Open Letter to the Philippine Development Forum 2008

From Former Senior Government Officials (FSGO)

As Filipinos who have served in senior positions of our government, we acknowledge with appreciation and gratitude the resources, knowledge and good will extended to our country by the international community. The Philippine Development Forum is an important platform for dialogue between leaders of our country and representatives of the international donor community about issues critical to Philippine development. We have no desire to disrupt your discussions nor hijack your agenda. We only wish to bring to your attention a matter that we believe requires your serious consideration.

For more than six months now, since September 2007, the Senate of the Republic of the Philippines has been investigating a public investment project of our government (National Broadband Network project) that was to be executed by a supplier (ZTE Corporation) and financed by a loan from the government of the People’s Republic of China. The media has called this the “NBN-ZTE deal,” or more often, the “NBN-ZTE scandal.”

Details that have emerged from the Senate investigations are disturbing. Alleged bribery in amounts of more than $130 million. Unexplained reversals of declared policies established by the NEDAICC process. Reported influence of politically connected private persons who are outside the chain of official decision-making. Possible crimes from kidnapping to bribery in attempts to prevent witnesses from testifying. Most disturbing of all, possible involvement of the President of the Philippines in corruption and coverup.

The President had authorized members of her Cabinet to negotiate and conclude the NBNZTE deal despite knowledge of possible anomalies. As details of these anomalies became public from the Senate investigation, the President cancelled the deal in October 2007. Despite the Philippine Senate serving as the only credible democratic institution seeking to uncover the truth about this scandal, the President has continued to impede and undermine its investigation of the cancelled deal.

Months after canceling the tainted deal, the President has still not taken any action herself to establish responsibility for any irregularities that may have occurred, nor has she taken any other action to hold any person in her Cabinet accountable for the international embarrassment and civil disturbance that this scandal has already brought to our country. She stands in the eyes of our people as a suspected plunderer, yet she has not acted to promptly bring out the facts that will clear up all doubts.

It seems to us that President Gloria Macapagal Arroyo is using her powers with impunity stave off the unmasking of her participation in the scandal. She has thus lost all credibility in fighting corruption, credibility that had already been eroded by her involvement in other unresolved scandals from election cheating to a fertilizer scam to bribery in Malacanang, among others.

We have therefore concluded that President Gloria Macapagal Arroyo is at the center of corruption and coverup in the NBN-ZTE scandal. Others may not agree with us, and we are open to be proven wrong. We ask those who agree with us, as well as those who think otherwise, to work together to determine responsibility for corruption in this deal, hold accountable those who are responsible, and devise measures to avoid recurrence.

Why is this important to PDF? This is about corruption, which sucks scarce resources crucial to development that benefits the poor, and which erodes public trust and destroys national unity essential to sustainable development. This is about corruption on a very large scale, with alleged $130 million bribes dwarfing costs of many projects financed by donors. This is about corruption within the NEDA-ICC process through which many donor-assisted projects have also been approved. And most important of all, this is about corruption, which may involve the President who is the principal with whom almost all country programs of assistance to the Philippines nominally relate. In the words of Joseph Stiglitz, Nobel laureate in economics and former World Bank Chief Economist, “Smaller scale corruption is bad, but systemic corruption of political processes can have even greater costs.”

We call on the PDF to examine the NBN-ZTE scandal as a possible example of “systemic corruption of political processes.” We make the following suggestions for the dialogue among PDF partners this year:

* We ask our colleagues who represent our government and our country to explain to the international community why has the President not cooperated fully with the Senate in investigating a deal that she has in fact cancelled as anomalous in October 2007? Why has no one in the administration shown acceptance of responsibility for the damage and disturbance that this scandal has caused? Why has there been no resignation, suspension, or dismissal of anyone officially involved with the cancelled NBN project?

* We also ask our colleagues in the international donor community to consider how the integrity and effectiveness of their assistance programs to the Philippines could be affected if corruption at scale and level of the NBN-ZTE scandal remains unresolved? How could the prestige, credibility and leverage of the donor community be constructively mobilized to help Philippine democratic institutions resolve this scandal? How urgent is it for the President to demonstrate with actions her declared intention to get at the truth and hold those accountable for any corruption in the NBN-ZTE deal?

We must all be disturbed by how weak are Philippine democratic institutions in fighting corruption that is so brazen, so obviously harmful and so clearly destroys public trust in government. Leaving such an awful mess as the NBN-ZTE scandal hanging unresolved and inconclusive can only fuel widespread anger, despair, hopelessness and alienation.

There is a rising tide of public disgust over an administration that remains deaf to calls for major reforms, chooses to be blind to worsening hunger and poverty in our communities, and refuses to acknowledge the corruption driving this deafness and blindness to the common good.

The PDF has already contributed to bringing the issue of corruption into the mainstream of priority development concerns. The PDF has also opened the way for civil society organizations to participate in oversight over procurement, financial management and monitoring of development projects, as a concrete measure to increase transparency and accountability. We are hopeful that the PDF can open a new and positive channel for constructive dialogue on addressing corruption of political processes that is central to strengthening the Philippine institutions to which many of us have devoted so much of our lives and careers.

Signed:
Former Members of the Cabinet, The Diplomatic Corp of Officers,
and Heads of Constitutional Bodies
Florencio Abad, former Secretary, Department of Education
Rafael Alunan III, former Secretary, Department of The Interior and Local Government
Senen Bacani, former Secretary, Department of Agriculture
Angelito Banayo, former Presidential Adviser on Political Affairs
Ramon Cardenas, former Head, Presidential Management Staff
Karina Constantino David, former Chair, Civil Service Commission
Edilberto de Jesus, former Secretary, Department of Education
Albert del Rosario, former Ambassador to the United States of America
Ramon Del Rosario, Jr., former Secretary, Department of Finance
Teresita Quintos Deles, former Presidential Adviser on the Peace Process
Benjamin Diokno, former Secretary, Department of Budget and Management
Narcisa Escaler, former Ambassador to the United Nations
Jesus Estanislao, former Secretary, Department of Finance
Fulgencio Factoran, Jr., former Secretary, Department of Environment and Natural
Resources
Victoria Garchitorena, former Head, Presidential Management Staff
Marietta Goco, former Chair, Presidential Commission to Fight Poverty
Philip Ella Juico, former Secretary, Department of Agrarian Reform
Lina Laigo, former Secretary, Department of Social Welfare and Development
Ernest Leung, former Secretary, Department of Finance
Josefina Lichauco, former Secretary, Department of Transportation and Communication
Narzalina Lim, former Secretary, Department of Tourism
Felipe Medalla, former Director General, National Economic Development Authority
Imelda Nicolas, former Lead Convenor, National Anti-Poverty Commission
Cayetano Paderanga, former Director General, National Economic Development Authority
Cesar Purisima, former Secretary, Department of Finance
Victor Ramos, former Secretary, Department of Environment and Natural Resources
Amina Rasul, former Presidential Adviser and Concurrent Chair, National Youth Commission
Rodolfo Reyes, former Press Secretary
Juan Santos, former Secretary, Department of Trade and Industry
Cesar Sarino, former Secretary, Department of The Interior and Local Government
Corazon Juliano Soliman, former Secretary, Department of Social Welfare and Development
Jaime Galvez Tan, former Secretary, Department of Health
Rene Villa, former Secretary, Department of Agrarian Reform
Veronica Villavicencio, former Lead Convenor, National AntiPoverty
Commission

Former Heads of Government Finance Institutions and GovernmentOwned
and Controlled Corporations
Leonor Briones, former National Treasurer
Jose Cuisia, Jr., former Governor, Central Bank of the Philippines
Francisco Del Rosario, former Chair, Development Bank of the Philippines
Evangeline Escobillo, former Commissioner, Insurance Commission
Vitaliano Nañagas II, former Chair, Development Bank of the Philippines
Norberto Nazareno, former President, Philippine Deposit Insurance Corporation
Ricardo Mirasol Tan, former President, Philippine Deposit Insurance Corporation
Deogracias Vistan, former President, Land Bank of the Philippines

Former Undersecretaries and Heads of Attached Agencies
Tomas Africa, former Administrator, National Statistics Office
Roberto Ansaldo, former Undersecretary, Department of Agriculture
Gerardo Bulatao, former Undersecretary, Department of Agrarian Reform
Sostenes Campillo, Jr., former Undersecretary, Department of Tourism
Isagani Cruz, former Undersecretary, Department of Education
Guillermo Cunanan, former General Manager, Manila Airport Authority
Edgardo Del Fonso, former Undersecretary, Department of Finance
Quintin Doromal, former Commissioner, Presidential Commission on Good Government
Jose Luis Gascon, former Undersecretary, Department of Education
Milwida Guevara, former Undersecretary, Department of Finance
Juan Miguel Luz, former Undersecretary, Department of Education
Jose Molano, Jr., former Executive Director, Commission on Filipinos Overseas
Conrado Navarro, former Undersecretary, Department of Agrarian Reform
Victor Ordoñez, Former Undersecretary, Department of Education
Walfrido Reyes, former Undersecretary, Department of Tourism
Melito Salazar, Jr., former Undersecretary, Department of Trade and Industry
Antonio Salvador, former Undersecretary, Office of the Presidential Adviser on the Peace Process
Leticia Ramos Shahani, former Undersecretary, Department of Foreign Affairs
Mario Taguiwalo, former Undersecretary, Department of Health
V. Bruce Tolentino, former Undersecretary, Department of Agriculture