ranged from the seemingly mundane, such as quick-counting votes, to more questionable tasks that could have had electoral manipulation among them.

These parallel operations seem to come as little surprise to those who have worked for the president, given what some describe as her “dualistic” nature. A former aide notes that during the canvassing, Arroyo was going around the Carmelite convents, including those in Bacolod and Iloilo, even as she was then placing “improper” calls to Garcillano. “It’s like Jekyll and Hyde,” says the ex-aide.

At the height of the political crisis, even her Cabinet split into two groups: one concerned with the president’s “survival at all cost,” the other pushing for “reforms.”

Soliman, a former Arroyo confidante, says of the president’s personality: “She was exposed and has accepted the practices of traditional politics such as paybacks, payups, operations of dirty tricks. At the same time she also believed in instituting reforms in the economic, social and governance spheres using principles of transparency, accountability, and service to the people. She believed that both worlds can exist in one person and the dissonance and disconnect will not clash in her and in her actions.”

Soliman says that in a crisis, such as now, when the two parts of the president become dissonant, Arroyo is more comfortable with traditional politicians and reverts to the old world of wheeling-dealing and compromises that she knows so well.

The official council

When she was with her executive council during the campaign, it was the no-nonsense technocrat Gloria Arroyo that presided over the meetings. The council shared with the president the top rung of her official campaign organization. From January 2004 to the elections, the council met weekly to hear and analyze Palace pollster Pedro ‘Junie’ Laylo’s report on the province-by-province surveys he was running. It identified strategies for Arroyo in areas where her showing was weak, to turn “swing” votes among the undecided voters to her favor, and to maintain her showing in places where she was likely to win.

Former President Fidel V. Ramos co-chaired the meetings with Arroyo. Aside from Ramos, council members included Deles and Soliman (both of whom represented civil society), campaign manager Gabriel Claudio, and campaign spokesman Michael Defensor. Also part of the council were the leaders of the political parties that made up the administration K-4 (Koalisyon ng Katapatan at Karanasan sa Kinabukasan) coalition: Speaker Jose de Venecia and then Defense Secretary Eduardo Ermita of the Lakas-CMD, Senate President Franklin Drilon and then Batanes Rep. Florencio Abad of the Liberal Party, Sen. Manuel Villar of the Nacionalista Party, and National Security Adviser Norberto Gonzales of the Partidong Demokratiko-Sosyalista ng Pilipinas.

Businessman and Philippine National Oil Company president Paul Aquino occasionally sat in the council meetings in his capacity as K-4’s consultant. Then presidential adviser for media and ecclesiastical affairs Conrado ‘Dodie’ Limcaoco, who was in charge of the K-4 senatorial slate, was also in the meetings.

Initially, the council met at the Palace. But when Cabinet meetings became irregular in the runup to the polls, the council would get together at the old Macapagal family residence in Forbes Park, Makati. Drilon also took over in the latter part of the campaign, says Deles.

At the Cabinet, then Executive Secretary and now Foreign Secretary Alberto Romulo was in charge of how members were to campaign for the president. Cabinet members, for example, were told to make a pitch for Arroyo when they distributed Philhealth cards. “We asked if we could campaign and they said we could legally because we were political appointees,” says Soliman.

On election day onward, Cabinet members fanned out to the provinces to gather the provincial certifi cates of canvass and the accompanying statements of votes. This time they took their cues from then residential legal counsel and now Defense Secretary Avelino Cruz, who had set up a quick-count center at the basement of the Olympia Towers in Makati.

Cruz also headed a legal panel assembled for the president’s election bid. Operating out of Olympia Towers as well, the panel included former local governments undersecretary and now Government Corporate Counsel Agnes Devanadera, ex-Comelec Commissioner Manuel Gorospe, and election-law experts Romulo Makalintal and Al Agra.

A big winning margin

Like any candidate, Arroyo wanted to win. That much was clear to all the president’s men and women. Actually, says an ex-Cabinet member, “she was obsessed with the idea of winning. She (couldn’t) stand a loss….(She) felt she had to redeem her father (the late president Diosdado Macapagal) who lost in his reelection (bid).”

That the president should win by at least a million votes, however, was never made known to most members of her Cabinet. Yet it apparently was common knowledge among the other groups working for her.

A handler of a K-4 senatorial candidate says that two weeks before the May 10, 2004 elections, a campaign operative had said the president would win by 800,000 votes. “Plantsado na raw (It was already arranged),” the handler says. That statement would make sense to the handler only after the “Hello, Garci” tapes controversy broke out.

More interestingly, however, is that other campaign insiders say First Gentleman Mike Arroyo, Kampi stalwart Ronaldo ‘Ronnie’ Puno, and a top government official met regularly at the Wack Wack Country Club before the campaign to discuss ways to ensure not only the president’s victory, but also a huge winning margin.

As campaign manager, presidential political adviser Gabriel Claudio was the K-4’s public face in last year’s elections. But those with the administration party say it was Mike Arroyo who was the de facto campaign manager, and that he got a lot of help from Puno.

At the peak of the political crisis, the president herself told some Cabinet members that she had called in the Antipolo congressman to help. But during the campaign, he had no official role in the Arroyo camp. “He was never mentioned, he was never seen,” says Deles. “I would even deny his involvement in the president’s campaign. Even the First Gentleman was not visible.”

Some Palace insiders, however, say Puno was working quietly behind the scenes with the First Gentleman and had recommended “unorthodox” means to clinch Arroyo’s huge winning margin over her opponent, actor Fernando Poe Jr.

A campaign strategist who was part of the K-4 coalition also recalls a K-4 lawyer assuring them that they were certain to get help. “The same operations as Sulo Hotel and Byron Hotel,” the strategist was told, apparently in reference to Puno’s operations at Sulo Hotel in Quezon City when he helped Ramos’s 1992 presidential campaign and at Byron Hotel in Mandaluyong when he backed Joseph Estrada’s presidential bid.

The strategist says, “DILG (the Department of Interior and Local Governments that Puno headed under the Estrada presidency) people in the provinces were used as listening posts. They even knew who drug and jueteng money were funding.”

Both Claudio and Puno were with the Ramos campaign. In a 2003 interview with PCIJ, Puno scoffed at allegations that he was the architect of Ramos’s supposed dirty-tricks department based at Sulo Hotel. He said he delivers because he has the science, citing his experience a campaign consultant for the U.S. lobbying fi rm Black, Manafort, Stone, and Kelly, which has strong links to the Republican Party.

In 2002, Puno supposedly set up camp again at Byron Hotel to build a comprehensive elections database for Arroyo. A K-4 campaign strategist says Puno disbanded the group when President Arroyo announced on Rizal Day in 2002 she was not running.

But he quickly got the group back together in April 2003, long before the president announced her candidacy. The strategy, this source says, was to use the database to pinpoint places where Arroyo was strong and employ “all means” to increase her votes.

Malaya columnist and opposition stalwart Lito Banayo, quoting Loren Legarda’s electoral recount consultants, says Byron Hotel was the “headquarters of choice in the 2004 electoral experience of a coven of prefabricators of election returns” used to ensure the president’s landslide victory in Pampanga, Cebu, Iloilo, and Bohol.

One member of the K-4 campaign says Puno oversaw the Mindanao canvassing after being proclaimed Antipolo City’s congressman. This source asserts that “Ronnie Puno played a big role,” although he was “distracted because he was running at the same time.”

‘Consultations’ with cash

Apparently more focused on their “tasks” were Garcillano and his cohorts. Indeed, Garcillano already seemed to know what he would be doing when he applied for the post of Comelec commissioner. In his Nov. 11, 2003 letter to the president, Garcillano reminded Arroyo that he was among those approached by her husband when she ran and topped the 1995 senatorial polls.

He also underlined his role in monitoring and protecting the votes of the Lakas senatorial candidates in 2001. Garcillano was formerly the Region 10 (Northern Mindanao) Comelec director. Sen. Aquilino Pimentel called him a “dagdag bawas” (vote-padding and shaving) operator, but he was named elections commissioner anyway in February 2004.

The burly Zuce says he was instrumental in bringing Garcillano to Rufino’s — and consequently the president’s — attention. In his sworn statement, Zuce says Garcillano, with Rufino’s blessings, in 2002 organized three “consultation meetings” with Mindanao-based Comelec officials in Lanao del Norte and General Santos City during which he solicited their support for the president’s candidacy and gave out cash ranging from P5,000 to P20,000.

A year later, says Zuce, Mindanao regional directors and provincial election supervisors met at the Grand Boulevard Hotel on Roxas Boulevard to discuss the president’s candidacy. Envelopes containing P17,000 each were distributed to the participants.

On Jan. 10, 2004, Garcillano, through Rufino’s office, organized yet another meeting with 23 Mindanao election officials, again at the Grand Boulevard.

This time, each Comelec official got P25,000, Zuce says. But Zuce’s most damning allegation so far is that President Arroyo hosted dinner for 27 Mindanao-based Comelec officials at her La Vista residence in Quezon City four months before the elections, and that envelopes containing P30,000 each were distributed by Lilia ‘Baby’ Pineda, wife of jueteng lord Rodolfo ‘Bong’ Pineda, to her guests in her presence. Zuce, who was invited to the dinner and got an envelope himself, says Garcillano and former Isabela Gov. Faustino Dy were also present. Zuce told the PCIJ as well as the Senate later that the president hosted another dinner that same month for about 20 Comelec officials from Luzon and the Visayas.

Baby Pineda again distributed money to the officials before they left Arroyo’s home. Malacañang has issued no categorical denial about the dinners, although the president herself has said, “Ang masasabi ko walang nagbibigay ng suhol sa harap ko (All I can say is no one gives out bribes in front of me).”

The now ailing Rufino’s own statement said, “I and my office have never been involved in influencing, much less bribing, Comelec officials to support Lakas-NUCD candidates including President Gloria Macapagal-Arroyo.” Comelec officials led by Region 4 Director Juanito ‘Johnny’ Icaro, who allegedly distributed the envelopes at La Vista, have likewise rebutted Zuce’s charges.

But Comelec regional director Helen A. Flores, who was not in any of the meetings Zuce said took place from 2002 to 2004, says Garcillano, through his security officer and nephew Capt. Valentino Lopez, had offered her P50 million to rig the 2004 polls. Flores says she spurned the offer. Four days before election day, she was relieved as regional director for the Autonomous Region of Muslim Mindanao and moved to Region 9 (Western Mindanao). Lopez, now with the Army Headquarters Support Group, denies involvement in the bribery attempt.

Zuce’s Mindanao trips

On August 10, Capt. Marlon Mendoza, a former Intelligence Service officer assigned as Garcillano’s chief security officer during the polls, surfaced to say he flew to Mindanao on May 11, 2004 on Garcillano’s order, and accompanied Zuce when the latter visited Lanao del Norte and Cotabato City. Mendoza told the Senate he saw Zuce handing Lanao provincial election supervisor Ray Sumalipao a “large amount of cash in an envelope” on May 12. A Comelec director in Cotabato City also received cash from Zuce on May 14, he said.

Mendoza said that by May 16, he and Zuce were in Iligan City. As their group was having lunch in a restaurant there, he heard someone say, “Huling binibilang ang balota sa area ng Lanao del Norte at Lanao del Sur para makakuha ng dagdag (The ballots from Lanao del Norte and Lanao del Sur will be the last to be counted so we can increase these) if GMA will lose in other areas in the country.”

In a recorded May 29 conversation with Garcillano, the president had asked pointedly, “So will I still lead by more than one million (votes)?” The commissioner replied that her rival’s count was high but “mag-compensate man po sa Lanao ‘yan (that will be compensated in Lanao).” At the time, the counting of votes from seven towns in Lanao del Sur’s 39 provinces was far from over.

Zuce says his uncle sent him to Mindanao to coordinate with the Comelec personnel there. He says the region’s “special operations” headed by Ernesto ‘Butch’ Paquingan, a political consultant based in Cagayan de Oro City, helped in ensuring Arroyo’s victory. Zuce says Paquingan was reporting directly to then Executive Secretary Romulo. Paquingan has called Zuce a liar. Zuce, he added, told him the opposition had offered him P4 million to P5 million to testify against Arroyo.

But an old hand in electoral campaigns says Zuce worked with Paquingan in previous polls, including the 1998 elections. Many candidates for national position also engaged Paquingan’s services to help them win in Mindanao, says the campaign veteran.

In his Senate testimony, Mendoza said Garcillano sent him to Cagayan de Oro on May 11, 2004 as security officer for Zuce, Paquingan, “King James,” and a certain “Jun L. Bamboo” of the Presidential Management Services. He identifi ed Paquingan as “a consultant related to DFA Secretary Romulo” and “King James” as George Goking, whom he said was Arroyo’s close friend.

In the “Hello, Garci” tapes, there are two recorded conversations between the Comelec commissioner and Zuce. The first was on May 28, 2004 when Garcillano asked Zuce and Goking, a Cagayan de Oro businessman who is also a director of the Philippine Amusements and Gaming Corporation (Pagcor), to come to his house for a meeting. Zuce, who confirmed to the Senate that he was among those recorded in the “Hello, Garci” tapes, called the commissioner again on June 16 to say he and “George” (apparently Goking) were at Harrison Plaza. In both conversations, Zuce addressed Garcillano as “’cle,” short for uncle.

The campaign veteran says Mindanao is home to many freelance operators, including businessmen, who help candidates by buying votes for them. Zuce had been Garcillano’s conduit to some of these key players, according to the source.

“(The operators) join Senate party coalitions if not hired by a senatorial candidate,” says the campaign expert. “Then they moonlight toward the fi nish line either buying votes or doing presidential campaigns. After the campaign, they are hired as political officers.”

The campaign veteran says the operators have long been in existence; all a candidate has to do is tap into the existing syndicates and networks.

‘Oplan Mercury‘

Businessman Rodolfo Galang, however, says it is also important to ensure the “cooperation” of local officials and political rivals for a candidate to win. Galang says he volunteered to do this for the president in parts of Mindanao during the 2004 elections.

Galang, who co-owns a banana chips processing plant in Maguindanao with Paulino Ejercito, brother of ousted President Estrada, says he decided to help the Arroyo camp because he believed the country would not benefit from a Poe presidency. Galang had also been eyeing a slot machine franchise from the Pagcor. He never got it.

Soon after the polls, Galang changed his mind about Arroyo and executed on June 21, 2004 an affidavit he later filed with the Office of the Ombudsman. His affidavit charged the Arroyo administration with buying off local officials and opposition candidates in Romblon and certain areas in Mindanao under “Oplan Mercury.” These were Lanao del Sur, Davao City, Davao del Norte, Maguindanao, Cotabato City, Davao Oriental, South Cotabato, Davao del Sur, Sulu, North Cotabato, Sultan Kudarat, Tawi-Tawi, Samal, Compostela, Sarangani, Zamboanga Sibugay, and Bukidnon.

Galang says his conduit to the president was Limcaoco. A March 28, 2004 memorandum for Arroyo purportedly coursed through Limcaoco identifi ed the political leaders who Galang said he could convince to pledge their support for the president, paving the way for the conversion of about a third of Poe’s projected votes to Arroyo’s. He estimated this roughly to be 1.6 million of the 5.5 million votes in the “Mercury” areas.

The “conversion,” according to Galang, could be made by using the carrot of fund releases to convince local government officials to mobilize support for Arroyo. Thus, in his affidavit, Galang implicated the officials who made those fund releases possible: Nena Valdez, the president’s former Assumption Convent classmate who reportedly took charge of the funds released for Oplan Mercury; then Agriculture Secretary Luis Lorenzo for approving the release of the fertilizers given to Mindanao officials; then National Food Authority director Arthur Yap for the rice distributed to them; Pagcor chair Ephraim Genuino for the capital equipment that was also given out; and then Health Secretary Manuel Dayrit for the medicine. (See “Running on Taxpayer’s Money.”)

Before the March 2004 memo, Galang says he submitted to the president, again through Limcaoco, analyses of the political situation these places, including informal surveys assessing the chances of Arroyo and local candidates. The document on Maguindanao projected Poe would win 70 percent of the votes, or about 284,310. “Oplan Mercury” would pad the votes to ensure that Arroyo got 262,2440, leaving Poe with only 43,740 votes. (PCIJ has copies of the Maguindanao document and the March 2004 memo.)

Right after Galang disclosed “Oplan Mercury” in a press conference last year, Limcaoco dismissed his allegations as hearsay and baseless. He said Galang had volunteered to campaign for K-4 but “he was never my employee or political operator. Nor did we authorize or support any illegal operation.”

Former Cabinet members say it was unlikely Limcaoco had time to mount such an operation. They say taking care of the K-4 senatorial candidates was a full-time job.

Still, the president did post one of her biggest winning margins in the congressional count for Maguindanao, garnering 193,938 votes against Poe’s 59,892. The opposition considers the outcomes in eight towns there as highly dubious. Poe scored zero in Ampatuan and Datu Piang, and got as little as five to 174 votes in six other towns.

In their June 6 conversation, the president sought Garcillano’s assurance that the documents in Maguindanao were consistent. The commissioner had replied that Maguindanao wasn’t really much of a problem.

Four days later, Arroyo expressed concern over the local canvassing in South Upi town, where Comelec had proclaimed different winners. But she told Garcillano that the important thing was “hindi madamay ‘yung sa taas (we don’t get affected at the top).” The commissioner assured her that he had control there.

A shadow quick count

Like the other Cabinet members gathering certificates of canvass, Deles brought the documents she had collected to presidential legal counsel Cruz, who ran the K-4’s official quick-count center at Olympia Towers. But that was not the only Arroyo quick-count in town. K-4 campaign handlers now speak of another done with the help of the Philippine National Police (PNP), then under Gen. Hermogenes Ebdane. Now public works secretary, Ebdane’s name was mentioned in the “Hello, Garci” tapes.

The PNP appeared to have instructed some of its members to get copies of precinct-level election returns. These were forwarded to the K-4 headquarters for senatorial candidates and their handlers to monitor. On the count’s third day, however, the Senate tally was canceled, forcing the candidates to get their own precinct count.

A consultant of a K-4 senatorial candidate was told the PNP received word to send the results straight to Malacañang. The consultant was then asked to call two phone numbers to check the count’s progress: one number was a phone at the Olympia Towers; the other was picked up by someone at the Department of National Defense or DND.

Soliman recalls that as election day neared, then Defense Secretary Ermita increasingly took the lead among the Cabinet members in the president’s campaign. But Deles says Arroyo had stressed the need for Ermita, a Lakas regional chairman known for his good political instincts, to stay “behind the scene.” Neither Deles nor Soliman, though, remembers any instructions given to the DND.

The K-4 candidate’s consultant, however, says ex-elections commissioner Gorospe, who reportedly had his own group besides being in the K-4 legal team, was often at the DND during the counting. A former DND staffmember also says access to the Defense Intelligence Service Group (DISG) compound at the back of the DND building in Camp Aguinaldo was prohibited during the elections. The DISG primarily provides the security escort of the defense secretary and pursues intelligence projects.

Heavily tinted vehicles were seen coming in and out of the DISG, even at late nights and early hours in the morning, according to the ex-DND insider. New computers were moved there, along with Arroyo election paraphernalia. Ermita’s head executive assistant Alfredo Bunye, the presidential spokesman’s brother, was said to have held office at the DISG during this period as well.

Requests from local goverment officials for election materials were directed to the DISG. On occasion, DND soldiers and personnel were used to distribute the materials to requesting parties, says the former DND staff member.

Fact-finding bodies and antidotes

After the “Hello, Garci” tapes revealed what appears to be military involvement in manipulating last year’s elections, the military formed a fact-finding board to investigate four senior officers mentioned in the conversations: Lt. Gen. Hermogenes Esperon of the Special Operations Command; Maj. Gen. Gabriel Habacon of the 1st Infantry Division; Brig. Gen. Francisco Gudani, assistant superintendent of the Philippine Military Academy; and retired lieutenant general Roy Kyamko.

During the 2004 polls, Kyamko was Southern Command chief. Esperon was the deputy chief of Task Force HOPE, Gudani the former chief of Task Force Ranao, and Habacon chief of Task Force Comet.

In a statement last August 4, a group calling itself “The Young Officers Union of the new generation (YOUng)” sought the investigation of other officers for their supposed part in the alleged electoral fraud: Brig. Gen. Nehemias Pajarito, chief of the Army’s 104th Brigade based in Marawi City; Brig. Gen. Nelson Allaga, 3rd Marine Brigade commander; Navy Capt. Feliciano Angue, then head of Naval Task Force 62 operating in Tawi-Tawi and now Navy operations chief; Marine lieutenant colonels Melvin Pelonia and Elmer Estopin based in Tawi-Tawi and Sulu, respectively; Army Colonels Rey Arde and Aminkandra Undug; and a certain Colonel Pereno and Captain Perez.

It’s uncertain if there was a military component to the so-called “Antidote Group,” which a senator’s adviser fi rst heard of weeks before the polls. While fretting over the absence of a K-4 senatorial campaign plan, the adviser was assured by a presidential consultant, “Don’t worry, there’s an antidote.”

Rufino also referred to an “Antidote Group” in his marginal note to Arroyo when he endorsed Garcillano as elections commissioner. Wrote Rufino: “He (Garcillano) will be a great asset to you. He has proven track record and can deliver! Part…The Antidote Group.” The senator’s adviser says the Antidote Group was often offered as the solution whenever the campaign had problems. Whoever made up the group remains a mystery to the adviser, but its purpose has since become clear. “Our own quick count showed some election returns did not match the certificates of canvass,” says the adviser. But many of these somehow got “cured.”

(VERA Files trustee Yvonne Chua wrote this for I Report published by the Philippine Center for Investigative Journalism.  She was then the center’s training director.)

(First published in July 2005)

OFFICIALLY, it’s President Gloria Macapagal Arroyo who, according to Congress’s canvassing, posted a 1.1- million lead over opposition candidate Fernando Poe Jr.

But with the subject of electoral fraud reverberating throughout the wiretapped conversations of then Elections Commissioner Virgilio Garcillano and Arroyo, people are beginning to wonder: Did the president truly win? If she did, was it indeed by more than a million votes? Or could Poe have won? If yes, by how many votes?

Answering these questions is not easy. The 2004 presidential race is the tightest yet since the first Philippine presidential election was held in 1946. Arroyo beat Poe by only 3.5 percentage points. Previously, the closest contest had been between Fidel V. Ramos and Miriam Defensor Santiago, with the former defense secretary leading over the former immigration commissioner by 3.9 points. All presidential elections before 1992 were decided by at least six points.

In the past, people who were skeptical about Congress’s count would look to the exit poll of the Social Weather Stations and the quick count of the National Citizens Movement for Free Elections (Namfrel) for validation. For the May 2004 elections, Arroyo has repeatedly invoked the results of SWS survey and the Namfrel tally to insist that she won. In fact, she cited these again in her statement last June 27, in which she apologized for making phone calls to Garcillano.

Indeed, in previous electoral exercises, the results of the two organizations had been fairly close to the official tally. But that was not quite the case in last year’s elections, and the discrepancies are too huge to ignore.

In the congressional canvassing, Arroyo got 40 percent of the votes and Poe 36.5 percent, a difference of 3.5 points. The SWS exit poll, however, showed that 45 percent of the respondents voted Arroyo for president and 34 percent elected Poe, or an 11-point difference.

Mistake from margin of error

While that may look as a clear validation of the Arroyo win, not a few statisticians raised their eyebrows. Dissatisfaction with the exit poll grew when it wrongly stated that Arroyo had defeated Poe in Metro Manila, which historically has voted opposition. This led to an independent review of the exit poll.

The review subsequently concluded that the error stemmed from the high number of non-responses and the understated margin of error used in the survey.

A margin of error estimates the extent to which a survey’s reported percentages would vary if the same poll were taken multiple times. A +/- 2 margin of error, for example, means that a 90 percent finding can range from 88 to 92 percent.

Former National Statistics Office chairman Tomas Africa said that if a +/- 2.8 margin of error instead of a +/-1.4 that the SWS used had been applied to the exit poll, the presidential election could be described as “too close to call, a near statistical dead heat, and not a clear victory for Arroyo.”

“The conjecture that Poe may have won in the voting but lost in the elections cannot be entirely dismissed,” he added.

SWS president Mahar Mangahas said the margin of error used in the exit poll is the industry standard. He acknowledged, however, the mistake the SWS made in the National Capital Region, where both the Namfrel and the official tally showed Poe winning. Mangahas, who is a cousin of Poe, said the research organization had failed to get a good sample and many respondents were not speaking up. “We had not gotten anywhere close to our target, 1,000,” he said. “We got 500 to 600. There were heavy rains. (The fieldwork) was stopped. People were pulled out.”

But Mangahas stressed that the SWS results for the Autonomous Region of Muslim Mindanao were consistent with the Namfrel tally (see “>>”). Both were the exact opposite of the official tally, which showed Arroyo winning in the region. “This is where Namfrel and Comelec should slug it out,” Mangahas said.

On the surface, the Namfrel overall count seemed to reflect the official tally—39 percent of the votes went to Arroyo and 37 percent to Poe—but sharp deviations detected in the provincial and regional breakdowns have made some sectors wonder if Namfrel managed to capture the real score in last year’s polls.

Unfortunately, Namfrel’s terminal report on the 2004 elections makes no reference to discrepancies in the presidential and vice presidential elections. It cites only discrepancies in the count for administration candidates Rodolfo Biazon and Robert Barbers, who were fighting over the 12th and last senatorial slot.

Less than one million?

Roberto Verzola, a computer expert who volunteered for the election NGO Coalition for Hope in the 2004 elections, found discrepancies in the Namfrel and congressional figures not only for the ARMM, but also for Central Mindanao, Northern Mindanao, Western Mindanao, Central Luzon, and the Cordillera Administrative Region.

He also came across discrepancies in the voter turnout reported by Namfrel and the Commission on Elections in the ARMM, Ilocos, Central Visayas, Central Mindanao, Eastern Visayas, Bicol, Cagayan Valley, and Central Luzon. (It also hasn’t escaped some election observers that the Comelec had 43.5 million registered voters in the list for 2004, versus 37.8 million in its list for the 2002 barangay elections, or a 15.2 percent increase over only two years. Even some Comelec officials say this is statistically improbable, explaining the increase should parallel population growth, or be slightly lower because not everybody registers.)

This made Verzola conclude: “It is clear from the Namfrel tally that GMA could not have won by 1.1 million votes.”

At the time Namfrel’s quick count closed on June 5, 2004, Arroyo was ahead by 680,922 votes. Verzola said, however, there were still 4.4 million uncounted votes mainly from Poe’s bailiwicks and about one million from Arroyo’s. If and when counted, these would further reduce Arroyo’s lead, he said. Namfrel collected 90 percent of the election returns and tabulated 83 percent of these.

Extrapolating from the congressional and Namfrel counts, Verzola said that either Arroyo or Poe could have won by up to around 120,000-plus votes. The only way to find out which way the voting really went, he said, is if Namfrel releases the breakdown of precincts per province they tallied.

Former Comelec Chairman Christian Monsod likewise believes that Arroyo did not win by more than a million votes. “There (were) just too many reports of cheating to be ignored, mainly in Mindanao, with Comelec high officials probably interfering with the process,” he said. “This may have been driven by what the administration thought was necessary for a so-called ‘clear mandate.’” He noted that the opposition lacked the machinery to protect its votes.

“Corruption at the highest levels of the Comelec and partisanship for a sitting president were the other issues,” Monsod added. “The prolonged and badly managed canvassing in Congress did much to also hurt the credibility of the process. And Namfrel, perhaps for the first time in its existence, perceived as not being totally transparent and decisive, lost some ground in credibility as well.”

Based on the former Comelec chairman’s own calculations, Arroyo’s margin of victory was probably close to one percent, or about 300,000 votes.

Longest canvassing in history

The canvassing of the presidential and vice presidential elections was the longest ever in the country’s history: The country waited for 40 days before Congress finally proclaimed a winner on June 20, 2004.

The political think tank Institute for Popular Democracy described the canvassing as “credible” and “legitimate” insofar as legal and procedural terms: The ballot boxes were opened, the certificates of canvass were examined and the opposition’s entering of its complaints were noted by the chair of the Joint Canvass Committee and the majority members of the of the committee.

But, it said, the rules and technicalities of the canvassing outweighed the principles of fairness and decency. “The fundamental question remains to be whether the electorate’s will was reflected in the counting and canvassing. The canvassing was credible according to the implementation of the rules prescribed but it did not provide a categorical answer to the question,” according to IPD.

This was exactly the opposition legislators’ beef about the majority’s decision to simply note and quickly set aside their objections to scores of municipal and provincial COCs and their accompanying statements of votes during the canvassing.

Citing discrepancies, alterations and erasures, the minority had objected to COCs from 41 provinces and cities. It requested going back to the precinct-level election returns, but was spurned. The minority alleged massive cheating in Cebu, Bulacan, Pangasinan, Bohol, Iloilo and the Mindanao provinces.

Based on figures on the election returns it had retrieved, the opposition contended that Arroyo’s votes were padded and Poe’s correspondingly shaved by 159,752 in Cebu province and 23,421 in Cebu City alone. The official tally counted 965,630 for Arroyo and 123,099 for Poe in the province, and 220,060 and 58,591 for the two respective candidates in the city.

And had the election returns in all the areas in question been tabulated, Poe would have posted a 511,981 lead over Arroyo, according to the opposition. “Candidate Poe and (Loren) Legarda are the real winners in the May 10, 2004 elections,” the minority declared in its report.
Until the election returns are opened and counted, the opposition’s guess is as good as anyone’s – and will remain one.

(VERA Files trustee Yvonne Chua wrote this report for I Report of the Philippine Center for Investigative Journalism.  She was then the center’s training director.)

(First published on Aug. 28, 2005)

THERE ARE virtually no farms in Las Piñas, Parañaque, Quezon City and certainly not in Makati. Yet these overbuilt and densely-populated cities were among at least 100 congressional districts that, according to the Department of Agriculture (DA), needed P1.8 billion in farm inputs and implements in February 2004, just when the presidential campaign was kicking off.

So when Makati Rep. Teodoro Locsin Jr. was asked last week how he used his P3-million allocation from the DA, he quickly denied ever having received it. “Where did the money go because it sure didn’t go to, well, at least (Las Piñas Rep.) Cynthia Villar and me?” Locsin asked in a privilege speech last Monday.

Part of the answer, according to records obtained from the Office of the Ombudsman and the Commission on Audit (COA), confirms what government critics and farmers’ groups have long been saying: that most of the money went to pro-administration governors, mayors and congressmen who were expected to support President Gloria Macapagal-Arroyo’s election.

What the Ombudsman and the COA have so far discovered is that at least P120 million found its way to 15 obscure or nonexistent private foundations that had nothing to do with agriculture, but were apparently used as conduits for campaign funds. The investigators still have not traced where hundreds of millions more in DA funds ended up, but these too, they say, were likely diverted to the campaign.

COA auditors were initially baffled by the manner in which the money, disbursed beginning in February 2004, just a week before the start of the 90-day presidential campaign, up to early May, flowed from the national coffers to the DA’s regional and local offices and then to the foundations.

But after months of research, the auditors, who asked not to be named, now say they have uncovered an intricate plot to use the DA’s network to divert money to private groups and entities beyond government control and exempted from the rigors of state accounting procedures.

“It was a well-planned project involving national and local officials and the DA itself, with its nationwide machinery, which ensured easy distribution throughout the country,” said a COA source involved in the investigation.

Questions over the use of agriculture funds are not new. Last year, several cases of plunder related to the use of DA funds were filed against President Arroyo and officials of the agriculture and budget departments.

Since last year, the Ombudsman and the COA have been discreetly following the money trail of the DA’s cash-rich Ginintuang Masaganang Ani or GMA Project, a program with several components that include rice-and-corn, livestock and seeds program.

One of these components was the P728 million released on February 3, 2004, supposedly for the agricultural projects of congressional districts, towns and provinces. Another component of the GMA Project is the P1.1 billion, released on February 11, 2004 supposedly for “maintenance and operating expenses.”

Both of these funds, according to former Solicitor General Fancisco Chavez, went to legislators, governors and mayors to support the president’s election. Chavez said these were “in reality, an infusion into the political kitty” of Arroyo. He alleges that the president committed plunder when she used government funds for her campaign.

Crucial to the project was Jocelyn “Joc-joc” Bolante, a close friend of First Gentleman Mike Arroyo and his fellow Makati Rotarian. Bolante was named DA undersecretary for finance and administration shortly after Arroyo took over the presidency from Joseph Estrada in 2001. He was in fact the first Arroyo appointee to the department and was already put in charge even before the agriculture secretary, Leonardo Montemayor, was named.

Bolante’s power over the agriculture department was widely known. Last year, just before the start of the campaign, it was he — and not then Agriculture Secretary Luis Lorenzo — who sent letters to various congressmen and local officials informing them of the availability of funds under the DA’s GMA Project.

In that letter, Bolante directed these officials to coordinate with his office “to discuss all the requirements to facilitate the said project fund.” Bolante’s letter is dated February 3, 2004, the same day that the Special Allotment Release Order or SARO for the fund was made available by the budget department.

A copy of Bolante’s letter was part of the documents submitted by Chavez to back up his plunder charge. A similar case was filed by the Kilusang Magbubukid ng Pilipinas and other farmers’ groups.

Former DA Undersecretary Ibarra Poliquit admitted Bolante had a hand in determining how the GMA Project funds were spent. He said former DA chief Luis Lorenzo “authorized Bolante to decide on the realignment of funds.” Although the DA has a list of officials whose “proposed projects” were to be funded by the GMA Fund, Bolante was given the authority to drop them and replace them with others.

Assistant Secretary and DA Spokesperson Jose Montes insisted “the money was put to good use” funding projects that were proposed by congressmen, governors and mayors themselves. He even cited the growth of the agricultural sector in 2004.

Montes also added that “the election had nothing to do with the timing (of the release of the funds). Ang timing namin always is kung kelan kailangan ng agrikultura yung pera, dun dapat natin ilabas. Hinahabol naming production targets, planting season ng April and May (Our timing is dictated by the needs of the agriculture sector. That’s when we release funds. We have to meet production targets and the April and May planting season).”

Urban areas also need farm implements, Montes said. In the case of Parañaque, the money went to shredders for composting. And contrary to the impression that there aren’t any farms or rice paddies in Parañaque, Montes said there is “urban agriculture” composed of what he called “vacant-lot farming” and the growing of ornamental plants.

Chavez said that the P728 million was disbursed to 105 congressmen, 53 governors, and 23 city and municipal mayors. He showed a list obtained from the Department of Budget and Management (DBM) attesting to the releases. He also revealed that some of these recipients received actual cash and not farm inputs, as DA rules had prescribed.

It now appears from COA findings that part of the agriculture funds went to questionable foundations. In the Metro Manila and Southern Tagalog region, COA auditors traced the funds to groups like the Gabaymasa Development Foundation, Magsasaka Foundation and Aaron Foundation.

Records of the Securities and Exchange Commission show Gabaymasa’s purpose is “to undertake integrated rehabilitation and restoration activities in areas affected by natural and man-made calamities.” Yet the DA issued to the foundation checks worth P23.1 million, supposedly to purchase farm inputs in Quezon, Marinduque, Oriental and Occidental Mindoro, Palawan and Paranaque.

Aaron Foundation, on the other hand, is listed in the SEC as engaging in livelihood projects and daycare centers for street children. It received P5.2 million, supposedly for agriculture projects in Batangas and Palawan.

The SEC has no record of a Magsasaka Foundation but it is listed as the recipient of P6.5 million for farm projects in Palawan.

In the Visayas and Mindanao, the agriculture funds went to various foundations, among them Ikaw at Ako Foundation (P13 million for projects in Bohol, Biliran and Agusan del Norte), Philippine Social Development Foundation (P31 million for projects in Agusan del Sur and del Norte and Surigao del Norte), Matatag na Republika Cooperative P3.2 million for Biliran) and People’s Organization for Progress and Development, Inc. (P5.2 million for Agusan del Sur and Surigao del Sur).

The other findings of the COA and the Ombudsman on these disbursements reveal that:

• In Metro Manila and Southern Luzon, P31 million that was supposed to go to 23 towns and two provinces in chunks of P500,000 or P5 million each was not received by the local government units, even if these local governments were listed as beneficiaries of the fund in the SAROs and Advise of Suballotment (ASA) of the DA central office.

The COA was not able to trace where most of this money went. The municipal treasurers of 19 towns issued certifications that their municipalities did not receive the money. Four other towns that were listed as having received P500,000-Lopez and Tayabas in Quezon and Lemery and San Juan, Batangas-reported to the COA that they got only 5,000 calamansi or mango seedlings, and in the case of Tayabas, also 434 bottles of Foliar fertilizer.

The treasurers of the two provinces listed in the SARO also certified that they did not receive anything from the DA funds. The province of Palawan, for example, did not get the P5 million that was supposedly allotted for it. Instead, a check for P3.2 million from the SARO was paid by the DA to the Magsasaka Foundation Inc.

Marinduque, too, didn’t get its P5-million share. DA records show that P3.2 million that was supposed to go to the province was instead paid out to the Gabaymasa Foundation.

• Seven towns in Bohol supposedly got P10.5 million, except that the entire amount was paid to the Philippine Social Development Foundation. Similarly, P3.8 million intended for two towns in Surigao del Norte, two in Agusan del Sur, and one in Agusan del Norte went through the foundation.

The first district of Surigao del Norte, represented in Congress by Glenda Ecleo, also got P4.3 million coursed through the same foundation. The amount remains unliquidated as of January 2005. The P5 million for the province of Agusan del Norte was also coursed through the same foundation; the money also remains unliquidated. Both Ecleo and Agusan del Norte Gov. Angelica Amante are staunch Lakas members.

• In contrast, in areas that were known to be staunchly supportive of Arroyo, like Central Luzon, the allocations for local officials were given in cash. This violates DA procurement procedures that state that disbursements from the GMA Project should not be in cash, but in farm inputs or implements.

DA Assistant Secretary Felix Jose Montes insisted no cash disbursements were made from the GMA Project. But COA records show that several provinces, including Rizal, Laguna and Batangas received cash transfers of P3 million to P5 million each during the campaign.

Former Pampanga Gov. and now Senator Lito Lapid also admitted getting P5 million in cash, which he said was put by the provincial government in a trust fund that was used to buy fertilizers and other farm inputs. A Pampanga farmers’ group, however, denied ever getting any support from the provincial government.

(VERA Files trustee Luz Rimban wrote this report for the Philippine Center for Investigative Journalism when she was its broadcast director.  This piece won first prize in the following year’s Jaime V. Ongpin Awards for Excellence for investigative reporting. Rimban was elevated to the awards body’s Hall of Fame that year after winning the first prize three times. This report was first posted in the PCIJ website.)

(First published in July 2005)

PITY party-list organizations. Although Republic Act 7941 reserves 20 percent of House seats for these groups, which are supposed to be from marginalized sectors whose interests are not represented in Congress, the reality is that it is difficult for them to win votes. That’s because Filipinos are still mostly uninformed about the party-list process and the Commission on Elections has done nothing in terms of a voter-awareness campaign to remedy the situation.

Based on the Garci tapes, however, it now seems that some party-list groups that President Gloria Macapagal-Arroyo supported may have been counting on help from no less than a Comelec commissioner himself. In several instances, Commissioner Virgilio Garcillano was heard discussing the chances of at least five party-list groups getting seats in Congress: VFP (Veterans’ Freedom Party), ALIF (Ang Laban ng Indiginong Filipino), ANAD (Alliance for Nationalism and Democracy), SMILE (Samahan ng mga Mangangalakal sa Ikauunlad ng Lokal na Ekonomiya) and TUCP’ (Trade Union Congress Party).

“These were all publicly endorsed by GMA,” says Ronald Llamas, national president of Akbayan, another party-list group. “They are all identified with GMA. There are no anti-GMA among the party-list groups mentioned in the tapes.”

Two of these groups have already been proclaimed winners and are currently holding seats in the House of Representatives; Ernesto Guidaya represents the VFP, while Acmad Tomawis represents ALIF. The Cornelec is also expected to proclaim ANAD as another winner, meaning its first nominee, ex-communist-turned-vigilante Jun Alcover, will soon have a seat in Congress.

The VFP was proclaimed ahead of ALIF, having been among the 15 party-list organizations declared as winners by the Comelec on June 2, 2004. Sitting as the national board of canvassers for the party-list elections, ihe Comelec proclaimed 15 organizations as winners, resulting in 23 party-list representatives. But this was only a partial proclamation. At that time, the Comelec said it was suspending the canvass as it was still awaiting a final Certificate of Canvass from the Autonomous Region for Muslim Mindanao (ARMM).

Favored groups first?

The next day, June 3, Garcillano is recorded as having called up someone named Lyn and telling her, “Ipaalala mo kay Romy meron silang reward niyan pero ‘wag maingay…Meron pa kasing isa pa sana kung pupuwede pero hindo kai ko alam meron silang ikakuwan, ‘yung SMILE din ke kuwan pa naman ‘yan, sa kaibigan diyan sa tabi. Pero ‘yung isa sigurado na ‘yun…Pagkatapos ng kuwan, tatanungin ko pa ‘yung isa (Remind Romy they have a reward but that they should keep silent…There’s still another one that could be included] but I don’t know if they have…and then there’s SMILE, which is our friend’s. But one’s already for sure…Later, I’m going to ask about the other one).” SMILE, which represents small and medium-scale businesses, including vendors and service providers, had former bastketball star Ramon Fernandez as a nominee.

Five days later, a certain Ruben called up Garcillano, asking, “Papaano ‘yimg ano natin, sa party list (so how’s our, you know, in the party list)?” The commissioner replied he could not do anything yet because “wala pang usapan ang mga tao tungkol diyan (there hasn’t been talk about that yet).” But Ruben pressed on, asking specifically about TUCP and ANAD. TUCP is the party-list arm of the Trade Union Congress of the Philippines, which has had its former secretary-general, Ernesto ‘Boy’ Herrera, become senator in the past.

Garcillano told Ruben that doing anything would be difficult because the proclamation of party-list winner was over and expressed concern about being too aggressive in pushing forward “favored” groups — ‘”yung mga malapit” — since they could be noticed. Ruben then reminded him that the organizations he mentioned were “malapit ‘yan ha kesa sa SMILE (they are more favored than SMILE).”

A few minutes after this conversation, Garcillano accepted another call that turned out to be about the VFP. The caller, an unidentified man, wanted to know if there was a chance the group could have another representative aside from Guidaya. Garcillano again said the proclamation was over, bul like Ruben die caller was insistent. Garcillano finally said that the number of votes garnered by the group had already been recorded and official; the implication was the figures could no longer be played around with.

Exactly a week later, on June 14, Garcillano accepted a call from another unidentified man who asked when something would be clone about “the party list.” The commissioner replied that he was still working on it, but that “ang mauna siguro iyong ALIF. Pero gusto ko masabay-sabay (ALIF could be first. But I would want them proclaimed all at the same time).”

Questionable qualifications

As it turned out, the Comelec did proclaim ALIF as a winner. But other party-list groups have since questioned that act. They note that ALIF was proclaimed alone, separate from the first batch, and ahead of another expected batch that to this day is waiting to be proclaimed. Why, the groups ask, did ALIF get special treatment? How did it get in, while other party-list organizations are still wailing for either their first or second nominees to be proclaimed?

As far as other party-list organizations are concerned, VFP, ALIF, and ANAD are among those vested interests seeking entry to Congress through a backdoor that has made a mockery of the party-list system. Long before the Garcillano conversations were made public, the party-list group Partido Manggagawa (PM) had already sought the disqualification of eight party-list organizations, including VFP, ALIF and ANAD, on the grounds that these did not meet the criteria for accreditation.

Had the Comelec been stricter in screening party-list candidates, these groups would not have had a chance in running in the elections. VFP is a reincarnation of the Veterans’ Federation of the Philippines, a group previously disqualified from the party-list contest because it was an entity supported by the government. It changed its name to Veterans’ Freedom Party less than a year before the elections. Its representative Guidaya was in fact a retired military man who used to head the Philippine Veterans’ Affairs Office (PVAO), an agency under the Armed Forces of the Philippines (AFP).

ALIF Representative Tomawis, meanwhile, was a party-list nominee of the Laban ng Demokrutikong Pilipino (LDP) in 2001. The LDP was disqualified then because it was clearly a traditional political party that was more than amply represented in both houses of Congress. PM asked the Comelec to disqualify ALIF this time because it violated one of the criteria for party-list accreditation: that not only must the party be marginalized, so must its candidate. “Tomawis is a big businessman engaged in overseas trucking, particularly trucking services in Iraq,” the PM said in its petition. A number of party-list representatives see Tomawis’s assumption as congressman as the most questionable of all the controversial party-list nominations.

Victims of fraud

The cheating in 2004 also affected radical party-list groups, like those above taking part in an anti-war demonstration.

The third group included in the petition for disqualification is ANAD, which is composed of former members of the notorious anti-communist vigilante group Alsa Masa. “It is in truth a project organized and an entity assisted by the government to promote an anti-communist position,” the PM said.

How such groups were able 10 sneak in anyway has long been a frustrating mystery for other party-list organizations. Another puzzle is the suspiciously high number of votes certain first-time party-list groups obtained in Mindanao, particularly in the Autonomous Region for Muslim Mindanao or ARMM. Since the Garci tapes surfaced, however, speculations have grown that negotiations were being made at the Comelec level, not only for questionable groups to be included in the race, but also for these to obtain votes afterward.

Improbable figures

Just months after the May 10.2004 elections, party-list groups were already questioning the results in some provinces in ARMM, which also happens to be an area where Garcillano is supposed to be the most well-versed among the Comelec commissioners. At least two patty-list groups — PM and the Citizens Battle Against Corruption (CIBAC) — have since filed complaints with the Comelec on what they say are dubious election results. The most basic issue is the turnout of votes.

•    In Lanao del Sur, the number of registered voters was 273,011 yet the total number of votes cast for party-list groups was 279,927, which translated to a 100.3 percent turnout for party-list polls.

•    In Basilan, the total number of registered voters is only 150,282 while the total votes cast for party-list organizations was 163.385.

•    In Maguindanao, the total votes cast for party-list candidates was placed at 283,012 out of a total of 334,331 registered voters, equivalent to a high turnout of 84,65 percent.

•    In Tawi-Tawi, the total number of votes for party-list groups was 76,334 out of 120,402 registered voters, or a turnout of 63.4 percent.

Various party-list groups have noted the mathematical improbability of such figures, especially since the survey group Social Weather Stations predicted before the elections that the voter turnout for party-list elections would not he more than 40 percent.

In Quezon City, headquarters of some of the biggest party-list groups and focus of intense election propaganda, the turnout of party-list votes was only 35 percent. Party-list groups wondered how the results could more than double in far away ARMM.

Interestingly, it was in Lanao del Sur where ALIF got the bulk of its votes. Comelec records show that ALIF got 116,489 votes in that province, representing more than one-third of total votes from there. This presents another statistical conundrum: there were 66 party-list organizations that competed, and there were at least three others based in Mindanao or having a Muslim constituency. How could an unknown, first-time organization like ALIF corner the lion’s share in such a crowded field?

There were other suspicious results as well. In Basilan. the party-list topnotcher was the unknown Visayas Farmers Party or Agrifil, which got more than 90,000. The party-list group Anak Mindanao (AMIN) called the Comelec’s attention to that “irregularity.” Last September, the Comelec’s first division responded; it said it was indeed statistically impossible for Agrifil to win because its papers showed that its base were the Western Visayan provinces of Aldan, Capiz, Guimaras, and Iloilo where it got only 11,464 votes. The Comelec said Agrifil “had no clear constituency” in Basilan and called for the investigation of the provincial election supervisor.

Shortly after the Garci tapes scandal broke out, Comelec chief Benjamin Abalos himself said that his office would prosecute the Basilan election officials responsible for the Agrifil votes. The decision, though, has yet to be implemented.

The Comelec has also failed in other things, particularly in being more transparent about the party-list count, which to this day remains unfinished. At the very least, party-list organizations are demanding accountability from the Commission. “They (the Comelec) are very evasive when we ask them about the last remaining COC (Certificate of Canvass) that still needs to be canvassed. They never came out with official statement of any sort regarding the conclusion of the party-list canvass,” says Blanca Kim Bernardo-Lokin, second nominee of the party-list group CIBAC, which along with party-list groups PM, Butil, and Gabri-ela are awaiting proclamation of their second nominees.

Of course, the Comelec can always say it is besieged with a mountain of complaints from party-list groups — some with legitimate grievances and others without. Most of them are asking for a recount, presenting COCs showing they won enough voles for a seat in Congress.

Groups like Akbayan are wondering how the Comelec will deal with the situation. A recount has probably been granted since the Comelec is poised to proclaim new winners. But Akbayan’s Llamas asks: “If they restore the votes of a group which says it was robbed of votes, then that means they have to take away votes from those who stole. We don’t know how the Comelec is doing it, And we don’t know either how the other party-list groups managed to scrounge for votes. Where are all these votes coming from?”

(VERA Files trustee Luz Rimban wrote this for I Report published by the Philippine Center for Investigative Journalism.  She was then the center’s broadcast director.)

(First published on Oct. 20, 2005)

POONA BAYABAO, Lanao del Sur — “Fernando Poe, Fernando Poe.” With clenched fists and his right hand raised, octogenarian Hadji Mohammad Monte repeated the name of the late action star like a mantra when asked whom he voted for in the last presidential elections. He insisted that Poe was number one among the residents of this town where the late king of Philippine movies was — and still is — very popular.

In fact, town residents cheered Monte on as they shouted, “FPJ! FPJ!” When asked, six of every 10 residents here claimed they had voted for Fernando Poe Jr. Only a few women admitted going for President Gloria Macapagal-Arroyo, but even they conceded that there was no way the movie icon could lose in a clean election here.

In the certificate of canvass that reached Congress, President Arroyo got 4,700 votes in Poona Bayabao, a fifth-class municipality in Lanao del Sur that is a 45-minute drive from Marawi City. All her rivals, including Poe, each scored a big, fat zero.

“What we saw in the election returns was that each candidate had votes,” said Nasser Dibansa, principal of the Bansayan Elementary School and head of the National Citizens’ Movement for Free Elections (Namfrel) 2004 Operation Quick Count here. “Not only Fernando Poe, but also (Eddie) Villanueva — every candidate had votes. Since I was born, I have not experienced (anything) like that, that a candidate would get zero.”

Because of the improbability of the poll results, Poona Bayabao has been cited as an incontrovertible proof of massive cheating in Mindanao, particularly Lanao del Sur.

These charges were bolstered by the controversial testimony at the Senate of Brig. Gen. Francisco Gudani, who was stationed in Lanao del Sur during the 2004 elections. Last month, Gudani told the Senate that he had witnessed and observed “all kinds of cheating from start to finish” in the province.

More proof

When “Probe” visited Lanao del Sur recently, it found further proof: Two political operators, Lomala Macadaub and Abdul Wahab Batugan of the Lanao del Sur Unity Movement for President Gloria Macapagal-Arroyo, who said that their group was behind alleged dagdag-bawas (vote-padding and -shaving) operations in the province, as well as in Sultan Kudarat, Sulu and Tawi Tawi. They also said the funds for their operations came from First Gentleman Jose Miguel ‘Mike’ Arroyo.

These operators say that their tasks included talking to, and paying off, elections officers to reverse the ratio of the votes in the president’s favor. Sometimes, they admitted, they altered the certificates of canvass (COCs) themselves, thus explaining the disparity in the results in the election returns and the COCs.

Lawyer Jesus Santos, spokesperson of the First Gentleman, denied his client masterminded and financed any rigging of the presidential polls. While he was not aware of the day-to-day activities of his client, Santos said, he was sure the First Gentleman was not very active in the President’s 2004 campaign. But he conceded, “He helped in a way. His wife was president and candidate. If he could help other people, the more he would help someone who happens to be his wife.”

While the charges of election fraud in Lanao were raised even last year, these were resurrected with Gudani’s testimony. What bolsters the general’s allegations, however, is not so much a smoking gun but a “smoking” tape. The general, who retired earlier this month, had been the subject of one of the wiretapped conversations between President Arroyo and then Elections Commissioner Virgilio Garcillano, who had complained about Gudani’s supposed intransigence in Lanao.

Two days after the elections, Gudani was suddenly relieved of his Lanao post. By May 29, the commissioner was telling the president on the phone that while Poe was still leading, “mag-compensate po sa Lanao ‘yan (we will compensate in Lanao).”

Based on the certificates of canvass submitted to the Commission on Elections (Comelec), President Arroyo trounced her closest rival, Poe, in Lanao del Sur with 158,748 votes as against 50,107 votes. But the ratio was different in the Namfrel reports, which are based on election returns (ERs). The terminal report of Namfrel’s national headquarters, which tallied less than 50 percent of ERs, had Poe leading the president, 42,374 to 32,389. Namfrel’s Lanao chapter, on the other hand, was able to complete 77 percent of the count in 38 of the province’s 39 towns. Poe was leading Arroyo, 67,989 to 52,633.

Hadji Abdullah Dalidig, Namfrel provincial chairman, said that the 2004 presidential polls was the “worst and dirtiest” of the five elections he has monitored in Lanao del Sur. “What was done to the votes at the presidential level, even grade one children would know the votes of the other candidates were sabotaged,” he said.

Dalidig’s suspicions were confirmed by Macadaub and Batugan, both members of the Lanao del Sur Unity Movement, then headed by Nagamura Moner, the Shari’a court judge of Wao-Bumbaran. It was Moner who founded the movement and launched it in April 2004, they said.

Judge Moner’s role

But while Macadaub said the president’s husband provided the funds for their operations, he denied Gudani’s allegation that the First Gentleman went around Iligan in a helicopter two weeks before the polls with a stash of P500 million. “It’s not true that the First Gentleman was going around in a plane, chopper actually,” he said. “The truth is that it was our boss who was in the chopper — Judge Moner.”

Moner supposedly went around Lanao del Sur, Sulu, Sultan Kudarat and Tawi Tawi from May 14 to 17 to distribute what was allegedly money from Mike Arroyo to his men, who were in turn tasked to deliver the funds to election officers “para baligtarin ang COCs (to reverse the certificates of canvass),” said Macadaub.

According to Michaelangelo Zuce, Garcillano’s nephew who testified in the Senate last August, the Lanao del Sur votes were crucial to the administration, as they were needed to offset Poe’s yawning lead in Misamis Oriental, where the action star was ahead of Mrs. Arroyo by as much as 70,000 votes.

In the meantime, Santos, Mike Arroyo’s lawyer, asserted that his client spent most of his time in Manila before, during and after the elections. Santos said it was presidential liaison officer for political affairs Jose Ma. “Joey” Rufino who was in charge of the Mindanao leg of the president’s election bid.

But newspaper accounts of the presidential campaign showed that Mike Arroyo was at least in Cagayan de Oro City, where he was the guest of honor at the launch of the Lanao del Sur Unity Movement for President Arroyo in April 2004. It was there where Macadaub and Batugan supposedly met the First Gentleman, who promised them a “better life.”

The launch was attended by a number of Lanao mayoralty candidates from the opposition who shifted to the administration camp reportedly upon Moner’s prodding. Even then, there were speculations that money flowed during the event, but this was denied by the First Gentleman and Moner.

Reached for comment in Iligan City, Moner neither confirmed nor denied the recent allegations of his men. He said the two were his former partners at the Moner and Associates Consultancy and Shari’a Law Office of Iligan City and are active officers of the Lanao Unity Movement.

“Not only are they former partners but some, or many, of them are my relatives…they seek my advice and I have always told them that number one, we should be patient and number two, we should stand for the truth,” Moner said.

A defeated gubernatorial candidate in 1998, Moner admitted converting his own political machinery into a movement to support President Arroyo. He said he planned to run for governor last year but was convinced by the First Gentleman to just help the president.

“I was persuaded by the First Gentleman through Alfonso Cusi, then Philippine Ports Authority general manager, whose assistant is my brother-in-law,” said the Maranao judge. “He even invited me to his birthday party in Malacañang.”

Moner said that upon his reappointment to the Shari’a court by President Arroyo in February 2004, he gave up the leadership of the movement to trusted lieutenants like Macadaub and Batugan.

P1M budget for Lanao del Sur operations

Macadaub told “Probe” that he was sent to Sulu during the canvassing of votes to meet an official who coordinated his meetings with election officers. He delivered P500,000 for the poll officials and went back to Iligan after five days with a photocopy of the COC. “Gloria, she won by about more than 18,000,” he said.

Certificates of canvass showed Arroyo beating Poe in Sulu with 78,429 votes against 60,807 votes. The final tally of Namfrel had Poe leading the count with 45,740 votes while Arroyo having 23,896 votes.

For his part, Batugan, a former election officer himself, was tasked with talking to Lanao del Sur election officials. Two other members of the movement accompanied him. “We talked to them to reverse the COC,” he said. “That’s where we did it, the COC. We just gave them money.”

The Lanao del Sur dirty-tricks operations had a P1-million budget, said Batugan. In a phone interview, Gudani said he has never met Moner but has heard of him and his group’s activities.

According to Batugan, the COCs in the towns of Wao and Bumbaran were doctored in front of him. In the town of Saguiran, he himself filled up the COC.

The Wao election returns secured from the Comelec and Namfrel indicated that Poe obtained 7,647 votes against Arroyo’s 3,816 votes. In the municipal COC, the tables were turned: Arroyo had 7,614 votes while Poe had 4,967 votes. The poll results in Bumbaran and Saguiran followed the same pattern.

Batugan and Macadaub said election officials intentionally delayed the canvassing of votes in Mindanao to make way for their “follow-up” operations. Elections officials had supposedly received a substantial amount before the polls and the money they distributed was for extra work that had to be done.

Zuce, who was then on Rufino’s staff, confirmed this in a separate interview. He also said that while administration operators worked independently of each other, it was clear to all that the First Gentleman had his own unit working in Mindanao. Zuce himself operated in Mindanao together with the group of Garcillano and Rufino. His tasks were similar to that of Macadaub and Batugan — emissaries assigned to monitor, coordinate and deliver money to election officials.

In the follow-up operations, the budget for the elections officers was between P30,000 and P50,000, depending on the size of the town’s voting population, said Macadaub. Every vote to cover the losses of President Arroyo was allegedly paid P10, while votes added in excess of the FPJ lead were equivalent to P20 each. A P5,000 to P10,000 “deposit” was made before the municipal canvass. Full payment was made upon the submission of a photocopied COC to administration emissaries.

The movement members said they worked independently, but were supposedly endorsed to the election officers by phone by Commissioner Garcillano. Macadaub explained, “We did not know the people we were supposed to meet or talk to. So Garci called them to advise that we were arriving with the money.”

Unfulfilled promise

Batugan and Macadaub admitted they are spilling the beans because they were disappointed with the First Gentleman. He did not fulfill his promise, they said. They had wanted government jobs. Said Macadaub: “We didn’t even ask for money. To tell you honestly, I went to Jolo for P5,000 only as my expenses. When I visited at the time, most were for FPJ.” He said Arroyo would have lost had they not gone there.

The disgruntled Lanao Unity Movement members wrote the First Gentleman and his son, Pampanga Rep. Juan Miguel “Mikey” Arroyo, to remind them of their promise. Two letters, one dated September 2004, the other March 2005, were signed by three movement members. It put on record “clandestine” operations in the 2004 presidential polls to secure an Arroyo victory. One even provided specific details of the irregular activities that included “approaching, convincing Board of Election Officers and Local Election Officers to facilitate and ensure that all votes be for PGMA in consideration of a certain amount of money” for each election official.

Surprisingly, the Office of the President answered one of the letters. The reply, written on a Malacañang letterhead and signed by Assistant Secretary Juris Soliman, said that while the First Gentleman acknowledges the “invaluable support” extended to his wife, he “does not and cannot meddle with governance of the administration.”

In fact, the alleged activities of Moner’s group are an open secret in Lanao. Macadaub and Batugan even said they had planned to come out with their story as early as June, when the Garci tapes scandal first broke. They thought of joining a protest rally that was supposed to greet President Arroyo in Cagayan de Oro, but Malacañang somehow got wind of their plan. The president reportedly called for Judge Moner who was supposedly asked to pacify his men.

Moner promised the men Malacañang would attend to their needs in two weeks. “We agreed,” said Macadaub. “That day we even held a presscon…instead of protesting, we again promoted her, supported her.” The group also condemned the opposition for supposedly recruiting them for a plot against the president. But even then, they didn’t get what they were promised.

Meanwhile, the townsfolk of Poona Bayabao have only recently learned that they had likely been robbed of their votes, and only because of a fluke. A town of just a little more than 17,000, a third of whom were registered voters in 2004, Poona Bayabao can provide only the bare minimum to its residents. Even the very basic services are lacking here.

“We have electricity only 20 minutes every day,” said police chief SPO1 Alimundas Lucman. “Sometimes we have none for the whole day. Here at the police station, we don’t even have vehicles so when trouble breaks out, we can’t respond right away.”

But by some stroke of luck, there was electricity when the story about the presidential election results in Poona Bayabao made TV news recently. Recalled Namfrel’s Dibansa, who refused to discuss what he said was a threat to his life: “It was only from TV that most of us here learned about how President Arroyo’s opponents got no votes, including FPJ.”

Lucman, meanwhile, looked like he still couldn’t believe what he had heard. He said Poona Bayabans grew up worshipping Poe as the fearless Muslim policeman in the movie “Magnum .357.” “How could we forget him?” he said. “And with us Muslims, we want our leaders to be men.”

(VERA Files trustee Booma Cruz wrote this  report for the Philippine Center for Investigative Journalism. The article is posted in the PCIJ website. )

(First published in April 2001)

FOUR days after it assumed office, the government of President Gloria Macapagal-Arroyo gave the final approval to the most controversial power project in the country: a $470-million hydroelectric power contract that was awarded to the Argentine firm IMPSA (Industrias Metalurgicas Pescarmona Sociedad Anonima).

For eight years, the project to rehabilitate and operate the 750-megawatt Caliraya-Botocan-Kalayaan (CBK) power complex in Laguna was in limbo because various state agencies and rival private companies objected to what they said was the favorable treatment IMPSA was seeking from the government.

But in an opinion dated January 24, Justice Secretary Hernando Perez, who was then just two days in his post, set aside these objections and removed the legal obstacles to the turnover of the CBK complex to the Argentine firm. Two weeks later, on February 7, the government-owned National Power Corporation (NPC) formally handed to IMPSA the most strategic power facility in Luzon.

The CBK complex is the heart of the Luzon grid. It acts as the grid’s regulator, able to transmit power to other plants in the grid in the event of breakdowns. It is also fuelled by water drawn from the Laguna de Bay and the Caliraya and Lumot lakes, a cheap and environmentally safe source of energy.

The haste with which the turnover was made under an administration that had barely warmed its seat has raised eyebrows in the power sector. It has also focused attention on the role played in the IMPSA saga of two well-connected individuals who have helped steer the Argentine company through the rough waters of three administrations: Mark Jimenez, a former trusted crony of ousted President Joseph Estrada, and Carlos Villa Abrille, a half-Argentine businessman who has been Philippine ambassador to Buenos Aires since the time of former President Fidel Ramos.

It was Villa Abrille who was helping iron out the kinks in the IMPSA deal up to the last days of the Estrada administration. Three days before the president was ousted, businessmen close to him said, the ambassador was in Estrada’s Greenhills mansion, seeking Malacañang’s help in getting a justice department opinion favoring IMPSA.

On January 20, the day Estrada left the presidential palace, Villa Abrille was seen by at least two businessmen at Linden Suites, which Arroyo used as a temporary headquarters during the revolt. Four days later, the opinion that IMPSA wanted was on the new justice secretary’s desk.

IMPSA-Asia President Francisco Ruben Valenti said he met with Perez at the latter’s office on the same day and gave him a briefing on the history of the CBK project. In those days, Perez was busy issuing hold departure orders against Estrada cronies yet he found time for Valenti.

But Perez, in an interview, flatly denied he had met with Valenti or other IMPSA officials on the CBK project. He said it was not Valenti, but NPC officials-whose names Perez could not remember-who pestered him to sign the opinion.

On January 26, newspapers reported that Jimenez saw Perez and offered to testify against Estrada. But the justice secretary said the Jimenez affidavit does not make any mention of the IMPSA deal. Yet on January 18, a newspaper article said former finance secretary Edgardo Espiritu had cited “the IMPSA power plant project, supposedly involving Mark Jimenez, as the first among many allegedly anomalous transactions.”

The IMPSA case, which dates back to 1993, shows the lack of transparency in the awarding of multibillion-peso government contracts. It also reveals the opportunities for brokering and deal making that arise from the privatization of the potentially lucrative power sector.

The case of IMPSA has been the most publicized, but similar questions have been raised about other power plant contracts, including the one involving the rehabilitation of the Binga hydroelectric power plant in Benguet. What these cases have in common is the connections private companies make at the highest levels of government to wangle contracts advantageous to them.

“There have been unseen hands working on this contract,” said Senator Sergio Osmeña, Jr., who has been opposing the IMPSA contract for the past two years. Osmeña, however, is himself identified with the Lopez family, which owns the First Private Power Corp. The Lopezes lost out to IMPSA, even if they, too, had their connections in Malacañang.

“That’s the difficulty with business in this country, it’s not a level playing field,” said a businessman familiar with the IMPSA case and who has brokered deals between government and private firms since the Marcos era.

The scramble for CBK began during the Ramos presidency, when the power crisis was at its peak and Luzon was suffering from daily outages. Villa Abrille, who had just been appointed ambassador to Argentina, facilitated IMPSA’s unsolicited proposal to rehabilitate CBK.

At around that time, the Philippine firm International Container Terminal Services, Inc. or ICTSI owned by the family of businessman Enrique Razon won a contract to privatize a port in Argentina.

The perception in the business community was that the Argentines and their brokers wanted the CBK contract as a quid pro quo for the ICTSI deal, although both Valenti and Razon deny this.

Both, however, were present when President Ramos visited Argentina, and when then Argentine president Carlos Menem visited Manila. The IMPSA proposal was taken up in both state visits.

The proposal, however, was held up by a land dispute in Laguna. It was also challenged by the Lopezes, who wanted to retain their dominance in the power sector. The Lopez firm offered to charge the NPC only 64.5 centavos per kilowatt hour for the electricity the CBK power plants would produce as against IMPSA’s original price of P1.80. IMPSA was forced to match the Lopez bid, although it would later charge the NPC a still higher rate of 69 centavos.

Questions were also raised over whether a foreign company should be given rights to operate a hydroelectric power plant as the Water Code allows only corporations with at least 60-percent Filipino equity to exploit water resources.

When Estrada took over, IMPSA found a patron in Mark Jimenez. The businessman, who is wanted in the U.S. for tax fraud and illegal contributions to the 1996 reelection campaign of Bill Clinton, was selling computers in South America in the mid-1990s. He met Villa Abrille in Argentina and was introduced to the ambassador’s friends, Valenti and Enrique Pescarmona, owner of IMPSA.

When Estrada was elected in 1998, “Jimenez convinced Estrada to do the IMPSA deal,” said a businessman who was often in Malacañang at that time. It was also Jimenez, this businessman said, who set up meetings between Valenti and Estrada, and arranged the signing in Malacañang on Nov. 6, 1998 of the BROT (Build-Rehabilitate-Operate-Transfer) contract between IMPSA and the NPC.

But Valenti denies any such relationship with Jimenez, saying only that “forces of evil have tried to link Jimenez with CBK.” Valenti did admit though that in July 1998, barely a month after Estrada became president, Jimenez approached him offering to help facilitate approval of the CBK Project.

It was also around that time when then NPC President Federico Puno sent Valenti a letter listing the three conditions that were thought necessary to protect NPC interests. The most contentious of these was the condition that the government should not give IMPSA a “performance undertaking,” a guarantee that the government would assume IMPSA’s debts and capital investments in the event the contract is terminated or if the NPC suffers losses, is privatized or dissolved.

The absence of a guarantee made it difficult for IMPSA to get financing for the CBK project. IMPSA needed the funds to rehabilitate the power complex, which is composed of three hydroelectric plants in Laguna. The firm, which would invest $130 million and borrow $340 million for the project, would then sell the power it generated to the NPC. Its contract guarantees a 12-percent annual return on equity-about $5.6 million a year-for 25 years.

In a letter to the finance department on February 12, 1999, Valenti said “distressed financial markets both abroad and in the Philippines” would make it difficult for IMPSA to implement the project without a performance undertaking.

Still, a broad range of officials from the NPC, the finance department and the National Economic and Development Authority (NEDA) refused to agree to a performance undertaking because it would violate the amended BOT (Build-Operate-Transfer) law that says unsolicited proposals like IMPSA’s cannot be given such guarantees.

Then Finance Secretary Edgardo Espiritu said he adamantly refused to sign a performance undertaking, despite Estrada’s insistence, lest he be held liable for graft for violating the BOT law. “Ang pumipirma sa (The one who signs the) guarantee is the Department of Finance,” he said. “And I talked to (then NEDA chief) Felipe Medalla and told him, ‘Philip, this is not what NEDA had approved.’ If we’re forced to sign this, said Philip, we should both resign.”

In the end, apparently to appease the President, what Espirtu signed on July 12, 1999 was a vaguely worded document that barely committed the government to honor the project’s obligations. In the meantime, the Manila Times published a report that raised questions about the IMPSA project and the firm’s insistence on a government guarantee, calling Estrada an “unwitting ninong” to an anomalous contract.

Estrada was mad, threatened a P100-million libel suit against the Times and eventually forced its sale to his crony Jimenez in late July 1999. The Times controversy made it all the more difficult for IMPSA to get the guarantee it wanted. In addition, IMPSA failed to meet other obligations set by the NPC, including a $70-million security deposit, which took the Argentine company two years to post even if the deposit was supposed to have been given immediately after the contract was signed in 1998.

IMPSA also violated the condition set by NPC that it retain 100-percent equity in the CBK project for the first seven years. Instead, the company brought in the American firm, Edison Mission Energy (EME), which specializes in hydroelectric power plants. The entry of EME diluted IMPSA’s equity to 50 percent even before the contract took effect. Valenti, however, insists that the BROT contract allows IMPSA to maintain a minimum of 20-percent equity.

Because of possible questions that might be raised about the government guarantee, the new finance secretary, Jose Pardo, hedged signing anything that might be legally questioned.

He finally gave in on December 28, 2000, just three weeks before Estrada’s fall, when he signed a Government Acknowledgment and Consent Agreement. This document is not a direct government guarantee but it bound the government to honor agreements IMPSA made with its creditors.

On January 17 this year, Pardo wrote the justice department a letter asking for a ruling on whether it was valid for him to sign that document. This was because the investment coordinating committee of NEDA, in which the finance department was represented, required approval of the document by the justice department. NEDA and finance department officials knew they were treading on dangerous legal ground. Unless this ruling was made, the contract could not get final government approval.

Pardo quickly withdrew his request for a justice department ruling, given the volatile political situation at that time, and because Espiritu had already come out in public identifying the IMPSA deal as an anomalous contract.

But the lobbying went on until just a few days before Estrada’s fall, when Villa Abrille was paying visits to the Ejercito residence on Polk Street. A few days later, he was seen at Arroyo’s headquarters at the Linden Suites in Mandaluyong.

What Perez signed soon after he became justice secretary was the document IMPSA had been waiting for. That opinion deviated from the norm: It is not numbered unlike other justice department rulings, and has not yet been published, reflecting the lack of transparency surrounding its release.

After it was issued, 19 banks led by BNP Paribas, the Dai-ichi Kangyo Bank, the Industrial Bank of Japan and Societe Generale agreed to put their money into the CBK project.

What could have convinced lenders to invest in the project was a line in the Perez ruling that said “the Republic of the Philippines has validly and effectively consented to the transfer and assignment to the Lenders of all of CBK’s rights under the Government Undertaking.”

Former finance department officials said the statement commits the government to agreements entered into by IMPSA and its creditors. “It’s a dangerous statement to make,” said a former finance assistant secretary. “It’s an additional defense for IMPSA against the NPC. It could put the Republic in a very precarious situation.”

Perez defended his decision. “There is nothing illegal in the contract,” he said, adding that the IMPSA opinion was just one of the standard rulings justice secretaries are made to sign. “To begin with, I didn’t know it was controversial… My staff looked into it and if there’s any impropriety, it should have been discussed at other levels.”

Perez was not completely new to the IMPSA controversy. In 1999, he was a partner in the Balgos & Perez Law Office that defended the Manila Times in the libel suit filed by Estrada.

In January, Perez conducted the direct examination on Espiritu during Estrada’s impeachment trial. The former finance secretary took the witness stand ready to divulge information on the anomalous contracts entered into by Estrada government, among them the IMPSA contract.—with additional reporting by Malou Mangahas

(VERA Files trustee Luz Rimban wrote this piece in April 2001 when she was the broadcast director of the Philippine Center for Investigative Journalism. Her story was a finalist in the following year’s Jaime V. Ongpin Awards for Excellence in Journalism. The article was first posted in the PCIJ website.)