Illicit list? Arroyo’s 977 ‘midnight’ appointees

LAWYERS at the Palace have been burning the midnight oil scrutinizing nearly a thousand appointments made by then President Gloria Macapagal Arroyo in various government agencies, including state-run corporations, from January this year until she bowed out of office on June 30.

One lawyer says the Presidential Management Staff (PMS) has so far tracked 977 Arroyo appointments in the last six months of her nine-year reign. “The list is growing,” says another lawyer involved in the rigid review of documents on the appointments but who is too timid to be named.

By all indications, precipitate haste and political accommodation – of allies, friends and benefactors – drove most of the 977 appointments that Arroyo made in her last six months in office.

The figure implies that in the twilight of her presidency, Arroyo was signing appointment papers at the rate of 162 per month, or nearly six per day, on average.

She was most productive on three days in particular – March 1, 2010 when she signed 41 appointments; March 5, another 52; and March 9, another 24 appointments. March 9 was the eve of the Constitutional ban on signing appointments during an election period.

Digging up still

Executive Secretary Paquito Ochoa Jr., however, would rather stress that not all the appointments could be classified as “midnight appointments.”

“We’re still digging up evidence. We’re still digging up all the documents,” he says when asked which appointments were legal and which could be revoked, and on what grounds could appointments be invalidated.

List of midnight appointments

* Office of the President, GOCCs
* Department of Agriculture
* Department of Energy
* Department of Environment and Natural Resources
* Department of Finance
* Department of Health
* Department of Trade and Industry
* Department of Transportation and Communications
* Department of Tourism

“Midnight appointment pertains to an appointment made during a prohibited period, and that prohibited period during the (last) election started on March 10,” explains Ochoa in an interview at his office by the Pasig river. “So, therefore, all appointments made that time which do not fall under the exemptions are midnight appointments.”

The 1987 Constitution enunciates the policy against presidential appointments 60 days before an election and until the end of the president’s term.

Article 7, Section 15 of the Constitution says: Two months immediately before the next presidential elections and up to the end of his term, a President or Acting President shall not make appointments, except temporary appointments to executive positions when continued vacancies therein will prejudice public service or endanger public safety.

The exemptions are clear: temporary appointments to executive positions when continued vacancies will disrupt public service or endanger public safety.

Yet even a cursory look at the list of appointments indicates that the appointments were not temporary. Appointees were given terms of office of one to five years. There were even 42 “regularized” acting appointments. Other appointments were either renewed or extended. There were a few who were transferred from one juicy position to another.

Ex-jurists, journalists

There were at least 49 appointees to governing boards of GOCCs who were elected by the board or stockholders after March 10. These include the appointees to the GSIS Family Bank whose date of appointment was April 29; People’s Credit and Finance Corp. (PCFC), April 28; Land Bank Realty Development Corp. (LBRDC), May 13; and Clark International Airport Authority (CIAA), May 17.

Among the appointees were two retired Supreme Court justices, two former senators, at least six former Cabinet secretaries, three political columnists and an editor, four retired military generals, two lawyers of former First Gentleman Jose Miguel Arroyo, and known personal friends of former President Arroyo.

In some cases, the appointments were made where there were no vacancies, according to a member of the presidential legal staff.

“We are going over the charter and incorporation papers of the GOCCs,” the staffer says when asked how rigid the review of the appointments is being done.

“Each appointment will be decided on a case by case basis.”

In President Benigno Aquino III’s inaugural address on June 30, one of the most-applauded statements he made was about a review of the so-called “midnight appointments.” He saw this as crucial to restoring public trust in the government.

Arroyo’s appointments can be categorized into three: appointments to positions with a term, such as board seats/directorships/trusteeships; appointments to career positions; and appointments to positions reserved for Career Executive Service Officers (CESO), according to former Civil Service Commission chairperson Karina Constantino-David.

Under serious review

All appointments made by Arroyo in her last few months in office, David says, should be “seriously reviewed and cleansed of all those that were part of the process of leaving behind people who will have favorable views to the administration that had left us.”

David is part of the Former Senior Government Officials (FSGO) group that issued an open letter calling on Arroyo’s “midnight appointees” to resign out of delicadeza without prejudice to being reappointed if they are qualified.

At least one appointee did resign (chairman Ephraim Genuino of the Philippine Amusement and Gaming Corporation or Pagcor), while five declined their appointments, and one said he was not accepting an amended appointment extending his term by one year.

Retired Navy Rear Admiral Tirso R. Danga, Alfonso B. Cruz Jr., and former Board of Investments (BOI) governor Jose P. Leviste declined their appointments as directors of the PNOC Exploration Corp. Earlier reports said billionaire Henry Sy’s daughter Teresita Sy-Coson had also refused her appointment as director of the Philippine Reclamation Authority (formerly Philippine Estates Authority). Arroyo’s manicurist Anita Carpon also did not assume the directorship of Home Development Mutual Fund or Pag-IBIG.

Former Surigao del Sur Rep. Prospero A. Pichay Jr., who was Arroyo’s political affairs adviser during the election period, said he was declining the extension of his appointment by one year. Pichay said he had taken his oath based on his Feb. 10, 2010 appointment for a four-year term ending in 2014. On March 9, he was issued a new appointment for a term of five years ending in 2015.

Rushed, politicized

David says that unlike during the Cory Aquino administration when the Freedom Constitution allowed her to relieve political appointees, the present Aquino presidency does not have that power.

Still, she points out that there are performance evaluation mechanisms to take unfit appointees out of government service.

“But let’s not use a blanket categorization of everybody as bad,” David says. “Some of these political appointees become dedicated public servants.”

Executive Secretary Ochoa meanwhile says that while they are sifting through documents, those whose appointments were dated prior to March 10, the “cut-off” date, should not rest easy just yet.

“Generally, there’s no such thing as midnight appointment as defined (for those appointed on March 9 and earlier),” he says. “But if there’s a pattern that will show that the interest is to thwart or to circumvent the prohibition, once that’s established, we can consider that ‘midnight appointment’.”

As it is, the dates of the appointments give an impression that these were rushed; most appointees are also somehow politically connected to or associated with Arroyo.

On March 1, for instance, then President Arroyo issued 41 appointments in GOCCs alone. There were 52 appointments on March 5, and another 24 on March 9, the eve of the start of the prohibited period.

‘Parking’ for allies

In a recent interview, former Economic Planning Secretary Solita Monsod said GOCCs have become “convenient parking places for patronage politics” and where appointments are made “not because of what they know (that would be beneficial for) the country, but who they know.”

A presidential legal counsel’s office staffer says those whose appointments were dated March 10 or earlier but took their oath or assumed office after March 10 could be considered “midnight appointments” and, therefore, illegal for being in violation of the constitutional prohibition.

But Pichay contends that the constitutional prohibition speaks only of the limitation to appoint, and is silent on the acceptance or assumption into office by the appointee.

“The prohibition is on the president, not on the appointee,” he argues. “If the appointment was dated March 9 or earlier and the appointee takes oath or assumes office even one month after, or even now in July, that is still valid.”

Prior to the extension of his own appointment, which he declined, Pichay had already served as Local Water Utilities Administration (LWUA) chairman since 2008, when the one-year ban on the appointment of defeated candidates in the 2007 polls ended. Pichay, running under the Lakas-CMD banner, lost in the 2007 senatorial race.

300 in GOCCs

A partial list of Arroyo’s appointments already reveals that she had packed 47 GOCCs and government financial institutions (GFIs) in nine departments and the Office of the President with almost 300 new appointments, many of whom are widely viewed as political accommodations.

A Palace inventory of the Cabinet portfolios shows 133 GOCCs and 24 attached agencies. The Office of the President has the highest number of GOCCs under its wings: 29. The Department of Finance comes second with 16, followed by the Department of Agriculture with 13.

Arroyo had filled up board seats in some of the entities that are considered juiciest, or where salaries, allowances and other perks are distantly higher than the standardized government salary rates. These are the Bases Conversion and Development Authority (BCDA), Subic Bay Metropolitan Authority (SBMA), Clark Development Corp. (CDC), Philippine Amusement and Gaming Corp. (Pagcor), Cagayan Special Economic Zone Authority (CSEZA), Home Development Mutual Fund (HDMF or Pag-IBIG), and the Philippine National Oil Co. (PNOC) and its subsidiaries: PNOC-Exploration Corp. and PNOC Development and Management Corp. (formerly Filoil Development and Management Corp.).

Posts pay well

The Commission on Audit’s (COA) “List of Principal Officers and Members of Governing Boards of GOCCs and Their Secretaries, Undersecretaries, Assistant Secretaries and Other Officials of Equivalent Rank Received Salaries and Allowances in FY 2007” shows 408 individuals who received from P900,000 to P14.5 million in that year.

The review of the Charter of GOCCs and GFIs includes a check on the legality of the pay rates given to the presidential appointees in the governing boards. Many of these have sought exemption from the Salary Standardization Law, or Republic Act No. 6758 (Compensation and Position Classification Act of 1989) that rationalized the functions, qualifications, and salary grades and rates of public servants.

Because of the exemption, officials and employees of these GOCCs and GFIs are receiving unconscionably high salaries, allowances, and other benefits that are five or even 10 times more than their counterparts with the same ranks and positions in government agencies and officers covered by R. A. No. 6758.

Most GOCCs are not only wallowing in huge debts and losses. These have also been relying on subsidies from the national government to sustain their operations.

Subsidized by state

This year, the General Appropriations Act provides P14.1 billion subsidy to ailing GOCCs. In 2009, the subsidy was 19 percent higher at P17.4 billion, courtesy of the taxpayers.

Among the losing GOCCs that have become heavily dependent on state subsidy are the National Food Authority, Home Guaranty Corp., National Electrification Administration, National Development Co., Philippine National Railways, Light Rail Transportation Authority, and Local Water Utilities Administration.

Apart from the scandalously high salaries, allowances, and other perks, a COA report on the transactions of GOCCs in 2006 notes that many of these state firms “were not effective in ensuring that the limitations prescribed under existing rules and regulations were observed and that funds were used for the purposes intended.”

The audit found that governing boards of monitored GOCCs approved “extraordinary and miscellaneous expenses” ranging from P72,000 to P5 million a year for each official. The rates “far exceeded” what was allowed or provided under the annual budget for each official at P68,000 to P230,000.

To spare the next administration the same complicated problems on appointments, David has these pieces of advice to the current Palace occupant: be concerned more on merit and fitness, give a chance to career officials to go up (the bureaucratic structure), and make political appointments co-terminus so as not to block the paths of career civil servants.

“Even the law says that the president has a right to appoint somebody who is not qualified for the exigency of the service,” she says, “but appoint as non-career people clearly as non-career rather than be open to the accusation that you are taking out political appointees to be able to bring in your own political appointees.” – PCIJ, July 2010