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Inside Philippine politics & beyond

Lucio Tan is part of our corrupt ecosystem, Romulo Neri told Whistle-blower Jun Lozada

August 7, 2010

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By Raïssa Robles

 

What’s happening now with Philippine Airlines (PAL) is not mere labor trouble. It is actually part of a political power struggle between the Aquino presidency and an entrenched kingmaker, whom the former economic planning agency chief once named as a key player in the Philippines’ corrupt ecosystem.

Lucio Tan, Romulo Neri and Jun Lozada

The nation’s other power players are closely watching who will win. And Filipinos who voted overwhelmingly to stamp out corruption and level the playing field should be closely watching too.

Romulo Neri’s web of corruption theory

The embattled Romulo Neri unwittingly predicted something like this could happen during a secret dinner meeting with whistle blower Rodolfo “Jun” Lozada, Senator Panfilo Lacson, Senator Jamby Madrigal and Angelito Banayo (now the National Food Authority chairman) on December 7, 2007.

Neri was at that time the director-general of the National Economic Development Authority (NEDA).

Details of that secret meeting were later bared by Jun Lozada in his February 18, 2008 testimony before a Senate probe on the allegedly anomalous telecoms broadband deal between the Arroyo government and ZTE Corporation of China.

Cringing, cowering and weeping during the probe that was telecast nationwide, Jun Lozada said that during that meeting, his friend Romulo Neri had called their boss, President Gloria Macapagal-Arroyo, “evil” several times because she was the center of a corrupt political ecosystem that was controlled by a handful of the nation’s oligarchs who influenced and benefited from corruption.

Jun Lozada said Romulo Neri specifically named Philippine Airlines (PAL) owner Lucio Tan as one of those oligarchs in control of the corrupt ecosystem. Romulo Neri even showed a diagram of his web-of-corruption political theory. Lucio Tan was designated in that drawing by the letters “LT”.

See the diagram below. (The three other “oligarchs” named were Enrique Razon, chairman and president of International Container Terminal Services, Inc.; a “Tommy” Alcantara and one of the “Aboitizes” (which one, Romulo Neri did not say).

Lucio Tan Romulo Neri BIG  diagram

Romulo Neri puts Lucio Tan (LT) in his web-of-corruption diagram

On the very day Jun Lozada testified, Romulo Neri suddenly had amnesia . He told reporters he was unsure whether he had called Gloria Arroyo “evil” several times:

I know Jun is very sincere with me and cares for me but I really cannot recall that statement. I don’t remember. I cannot up to now.

However, the former Asian Institute of Management professor could remember in detail the rest of his dinner lecture.

That’s very little thing to do with ZTE. That meeting was more on the discussing the political economy. I gave my usual lecture on political economy and to shorten it I just put one brief framework and I think we all agreed that this is the nature of the Philippine state and the oligarchic state, the players concerned.

We had to map the whole players in the political system and of course everybody has a role to play in the whole system. And my conclusion is that in this whole system, we are all victims of the whole oligarchic structure of the Philippine State.

To watch the video of one of Romulo Neri’s ambush interviews at that time, click on this.

Romulo Neri did not deny naming Lucio Tan, Razon, Alcantara and Aboitiz as key players in that corrupt eco system.

Now I myself wonder why Romulo Neri named Lucio Tan.

In an earlier entry I wrote entitled Why does world billionaire Lucio Tan have such a troubled airline? , I provided a timeline of how Lucio Tan broke off the profitable units of PAL to make completely different companies that are now quite profitable to this day, while PAL continues to lose heavily.

My Facebook friend Reyn Barnido reacted to my timeline by pointing out it was incomplete. He said,

So what happened between 2000 and 2010? There is a a full decade gap in the timeline.

He’s right. This decade covers Gloria Macapagal-Arroyo’s administration. And so I started digging and that was how I rediscovered Romulo Neri and Jun Lozada.

And then I dug some more and found reports saying President Gloria Macapagal-Arroyo dined with tobacco and beer magnate Lucio Tan and shortly afterward, a planned hike on cigarette and beer taxes was reduced, while there was a higher increase in our Value Added Tax (VAT).

The justifying argument used then was that a steep rise in tobacco and liquor taxes would harm sales, which would eventually lead to lower tax collection.

In this instance, rather than tax cigarettes and beer owned by Lucio Tan, everyone bore the brunt of higher VAT on basic necessities such as food, medicine, water, electricity.

Romulo Neri’s proposed solution for sweeping away web of corruption

Before he joined the executive department, Romulo Neri was one of my favorite sources. He headed the Congressional Planning and Budget Office (CPBO). He was always frank in his views and I could always expect choice quotes from him on how the national budget was skewed toward military and anti-insurgency spending at the expense of education and social services.

I was therefore not surprised that he said all that during his “secret” dinner with Jun Lozada and the senators.

He’s very proud of his web-of-corruption theory. On Valentine’s Day, four days before Jun Lozada testified, Romulo Neri told reporters in an ambush interview that “the truth is deeper than what you think.”

He said the nation’s problems were quite deep and could not be solved by people power rallies alone because the Philippines was an oligarchic state where in reality, a handful of families and personalities dictated government action.

Today, Romulo Neri is in serious trouble, facing a corruption case that could land him in jail. The charge stemmed from his having told Gloria Macapagal-Arroyo that then Commission on Elections chairman Benjamin Abalos had offered him a hefty bribe – “Sec, my 200 ka dito” – which he interpreted as 200 million pesos.

Neri said in his own testimony before the Senate that Arroyo told him to ignore Abalos’ offer but still go through with the recommendation process for the ZTE project.

The bribe was allegedly for his facilitating NEDA’s approval of ZTE Corporation’s $329-million national broadband network (NBN) contract with the government.

Romulo Neri may be the first Filipino academic to put forth a theory on political economy and become the very example of how this theory actually works.

For me, he made two interesting statements that are very relevant to this day.

First, Romulo Neri said that replacing Gloria Arroyo as President would not correct the situation since the ecosystem would remain.

Second, he said reforms in the political economy could only be brought about by the President with the help of all sectors of society.

What do you think?

Tagged With: Lucio Tan's place in Romulo Neri's web of corruption diagram, Philippine Airlines

Comments

  1. nanie geronimo says

    September 30, 2011 at 12:30 AM

    Strangely, but truly, the statements are not only pragmatic, they are very valid. The President can move the whole system to move and reform if he/she has the personal strength to not be a politician. For this to happen, there is a need for successive Presidents to have the same goal and for mutli-sectoral groups to share the same transformational agenda. It’s sad, infuriating and disappointing to realize that indeed, as a people, we are clearly helpless. How to galvanize sectoral support, which is slowly emerging now, can be done if successful prosecution and truth telling result to the true punishment of those who participated and benefited in the corruption.

    • Ting Juan says

      September 30, 2011 at 10:43 AM

      perhaps the only place the president can galvanize enough support for substantial change comes from the labor sector now fighting for their rights. in essence, it is the most abused and intimidated group. all labor unions have one agenda in common and that is to work with dignity and get a decent wage for a better future not only for themselves but for their families and the country. a contented and happy labor force will do an economy good more than the influx of investments wherein the products of our resources are being sold elsewhere and the profit is secured likewise.

  2. Ramon Nocon says

    September 29, 2011 at 9:28 PM

    That “Tommy” Alcantara mentioned is Tomas Alcantara, Chair & President of Alsons Consolidated Resources, Inc. http://www.acr.com.ph/directors.html

    • raissa says

      September 30, 2011 at 5:01 PM

      Thanks.

Trackbacks

  1. raissa robles | Sacked PAL employees to be hired by 2 possibly ‘dummy’ companies? says:
    October 2, 2011 at 12:23 PM

    […] Lucio Tan is part of our corrupt ecosystem, Romulo Neri told whistle blower Jun Lozada […]

First they came for the Socialists, and I did not speak out— Because I was not a Socialist Then they came fof the Trade Unionists, and I did not out speak out— Because I was not a Trade Unionist. Then they came for the Jews, and I did not speak out— Because I was not a Jew. Then they came for me— And there was no one left to speak for me. —Martin Niemöller (1892-1984)

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