Tactics of Coercion and Deception

Mr. Sta. Ana is the Coordinator of Action for Economic Reforms. This article was published in the February 16, 2009 edition of the Business World at pages S1/4 and S1/5.

The do-gooder becomes the accused.  Hasn’t this been the pattern under the Gloria Arroyo administration to cover up crime and corruption?

General Francisco Gudani, who revealed the systematic cheating in the 2004 elections that manufactured an Arroyo victory, was relieved from his post for disobeying an order that barred him from testifying in a Senate investigation.  Jun Lozada, who exposed the kickback relating to the national broadband network deal, has been charged with corruption.

In the inquiry conducted by the Lower House on the Ponzi operations of the collapsed Legacy group of companies, congressmen associated with Speaker Boy Nograles have concentrated their fire on the regulators, not on the fraudsters. Nograles has acknowledged having made substantial investments in Legacy.

And there is the case of barring seven firms and an individual from bidding on World Bank-financed contracts. Arroyo’s lapdogs in the Senate have trained their guns on the World Bank, not on those found guilty of collusion, not on the accomplices and patron.  In the meantime, the Lower House has cleared the two Filipino firms that the World Bank blacklisted.

The administration’s message to the public is dark and dreadful.  Don’t mess with us.  We will use all means, legal or otherwise, to destroy whistleblowers.

And by attacking the truth-seekers, the administration creates a red herring. The public’s attention is diverted from the investigation of criminal cases to the pursuit of specious issues.

Take a closer look at the ongoing inquiry into the World Bank’s disbarment of several parties with respect to the bidding on the Philippine roads project.  The faction of Senator Juan Ponce Enrile and Miriam Defensor Santiago is trying to paint the World Bank as the villain.  Enrile’s Senate is not interested in the collusive practices that tainted the Philippine roads project. Enrile, Santiago, Joker Arroyo, and the like are more interested in vilifying and punishing the World Bank.  They accuse the Bank of withholding information and not cooperating with the Senate. Thus, they have moved to issue a subpoena against the World Bank country director, Bert Hoffman.

But here are the facts:

Two World Bank documents are relevant in this case:  the Referral Report and the sanctions process document (or Notice).

The World Bank has shared with the Philippine government, specifically the Department of Finance and the Ombudsman, the Referral Report.  The Referral Report contains the investigation’s findings.  But of course, it is the Philippine government’s responsibility, not the World Bank’s, to determine whether the country’s laws have been violated.  In other words, it is the government’s task to conduct its own investigation on the basis of Philippine laws.

According to the World Bank, “Referral Reports are written to help guide the national investigation and thus typically do not contain all the details and supporting evidence obtained through the Bank’s own investigation.”  The Referral Report serves as “an offer to begin a cooperative relationship between the Bank and the Philippine investigative agency, if the investigative agency so desires.”

On the other hand, the Notice provides the detailed evidence and the reasons as to why the parties have been disbarred.  The Notice was given to the disbarred firms and individuals so they can have the “information to understand the Bank’s arguments to be in a position to properly defend themselves.”  This is in accordance with the basic principle of fairness.

Enrile, Santiago and their faction are angry at the Bank for not providing them the detailed evidence (including the link between Mike Arroyo and a disbarred contractor), which can be found in the Notice.

But then, the Notice is intended for the respondents, not for other parties.  But the World Bank has likewise clarified that if the Philippine government “is seeking to investigate the case [it] can always ask the Bank for additional information.”

Finance Secretary Margarito Teves and Ombudsman Merceditas Gutierrez make a fuss over the World Bank ‘s statement that the Referral Report “should not be cited or referred to in the course of any investigation, report or administrative, civil or criminal proceedings undertaken by the government.”

Are the Finance Secretary and Ombudsman intellectually deficient, or are they plain lazy?  What they should do is painstakingly conduct their own investigation.  The Referral Report does not intend to provide all the detailed evidence. Further, the World Bank’s administrative rules may differ from those of the Philippine government.  And what is contained in the Referral Report does not make any judgment on whether Philippine laws have been violated.

But we should stress this important development: The World Bank has said that “both the Referral Report and the documentary evidence are in the hands of the Office of the Ombudsman.  We believe the country has the relevant body of information to consider in carrying out whatever investigation the Office of Ombudsman deems appropriate.”  Ombudsman Gutierrez has acknowledged receiving the documentary evidence during a Senate hearing.

There is no reason for Enrile to subpoena the World Bank’s country director. First of all, it will be a breach of the International Bank for Reconstruction and Development’s Articles of Agreement, of which the Philippines is a signatory. Article VII, Section 8 states that “all governors, executive directors, alternates, officers and employees of the Bank shall be immune from legal process with respect to acts performed by them in their official capacity except when the Bank waives this immunity.”

Further, the Philippine government, through the Ombudsman, has all the relevant information and documentary evidence, making a World Bank testimony redundant.  If the Senate wants to get the information, it should summon the Ombudsman, not the World Bank.

But Enrile, Santiago and company will force the subpoena.  That’s part of the game.  Enrile asserted (in Filipino): “What do I care about their immunity.  Then let Hoffman invoke it.”

The trick is to change the game, create a new issue that will make the World Bank the villain.  Enrile and Santiago will raise the flag of nationalism, paint the World Bank as arrogant, and make the real issue of collusion and claims of corruption vanish from center stage.

And to hell with the international repercussions.

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