Thursday, October 28, 2004

Cover-up in the Military

By: Raphael Martin/Glenda M. Gloria,
Contributing Writer/Managing Editor
Newsbreak (October 28, 2004)

This is the sad story of how military generals protect their own, and why.

As early as January 2004, the Armed Forces leadership got wind of reports that about US$100,000 being taken to the US in December 2003 by a son of Maj. Gen. Carlos F. Garcia had been intercepted at an American airport for being undeclared. The military leadership did not lift a finger to verify the reports, much less investigate the elder Garcia.

In March, claiming he had no hard evidence to prove the “rumors,” Gen. Narciso Abaya, Armed Forces of the Philippines (AFP) chief of staff, chose an easy way out of the mess: he transferred Garcia from the lucrative position of J6 (AFP deputy chief of staff for comptrollership) to J5 (AFP deputy chief of staff for plans and programs), which has the lowest budgets of all the J-staff offices in Camp Aguinaldo.

Over dinner in early August with NEWSBREAK, after we wrote a blind item on the US airport incident, Abaya disclosed that he had been “hearing things” about Garcia, thus his decision to move him to J5. “At least, walang pera doon (There’s no money in that office),” he explained.

The transfer didn’t sit well with some officers.

From March to June, the recalcitrant Army Col. Ricardo “Dick” Morales—one of the presidential guards of former President Ferdinand Marcos who joined the rebel movement that staged a coup against him in 1986—pestered Abaya with text messages asking him two questions: first, if the reports about Garcia’s son were true; second, what the AFP leadership intended to do about it. Abaya himself had told NEWSBREAK that “Morales has been busy texting me about Garcia.”

By July, feeling nothing was being done about it, Morales decided to write Abaya. In his July 15 letter, Morales told the AFP chief that as far as he knew, the US had already relayed the information to the Intelligence Service of the AFP (Isafp). It was the talk in military camps. While he didn’t want to prejudge Garcia, Morales told Abaya, the comptroller had to come clean for the sake of the institution.

Morales also asked Abaya if Garcia’s transfer to J5 had something to do with the US incident. Morales thought: Is Abaya now sending signals to the AFP that the J5, which attracts the strategists and good writers in the military, is a lounging area for the corrupt?

Abaya called up Morales and ordered him to bring his complaint to the AFP Office of Ethical Standards and Public Accountability (OESPA), the unit tasked to look into complaints against soldiers. Morales did, only to be asked by an OESPA officer for advice on how they should proceed from that information. The head of the OESPA, Vice Admiral Ariston de los Reyes Jr., who was Garcia’s classmate in the Philippine Military Academy (PMA), did not deem it necessary to inhibit himself from the case.

“We did not know who among the US authorities we were supposed to deal with regarding the incident. The information from the letter only said so much,” De los Reyes told NEWSBREAK. The AFP was satisfied with Garcia’s August 2 letter to Abaya explaining that the money had come from loans from friends and relatives.
If the military bosses wanted to probe Garcia’s dollar possessions and other assets in the US, they would have gotten results—easily.

The Philippine military is the staunchest ally of the US in the region, and Abaya, a West Point graduate, has extensive personal and official networks with American authorities. The Philippine-US Joint Defense Assessment has been in place since last year, a mechanism that allows officials from the Pentagon and the US Pacific Command to assist the military on key reform areas.

One phone call by Abaya would have led to a discreet probe of Garcia’s properties in the US and an accounting of how much his family had carried through US airports in the last few years.

Internally, the chief of staff enjoys the power of moral suasion over his peers. Abaya, even if he is chair of the board of the AFP Savings and Loans Association Inc. (AFPSLAI) where Garcia has millions in deposits, could not poke into the transactions since the bank is covered by Central Bank rules. But through informal channels, the chief of staff can get information from the bank, which is run by retired military officers.

Abaya, however, told a House hearing that he needed time to gather evidence against Garcia and that “we were already overtaken” by the Ombudsman’s actions.

Two things stopped the AFP high command from investigating Garcia: the unchecked, antiquated procurement and disbursement system in the AFP and the culture that pervades among men in uniform.
It doesn’t help that the defense secretary, lawyer Avelino Cruz, is new on the job. While many favor the appointment of a civilian to the helm of the defense department, Cruz has a handicap at this crucial time: he barely knows the complex organization to be able to crack the whip on it.

“He has to fight tooth and nail to change the culture [in the military],” said Orlando Mercado, the first civilian defense secretary in the post-Marcos era.

Lucky General

Until his questionable wealth was exposed, Garcia had the best of both worlds. He belonged to two powerful cliques in the Armed Forces: the class of 1971 of the PMA, which includes Abaya (who graduated on the same year from West Point but is included in the PMA Alumni Registry as a member of the class) and the so-called comptroller family, a tight, exclusive bloc of military officers who corner appointments to comptrollership positions. If one is to find another explanation for this stroke of luck, Garcia, like Abaya, is an Ilocano.

Until last year, Garcia was class president of the Class 1971 alumni. A PMA classmate describes him as a “very generous” officer.

No senior officer of the AFP in recent history has been punished for corruption or incompetence in the battlefield. At the most, they are transferred to remote provinces, put on a “floating” status, or, like Garcia, named to a low-budget unit.

Two senior generals had been investigated and charged with corruption in high-profile cases—but only after they had retired. They were former AFP chief of staff Gen. Lisandro Abadia and his PMA classmate (1962), retired Brig. Gen. Jose Ramiscal Jr.

Abadia was former comptroller of the Army (G-6) while Ramiscal was former J6. Ramiscal is facing 24 graft cases and 148 counts of estafa before the Sandiganbayan for allegedly mismanaging the AFP Retirement and Separation Benefits System (RSBS). A similar graft case was recommended by the Senate against Abadia, and this is still pending with the Ombudsman. Both men were charged by civilian agencies.

In January 2002, the AFP investigated four Army and Air Force officers for their involvement in selling duty-free goods in the black market in East Timor, where they were assigned as part of the United Nations peacekeeping force. The case was so embarrassing to the country that the military leadership threatened to dismiss them from service. Today, the alleged leader of the black market group, Army Col. Allan Bontuyan, is the deputy commander of an Army task force based in northern Mindanao. The military had cleared him.
Garcia undoubtedly knew the military culture well enough to get reckless in the last two years before his scheduled retirement in November 18 this year.

In 2002 alone, immigration records showed that he made a dozen trips abroad—Europe, US, Singapore, Hong Kong—even if his work didn’t require him to do so. The same records obtained by NEWSBREAK showed that the general made seven trips abroad in 2003, including a trip to Europe in early December with his wife, a military aide, and the latter’s wife. After that European trip, Garcia went to the US on Dec. 29, 2003. Between the Europe and US trip was the incident of December 19, when his son was apprehended at the San Francisco airport for failing to declare $100,000. The son was traveling with his younger brother.

It was in 2002, a year after his appointment to J6, that Garcia’s bank deposits and properties rose. That year, his deposits in AFPSLAI reached P7 million. In 2003, he took $200,000 to the US as downpayment for two posh condominium units in New York. From January to March this year, he made three outward dollar transmittals amounting to P27 million.

Estimates show he must have brought P71 million to the US from 1993 to last year, enough to buy 71,000 pairs of boots for soldiers or provide a one-year meal allowance to 6,500 troops.

Marcelo’s shock

Unfortunately for Garcia, Ombudsman Simeon Marcelo has been busy training his field investigators and prosecutors. Bogged down by a meager budget when he was appointed to the post in 2001, Marcelo had to tap grant money to help him improve the work of his staff. Among the aid agencies that have been funding Marcelo’s training programs is the US government’s aid agency that has been working in the Philippines for a long time now—the USAID.

Early this year, upon Marcelo’s request, Usaid brought officials from the US Customs and the Federal Bureau of Investigation to give a lecture to Ombudsman investigators. That’s when Marcelo personally met with officials of these agencies, who have since kept in touch with him. And that’s why Marcelo got to pin down Garcia—not because of some US conspiracy, as raised by Sen. Juan Ponce Enrile and other sectors, to pressure the Arroyo government to be tougher on terrorists.

During an October 9 forum sponsored by the Presidential Management Staff in MalacaƱang, Marcelo talked about the Garcia affair, which he described as “tsamba” (luck) for his office. “When these US Customs officials were here, they mentioned to me over dinner that they have anti-corruption officials who monitor movement of assets such as in the airports,” Marcelo recalled. “So I told them that since I am investigating officials from the Customs, Department of Public Works and Highways (DPWH), and Bureau of Internal Revenue, perhaps they should help me.” The three agencies are perceived to be the most corrupt. Marcelo asked the Americans to inform him of any suspicious entry of money to the US from the Philippines in the last 12 months, hoping this could yield familiar names from these agencies.

“To my shock and surprise, on September 14 they transmitted to me a list of the amount that General Garcia has brought to the US,” Marcelo said. “It was manna from heaven.”

Garcia’s case has somehow upset the Ombudsman’s timetable. For this year and the next, he has been training his guns on the top three agencies. “My timetable for the military was 2006 yet…but the case is already here and I can’t turn my back on it.”

The military was reluctant at first to give the Ombudsman all the records pertaining to Garcia, Marcelo disclosed. He got all the data he needed by issuing the AFP a subpoena. On September 28, finding a prima facie case against Garcia, Marcelo ordered him suspended for six months without pay.

When the news broke, Abaya could not even persuade Garcia to present himself to the media. The AFP initially refused to produce an official photograph of the man; the media had to rely on a charcoal portrait displayed in his office. Yet, when the military exposed some of its officers for allegedly campaigning for the opposition in the last elections, military officials not only identified them, they immediately had them grounded and recalled to headquarters.

The high command waited almost two weeks after Garcia’s suspension before filing court-martial proceedings against him, and only after the President ordered them to do so. A court-martial case gives the military immediate and total custody of an accused. The delay allowed Garcia to leave his quarters, withdraw P19 million from AFPSLAI, and plot his defense.

‘Comptroller Mafia’

How could Garcia have enriched himself so fast? And why is the military afraid to touch him?

It’s not quite accurate to say that Garcia is a mere sacrificial lamb in this sordid affair. As J6 from March 2001 to September this year, Garcia was a power center all by himself. Officers from captains to generals went to him if they needed approval for more allocation for their units, allowance for their travels, or money for social activities, like Christmas parties.

Besides, Garcia was secure as a member of the comptroller family—an elite bloc of former and current military comptrollers in the AFP and its major service commands. Among the former chiefs of staff who belong to the comptroller family are Abadia and retired general Roy Cimatu.

Officers interviewed by NEWSBREAK call them “the comptroller mafia.” As such, they follow a certain career path that assures them the comptroller post most of the time in their careers, according to a former Army chief. They usually treat combat assignments as mere requirements; they know that they will always land in a comptroller job after months in the battlefield.

In most cases, a comptroller who is scheduled to retire or assigned to the field will make sure that it is officers from the “family” who will replace him, the same source says.

The AFP has a comptroller eligibility list, a short list of military officers qualified to be comptrollers. “Once you’re there, you become associated with the mafia one way or the other,” says an Air Force general. Garcia didn’t spend much time with the comptroller family before he became J6; he used to be logistics officer of the Army (June 1992 to November 1993). However, he began his career in the military as a comptroller for the 51st engineering brigade in the 1970s.

The Army’s engineering brigade is another unit that deserves scrutiny. Garcia spent at least nine years there. Because it does road projects for the national and local governments, the brigade gets its resources not only from the AFP but from the national government as well. It is a beneficiary of pork barrel funds from lawmakers. Ideally, the brigade should just do work for military purposes; some officers say that its mission should be reassessed.

Garcia was the Army’s chief of engineers when he was promoted to J6 in March 2001, shortly after Edsa 2. Gen. Diomedio Villanueva, the chief of staff at the time, told NEWSBREAK that Garcia’s appointment “was already approved by MalacaƱang” when he took over as AFP boss.

Garcia’s predecessor was Jacinto Ligot, now a retired major general and a known close associate of Angelo Reyes, whom Villanueva replaced as AFP chief and who is now interior and local government secretary. Ligot owns a unit in the posh Essensa Towers in Makati City, says a former defense official.

“They take care of each other,” says the official. When comptrollers are required to take field assignments, chances are they will succeed in these command posts because of financial support from the “comptroller family.” The official adds: “They never fail in the field because bubuhusan sila ng pera ng mga kasama nilang comptroller.”

The source cites the case of former AFP budget officer Army Col. George Rabusa, who is now with the Central Command (Cencom) in the Visayas but who was investigated by the Ombudsman for unexplained wealth in 2002. To take the heat off Rabusa, his superiors sent him to Cencom, which was then commanded by Ligot, his former boss at J6.

The new J6 who replaced Garcia is Brig. Gen. Antonio L. Romero, who also once served as deputy J6.

Arroyo’s flawed style

Garcia is the only J6 to have served five AFP chiefs of staff. Blame this on President Arroyo’s preference during her first term for appointing favorite generals to the top AFP post even if they were to retire in a few months. This somehow ensured Garcia’s tenure because no short-term chief of staff would dare replace his budget adviser.

“I saw no need to replace him when I assumed office,” retired AFP chief Gen. Dionisio Santiago admitted. “Why should I when I would be serving for only four months?” Even if he served for only four months (November 2002 to April 2003), Santiago claimed he was able to finish 14 building projects—and Garcia, he said, made sure all these were amply funded. Aside from Villanueva and Santiago, the other chiefs of staff served by Garcia were: Cimatu (May 2002 to September 2002), Benjamin Defensor (September 2002 to November 2002), and Abaya (April 2003 to November 2004).

Overlooked by Abaya was one of the recommendations last year by the Feliciano Commission that investigated the causes of the July 2003 Oakwood mutiny: for junior and senior comptrollers in the AFP to serve only for two years at the most in their posts.

A former comptroller told NEWSBREAK that it was unwise for the leadership to keep an officer as comptroller until his retirement. “You don’t retire a comptroller at his post because if he turns out to be a bad choice and an abusive one, then you are courting trouble,” he said. He laments that their work has been tainted by abusive officers. “We tried in the past to establish criteria on who can be comptrollers…that it should not be just anyone else…unfortunately, such has been set aside.”

Prized post

Comptrollership used to be a mere technical job.

In the 1970s and ’80s, PMAers looked down on this work so that only the non-PMAers and commissioned officers applied for the post. The prestigious staff positions then were intelligence and operations.

Now it’s the other way around: military classes for comptrollership sometimes have to shut off officers seeking to attend advanced courses for this work. Enrolment in intelligence courses, on the other hand, is thinning.

In the past, commanders and J-staff officers had control of their allocations, but the J6 has emerged as the central clearing house for all AFP money. All the J-staff and major commands now pass their request for allocation to the J6, which has the final say.

Comptrollers in all levels in the AFP (down to the battalions) are the chief financial advisers of commanders on how their budgets may be used. The J6 is the principal financial adviser of the chief of staff. He controls the disbursement of funds in the whole AFP and determines who receives how much. The J6 has the power to evaluate the mission accomplishment reports of these units and determine if they deserve the resources they are getting.

Said the Feliciano Commission in its 2003 report: “Not surprisingly, a commander tends to follow the comptroller’s advice on how [an allotment advice] can be utilized to generate cash or supplies.”
It is the J6 who drafts and presents the AFP budget to Congress for approval. Three officers say the J6 can “to a certain extent” hold the chief of staff hostage because of the special “skills” that he possesses and the dependence of the chief of staff on quick money for operations.

Thus, Garcia was not being forthright when he told a House hearing that his duty as J6 was “simply ministerial.”


Still, these powers don’t mean much when one is dealing with a fixed budget that is subject to audit.

But the AFP has institutionalized a “creative” way of converting its allocation to cash with fake receipts from dealers and suppliers with connivance among commanders, comptrollers, and logistics officers. In this system of conversion, the AFP can, for example, request equipment from a certain supplier, who gives receipts for non-existent supplies. The request is approved and converted to cash, but the money goes to operations or to the pockets of commanders. Conniving suppliers get a share as well.

The AFP had to resort to conversion in the 1970s to skirt a very circuitous procurement and disbursement process not suitable for an organization fighting a war. Now, the AFP procurement process has two categories: actual procurement and procurement for “constructive purposes (conversion).” And the AFP has two kinds of dealers and suppliers: the legitimate ones and those who are used for conversion purposes only.
The J6’s operating arm, the headquarters comptroller, does the duty of “converting” the budget for use by units, says former Army Capt. Rene Jarque. This is where generals “convert” their budget for allowances, he adds.

Also, by juggling the allocation for the AFP (its budget this year is P50 billion), the J6 can approve requests for allocation that in reality may go to those who have the power to poke into AFP affairs: lawmakers and the Commission on Audit. At least one congressman who has been quite noisy over the Garcia controversy has benefited from J6 largesse because he controls some of the AFP dealers and suppliers in the “conversion” category, according to two senior officers.

And when an AFP chief retires, it’s SOP for the J6 to prepare a “pabaon” or going-away gift for him, amounting to millions of pesos.

The comptroller is also overall in charge of allocating “defense support fund,” a euphemism for a slush fund. It’s an internal illicit arrangement whereby generals are given monthly allowances of at least P50,000 that are given through operating units and don’t appear in their payrolls.

All this seemed routine for Garcia. Until the heavens fell on him.

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