Red flags

FIRST PERSON - Alex Magno - The Philippine Star

The phrase red flags is now in more frequent use in the public utterances of the Commission on Audit (CoA) — once upon a time a most discreet and inscrutable agency.

Red flags refer to indications something might be amiss in the transactions of a public agency. They are not conclusive findings of fault. They merely direct auditors to look more closely at the details of the flagged transactions.

When used repeatedly, especially by COA chair Grace Pulido-Tan during public hearings, the phrase immediately turns derogatory. Red flags instantly equates to anomaly. The transaction becomes condemnable even before a final audit finding is sealed and signed. This is the peril of round-the-clock journalism.

There is a reason why, as a matter of policy, the COA keeps red flags confidential. Just using the phrase is a short fuse to trial by publicity. It fires speculation or fuels insinuation. It becomes a convenient ball for political hacks to play with.

The COA chairperson may abide by policy by refusing to discuss the details of flagged transactions during the Senate hearing on the Malampaya fund last Monday. But when she kept referring to red flags raised on the Makati buildings during the previous “subcommittee” hearings, the three senators conducting this farce wanted the special audit highlights disclosed, even as the policy on confidentiality stood on good ground.

The three senators conducting an inquisition rather than a hearing finally got their way when the COA chair was absent. They goaded a lesser audit official to disclose the highlights of an incomplete audit, promising him immunity for breaking a wise policy.

Senator Nancy Binay, unfortunately, did not have the temerity or the boorishness of her three colleagues in the “subcommittee.” During last Monday’s hearing on Malampaya where P900 million appear to have been wholly redirected by Napoles NGOs, she wanted an advance copy of the “audit highlights.” She promised to keep the document secret, in observance of COA’s confidentiality policy.

Acquiring the “audit highlights” (or red flags) might be useful for Senator Binay. The document will give her leads so that she can ask the right questions to the right people. That, in turn, will help orient the entire inquiry into the possible misuse of Malampaya money.

The COA chair refused to accede to the senator’s request. She had standing policy to lean on. State auditors did have to get the side of the agencies whose transactions were flagged.

Senator Binay did not get much support from Blue Ribbon chair Teofisto Guingona Jr. The request for partial disclosure of flagged transactions, said the Blue Ribbon chair who tolerated the breakaway “subcommittee” doing its gig, will be studied.

Guingona had always seemed reluctant to convene the hearing on the Malampaya funds even as the amounts involved in this case are truly staggering. We can only surmise on the reasons for that reluctance. 

The political grapevine is, as usual, rife with gossip about where the money finally went after being laundered by the fake NGOs. Many agencies and some of the most visible political players could be burned if all the unprocessed information spills out somehow.

With Guingona pussy-footing and Pulido-Tan stonewalling, it now seems a lot of information relating to the Malampaya funds could be pushed under the rug. Last Monday’s hearing suggests that.


Gregorio Larrazabal, when he was Comelec commissioner, played a heroic role in bringing our electoral process out of the Stone Age.

As chair of the poll body’s steering committee for automating our elections, Larrazabal oversaw what seemed to be an impossible logistical operation: the deployment of 82,000 voting machines nationwide, the printing of over 52 million precinct-specific ballots and the training of tens of thousands of poll workers in the new technology.

Larrazabal pulled it off with aplomb. Except for a few minor glitches, the shift to automated elections was accomplished quite against the odds. There were no riots and no armed clashes in the aftermath of the 2010 polls. Three of four Filipinos found the exercise credible. The foreign observer missions were impressed. Our people respected the outcomes, notwithstanding the many claims of electronic cheating.

More than any other commissioner since automation dawned, Larrazabal should be most familiar with the technology whose deployment he oversaw. As chair of the steering committee on automation, he dispatched a team from the Comelec’s IT department to the Shanghai factory where the PCOS machines were being manufactured. The team included representatives from the Comelec Advisory Council (CAC) and several respected journalists.

That team should have reported to Larrizabal, ahead of the arrival of the machines, that the equipment was manufactured by Jarltech. The manufacturer is a subsidiary of Smartmatic. He seemed, at that time, to have full grasp of all the details regarding the technology provider. After all, so much depended on equipment costing billions of pesos delivering credible results.

Many were therefore surprised that Larrazabal has recently turned around and seemed to be opposed to the continued use of the Smartmatic system that successfully carried us through two elections. The basis of his altered opinion, it appears, is his claim that Smartmatic did not manufacture the equipment used for our poll automation.

The inspection of the plant by the Comelec IT team he himself dispatched appears to have slipped from Larrazabal’s mind. He knew then, as he should know now, that the manufacturing firm is a subsidiary of the technology provider.

How could such a significant detail slip the former commissioner’s mind?

We can only hope this avid cyclist has not had a bad spill lately.


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