Commission on Audit bombshell

Today’s movie quote comes from the film, Casablanca:

Rick: How can you close me up? On what grounds?
Captain Renault: I’m shocked, shocked to find that gambling is going on in here!
[a croupier hands Renault a pile of money]
Croupier: Your winnings, sir.
Captain Renault: [sotto voce] Oh, thank you very much.
Captain Renault: Everybody out at once!

And so, shocked, shocked was she to find that bribery is going on in here! That an ‘Upset’ Arroyo orders probe of Palace ‘bribery’.

The problem is, that the Palace’s own allies are compounding the problem. If the There’s the Hamlet-like agonizing of Rep. Antonio Cuenco – Arroyo ally torn between telling truth, hurting her– isn’t bad enough, then there’s this: Arroyo present during cash distribution–Manila solon although in a major clarification to a major error, it turns out (CORRECTED) Arroyo wasn’t present, says Manila solon:

full statement of the Philippine Daily Inquirer, parent company and one of the content providers of, follows:

“The Philippine Daily Inquirer deeply regrets that it inadvertently reported in today’s issue that Rep. Bienvenido Abante said President Macapagal-Arroyo was present during the distribution of cash handouts to politicians last Thursday. Abante had actually said the President was not present.

“The Inquirer sincerely apologizes for the error.

“We are looking into the matter to ensure that no similar errors occur in the future.”

Even Ramos denies giving gifts to Atienza, solons and the Inquirer editorial says these recent revelations act as indirect confirmation of past testimony. The whole thing’s so squalid that poor Bong Austero has to point out,

I am not saying that what happened last week was justifiable. I am not saying we should condone it. All I am saying is that there is context around it. This culture of political patronage has been around for quite some time and will continue to be around for as long as voters continue to hound their elected leaders for all kinds of assistance.

What made what happened last week galling was the brazenness and shamelessness of it all. In short, bastusan at garapalan na talaga.

Which may be why up-to-now loyal allies of the President are beginning to publicly discuss whether to spill the beans or not (like Cuenco). This can only send the Speaker’s sensitive political antennae quivering. Newsstand is far more inclined to caution than I am, and yet he has begun to wonder,

Now, on dzMM’s TeleRadyo, I see Speaker de Venecia announcing that, as he had promised last night, he had written an appeal to President Arroyo, calling on her to start a “moral revolution.” She can start, he said, by firing some of her Cabinet members.

This, it seems to me, could very well be the signal to start (open) hostilities.

What does this mean? It means, just possibly, that JDV has seen the same thing as the opposition leader did, and has decided to go down fighting.

See De Venecia calls on Arroyo to set up new administration.

I can’t help but recall, as I recently recalled in Jose De Venecia’s Last Stand (essentially reprinting my August 29, 2005 Inquirer column, which, unfortunately, is no longer available on line), that the possibility, even probability, of a parting of ways between the Speaker and the President was something I saw coming even back then, and was of course trying to encourage. A paper published in 2006, Constitutional Reform in the Philippines: Out of Crisis, What? by Joel Rocamora very kindly quoted a portion of my column:

In the great division of our people that took place in recent months, it was the speaker who put foot soldiers, so to speak, at the command of former President Ramos when he decided to support the president. In truth, what Ramos possessed at the time was an impeccable sense of timing, and a residual prestige. It would depend on the speaker, however, to hold the line, and man the trenches in what has become a political battle of attrition, with loyal troops and efficient lieutenants.

But the I-told-you-so part I’d like to point out is this:

In fighting for her political life, the president nailed not hers, but Ramos’ and De Venecia’s colors to the mast, and proceeded to continue sailing the ship in the direction of enemy fire. Furthermore, she has tied both Ramos and the speaker to the mast, which means it is they who are getting shot at, while the president continues to command the show from the comfort of her cabin.

While Ramos has already done all he can do – you can only throw your support behind someone once — the speaker is still being called upon to marshal the troops in the House, and for what? Whatever their view about the president, the majority of the public wants the impeachment process to continue. The speaker might have been able to justify fighting “creeping impeachment” by “stealthily railroading” the throwing out of the impeachment, but the unpopularity both of himself and his parliamentary cause would only be worth it if the president did her part by gambling big on achieving constitutional change. She has done the opposite: She has gambled small, and it may be her real bet is on herself.

And at the end of the day, perhaps he’s taken heart from realizing (see De Venecia can only be replaced if he agrees–solon: Speakership only for Lakas, he says) that even at the age of 70, he could just possibly get a new lease on political life if he remains the party chief. At a time when his party has begun to publicly fret about its association with the President.

But this, I think, will be the story primed to hog the headlines over the next few days: Palace misused charity funds, gave loans sans records – COA. The report details the findings of a Commission on Audit annual audit of the Office of the President.

In particular, this section of this story:

In 2006, COA said the Office of the President received “from various sources” donations totaling P65,413,463.79 or P65 million, for the following purposes:

‘ Donation for the Southern Leyte landslide, P7.1 million
‘ Donation for Socio-Economic Projects of the President, P35.6 million
‘ Donation for Typhoon Milenyo victims, P2.7 million
‘ Donation for the relief and rehabilitation of affected areas in Albay province, P20 million.

COA’s adverse finding follows: “We noted, however, that out of the actual expenses incurred totaling P64,079,173.40 from the donations, expenses totaling P8,807.621.75 could not be identified with any of the purposes of the donations.”

According to COA, Malacanang had reported using the donations thus:

‘ Burial expenses, P795,000
‘ Hotel Expenses, P815,380.15
‘ Maintenance of the Malacanang Golf Course, P900,000
‘ Summit Conferences/General Assembly, P2,295,241.60
‘ Donation to Foundation, P4,000,000

These expenses “out of the purposes of the donations are contrary to Section 13 of the General Provisions of the General Appropriations Act of 2005,” which stipulates that “donations, whether in cash or kind, shall be deemed automatically appropriated for the purpose specified by the donor.”

The golf course and unnamed foundation donations in particular, are primed for heavy political play. The full report can be found online, supposedly, at the Commission on Audit website but when I tried going there, it was under construction. A source familiar with government accounting practices sent me a cautionary note, however:

Just a word of caution on interpreting the findings, it is common practice among government agencies that the findings are first discussed with management before they are actually published. These findings are therefore expected by government. Also, COA can only recommend and most of the time their recommendations are not followed.

Uniffors reports on the rumor mill.

Meanwhile, Senators revive call on Gloria to resign: a case of jumping the gun? What surprises me is that Senator Pangilinan has taken the lead in an issue. And Bypassed Cabinet members reappointed. Tick tock for the armed forces brass: High Court gives CA green light to require disclosure of Burgos report.

This article should be required reading for Filipinos in the IT sector: India’s IT Sector Needs to Reboot.

Part 1 and Part 2 of my column for this week, were on Mabini’s independence blueprint.

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Manuel L. Quezon III.

282 thoughts on “Commission on Audit bombshell

  1. Pinnochio Test on spins:

    Puno: Money came from JDV’s office not Malacañang!

    “Interior Secretary Ronaldo Puno on Thursday absolved Malacañang from bribery allegations using as basis recent statements of some members of the House of Representatives that the money they received inside the palace compound came from the office of Speaker Jose de Venecia Jr.

  2. It’s “closure” when it’s closed the way I want it to be closed.

    The “truth” is what I believe…or what I want you to believe.

    “I’m innocent” is claimed by the pure and the corrupt.

    “You are guilty” is shouted by the sinful hypocrite.

    Which of the following does not practice “spin”?:

    A businessman
    A newsman
    A politician

    As always, My own advocacy is that we need to have f-a-c-t-s and we need to follow the laws, processes and procedures. The rest is bias and BS.

  3. Thanks Dr D.

    I poste dteh same question several montsh ago pero walng nag respond eh.

    Hayaan ko na mna si ramrod mag practice.dahil baka mapuno ang thread na eto ng mga testing.

    Need to go now

  4. hey guys,

    I have to attend to “quality time” with the Mrs., enjoy the rest of the night…

    Bencard, nice to hear from you again 🙂

  5. “It is the government accounting system, sir, where the per books and and the actual would not meet. We call it TIMING DIFFERENCE”.

    Goddamn COA auditors, don’t know anything about Government accounting.. following the reasoning that the COA reports were the results of their lack of knowledge of Government Accounting Procedures that it takes another decade for the per Books and the Actual to meet, then Gloria could now use this line, and fire all the Auditors…But then the Philippine’s Government has some kind of Unique Accounting System, giving cash like the way Underworld figures(now, that is Government acct.) I give up…

  6. “Which of the following does not practice “spin”?:

    A businessman
    A newsman
    A politician

    As always, My own advocacy is that we need to have f-a-c-t-s and we need to follow the laws, processes and procedures. The rest is bias and BS.geo”

    Geo:Agree 100%!

    Which of these are NOT spins?

    1) The Philippines is the most democratic country in our region. We have no tolerance for human rights violations at home or abroad.” GMA Speech in the UN General

    2)”The Days of plunder are over!” GMA

    3)”I’m sorry, it was lapse of judgment”GMA

  7. you can type a blockquote tag thusly:

    your text

    remove the spaces in between the characters and you’ll see it.

  8. oops. let’s try that again (apologies to all)

    your text

    remove the asterisks to place text in a block quote

  9. “As broadcast journalists and columnists have continuously discussed the issues, it appears the general public has not reacted vigorously to the recent events,” Bishop Bacani said.” GMA-7 News

    Well, well well. We lost the fight again.
    “Lets move on” will be the slogan again. What will enrage this nation. Filipinos are the dumbest people on Earth. We deserve our faTE.

  10. (blockquote) your text (/blockquote)

    use the ‘lesser than’ sign in place of the ‘(‘
    and use the ‘greater than’ sign in place of the ‘)’

  11. i agree tonio, that’s why i chose blogger. i thought benign0 was a genius until i learned to do those smileys myself.

  12. Just like algebra…

    Let ( be …

    (blockquote)My comment.(/blockquote) will appear like this:

    My comment.

  13. cvj, hahaha…

    Let ( be the “lesser than” sign
    and ) be the “greater than” sign…

    (blockquote)My comment.(/blockquote) will appear like this:

    My comment.

  14. NEWS: Palace wants dialogue with bishops on bribery scandal -“to explain what’s going on.”

    (Invitation says: Bring extra paper bags.) hehe

  15. Why can’t the Palace issue this statement: Those who return the bribe within 5 days will be offered presidential amnesty.

    That would be a good start.

  16. Rego, Ramrod, if you want to do this:

    insert text here

    then type your text like this:

    <blockquote> insert text here </blockquote>

  17. geo, thanks. that’s also my simple advocacy. facts, facts, facts before conclusions, proof of guilt, before condemnation. it’s not about pgma, it’s about me, because some troll could accuse me of having an ongoing illicit affair with his wife in the philippines who has never been to the u.s., where i live and have never left before being arrested at the airport in the course of a balikbayan trip.

  18. Bencard,

    “before being arrested at the airport in the course of a balikbayan trip.”

    Question of facts: What on earth happened? You were arrested for not having an illicit affair or because you were found out?

  19. tried cvj did
    and…he did succeed!


    In the “COA CIRCULARS DOCUMENT SEARCH FORM” (search query: “discretionary funds”) I found this:

    COMMISSION ON AUDIT CIRCULAR NO. 85-55-A September 8, 1985


    4.7.1 For National Government Sector

    Extraordinary and miscellaneous expenses shall include,, but not limited to, expenses incurred for or during meetings, seminars and conferences, official entertainment of the official or through his authorized representative, public relations, educational, athletic and cultural activities, contributions to civic or charitable institutions, membership fees in government associations, informative magazines, library books and materials, office equipment and supplies and other similar expenses that are not supported by the regular budget allocations, PROVIDED, that no portion of the amounts authorized thereon shall be used for the creation of positions, nor for salaries, wages, allowances, intelligence or confidential expenses.

    4.7.2 Local Government and Corporate Sectors

    The above provision contained in 4.7.1 shall also apply to the local government and corporate sectors.

    …but that was a Marcos-era COA Circular. I wonder if the term discretionary fund was resurrected after the genuine EDSA revolt. I also wonder how the term is defined now. It’s possible the recent dole-outs from Malacañang were covered and justified by their definition.


    How about the dole-outs, a.k.a. bribes, coming from the Office of the President’s intelligence funds?

    Could be. By the way some of our elected officials are behaving and thinking…they sure could use some funds from Malacañang to buy human intelligence.


    Now that COA has revealed it…calamity or charity funds earmarked, of course!, for calamity or charity could be the source of the Malacañang dole-outs. But come to think of it, some elected officials really need charity for their calamitous conscience.

  20. Those crisp bills, and paper bag are not facts, facts but the evil work of camera tricks.

    And Ate Glue dropped the ZTE deal because of speculations going around.

    Know what, that’s her voice but it’s not her talking on the Garci tapes. Facts you, man.

  21. The bishops branded the Arroyo administration as “morally bankrupt.”

    Let’s not be too diplomatic at this stage. Say it straight: Gloria Macapagal-Arroyo is “morally bankrupt.”

  22. Watchful eye, just as a guide to Bencard’s terminology, when he says facts, he does not mean just any kind of facts but one that is certified by a judge and therefore achieves the status of legal truth. After all, who are we supposed to believe, the word of a judge, or our own lying eyes?

  23. mbw, none of the above,but i was just illustrating how one could be put to shame, annoyance and expense, if not jail, for mere unsupported speculations or bare allegations, if we dispense with the requirement of proof. i think you are smart to appreciate that, aren’t you?

  24. cvj, i notice that you appointed yourself “the explainer” for this blog,huh? i think mbw and others have their own comprehension of things. you are too condescending and presumptuous. wait till you get arrested on a trumped up charge of terrorism, and see if you don’t demand proof and just meekly enter the prison cell with head bowed in shame.

  25. Didn’t GMA dispense with the requirement of proof in cancelling the ZTE deal? She was smart enough to appreciate that?

  26. Just having a little fun here: The Malacanang Version of the “Desperate Housewife”

    The COA chief after submitting her report to the President of his audit and telling the President that he found many irregularities of her Office Accounting of Public Funds (ala Arthur Andersen on Enron), PGMA abruptly told him to stop and ala Term Hatcher said:

    “Before you go any further, can I check those diplomas? I would just like to make sure that they’re not from some Accounting schools in the U.S.A..
    You know our government accounting system is not similar to that of U.S.A or for that matter any country at all. My Accountants once worked for Arthur Andersen, the fifth largest in the U.S. and they know exactly that you are following the U.S. system”.

  27. “having an ongoing illicit affair with his wife in the philippines who has never been to the u.s., where i live and have never left before being arrested at the airport in the course of a balikbayan trip.bencard”

    hope you are ok now!

  28. watchful, i don’t have the details but i thought pgma canceled the deal because of hullabaloo raised by the “gullible, pushover” crowd. as chief executive, she has that power without need for an order from a co-equal branch, the judiciary, unless a justiciable case on the matter is actually pending before it and which implicates a constitutional issue.

  29. If GMA has solid basis (facts) to assume the ZTE deal was good for the country and would benefit the Filipino people, and as President she’s made of the right stuff, no amount of hullaballoo from anyone should have made her ever to cancel the deal and risk the displeasure of a regional power.

    So, it’s either that she is a pushover leader or the deal was too hot to handle. Which one of these is the fact?

  30. “Sarkozy, wife divorce, lawyer says
    French president and his elegant but enigmatic wife, Cecilia, have divorced after months of questions about their relationship.”

    If divorce is allowed in the Philippines, FG Arroyo would have been kick out of Malacanang a long time ago. Nani Perez would have been the new FG.

  31. Bencard,

    Just so we get your facts straight — if I understand correctly, you’re saying you were neither having an illicit affair nor was found out before you were caught at the airport. ‘Smartly’ factual enough?

  32. Supremo,

    Speaking of ‘Bencardian’ facts, the Sarkozy’s have NOT yet divorced.

    They signed a legal separation before a judge. It’s some kind of ‘reflection period’ or ‘settling down to the idea’ period are therefore legally married still — with all corresponding marital and moral responsibilities that marriage entails except living together.

    If they go back to the judge in 6 weeks time to say, “Yeah, Mr Judge, we’ve decided to do it and want a divorce”, then divorce proceedings will take place. There will be hearings, etc., and normally, one year from date of legal separation, divorce will be pronounced (don’t know if the time period will be shortened for president…)

  33. mbw,

    I understand. My point is GMA’s life could have been easier if she has the option to divorce FG Arroyo.

  34. Supremo,

    Divorce is not allowed in RP laws but it’s hell easy to get a marriage annulment so I hear… Imagine a marriage annulment would mean that she would free to marry — as free as if she never married Mike Arroyo and so could easily marry again, i.e., get Nani Perez or Bencard or Bunye, for a prince consort.

    Who can or will stop her, certainly not Mike Toh, er I mean Arroyo?

    Anyway, what has ever stopped Gloria from obtaining something that isn’t allowed by law in RP?

  35. mbw,

    Imagine a long line suitors at the gate of Malacanang bearing gifts for the little one. China might even send one of their guys.

  36. Supremo,

    Absolutely! Think of the dowry that these suitors will be offering her — wait, the Chinese culture has a different take on dowries, right? I mean, it’s the women who offer dowries or am I wrong? Shit, if that’s the case, we’re in for bigger trouble. She might offer Pampanga for a dowry if she chooses a Chinese suitor!

  37. mbw,

    It’s the Indians who has a different take on the dowry. So no Indian suitor.

    It would be hard for GMA to kneel before Bill C.

  38. mbw,

    Or maybe Palparan, Esperon, Angeles.

    I think she would go for some very rich guy like the Sultan of Brunei or a Colombian drug dealer.

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