By Rigoberto D. Tiglao
(First of a Series)
IN his acerbic, sound-bite style, Foreign Affairs Secretary Teodoro Locsin Jr. tweeted that he’ll “eviscerate alive the Yellows who did the passport deal.”
I’m sure he wasn’t aware — deliberately misinformed by his officials, most probably — that those responsible for the controversial contract given to a private firm were his close colleagues and friends in Malacañang during the Corazon “Cory” Aquino administration when he was Cory’s trusted confidante and spokesman.
“The Yellows” — to use Locsin’s own term — who gave the extremely lucrative passport-printing contract without bidding to a private firm United General Expression Corp. (UGEC), reportedly controlled by billionaire Inigo Zobel, were:
— Milagros Alora, then chairman of the APO Production Unit (APO-PU) to which the Department of Foreign Affairs had given the contract in October 2015 to print its new e-passports, but which in effect sub-contracted it to UGEC. Alora was assistant press secretary during the Cory administration, and in the years after that a diehard “Coryista,” a PR operator who had befriended many editors, and an anti-Arroyo and anti-Duterte propagandist.
— Herminio “Sonny” Coloma, secretary of the Presidential Communication Operations Office during the previous Benigno Aquino 3rd government, who supervised the APO-PU. Former foreign affairs secretary Perfecto Yasay, Jr. has claimed that Coloma — who had been very close to President Aquino 3rd — lobbied for the transfer of the passport-printing contract from the Bangko Sentral ng Pilipinas (BSP) to APO-PU. Coloma was a favorite of Cory, appointed as undersecretary of the agrarian reform department, then of the transport and communications department, and finally head of the Presidential Management Staff.
— Aquino 3rd’s Foreign Affairs Secretary Alberto del Rosario who ordered in 2015 — “without compelling reasons,” Yasay claimed — that the printing of passports be removed from the BSP and transferred to APO-PU, which then subcontracted the job to UGEC.
I trust Locsin will embrace former president Estrada’s famous saying, “Walang kai-kaibigan at walang kamaganak-anakan.”
The passport controversy erupted in the past week after Locsin disclosed that DFA needed to rebuild “from scratch” its data base of passport issuances as the previous contractor had refused to give this to the agency when their contract was terminated. As a result, DFA has required applicants for passport renewals to submit their birth certificates, which raised a howl in social media. While he did not identify the contractor, Locsin was said to be referring to the French-based Francois-Charles Oberthur Fiduciare.
However, Yasay claimed that Locsin didn’t seem to have been informed that it was the APO-PU that was given by the DFA the contract to print the passports since 2015, but which it subcontracted to UGEC just before the new Duterte government assumed office on July 1, 2016.
A source in Malacañang claimed that in Duterte’s first meeting of his Cabinet right after he assumed office in 2016, Yasay reported that the sub-contracting contract with UGEC was anomalous, and extensively explained why this was so.
Yasay vociferously objected to the awarding of the contract to a private firm by APO-PU, on legal and moral grounds — that the award wasn’t bid out to get competitive prices and that the huge profits from the contract would be going only to a private firm. The contract is estimated to generate at least P1 billion for UGEC if it remains the passport printer for 10 years, which is the length of the term of DFA’s contract with the APO-PU.
At the initial hearing of a joint congressional inquiry into the troubled passporting process last March, lawmakers noted that the joint venture has earned UGEC at least P630 million in profits annually for the past three years, with its investment amounting to only P193 million. Indeed, the contract has been so profitable for UGEC that it announced plans of listing its shares in the stock market last year.
Yasay presented the President with two options to correct the anomaly by which private firm UGEC would generate huge profits from what is a monopoly — the printing of passports.
One option was for the Presidential Communications Operations Office (PCOO) (which had supervision over APO-PU) to amend its contract with UGEC to make it advantageous to government, and to limit its term. A second option was for the Finance Secretary to convince the BSP’s Monetary Board to revert the printing of the passports to its unit. Yasay also recommended that Duterte order the justice department to investigate the printing deal with UGEC to determine if there was corruption on the part of APO-PU or PCOO officials.
Yasay claimed that he had no choice but to let the UGEC continue the printing of passports on a provisional basis for six months so that passport issuances would not be disrupted, considering that overseas Filipino workers (OFWs) have tight deadlines to get such travel documents and to report to their work abroad. When UGEC and even APO-PU refused to amend the printing contract, he ordered it terminated in November 2016. But he never got to effect the termination when the Commission on Appointments rejected his designation to his post.
Yasay claimed a powerful lobby was undertaken to remove him from office because of his opposition to the UGEC contract. Josephine Sato, a member of the Commission on Appointments and who was the Liberal Party secretary general, reportedly spearheaded the blocking of Yasay’s confirmation as foreign affairs secretary.
Yasay’s successor, Alan Cayetano, totally ignored his predecessor’s analysis and recommendations and did not move at all to amend the UGEC contract. He even defended it amid concerns raised by congressmen early last year that UGEC had increased the cost of production of the printing of the passports from P700 to at least P900, because of the private company’s profits. The congressmen alleged that it was a security and privacy risk, since UGEC would have access to the records of 70 million Filipinos who were issued the passports. Their fears have proven right, with Locsin first disclosing — but later backpedaling — that there were leaks in the passport holders’ data.
When I asked Alora to comment on the controversy, she replied that APO did not sub-contract UGEC to print the passports. Rather, APO and UGEC have a joint venture for the passport printing favorable to the government agency. This joint venture, she claimed was “approved by NEDA, the governent procurement board, DBM and DOST and other pertinent agencies.”
Alora may have inadvertently disclosed how the scheme by which a private firm without any public bidding was given by the Yellow administration access to the private data of 70 million Filipino passport holders and the monopoly to print this crucial document that declares an individual to be a citizen of the Republic.
What makes this scandalous is that this firm is owned by billionaire Iñigo Zobel — whose wealth owes almost entirely to his inheritance — and to a secretive firm Haldane Investments, based in the tax-haven microscopic island nation of Vanuatu. That means the 3 million OFWs and Filipinos with dual citizenships requiring passports are and will be fattening the bank accounts of a Spanish mestizo billionaire and shadowy foreign capitalists.
The exposé on that scheme on Friday.
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** article originally printed on the January 16, 2019 issue of The Manila Times