Plunder in pinstripes: When public funds pay for private greed

The law sees plunder in only one direction. Under Republic Act 7080, plunder is a crime committed by a public officer who amasses ill gotten wealth of at least P50 million through a combination or series of overt criminal acts. The statute was written with a particular villain in mind, the corrupt official raiding the treasury. It is a good law, but an incomplete one. It assumes that the only hands capable of looting the public purse are hands that hold public office.

History, both global and local, tells us otherwise. Some of the largest transfers of wealth from ordinary taxpayers to private pockets were engineered not by officials but by corporations whose recklessness and, in some cases deliberate rule breaking, left governments no choice but to rescue them.

When greed grows large enough to require a bailout, the loss to the public is indistinguishable from the loss caused by plunder. Only the label differs.

Privatized gains, socialized losses. The world learned this lesson brutally in 2008. American banks packaged reckless mortgages into securities they barely understood and when the tower collapsed, the United States Congress authorized $700 billion under the Troubled Asset Relief Program. One insurer alone absorbed roughly P180 billion in rescue commitments.

Across the Atlantic, the British government spent about 45 billion pounds nationalizing a single bank. Ireland guaranteed its banking system and saddled its citizens with a rescue bill of more than 60 billion euros, forcing a small nation into years of austerity. Schools, hospitals and pensions paid for the sins of trading floors.

Very few executives faced prosecution. Many collected bonuses while the public collected the debt. Greece endured a lost decade of hardship after rescues tied to obligations inflated in part by private financial engineering. The phrase that emerged from that era remains the sharpest summary of the injustice: profits were privatized, losses were socialized.

We have our own history of quiet rescues. The Philippines is no stranger to this pattern. In decades past, behest loans extended to favored borrowers collapsed into obligations that the national government ultimately absorbed, a burden carried by taxpayers for decades.

In the power sector, onerous take-or-pay contracts with independent power producers obliged the public to pay for electricity that was never consumed, with the resulting liabilities eventually folded into universal charges on every electric bill in the country.

In mass transit, a guaranteed return arrangement on a rail line has required the government to pour billions in subsidies year after year to cover the gap between promised profits and actual revenues. In each case, private parties structured the upside for themselves and the downside for the state. In each case, the amounts dwarf the P50-million threshold that defines plunder for a public official.

Ayuda for the boardroom. The pattern is not confined to banking or energy. Even direct assistance now flows to private fleets. During the pandemic, government paid private transport operators through service contracting arrangements, extended fuel subsidies to keep vehicles moving and channeled wage support through corporate payrolls. Much of that was defensible, because keeping mobility alive in a crisis served the public.

But ayuda designed for survival becomes something else entirely when it reaches companies that grew their fleets beyond what regulators allowed, or that treated compliance as optional while lining up for assistance.

Public money should never subsidize a violation. When a firm expands outside the rules and then receives taxpayer support for the very fleet it was never authorized to field, ayuda stops being relief and starts becoming a reward for excess, paid by citizens who never agreed to underwrite anyone’s ambition.

A modest legal proposal. If plunder is the crime of amassing wealth at the expense of the public, then the concept deserves a private sector counterpart. Call it constructive plunder.

Where a corporation knowingly violates regulations at scale, enriches itself through those violations and thereby creates losses or risks that the government must absorb, the law should respond with the gravity the harm deserves. The tools already exist in embryo.

Congress has recognized that certain economic offenses, such as large scale agricultural smuggling, amount to economic sabotage. Extend that logic. Legislate automatic disgorgement of profits earned during periods of proven violation. Impose personal and solidary liability on directors who approved the scheme. Claw back dividends and bonuses paid while the rules were being broken. Condition every peso of rescue on equity for the taxpayer, so that if the public bears the risk, the public shares the reward.

None of this punishes honest enterprise. It simply ensures that the cost of breaking the rules finally lands on those who broke them.

The measure of a nation. A republic that can imprison a governor for P50 million, yet merely fines a corporation whose violations cost the treasury billions, has its scales of justice out of balance.

Bailouts will sometimes be necessary. Crises are real, and letting essential institutions collapse can hurt the innocent most of all. But necessity is not absolution. The next rescue should come with conditions written in advance, not negotiated in panic.

The question we should ask of every corporate giant is the same question we ask of every public official. Did you enrich yourself at the expense of the people? If the answer is yes, the name for that is not misfortune, and it is not merely mismanagement.

Stripped of its pinstripes, it is plunder, and the law should finally learn to say so.

And when it does, we will be closer to a republic worthy of the people who keep it moving.