Stonehill and pork: Prelude to farce?


12:08 AM September 9th, 2013

By: Amando Doronila, September 9th, 2013 12:08 AM

Karl Marx said, “History repeats itself, first as tragedy, second as a farce.”

Corruption has been a recurring theme in the rise and fall of governments in the Philippines since it became an independent republic in 1946.

In 1962, the reformist administration of President Diosdado Macapagal was rocked to its foundations by the Harry Stonehill corruption scandal, in which the government deported the American ex-GI in World War II turned multimillionaire industrialist during the postwar reconstruction period, on charges of tax evasion, economic sabotage, blackmail and corruption of public officials, on a scale not previously reported in the Philippine press.

The government’s case was built on 35 truckloads of documents seized by 200 agents of the National Bureau of Investigation in raids on March 3, 1962, on 27 offices and corporations in Manila controlled by Stonehill.

The prize catch of these raids was the so-called Stonehill Blue Book, a ledger that listed more than 200 officials who received money from him in the course of his transactions with them. What made the Blue Book politically explosive was that it contained entries that showed the President himself and the leading Liberal Party senator, Ferdinand Marcos, took money from Stonehill, a revelation that devastated Macapagal’s moralizing claim that his New Era Administration was committed to eradicate graft and corruption in the government.

Centerpiece evidence

The Blue Book was the government’s centerpiece evidence to prove that the raids uncovered a treasure trove of documents that showed that Stonehill operated a “network of corruption,” whose tentacles penetrated all levels of government, from the presidency to the legislature to the bureaucracy.

The disclosure of the Blue Book’s contents during the hearings at the deportation board led to a crisis of government, including a Cabinet shake-up and the dismissal of Secretary of Justice Jose W. Diokno, who spearheaded Macapagal’s Moral Regeneration campaign, with the raids on Stonehill’s business conglomerate offices. The Stonehill scandal broke out just two months after Macapagal took office. He had defeated in the elections President Carlos Garcia of the Nacionalista Party by running on an anticorruption platform.

Ironically, 41 years since the deportation of Stonehill, the biggest corruption scandal to hit the country erupted in the midterm of the reformist administration of President Aquino—the controversy over the embezzlement of P10 billion in congressional pork barrel through a group of dummy nongovernment organizations (NGOs) headed by Janet Lim-Napoles, with the alleged collusion of a number of senators and congressmen.

Bearing in mind Marx’s dictum, the sitting administration’s involvement in this colossal hijack of taxpayers’ money has come under strong public pressure to make clear whether Mr. Aquino is for or against the abolition of pork barrel, in all its forms, including his own patronage chest.

Aquino in same rut

The Aquino administration has fallen into the same rut in which the Macapagal administration was trapped when the latter hurriedly ordered the deportation of Stonehill after it became clear that the disclosure of more evidence, based on documents seized in the raids, at the deportation board hearings, would reveal Macapagal’s links with Stonehill, resulting in extreme embarrassment to his government. There were conclusions that the hasty deportation was a cover-up.

Similarly, the pork barrel diversion scandal has pushed the current administration to the brink of being accountable for why the pork barrel fund misuse continued into his administration, as revealed by the Commission on Audit special report on pork barrel fund disbursements.

History repeats itself in patterns, mimicking the original case, but not in detail, which is what is happening in the current government investigation into the misuse of the pork barrel. There are many parallels between the Macapagal handling of the Stonehill deportation case and the Aquino administration’s dilemmas that make it vulnerable to cover up solutions for shortfalls in oversight functions in the disbursement of funds under his administration.

This is especially evident in the release of P428.5 million in Priority Development Assistance Fund (PDAF) through five state companies, from October 2010 to December 2011 to nine NGOs with dubious records. Of course, Stonehill was the face of corruption under the Macapagal administration while Napoles is the face of corruption unearthed during the Aquino administration’s investigation into the pork barrel scam.

Also, the face of the pork barrel scandal is blurred by the involvement of five senators and 23 congressmen in the PDAF misuse. They are facing possible charges, according to the justice department.

In the next article, I will demonstrate the patterns of an emerging cover-up of the pork barrel misuse by public officials.

(To be continued)

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