A new scandal has enveloped the Social Security System; unlike the plunder case involving President Joseph Estrada’s illegal commission almost two decades ago and the on-again, off-again controversy over the excessive pay of the pension fund’s executives, the latest issue was brought to light by a high-ranking officer of the SSS itself.
Commissioner Jose Gabriel “Pompee” La Viña has filed a complaint with the Social Security Commission against the SSS executive vice president for investments and three other ranking officers, for “serious dishonesty and grave misconduct.”
The main issue is conflict of interest. La Viña accuses three of the officers of illegally profiting from an unethical internal arrangement allowing trade in stocks, and the fourth of gross negligence, having failed to provide La Viña with the complete trading records of the three others.
“The first problem is these three guys have a major role in approving stockbrokers and allocating trades,” La Viña said. Considering that the SSS has almost half a trillion pesos in assets, and that as much as 30 percent of the reserve fund can be invested in the stock market, the three officers—Rizaldy Capulong, EVP for investments; Reginald Candelaria, chief of the equities investment division; and Ernesto Francisco Jr., equities product development head—enjoyed considerable leverage over stockbrokers, especially those they chose to accredit to manage the state-administered pension fund’s portfolio.
“They used an SSS-accredited broker for their own [personal] trades,” La Viña said. “It’s a conflict of interest. And our rules [define] conflict of interest as ‘real or apparent’ on its face.”
He said Candelaria and Francisco endorsed each other’s stock purchases; Capulong approved them.
La Viña said the officers even received special consideration when companies launched initial public offerings, in the form of coveted allocations. “These opportunities belong to the SSS. They don’t belong to you. You have a duty to present the opportunity to the commission,” he said.
Candelaria resigned on Wednesday, “but without prejudice to the investigation and subject to clearances,” SSS Chair Amado Valdez said. The fourth SSS officer implicated, chief actuary George Ongkeko Jr., also tendered his resignation, but its acceptance has been “deferred until December,” Valdez said. Capulong and Francisco are now on “floating status,” pending the investigation.
The four officers will have their day in court—and even in Congress, if the plan to conduct a congressional inquiry into the scandal finds space in the crowded legislative calendar. La Viña and the rest of the Commission are to be commended for discovering the problem and acting appropriately.
This kind of dispatch and transparency is important, as the SSS seeks to implement an increase in the monthly contribution of its 35 million members by 2018. And this kind of house-cleaning is crucial, both because the size of the fund’s assets makes it a major market mover and because the retirement of millions of hardworking Filipinos is at stake.
Would that this kind of eagle-eyed fiduciary oversight were the practice in other government agencies. The conflict-of-interest scandal at the SSS’ highest reaches is a little more complicated than outright bribery or extortion; the crime needs to be explained, the violence done to the fundamental principle that public office is a public trust must be pointed out. And yet, indubitably, it is a crime.
When it comes to the use and disposal of government resources and the opportunities that inevitably arise in the process, conflict of interest, whether real or apparent, can give rise to serious dishonesty and grave misconduct. Thus, and to point to only one of many egregious examples, the dual responsibilities of someone like Mocha Uson, simultaneously an assistant secretary of the Presidential Communication Operations Office and a politically partisan blogger, create a conflict of interest. As a blogger, she can write about anything she likes, and support anyone she wants; as a government official, her main responsibility is to discharge her responsibilities to the best of her ability. A public office is a public trust; it is not a perch from which one inflicts outright lies and fabrications in the form of “opinion.”
Kudos to La Viña then for reminding the public, and the administration he serves, that public officials are expected to meet higher, not lower, standards.