Wake Up, Philippines!

Greed, Corruption and Shamelessness

Posted in Corporation, Graft and Corruption, Greed, Shamelessness by Erineus on February 11, 2009

THE RECENT SHUTDOWN OF MANY companies and plants in the services, manufacturing and electronics sectors in the country and the subsequent mass layoff of workers spawned by the economic downturn in the United States call to mind the wave of corporate scandals that shook the international business community in the last two decades.

Foremost among these scandals involved Enron Corp., which was then one of the world’s leading energy, pulp and paper, and communications companies, employing about 25,000 people. In 2001, it filed for bankruptcy in New York after authorities found that it had concealed its debts, following its involvement in shady deals and fraud and colluding with Arthur Andersen, its accounting firm. It turned out that many of the debts and losses Enron had incurred through the 1990s were not reflected on its financial statements. Arthur Andersen was found guilty of obstruction of justice in 2002 for destroying documents related to the Enron audit.

Still recovering from the shock created by Enron, the business world was subjected to another scandal involving WorldCom, whose top executives admitted to committing a multibillion-dollar accounting fraud.

Similar cases

Here at home, one is reminded of the Dewey Dee affair in which the industrial magnate borrowed heavily in the commercial paper market in the 1980s and then fled the country, leaving behind a billion-peso debt and shrinking the market.

Remember Dante Tan and Stanley Ho? Aside from earning the ire of Church officials, they scared the living daylights out of top honchos and traders of the Philippine Stock Exchange (PSE), which was left precariously perched on a tree branch about to snap. The PSE later uncovered heavy buying and stock price manipulation by Tan, with many investors incurring heavy losses.

It’s a fact: Corrupt leaders are legion. Although these scams have eroded investor confidence, the greater problem involves accumulation of monetary and material wealth driven by corporate greed and corruption, which have sent innocent workers out of work.

Shame

The basic problem, says US professor and author George Panichas, lies in “an absence of a culture of shame” of which corporate greed is cruelly symptomatic.

He says the pursuit of what is shameless is often equated with creative freedom. “We are so governed by our temporal absorptions and adventurisms that we ignore moral and spiritual considerations. We think of shame no more than we think of sin,” he says.

“Shame, no less than words like virtue, honor … has become an empty word, or just another expedient word that belongs exclusively to social and political vocabulary, in which words often signify anything or nothing.”

American writer Fred Flanagan looks at corruption in business and government in a different perspective. Writing for an American political party commentary website, he says everyone wants to have financial security but the reasonable desire for it shouldn’t be confused with the problem of greed.

“How many homes and cars are needed by one individual?” he asks. “When I hear political leaders talk about working hard on people’s business, I don’t think they understand what ‘working hard’ means. To me, working hard is a housekeeper cleaning hotel rooms all day for a minimum wage, a coal miner working in the coal mines all day, and parents working two jobs to support their family.”

Obviously conscious of his own mortality and somewhat dissecting the compulsion to accumulate by stealing, Flanagan says he thinks some people acquire great wealth because no one has told them they can’t take it with them when they die.

One possession political and corporate leaders can take with them, he says, is their good name–a legacy worth more than any material possessions.

This writer couldn’t agree more. Society desperately cries out for leaders who are honest, honorable and virtuous. But that’s the subject of another article.

A matter of view?

THE World Bank (WB) is a specialized agency of the UN system, established in 1944. It encompasses two development institutions and three affiliates focused on worldwide poverty reduction.

Helping poor nations

The International Bank for Reconstruction and Development (IBRD) is WB’s main component that provides loans and technical assistance for projects in developing – poor – member countries, like RP, and encourages co-financing for projects from other countries or a syndication of dozens of giant commercial banks in the US and Europe.

Huge loans

Most big infrastructures in RP are funded with loans by the billions of pesos from IBRD, that in turn urges big commercial banks in Europe by the dozens to invest here.

One bridge or highway project here costing R500M needs a long-term loan of .52 million. The World Bank will then encourage other giant banks in Switzerland, Paris, London, Berlin, New York, etc. to share in meeting the loan and its terms.

One or two banks may not loan more than R500M to RP.

Fraud

Disclosures of IBRD that some Filipino contractors and politicians connive or help each other to “corner” contracts via acts amounting to fraud, conflict of interest, influence peddling and other fraudulent means serve as notice/revelation to the lending banks.

The above places RP on the banks’ blacklist of nations notoriously engaged in making net loans result in inferior bridge or road called by honest builders as “matapang sa buhangin.” The same notice or knowledge is not forgotten for years by nations that apply their IBRD loans with unassailable honesty.

Just an image

This was probably the start of RP’s unkind image of having corrupt high officials, national and local, and of wasting loans from IBRD and other sources encouraged by the World Bank Group.

Our high officials and politicians were “splendidly quick” in denying allegations of contract “rigging, fixing and spinning yarns or wizardry.” They – officials and contractors – angrily disputed the lending bank’s official list of shadowy contractors and questioned results of a long investigation by independent experts.

Blacklisting

The bank officials did not answer the rage/anger of blacklisted contractors and their protectors. Neither did it refer to blacklisted contractors considered by DPWH officials/engineers as truly friendly and kind and thoughtful and honest – of all things – all the time.

Unkind words

And all 91.8M of us don’t know what epithets and unkind words are being thrown by lending banks in our way for years.

Let’s not forget that a syndication of banks is like a club and can influence other banks in Europe and in the US not to give RP loans of any kind in years.

But let’s not be too harsh on DoJ investigators and the NBI if they call World Bank investigations without basis or based on unreliable evidence like the findings favorable to dirty little crooks selling drugs.

Lacks ‘audacity’

The two agencies combined, including other good agencies, cannot summon Obama’s audacity to take a closer look at disbursements called pork or view a few bottles of liquid fertilizer (replaced by deepwell water) but commanded a price amounting to 1000 percent (or 10 times) of the normal price tag.

Lender’s view

DoJ and NBI conclusions with respect to PDEA’s arrests of drug traders they considered innocent are now under review by a commission headed by a retired and distinguished Supreme Court justice. (Comments are welcome at roming@pefianco.com)

Author: Atty. Romeo V. Pefianco
Source:
http://www.mb.com.ph/OPED20090203147184.html