Pagcor bureaucracy needs cleaning up

After President Duterte fired a crooked Customs deputy chief and purges dirty old-timers at the Land Transport Office, what next? A good target would be the extortionate bureaucrats left behind by past admins at the state casino regulator-operator Pagcor (Philippine Amusement and Gaming Corp.). Many times in previous years their racket has been  bared in the newspapers. In exchange for license approvals they forced upon big gaming investors certain local casino constructors. The latter in turn pay them not just one-time finder’s fee but monthly kickbacks for the duration of the construction work. Since the racketeers were not stopped by past media exposés, later investors came to believe they were fixtures, and so had to give. Considering the number of casinos erected, the Pagcor bureaucrats surely have amassed hundreds of millions of pesos.

Investigating them now is crucial, since major gaming projects are in the pipeline. It would send across the message that the Duterte tenure would not tolerate any more harassment of investors. To rise at the Clark Freeport in Pampanga next year is the Sun Valley Resort and Country Club, a $400-million mixed-use development of Korean Donggwang Construction Co. In Metro Manila, Solaire Resort and Casino’s Enrique Razon Jr. announced plans to build a P20-billion complex in Quezon City, for operation by 2019. In 2020 Travellers International’s Westside City Resorts World is set to open the much-awaited fourth gaming outlet at the Entertainment City (Pasay), in addition to Solaire, City of Dreams, and the Okada Manila.

In Mactan, Cebu, domestic Calata Corp. and foreign Sino-America Gaming Investment Group and Macau Resources Group will complete by 2020 a P65-billion beachfront gaming estate.

These investors must be insulated from solicitations of big sums that has been the practice for years.

In turn, investors other than in gaming and entertainment would be encouraged, unlike in past admins.

*      *      *

Industry watchers are puzzled. Why is the giant Malaysian contractor, UMW Oil & Gas suing the near-broke Filipino junior explorer, Frontier Oil Corp., over a drilling dispute in Philippine waters, with seemingly no prospect of financial benefit? The answer is emerging.

Word is that the lawsuit is a ploy to block the development of Philippine energy resources in the South China Sea.

It has worked so far for the Malaysians. Since drilling did not start by the deadline, Frontier lost its development rights to the proven Calauit deposit, off northwest Palawan. The lawsuit makes it now impossible for Frontier to raise equity and drill other areas.

As a result, Filipino progress to energy self-sufficiency has been stymied for the time being in Service Contract 50, and elsewhere. Some observers think the real aim is for Malaysian interests to break the Filipino explorer, dispossess it of its assigned drilling block, then steal the resource for themselves.

UMW-OG is no stranger to political power play that taints the Malaysian oil and gas sector. Central in that sector is the Malaysian Petroleum Resources Corp., set up by Prime Minister Najib Razak to make Malaysia “preeminent in oil and gas services in Asia-Pacific.” The annual reports of UMW-OG and MPRC reveal many connections. One of MPRC’s stakeholders is the powerful Ministry for International Trade and Industry, which for many years was headed by Asmat Kamaludin, now the Chairman of UMW-OG. Sitting in the Industry Advisory Panel which gives “key” feedback and guidance to MPRC is Rohaizad Darus, President of UMW-OG. Darus was the chief negotiator, then terminator of the contract with Frontier, and is central to the blocking litigation against the Filipino.

From there the connections get more sinister. Calling the shots as President and CEO of MPRC since May 2013 is Shahrol Halmi, who was for five years the founding managing director-CEO of 1-Malaysia Development Berhad. 1MDB is a strategic investment fund set up by the Malaysian government for new ideas and growth sources to transform the state into a thriving economy. 1MDB is notorious for the theft and international money laundering of more than $3.5 billion of its funds, with $680 million ending up in Najib’s personal bank account. Global sleuths including the Kleptocracy Asset Recovery Initiative in the United States are pursuing more than $1 billion in misappropriated assets.

Much of that larceny took place in 2009-2013, during Shahrol’s watch. In April 2016, a parliamentary bicameral committee confirmed those findings and censured Shahrol for mismanaging 1MDB. The embezzlement scandal is front-page news across Asia for three years now.

Here is the rub for the Philippines today. UMW-OG is a government-backed entity, spun off in 2013 from the industrial conglomerate UMW, the drilling arm of the Malaysian national oil company, Petronas. The link to the 1MDB scam has tainted UMW-OG’s reputation under Chairman Asmat Kamaludin. The perception of resource blocking in the Philippines makes it worse. Kamaludin and Darus must be made to explain their misdeeds in Manila.

*      *      *

Catch Sapol radio show, Saturdays, 8-10 a.m., DWIZ (882-AM).

Gotcha archives on Facebook: https://www.facebook.com/pages/Jarius-Bondoc/1376602159218459, or The STAR website http://www.philstar.com/author/Jarius%20Bondoc/GOTCHA