Corruption in

the military
A DIAGNOSTIC
What is Corruption?

▪ Corruption is most commonly defined as the misuse or

the abuse of public office for private gain (World Bank,
1997)
▪ It can come in various forms and a wide array of illicit
behavior, such as bribery, extortion, fraud, nepotism,
graft, speed money, pilferage, theft, embezzlement,
falsification of records, kickbacks, influence peddling,
and campaign contributions
What is Corruption?
Corruption and Governance

▪ “Good government” plays an important role

in the development process, and “requires
the highest standards of integrity, openness
and transparency”.
Corruption and Governance

▪ The main requisites for good governance include:

1) Political legitimacy for the state through democratic elections and
transfer of power and an effective political opposition and
representative government
2) Accountability and transparency in the sharing of information
3) Separation of powers
4) Effective internal and external audit
5) Effective means of combating corruption and nepotism
6) Competence of public servants
7) Impartial and accessible justice systems; and
8) The absence of arbitrary government power
Corruption and Governance

▪ Corruption and governance lie on a continuum but

occupying opposite poles. Whereas governance,
with its end goal of creating a good government,
aims to serve the interest of the people,
corruption, through the use of public office and
resources, serves the narrow interest of family
and allies.
Corruption and Governance

▪ The survey conducted by the Transparency International finds that

corruption in the public sector takes the same form, whether one
is dealing with a developed or developing country. The areas of
government activities most vulnerable to corruption are:
▪ Public procurement
▪ Rezoning of land
▪ Revenue collection
▪ Government appointments; and
▪ Local government
Corruption and Governance

▪ The methodologies were also observed to be remarkably similar,

such as:
▪ Cronyism, connections, family members and relatives
▪ Political corruption through donations to political campaigns, etc
▪ Kickbacks on government contracts (and subcontracting
consultancies), and
▪ Fraud of all kinds
Corruption and Governance

▪ Typical features of system prone to corruption are:

▪ Concentration of powers in the executive and weak or non-existent
checks and balances
▪ Poor transparency surrounding executive decision combined with
restricted access to information
▪ Elaborate regulatory systems allowing for discretionary decision
making
▪ Weak systems of oversight and enforcement
▪ Soft social control systems/high tolerance for corrupt activities
How does corruption take place?

▪ Klitgaard (1998)

Accountability
Corruption Monopoly of power Discretion
Military corruption occurs in several key areas:

▪ Procurement of non-military equipment and

supplies
▪ Procurement of military equipment, hardware
and defense supplies;
▪ Bloating of servicemen and veterans’ rolls; and
▪ Operation of criminal rackets including gun-
running, smuggling, protection of crime- and
warlords, etc.
Procurement of non-military equipment and
supplies

▪cheap or sub-standard materials

(buildings, houses, bunks, ex. National
Defense College of the Philippines
Building)
▪higher proposed budget on stocks (food,
beverages, batteries)
Procurement of military equipment, hardware and
defense supplies

▪ over-pricing and/or embezzlement of allocated

funds
▪ inflated prices for military supplies to be
purchased and thus the military budget for a
particular year will be larger
▪ defective ammo, firearms, combat boots,
uniforms, tents, inefficient gas for vehicles and
other military equipment
Rear Admiral Wong VS Marines
▪ RAdm Wong alleged the Marines for
irregularities in the procurement of P3.8
million worth of Kevlar helmets. In the
events that followed, the Marines prevailed
and RAdm Wong was stripped of his
command and was ‘promoted’ to an
ambassadorial post.
Bloating of servicemen and veterans’ rolls

▪ corrupt individuals and networks to continuously collect

the pay of ‘ghost’ soldiers and veterans
▪ bloating of servicemen’s rolls is comparatively easier
with militia than with the regular services because of the
irregular character of the forces involved
▪ difficult to verify the accuracy of militia rolls compared to
the list of regular servicemen
▪ conceal the death of veterans so they can continue to
draw their financial benefits
Pabaon System
- refers to the money given to a retiring chief of staff as send-off
money
-former COA auditor Heidi Mendoza testified that she uncovered
irregularities in funds by the military. Among the irregularities she
found was the 200 million peso AFP Inter-Agency Fund, and the$5
million UN reimbursement for Filipino peacekeepers.
▪ Military whistle-blower and retired military budget officer
Lt. Col. George Rabusa, who has a plunder suit in the
Sandiganbayan, exposed the alleged pabaon or send-off
system in the military, which gives at least PHP50 million
to retiring chiefs of staff of the AFP. Former AFP chiefs of
staff Carlos Garcia , Angelo Reyes , Diomedio Villanueva
and Roy Cimatu were said to be given send-off money.
The payoffs, done monthly, were also given to vice,
deputy and secretary to the joint chiefs of staff. Rabusa
also admitted that he pocketed PHP50 million when he
was still a budget officer from 2000 to 2002, and that
wives of the generals were also given money.
Orly Mercado on “esprit de corps”
▪ Former Defense Secretary Orly Mercado Stated that the s
ource of the culture of corruption that has tarnished the ar
med forces. He stated that “the concept of esprit de corps
has been misinterpreted and misused in the military” “it is
useful in the battlefield however there should be no place
for esprit de corps on the issue of graft and corruption”.
▪ Mercado initiated the investigation of the AFP Retirement
and Separations Benefits System (RSBS) during his investi
gation deduced that the officials involved where all memb
ers of PMA class of 1962.
▪ His investigation has also discovered that the PVAO has been
paying “ghost veterans” which was proven when he found checks
that were being written to a “living” 106 year old veteran who
fought in the Filipino-Spanish war.
▪ He stated that the DND has no control of the funds of the AFP. The
only time he can meddle with their funds if they were to make a
single purchase of more than P50 million however anything lower
than that is under the discretion of the AFP chief of staff. He also
said there’s a need for transparency for whenever he request for
the breakdown of expenses the military has always used “National
Security” as an excuse to not disclose their expenditures.
▪ DND has no control of the funds of the AFP. The only time
one can meddle with their funds if they were to make a
single purchase of more than P50 million however
anything lower than that is under the discretion of the
AFP chief of staff. There’s a need for transparency for
whenever one request for the breakdown of expenses the
military has always used “National Security” as an excuse
to not disclose their expenditures.
Operation of criminal rackets including gun-running,
smuggling, protection of crime- and warlords, etc.

Unsolved murder of Ensign Philip Pestaño

▪ Pestaño discovered that a cargo being loaded
onto his vessel included logs that were cut down
illegally, were carried to the ship illegally, and
were destined to be sold, illegally. Then there
were 50 sacks shabu that is worth billions. And
there were military weapons which were destined
for sale to the Abu Sayyaf. He did not approve the
cargo. He was found dead in his stateroom. The
Navy ruled his death a suicide.
Combat Operations
▪ intentional loss of equipment and supplies with the
eventual intent of selling the same for private profit. It is
also difficult to audit how much ammunition was
expended during a military operation. So corrupt
commanders can report that they used so much ammo
and lost so much firearms and equipment but the actual
ammo expenditure is actually so much less and no
firearms and equipment were actually lost. The
differential is embezzled and sold even to warlords and
the guerillas themselves for private gain.
Actions and Resolutions

LEGAL MEASURES
▪ The 1987 Philippine Constitution
▪ Republic Act No. 3019 also known as the Anti-Graft and Corrupt
Practices Act of 1960
▪ Executive Order No. 292 or the Administrative Code of 1987
▪ Republic Act No. 6713 also known as the Code of Conduct and
Ethical Standards for Public Officials and Employees of 1989
▪ Republic Act No. 6770 also known as the Ombudsman Act of
1989
Actions and Resolutions

▪ Republic Act No. 7055 also known as An Act Strengthening Civilian

Supremacy over the Military
▪ Republic Act No. 7080 also known as the Act Defining and
Penalizing the Crime of Plunder
▪ Republic Act No. 8249 also known as the Act Further Defining the
Jurisdiction of the Sandiganbayan
▪ Presidential Decree No. 46
▪ Presidential Decree No. 677
▪ Presidential Decree No. 749
Actions and Resolutions

CONSTITUTIONAL ANTI-CORRUPTION BODIES

▪ The Office of the Ombudsman (OMB)
▪ The Civil Service Commission (CSC)
▪ The Commission on Audit (COA)
▪ The Sandiganbayan
Actions and Resolutions

OTHER GOVERNMENT ANTI-CORRUPTION BODIES

▪ Department of Justice (DOJ)
▪ National Bureau of Investigation (NBI) and the Philippine National
Police (PNP)
▪ Presidential Commission on Good Government (PCGG)
▪ Presidential Commission against Graft and Corruption
▪ Inter-Agency Anti-Graft Coordinating Council
Recommendation

▪ Create policies for greater deliberation and transparency when it

comes to the military’s expenses
▪ Increase the reach and powers of the Commission on Audit and
Sandiganbayan
▪ Frequently change the members of the Bids and Awards
Committee
▪ Impose stiffer penalties on cases of graft and corruption
▪ Loosen the criteria that qualify undesirable actions as crimes
Recommendation

▪ A strong Freedom of Information Act

▪ Constitutional Reform
▪ Protection to the truth tellers
▪ Cultural and Behavioral Change
References

▪ Balana, C. (February 11, 2011) misplaced esprit de corps blamed for

corruption in the AFP, Philippine Daily Inquirer.
▪ Mendoza, B. (2011, January 11). Corruption in the Philippine military |
bong mendoza's blog. Retrieved from
https://bongmendoza.wordpress.com/2011/01/07/corruption-in-the-
philippine-military/
▪ Meruenas, M. (2013, April 17). Ex-AFP budget officer Rabusa eyes SC
help in case vs. 'pabaon' generals | News | GMA News Online. Retrieved
from
http://www.gmanetwork.com/news/story/304270/news/nation/ex-afp-
budget-officer-rabusaeyes-sc-help-in-case-vs-pabaon-generals
▪ Philippine Center on Transnational Crime. (n.d.). PCTC paper on graft and
corruption. Retrieved from http://www.pctc.gov.ph/papers/graft.htm