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THE CONTRACTORS By Senator Miriam Defensor Santiago Privilege Speech on 26 January 2009 Mr. President: According to Black’s Law Dictionary, a contractor is: “one who contracts for the completion of an entire project, including purchasing all materials, hiring and paying subcontractors, and coordinating all the work.” That is according to the dictionary. But to many Filipinos, a contractor is simply defined as a crook, who engages in gross overpricing of materials, pays salaries to ghost employees, produces shoddy public works that endanger the public, and gladly hands out massive, clandestine, unreported campaign contributions in cash to candidates, in order to cover up his tracks. The Senate is poised to conduct an inquiry, in aid of legislation, on whether three Filipino contractors “debarred” or blacklisted by the World Bank, may have bribed certain public officials, and otherwise engaged in criminal conduct, such as collusion in bidding for projects. But the House of Representatives has beaten the Senate to the draw, although their public hearing produced not an investigation, but a comic opera. Some honorable representatives reportedly joined in singing a hallelujah chorus to the almighty contractors, from whom all good things come. The honorable investigators reportedly morphed into opera singers by sending up embarrassing paeans of praise for the contractors under fire. Thus, once more, the political power of big-time contractors proved itself to be awesome. We are not talking of penny ante contractors. We are talking of giants in the construction industry: E.C. de Luna Construction, Cavite Ideal Construction, and CM Pancho Construction. Here are some of their multimillion public works projects over the years. First, E.C. de Luna Construction: Tagaytay-Palico Road – P104.20 M Road concreting Palawan – P322.20 M Tagaytay City Flyover – P292.94 M Road construction Misamis Occidental and Zamboanga del Norte – P254.83 M Road improvement San Jose, Patnongon – P126.68 M Overlay Asluman Road, Iloilo and Antique – P 997.57 M

Iloilo East Coast – Capiz Road – P 530.59 M Second, Cavite Ideal Construction: Naga-Toledo Road – P 805.6 M Sablayan Road, Occidental Mindoro – P 889.3 M Tacloban Road, Leyte – P 964 M C-5 flyover, Metro Manila – P 765 M Putlan bridge, Nueva Ecija – P 205.6 M Lotus Central Mall, Imus, Cavite – P 425 M Rehab project Echague, Isabela – P 587.9 M Civil works for Sta. Maria bridge, Ilocos Sur – P 97.6 M Civil works Baybay Bato, Leyte, Cebu – P 856.2 M Civil works Reina Mercedes, Isabela – P 562.5 M Macalelon Road, Quezon – P 654.7 M Aritao Road, Baguio – P 1,422.4 M SLEX Service Road, Metro Manila – P 524.4 M Arterial road, South Leyte – P 829.7 M Third, CM Pancho Construction. I have a list of their projects, but without the cost. However, the point common to all these three contractors is that they are masters of their universe, and they could be grand players in politics. In blacklisting these three contractors, the World Bank Group Sanctions Board said, in its decision dated 12 January 2009: 3. The Notice relies on circumstantial and testimonial evidence of collusion in order to establish that the Respondents engaged in corrupt practices and collusive and other fraudulent practices in connection with the World Bank-financed project. The circumstantial evidence consists of alleged indicia of collusion, including high bid prices, symmetrical relationships among bids, bids containing 2

significant errors, “clusters” of bids, “strange and unnatural” bid prices, submission of fraudulent bid securities, and inconsistent application of criteria within the prequalification process. The testimonial evidence is in the form of statements from multiple witnesses, some identified in the Notice, some anonymous, and others whose identity was withheld from the Respondents as confidential materials. . . . 8. In the case of Respondents E.C. de Luna and Eduardo C. de Luna, the Sanctions Board determined that the appropriate sanction would be debarment for an indefinite period. In determining this sanction, the Sanctions Board took into account, inter alia, E.C. de Luna’s position as designated winner in the collusive scheme and also the multiple witness statements identifying E.C. de Luna and Mr. Eduardo C. de Luna as ringleaders in this scheme. The Sanctions Board considered as a further aggravating factor that these Respondents had engaged in multiple instances of misconduct, concluding that this conduct was sufficiently egregious as to warrant the most severe sanction. I wish I were a contractor, instead of a lawyer. Instead of having to be honest, competent, and hardworking, I can grow fabulously rich, and maybe reduce certain legislators to jelly. Instead of reading myself blind, I could just bribe public works and local government officials. Instead of going to boring church every Sunday, darn it, I can just build an entire church and thus secure the redemption of my immortal soul. Instead of serving as a moving target for paid character assassins and expensive PR firms whose only expertise in journalism is bribery of media practitioners who inhabit their pockets, I would be canonized by media. If I were a contractor, I would just buy off unpleasantness, such as adverse publicity or a congressional investigation. How convenient in a country whose many things are for sale, including men’s souls. But I digress. After the Senate reorganization, I did not apply, nor did I particularly want, but was nevertheless appointed, as economic affairs chair. When I started on my duties and examined the records, I found that four resolutions on the World Bank scandal were filed, and all were referred to my committee. The three separate resolutions filed by Sen. Roxas, Sen. Legarda, and Sen. Revilla were all referred on 21 November 2007. The fourth resolution by Sen. Lacson was referred on 19 January 2009. With all the four resolutions, economic affairs was the primary committee, while both public works and finance were the secondary committees. After session was resumed this January, I set a public hearing for tomorrow. I ordered invitations to be sent out, and I buckled down and read the background file. However, last Wednesday, 21 January 2009, a fifth resolution by Sen. Roxas was called for first reading, and would have been routinely assigned to economic affairs. But Sen. Pangilinan suddenly filed a motion for reconsideration to transfer the referral to either the public works or blue ribbon committees. Sen. Roxas, who was formerly chair of the economic affairs committee and author of the latest resolution, objected to the motion. I was no longer in session hall.


The next day when the staff reported the incident to me, I was as shocked as if I had suffered multiple stab wounds. The first stab wound came from behind. In my two terms as senator, the approved parliamentary behavior has been to show respect to a committee chair, by consulting her first, before trying to remove a subject from her jurisdiction. It is just elementary courtesy, but it was denied me. I immediately dashed off a letter to Sen. Zubiri, the majority leader, filing my opposition on the ground of laches. Laches is the doctrine in equity, by which a court denies relief to a complainant who has unreasonably delayed in asserting the claim, when that delay has prejudiced the party against whom relief is sought. In other words, laches is sleeping on your rights. The referral of the first three resolutions were made to my committee more than a year ago, in November 2007. Why did not Sen. Pangilinan file a timely motion for reconsideration? At that time, he was majority leader and ex officio chair of the rules committee. Why did he wait more than a year until the committee chairmanship had been assigned to me? Under the Senate Rules, all four committees involved – economic affairs, public works, finance, and blue ribbon – have overlapping legitimate jurisdictions over the subject. However, the Senate President chose to make the referral no less than four times to the economic affairs committee. Thus, there is no problem with the committee. Perhaps, the only problem is . . . me? The next day I received a second stab wound. The majority leader was quoted as saying that, without consultation, he had decided to make a new referral to the blue ribbon committee. He cited a consensus allegedly reached in caucus that all investigations of government anomalies should be assigned to the blue ribbon committee. In effect, does this mean that blue ribbon would have a monopoly of all criminal investigations? Then it should also assume the duty of filing the corresponding bill on each and every subject matter, instead of just filing a report with the Ombudsman. And does this mean that even the committee with regulatory jurisdiction over the subject matter has no personality to participate, even only as a secondary committee? Then every committee would be reduced to administrative research. Where in the Constitution does it authorize the Senate to vest its power to conduct inquiries in aid of legislation in just one out of some 36 committees? Doesn’t this alleged consensus amount to a gag rule with respect to every committee chair? For every senator has his or her own style of presiding. I respectfully remind you that the Constitution authorizes the Senate to conduct inquiries in aid of legislation, but only “in accordance with its duly published Rules of Procedures.” Has this Senate published this alleged rule on exclusivity? In the Senate Rules defining the jurisdiction of each committee, the Rules uses the term “all matters.” The Rule does not use the term “exclusive” with respect to the jurisdiction of the blue ribbon committee. For this committee, the Rules merely uses the clause “all matters relating to, including investigation.” If the intention was to change the meaning, then the rule should be 4

formally amended in writing, and published. Otherwise, this alleged consensus should be put to a vote in plenary session. But putting aside this issue of statutory construction, why make this alleged consensus retroactive? The resolutions were first referred to the economic affairs committee over a year ago, in November 2007, when the consensus had not yet been reached. If the consensus is that only blue ribbon can investigate government anomalies, then the motion should have sought transfer to the blue ribbon committee alone. But the motion sought transfer to the public works committee, or to the blue ribbon committee. So I demand to know: why is it acceptable to assign the subject to either public works or to blue ribbon, but not to economic affairs? It is obvious that the Senate probe of the World Bank blacklisted contractors will have little legislative value, because it has been overtaken by events. Pres. Arroyo has already ordered the Department of Trade and Industry to investigate the subject. The Ombudsman is already conducting preliminary investigation of the criminal cases, and she is scheduled to release the results in February. The World Bank itself has already identified the following administrative remedies: • An independent permanent assessment and technical audit that strengthens transparency of the bidding process. • Enhanced processes for procurement, financial management, internal controls, and audit of the road management agencies. • Inclusion of a new and innovative coalition of citizen and road users group, called “Road Watch” in the project management setup. The only value of a Senate hearing would likely be publicity for reelectionist politicians, and other candidates. There might be some political value in Sen. Lacson’s disclosure, if any, of the public official who allegedly received P70 million in bribes. Last December, the World Bank issued a policy research working paper entitled “Grand Corruption in Utilities.” The paper states: Grand corruption . . . includes cases when politicians or high-ranking civil servants manipulate a country’s management or regulation of infrastructure industries to gain exclusive benefits. It can be a “purely” public sector phenomenon or involve both public and private agents. In the first case, stateowned public service providers serve as tools for politicians, who benefit in the form of personal revenues, bolstered positions, or party contributions. In the case of public-private interactions, private sector actors used bribes to influence


the form of the market or contractual terms at the cost of consumer welfare. Sometimes these phenomena are described as crony capitalism, in which political networks dominate important private assets, or state capture, in which private firms are able to influence public power to their own benefit. (Emphasis added.) The only salient issue in the probe is: who are the public officials involved in crony capitalism, and in state capture? There is a complication, because under international law, the government cannot subpoena World Bank officials, or subpoena the written report of its Department of Institutional Integrity. However, it appears that the World Bank has furnished copies of its report to the finance secretary and to the Ombudsman, and we can subpoena these local officials. But the Philippine government has no authority to substitute its own disciplinary judgment for that of the World Bank. If the Senate probe has little legislative value, why bother to insult me by removing it from my committee? Is the influence of the contractors so strong that they can now determine who shall investigate them? Am I disqualified because I happen to be the only former RTC judge in the present Senate? I feel like Julius Caesar, after he was stabbed by Cassius. The hostility is as palpable as the pain. In this chamber, I am the only recipient of the Magsaysay Award for government service. I have proved that I will fight the crooks in government at any time, at any place. But to ask me to squabble with my own colleagues in the workplace for scraps of power is unacceptable. This bloodsport is extremely distasteful to me. If my fellow senators do not like my style in presiding at public hearings on scandals, that is their problem. Many of our colleagues in this lawmaking body are non-lawyers. And of the few lawyers, even fewer have spent enough time in trial courts. I was a multi-awarded RTC judge for five years. I taught Remedial Law, aka the Rules of Court, in UP for ten years. Despite these credentials that I am obliged to recite, there is now a move to prevent me from presiding at a picayune public hearing on the blacklisted World Bank contractors. If my critics wish to vaporize or neutralize me, that is their impossible dream. But it is a different matter if my own colleagues wish to turn me into a monkey who sees nothing, hears nothing, and says nothing. I cannot remain in the Senate and consent to be emasculated. Hence, I express in the strongest terms my disgust at this transparent attempt to play puerile power games with me. I do not think that the public will be thrilled, much less edified, to watch senators fighting for turf, as if the territory of corruption were not extensive enough in this corrupt country. Let me serve notice that if I continue to be treated without the respect that I am entitled to as a co-equal senator, even only because of my age and my experience, I shall be compelled to tender my resignation as Senator of the Philippines, and to bring this issue directly to the Filipino people. Let me ask the three big-time contractors – E.C. de Luna Construction, Cavite Ideal Construction, and CM Pancho Construction: Are you people behind this move to prevent me from presiding at the hearing tomorrow? Are you happy now? 6

May I know if I am permanently barred from presiding at the investigation of any scandal, even if it directly falls under the jurisdiction of the committee on economic affairs and on foreign relations, both of which I chair? If so, I respectfully move to submit this alleged monopoly consensus to a vote on the floor. Meantime, Mr. President, out of delicadeza, I leave to the sound discretion of our colleagues the question of the scheduled public hearing tomorrow, and who shall preside over it. Because of its urgency for the public interest, I shall deliver tomorrow afternoon the sponsorship speech on the baselines bill, and then proceed to interpellation. I avail of my parliamentary privilege, and I refuse to take any questions. Instead, I shall now walk out of this Senate, to express my strong personal disgust at the exhibition by some of our colleagues of the absence of common decency, and the failure of parliamentary conduct, in connection with the big-time contractors blacklisted by the World Bank. TAGS: contractors, corruption, World Bank scandal, Senate investigation, privilege speech


26 January 2009 The Contractors  

Road construction Misamis Occidental and Zamboanga del Norte – P254.83 M Road improvement San Jose, Patnongon – P126.68 M Road concreting Pa...

26 January 2009 The Contractors  

Road construction Misamis Occidental and Zamboanga del Norte – P254.83 M Road improvement San Jose, Patnongon – P126.68 M Road concreting Pa...