Business Matters

Guarding the guards

The appearance of former Makati officials before the Senate blue ribbon committee investigating the city’s allegedly overpriced parking building has perked up public interest in the hearings. Their revelations recall a classic problem the ancient Romans recognized and never entirely resolved: Who will guard the guards?

Because those given power to ensure honest government can use it to facilitate and conceal corruption, we introduce more and stricter rules and procedures, such as the public bidding process, to prevent abuse of authority. Nonetheless, Mario Hechanova, who headed Makati’s General Services Department and served in the Bids and Awards Committee (BAC), related how routinely the process was fixed to favor preselected bidders. He denied taking a kickback from winning contractors, but admitted receiving a monthly BAC allowance of P200,000, allegedly from the then mayor, Jejomar Binay. Ernesto Mercado, who, as then vice mayor, functioned as Mayor Binay’s chief operating officer, also acknowledged that he had benefited (may pakinabang) from the Makati system.


Both men accepted inclusion in the Witness Protection Program, with Mercado anticipating that any harm he may subsequently suffer would only come from the Binay family. The first threat the two men are facing is legal prosecution.

By their testimony, both have incriminated themselves in illegal acts: Mercado for gaining personal benefit from questionable official transactions and Hechanova for his role in rigging the bidding process. Both spoke out before securing immunity for themselves. The risk they took has enhanced their credibility. Few corruption cases are successfully prosecuted without an insider blowing the whistle.


Serving as guards against corruption, they were also the mayor’s subordinates; as Hechanova declared, he was just a soldier following orders. Another guard, the Commission on Audit (COA), should be less vulnerable to pressure than employees reporting to the mayor. COA resident auditors deployed in major government offices report to their agency. Under Sen. Alan Peter Cayetano’s intense questioning, however, the COA auditors reviewing the parking building showed unfamiliarity with standard tools that individual home builders and businesses use to check that construction costs are within a reasonable range of expected values.

At the session she attended, COA Chair Grace Pulido Tan confessed embarrassment that her staff had not done a better job in auditing the Makati project. The confession elicited soothing words of comfort from Senator Cayetano, who acknowledged the work she was doing to strengthen the agency. Clearly, a lot remains to be done.

COA resident auditors enjoy discretionary powers to make things easier or more difficult for implementing agencies. They can “work to rule,” demanding strict compliance with every procedural point, thereby causing unnecessary bureaucratic delays. Or, they can relax requirements—to expedite implementation, but, possibly, to extract personal gain. Their job is neither simple nor safe, especially if they are deployed in offices controlled by people of influence and power.

Which is why the COA must take steps to tighten recruitment criteria and to provide training and support to its field people. Providing them the construction reference and manuals identified by Senator Cayetano would be a start, as well as on-the-job training on the technical aspects of the specific sectors they are assigned to oversee.

Mercado’s testimony has provoked Vice President Binay into an angry denial that he profited from the building’s construction. Both whistle-blowers have expressed their belief that the then mayor knew the details of the parking building’s contract and costs and may have taken a kickback. The senators, however, have mainly and properly focused on the prior issue of whether the building was, in fact, overpriced.

In the last hearing, Senator Cayetano picked apart the reasons offered for the high cost of the building: its world-class, “green” character; the surge in the cost of steel; and the need for reinforced foundations. Rogelio Peig, vice president of Hilmarc, the general contractor for the project, denied that the company had ever represented the building as world-class or green. Unable to provide the blue ribbon committee with cost information, he was also forced to withdraw any categorical conclusion that the building was not overpriced. The next hearing, to which the Hilmarc board was invited, should help clarify the issue.

The Makati government has used clearances from the COA as a shield against the overpricing allegation. The COA chair’s own discomfort about the quality of the agency’s project oversight makes this defense unconvincing. Moreover, the COA still has to present its conclusions on the project. Appealing to COA clearances becomes an even slimmer reed behind which to seek cover when members of the COA resident staff are also included in the investigation. Collusion among the guards is always a danger.


The issue that perplexed the Romans continue to concern us: What is the recourse when the guards expected to protect the public coffers are incompetent, poorly trained, or easily prey to corruption or coercion? But we are relearning the lesson that much depends on the leader governing the guards.

Edilberto C. de Jesus ([email protected]) is professor emeritus at the Asian Institute of Management.

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TAGS: COA Chair Grace Pulido-Tan, Commission on Audit (COA), Ernesto Mercado, Jejomar Binay, Makati City, Makati City Hall parking building, Mario Hechanova, Sen. Alan Peter Cayetano
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