The Senate Blue Ribbon investigation into the questionable transactions made by the Department of Health (DOH) at the height of the coronavirus pandemic has slowly unmasked Rodrigo Duterte’s campaign to eradicate corruption.
He has repeatedly said: “Corruption must stop.” He did not only fail to stop the practice but could have even encouraged it.
Senators have yet to find a smoking gun to pin down Duterte on the highly irregular transactions made by the former head of the Department of Budget and Management (DBM)-Procurement Service (PS), Christopher Lloyd Lao, with an obscure private company, Pharmally Pharmaceuticals Corp., but it was easier to connect the dots and establish the linkages in the web of corruption.
Lao, a Davao City-based lawyer, was in the election campaign team of the president, so it would not be difficult to establish that Duterte personally knew him, and appointed him to key positions in his administration.
Lao had also worked in an office created by Duterte for his long-time personal assistant, Christopher Lawrence “Bong” Go before he was elected senator in 2019.
Go has denied personal links with Lao but acknowledged he was also from Davao City and had gotten jobs in government, including under his former political office.
He was also a senior official in a housing agency before he moved back to the procurement service, a very lucrative position as the government started buying billions of pesos worth of much needed medical supplies, equipment and other materials.
The company that cornered most of the government contracts, Pharmally Pharmaceuticals Corp., is controlled by an ethnic Chinese businessman, Michael Yang, who has close ties with the president.
At one point, Yang served as a presidential adviser and was widely rumored to be the source of the unauthorized Sinopharm vaccines that the Presidential Security Group (PSG) and some officials used a year ago.
The country’s food and drug regulator granted only this year different vaccine-makers emergency use authorizations (EUA) for their doses to be used in the Philippines while still on third-phase clinical trials.
Sinopharm also got a permit even without applying for an EUA because it was the DOH that filed an application for the company, and the Food and Drug Administration, an agency under the DOH, approved the permit amid questions.
Yang’s company was conveniently set up less than a year before it bagged more than P8 billion worth of contracts, which was larger than all nine other contracts awarded to other companies.
It had no track record in supplying materials to the DOH and does not even have a permanent address.
These are the red flags for diligent state auditors.
DBM-PS obviously awarded the contract to a favored company even if there was a public bidding.
The coronavirus crisis has indeed opened greater opportunities for people who are really close to the administration to make business and profit.
Of course, people in government who are in cahoots with these contractors get a share, or some form of dividends from the hefty contracts awarded to them.
There have been so many precedents about the unholy alliances between public servants and private contractors. It was nearly impossible to escape from the eagle eyes of the Commission on Audit (COA).
The COA’s findings on government agencies’ deficiencies could escalate into notices of disallowances. If these agencies could not satisfactorily explain the expenditures, the cases usually go to the Office of the Ombudsman and the anti-graft Sandiganbayan court.
The Senate investigation was prompted by the COA findings after it flagged the DOH for transferring P42 billion to DBM-PS to buy face masks, face shields, testing kits and personal protective equipment (PPEs).
COA was looking for a memorandum of agreement between the two government agencies for the fund transfer because it found the procedure highly questionable.
The DOH had bidded out contracts for big-ticket items, like X-ray machines and ventilators, but could not purchase ordinary face masks and face shields.
The DOH and DBM-PS were also called out for the overpriced materials awarded to Pharmally Pharmaceuticals.
It would be impossible for Yang’s company to get the contracts without the president’s knowledge or without him using his personal relationship with Duterte.
On the other hand, Lao would not award the contract to a company which has no permanent address and was started just seven months earlier with little paid-up capital, without taking into consideration who owns or controls the supplier.
Lao conveniently threw away basic requirements in approving government contracts in the name of political connections going all the way to the top, the president.
Of course, it is hard to prove Duterte had given orders to award the contract to Yang’s company. Lao is very much liable, in this case, and it seemed he was taking all the responsibility for the highly irregular transaction.
The public is no longer shocked at these shameless transactions. There had been numerous precedents. A decade ago, the Senate also opened an inquiry into how lawmakers’ “pork barrel” funds were laundered by a businesswoman, Janet Lim Napoles, who was convicted of plunder and is serving her sentence at the Women’s Correctional facility in Mandaluyong.
The public was treated to a telenovela at the Senate featuring Jun Lozada, who blew the whistle on several government officials for a kickback deal involving a Chinese telecommunications company offering to build a government broadband network.
Sen. Richard Gordon led the Senate in the broadband deal inquiry, which dragged then-president Gloria Macapagal Arroyo to the stinking contract with ZTE, which was later scrapped.
Gordon is in the same situation but no contract would be scrapped because Yang’s company has delivered the medical supplies and materials.
How will the Senate investigation end? Will the public see top officials get punished for stealing from the government? The medical materials were overpriced but the extra cash did not end in the businessman’s pocket alone. People in government had also profited from the deal.
Duterte promised to end corruption but fell short of his promise. He has removed hundreds of bureaucrats for minor infractions but has not really gone after the big fish.
Some of his appointees were even recycled after being removed from their positions. They were appointed to other sensitive and juicy positions.
Now, the public knows why Duterte is only paying lip service to his anti-corruption crusade. He might be even at the center of the procurement scandal in the DOH and DBM-PS because of his close connections with all the main players in the contracts worth more than P8 billion.
Duterte had failed again in one of his campaign promises.