Saturday, October 7, 2006

Criminal Elements of Graft and Corruption

NOTWITHSTANDING its Conclusions, the more I read the Ombudsman's Supplemental Resolution on the voided-and-nullified Comelec automation contract, the more convinced I get that there is actually probable cause to prosecute Comelec Chairman Benjamin Abalos, et al, criminally and administratively.

In its 1995 Decision in the case of Quibal vs. Sandiganbayan, the Supreme Court said:
Violation of Section 3 (e) of R.A. 3019 [Anti Graft and Corrupt Practices Act] requires proof of the following facts, viz:

1. The accused is a public officer discharging administrative or official functions or private persons charged in conspiracy with them;

2. The public officer committed the prohibited act during the performance of his official duty or in relation to his public position

3. The public officer acted with manifest partiality, evident bad faith or gross, inexcusable negligence; and

4. His action caused undue injury to the Government or any private party, or gave any party any unwarranted benefit, advantage or preference to such parties.
Relying solely on the undisputed FACTS of the case, both from the Supreme Court decision and the OMB's Resolution, let me cite a simple example of each of the elements in bullet #3 above in this whole sorry mess involving Comelec and now the Ombudsman.

EVIDENT BAD FAITH: The Comelec's Official Request for Proposal (RFP) specifically required a 99.9995% accuracy rating for any acceptable system. This requirement was later decided by Comelec to be unachievable and so it changed the requirement to 99.995% AFTER the eligibility phase had already either discouraged or eliminated many potential bidders or offerors. Only two bidders survived: MPC, the eventual winner, and TIMC, the eventual loser. That the Comelec did not restart the entire bidding process with a revised RFP was SELF-EVIDENT BAD FAITH! Indeed the Supreme Court already noted this point in its decision, yet the Ombudsman clearly ignores the testimony of Dir. Jose Tolentino, the Comelec's Phase II Project Manager, who attested to these facts.

The OMB's Resolution makes a great show of how impartial the Comelec was in judging between MPC and TIMC, how manifestly superior the MPC system was to that of TIMC. Comelec's partiality becomes MANIFEST when one considers the testimony of the Comelec in the OMB's Report that they reduced the required accuracy rating from 99.9995% to 99.995% after being informed, probably by the bidders, that the 99.9995% rating was unachievable. To make their partiality even more manifest consider the simple fact testified to by Secretary Estrella Alabastro and Engr. Rolando Viloria both of the DOST that both MPC and TIMC actually failed the technical evaluation tests for compliance with the 27 Key Requirements contained in the Comelec's own bid documents and RFP, including the REDUCED 99.995% accuracy rating requirement. Despite failing the eval, the Comelec nevertheless awarded the contract to MPC, when by every law of God and Nature they should have declared a failure of bidding process and restarted. A pattern emerges: Comelec was hell-bent on giving the contract to MPC no matter what. MANIFEST PARTIALITY!

GROSS INEXCUSABLE NEGLIGENCE: The Supreme Court Decision expounded upon its interpretation of "gross inexcusable negligence" :
Gross negligence is the pursuit of a course of conduct which would naturally and reasonably result in injury [or unwarranted benefit]. It is an utter disregard of or conscious indifference to consequences. In cases involving public officials, there is gross negligence when a breach of duty is flagrant and palpable.
I think this aspect of the Comelec's demeanor can be seen also in the OMB's Resolution in the overall pattern of ignoring requirements and discounting the failures reported by the DOST to it, and worse, getting that body to do "verification tests" and re-tests in an obvious, heedless drive to get that vendor to pass. Awarding the contract to a bidder that fails multiple explicit requirements of the RFP displays a callous disregard for the long-term consequences of its acts. When the Comelec ignored, and now the OMB glosses over such major deficiencies of the ACM system, such as the ability to provide an audit trail, and others noted by the Court in its decision, amounts to GROSS, INEXCUSABLE NEGLIGENCE. It was their duty as public officials to reject all bids, since they failed the very requirements set forth. They breached that duty in their flagrant act of graft and the palpable corruption of spirit that must have motivated them.MPC was undeserving of the benefit done them with manifest partiality, in evident bad faith and gross negligence.

Altogher that spells the crime of GRAFT and CORRUPTION.

Then there are the utterly ignorant and naive arguments in the Ombudsman's Resolution about SOFTWARE -- generic and customized -- which are actually based on not understanding the difference between CODE and DATA that I however, will have to reserve for another Commentary.


Bokyo said...

Hi Dean,
That is why I don't know what evidence Cong. Locsin is asking. The facts are there with regard to the actions made by Comelec about the bidding. We just have to evaluate if they committed gross inexcusable negligence and bad faith, which I agree with you that they did.

Rizalist said...

Bokyo, I'm surprised at Teddy Boy actually. To me one of the most interesting mysteries that will surely get light shed on it sooner or later, is the true story of how this MPC deal got put together, by whom, how and who really benefited. Like, right now, who's feasting on that one point two billion peso carcass? Who's bought cars, homes, jewelry with that money. I estimate the hardware price of what's been delivered to be about 50 million pesos max. So the profit was really good. Someone's spending it other than those fancy lawyers right? Who?

postigo luna said...

Ok, DJB. I'll bite. Hardware fetched about 500 million. That's what Kilosbayan is insisting on, eh? That's just hardware. Software: All original, all licensed. Security provided by ePLDT, using VeriSign: can't be cheap. Yadda-yadda-yadda. I think we're in the ballpark now. Add to that the profit shares of each consortium member, unless of course you're saying the various corporations in on this project contributed (or should have contributed) their efforts and resources for a song. Now that would be naive.

As for your interpretation of the facts, the Ombudsman tackled this case precisely on the eleements. Nevertheless:

Undisputed facts. - Read the decision again, DJB. The facts weren't undisputed. Actually the disputed facts were of such magnitude and importance that several justices called for remanding the case to the RTC for a proper ventilation of facts.

Evident bad faith - you know for a fact that potential bidders were scared off by the accuracy requirement? that's funny, because there were several offerors and only two qualified - even before the accuracy rating came into play. no one ran away scared.

Manifest partiality - partiality when the standard was applied to BOTH bidders? Come ON!

Gross inexcusable negligence - now you're just grasping at straws. no unwarranted benefit or advantage was given to the winning bidder because the standard was applied equally to both. as for injury. what injury? the machines were proven to be sound (despite your reservations about that call); and the contract was awarded to a superior offer. After all, the other machine on offer couldn't even distinguish between a photocopy and an authentic ballot.

Rizalist said...

Partiality is a principle that the Ombudsman played fast and loose with, and you have followed her lead. It's an old trick of corrupt agencies to have two bidders, so that "impartiality" can be asserted by an application of rules and conditions to both and then saying, as you do, see, we applied these rules to both and neither even complained.

But isn't it obvious that Comelec applied its rules and standards to NEITHER of those two bidders and not BOTH as you claim.

NEITHER passed the original 27-requirement tests, yet both passed that stage.

I think impartiality is a test of fealty to the rules and requirements and their faithful application to all.

You can therefore practice MANIFEST PARTIALITY even if there is only ONE bidder.

Having two bidders was necessary precisely to present the excuse.

If you brake your own rules then you have applied them to NEITHER of the parties. That is NOT impartiality.

This is the line of reasoning of the Ombudsman I shall demolish next because it was here that her most obvious logical shortcomings are to be seen.

Gross Negligence is evident in the PATTERN of ignoring the consequences of various decisions along the way.

For example the excuse that "demo" software (CODE) was used instead of final software because the Comelec was not ready with its DATA is a bald admission that it was not holding up its end of the process. Everyone in the software industry knows that CODE is different than DATA. It was grossly negligent of Comelec not to have been able to test the FINAL code even if the final DATA was not yet available.

That pattern of gross negligence, mismanagement and "customer noncooperation" is a well-known phenomenon that big software vendors are familiar with. That is where a customer does not appreciate HIS responsibilities in making a complex system work.

It is evident to me from the Ombudsmans Report that the Comelec was probably frustrating the software programmers and the technical vendor because it was always NOT ready with stuff it was responsible for and kept putting them off for "later". Another common problem in the industry.

Except they don't call it "gross inexcusable negligence" on the part of the customer, who is always right, of course.

Rizalist said...

Now on the matter of EVIDENT BAD FAITH, as much as I do not know how many potential bidders were scared off by the accuracy rating, neither do YOU know that there were ONE, perhaps even ONE that could have ended up offering a system better and cheaper than that of MPC. I don't know that's true, but neither do you know that it is false. That's the whole point of EVIDENT BAD FAITH. The Comelec did not play by its own rules. Which is exactly what the Suypreme Court said in its decision. Now it is the duty of the Ombudsman to determine only whether the criminal element was present, since it is an undisputed fact, infact it is TESTIFIED to by Jose Tolentino, manager of the Phase II project, that they agreed to 99.995% AFTER the elegibility phase had already, in evident bad faith, eliminated most of the bidders.

Granted they actually eliminated them on the basis of the requirement that there be a track record in a previous election, but THAT does not eliminate the element of EVIDENT BAD FAITH shown in the ACTIONS of Comelec regarding the accuracy rating.

The Ombudsman's Report contains the FACTUAL TESTIMONY that establishes this element of probable cause. That is what I am claiming. It is only her CONCLUSION that is WRONG. And so is yours.

There WAS evident bad faith and the testimony recorded in the OMB Report proves it to the level that CRIMINAL PROSECUTION should begin.

Rizalist said...

If I accept your number of P500 million for the hardware, you will have contributed to the future prosecution of some people for plunder because that is clearly OVERPRICED hardware at P250,000 for each of about 2000 ACMs. A complete PC and printer/scanner system (which is all the OMR-subsystem is) can be had at Virra Mall for P25,000 or IBM at P50,000. Retail. Even assuming a really deluxe vendor and hardware system (which this Korean thing wasn't) say each unit is P100,000 (a dream system). That still leaves an overprice of P300,000,000.00 -- just enough to charge six commissioners and/or conspirators with PLUNDER. Each and together.

There is another point about your claim that the hardware is worth P500 million. Even assuming it is justified, this proportion does not speak well of the project concept, because typically software development costs are anywhere from 5 to 10 times the hardware cost -- even in say the banking industry, where none of this is any mystery whatsoever.

Btw, I am not claiming that this was such a BIG HEIST moneywise, (though 1.3 billion isnt exactly small change).

For me the element of GROSS NEGLIGENCE weighs the most, because no matter how you cut it, Comelec has been a miserable failure at automation. The entire 2.5 billion peso program is a SHIPWRECK disaster.

That's not because of inconvenient Supreme Court decisions that uphold the Law, or missing witnesses that can be used as alibis for not upholding it.

postigo luna said...

A little knowledge is a dangerous thing, DJB. And your three comments contain so many bad suppositions and false assumptions, I'm getting a headache just looking at it. Don't be fooled by all the bad press, DJB.

Anyway, like you said, let's agree to disagree. When the Supreme Court finally comments on this report, there'll be opportunity enough to get back in the trenches.

In the meantime, *Postigo hands DJB a beer*