Corruption Rules

Sta. Ana is Coordinator for Action for Economic Reforms. This article was published in the BusinessWorld on September 15, 2008, page S1/4.

Supreme Court (SC) dismisses Court of Appeals (CA) Justice Vicente Roxas. Suspends Justice Jose Sabio Jr. Reprimands Justice Bienvenido Reyes and Presiding Justice Conrado Vasquez Jr.

This was the headline news on 10 September 2008, a day before Camilo Sabio—chair of the Presidential Commission on Good Government (PCGG) and Jose’s brother—could have tripped the light fantastic, dancing with Imelda to celebrate the late Ferdinand’s birthday.

Camilo is a damaged good.  For talking to his brother to favor the Government Service Insurance System (GSIS) in the legal battle with the Manila Electric Co. (Meralco), Camilo will face investigation to be conducted by the SC’s Office of the Bar Confidant.

Camilo has taken an indefinite leave of absence at the PCGG. But that’s not enough.  He should be fired. And it’s not just about the ethical breach he committed in persuading his brother to take up the cudgels for GSIS. Camilo has likewise undermined the very mandate of PCGG to recover the Marcos’s ill-gotten wealth.  Instead of exhausting all means to trap Imelda, he ended up being Imelda’s dance partner.

In the meantime brother Jose got a slap on the wrist.  When he publicly revealed the manipulation and the alleged bribe attempt surrounding the legal skirmish between GSIS and Meralco, he thought that the outcome would earn him a nice payoff. He perhaps imagined that the public would regard him as a hero, boosting his chances for career advancement like being appointed to the SC.

He was mistaken.  He brought down the whole CA; its credibility damaged to the greatest degree. Each and every CA justice is worse off; even the honest ones have been tarnished.

At any rate, even though his reputation is now in tatters, Jose should thank his lucky stars for getting a light punishment.  Well, he’s lucky that Gloria Arroyo packed the SC with figures (those with rods or strings attached to them) who bring fortune to the otherwise beleaguered Sabios and Romy Neris.

Some are nevertheless hopeful that the intense public attention on the CA scandal and the SC’s punitive actions will lead to judiciary reforms. In Examination of conscience (Inquirer, 13 September 2008), Winnie Monsod wrote that a proposed covenant among CA justices that will “show their commitment to improving the judiciary and restoring the public’s faith in it” is the first step towards reform.  Said Monsod: “The CA is talking the talk, and now it must walk the walk, creating an environment that will encourage the heroic, rather than the evil act.”

Sadly, the existing environment is one of a culture of impunity.  Reforming the CA is indeed welcome but inadequate.  For example, another party principally responsible for the CA mess was the Executive in its attempt through GSIS to ensure an unfavorable ruling for Meralco.
For reforms to be credible, bigger heads, or the biggest heads, have to roll.

It is common knowledge, especially in the legal profession, that corruption and breach of ethics are endemic in the CA.  The well-known and riveting GSIS-Meralco battle is just one of many high-stake cases tainted with unethical and illegal practices,

The violation or non-enforcement of contracts, the judiciary’s submission to Executive power, the behind-the-scenes fabrication of its decisions, and the high-level corruption that yields unpredictable outcomes are all detrimental to the country’s long-term growth.

Investors who do not know how to play the dirty game or who refuse to play such a game will avoid doing business in the Philippines.  To help them prosper, businesses are compelled to engage in rent seeking and bribery.

Businessmen are being castigated for engaging in rent seeking, diverting resources from productive use to political lobbying and capturing regulation, including bribing.  But we cannot always blame them.  There is such a thing as defensive rent seeking or defensive bribes.  Especially when confronted with a weak, corrupt state, a predatory state in fact, businessmen have no choice but adopt the unethical or even illegal measures that its enemy, the state or another private party, is mainly using.

Let’s return to the dirty war between GSIS and Meralco. Known to everyone, Winston Garcia’s GSIS is but the demolition team of the Arroyo administration. With the state’s resources behind it, the GSIS is hell-bent on destroying Meralco’s ownership and management.  Meralco, a master at playing this game since time immemorial, knows that it can’t act like a good boy when the other party is a behemoth and a bully.

All is fair in love and war.

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