Miriam: Heads must roll over WB blacklisting


Posted at Jan 27 2009 01:17 PM | Updated as of Jan 28 2009 08:00 PM

Sen. Miriam Defensor Santiago on Tuesday said three government officials should be sacked from their posts for failing to investigate three Philippine construction firms blacklisted by the World Bank because of corruption.

Santiago said Finance Secretary Margarito Teves, Ombudsman Merceditas Gutierrez, and Public Works Secretary Hermogenes Ebdane Jr., failed to act on the World Bank's advisory that it is investigating three Philippine contractors for collusion, which, the senator, said is a crime under the Constitution.

"Dapat mag-resign ang tatlong ito o di kaya paalisin sila sa puwesto nila (These three public officials should resign or be sacked from their posts)," Santiago said at the end of Tuesday’s Senate hearing.

The World Bank earlier blacklisted Philippine firms E.C. De Luna Construction Corp., Cavite Ideal International Construction and Dev't Corporation and CM Pancho Construction, Inc. for alleged collusion. The bank has also stopped the release of a $33-million loan to the Philippines because of its findings.

She said the three officials should have immediately conducted inquiries after receiving advisories from the World Bank on November 2007.

She said she will initiate measures to possibly cite the three government officials for contempt and threatened to send the three to the jail indefinitely.

Santiago also dismissed denials of Eduardo de Luna, E.C. De Luna Construction Corp. president, and Lamberto Lee of the Cavite Ideal International Construction and Dev’t Corp. about allegations that they paid a DPWH official P70 million to win the bidding of contracts for the road project.

The senator was sure that somebody in DPWH received money from the three blacklisted firms.

Ebdane, however, said the DPWH has yet to identify the erring official.

Earlier, Santiago castigated Teves and Gutierrez for declining to attend the hearing. She also ordered the secretary of the committee to send notices to Gutierrez and Teves, ordering them to explain within seven days from receipt why they should not be cited for contempt.

"What kind of public officials are Secretary Gary Teves and Ombudsman Merceditas Gutierrez that they will not act on a cause of action that brings national embarrassment to the entire Philippine govenment in the international community?" she asked during the hearing.

"How dare they flaunt the order of the Philippine Senate to report on what they have done? Because if they have done something then they should have sent a copy of their report or their findings," she added.

Teves failed to attend the hearing because he had a prior commitment with the House of Representatives, while Gutierrez said she could not participate in the hearings because of an ongoing preliminary investigation about the WB report.

Procurement Act needs reforms

Vincent Lazatin, executive director of the Transparency and Accountability Network, backed the Senate investigation on the World Bank report, which he said could lead to much needed reforms in the government's procurement system.

In a statement read before the Senate hearing, Lazatin shared three possible amendments and supplementary policies to Republic Act 9184 or the Government Procurement Act.

These are:

1. Mandatory invitations should be extended to procurement observers to attend the pre-procurement conference; intervention of civil society firms; stronger oversight on project implementation

2. Participating bidders should be made to explain questionable behavior that indicate collusion

3. Public disclosure policies should be put in place

During the hearing, Ebdane admitted that blacklisted firms can still bid in other government public works projects. 
"In other projects your honor, but not with the World Bank-funded projects... We follow a set of rules, and if they so qualify then they be involved (in other public works projects), unless they have some other violations," Ebdane said during the Senate investigation.

Santiago read a portion of the rules titled "Guidelines on the Blacklisting of Contractors and Supplier" that Ebdane was referring to.

The guidelines read: "if the blacklisting order is issued after the award of a government contract to the blacklisted entity, the awarded contract shall not be prejudiced by the blacklisting order provided that the offense committed by the blacklisted entity is not connected with the awarded contract."

Santiago said the guideline was "very defective" and "outlandish" because it does not provide a preventive suspension against the offensive parties and it does not really restrict an erring a member of the "bid rigging cartel" from bidding for other government projects.

Contractor linked to President’s husband

Sen. Panfilo Lacson, meanwhile, accused de Luna of having close ties to President Arroyo's husband, First Gentlemen Jose Miguel Arroyo.

Lacson said de Luna met with the First Gentleman at least 20 times in the year 2002, referring to Arroyo's appointments book.

He also enumerated a number of instances that De Luna was with Mr. Arroyo in the Makati area, saying that he was even in the same place at the same time with former Agriculture undersecretary Jocelyn "Jocjoc" Bolante, the alleged architect of the P728-million fertilizer fund scam.

Citing a newspaper column, Lacson said a group of five contractors--which included one of the three blacklisted firms--brought P70 million in bribe money to a building in Makati City last year. The P70 million in cash bribes, Lacson said, represented around five percent of the P1.4-billion budget for either the EDSA road repair project or the NAIA access road project.

Lacson said that the group--while carrying the huge box of cash amounting to P70 million--opted to use the staircase over the elevator after going to the wrong floor of the building. The package was too heavy, Lacson said, causing the box to be ripped open, revealing its contents.

De Luna denied he is close to the Mr. Arroyo. He also denied involvement in the alleged P70-million bribery.

"I am not close to the First Gentleman. Maybe we only got to meet three times," de Luna said.

Lacson said he wanted to know Mr. Arroyo’s link to De Luna as he was aiming to find out if there are fixers or syndicates in the government that are involved in the “bid-rigging cartel.”