POSTSCRIPT / March 12, 1998 / Thursday


Philippine STAR Columnist

Share on facebook
Share This
Share on twitter

Big bucks = big scandals in giant gov’t projects

THE rumor percolating last month in Manila coffee shops was that the wife of a top public relations consultant of Vice President Joseph Estrada had run off with the campaign chest of the leading opposition presidential candidate.

The story turned out to be false, but the truth proved to be just as juicy. And politically explosive.

When the details of the pyramiding scheme rained on gossipy Manila, nervous investors flocked to the San Juan house of Estrada for help in recovering the millions they had entrusted to the wife of Reli German, the Veep’s long-time PR consultant.

The woman, Josephine “Bunny” German, had enticed them to hand over their millions for her to plunk into high-yielding investments (5 to 10 percent in just 10 to 15 days!). These supposedly involved buying foreclosed real property and cars and bidding for seized smuggled goods.

* * *

NOW Bunny lies over the ocean, having taken a Philippine Airlines flight last Feb. 27 bound for Frankfurt via Bangkok. She left behind a trail of bouncing checks – worth at least P800 million — for anxious investors demanding their money back.

As expected, the opposition is going to town with what it had dubbed as the “Eraption Scam.” Senate Majority Leader Francisco Tatad, a vice presidential candidate who had assailed Estrada’s well-known womanizing, stands out for being charitable to him this time. The Vice President was a victim himself, Tatad points out.

The alleged swindling victims include Estrada’s wife Loi (P27 million), his daughter, a brother, staffers and several classmates in the old Ateneo where he and Reli had studied.

The rest of the opposition insist, however, that Estrada knew more than what he had conceded so far. Besides, why did he not report the matter to the police earlier and thereby prevent Bunny from fleeing? Where did Estrada’s wife and staffers get the millions they had given to Bunny to invest?

For the Manila crowd salivating for a really good scandal to disturb the predictable drift of the campaign, this latest Eraption seems to be good for a few more days of barbed exchanges.

* * *

THESE bits and pieces have been reported in the Manila press:

* Makati Mayor Jojo Binay and his wife Elenita, who is running to replace him, were reported to have lost P75 million in the scam. After his enemies asked where they got that money, the Binays denied having made the investments.

The version now is that the investments were not made directly by the Binays but through Nicanor Santiago, Makati City administrator.

* Reli is reportedly estranged from his wife, but had agreed to stay in the same house for appearances and for the sake of the children. When Reli was busy marching against the Marcos dictatorship, Bunny engaged in buy-and-sell and was able to send their children through college.

When she got into trouble, the family tried to bail her out by pooling resources, selling their appliances and jewelry and even the wedding gifts of a newly married daughter. A daughter even had to give her engagement ring to one investor who went to the house demanding a refund. But these were not enough to cover all the claims when the pyramid collapsed last month.

* * *

ANOTHER grisly financial scandal is that of the Orient Commercial Banking Corp. controlled by the group of retailing tycoon Jose Go (of Gotesco). The bank called a prolonged holiday (euphemism for indefinitely closing the bank’s doors to depositors) after it ran out of cash to dole out to panicking clients.

An audit has uncovered some P5.8 billion in bad loans to the bank’s own directors, officers, shareholders and related interests (DOSRI), some of which are reportedly not backed by collateral and some allegedly made to fictitious parties.

The Bangko Sentral and the Philippine Deposit Insurance Corp. (PDIC) moved to save the bank by having PDIC absorb the bad loans and selling the bank, clean, to interested investors.

There was a big howl. Why should P5.8 billion in bad, also illegal, loans be passed on to PDIC — in effect making taxpayers shoulder the obligations of the Gos? The government has the bad habit of passing on to taxpayers the multi-billion-peso debts of government-controlled firms that are in the red.

The “palusot” became too obvious, so the authorities dropped the write-off idea and are exploring other ways of rehabilitating Orient Bank. Strangely, no charges are being filed against the Gos.

* * *

OF all things, the big centennial celebration in June also appears to be mired in money scandals.

Chairman Victorino Basco of the Bases Conversion Development Authority has denounced to Malacañang as arbitrary and irregular the selection of Asian Construction and Development Corp. (Asiakonstrukt) over other bidders to build the P2.4-billion centerpiece of the centennial celebration in Clark Field, Pampanga.

Basco said there was no honest evaluation of the three bids submitted and that Salvador Laurel, chairman of the National Centennial Commission, simply picked Asiakonstrukt although this firm could not guarantee project completion on time.

Even before the contract was signed, the NCC committed to advance P600 million to Asiakonstrukt, he added.

Once the contract was awarded, Basco said, Laurel expanded the teflon roofing of the Freedom Ring, a show arena, from two to nine hectares (four times the size of the Araneta Coliseum dome in Quezon City), inflating project costs from P280 million to P1.2 billion. This gave Asiakonstrukt a bigger contract without bidding.

There are fears that the huge project in Clark may not be ready by June 12, Independence Day. Subcontractors are threatening to pull out since they are not being paid on time.

* * *

Share your thoughts.

Your email address will not be published.