POSTSCRIPT / January 22, 2006 / Sunday


Philippine STAR Columnist

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Lawyers try smuggling new energy super body

MYSTERY: The private sector is baffled by Executive Order 474, signed last Nov. 30 and withdrawn by President Gloria Arroyo several weeks ago, creating an energy super body to attract investors and “arrange and negotiate financing” with financial institutions.

Whoever drafted that EO creating a “Philippine Strategic Oil, Gas, Energy Resources and Power Infrastructure Office” (PSOGERPIO) and asked the President to sign it appears to have done a great disservice to the country.

The grapevine has it that Ms Arroyo was forced to withdraw the EO after noting a “procedural lapse” in its crafting. For one thing, whoever wrote the EO did not even bother to consult the private sector.

I was told that Energy Secretary Raphael “Popo” Lotilla did not know of the EO creating the PSOGERPIO until he was asked by the President around November to submit his inputs.

“The PSOGERPIO is an authority without responsibility or transparency,” one source who has been in the energy sector the past three decades said. “It seems that some people thought of it as a way to make another quick buck.”

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FIRMLY NOW: A Malacanang source said a law firm in Makati identified with the First Family had a hand in drafting EO 474 that created the mysterious PSOGERPIO.

The source said its proponents — mostly lawyers — defended it as finely crafted and pro-investor, but that at least one economic adviser of President Arroyo thought the EO was nothing but trash.

Irritated by the media leak on the EO’s signing, President Arroyo gathered on Dec. 18 personal lawyer Pancho Villaraza, presidential consultant Tomas “Tommy” Alcantara, a lawyer of Executive Secretary Eduardo Ermita, and Nieves Osorio, president of Power Sector Assets and Liabilities Management Corp., to discuss the EO.

Alcantara argued for the revocation of the EO, citing Malacanang’s failure to get the input of the private sector.

Who won the argument? Well, Secretary Ermita announced last Friday that President Arroyo has put the EO on hold.

But the war is not over yet. Remember, some entrenched influence peddlers seem to hold the Arroyos firmly by the, huh, don’t forget to buy your SuperLotto ticket today so, who knows, we can finally open soup kitchens for the poor.

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WRONG SIGNAL: Industrialist Raul Concepcion, one of the few vocal critics of the PSOGERPIO, said creating the super body “sent a wrong signal to investors.”

Concepcion pointed out that the EO invaded the powers and functions of the Department of Energy and its attached agencies, including the Philippine National Oil Co.

He also warned that the EO raised the possibility of its negating policies under the Electric Power Industry Reform Act of 2001 (Epira, for the electricity sector) and the downstream Oil Industry Deregulation Act of 1998.

Many businessmen were intrigued by PSOGERPIO’s function “to arrange and negotiate financing from public finance, bilateral and multilateral Official Development Assistance Institutions, and from the private sector, subject to existing procurement, accounting and auditing rules and regulations.”

They said that with Epira and the oil deregulation law providing adequate basis for building a robust energy sector, there is no more need for a super body like PSOGERPIO that, they said, looks more like a money-making mechanism.

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AFTER-DRAW INSERTIONS: This town in search of deliverance is agog with today’s P140-million SuperLotto jackpot. If you have not placed at least a P10 bet (one ticket), you better hurry up, as the lines are getting longer.

With that, POSTSCRIPT repeats this 1-2-3 suggestion meant to banish fears that bogus winners are sometimes inserted after the 9 p.m. draw to grab part of the Lotto pot:

  1. Immediately after the close of the nationwide betting at around 8:20 p.m., the consolidated file of all bets (plus related data on agents, location, etc.) in the server is burned or copied into a compact disk (CD).
  2. The CD is then taken to the TV station and presented during the preliminaries leading to the televised 9 p.m. draw. The CD will remain in public view during the show.
  3. Immediately after the jackpot number is drawn, the CD is opened. The number of bets playing is checked, and the winning bets pinpointed and identified. Right then and there, the viewing public gets to know how many bets were playing, how many bettors won, and where (betting stations) the winning bets were placed.

That should be enough to allay fears of after-draw insertions. If the Lotto is indeed clean, there is no reason why the Philippine Charity Sweepstakes Office management should not adopt this simple doable suggestion.

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GANITO NOON: Meanwhile, we have this interesting email of one Rene M. Luspo identifying himself as the ABS-CBN head of security. Reacting to my Jan. 19 column subtitled “Lotto Loot,” he said:

“All ticket-selling transactions in Lotto operations are recorded in both hard disk and DAT tapes (CD was not available at the time but the purpose as suggested in your column is the same). Each transaction records all details like which ticket machine, location, number combinations, amount, coded control number, etc. 15 minutes before draw time, the system will stop selling tickets and the DAT tape is physically extracted from the computer, placed inside an envelope, sealed, then put into a locked metal box and applied with crimped plastic seal with serial numbers.

“This activity is witnessed by reps of PCSO, COA and PGMC (Philippine Gaming Management Corp.), the equipment provider of the Philippine lotto and covered by video and supported by documents. The removed DAT tape is then brought to an off-site storage for safekeeping to be opened and audited one year after the draw. Even the vault is applied with crimped seal every time it is closed. Any attempt to enter a transaction after the system has stopped selling, even by an expert with top level access, will be detected because the system provides for audit trail and such transaction will be recorded in the hard disk but not in the DAT tape which has already been removed by then.

“Draw results are announced immediately because right after the mechanical draw which is shown on TV, results are entered into the computer system and immediately the system generates a report that indicates the winners. The report already indicates how many winners there are which Lotto outlet has sold the winning tickets. During our time, these were made immediately available even to media to ensure transparency.

“I know because I was responsible for the operation’s security and integrity as Vice President for Security of Philippine Gaming Management Corp. (PGMC) in the first three years of Philippine Lotto. The above procedure was how I, and my Data Security Department (PGMC) at the time protected the system and the betting public from possible fraud. We had the procedure written and all draw personnel (during my time) I personally trained. My Data Security Department was independent of Computer Operations purposely to avoid collusion. Security design for the lotto was purposely made redundant, if not double-redundant, to preclude any attempt to defraud the system even by ‘insiders.’

“That was then, I do not how it is now. The question that begs to be asked is whether an independent Data Security Department is still existing to provide check-and-balance to computer operations.”

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FADING BETS: Reader Vicente F. Gambito of Cebu who made the 1-2-3 suggestion way back in 2002, reacted to Luspo’s revelations. He said in an email:

“How about requesting for a public audit on the procedures as enumerated? This is good to know; however we never noticed its implementation. I hope it can be supported with documents and not just through faded recollections of how things should have been.

“But going back to the suggestion, why don’t you request for a tour of their security procedures and see for yourself whether the same system or better is in place. If so, there is no reason I can think of for management of PCSO to refuse our proposal of announcing the winners, if any, IMMEDIATELY AFTER the draw and TELEVISED.”

Before the discussion takes another direction, I reiterate my other suggestion that better printing equipment and better paper be used for the bet slip, so the numbers and other data on the slip do not fade way ahead of the one-year deadline for claiming prizes.

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(First published in the Philippine STAR of January 22, 2006)

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