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crocAccording 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.]

benign0

benign0 is the Webmaster of GetRealPhilippines.com.

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24 Comments

  • OnesimusUnbound says:

    From the news

    …Sen. Loren Legarda was not involved in the scam, said the principal whistle-blower, Benhur Luy, a former Napoles employee. “There was an attempt, but I heard she was dropped because she scrutinized it and she was very keen on receipts,” …

    But

    All three senators [Sen. Estrada, Enrile and Revilla] earlier acknowledged that they had identified agriculture projects that were funded by their pork but denied any knowledge that an NGO that handled the funds was a bogus organization.

    Ang labo, ‘no? :-S

    • Baptized w/o My Consent says:

      “denied any knowledge that an NGO that handled the funds was a bogus organization. ”

      The “ignorance” card again…

      So they mean to say they don’t do background checks of organizations where they put OUR money into? that’s a valid excuse for a promdi victim of some investment scam. But senators? the ochos?

  • libertas says:

    The combination of pork barrel corruption and ngo scams are not new and with the ‘reported’ 60% commission for senators/congressmen/mayors it represents the maximum corruption for the minimum effort.

    But what is both sad and sick will be the usual suspects making the usual statements of innocence and a lid put on the whole sorry saga. And am sure it is not the only such ngo scam – i recollect one was reported just a few months ago.

    The case of bong revilla highlights the absurdity. He ‘gave/allocated’ 1 billion pesos to jln ngo and now says he was not aware of anything wrong. Outright liar. And senators can hardly in the same breath say pdaf is for their pet projects when they give it away to ghost ngo’s without any receipts/follow up. Are they saying they were stupid enough to be scammed!!

    Criminal scum any which way.

    And will pnoy dare to talk about reduction in corruption in sona. Most probably.

    Hypocricy and greed hits a new high as senators reach a new low.

  • Bubba G says:

    I was able to go through all four articles of Inquirer and didn’t really find anything new with the report. If you’ve been in government long enough, you’d know that this kind of “profit-making” system has been around for quite some time now.

    Just an observation on this exposé, i just hope that the writers of these articles find more consistency with their figures.

    An article in abs-cbnnews.com says that the figures involving the senators are quite lower than the inquirer version. Actually, they are significantly lower.

    Don’t get me wrong, i’m not defending anyone. All I’m looking for is consistency because right now, with figures that are so different, one can’t help but wonder if this is just another witch-hunt by inquirer and abs-cbn.

    Just my two cents worth…

  • Andrew says:

    this is an interesting story, not least because it will be written in the future – it is dated July 16th!

    Seriously, interesting stuff, and an insight into the money-go-round…

  • Johnny Saint says:

    Seems Loren Legarda has already been absolved of any wrongdoing by Leila De Lima even before the investigation gets under way.

    • Baptized w/o My Consent says:

      LDL knows about the existence of this scam. LDL most likely knows LL refused offers to join this scam. LDL just turns a blind eye because she would be going against most of the senate and congress this time but she saves who she could (LL and some other names which will be revealed soon if any)

      my 2 cents..

  • libertas says:

    Abolish pork barrel/pdaf, and implement FoI, and in one fell swoop the nature of politics, would change for the better.

    Or keep ‘paying’ these thieves 40 – 60 million pesos a year for nothing!

  • Lord Chimera says:

    Another compelling reason to abolish pork barrel. But unfortunately Status Quo is God.

  • Kim says:

    Naku daming mga senador na di mapagkatiwalaan, mabuti na lang at hindi totoo ang mga paratang ka senator legarda, sya lang ang mapagkakatiwalaang senador.

  • Jane says:

    Legarda was already cleared, hindi sya kasali dito.

  • Nancy says:

    I believe that Legarda has nothing to do with this.

  • Pia says:

    Wala talaga akong tiwala kay cayetano..tsk tsk

  • Lloyd says:

    Si cayetano lakas! lakas mangurakot!

  • efren says:

    The Senate and Congress prove to be effective in scam and corruption.

  • janet de la riva says:

    Thats why some of them really had a hard time passing a
    guilty verdict on the CJ case parepareho Lang pala really
    birds of the same feather. Not only the same feather but notice
    sons having the same charges as the father – really is corruption
    genetic? hope we Filipinos finally learn – how many xray machines
    could we have bought for our airports, how many suicides of
    students we could have prevented, how much farms we could
    have operated with modern macjines/tractors. . .Really trashing of
    our country begins not with the Chinese, etc. but with our so
    called leaders.

  • linux vps says:

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  • Jo Anton says:

    I thought that the Mafia was the most organized and biggest criminal syndicate in the world. I was wrong, please guest then the name of the biggest syndicate?

  • Jo Anton says:

    Enrile malaki na ang pahirap mo sa bayan, pamuhat pa noong martial law. Nag lead ka ng coup de tat hindi para sa bayan kundi para sa inyong dalawa ni Gringo to grab power. Na overtaken ka lang ng events kaya kumabio ka para maging hero ka. Ikaw ang author ng sunod sunod na coup sa panahon ni Cory kaya nahirapan ang bansa. Ikaw ang author ng dag dag bawas. Sa libro mo ay puro kasinungalingan. Ngayong matanda kana ay Pork naman ang knasangkutan mo.

  • eugen alba says:

    This is why the Philippines is the laughing stock of all Asian countries. Sure there are corruption in other countries, but the Phil. corruption system is the Mother of all corruptions.
    The Aid that was/is generously given by countries like Germany, USA and Australia, are frittered away by graft and corruption, the scale of which is unacceptable. Mahiya naman kayo. This can not continue.
    Filipinos were once proud people, now they are tainted by the extent of corruption in the Philippines. Bukas yung mata ninyo at tignan ninyo how far other countries have progressed and the Phil is a basket case. I say that because it can not look after its own people.

  • Jan says:

    Hold on.. seriously? So the corrupt government leaders actually have an “allowance” from the government to use as they please?

    You’ve gotta be kidding me here. What the hell is wrong with this country?

  • DAVID FLORES says:

    Am happy with this investigation but i still want government to work well on mny issue in philippine most especially immigration as well. I was scam there when i was in philippine to extend my document but they kept my passport and get me arrested after 1year after i paid alot of money to get my passport back. i decided to left the country and abandon my my wife and son with house and car in philippine. Because of this issue i got married in my country bcos former immigration commissioner said his happy to do so. i pity my son and wife for ruin my wedding. many people lso victim of fake extension visa

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