Helicopter refund, gone with the wind

Soviet missiles in Cuba. Sixty years ago, in October, 1962, US intelligence discovered evidence of a Soviet arms buildup in Cuba that included sites for medium-range and intermediate-range ballistic nuclear missiles (MR and IRBMs). This triggered what has since been known as the Cuban Missile Crisis. It was the most dangerous confrontation between the United States and the Union of Soviet Socialist Republics (USSR) and the closest to nuclear conflict between the two powers. At that time, present-day Russia was still part of the USSR.

In a nationwide address on television, President John F. Kennedy reported the discovery of the missiles and declared: “It shall be the policy of this nation to regard any nuclear missile launched from Cuba against any nation in the Western Hemisphere as an attack by the Soviet Union on the United States, requiring a full retaliatory response upon the Soviet Union.” At the same time, readiness levels of US forces were raised to DEFCON 2 and for the only time in US history, B-52 bombers were in continuous airborne alert. 23 of these bombers were nuclear-armed, and sent to orbit points within striking distance of the Soviet Union.

Personal note: At that time, I was a young Air Force captain detailed at Clark Air Base, serving at the Joint Air Defense Control Center, and witnessed the alert status and preparations made by units of the 13th Air Force.

Today, President Joe Biden faces his own missile crisis as President Vladimir Putin threatens the use of nuclear arms in his disastrous war against Ukraine.

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Last week in a House of Representatives hearing on the proposed budget of the Department of National Defense, it was revealed that the government remains “unsure” if it can secure a refund of P1.9 billion (or P2 billion according to other sources) that was an advance payment for the cancelled deal to purchase 17 (16 according to other sources) military helicopters (Mi-17) from Russia.

For greater accuracy, let me quote from a news report by Sheila Crisostomo, published in The Philippine STAR of Sunday, Sept. 25, 2022.

“Libanan (House Minority Leader) asked the Department of National Defense for updates on the aborted procurement of 17 Mi-17 helicopters for P12.9 billion from Russia. The deal was signed during the term of former president Rodrigo Duterte, but was ordered terminated by President Marcos in the wake of Moscow’s invasion of Ukraine.

“The DND, through its budget sponsor, Negros Occidental (6th District) Rep. Mercedes Alvarez, had informed the lower chamber that the Philippine government had already given P1.9 billion in advance payment. The Department said the payment was made in January this year, a month before Russia started attacking Ukraine. This prompted Libanan to ask why the Philippines’ military attachés in Russia and the US had failed to inform the government about Moscow’s plan. The country has no military attaché in Ukraine.

“‘We do have this intelligence in our hands, that something is going to happen before. That’s why we have military attachés abroad. Why did they not relay this information and inform our government to delay the payment because a war was going to happen?’ Libanan asked.

According to Alvarez, the ‘Notice to Proceed’ was issued on Jan. 26, 2021, so the advance payment pushed through. ‘The Department recognizes the difficulty to refund the advance payment as the supplier has already invested resources for the project,’ she said.”

Just to refresh our memory, let me provide some background information on this particular transaction, which is quite controversial, to say the least.  Last July 2022, former defense secretary Delfin Lorenzana announced that in June 2022, the last month of the Duterte administration, he cancelled a P12.7-billion deal to acquire 16 Mi-17 multi-purpose helicopters from Russia. The transaction was signed in November 2021, and a down payment of P2 billion was made in January 2022 with the expected delivery of the first batch in two years. In justifying the last-minute cancellation, Lorenzana explained that the purchase of Russian military aircraft could have led to US sanctions under a 2007 law “Countering America’s Adversaries Through Sanctions Act” (CAATSA).

Herein lies the great mystery that could have been unraveled by the right questions being asked about the chopper deal. In the first place, why were we negotiating and eventually closing a deal with Russia for their helicopters, knowing full well that we faced possible sanctions from the United States? And in fact, as secretary Lorenzana pointed out, this is exactly the reason why the transaction was cancelled, but only after making a down payment of P2 billion. As the late Maximo Soliven would sometimes say in his hard-hitting columns, “Susmariosep, sanamagan, we are now the laughingstock of ASEAN and the international community!”

The STAR report concludes, saying that the “DND and the Armed Forces of the Philippines are now exerting efforts to get the refund through a ‘diplomatic channel’.” Are we living in some kind of fantasy land? Russia is engaged in a difficult war with Ukraine, and has even ordered a partial mobilization of its citizens to raise more soldiers. She needs every ruble in her treasury to continue the war effort.

For the Filipino taxpayer, he can consider the P2-billion down payment as money gone with the wind. But perhaps, he is entitled to some explanation as to how the DND got us into this deep hole and also, who should be held accountable for this inexcusable blunder.