A not-so-curious lack of support

Michael Alan Hamlin

Posted on September 4, 2009

In 2007, then socioeconomic planning secretary Romulo Neri testified before the Senate that then Commission on Elections chair Benjamin Abalos offered him a bribe to approve the controversial $329 million NBN-ZTE project. The project was meant to provide a national communications backbone for government. Following Mr. Neri’s testimony, Mr. Abalos resigned from government. Mr. Neri is currently president of the Social Security System.

The project was controversial on many levels, and further damaged already largely negative international perception of the Philippines among foreign investors, governments, and multilateral institutions. It stunned Chinese trade officials, who were treated to a bruising first-hand experience with how investors are frequently treated in the Philippines, especially when they work with government-even when investors are linked to “friendly” foreign governments themselves.

ZTE, China’s largest telecommunications company is identified with the Chinese military. As I wrote in July, Fraport A.G., an investor in Terminal 3 of the Ninoy Aquino International Airport, is partly owned by the German state government of Hesse. In ZTE’s case, the administration of President Gloria Macapagal-Arroyo cancelled the project before it began, in October 2007. Mrs. Arroyo’s government seized Terminal 3-a project identified with her deposed predecessor-after it was substantially completed, and Fraport continues to seek repayment of $60 million of its investment.

While the Fraport controversy was tied to the legality of the consortium to which Fraport belonged and the legitimacy of the bidding process for the construction of the new airport terminal, the NBN-ZTE scandal was much more complex. Allegations included substantial overpricing, a flawed bidding process, and kickbacks to high government officials, including Mrs. Arroyo and her husband.

Last week, the Office of the Ombudsman-itself under fire by government critics for a long list of perceived wrongs-cleared Mrs. Arroyo on the basis of her constitutional immunity from suit as a sitting president. It also cleared her husband, citing lack of evidence. The Ombudsman recommended prosecution of Messrs. Abalos and Neri. Both men were accused of misconduct, which the Ombudsman reportedly could not ignore. According to reports, Ombudsman Merceditas Gutierrez inhibited herself from the deliberations because she was a classmate of Ombudsman Merceditas Gutierrez, the president’s husband. Party-list members of Congress are attempting to impeach Ms. Gutierrez for failing to act on previous complaints involving administration officials.

Given these facts, the clearance of Mrs. Arroyo and her husband appeared to come as little surprise to most observers. The recommendation that Mr. Abalos be prosecuted was likely a pleasant surprise. But the decision to recommend that Mr. Neri be prosecuted was surprising to many, especially Mr. Neri. As one text messenger put it, “Welcome to the Philippines… The only country in the world where you are indicted and suspended by the Ombudsman for REFUSING a bribe.” Apparently, Mr. Neri did not refuse vigorously enough to suit the Ombudsman. (Disclosure: Mr. Neri is a friend of mine, and I recommended him for his first job in government.)

However, the announcement of Mr. Neri’s recommended prosecution met with little criticism. This is because critics of the administration are angry with him for not revealing everything they say he knows about the NBN-ZTE scandal. It seems duplicitous, at best, for these critics to criticize the Ombudsman-which many believe has failed repeatedly to act in the public’s interest-for clearing Mrs. Arroyo and her husband and yet celebrate its recommended prosecution of Mr. Neri. The last time I looked, refusing a bribe is clearly in the public’s interest. So is testifying about it. Whether Mr. Neri should have felt compelled to say more despite his boss’s apparently legal direct order not to do so on the basis of executive privilege is a different matter.

If Mr. Neri had said more to the Senate and implicated Mrs. Arroyo and her husband in the scandal, her government would have been shaken to the core. But given public sentiment at the time and the composition of the House of Representations-which must initiate impeachment proceedings-it is hard to imagine much else happening. The president is still immune for suit, it’s used to negative media, and this time no cabinet members would have resigned.

But imagine if Mr. Neri speaks out now. While Congress is still under the tight control of the administration, in the weeks after the emotional wake and funeral of former president Corazon C. Aquino, public sentiment has shifted dramatically. Time is beginning to reduce the intensity of the emotion many in the Philippines felt as Mrs. Aquino made the journey to her last resting place beside her martyred husband, but the yearning for an honest and transparent government remains passionate.

Unbridled passion, however, is how the Philippines got to where it is. And passion is best exhibited when it is meant to support a constitutional transition of power.

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