Moneyed kin, personal coffers paved Senate victories in 2022

Senatorial candidates in the 2022 polls won fresh terms by financing their campaign with money from family members and money from their own pocket.

By CHERRY SALAZAR
Philippine Center for Investigative Journalism
May 10, 2023

Loren Legarda won big time in her comeback bid in the Senate last year, coming in second with 24.3 million votes. She got a lot of help from her son and father, whose combined contribution to her campaign kitty totaled P136 million, based on her own declarations.

Sherwin Gatchalian reported receiving a hefty P89 million from three family members, while Juan Miguel “Migz’’ Zubiri and Joseph Victor “JV’’ Ejercito each accepted at least P20 million from their parents to secure fresh terms in the Senate during the 19th Congress.

Zubiri was eventually elected Senate president.

It is expensive to run for office in the Philippines. The 12 winning senators reported a total campaign spending of P1.5 billion in their SOCEs, an amount that watchdogs said may be an underreporting. Three candidates ran ads on mainstream media that were worth more than P1 billion, based on published rate cards or before discounts were given to the candidates.

Billionaire donors and business executives have always played key albeit covert roles in the campaign of national candidates.

But the 2022 senatorial race showed that some candidates relied more on the money of family members as well as their own to fund their campaign.

Election lawyers said receiving financial support from relatives could lead to a possible conflict of interest especially if the family members also have business interests.

“[T]here is a tendency for campaign contributors to be able to dictate or influence the candidates should they win the election. So when you have a business interest… then this particular influence is magnified,” said lawyer Izah Katrina Reyes, policy consultant of poll watchdog Legal Network for Truthful Elections (Lente).

The “quid pro quo agreement” for a business to benefit from the influence of an incumbent official can be “really a possibility,” Reyes said.

Election lawyer Donnah Guia Lerona-Camitan said it also “raises questions whether elected officials can make impartial decisions against the interests of their family businesses for the benefit of the public’s interest.”

Six of the 12 winning senators received a total of P291.91 million from their own families, according to the statements of contributions and expenditures (SOCEs) that the candidates submitted to the Commission on Elections (Comelec).

Family and personal funds accounted for a fifth of the P2.18 billion total spending reported by 48 candidates in their SOCEs. Sixteen candidates did not submit a finance campaign report to the Comelec.

Two neophyte senators – Mark Villar and Rafael “Raffy” Tulfo – funded their campaign from their own pocket. Their combined campaign bill ran up to P170.61 million, based on their SOCEs.

A “limited or confined support base,” such as electoral campaigns largely funded by relatives or personal money, is not ideal, Reyes told Philippine Center for Investigative Journalism (PCIJ) in an interview.

“What we really want is a more distributed support base for our candidates in terms of seeing their campaign contributions… We want more active participation from our voters and the public,” she said.

Top donors backed Legarda

Two of the top five donors backed the campaign of Legarda, who came in second behind actor Robinhood “Robin’’ Padilla.

Her son Leandro Leviste gave her P100 million, while her father Antonio C. Legarda shelled out P36 million. These account for 86 percent of the senator’s declared contributions.

Leviste is the founder and president of solar energy firm Solar Philippines.

According to an earlier PCIJ report, Leviste’s Solar Philippines cornered a significant share of the government’s Green Energy Auction Program (GEAP), a Department of Energy program that allows renewable energy developers to bid for supply contracts at a set ceiling price.

During the first auction in 2022, the firm won 90.58 percent of auctioned solar capacity, or 1,350 of 1,490.38 megawatts (MW), and 70.16 percent, or 1,380 of 1,966.93 MW, of renewable energy capacity across all technologies.

Solar Para sa Bayan Corp., a subsidiary of Solar Philippines, also received a 25-year distribution franchise from Congress which then President Rodrigo Duterte signed into law in 2019. At the time, Legarda held the lone congressional seat for Antique province.

Some lawmakers, renewable energy groups, and energy advocates opposed the legislative franchise, as it “effectively grants a monopoly and exempts one private company from the rules of competition and oversight.”

Former Comelec Commissioner Luie Guia said a donor’s relationship with a candidate, “whether there is a violation or not, is already a red flag for a potential conflict of interest.” But he added that it is more important that disclosures are honest.

Legarda said she did not defend the bill on the floor and abstained from voting “out of delicadeza” because the firm is owned by her son. “In fact, I would always be out to make sure that there is no conflict,” she said in 2019.

Reyes said Legarda’s abstention was “a good start to maintain neutrality…but what we don’t see are the discussions maybe among colleagues.”

Currently, eight bills on solar and renewable energy are pending at the committee level in the Senate. None of the bills were authored by Legarda, but she has publicly supported green initiatives in the past.

Gatchalian and family firms

Family and business partners helped Gatchalian secure his reelection. He ranked fourth in the race with 20.6 million votes.

More than half of the contributions he received, or P81.91 million, were from his kin: over P58.41 million from his mother Dee Hua; P15.5 million from his brother Kenneth; and P8 million from his maternal aunt Elvira Ting.

Dee Hua is the second top individual donor, next to Leviste.

The Gatchalians have interests in various industries from plastic manufacturing to hotels and casinos, banking, and mining.

Earlier this year, Kenneth, director of Altai Philippines Mining Corp., was embroiled in a controversy over alleged illegal mining operations in biodiverse-rich Sibuyan Island in Romblon. Protesting residents accused the company of operating without necessary permits and violating environmental policies.

The senator himself owns 9.71% shares in Wellex Industries, Inc., a mining and oil exploration firm, according to the company’s reports to the Philippine Stock Exchange (PSE) as of April 2023.

In separate bills, Gatchalian proposed amendments to the Oil Exploration and Development Act and the Philippine National Oil Company charter. He also proposed income tax incentives for petroleum service contractors. These bills were referred to the committee on energy, where he sits as vice chair.

Bills on the suspension of excise taxes and value-added tax on petroleum and petroleum products were also referred to the ways and means committee, which he chairs.

The Gatchalian family was also earlier linked to at least nine offshore companies, according to the Pandora Papers. The family’s legal counsel claimed that the offshore companies were incorporated for “legitimate investment purposes” with plans to venture into “global trading.”

Gatchalian’s other backers included Sergio Ortiz-Luis and wife Margarita, who chipped in P9.5 million and P2 million, respectively, to his campaign.

Sergio is the president and chief executive officer of Philippine Exporters Confederation, Inc. and chairman of the Philippine Chamber of Commerce and Industry. He also sits on the board of Gatchalian-owned businesses, including Waterfront Philippines, Inc.

Waterfront subsidiaries won government contracts worth P234.5 million between January 2021 and March 2023, according to data from the Philippine Government Electronic Procurement System (Philgeps).

Of these, 86.7 percent were sealed through direct contracting and negotiated procurement.

Direct contracting does not require submission of voluminous bidding documents, such as price quotation or a preliminary (pro-forma) invoice with conditions of sale. Negotiated procurement, on the other hand, is resorted to under “extraordinary circumstances” such as two failed biddings.

The law distinguishes between individual and corporate donors, but Lerona-Camitan said it is “a red flag” if there is a “direct and causal link” between an individual donor and a company that holds government contracts.

“This would be an indirect violation of the Comelec prohibition,” she said. “What cannot be done directly cannot also be done indirectly.”

The Omnibus Election Code prohibits natural and juridical persons who hold contracts or subcontracts to supply the government with goods and services from making campaign contributions.

Parents for Zubiri, Ejercito

The parents of Zubiri and Ejercito also poured money into their campaign, propelling them into the winner’s circle. Zubiri ranked eighth with 18.7 million votes, while Ejercito placed 10th with 15.8 million votes.
Zubiri’s mother Maria Asuncion and his mother-in-law Lourdes Tan donated P20 million each to his campaign.

His other top donor is businessman Francisco Tiu Laurel, Jr. who also gave P20 million.

Laurel also contributed P30 million to Partido Federal ng Pilipinas, the political party chaired by now President Ferdinand “Bongbong” Marcos, Jr.; and nearly P8.75 million worth of airtime in GMA Network for Padilla, SOCEs showed.

Laurel is president of Frabelle Group, which ventures into deep-sea fishing and aquaculture, food manufacturing and processing, cold storage, shipyard operations, and real estate, among others.

Frabelle Shipyard Corp., a subsidiary, won six different contracts from the Mines and Geosciences Bureau (MGB) between January 2021 and March 2023 totaling P15.69 million, according to Philgeps quarterly reports.

Laurel also has interests in the energy sector through Markham Resources Corp., which develops hydroelectric energy projects in northern Luzon and in Mindanao.

After the elections, Laurel was appointed as a member of the agriculture group of the Private Sector Advisory Council that was formed in July 2022. The group was expected to help the government address food security issues. Mr. Marcos concurrently serves as agriculture secretary.

Antonio Tan and his son Miguel Alissandro also donated P10 million each to Zubiri’s campaign. They are the corporate secretary and president, respectively, of real estate company MVT Group and cladding firm Fasclad, Inc.

Ejercito, for his part, disclosed getting P20 million from his father, former President Joseph Ejercito Estrada, and P10 million from his mother, former San Juan City mayor Guia Guanzon Gomez.

The senator also received P10 million from Edward William Tan, founder and director of the Brent Group, distributor of liquefied petroleum gas and other petroleum products, among others.

Ejercito called for the suspension of excise tax on fuel to mitigate soaring prices of petroleum products during the campaign.

Meanwhile, Ejercito’s brother Sen. Jose “Jinggoy” Estrada did not report receiving support from the former president. He identified several media outfits as donors in his SOCE. The outfits denied this.

Estrada secured the 12th spot with 15.1 million votes.

Cousin, sibling support Hontiveros, Cayetano

Reelectionist Sen. Ana Theresia “Risa” Hontiveros reported a P3-million contribution from her cousin Marianne, former chair of AirAsia, Inc., while returning Sen. Alan Peter Cayetano disclosed receiving P500,000 each from his brother Rene Carl and sister-in-law Mary Bianca Calalang.

Outside the family, Cayetano also benefited from the contributions of big business, including P10 million from Jaime Santos dela Rosa of Puregold Price Club, Inc.

Puregold was awarded government contracts between January 2021 and March 2023 worth P1.67 billion, according to Philgeps data.

Cayetano’s other donors included businessmen Jorge Villacorta Pascual, Jr. of JJ Drilltek Corp. and Danilo Michael Yamsuan of Elaia Green Vehicles, each donating P10 million.

Yamsuan is the first cousin of Bicol Saro Partylist Rep. Brian Raymund Yamsuan, who also chipped in P10 million to Cayetano’s kitty.

Hontiveros placed 11th in the race with 15.4 million votes, while Cayetano came in seventh with 19.3 million votes.

Self-funded campaign for Senate neophytes

Villar and Tulfo financed their own campaigns in their first bid for a Senate seat, finishing sixth and fourth in the race and garnering 19.5 million votes and 23.4 million votes, respectively.

Villar’s campaign cost him P131.86 million. He is the son of real estate mogul Manuel “Manny” Villar, Jr., who topped Forbes’ list of Filipino billionaires in 2023 with a net worth of US$8.6 billion.

Tulfo, a prominent and feisty broadcast personality, meanwhile, reported spending P38.74 million on his campaign.

His family is no stranger to politics and governance.

His wife Jocelyn Pua and son Ralph Wendell Tulfo are both members of the House of Representatives, representing ACT-CIS partylist group and the 2nd district of Quezon City, respectively.

His sister Wanda Tulfo Teo was the tourism chief for two years during the Duterte administration, while his brother Erwin Tulfo had a short stint as social welfare secretary during the first few months of the Marcos administration in 2022.

While self-funded campaigns may lead to greater autonomy and minimize external influence when a candidate gets elected, legislating or encouraging such may be considered “anti-poor,” Lerona-Camitan said.

“It would in effect bar less fortunate candidates from running for public office. Additionally, it would undermine the well-protected principle on equal representation enshrined under our Constitution,” she said.

Padilla’s ‘secret weapon’ not disclosed in SOCE

Padilla, who topped the race with 26.6 million votes, identified his biggest donor as Jose Arturo “Jay Art” Tugade, who pumped P10 million worth of airtime in GMA Network for the candidate.

Tugade, son of former Transportation Secretary Arthur Tugade, was appointed Land Transportation Office chief in November 2022, following a weeks-long stint as acting general manager of the Manila International Airport Authority.

In August 2022, Padilla proposed a cable car project to help address traffic congestion in Metro Manila. In the same month, a bill was filed by Sen. Ramon Bong Revilla, Jr. for the creation of a “mobility czar” office that will address transport and traffic issues. A similar bill was filed the following month by Estrada. Both Revilla and Estrada faced plunder and graft charges in relation to the multi-billion “pork barrel” scam.

The measures were referred to the committees on public services, constitutional amendments, and finance. Padilla chairs the committee on constitutional amendments.

In a social media post in June last year, Padilla shared that he owed his victory to former President Gloria Macapagal-Arroyo, her husband Jose Miguel “Mike” Arroyo, and their son Juan Miguel “Mikey” Arroyo.

Padilla called them his “secret weapon.”

“Ngayon naman eleksyon, nabalitaan ni ninang (Gloria Macapagal-Arroyo) wala akong logistics. Nagsagawa siya ng mga conference at convention para sa akin,” Padilla posted.

“Inikot ako sa Pampanga at sa Iloilo. Sagot lahat ni FG (Mike Arroyo). Wala akong kagastos-gastos. Kaya ang naging katapos-taposan (sic) number 1 ako sa Pampanga! At kahit hostile and Iloilo sa Uniteam, ako ay nakakuha ng mataas na boto,” he said.

However, Padilla did not include any of the Arroyos in his campaign finance disclosures. He listed only 15 individual and corporate donors.

This should prompt a Comelec investigation, said Guia. “All donations need to be reported; that is the law. Violation is an election offense.”

Lente executive director Rona Caritos agreed. But Caritos, a lawyer, also acknowledged that the poll body’s campaign finance office “is undermanned, understaffed, [and] the skill set of most of the individuals [comprising] the office… is not compatible with their duties and functions.”

Gov’t contractors, new appointees

Returning Sen. Francis “Chiz” Escudero and reelectionist Sen. Joel Villanueva benefited from the donations of government contractors.

Escudero finished fifth in the race with 20.3 million votes, and Villanueva ninth, with 18.5 million votes.

Escudero received P30 million from Lawrence Lubiano, president of Centerways Construction and Development, Inc. The amount is less than 1 percent of the construction firm’s awarded contracts.

Centerways bagged P5.75 billion worth of contracts between January 2021 and March 2023 from Department of Public Works and Highways (DPWH) offices in the Bicol region, according to Philgeps data.

At least P2.43 billion worth of DPWH projects awarded to Centerways was undertaken in Sorsogon province, where Escudero served as governor from 2019 to 2022.

Maynard Ngu, chief executive officer of Cosmic Technologies, Inc. (Cherry Mobile), also contributed P30 million to Escudero’s senatorial comeback. Ngu also donated mobile phones worth P1 million to Padilla in kind.

Between January 2021 and March 2023, Ngu’s company won P1.73 billion worth of contracts from local government units and the Department of Education.

Lubiano and Ngu are among the top five donors in the 2022 senatorial race.

Escudero also received P10 million from Arnel Isilen Peil of A.I.P. Construction, which won P1.74 billion worth of government contracts between January 2021 to March 2023, Philgeps data showed.

Escudero’s donors got presidential appointments after the May 2022 vote.

Ngu was appointed special envoy to China for trade, investment, and tourism in March. Leo Tereso Magno, who donated P10 million to Escudero, was also appointed presidential assistant for Eastern Mindanao in November last year.

Magno, board chairman and chief operating officer of the Rizal Memorial Colleges, said his office cannot approve projects and contracts but is tasked to monitor and evaluate the implementation of such in the region.

Josue Gocella Tesado and Jessimar Catatista Panisales, both linked to Davao-based construction and trucking firms with government contracts, also donated P10 million each to Escudero’s campaign.

Tesado and Panisales, respectively, are secretary and treasurer of Maxan Construction & Trucking Services, Inc., according to Securities and Exchange Commission (SEC) records.

Maxan bagged P819 million worth of government contracts between January 2021 and March 2023, according to Philgeps data. Nearly 85 percent of this amount, or P693.84 million, are for hauling services of garbage and shredded currency notes.

Tesado also leads the San Josue Group, which ventures into real estate and leasing, metal roofing manufacturing, container yard operations, and banana plantations, among others.

Meanwhile, Villanueva received P20 million from a certain Ben Co.

Real estate firm New San Jose Builders, Inc. (NSJBI), founded by housing czar Jose “Jerry” Acuzar, also donated P20 million to the campaign of Villanueva.

NSJBI emerged as the top corporate donor in the senatorial race. It supported only Villanueva.

Lerona-Camitan acknowledged that “[m]aintaining impartiality in the face of direct or indirect influence from campaign donors can be challenging.”

But she said a public official’s decision-making “should never be swayed” because his or her authority “stems from the collective will of the majority who elected them, rather than the financial contributions they received during the campaign period.”

The election lawyer said it should be incumbent upon public officials “to refuse support from persons who may have potential conflict of interest or from those people who may have business interests in their campaign.”

Poll watchdogs have repeatedly called for stronger transparency and accountability legislation. Pending since the 17th Congress, a proposed “Comelec integrity bill” seeks to reinforce the independence of the poll body by providing office spaces separate from local governments and appropriating funds from the annual government budget, among others.