Bantay-Pilipinas

California

July 14, 2010

BANTAY Points Out ‘Conflict of interest’ in the Aquino III Cabinet

Los Angeles--. The BANTAY PILIPINAS based California said today that President Benigno Aquino lll’s decision to pick executives from big business for key Cabinet posts has placed his administration in potential conflict-of-interest situations, particularly in state-regulated enterprises, such as power, water, telecommunications and toll roads, the EPCC noted Tuesday.

The BANTAY PILIPINAS said the big business appointments were a growing public concern because they were identified with four of the most influential business conglomerates in the country – the Ayala, Lopez, Aboitiz and Metro Pacific groups – to positions with powers to make or unmake business empires.

The appointees mentioned were Transportation Secretary Jose de Jesus, Public Works Secretary Rogelio Singson and Energy Secretary Jose Rene Almendras.

De Jesus used to be president of Meralco (where the Lopez group and Manuel V. Pangilinan of Metro Pacific are controlling partners) and former executive vice president of Philippine Long Distance Telephone Co. (headed by Pangilinan).

Singson is a former president of Lopez-owned Maynilad Water and former director of Metro Pacific Investments Corp.

Almendras is a former president of Manila Water and Cebu Holdings Inc. (both owned by the Ayala group) and former treasurer of the Aboitiz group.

Clear Conflict of interests

BANTAY PILIPINAS pointed put that the Department of Transportation and Communications (DOTC) handles toll road fees (through the Toll Regulatory Board) and telecommunication franchises (through the National Telecommunications Commission).

Both the Lopez group and Metro Pacific have interests in telecommunications (Bayantel and Smart, respectively) and toll roads (North Luzon Expressway and Subic-Clark-Tarlac Expressway).

Apart from being head of the Department of Public Works and Highways (DPWH), Singson has also been named chair of the Metropolitan Waterworks and Sewerage System (MWSS), which handles water rates and policy.

Another conflict-of-interest situation was purportedly created in the Department of Finance (DOF) with the appointment of executives from a logistics conglomerate – the Lina group of companies – to government posts – Angelito Alvarez as customs commissioner and Guillermo Parayno as finance department consultant.

The Lina group, through its information technology arm E-Konek Pilipinas, has a multimillion-peso contract with the government.Alvarez has sailed into controversy early.

Some senators have called on Mr. Aquino to revoke his appointment after he was suspended by a golf club for cheating during a tournament in February.

The Regulators

Albay Representative Edcel Lagman said, “It’s really odd to see how the regulated have become regulators in the Aquino administration.”

Bayan Muna Representative Teodoro Casiño called it a “disturbing pattern” of appointments that could compromise the administration in deciding on issues that divide the interest of consumers and big business’ hankering for profits.

“This is definitely a matter of concern considering that these business interests are known supporters and funders of Aquino’s presidential campaign,” Casiño said in a text message. We can only hope that this is not a case of payback time and that the appointees will not allow themselves to be instruments of big business in “

Detrimental to National Interest

Bayan Muna Representative Neri Colmenares said that while Cabinet appointments were the President’s prerogative, “I cannot help but express concern over some appointments – particularly the appointment of Cabinet members who have or had substantial direct or indirect interest in businesses being regulated by their very departments – which could be detrimental to the Aquino government’s avowed promises of reforms and battle against corruption.”

Colmenares said these conflict-of-interest situations could jeopardize Mr. Aquino’s promise to stamp out corruption.

He cited the case of Almendras, whose former employers, Aboitiz and Ayala, are involved in energy. The Aboitiz group is one of the biggest power players in the Visayas and Mindanao, while the Ayala group is bidding for the Angat hydroelectric power plant, in partnership with the Lopez group and Metro Pacific.

“Considering that energy is one of the main problems of this country, and which requires a drastic overhaul for long-term solutions and to weed out corruption, it is best that the energy secretary will not only have the mandate, but the image of being ‘nonaligned’ as well to reform the industry,” Colmenares said.

He noted that the Constitution explicitly frowns on conflict-of-interest situations. Colmenares also cited the case of Alvarez who, as a part owner of Air 21 and E-Konek, would be forced to deal with his companies, which have dealings with his department.

“Conflict of interest will always be perceived by the public in his decisions involving these companies, even if he divested from these. The anti-graft law made the conflict-of-interest provision broad precisely to discourage such situation,” he said.

During the campaign, Mr. Aquino said he would give no favors to his campaign donors but promised a “level playing field” to ensure fair play for all players in the industry. But he is doing the reverse. The same thing that all presidents did during their time. If it is not Kamag-anak INC, its classmates and friends.

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