IF you hadn’t noticed, President Duterte’s war against the rule of the Philippine oligarchy has started, and gone into high gear.

A part of this offensive is the move to collect billions in taxes allegedly evaded by the Philippine Daily Inquirer’s controlling owner, the Rufino family, and to recover prime government land that they’ve held for nearly four decades, as well as his threat not to renew the franchise of the Lopez clan’s ABS-CBN television network.

This campaign’s long-term consequences are as important  as those of his war against illegal drugs, what with the consensus in serious studies of the Philippines that it has been this cacique kind of oligarchy in our country that is the major root of its underdevelopment.

BANANA REPUBLIC? Bananas farther than the eye can see, with land “leased” from the Bureau of Corrections for 48 years now: Tadeco plantation and warehouses in Davao del Norte

A crucial battle now raging is against one of the country’s most powerful oligarchs, the banana tycoon Antonio Floirendo, Jr., who is not only based in Duterte’s Davao territory, but is also his erstwhile buddy and even campaign contributor. Duterte’s top political lieutenant, House Speaker Pantaleon Alvarez, is leading this fight, among other reasons, because Floirendo has been a congressman for three terms with loyal allies in Congress.

Duterte and Alvarez’s move against Floirendo is an earth-shaking one in our political and economic landscape.
Floirendo has been practically a crony of the past six Presidents starting with Marcos. This is because all past Presidents allowed his huge banana enterprise, the Tagum Agricultural Development Corp. (Tadeco) in Davao del Norte to control for 48 years – nearly half a century – and at atrociously cheap rates some 5,500 hectares of property, which is under, but not owned, by the Bureau of Corrections (BuCor), that is just one of the many bureaus of the justice department. It was crony access to such vast cheap lands and labor that made the company one of the world’s largest banana exporters.

Political lord

Past presidents’ amity with—or subservience—to Floirendo is perhaps understandable. His clout is not only because of his conglomerate, which includes several other plantations planted to other crops and employing more than 7,000 workers. Floirendo is a political lord in Northern Mindanao because of the vast network his father, the late Antonio Sr., built over 60 years, in alliance with other politicians. His uncle, Davao del Norte governor Rodolfo del Rosario, has been a political kingpin in that part of Mindanao since Marcos’ time, and held various high posts in past administration.

Floirendo’s father who started and built up the banana empire in the 1970s, inadvertently revealed the secret of his success when he told the New York Times in 1981: I am the only businessman here “who has been in the good graces of all the Presidents.”

It was President Marcos though who started Floirendo on his path towards building his banana empire by providing him with cheap land. Tadeco got hold in 1969 of the Bureau of Corrections’ 3,000 hectares that was part of its Davao Penal Colony, its control disguised as a “production contract”. Floirendo even got cheap labor as his plantation employed the inmates at the Davao Penal Colony who were paid a pittance, much less than minimum wages. It was a capitalist’s dream system: Convicted prisoners would be happy at the lowest wages possible, and they’d never get unionized, much less go on strike.

The area was subsequently expanded over the years to its present 5,500-ha size. Cory in 1989 extended the lease for another 25 years, which was renewed for another 25 years in 2003.

Why would the fiercely anti-Marcos Cory government extend the Marcos crony’s lease?

Most probably because Floirendo ratted on Marcos. In 1987, he turned over to the Cory government prime properties in the US which he said was just under his name, but were really the strongman’s: Lindenmere Estate and Olympic Towers in New York and a residence on Makiki Heights Drive, Honolulu, Hawaii. Perhaps more importantly, Floirendo also turned over P70 million in cash to the Presidential Commission on Good Government in what was euphemistically called “compromise agreement.” What was the compromise? Would you believe that for a billionaire many times over, P70 million was all that was involved?

Kept secret

As in the case of, but worse than, the Rufinos’ hold on prime Makati property since 1980, Floirendo’s cronyism with past administrations had astonishingly been kept secret for decades.

It had to be hidden: Floirendo’s hold on 5,500 ha of state-owned lands has been a blatant mockery of our laws and even our Constitution, as three different agencies of government—the Commission on Audit, the Office of the Solicitor General, and the justice department—concluded in just a few weeks of separate research independent of each other.

For starters, both the 1935 and the 1987 Constitutions categorically prohibit any corporation from holding by lease or by any other mode government land exceeding 1,000 ha. Tadeco got 5,500-ha.

There were other gross violations of our laws. The BuCor’s lands involved was so-called “inalienable lands of the public domain”, as nature reservations and national parks are, which, as the justice department study put it, is “outside the commerce of men’’. The President is authorized to declare some lands as alienable, but only the President. In the Tadeco case, neither Marcos nor succeeding Presidents did. Only a department bureau, the BuCor, in effect alienated what is inalienable. Even assuming that the land could be leased, various laws require that this should be bid out, which the BuCor land was not.

Worse for Floirendo on a personal level, and probably due to his hubris as crony, is that when the lease between BuCor and Tadeco was renewed in 2003 for another 25 years, he was a sitting congressman at the same time the biggest registered stockholder of Tadeco. This is a gross violation of Section 14, Article 4 of the Constitution which categorically bans an incumbent Congress member from having any interest in a firm with contracts with government.

The provision was implemented in the Anti-Graft and Corrupt Practices Act, and punishable from one to 10 years in prison. “Floirendo will go to jail,” said a source close to Duterte. “And with him in jail, other oligarchs would start ending their oligarchic rule of the country.”

Crucial battle

Duterte and Alvarez’s siege of the oligarch Floirendo is a very crucial one for the future of our nation for two major reasons.

First, while he is not well known as among the country’s super-rich, with his fame due only to his marriage to the 1973 Miss Universe in 1974, Floirendo is the quintessence of the country’s present oligarchic elite. This select group’s wealth expanded exponentially as cronies of the strongman Marcos, and who continued to grow in wealth and power under Corazon Aquino and her successors. The term “oligarch” means a magnate whose power and wealth owe to his clout with a state’s high officials who have allowed him to use government’s resources, to the exclusion of others. That definition, fits Floirendo to a T.

Second, Floirendo has been based in Duterte’s Davao territory, and was even his biggest financial contributor in the last elections in which he was elected President. Giving such huge amounts of money for their campaign war-chests in fact had been the most common modus operandi of our oligarchs to put presidents under their thumb. With the quagmire that Floirendo is in now, oligarchs are learning that things have so changed—they can no more buy a president as they have done so for decades.

If Duterte does nothing, and merely allows Floirendo to continue with his very anomalous hold on BuCor lands, he would be countenancing his oligarch. The Philippine oligarchy would rightly be laughing at him for his hypocrisy. If he fails in his campaign against Floirendo, Duterte will appear weak and/or incompetent, whom they therefore can also defy.

Every war relies heavily on propaganda. The media oligarchs’ stooges’ propaganda is that Duterte is becoming tyrant, and controlling media is the first step. This argument of course falls on its face by the fact that the
President has left alone other media outfits whose owners have no hidden debts with government.

Floirendo on the other hand had managed to trivialize Duterte’s siege of him as the outcome of a squabble between his mistress and that of Alvarez. The truth is that Floirendo had moved against Alvarez to unseat him from the speakership post when he learned of Duterte’s plans against him. Floirendo immediately undertook that clever propaganda move. Floirendo’s no-holds barred move in dragging his and Alvarez’ private matters into the public sphere could be an indication of his desperation.

Foirendo’s success in that clever propaganda move is quite understandable if it is true that some P50 million had been allocated for his PR and propaganda machine, a mere drop though in the billionaire’s wealth.

An indication of this oligarch’s power is the fact that he got to employ as his black propaganda chief and bribe-distributor the long-time PR of a magnate in the Duterte Cabinet itself. That’s sad. It’s like lending your gun, or even seconding your hitman, to your colleague’s enemy or even worse, to that of your boss himself.