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Commission on Audit bombshell
By mlq3 Posted in Daily Dose on October 18, 2007 282 Comments 8 min read
Target of opportunity (updated) Previous The ploy to keep the Speaker loyal Next

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.
[aloud]
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 INQUIRER.net, 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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  1. MBW,
    One little question, what could be a valid ground to obtain an annulment. Usually, one reason I remember years ago is the failure to consummate the marriage. Irreconcilable difference maybe? But it seems there is not a single “fault” between the two. They seem to be made for one another. A perfect couple, when it comes to you know what…

  2. same pattern.

    first step: an obscure, lawyer files an impeachme complaint, citing his patriotism as the reason for doing so;

    second step: feeding frenzy in the trough with all sorts of allies trooping to the palace for fattening and then making the rounds of tv talk shows proclaiming briberies never happened; while hysterical-sounding columnists (e.g., magno,cunanan, etc.) present a one-sided pro-gma
    opinions and gossips;

    third step: love-gloria bloggers spring into their acts , telling everybody to let’s move on;

    fourth step: government distances itself from the impeachme complaint, proclaiming innocence to high heavens;

    fifth step: irresponsible print and broadcast media (journalists cum columnists), in tandem with love-gloria bloggers, cry in unison: fabrications!, lies!, fabrications!, lies!”.

    sixth step: house commitee junks impeachme complaint, giving gloria one year reprieve from true impeachment complaints;

    seventh step: pro-gma politicians and allies starting to count crisp thousand peso bills.

    then, on to the next garci, fertilizer,ZTE,cybered,etc… anomalies.

  3. 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

    It is not lack of knowledge, sir, it is the accounting system. Like in the private accounting system, the cash in bank in the balance sheet is not the real balance as of the cut off date because there might have been transactions in the bank that were not yet taken up in the books. So the bank reconciliation is done the following month when all bank charges, cashed checks,bank debits and credits are fully accounted for.

    The difference in the balance does not necessarily mean there is a theft or fraud. The work of an auditor is to reconcile what is expected and what was observed.

    So the auditor and the auditee sit down to thresh the differences.

    Explaining everything to you will require more than one semester. But when there are questionable expenses, the auditor still have to ask for the supporting documents.

  4. Supremo,

    Sultan of Brunei with Gloria? Don’t think he’ll like her — not pretty enough and she’s so taray, best would be to pair her off with either Hugo Chavez or as you say, a Columbian drug lord.

  5. The cat, you mean to say Ramos is lying?

    When he calls it by another name i.e not cash gifts then he’s not lying.

    After his administration, there were also unliquidated advances in the Palace account.

    I also explained the same thing.

    And the people in charge of funds that need to be liquidated can not get clearance from the government not unless they are cleared of advances.

  6. “The difference in the balance does not necessarily mean there is a theft or fraud. The work of an auditor is to reconcile what is expected and what was observed.

    So the auditor and the auditee sit down to thresh the differences”

    Just like the COA auditors, may not know much about accounting, but I also believe that when the Auditors submitted the results of their audit, they fully undergone all the processes and procedures and even had sat down with the Auditee to thresh out the differences and the reports is the culminations of their job.

    Well, there’s no need to lecture a semester-long to a person who is not interested to join the firm like the Arthur Andersen and a lot others, who like any other profession, has too many undesirables.

  7. Sorry for the question Supremo, but you see am trying hard to get ‘facts’, ‘facts’ and ‘facts’ here so asking questions here before I make any assertion…

  8. MBW, yes the daring do couple, but at least they were tough and fearless and did their crime without trying to hide them. Unlike the other two, trying very hard to get ready for anointment for sainthood at the same time..

  9. “Manila Bay Watch :
    Supremo,

    What do you mean by “It would be hard for GMA to kneel before Bill C.”

    Is it because she’s the Queen of an Enchanted Kingdom?”

    I mean ‘kneel’ in the tri-X world. Bill is almost 6’2″. GMA will not be able to do a Lewinsky even if Bill is sitting down. The ‘stain’ would be all over her head.

  10. Supremo,

    I see what you mean. No wonder Manuel Buencamino reckoned that when she was boasting of being ‘eyed’ by Clinton in Georgetown, it was probably to use her head as a coaster platter.

  11. Vic,

    But hang on, didn’t the Arroyo brothers say they were related to St Theresa of Avila? Maybe that’s the reason why, if ever, the two are ” trying very hard to get ready for anointment for sainthood at the same time..”

    Imagine — RP can be soooo proud, St Gloria and San Miguel, two saints in one go (wonder if they will be required to bribe the Vatican to get the sainthood.)

  12. vic:

    the annulment ground most commonly used is “psychological incapacity”, roughly defined as the couple is psychologically incapable of living together.

  13. wow, it’s incredible how some grown-up people in this blog could spend time in childish heckling. talaga yatang walang magawa sa buhay nila kaya puro misirable at kabulastugan ang nasa isip. kung ganyan ba naman ang kalibre ng mga kalaban ni gma ay talagang wala siyang problema o dapa’t ikabahala. mga utak-hanip.

  14. mlq3, it looks like your “bombshell” has turned into a stink bomb (courtesy of your hate-gloria gang) and the putrid smell reaches as far as here on the other side of the world.

  15. Quoting the Cat:

    >When he (Ramos) calls it by another name i.e not cash gifts then he’s not lying.

    After his administration, there were also unliquidated advances in the Palace account

  16. (continuation)…The Cat, how did you know? Were you the accountant? And were (or are) you working in Malacanang?

  17. wow, it’s incredible how some grown-up people in this blog could spend time in childish heckling. talaga yatang walang magawa sa buhay nila kaya puro misirable at kabulastugan ang nasa isip. kung ganyan ba naman ang kalibre ng mga kalaban ni gma ay talagang wala siyang problema o dapa’t ikabahala. mga utak-hanip.

    tama yata si binign0. ano ba ang sabi niya? smart people talk about issues?

  18. aquilino pimentel, the black-haired septuagenarian, grabs center stage in reviving the much-ignored call for pgma to resign, obviously seeing an opportunity in what seems to be an orchestrated “bribery” melodrama. in a breakfast meeting “honoring” the spurned influence peddler who wastes no time making the same call (like he is someone that the president would listen to), aquilino (who had never addressed pgma president, calling her contemptuously by her first name) imperiously extolls noli as puede ng pagtiagaan in lieu of “gloria”. what a low-down, unmitigated s.o.b!

  19. (continuation)…The Cat, how did you know? Were you the accountant? And were (or are) you working in Malacanang?

    It was also in the news at that time. And the forum where I was active in politics had the same argument about government accounting.

    It pays to keep yourself posted with the events, past and current so you do not have ask silly question.

    Even I if I were not an accountant of Malacanan but I am an accountant who knows Government accounting, then I know what’s going on in the books of a government agency.

  20. The cat,

    So GMA and company gets away with this because its allowed by law. I believe this unique accounting procedure needs to be revisited, liquidations need to have deadlines, they don’t need to be done months or years after cash is being spent. Isn’t it possible to liquidate immediately after an event/use? I know we do.

  21. Just like the COA auditors, may not know much about accounting, but I also believe that when the Auditors submitted the results of their audit, they fully undergone all the processes and procedures and even had sat down with the Auditee to thresh out the differences and the reports is the culminations of their job.

    COA auditors are supposed to be CPAs and therefore they know Accounting. Gone are the days when
    anybody can just become auditor.

    You do not want to hear a lecture about accounting but you have been blurting out something that makes you ridiculous to people who know what accounting business is.

    One word of advice, if it is not your turf, don’t even try to discuss the topic. More talk more errors.

    Like I do not try being legalese because I am not a lawyer.

  22. Anyway, in my experience(s), everytime cases of unliquidated expenses (delayed even) are brought to my attention there’s really some underlying issues like lost receipts, no receipts, and worse – malversation (technical or otherwise).
    I have terminated or asked to resign many a salesman for the same issues, proven or not proven. Fot me, there are positions that carry responsibility to a degree that not even a hint of impropriety is tolerated.

  23. wow, it’s incredible how some grown-up people in this blog could spend time in childish heckling. talaga yatang walang magawa sa buhay nila kaya puro misirable at kabulastugan ang nasa isip. kung ganyan ba naman ang kalibre ng mga kalaban ni gma ay talagang wala siyang problema o dapa’t ikabahala. mga utak-hanip.

    bencard

    This is democracy at its best. Anyway, you’ll probably notice that its mainly just a ventilation of our frustrations to the administration’s performance, but you need to experience the corruption in customs, businesss licensing departments, BIR, garbage-eating-species of man, street children, generals playing golf during office hours, politicians playing golf durign office hours, unliquidated billions, etc. You need to see it to believe it, you may have been out of the country for too long.
    Wish you were here…:)

  24. i have terminated or asked to resign many a salesman for the same issues, proven or not proven. ramrod.

    live by the sword, perish by the sword (unless you own the entire business).

  25. bencard

    This is democracy at its best. Anyway, you’ll probably notice that its mainly just a ventilation of our frustrations to the administration’s performance

    ramrod, i guess bencard’s just frustrated when he sees posts hitting GMA with childish remarks. it’s not you.

  26. ramrod, that’s why i say the problem are these people you mentioned, not gma. make her a dictator (with all the power to summarily put these people in jail, proof or no proof of actual wrongdoing, as you do in your company). then we hold her liable for everything under “command responsibility”.

  27. live by the sword, perish by the sword (unless you own the entire business)

    bencard

    Losing a job for violating the same principles you believe in, so be it, you keep your integrity intact and you retain the respect of people who know you. Even in the event that you were not even guilty, the truth has an uncanny way of coming out, and like sin, good deeds do not go unrewarded/unpunished.

    I wish I owned the entire business, then I can afford to hire you, you make a good corporate lawyer, you stick to the law no matter what, disregarding controversy. I must admit there was a time I was mired in controversy but some people hated me too much I had to leave. Two years later they found out the truth, now the owner is a good friend of mine. It is my belief that you can’t function effectively anymore if the people you serve do not trust you, why force the issue?

  28. To be fair to GMA, I actually voted for her. To me she is probably the “managerial type” not trapo, very well versed in economics, very intelligent, hardworking, sticks to her beliefs (regardless of being unpopular), she represents the country extremely well in the international community (Erap will never do), and she knows how to take care of her staff. To top it off, we have good report card grades on our economy.
    But then again, leadership, expecially the presidency is a very heavy responsibility and as we can see, very demanding. Perception plays a major part, perhaps more than achievement (or equal to). Whether she will be vindicated in her term or later remains to be seen, but for now its pretty obvious that she will find it very hard to function. Everything she does will be viewed through a microscope and shown for all the country to see, professional or personal. The good works will be ignored, the controversy magnified. Even her family will not be spared. We can’t help it, this is reality, this is how the world works.
    Inspite of her strengths, she has some weaknesses, to start with is her stature, a leader should look the part, strong, tall, unwavering (figuratively speaking). Second, power, she cannot control the people around her, so she is viewed as a lameduck by some, third, she lost the battle for perception. It will be extremely difficult for her to lead at this point. In effect, she will not be a good president, we have no use for her and the likes of her.
    Bencard, you’re right to stick to what you believe in, uphold the law/rules, unfortunately, the world does not work that way, especially politics.

  29. ramrod, thanks for the compliment, albeit coming from left field.

    i don’t doubt your sincerity in doing the right thing. i know you, like me, hate injustice in whatever shape or form and whoever is committing it. i guess our difference is in deciding who is the victim and who is the culprit, and how we make that decision. i say we follow the rule of law and you say, forget the law, our intuition is good enough. am i wrong?

  30. ramrod,

    stop making excuses for gloria. she is the president and the most powerful person in the country and she is supposed to control her people. is it not her fault that she cannot control her own people? i doubt you will make that justification if the president is a man.

  31. “watchful, i don’t have the details but i thought pgma canceled the deal because of hullabaloo raised by the ‘gullible, pushover’ crowd.” Bencard

    Who is the “pushover” here? Who buckled down? Gloria or the “crowd”?

  32. To the CBCP:You are as guilty as Gloria for tolerating all her excesses all these years.Your “critical colloboartion” with her gave her the confidence to commit all her excesses.

    ‘Depart from me, accursed ones, into the everlasting fire which was prepared for the devil and his angels. For I was hungry, and you did not give me to eat; I was thirsty and you gave me no drink; I was a stranger and you did not take me in; naked, and you did not clothe me; sick, and in prison, and you did not visit me.’ Then they also will answer and say, ‘Lord, when did we see you hungry, or thirsty, or a stranger, or naked, or sick, or in prison, and did not minister to you?’ Then he will answer them saying, ‘Amen I say to you, as long as you did not do it for one of these least ones, you did not do it for me.’ And these will go into everlasting punishment, but the just into everlasting life.”

  33. ramrod, i find it very amusing for you to consider pgma’s height as a “weakness”. napoleon bonaparte was not that tall but he almost ruled the world by conquest. c.p. romulo did not become president but i never heard that his small stature was a weakness. so was churchill’s.

    do we always have to change presidents through “people power”? we might as well abolish presidential elections, it’s never respected and accepted by the losers, anyway. in a unique system where the losers, collectively, has the support of more people than the winner, the losers will always “have no use for her(/him)”.

  34. Bencard,

    I’m just speaking from my experience, its peobably the only topic I know best. I am for following the law, in fact I am a stickler to it and enforce it without prejudice. But the law is not everything, to me there are other considerations, like trust for instance. Why would I continue to defend myself even if I’m innocent? (granted). My point is, the presidency, whether in government or corporate, is just a job, if you don’t have the trust of the people you serve, unfounded or not, why stay? Life is more than that…

    Beancurd,

    I’m not actually making excuses for GMA, I’m just trying to look at it from a disinterested person’s point of view, without my biases, based on function, not personality. Don’t get me wrong, I’m not above the “oust GMA slogans,” sometimes my training gets in the way and I have to see other perspectives just to get a clearer picture.
    Of course, you and I have to admit, the Filipino psyche is still “machismo.” Whether we are willing to admit it or not, the military will (although secretly) not take kindly to being led by a woman, the “macho” senate or congressmen included, even the electorate. If we look at our history, the coups that happened during Cory’s time were the worst.

  35. “To be fair to GMA, I actually voted for her. To me she is probably the “managerial type” not trapo”

    RAMROD:”Not very trapo”.The understatement of the year!

  36. Instead of investigating the source of the bribe money (for we know who the real bribe-giver is), they should investigate the food served during breakfast last October 11. What could be in the food that so many congressmen, governors, and mayors were suddenly afflicted with extreme amnesia, failing to remember what happened that day? This is the height of sabotage! Imagine, causing damage to the brains of those honorable congressmen, governors, and mayors! It was fortunate that Among Ed must have partaken just a little of the food, or must have developed some kind of immunity from whatever malevolent substance they put in the food, so that he was still able to remember clearly what really happened.

    So, as a citizen who dutifully pays his taxes, I call on the Senate and the House to investigate the chefs, kitchen assistants, and waiters who were in Malacanang on that fateful day.

  37. “So, as a citizen who dutifully pays his taxes, I call on the Senate and the House to investigate the chefs, kitchen assistants, and waiters who were in Malacanang on that fateful day.Shaman”

    That’s really funny!LOL

    SHAMAN:Trick-or-treating is one of the main traditions of the palace. It has become socially expected that if one lives in the Palace by the Pasig ,a neighborhood frequented by begging congressmen, one should prepare the brown money bag as treats in preparation for the trick-or-treaters.

  38. Bencard,

    I don’t think many people here are into people power anymore, its more of a popular disapproval although vigorously expressed. Thats democracy for you. This is the same democracy GMA fought for when she opposed Erap, she should also expect the same.

    Stature, you know what I mean, he/she has to be a figure of strength (MLQ1, Marcos,Bush?).

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