Aquino & Villar: Conflict of interest

Posted: March 23, 2010 in 2010 elections, Cojuangcos, Cory Aquino, GMA, Hacienda Luisita, Makati Business Club, Manny Villar, Noynoy Aquino, Philippine politics

A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other.

The top two contenders for the presidency, Noynoy Aquino and Manny Villar (obviously in alphabetical order) must deal with ‘conflict of interest’ issues as the electoral campaign enters its most interesting stage.

For Noynoy, it is the Hacienda Luisita issue.  In this case, he has to navigate between the interests of the Cojuangco clan and the estate’s farmers and their dependents.  Tita Cory had managed to parry demands to honor her campaign promises regarding land reform by passing the buck to an eventually landlord-dominated legislature.  But not before issuing two orders outlining her reform program that included stock distribution options (SDO), a mode that did not involve the actual transfer of land ownership to farmers.  The option allows landowners to give farmers shares of stock in a corporation instead of land.  In effect, the Cojuangcos apparently took advantage of the powers of the Cory presidency to retain control of the estate.

Noynoy must face the tough questions regarding the estate’s future disposition given that the GMA government has revoked the SDO and ordered the distribution of land to the farmers.  While the Cojuangcos obtained a temporary restraining order (TRO) against the government order in 2006 (meaning, the TRO is in force for  more than three years to date), Noynoy (at the start of his presidential campaign) has recognized the sensitivity of the issue and had promised that the land will be distributed by 2014.  He was later embarrassed by his cousin (recently interviewed by New York Times; for the full story, read it at <http://www.nytimes.com/2010/03/15/world/asia/15phils.html&gt;), who manages the estate,  that the family did not have any intention to give the land or sugar production.

Ultimately, Noynoy must convince the electorate that if he wins the presidency, he will not use the same to frustrate distribution of land to Luisita’s farmers, the original premise of the loan extended by government to the Cojuangcos to purchase the estate.

In Villar’s case, he has yet to respond to published reports in the Philippine Daily Inquirer (Jerry Esplanada, ‘The Villar Empire: Dream homes on farmlands’, July 24, 1998)  that conversion of many of his land-holdings from agricultural to residential use was made without the proper clearances from the Department of Agrarian Reform (DAR).

Premature or illegal conversion is a criminal act as mandated under the Comprehensive Agrarian Reform Law and the Agriculture and Fisheries Modernization Act.   Administrative sanctions are also spelled out in DAR Administrative Order No. 7 (Series of 1997) which states that petitions for conversion covering lands which have been prematurely converted shall be disapproved and the subject lands automatically placed under CARP coverage.

It is quite apparent that the two front runners have land issues.

The major business groups represented in the Makati Business Club are apparently not enamored with a Villar presidency presumably because of conflict of interest considerations.  Villar’s latest political ads had him explaining that he will not steal (magnanakaw) while in office because if he wanted to make more money, he would have remained being a businessman.  He also said that he was spending his own money for his political campaign, implying that was good since he will not owe anybody any big favor that must be repaid upon his election.

For businessmen engaged in the same line as Villar’s businesses, these words are not reassuring.  First, they must be convinced that Villar (and his relations up to the fourth degree of affinity or consanguinity) truly divest their corporate interests or at least put them in a blind trust to mitigate COI concerns.

In addition, there’s another angle to one’s spending one’s own money to win an election.  If Villar does not owe anybody but himself for his victory, what is to stop him from using his position not only to recoup his electoral expenses but to enrich himself and his relations further while in office?

Aquino and Villar (and all other candidates for high office) will do the electorate a favor by a public and full disclosure of their assets and liabilities as soon as possible.  I believe in fact that both are legally obligated to do so since they are incumbent senators.

I wish the electoral debate can touch and shed light on these COI issues.  I will discuss other important concerns in future blogs.

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