Multi-billion SEA Games 2019 fund follows Cayetano where he goesdesktop
The money trail shows SEA Games organizing committee chair Alan Peter Cayetano has control over the budget regardless of which agency the money is lodged under
AT A GLANCE
Aside from his role as Speaker of the House, Alan Peter Cayetano is also appointed chair of the Philippine Southeast Asian Games Organizing Committee (Phisgoc).
The money trail for P6 billion worth of SEA Games funds leads to Cayetano.
Phisgoc is a private entity that performs a function of a government office.
Constitutional and ethical questions hound Cayetano’s appointment.
MANILA, Philippines – Alan Peter Cayetano, the embattled chairman of the Philippine Southeast Asian Games Organizing Committee (Phisgoc), has at least P6 billion at his disposal – money that he essentially has control over – even if it was reallocated from one government agency to another within a year.
The money trail shows the funds followed Cayetano from his days as Department of Foreign Affairs (DFA) chief in 2018 to the Philippine Sports Commission (PSC), which entered into an agreement with Phisgoc and the Philippine Olympic Committee (POC) to host the 30th SEA Games. (READ: Venues, budget, sports: What you need to know about SEA Games 2019)
Despite the deluge of controversies hounding Phisgoc – from its allegedly questionable contracts to the logistical blunders days before the games – Cayetano remains well protected.
No less than President Rodrigo Duterte himself appointed him in 2017 as chairperson of Phisgoc, which, according to its articles of incorporation, is a non-stock, non-profit corporation tasked to primarily organize the biennial regional sporting meet.
While the P6 billion for the SEA Games is currently under the budget of the PSC – the primary mandate of which is sports development – this was not always the case.
Once upon a time, Cayetano, now Speaker of the House of Representatives, wanted the money lodged under the budget of the DFA. But senators blocked this attempt.
Red flag: transferring budgets
Sometime in early 2018, government agencies were drafting the proposed national budget for 2019. At the time, Cayetano was still DFA secretary and simultaneously Phisgoc chairman.
Even if the DFA has no mandate to help develop sports in the Philippines, P7.5 billion was inserted in the agency’s budget for the hosting of the 2019 SEA Games.
It was done, Cayetano said, out of “expediency,” with approval from no less than Malacañang.
“I have a memo to the Executive Secretary asking that the whole budget be put under the Office of the President and sumagot sila (they replied) that after consulting everyone, and their legal, it should be under the DFA sapagkat ako ang secretary no'n and chairman (because I was the secretary then and the chairman). It was for expediency,” the Speaker told reporters on Thursday, November 28.
It appears the P7.5-billion line item was glossed over by the House when it scrutinized the DFA budget under the 2019 General Appropriations Bill, as it was only in the Senate when the funds were found to have been lodged under the DFA on December 6, 2018.
Note that the discovery happened at the Senate plenary already. This means the Senate committee on finance approved the P7.5-billion allocation as well.
When the Senate was deliberating on the proposed 2019 budget in the plenary, Cayetano was no longer with the DFA as he had resigned to run for congressman. He was replaced by Teodoro “Teddyboy” Locsin Jr as foreign affairs chief.
It was opposition Senator Franklin Drilon who first questioned why allocations for the hosting of the SEA Games was placed under the DFA’s proposed 2019 budget.
"If such a huge amount of funds can be misallocated in an agency which has nothing to do, where the activity has nothing to do with its mandate, I hope that does not prompt us to comb over every item. So our question: how did this happen?" asked Drilon.
Then-Senate committee on finance chair Loren Legarda replied that it was Cayetano, not Locsin, who included the P7.5-billion item in the DFA budget under the National Expenditure Program (NEP), the version of the proposed annual national budget submitted by the executive branch to Congress.
"Mr President, the former secretary, our former colleague Senator Cayetano, is the chairman of the organizing committee and had requested that it be lodged under [the DFA budget]. So in preparation of the NEP, it was put under DFA. I think he even mentioned this to me," Legarda said.
Drilon then cautioned against transferring budgets out of "personal preferences" of the heads of agencies.
"It has to be, you know, certain rules have to be followed, and in this particular case, the mandate of the DFA has nothing to do with sports development. This is the first time I hear that the DFA has a P7.5-billion budget for sports development,” said the senator.
Before Drilon’s interpellation of Legarda, he had asked Senator Juan Edgardo Angara to break down the P7.5-billion lodged in the DFA budget. Angara was then sponsoring the PSC’s measly P274.794-million proposed budget in the Senate plenary.
Senate Journal No. 41, which contains minutes of the session on December 6, 2018, showed the breakdown of the proposed P7.5-billion SEA Games budget as follows:
Drilon then suggested the funds to be realigned under the PSC budget instead. Senate President Vicente Sotto III agreed. PSC chairperson William “Butch” Ramirez, who was present during the session, nodded his head too.
“Obviously, at first glance, it should be transferred to the Philippine Sports Commission,” said Sotto.
DFA admits lack of expertise
Later on during the same session, Legarda was quoted by the Senate Journal as saying that Locsin already wrote to the Senate requesting that the P7.5 billion be moved “to a more competent agency.”
A copy of Locsin’s letter to Legarda dated December 3, 2018 and obtained by Rappler showed the DFA chief admitting his agency has “no expertise” in handling the 2019 SEA Games.
“Recognizing the importance of the Philippines hosting the event, I conducted meetings and consulted the various heads of the DFA organization. They were unanimous in the assessment that DFA has no experience, expertise, or personnel to handle the sporting event of this magnitude,” Locsin wrote.
He then left it to lawmakers to decide under which government agency the money should be transferred to.
On January 21, 2019, Legarda included the transfer of the SEA Games hosting fund from the DFA to the PSC among the Senate’s amendments to the 2019 budget.
“The significant reduction in the budget of the DFA is due to the transfer of the P7.5-billion budget for the SEA games from the DFA to the PSC…PSC will receive funding for the SEA Games and for the training expenses of athletes participating in the SEA games,” said Legarda.
Four days later on January 25, Executive Secretary Salvador Medialdea issued a memorandum circular directing all government agencies to extend their support to Phisgoc to organize the SEA Games.
Locsin, however, clarified in a tweet that he wanted the money to be returned to the National Treasury – not the PSC.
“You mean the P7.5 billion for the 2019 SEA Games. I returned it to the DBM. It should go back to Treasury. It might be with PSC which I don't trust. Cabinet was stunned I returned the money but I said I don't want it. I don't like sports in general,” tweeted the DFA chief on April 9.
You mean the P7.5 billion for the 2019 SEAGames. I returned it to the DBM. It should go back to Treasury. It might be with PSC which I don't trust. Cabinet was stunned I returned the money but I said I don't want it. I don't like sports in general. https://t.co/sQ8xblI2VP— Teddy Locsin Jr. (@teddyboylocsin) April 9, 2019
But Congress not only reduced the amount to just P5 billion during the bicameral conference committee level, but also retained the funds under PSC. This budget decrease forced SEA Games officials to tap more private sponsors to alleviate the other costs.
To Cayetano’s delight, Duterte agreed to boost the SEA Games budget by P1 billion in May this year. The money was taken from the Office of the President’s contingency fund in the 2019 budget.
"The President agreed to augment the current budget of the SEA Games because he understood the importance of the SEA games to the Filipino athletes and its long-term benefits to the tourism and economic sectors in the country," Cayetano said in a statement.
Even if the multi-billion peso SEA Games fund was placed under the PSC’s 2019 budget, it was still the Cayetano-led Phisgoc that ultimately got the power to decide where the money goes.
This is all thanks to the agreement signed on August 14 by Phisgoc, PSC, and POC for the country's hosting of the SEA Games. Under this agreement, the PSC is mandated to train the Filipino athletes and give public funds to Phisgoc so the latter can prepare for, organize, and execute the sporting events for the SEA Games. On the other hand, the POC, as franchise-holder of the games, was tasked to monitor Phisgoc’s activities and ensure it complies with the contract.
When PSC received flak over the infamous P50-million SEA Games cauldron, its chairman Ramirez argued they merely disbursed the money upon Phisgoc’s request.
“We were hit because of the cauldron as if we were the ones behind its design and construction. It was the Phisgoc. PSC is not responsible for the cauldron, Phisgoc made all the transactions for it,” Ramirez said on November 21.
That’s on top of Cayetano’s defense of the controversial P50-million SEA Games cauldron. The Speaker justified the high price of the structure that will be used only once by saying it is a “work of art” designed by the late National Artist for Architecture Francisco “Bobby” Mañosa.
As it turns out, Phisgoc now has direct control over P1.5 billion of the SEA Games hosting fund after the PSC and POC realized they didn’t have enough procurement lawyers to bid out contracts. They were forced to turn over the huge sum as “financial assistance” to Phisgoc.
As financial assistance, the money is exempt from government procurement laws and need not be subject to public bidding.
Senator Panfilo Lacson already warned that the P1.5-billion fund transfer to Phisgoc was reminiscent of the pork barrel scam. Drilon was also relentless in raising red flags over the SEA Games budget, questioning why P50 million was spent for the cauldron to be used for the torch-lighting ceremony and why the government used P9.5 billion to build the New Clark City facilities in Tarlac when the venue would host only two sports: swimming, and track and field.
Cayetano asked then: why complain only now, when the SEA Games are but days away?
“They had two years na mag-ingay…They also have unlimited time after December 11. Bakit ngayon nag-iingay? They want it to fail, so words lang ang sinasabi nila na ceasefire,” said the Phisgoc chief on November 28. The SEA Games end on December 11.
(They had two years to make noise…They also have unlimited time to do so after December 11. Why make noise now? They want it to fail, so their saying that there should be a ceasefire is but empty words.)
Cayetano maintains he did not earn a single centavo from the hosting of the SEA Games and that he is willing to have the funds undergo a special audit by the Commission on Audit. (READ: Cayetano dares critics: ‘Hold me accountable’ for SEA Games mess)
“I can look anyone in the eye [and say] ni singko, wala kaming kinita dito sa SEA Games (I can look anyone in the eye and say I didn’t earn even a single penny from the SEA Games),” he said.
But perhaps the biggest question that Cayetano and his allies should address is the constitutionality and propriety of his appointment as Phisgoc head, considering his post as Speaker and before that, as Cabinet member.
Section 13, Article VII of the 1987 Constitution says members of the Cabinet "shall not, unless otherwise provided in this Constitution, hold any other office or employment during their tenure.”
Section 13, Article VI also says no senator or House member “may hold any other office or employment in the Government, or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries, during his term without forfeiting his seat.”
While supposedly a private entity, Phisgoc performs a government function, thus providing some basis to questions about Cayetano’s dual roles. Constitutional law professor Tony La Viña said: “Phisgoc, from my understanding, was organized as a private organization, but in this particular case, the money comes from government, the officials are from government….If it doesn't break the letter of the law, it breaks the spirit of the law.”
At the very least, besides the legal issues, there is also the question of delicadeza or a sense of propriety on the part of Cayetano. Should a lawmaker – tasked to scrutinize how public funds are allocated and spent – have accepted the top post of a private foundation like Phisgoc that is spending billions from the nation’s coffers?
Former POC president Cristy Ramos put it well: “You’re really putting public funds from one pocket just into the other pocket of the same short pants. And I really don’t know how they’re going to do a check and balance here since it’s just one and the same person,” Ramos told ANC’s Early Edition.
Cayetano, of course, disagrees. Other congressmen head national sports associations, he reasoned, and private foundations were created in the past so the Philippines could host the SEA Games. So why can’t he head Phisgoc?
“So madali naman dumakdak eh. Madaling sabihin na may conflict of interest. Nasaan ba kayo noong kailangan kayo ng Phisgoc? 'Di sana nagvolunteer kayo, sana kayo ang nagchairman, sana kayo ang nag-ano ng pera 'di ba?” he said on November 28.
(Talk is cheap. It's so easy to say there's conflict of interest. But where were you when Phisgoc needed you? Then you should've volunteered, you should've become the chairman, and you should've looked for the funds, right?)
As one blunder after another unfurled days before the SEA Games, Cayetano downplayed the criticisms and turned the tables on his critics.
“You know, you can look for anomalies as long as you want. Eh wala eh, 'di ba, wala? (But there’s nothing there, right, there’s nothing?) So do you want us to talk about that now, or do you want us to talk about your children who have worked so hard to win these medals and make the country proud?” asked Cayetano.
These are the facts: Two years ago, Duterte gave Cayetano the responsibility to organize the 30th SEA Games. It authorized one man – a Cabinet official turned congressman – to have full control over P6 billion of taxpayers’ money. The funds went where he went, as Phisgoc head, from the DFA all the way to the PSC. He confidently says there are no anomalies.
Do we take his word for it? – Rappler.com
TOP PHOTO: THE CHAIRMAN. House Speaker Alan Peter Cayetano, chairman of the organizing committee of the 30th SEA Games, delivers his speech before foreign dignitaries, sponsors, and Filipino athletes during their site visit on October 16, 2019 at New Clark City. Photo by Angie de Silva/Rappler