Then President Fidel V. Ramos ordered in the 1990s the award to two losing bidders of a contract to lease online lotto technology to the Philippine Charity Sweepstakes Office (PCSO) for the Visayas and Mindanao.
Ramos’ role in the costly, long-running deals with the suppliers of online lotto hardware and software on Tuesday came to light at the Senate inquiry into the alleged misuse of PCSO funds.
Manuel Morato, the PCSO chair at the time, told the Senate blue ribbon committee that Ramos had given instructions to split the contract between the winning bidder, Philippine Gaming Management Corp. (PGMC), and the losing bidders, G Tech and Tanjong.
Under the deal, instead of leasing systems to PCSO lotto outlets nationwide, PGMC would focus only on Luzon while Pacific Online Systems Corp., formed by the losing bidders, would handle the Visayas and Mindanao.
“Your honor, the PCSO is under the Office of the President. And I was given instructions that the country must be divided into two suppliers,” Morato told the committee.
Corona, Carpio
Morato said Ramos, through then two presidential counsels, now Chief Justice Renato Corona and now Associate Justice Tony (Antonio) Carpio, gave the instructions.
Morato explained that Ramos “didn’t want a monopoly” and that PGMC “acceded to the arrangement” with Pacific Online.
Cartel
Senate President Juan Ponce Enrile read into the records Ramos’ Oct. 28, 1993, memorandum informing the PCSO that he had approved the award of the project to PGMC and contracts to the two losing bidders, provided the latter could match PGMC’s bid proposal.
“What was created was worse than a monopoly. It was a cartel. There’s no difference between terms and conditions of contracts,” Enrile said.
“All that you did is for the entire country to cut the pie under the same terms and conditions, and the hell with the consumer.”
Without bidding
Morato grudgingly admitted that on Ramos’ written instructions, the contract to lease technology to the PCSO in the Visayas and Mindanao was awarded to Pacific Online without any bidding.
Hearing this, Sen. Franklin Drilon remarked: “Malacañang is not above the law.”
After the hearing, Drilon declined to say if Ramos had any liability but the senator said the award of the contract to the losing bidders without any bidding should prompt a review.
“Just because the President issued the order doesn’t mean it was legal,” he later told reporters.
In December 1993, PGMC won the international bidding to operate an online lottery for the PCSO under its chair, then Mita Pardo de Tavera, and was awarded the contract to lease the facilities for an online lottery system.
Rental fee
The Supreme Court in May 1994 nullified the contract, prompting the PCSO then under Morato to renegotiate a new equipment lease agreement (ELA) with PGMC in 1995 for a rental fee of 4.3 percent of gross ticket sales.
That same year, the PCSO entered into a similar agreement with Tanjong and G Tech through Pacific Online.
In both contracts, the lease period was eight years, which began during the commercial operations.
The installation of a certain number of terminals by both PGMC and Pacific Online, which were either increased or decreased years later, became the reckoning date for commercial operations.
The contracts were renewed over the years.
Seek better terms
Current PCSO Chair Margarita Juico said the agency had begun preliminary talks with PGMC and Pacific Online to negotiate for better terms.
At one point in the hearing, a disgusted Enrile berated Morato for insisting that he had no say on the lease agreements, and that every decision emanated from Malacañang.
“During my time, your honor, I was completely controlled by the Office of the President,” Morato said.
Enrile then asked him: “Are you saying you’re incompetent to testify here? That you have no competence? That you’re wasting the time of this committee?”
Morato replied: “What I meant is everything that happened during my time as chair was fully under the instruction of the Office of the President. I didn’t have the freedom that I have now.”
Enrile then asked him if he was dictated upon by the Office of the President, and Morato said: “That is correct. Yes it’s true.”
A miffed Enrile then asked: “Did you object? Did you object to the dictation of Malacañang?”
Morato said he did not because he was merely following the advice of Carpio and Corona.
Enrile remarked: “Did you love your job so much you could not say no?”
Morato retorted: “I never wanted the job. I turned it down. He (Ramos) became angry with me because I refused to accept the post. We had a fight. I didn’t want to work for the government. He became angrier. Then I finally accepted, just to help. I had no liking for government. All government posts were forced on me.”
Never again
Morato said he never asked for any of the government posts he occupied. “Never will I accept a government appointment ever again. Never.”
Grilled by Drilon, Morato was at pains explaining why the losing bidders were awarded the contract for the Visayas and Mindanao. He said Enrile had given the explanation by producing Ramos’ letter.
At this point, Drilon said: “Malacañang is not above the law. There was bidding and they lost the bidding. From the point of view of bidding laws, how did they end up operators when in fact they did not win the bid?”