Friday, January 29, 2010

Big business and trapos

is the familiar word Filipinos have come to use in describing the country’s traditional politicians. Literally translated from Spanish, trapo means “dishrag,” quite an appropriate term for our local politicians, who, by any stretch of imagination, are perceived to be corrupt.

Today, our understanding of trapo has very little to do with being traditional but more with being dirty and immoral. A twist of irony because to be traditional originally meant to stick to one’s moral standards.

We are in effect conducting a useless and expensive democratic exercise in electing trapos to office. The enormous amount of money spent in electing trapos could have been better put to use on social and economic programs that the people direly need.

Candidates for president and vice-president in the Philippines are allowed by law to spend 10 pesos per registered voter. Assuming there are 5o million registered voters, this is 50 million pesos per candidate, or roughly $1 million (U.S.) each candidate. Add a counterpart fund of 5 pesos per voter that a political party can spend, or a total of approximately $1.5 million for one candidate. And this is just scratching the surface. If we add cheating expenses incurred during the actual election and counting of votes, the total cost could reach about 5 billion pesos (approximately $1oo million U.S.) per presidential candidate, an amount estimated by Senator Manuel Villar, a presidential aspirant, in an interview in October 2009. While this figure is way beyond the allowable expenditure limits, every candidate knows how to avoid the law governing election finance because there is no effective enforcement of said election laws.

Reality Show: Only the rich can be elected

The real issue is not so much about election spending and regulating campaign financing but the fact only the rich can be elected to public office in the Philippines. This is true from the beginning of time, more than one hundred years before the National Assembly created by the revolutionary Malolos Republic in 1898 and to the democratic institutions ushered in thereafter by the American colonial regime.

While democracy was introduced in the Philippines under American tutelage, it was a dysfunctional democracy in many ways. The Americans nurtured a legacy of patronage-based politics that relied on public funds that passed through the hands of national legislators. They also ensured the perpetration of an elite political system that excluded the masses, a continuation of an oligarchy for the benefit of the landlord class. Even though the electorate had expanded to include non-elites in subsequent decades, a national oligarchy has been so well entrenched to maintain control of the political system until now. So those who have the financial resources or their anointed representatives are elected many times over to the detriment of the ordinary citizen’s political engagement in governance and decision-making.

No matter what electoral reforms like campaign financing or expenditure limits are adopted, only the rich and their chosen delegates will always be elected to power. There is truism in the words of a great American Republican kingmaker who said in the late 19th century: “There are two things that are important in politics. The first thing is money, and I can’t remember what the second one is.”

U.S. Supreme Court backs big business spending

The idea that money talks in politics is recently reinforced by the latest decision of the United States’ Supreme Court which struck down the longstanding ban against corporate financing during political campaigns. In short, American corporations, according to this decision, are free to spend as much as they want to elect and defeat candidates during elections. With this ruling, the U.S. Supreme Court has dealt a big blow to democracy and plunged the country to the robber baron era of the 19th century.

The U.S. Supreme Court likened corporations to people and are therefore entitled to the same First Amendment rights, i.e., that artificial legal constructs (corporations are creations of the state to make money) have the same right to spend money on politics as ordinary Americans have, to speak out in support of their political candidates.

What is disturbing in the U.S. court’s decision is the majority’s claim that, unlike contributions, which are still prohibited, independent expenditures by corporations “do not give rise to corruption or the appearance of corruption.” This has led a major U.S. newspaper to react in its editorial: “If Wall Street bankers told members of Congress that they would spend millions of dollars to defeat anyone who opposed their bailout, and then did so, it would certainly look corrupt.”

Reacting to the shameless judicial overreaching by the Supreme Court, U.S. President Barack Obama called the decision a “major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.”

‘Legitimate’ money and ‘grey’ money

Regardless of what Philippine election laws say about election financing, there are two categories of funding sources for Filipino politicians: “legitimate” money and “grey” money. The big contributors to “legitimate” money are businesses, especially Chinese businessmen who are considered more politically vulnerable and prone to use cash to curry certain favours and business advantages.

“Grey” money, on the other hand, comes from operators of illegal economic activities, gambling, smuggling, prostitution and drugs.

In addition, the ruling party has also the distinct advantage of tapping government resources to ensure that their anointed candidates win. Despite legal prohibitions, the party in power has the unlimited resources of government and its machinery to help their candidates. The ruling party is in a powerful position to secure contributions from business sources because of the party’s control of government contracts, licenses and other favours.

Election a contest of promises

It is therefore much clearer for corporations and businesses to corrupt the political process in the Philippines. Businessmen and corporations place bets on candidates with the greatest chances of winning so they can recover their investment once these candidates are elected. This is why they prefer the trapo to win rather than throw support on some odd crusader for good and honest government.

While some Americans may find it difficult to see the effects of stricter campaign finance rules in reducing corruption in government, which the majority of the U.S. Supreme Court justices also failed to comprehend, businesses and corporations in the Philippines, however, determine the ultimate electoral outcome by the sheer power of their money. Just like American corporations and their lobbyists in the U.S. Congress, big Filipino business corporations also shower large contributions on politicians because they want to gain access to government decision-making and shaping of policy. They would not spend the money if they get nothing in return.

Tighter restrictions on campaign money are obviously important in curbing corruption, and this is not an academic issue. At the same time, they can also level the playing field between the haves and have-nots.

But this is not going to happen in the Philippines. For as long as the culture of patronage pervades our political life, elections will always be nothing more but contests to determine who can give more and promise more.

Replacing our dysfunctional political system with one that will result in greater democratization represents a daunting challenge. This struggle for a new form of governance, however, cannot be accomplished by merely joining a moral crusade against the evils of traditional politics.

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