April 2008


Here in the Philippines we are so obsessed with this concepts of “the rule of law” and that accusations (seemingly, though, only against government officials) must be proven in a “court of law” with adequate proof. We are so obsessed with the idea of procedural due process that we forget about substantive due process. We are all form and no substance. We (and I’m sorry to say, but especially the Jesuits) are so stuck on the process that through following process we fail to address the purposes for which the processes exist in the first place. We fail to see that our processes/institutions are captured. Our institutions are so fundamentally broken that simply trying them out over and over will not function to strengthen our democracy, but actually functions to weaken it by establishing that dysfunction as the norm and further weakening people’s faith in those institutions.

No matter how much we cry out for a “real” impeachment hearing or a “truly independent” investigative council, these process will never be “real” nor “truly independent” unless we change the fundamental rules of the game. And, I’m sorry, mga comrade, but I’m not talking about TRG either, because (and perhaps this is a function of my being a cynical New Yorker) I have limited faith that an ideologue will remain an ideologue once in power – nor do I believe that institutions built by and for ideologues can stand the test of time once those ideologues have moved on. The only thing guaranteed in this world is that every man’s in it for himself (I can hear you now already “Well, that’s a function of our capitalist society, but if we can re-educate the masses… Hey, whether we like it or not, this is the situation we’re in and if you’ve been following world history for the past 20 years, it doesn’t look likely to change) – the question is how to use that self-interest for the benefit of all – see de Tocqueville’s “Enlightened Self Interest.”

Anyway, I digress. Here, I am reproducing the last 2 installments of Jarius Bondoc‘s column (emphasis in bold and comments in parentheses my own), which itself reproduces a sworn affidavit by Clarita Garcia, the wife of AFP 2-star General, Carlos Garcia. It chronicles how their family was able to amass a small fortune through the informal but institutionalized acquirement of government money.

Now, here is how this story is related to our broken institutions: This is an affidavit. A sworn, legal statement. This should be treated as hard evidence (basically, a confession) in a court of law. Yet, as Bondoc points out, almost as a punchline, at the end of the second column, “The general has since been acquitted in two of four charges of perjury in concealing his wealth from his Statements of Assets and Liabilities.” As I have said over and over again, the current state of our institutions functions to legalize the criminal.

Lest we forget, this was what she said

GOTCHA By Jarius Bondoc , The Philippines Star, Friday, April 18, 2008 <!–

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On Dec. 19, 2003 US Customs detained two brothers who had just landed at San Francisco Airport from Manila. Ian Carl Garcia, 26, and Juan Paolo Garcia, 23, did not declare their $100,000 cash, a federal offense. On questioning, they swore to be US citizens but didn’t know the gravity of the misdeed. Ian owned up to the mistake, saying he had fallen asleep and let his brother fill up the Customs form. Juan said he only wanted to avoid questioning, having been accosted in a similar trip two months earlier for flying first class though only a college kid. Unmoved, the US agents confiscated the cash.

Their mother came to the rescue. Pleading for return of the money, she submitted a sworn statement on Apr. 6, 2004, to wit:

“I, Clarita D. Garcia, date of birth Dec. 3, 1950, swear the following are true and correct to the best of my knowledge.

“On or about Dec. 19, 2003, I instructed my sons Juan Paulo and Ian Carl to bring cash in the amount of $100,000 into the US from our home in the Philippines. I told both my sons to declare the money when entering the US. The money was to be used as down payment for a condominium in New York City where my son Timothy would live while going to school. Timothy was paying the amount of $3,000 per month to rent an apartment. My son Juan Paulo told me he didn’t declare the money because ‘it was too much hassle.’ I always declare the money when I bring it into the US. I declared the money in 1993, in 1995 when I had a medical operation. I declared $100,000 on Dec. 17, 2003. I also declared $200,000 in Jan. 2003. My son Juan Paulo is a risk-taker and is very spoiled.

“Source of Funds: My family’s income is from four sources, two corporations, a daycare school, and my husband’s job as a Two Star General in the Philippine Military. My family has 80% interest in the two corporations and we may earn a monthly income equivalent to US$8,000. The daycare brings in more money, perhaps $10,000 per month. However, based on Philippine tax laws regarding both the corporations and daycare, we are allowed to declare zero income. (And yet, we have an administration claiming to clean up the tax system to boost government revenue. Also, we have a 12% VAT. Lest we remember that a sales tax is the most regressive form of taxation.) The income received from these businesses was not reported as a basis for tax liability. The two corporations, IJT Mango Orchard Inc. and IJT Katamnan Corp., were incorporated on March 22, 2002.

My husband Carlos Garcia (Two Star General in the Armed Forces) was assigned to the Comptroller’s Office until Apr. 4, 2004. He receives a salary that is declared as income for tax purposes. In addition, Carlos receives travel money and expenses in excess of several thousands of dollars. I often travel with my husband on business and my travel, expenses and shopping money (!!!) in excess of US$10,000 to $20,000 is provided to me. He often receives cash for travel and expenses from the businesses that are awarded contracts for military hardware. These businesses are in Europe and Asia. He also receives gifts and gratitude money from several Philippine companies that are awarded military contracts to build roads, bridges and military housing. (There’s nothing wrong with corporate gift-giving to clients, but we all know – and PCIJ has documented – what forms these gifts actually take and what they actually cost in terms of quality of contract execution.)

“As the comptroller, my husband handles all budgets for the Armed Forces. My husband prepared the budget for the armed forces based on the requests from each branch of the military. The budget is sent to the Secretary of National Defense and it is sent to the Senate for approval. The Armed Forces Committee reviews each contractor’s bids. Once the bids are approved and the review committee has checked out the companies, my husband’s is the final signature for funding the contracts.

“The expense money, gratitude money and shopping money are not declared as income. (Institutionalizing the informal)

“My husband will always thank the person that provides the gratitude. If someone stops by the house with a gift or gratitude, my husband insists that their name and telephone number be taken so they may be called and personally thanked. As the wife of a general, I am afforded several privileges including a 4,000-gallon per month gasoline allowance, security detail and five drivers. I have a military cook that also provides piano music upon request. (Sarap talaga ng buhay!)

“My husband’s position in the Armed Forces is one of privilege. The gratitude money that he receives is common and unsolicited. Contracted companies and personnel from the different branches of the armed services are grateful for my husband’s assistance and timely payments for contracted work. In addition, I provided Agent Van Dyke with a four-page handwritten statement that explains my husband’s job and our additional source of funds. Signed: Clarita D. Garcia. Date: 4/06/04.”

More of what General and Mrs. Garcia said
GOTCHA By Jarius Bondoc
Monday, April 21, 2008

Voluble Clarita D. Garcia wanted back the $100,000 cash that U.S. Customs confiscated from her sons in Dec. 2003. But she felt that she and her husband, AFP Maj. Gen. Carlos F. Garcia, hadn’t explained enough. So on Apr. 6, 2004, she handwrote Customs agent van Dyke (presented as is):

“This statement is in addition to justify how we were able to accumulate the $100,000. As on the papers submitted by my husband, he just showed his income tax return from his earnings, which showed insufficient funds to accumulate the amount brought by our two sons. Aside from my husband’s declared income, he did not mention his other income from his travel and schooling allowances, honorariums and gratuities given to him due to his added duties and functions designated for his position as Major General in the Philippine Armed Forces.

“For example, honorarium benefits: My husband holds different chairmanship and directorship with different Armed Forces institutions and he receives money allowances for every meeting that he attends weekly.

“Travel allowances: As a comptroller, J6 Assistant Deputy Chief of Staff for Comptrollership, he is a member of the Management Team of Projects. For example: A certain foreign company wins a bidding from the Bids and Awards Committee for selling military hardware. This procurement is approved by the Secretary of National Defense and Office of the President. (Basic institutional design problem – a military contract [executive branch] is subject to approval by the Secretary of National Defense [executive branch] and Office of the President [executive branch.] What happened to checks and balances? Out the window, along with transparency) Then a team committee is formed in the Armed Forces to oversee the implementation of the contract. Since my husband’s office is under the Department of Budget and Management that holds the budget of the whole government, his office is part of the inspection team. In one of the provisions of the contract, a team of committee will oversee the implementation of the contract before, during and after. During the ‘before’ portion of the contract, my husband goes to inspect the site or location of the plant of the contracted party. Then during the ‘during’ portion of the contract, he goes back to the contracted country to see the actual products. During the ‘after’ portion of the contract, he returns to the contracted country to accept the finished product. During these travels, my husband always brings me along and we are each given travel allowances by the proponents/host country. (Although this has the potential to take the form of bribery, they’re not spending RP money, so this is ok with me) He is also by his office stipend and allowances to be used at his discretion. (RP money – this is very NOT ok with me) As a wife, I am also given an envelope as they called ‘shopping money’ that I can use for my own discretion, no receipt of how we use the stipends are ever required. (RP provided shopping money! What the freaking hell!) Business class airfare/first class accommodations and transportation are provided by the host/proponents and this happens on every trip since 1993 to present. Our meals, purchase of souvenirs and cost of visiting sites are also paid for by our host. (Again, not RP money, so that’s ok, but here’s the zinger:) As a result, our allowances are not used and we are allowed to keep them. I am unable to provide the exact amount of each stipend/allowances because it varies from country to country we are assigned to visit.

“When my husband is assigned to travel domestically in the Philippine Islands to conduct inspection on different military camps, he is also given stipend/allowances and also often given gratuities.

“With regards to expenses such as salaries for our drivers, security guards, their wages are paid for by the government. My husband’s office is provided with government vehicles, free gasoline, housing allowances and lots of gratuities, gifts received from colleagues. This is again part of the PERKS that my husband receives from holding a key position in the Philippine Armed Forces.

“Also, when he was sent for schooling abroad, his salaries and allowances go to his savings. The counterpart country also gives him stipend and housing allowance. For example: when he took his Master’s Degree at Monterey Post Naval Graduate School, CA 1993-95; for those period he was given allowances from his country and counterpart country. Since I am a license registered nurse in California, I was able to work for two years as a nurse that also contributed to our income. This money was not only accumulated for 1-2 years but this is our accumulated savings for the past years.

“With regards to my income from the resort and orchard that came from my parents inheritance, Philippine laws allow the reporting of income, for the first two years of operation, as a loss. Then even though the corporation made profits since its start of operations, we reported a loss the first two years of operation.

“As an American given or accumulating peso funds, I always change these peso funds to dollar money, including all the profits of our corporations that accumulated through the years.

“(Signed) Clarita D. Garcia, 4/6/04.”

* * *

The general has since been acquitted in two of four charges of perjury in concealing his wealth from his Statements of Assets and Liabilities.

So yeah. The Sandigbayan (Corruption court – yes there is actually a special court dedicated to corruption cases. Yet another way the administration can claim to those silly western governments and their arms like the IMF and World Bank that this is a working democracy.) decision can be found here. Abangan: a summary and analysis of the decision’s main points.

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I remember when I was in middle school I stumbled upon a now closed web magazine, generationrice.com. They were giving out free I ❤ Rice stickers and I got some cause, well, it’s true.

Last night I went to my neighborhood palengke in Krus na Ligas and bought a kilo of rice at a choking P32. Eventhough the price of bigas has been around 30-something pesos for a while now, it was still the talk of the tambays.

So this is the crisis that hits everyone. This is now the crisis that Malacañang is scrambling to keep up with. Perhaps only the politically astute will rally over corruption, but the masses will riot over food.

So what is Malacañang doing? According to the main headline of today’s Inquirer, GMA has lifted the quota on rice importation. Sounds good, right? Think again…according to the article,

“The private sector is allowed to import a maximum of 300,000 metric tons of rice annually. But private traders have imported less than 10 percent of that volume over the past two years because of high world prices and the tariff.”

In other words, importation already occurs way below the government-imposed quota and so Lifting the quota doesn’t matter! So these are the educated people we have running the nation? If I was Georgetown I would be embarrassed at what this woman is doing to the reputation of my economics department.

In related news, Conrad DeQuiros’ article puts into context the rice crisis.

“Raul Gonzalez has created the Anti-Rice Hoarding Task Force which will hound ‘unscrupulous rice traders for acts inimical to public interest,’…You want to jail for life the friendly neighborhood Chinese or “Bombay” who rips off Juan de la Cruz at the margin while providing him with goods and services government cannot…

“Compare the entire agricultural subsidy (P5 billion) with the $130-million “bukol” [bulge] Jun Lozada accused Benjamin Abalos of demanding from the national broadband network deal. At the exchange rate then, Abalos would have gotten around P6.5 billion…That is just one kickback by one official from one deal. Imagine the size of the “bukol” the First Couple alone are causing on Juan de la Cruz’s head. You want the Binondo cartel to rot for life in jail and the Malacañang Mafia to rule for life in the Palace by the river?

“The second thing that’s wrong with the picture is less obvious but more insidious. That is that the cause of the disease is pretending to be its cure. Arroyo did not create the rice crisis but she created the situation that made us exceptionally vulnerable to it. She it was who obsessively pursued a policy of relying on global markets for rice on the ground that it was cheaper to buy it than to produce it.”

Yes, in the end it all comes back to the farmer. We are now paying the price for our disdain of the farmer. But, as much as I enjoy taking part in the GMA-bashing, let us look not only at her but at her friends the Sy’s. We are a country awash in subdivisions and malls, where a new SM opens every other month in even the most far-flung locations. Of course, this occurs at the price of farmland. We are living in a culture and economy where all income is disposable, instead of saving, people rush to SM to buy things that they don’t need and then complain that they have no money.

As the discussion went in Krus na Ligas last night, dame nang damit, wala nang pagkain.

The myth of economic growth – which the GMA administration is clinging to – is exactly that, a myth. Ramdaman mo ba? Ako naman, ramdam ko na nagmamahal mga bilhin, lalo ang bigas, at hindi nag-bago ang sahod ko ni mga problema sa infrastructure.

Ate Glo, wala po kayong hiya? Mahirap na po kami at ang taba taba mo. Dapat minamahal mo mga kababayan mo. Dapat lang po.

Vol. XXI, No. 170
Tuesday, April 01, 2008 | MANILA, PHILIPPINES

Today’s Headlines

71% of Filipinos consider selves as poor — survey

REPEATED government claims of growth aside, two out of every three Filipinos believe the economy has worsened in the last three years while seven out of every ten consider themselves to be poor.

The results of a nationwide Pulse Asia survey, conducted from February 21 to March 8, 2008, showed that 66% of Filipinos feel the economy is in a worse state, while 71% consider themselves as poor.

Palace officials blamed political noise for the results and stressed that the government had been boosting social services expenditures to improve the lives of the poor.

Using face-to face interviews, Pulse Asia asked 1,200 adults: “If you compare the state of the national economy now with that in 2005 or three years ago, would you say that the state of the national economy is better now, same, or worse now?”

Pulse Asia said the belief that the economy had deteriorated was shared by considerable to big majorities (61-74%) across all geographic areas and socioeconomic classes.

Only 11% of Filipinos believe the present economic situation is better now than in 2005, while about a quarter (23%) said there had been no change between 2005 and today.

Pulse Asia also reported that around 12.8 million households said they were poor or very poor. The survey firm said this figure (71%) was nearly the same as those recorded in July and October 2007 (75% and 68%, respectively).

On the other hand, 15% of Filipinos said they were well-off or wealthy while 14% said they were “on-the line.”

Asked to assess their present personal quality of life relative to last year, nearly six in ten Filipinos (59%) said they were worse off now than in 2007.

Only 10% consider themselves to be “gainers”.

With respect to the national quality of life, 71% believed that most of their countrymen were worse off now than last year — 10 percentage points higher than in October 2007.

Asked to comment, Deputy Presidential Spokesman Anthony T. Golez, Jr. said the results were influenced by the negative news about supposed corruption in the government.

Mr. Golez claimed the government has been increasing its spending on basic services and infrastructure to enable the people to feel the economic gains. — ADBR

In somewhat related news, today the Philippine Star reports that Archbishop Cruz has been threatened by pro-GMA Congresspeople that they will go to the Vatican to have him sanctioned. Cruz replied that if he were to be stripped of his faculties, he’ll just “plant kamote.” Hahaha priceless!