According to an NBI investigator, it is “the mother of all scams”. Allegations that up to Php10 billion was siphoned off by a syndicate into dummy firms is rocking the foundations of both chambers of Philippine Congress. Linked to the scandal are no less than five senators and 23 congressmen. Was it a racket knowingly or unwittingly participated in by the 28 law makers? That remains to be determined. At the moment investigations are still on-going and the legislators implicated in the racket have so far either kept mum or denied the allegations.
The news first broke in the Inquirer.net which over a four-part series of articles revealed the extent of the scam allegedly perpetrated by a certain Janet Lim Napoles, CEO of trading firm JLN Corporation. The series of stories ran by the Inquirer.net are as follows (key excerpts quoted for each):
NBI probes P10-B scam (Fri, 12 Jul 2013)
JLN stands for Janet Lim Napoles, who has been identified as the alleged brains behind the racket. She runs the company with her brother, Reynald “Jojo” Lim.
The sworn affidavits—prepared by six whistle-blowers with the assistance of their lawyer, Levito Baligod, and submitted to the NBI—stated that JLN Corp., with offices on the 25th floor of Discovery Suites in Ortigas Center in Pasig City, had defrauded the government of billions of pesos in ghost projects involving the creation of at least 20 bogus nongovernment organizations. These NGOs were supposedly the ultimate recipients of the state funds, but the money went to Napoles, according to the affidavits of the six whistle-blowers.
‘I am not involved in any scam’ (Sat, 13 Jul 2013)
Janet Lim-Napoles, who first appeared on the radar screen of whistle-blowers in 2001, has dismissed as a “product of lies,” allegations she engineered a P10-billion scam over the past decade using mainly pork barrel funds of senators and congressmen for ghost projects.
In an affidavit prepared by the MOST law firm, the 49-year-old trader said she and her company, JLN Corp., had “never transacted business or closed deals with the government or any of its agencies or instrumentalities.”
“I certainly was not involved in any of the high-profile scams which occurred during the previous administration,” she said [...]
How P10-B racket works (Sun, 14 Jul 2013)
The scheme involved the Malampaya funds, the fertilizer fund and the lawmakers’ allotments from the priority development assistance fund (PDAF), or pork barrel.
Napoles and her company had been trading agricultural products since 2000 until she reportedly discovered in 2003 a quicker scheme to make money, her former employees said in interviews and affidavits submitted to the National Bureau of Investigation, which is looking into her activities.
For such a high-stakes racket, the modus operandi was surprisingly simple, the INQUIRER has learned.
Napoles, who allegedly ran the racket from unit 2502 of Discovery Suites in Ortigas Center, Pasig City, established foundations or nongovernment organizations (NGOs) to serve as recipients of the funds and named her own employees, including a nanny, as presidents of these outfits.
The funds, which were deposited in the foundations’ bank accounts, were eventually remitted to her to be split between her and the lawmaker whose PDAF allotment was used, or the official of the state agency involved.
28 solons linked to scam (Mon, 15 Jul 2013)
Sen. Ramon “Bong” Revilla Jr. topped the list of lawmakers who were said to have allowed the use of their Priority Development Assistance Funds (PDAF) to the scheme allegedly hatched by Janet Lim-Napoles, president and CEO of the trading firm JLN Corp., according to the documents secured by the Inquirer.
Revilla gave the syndicate access to his PDAF, or pork barrel, to dummy NGOs formed by Napoles and registered in the Securities and Exchange Commission in 22 instances; followed by Senators Juan Ponce Enrile on 21 occasions; Jinggoy Estrada, 18 times; Ferdinand Marcos Jr., four; and Gringo Honasan, once with a small amount.
Topping the list of 23 House representatives is Rizalina Seachon-Lanete of Masbate’s third district, who allowed her pork to be used 13 times; followed by Conrado Estrella III of Pangasinan’s 6th district and Rodolfo Plaza of Agusan del Sur, both nine occasions; and Samuel Dangwa, of Benguet, eight.
Interestingly, pork barrel funds have long been seen to be an obvious source of corruption in Philippine politics. Under the pork barrel system, each senator enjoys an allocation of P200 million from the national budget while each member of the House of Representatives receives P70 million. Each one has full authority to decide how these funds are used to “assist” their respective constituencies. Because Malacañang has control over the formulation of the national budget and the release of the PDAF allocation included in the budget, some influence over the behaviour of members of Congress can be exerted by the President.
As Neal Cruz points out in his recent piece on the issue…
I am sure that President Aquino, the self-proclaimed nemesis of graft and corruption, has again submitted to Congress a budget for next year that includes the hated PDAF.
Why do the presidents do it? Because it is a means of making the legislators do what the president wants. Cooperative legislators get their pork allocations quickly; uncooperative ones don’t get theirs as quickly. The pork is a sort of carrot-and-stick for the legislators. In short, the pork is a bribe by the President to members of Congress. Because of the pork, presidents, including President Aquino, are guilty of bribery.
Senator Franklin Drilon has reportedly proposed that the pork barrel either be scrapped or that the types of institutions eligible for receiving these funds be limited. House Speaker Feliciano “Sonny” Belmonte, however, has expressed his position that the PDAF should be retained saying that controls should, instead, be tightened and scrutiny over the way the funds are disbursed increased.
[Photo courtesy FanPop.com.]