Business and politics

It is often said and only half in jest, that the more astute businessmen leave the country at least three months before a presidential election. Being asked for contributions is a hazard specially with politicians running “for the funds of it.” Even worse is getting caught in a political crossfire and end up being summoned to a Senate hearing.

Besides, no one is supposed to make really serious business decisions just before an election. And with the state of today’s communications technology, any business can be handled from anywhere in the world.

Business and politics have always been a combustible combination in the Philippine economic environment. The historical example most cited is how former President Marcos smashed the once proud Lopez business empire just as martial law was declared.

On the other hand, many of the country’s top corporations today got their break as crony companies of the Marcos regime. It is said that when the Marcos family came back from exile, they tried to reclaim ownership of among others, a tobacco company, a television network, a phone company, a satellite communication company and what is now a diversified conglomerate.

The grapevine rumors have it that the former Marcos cronies refused to return ownership of these business empires, claiming Mr. Marcos never really paid to own any of the claimed shares. Everything was just verbal, so no claim can be enforced.

I found it amusing to see a television news footage of a prominent Chinoy taipan walking behind Bongbong Marcos last Tuesday. Mr.  Marcos was the speaker at the meeting of a Chinoy business federation of which the taipan was emeritus head. Will the Chinoy taipan now be more forthcoming as the Marcos family reclaims Malacañang?

With a second generation Marcos a heartbeat away from reclaiming lost glory, many of the former cronies of the late dictator must be worried. The widow and the children in all likelihood did not appreciate the runaround and outright denial they got from former Marcos cronies when they were down and out of power.

The EDSA event gave rise to new favorites as the Aquinos assumed power. It was during the watch of Tita Cory that the so called Kamag-anak Inc.  gained prominence. There are the Cojuangcos of Hacienda Luisita and related businesses. She had also been accused of returning many oligarchs back on their saddles.

For FVR, the most scandalous transaction during his watch had to do with the building of NAIA Terminal 3. After asking a group of taipans to organize a company to make an unsolicited bid to build the terminal, FVR turned around and awarded it to what should have been declared a non-responsive bid during the Swiss Challenge.

The taipans were also reportedly instructed to withdraw a court challenge to the award. It was a most unfortunate and contentious project through three administrations.

Then there was the MRT-3 award. The problems of MRT-3 today are rooted on how the BLT contract was structured and restructured through several administrations. The MRT Consortium was composed of some of the bluest of blue chips in the local business sector including FilEstate, Ayala Land, Anglo Phil (related to National Bookstore), Greenfield (related to Unilab), Ramcar, Antel and DBH.

Crony power became scandalous again during Erap’s watch. Erap used GFIs or government financial institutions to help his friends to among others, buy a bank and boost the share price of an issue called BW Resources. Erap also brokered the sale of PLDT from the Cojuangco group to the First Pacific or Salim Group.

The Arroyo watch was marred with scandals involving Chinese business interests that were favored at the behest of powerful Lakas politicians. Remember the ZTE broadband deal? Then there is also the NorthRail deal. There were pervasive rumors of family members dipping into various projects.

The current administration suspected a retail, property and financial conglomerate got too cozy with Ate Glue which explains why it ended up in the dog house. The suspicion was heightened because some close former aides of Ate Glue got positions in the conglomerate’s financial institution and foundation. Worse the Ate Glue underlings flaunted the connection on Facebook and traditional media.

At least two big land deals of the group are on hold, one large parcel in Bonifacio and the other is the former Pimeco property on C5. A reclamation project in Pasay City is with the LGU, but is facing tough national regulatory scrutiny.

DOTC also backed out of a deal on the common station for the LRT/MRT system on North Avenue even if the group already paid P200 million to locate it near their mall. The Palace is pushing for a second “common” station proposed by a favorite’s mall across the street.

Though not suspected of collaboration with Ate Glue, the most unfortunate conglomerate is the Metro Pacific Group. For some reason, the Palace seemed to have so disliked MPIC and made it tough for them to get projects or even contractual rate increases.

MPIC had to negotiate control of the Subic toll road three times before eventually getting it, but only after a Swiss Challenge. MPIC gave in to everything government wanted each time but couldn’t seal the deal. Even Tong Payumo, who was BCDA chair at that time, couldn’t understand it.

The MPIC proposal to build the connector road connecting the NLEX with SLEX over the PNR right of way was discussed for almost six years now and nothing much has moved. A decision was recently made for a Swiss Challenge, but even that hasn’t moved too.

Rate increases for Maynilad, NLEX and Cavitex have been ignored even if the terms of the contract called for the adjustments. These are all in arbitration now and in the case of Maynilad, for the second time too.

A generous MPIC proposal to take over MRT 3 with all its legal problems and all the capex necessary to modernize the dilapidated system for fares competitive with at-grade buses was rejected without explanation. It would have removed a very big problem for government. But DOTC decided to inconvenience commuters and put them in danger presumably as instructed by the Palace.

There are other stories, but these main ones show how important it is to be in the good graces of whoever is the current tenant of Malacañang. There was a time when it was possible for a businessman, like the late Eugenio Lopez, to be strong enough to fight then President Diosdado Macapagal and prevail.

But the weight of the business-palace relationship shifted in favor of the palace after Marcos subdued the Lopez patriarch by first denying Meralco rate increases and later during martial law actually taking over the company. From that time on, no business leader can displease a president consciously or not.

Today the wise leader of a conglomerate invests in up and coming politicians early in their public careers. That explains why Chiz Escudero had two lavish wedding receptions and two dozen sponsors, all taipans and sons of taipans, Pinoy, Chinoy and Conyo. That is also why big companies are lending their corporate planes to politicians specially during the campaign season.

The most interesting development after this election, if Bongbong wins, is watching how the Marcos family deals with the Marcos cronies, specially those who denied they kept shares in their companies for the late dictator. It is going to be payback time.

Boo Chanco’s e-mail address is  [email protected]. Follow him on Twitter @boochanco.