Tuesday, September 27, 2011

Ending the culture of corruption

Business tycoon Manuel V. Pangilinan is understandably impatient at the delayed approval of the acquisition by his flagship telecommunications company, Philippine Long Distance Telephone, of the country’s third largest telco, Digital Telecommunications Philippines Inc./Sun Cellular.
But it seems he might have to wait some more before getting the approval of the mega deal with the Gokongweis’ Digitel as MalacaƱang and the National Telecommunications Commission review the deal in the light of the anti-trust suit against the dominant United States telco AT&T in its bid to acquire T-Mobile.
AT&T’s T-Mobile acquisition is apparently distinctly similar to the PLDT-Sun/Digitel deal. The Aquino administration apparently wants to make sure that the pitfalls that might be revealed in the highly controversial AT&T case is avoided by the Philippines.
There are some differences of course in the situation in the US and in the Philippines. For one, the Philippines still has to craft its own anti-trust law although President Aquino’s order for the creation of a Competition Authority to be lodged with the Department of Justice could fill the gap temporarily.
We recently interview Globe Telecom’s legal counsel Rodolfo Salalima in our radio program Karambola sa dwIZ. He pointed out that the acquisition by PLDT of Digitel will result in a monopoly of frequencies and harmful control of consumers.
Salalima said that by monopolizing the frequency highway, PDT stymies the consumer freedom to choose and effectively suppresses free market competition.
He contended that the consolidation of PLDT and Digitel will result in a lopsided imbalance of spectrum allocation as PLDT’s Smart and Digitel’s Sun will in effect serve their 60 million subscribers with 372 MHz while Globe serves 27 million subscribers with only 99 MHz.
PLDT is of course claiming that the global trend is the consolidation of market players to improve the economies of scale, rationalize capital expenditures and to meet the demand of new technologies.
Salalima said the significance of these business trends cannot override the provision of the Constitution which provides that “The state shall regulate or prohibit monopolies when the public interest so requires.”
He noted that other countries impose regulatory conditions for in-country telecom mergers. He pointed out that in the AT&T purchase of T-Mobile, AT&T was prepared to shed a significant chunk of T-Mobile’s spectrum.
Even then, the acquisition was questioned and an anti-trust suit was filed against AT&T.
Perhaps what is needed in the absence of an anti-trust law in the Philippines is for President Aquino to already activate the Competition Authority so that it can help assess the NTC impact of PLDT’s acquisition of Digitel.
Even jaded observers are shocked at the recent revelations about the extent of the culture of corruption that had prospered in the 10 years of the Arroyo administration.
The most outrageous perhaps is the so called PNP chopper scam exposed in the recent Senate Blue Ribbon probe. It epitomized the boldness and temerity of the people close to the Arroyo administration who thought they could get away with anything and everything.
The people behind that scam of passing off second-hand helicopters at premium brand prices that were even higher than the prevailing market price must have been confident that their scheme would not be discovered. In the event that they were found out, they would be immune from prosecution.
For a while, many people believed that the Aquino administration was simply engaged in a witch hunt and a noise-making spree to cover up the amateurish bungling of what critics are fond of describing as the Aquino Student Council government.
But the shocking new revelations like the chopper scam and other compelling evidence and witnesses against cases that have been exposed before have convinced the public that what the Aquino administration is doing is more than just vindictive prosecution. Rather, this is a serious campaign by President Aquino to finally end the culture of corruption that has gripped the government for decades.
The public apparently approves of the anti-corruption campaign of Mr. Aquino as shown by his continued high approval and trust rating in surveys. We believe this is more because of public perception of the President’s personal integrity, honesty and sincerity to prosecute corruption in the past administration and to stop corruption in his own administration.
Despite talks of corruption of its own in the Aquino administration it is obvious from the opinion polls that the majority of our people continue to believe that Mr. Aquino is sincere in his anti-corruption campaign.
The high hopes of the public on the President’s anti-corruption crusade are actually not surprising. During the last presidential elections, corruption became a top issue among the electorate. And it was the anti-corruption stand of then-Senator Aquino that stole the thunder from all the other presidential candidates.
Mr. Aquino’s “kung walang corrupt, walang mahirap” slogan was the most effective campaign line in the 2010 presidential elections. It struck a responsive chord among the voters who gave Mr. Aquino biggest vote ever for a presidential candidate.
And now, into the second year of the Aquino administration, corruption cases during the past administration keep coming up. There is the Philippine National Police chopper deal, the Philippine Charity Sweepstakes Office anomalies, the Philippine Amusement and Gaming Corp. coffee deal, the Armed Forces of the Philippines “pabaon” mess, to name a few.
The long line of witnesses and whistle-blowers who have come out in the open to testify about what they know about these corruption cases, and even election cheating during the 2004 and 2007 elections, both during the Arroyo regime have convinced the public that what the Aquino government is doing is not a witch hunt against the Arroyo administration.
And, from what is slowly emerging, the culture of corruption apparently had reached the local levels. There is the case of a treasury official in Pangasinan who was recently dismissed by the Department of the Interior and Local Government for stealing millions from the local government’s funds by cashing LGU checks and depositing the proceeds to her personal bank accounts. Most likely, this is not an isolated case, and there could be more worms emerging out of the can in the days to come.
What this points to is a culture of corruption and impunity, a systemic raid of public funds by those in who are in power, by their family, by people close to them and by those who simply access to government funds.
From the horror corruption stories that have emerged it appears that officials and cronies of the previous administration thought that anything that is government money is their own personal fund. Every opportunity to make money is perfectly all right, no matter how this is achieved. So long as there is money to be taken, they will take.
There is the report that the PCSO, among the many anomalous contracts and transactions and payments and deals it had entered into during the Arroyo days, did not pay some P3.5 billion in taxes to the national treasury, money that could have been used to fund our schools, roads and bridges, or to feed the millions who barely survive. The money was reportedly diverted to Mrs. Arroyo’s discretionary fund, which she and her chosen officials alone can decide how to spend or send, in the year prior to the 2010 elections. How and where this P3.5 billion was disposed will likely emerge in the future as another anomaly.
We do not know whether President Aquino, when he promised to stop corruption during the presidential campaign, realized the extent of this problem, and the gravity of the legacy of plunder that he was about to uncover. Clearly, the Aquino administration has only managed to scratch the surface of this problem, and more cases will emerge.
As Mr. Aquino goes after the corruption cases of the previous administration, he should be careful. He must ensure that his officials remain clean and that the Caesar’s wife principle is applied to those close to him.
This means that those close to the President must not only be honest and but more important they should be perceived by the public as corruption free.
Otherwise, his campaign to end the culture of corruption and run after graft cases in the previous administration will go for naught

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