Integrity Initiative

Two weeks ago, Integrity Initiative convened its 4th Summit Conference, with Sen. Grace Poe, Rep. Leni Robredo and former Chief Justice Artemio Panganiban featured in the keynote panel. Launched by the private sector in 2010, Integrity Initiative seeks to promote ethical principles and practice in business. While focused on the private sector, every summit has taken place against the background of a major public-sector corruption case.

In 2011, the concern centered on the cases in the executive branch that led to the indictment of President Gloria Macapagal-Arroyo. Attention shifted in 2012 to the judiciary with the impeachment case against then Chief Justice Renato Corona. It was the turn of the legislature to take the heat in 2013, with the exposure of the pork barrel scam that implicated leaders of the legislature, including former Senate President Juan Ponce Enrile. This serial indictment of officials holding the top position in the three branches of government perhaps already establishes an unprecedented world record.

This year’s summit focused the spotlight on Makati and the Senate inquiry into the allegedly overpriced City Hall Building II. The building is a parking/office building, began during the term of Mayor Jejomar Binay, now Vice President and the leading candidate in 2016 presidential surveys. It was not surprising, then, that the impact of the corruption issue on the presidential election surfaced in the open forum with the panel.

The lawmakers were asked the relative weight they would give to experience and integrity in their choice of presidential candidate: Would they endorse a seasoned politician suspected of lax ethical standards over a neophyte with impeccable integrity? Representative Robredo thought this was a “trick” question to trap the two rookie legislators into self-serving answers. She and Senator Poe stressed the need for both integrity and competence. CJ Panganiban took a tougher line: Voters cannot make a choice favoring corruption.

For voters demanding the continuation of “daang matuwid,” the “trick” question is critical. Hence, if the Binay family, which has controlled Makati for over 25 years, had a credible explanation for the parking/office building’s price tag, it should have offered it to the Senate immediately. The Binays’ testimony might have moderated the impact of the whistle-blowers’ testimony or contained the proceedings to the case of the parking/office building alone.

Unchallenged, adverse witnesses gained the time and opportunity to tug at other threads of corrupt transactions, leaving critical points uncontested:

• The parking/office building is overpriced. It is not of world-class quality. It is not a certified green building. Its per-square-meter construction cost, calculated at between P70,000 and P100,000, is way beyond those spent on luxury private-sector projects.

• The project went through a fraudulent bidding process. A construction company listed as a competing bidder did not submit a bid for the project and, in fact, was not qualified to participate; it had not previously managed projects of the required budget level. The signature on the bid document and the document itself had been forged.

• More damning was the admission of Makati officials that the bidding process for all city projects under the Binay dynasty were rigged for preselected winners. A bidder in another project confirmed that he was late in submitting his bid because Makati officials conspired to trap him in an elevator for over an hour.

• The pattern of biding-bidingan (pretend bidding) gained credence with the testimony of Audit Commissioner Heidi Mendoza of “red flags” ignored in the contract award for the parking/office building and of a special audit that revealed massive overpricing in the 2000-2001 procurement of equipment for the Ospital ng Makati, a case already in court.

• The issue of kickback from Makati contracts and VP Binay’s alleged control of realty and security services companies raise the issues of illegal, undeclared earnings. These cast doubt on his statements of assets, liabilities and net worth, and expose his friends to questioning by the Senate.

During the dark days of martial law, when democratic reforms at the national level appeared unattainable, we drew hope from local government leaders in Cagayan de Oro, Cebu, Davao, and Bulacan, working under the radar to improve democracy and governance in their respective territories. In the hands of unscrupulous local executives, however, relative autonomy can allow corruption to flourish undetected. City governments are lucrative and vulnerable prey for predators. This was the caution conveyed by “Corrupt Cities,” published in 2000 by Robert Klitgaard, Ronald MacLean-Abaroa and Lindsey Parris.

The case of La Paz, Bolivia, where coauthor MacLean-Abaroa served as mayor for four terms, showed how a reform process powered from the top can dismantle systemic corruption. Reform from the top becomes more problematic when it is the Vice President and front-runner “presidentiable” who is suspected of entrenching the pattern of corruption.

Klitgaard came to Manila twice to help the P-Noy Cabinet develop a strategy for implementing the “daang matuwid.” A Makati case study would provide an instructive sequel to “Corrupt Cities.”

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