THE FIRST serious attempt to fully computerize the antiquated Philippine electoral system stands on the brink of being scuttled as squabbling partners of the consortium, which won the bidding to install an automated system, are hard pressed to iron out their differences by today under orders of the Commission on Elections.

The last-minute withdrawal from the automation project of Total Information Management Corp. (TIM), the Filipino partner of Smartmatic, plunged the consortium into disarray. It also put in jeopardy the plan to install a quick-count balloting system that is expected to minimize rigging of election results.

The breakup of the consortium was precipitated by the reported demand of Jose Mari Antuñez, head of TIM, for P500 million to proceed with the joint venture and allow the consortium to sign the contract with the Comelec.

Antuñez denied the claim of Makati Representative Teodoro Locsin Jr., a lawyer, who is not known for making reckless accusations on matters involving corruption scandals.

The internal rift in the consortium marred the transparency of a transcendental political project that involves the outcome of the presidential election in May next year. It introduced the element of intra-corporate squabbling interfering in the integrity of election procedures.

Philippine elections are a deadly serious and bloody issue, and Filipinos recoil violently against any interference in their elections, either by their leaders or politicians or by business groups (domestic or foreign). This is the reason the Smartmatic row goes beyond a mere dispute between the consortium partners over money matters.

The dispute developed political overtones when it was revealed that one important underlying issue is who controls the computer machines into which election results are fed for quick processing from thousands of polling stations all over the country. It can be seen from this perspective that we are really talking about election outcomes, which is why there are calls in Congress to investigate who are behind the consortium and what are their political lies.

Philippine elections have historically been seriously marred by rigging and cheating scandals, and any interference in the integrity of the upcoming 2010 election count will be viewed with suspicion and hostility by the public.

According to newspaper reports, TIM backed out of a joint venture for election automation, “fearing the deal gave its foreign partner unbridled power that could lead to potential abuse.” The Inquirer report said that documents showed that TIM questioned the authority to be bestowed upon the chair of the joint venture to sign checks singly in case of disagreements.

The report further said that TIM was opposing several key provisions in the joint venture agreement.

It was reportedly concerned that it had no say on the counting software development and would be liable if electronic cheating were to occur. TIM did not want to be part of a system that would be vulnerable to electronic cheating.

The internal issue that has emerged from the dispute is control of the joint venture. Concerning TIM’s demand for P500 million up front, Locsin said, “Smartmatic cannot cough up half a billion pesos before they even implemented it because some things could happen.”

According to Locsin, TIM suddenly became “unreasonable” shortly after signing a joint venture agreement by making all kinds of demands from its foreign partners. He said Smartmatic had given in to almost all of TIM’s demands, except when it asked that it be given the “power to decide when and how much money to spend.”

He added: “The opponents of automation who are all masters of manual cheating got to the local partner who wanted Smartmatic to give him up front half a billion and control of the money of the joint venture.”

From another sector of Congress, Rep. Teodoro Casiño of the left-wing Bayan Muna called for a congressional inquiry into how TIM entered into the picture.

Casiño said his curiosity over TIM’s connections was roused when he found that a brother of Antuñez, head of TIM, was married to a member of the Aboitiz family of Cebu, who are known to be close to President Macapagal-Arroyo.

A Senate inquiry last week revealed the Aboitizes’ participation in the automation plan when the Comelec admitted that Aboitiz Transport Systems’s 2GO would ship the 82,200 counting machines to be used in next year’s election.

Malacañang expressed mock outrage over the squabbles within the consortium.

Claiming that automation was a “major project” of the administration, Executive Secretary Eduardo Ermita said the government “would hold accountable and prosecute to the full extent of the law parties in the breach of contract with Comelec.”

He said that the President had expressed “concern” over the dispute, noting that automation was an administration’s “centerpiece” project.

He said that companies should “exercise all the prudence, responsibility, and professionalism they can muster to get their act together and see the automation of the 2010 election through.”

There’s no hint of deep concern on the part of Malacañang over the political consequences of the collapse of a project designed to eliminate large-scale rigging in the next election.

They are all playing with words as commercial interests hold the fate of the election hostage.