Winning candidates defy law

from NAMFREL Election Monitor Vol.2, No.16

The Philippine Center for Investigative Journalism (PCIJ) came out this week with an in-depth report on the nonsubmission to the Comelec by candidates in the May 2010 elections of Statements of Election Contributions and Expenditures (SECEs), as required by law. "If laws on campaign finance were enforced to the letter, (many winning candidates) should not be occupying their seats right now," says PCIJ.
According to Section 14 of Republic Act No. 7166 (An Act Providing for Synchronized National and Local Elections and for Electoral Reforms):
"Statement of Contributions and Expenditures: Effect of Failure to File Statement. - Every candidate and treasurer of the political party shall, within thirty (30) days after the day of the election, file in duplicate with the offices of the Commission the full, true and itemized statement of all contributions and expenditures in connection with the election.

No person elected to any public offices shall enter upon the duties of his office until he has filed the statement of contributions and expenditures herein required.

The same prohibition shall apply if the political party which nominated the winning candidate fails to file the statement required herein within the period prescribed by this Act."
According to the report, the Commission on Elections (Comelec) has identified one presidential candidate and one vicepresidential
candidate, nine senatorial candidates, 36 party-list groups and 70 political parties as having failed to submit their SECEs. The list doesn't include yet those who ran for local positions; the roster of names of local candidates, according to the report, runs 457 pages.

Some of the parties and candidates highlighted in the report as having not complied with the law are:
United Opposition (UNO) Party that supported Vice President Binay during his campaign - have not submitted their
SECE, though Binay submitted his already in June 2010; UNO was one of two registered political parties that
nominated Binay, but there is contention whether UNO participated during the campaign, hence the non-submission of a SECE
Partido ng Masang Pilipino (PMP) - though candidates it fielded -- like Senators Enrile and Estrada -- have
already submitted their individual SECEs, the party has not
Kilusang Bagong Lipunan (KBL) - the party claims that the Comelec never required it to submit an SECE because the poll body considers KBL as a "penniless" party
Bangon Pilipinas of presidential candidate Bro. Eddie Villanueva - the party submitted an SECE that covered
contributions received by all its candidates, but did not identify the amount received per candidate, which is
required by law
However, a good portion of the PCIJ report focused on the excess campaign contributions received by President Aquino, and what was done with the money, per Malacañang. According to the report, President Aquino had nearly Php 37 million in excess campaign funds. Though the PCIJ hailed Aquino's filing of his SECE and disclosing the amount -- "a unitary exemplary act that all other candidates for national office in the May 2010 elections failed to emulate" -- it also said that Aquino "has not followed it up with a full disclosure of what he did with the money." The report said the amount was initially earmarked for donation to charity, as advised by his fund-raisers, but this did not happen. Instead, according to Malacañang:

“Out of the Php 36,930,018.19 (excess campaign donations), Php18,356,859.88 was remitted to the Bureau
of Internal Revenue (BIR) representing 5% creditable withholding income tax on election related purchases"
“The campaign also spent around Php 4,000,000.00 for the printing of sample ballots that were distributed
nationwide before the elections. This expenditure was not included in the SECE because under Section 101(k)
of the Omnibus Election Code, the cost of printing sample ballots shall not be taken into account in determining
the amount of expenditures which a candidate may lawfully incur in connection with his candidacy.”
“The rest of the excess campaign funds were actually returned to some of the donors who made substantial
contributions to the campaign.” Malacañang provided a list containing the names of three donors to whom a
portion of their contribution was returned.

In its report, the PCIJ raises concern regarding the computation as well as the legal basis for the amount Malacañang claimed was turned over to the BIR. It also highlights in the report the question of which donor should any excess contributions be returned to, which means that the income tax return of Aquino and of said contributors for the election year would have to be amended. The PCIJ also says that one of the contributors have not received the amount that Malacañang said was returned. "The implications are bad: It’s either Aquino
had under-reported his expenses in his Comelec report, or he had under-declared the withholding tax he remitted to the BIR," the PCIJ report reads.

The report comes in the thick of controversy surrounding the investigations on anomalous disbursement of intelligence funds of the Philippine Charity Sweepstakes (PCSO) during the Arroyo administration; records show that the amount of intelligence funds held by PCSO nearly doubled in 2010, an election year, from Php 90 million from the previous year to Php 160 million. It is suspected that money from PCSO, as well as other government agencies like PhilHealth, was used by the former administration for election campaign. The money from PCSO was also reportedly used in buying expensive vehicles given to Catholic bishops who were perceived to be close to former President Arroyo.

The PCIJ report highlights the need to take seriously the stipulations of the law with regard campaign expenditures; the need to have a clarification as to what exactly has to be done with excess campaign contributions instead of being treated or viewed as income; and for the government, specifically the Comelec, to have the teeth to go after violators. The Comelec's new Campaign Finance Steering Committee has their work cut out for them.

Read the PCIJ report.
Part 1: http://bit.ly/mUDOHh
Part 2: http://bit.ly/osRPlX