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DAP: A tale of bribery, greed, and Hacienda Luisita

“The Disbursement Acceleration Program (DAP) was implemented in good faith, and it stimulated the economy as was its intent,” President Aquino’s usually clueless spokesperson Edwin Lacierda said as he wriggled to defend what the Supreme Court ruled the other day as unconstitutional. Lies from Lacierda are becoming too commonplace.

The Supreme Court should take to task the Aquino government for misleading it by citing the World Bank’s March 2012 report that the DAP contributed “1.3 percentage points to GDP growth in the fourth quarter” (of 2011).”

How could that happen, when the DAP started only in November 2011 and released less than P20 billion in the last two months of the year? Indeed, the World Bank’s subsequent reports back-pedaled on its view of the DAP’s contribution to the country’s economic growth.

The World Bank noted in its updated December 2012 report that DAP represented a mere realignment of funds, which “does not guarantee sustained improvement in public spending to address growth and poverty targets.”

Even if it represented some increase in spending, the World Bank pointed out, “its contribution to gross domestic product growth is still miniscule (at less than 0.01 percentage point) given its relatively small amount (P40 billion) relative to the size of the economy (P10 trillion). “

Look at the numbers, and you’ll see the argument that the DAP stimulated the economy is so stupid. The P142 billion released in 2011 and 2012 is just 0.8 percent of the P20 trillion GDP for those years, and 5 percent of government expenditures.

While the DAP money (totaling P157.5 billion, including the P15.3 released in 2013) disbursed in three years is indeed tiny compared to the economy or the national budget, a major chunk of this—at least P34 billion—represented probably the biggest slush fund ever held solely by a president to spend at his whim in just two years.

Hacienda Luisita
The root of this DAP saga is the Hacienda Luisita case.

By July 2011, President Aquino had told his key inner circle that by hook or by crook Supreme Court Chief Justice Renato Corona must be removed. He claimed that the Gloria Arroyo-appointee would impede his anti-corruption campaign.

Aquino’s real reason was that he and his Cojuangco clan had become desperate to reverse the Supreme Court decision issued that month. The ruling voided the fake land reform in 1989 of his family’s Hacienda Luisita (which then agrarian reform secretary Florencio Abad implemented) and ordered the hacienda’s land to be distributed to its farmers.

The Cojuangcos, according to the Supreme Court, should be given fair and just compensation of P173 million, or Hacienda Luisita’s 1989 value when the landlords undertook their fake land reform program. The landlord clan wanted P10 billion, its present market value.

Aquino’s appointee to the Supreme Court, the very inexperienced classmate of his, Lourdes Sereno, couldn’t convince the Court to increase the payment to the clan from P173 million to P10 billion. I was told then that Sereno herself told Aquino that there was no way for her to sway the Court if Corona remained as chief justice.

He had to be removed, and that could be done only through impeachment.

The problem obviously is that Congress would have to be bribed for that to happen, and the existing source for the bribes, the Priority Development Assistance Fund (PDAF), wasn’t enough to push the legislators to undertake such an unprecedented action, even if Aquino and Congress more than tripled the pork barrel fund from P7 billion in 2010 to P22 billion in 2011.

Enter Aquino’s brain trust, Abad. He wasn’t appointed to the Budget post for nothing.

If Abad could tutor pork-scam queen Janet Lim Napoles on how to use non-governmental organizations (NGOs) to steal taxpayers’ money, as she alleged in her affidavit, he certainly had the expertise to advise Aquino how to create a secret slush fund out of the budget.

This is the DAP, whose illegal, unconstitutional features the Supreme Court decision analyzed in much detail.

Cloaking the slush fund
To cloak the creation of the bribe-money fund, Aquino and Abad claimed it was intended to stimulate the economy by releasing funds to the system. It’s the ancient classic trick of tricksters: mix the bad tomatoes with the good.

Indeed, one usually naive columnist (not in The Manila Times) praised the DAP for allocating P1.6 billion for the Disaster Risk Exposure and Assessment for Mitigation (DREAM), a project to forecast floods more accurately. The columnist concluded, “Lost in the subsequent hullabaloo (after Senator Jinggoy Estrada exposed the existence of the DAP) were the other uses for the DAP which were not just legitimate but urgent as well.”

I don’t think that even that columnist would argue that the following uses of the DAP were legitimate and urgent:

• P5 billion to bribe the House of Representatives (at P15 million each) to file the impeachment proceedings against Corona, and P1.1 billion to the 16 senators to convict him. (See details, including the evidence, in my column, “DBM data confirms P100M ‘bribe’ to 16 senators each,” October 5, 2013.)

• P9 billion, called the Transition Investment Support Program (TISP), to provincial and municipal officials of the Autonomous Region for Muslim Mindanao (ARMM) for them to acquiesce in Aquino’s pact with the Moro Islamic Liberation Front that would create a Bangsamoro substate in the region. (See my column last Wednesday, “Aquino used P9 billion for his Nobel Prize fantasy.)

That the DAP’s TISP could be worse than the PDAF-funded ghost deliveries in local projects, or were outright bribes, is indicated in the Commission on Audit’s review of the Department of Interior and Local Government (DILG).

According to the COA audit, P613 million of the TISP was used to fund potable water projects in ARMM in 74 municipalities in the region’s five provinces, released directly to the local governments from October 2011 to Dec. 17, 2012. “At year-end (2012),” the COA report said, “no water system had so far been constructed.”

Bribing LGUs
Shocked in the 2010 elections by Vice President Jejomar Binay’s hidden strength among local government leaders (reportedly developed through such means as donations of ambulances to towns), Aquino and Abad used the DAP to counter the 2016 presidential candidate’s base among local governments.

It allocated P6.5 billion from the DAP fund for what is essentially a pork-barrel scheme —practically a give-away—for local governments down to the municipal level, euphemistically called LGU (Local Government Unit) Support Fund.

The Fund was disguised as something intended to augment the internal revenue allotments of provincial and municipal governments which had fallen because of national government shortfalls in its revenues. The annual budget approved by Congress actually has a regular allocation for the LGU Support Fund of P200 million.

How much did Aquino allocate from the DAP? A total of P6.5 billion, disbursed practically at the discretion of Abad and DILG Secretary Mar Roxas, who not coincidentally still believes he will be the Liberal Party’s candidate for president in 2016.

What indicates an anomalous irregularity, though, is that the COA’s audit reports of the DILG for 2011 and 2012 do not contain any reference at all to this P6.5 billion LGU Support Fund coming from the DAP.

The only reference to DAP funds was in the 2012 audit which reported that out of the P1 billion given to the so-called “Performance Challenge Fund” for local governments—in essence another form of pork-barrel, disguised as awards for good governance by an LGU—P253 million came from the “DBM’s Disbursement Acceleration Fund.”

According to Abad’s memorandum to Mr. Aquino of October 12, 2011 which in effect set up the DAP after the president’s signed approval, other projects it would fund would be “DPWH: Various infrastructure projects” for P5.5 billion and “various Other Local Projects” for P6.5 billion.

Since it would be entirely at Abad and Aquino’s discretion what “other projects” these would be, the funds obviously could be used as bribes for political leaders in whose district or area these will be implemented.

A perfect crime
The DAP was, as it were, a perfect crime that nobody knew anything about until Senator Jinggoy Estrada in September last year exposed it and claimed that senators were each given P50 million for voting in favor of the impeachment of Corona — and Abad rather stupidly claimed that it was part of the then unheard-of DAP.

If this DAP hadn’t been exposed, do you think Aquino would have ended it, or not used its template for similar slush funds?

A strange DAP allocation was P750 million as “Development Assistance to the Province of Quezon.” The amount is huge, half of the usual P1.4 billion internal revenue allotment to the province. Why Quezon, which isn’t even among the 15 provinces where poverty incidence is highest? Was Senator Edgardo Angara so clever as to demand that amount from Aquino for his son to run as senator and support his administration?

I reviewed the COA audits for 2011 and 2012 of government entities through which the DAP fund releases were coursed. The audits do not contain, except for very few mentions, any reference or examination of the DAP.

The COA came up with special reports involving P41 billion of PDAF money and P900 million of Malampaya funds. But it hasn’t undertaken any audit of the P157 billion DAP funds that were not even authorized by Congress. Worse, the DAP appears to be missing in the COA audits of government entities which supposedly received them.

A glaring case is the P750 million “development assistance for Quezon” which isn’t in the provinces financial statements for 2011 and 2012, as reported by COA. Was this fund diverted, or simply missing? How much of DAP funds have not been audited by the COA, or are even missing?

Did the COA, supposedly an independent entity and the guardian of the taxpayer’s money, close its eyes on Aquino’s creation of his pool of bribe money, and even evaded auditing it?

And will the reward for this “collaboration” be COA chair Ma. Gracia Pulido-Tan’s appointment to the Supreme Court? More on this in my column on Monday.