A creeping containment

BACKBENCHER
Rod P. Kapunan
9/8-9/2012



Maybe it is high time to remind US Secretary of State Hilary Clinton that China is the only great power to fight the US yet comes out to exert an even greater influence in world politics. Unlike the great powers whose influence have either been reduced by defeat as Germany and Japan, or imploded in the aftermath of internal political retraction as the Soviet Union, China fought the US in a bloody but limited land war in Korea. Yet it is about to emerge as the greatest economic power of our time.

China's entry into the Korean War in 1950 has put a dent on the image of the US as an invincible superpower. The country whose huge army was derisively called "pajama-clad soldiers" was the first to deny the US its trophy of victory. The Korean War ended in the signing of an armistice agreement on July 27, 1953. It was not peace brought about by victory or one negotiated to end the conflict, but a temporary cessation of hostilities.

Although it was North Korea and the US that signed as principal parties to the armistice agreement, the world knew it was the result of an agonizing realization by the US that it was locked in a fierce stalemate with no hope of victory. Pouring in an insurmountable number of troops to fight alongside with their North Korean allies, the People Liberation Army in no time pushed the allied forces to the fringes of South Korea. Many anticipated it as another Dunkirk with the humiliated American soldiers about to wade their way to Japan.

The early optimism of General Douglas MacArthur to cross the Yalu River ended up in disastrous retreat. After the Inchon landing where the US forces rapidly advanced, that was soon reversed after Chinese troops pushed US troops far below the 38thParallel. That victory, though paid with a heavy price, left a deep scar into the unblemished record in American military history.

To repair his badly tarnished image, General MacArthur proposed the idea of using an atom bomb to destroy China's industrial plants in Manchuria and carpet bombing the supply lines for the Chinese troops that were advancing like swarm of ants. Unfortunately, that arrogance was not shared by US President Harry Truman, thus forcing him to unceremoniously sack the aging Commander of the US Forces in Korea.

We are compelled to give this backdrop to remind Clinton that while China cannot militarily match the US, its armed forces have been modernized by quantum lead. The army that once walked in snickers to cause the US to nosebleed in Korea could usher in an even devastating damage to the US forces in the whole of Asia in the event of another conflict. It is for this why the US is trying to avoid direct confrontation with China over the disputed islets in the South China Sea.

The problem with this duplicity in the US policy is it cannot pursue a neutral position while marshalling the members of the Asean to ratify the Code of Conduct for the South China Sea that could technically place them on a direct collision course with China.

First, not all the members of the association have territorial claims in the South China Sea. This explains why Cambodia refused to come out with a final communiqué in the recently concluded Asean ministerial meeting in Phnom Penh.

Second, the member-countries are aware that the association is not an ideological bloc, but an economic bloc which has succeeded in institutionalizing many of their declared policies. Formally integrating the disputed territorial claims in the South China Sea into their agenda could transform the economic bloc to a political forum that could be exploited by non-member countries like the US.

Third, not all Asean-member countries share the same ideological sentiments to unify them, viz. ratify the proposed Code of Conduct. Their primordial concern is on how to develop further their trade ties and explore the possibilities of welcoming Chinese investments.

Fourth, for the fact that the US is the one brokering for the early ratification of the Code of Conduct, that endorsement has backfired. Right now, it is perceived as a Trojan horse. Once ratified, it could automatically convert the dispute to one between China and the Asean with the bloc playing proxy for the US in containing China.

Fifth, to ratify the Code of Conduct could spell an end to an illustrious economic bloc. Either it could disintegrate due disuse or could signal the revival of an arms race. The price they will have to pay to subsidize the ambition of the US and its surrogate states, like the Philippines, is too high for the brisk trade they now enjoy with modern China.

Sixth, Asean today stands as the most successful regional bloc in the whole of Asia. Many of its economic agenda have been institutionalized and integrated as part of the member-countries' economic development goals. That feat could easily be set aside by the conversion of Asean into a highly politicized regional bloc.

As of now, the US is the one heavily profiting from the increased tension as seen in the steep purchase of military equipment by the Philippines that could not even tip the scale to alter the balance of power in the region. Instead its limited resources will be dissipated, while in the meantime, the US takes advantage to advance its economic interest in dealing with China.

Finally, a direct confrontation now with China could be far costlier and more devastating for the US. A second round confrontation is something even the majority of the Americans would wish to avoid.

rpkapunan@gmail.com

9/11: 2001 to 2012

DIE HARD III
Herman Tiu Laurel
9/7/2012



The New Year's Eve celebration on Dec. 31, 2000 was drummed up as a very special one.  Man's history was turning not just another year but another century and a new millennium. The year 2001 would begin a new hundred years or century, and 10 of that would end in a New Year's Eve bang toward 3001. Hopes were high in the world as the decade before had been one of massive historical shifts with the end of the Soviet Union and with China's detour toward market-oriented reforms.

But in the Philippines, just 17 days into 2001, a coup against the "dropout" President Estrada was carried out — one that installed an "economist" promising reforms in the form of a diminutive Gloria Arroyo. In the US, too, another change was in the offing as George W. Bush was sworn in as president on Jan. 20 after much electoral and legal wrangle.  In both instances, mainstream failed to read the creeping malevolence beneath the stage-managed "euphoria."

Bush, for one, set the tone for the 21st Century by denouncing the "Axis of Evil" of Iran, Iraq, and North Korea — none of which, it must be stressed, ever invaded his country. Seven years later, Gen. Wesley Clark, in a speech to the Commonwealth Club in Frisco, described what he viewed was "a policy coup" in the weeks after 9/11 by neocons Dick Cheney, Don Rumsfeld, Paul Wolfowitz and "a half dozen other collaborators from the Project for a New American Century" revealed to him by a fellow officer who said: "We're going to attack and destroy the governments in seven countries in five years… We're going to start with Iraq and then we're going to move to Syria, Lebanon, Libya, Somalia, Sudan, and Iran."

Iraq has been demolished into perpetual "suicide bombing" of Sunnis, Shi'ites and Kurds against each other; Afghanistan became a necessary sequel to 9/11's "Hunt Bin Laden" drive; Libya has been reduced to a militia nation; while Syria is being wrecked to open the way to Iran. In the Philippines, the tone for the decade was set by Gloria Macapagal-Arroyo's speech at the Yellow crowd's coup-plotting Council of Philippine Affairs (Copa)'s fête with military and police generals, "civil society" leaders and media — her co-conspirators in the Edsa II coup. As that "rule of force" of the elite was set in place, the economy and bureaucracy were carved up by power blocks, with the military generals getting their "pabaon" and civilian posts, and the elite getting P10 trillion in profits over the decade (as reported by Arroyo economic adviser Joey Salceda).

Gloria then got the Philippines onboard the "Coalition of the Willing" of Dubya and joined the carnage in Iraq until overseas Filipino worker truck driver Angelo de la Cruz was kidnapped by the Kaleed bin al-Waleed Brigade and later returned in exchange for the withdrawal of the Philippine contingent. Now Arroyo is in and out of prison, spat upon by the Yellow crowd.
Marking the decade, the "War on Terror" has provided justification for the US and global campaign to enforce the "national security state" in US-dominated parts of the world.

Domestically, the US established the Department of Homeland Security. US TV now has a series called "Homeland" about a colonel turned Arab DPA terrorist and a CIA lady out to catch him. "Terror" has led to the reviled TSA (Transportation Security Administration) "total pat down" of airport travelers that includes the grabbing of crotches. In Iraq, the consequence is over a million civilian deaths; a figure the Los Angeles Times reported as far back as 2007. Total Afghanistan war casualties are estimated at 50,000 while Pakistani civilian deaths from US-Afghan drone attacks, suicide- and IED-bombings have reached 35,000. The War on Terror also gave impetus to the numerous anti-money laundering laws in the world.  All these are thanks to Bush and Nobel Peace Prize awardee Barack Obama.

The Sept. 11 tragedy was the most powerful event in television history, according to a new study released Wednesday by Sony Electronics and Nielsen surveying 1,077 American adults — the most "universally impactful" televised moment in 50 years.  
Yahoo reports: "To measure impact, Nielsen and Sony created a score for each event derived by the number of people who viewed the event live, the number who could recall details about where they were during the occurrence, and the number who could remember discussing what happened with others." Conversely, surveys have also been made of what citizens think of the connection of 9/11 to the notion of a conspiracy. In 2006, Zogby Polls found that over 70 million Americans distrusted the official government investigation of the event and supported new investigations. Today, activist Alex Jones reports a survey by Gok NOP with the BBC finding 14 percent of Britons and Americans believing the US government staged the 9/11 attack.

I believe all the evidence that point to the 9/11 World Trade Center (WTC) attacks as an "inside job," with the neocons at the helm (watch YouTube, Architects and Engineers for 9/11 Truth; Experts speak out). A third building (WTC 7), never hit by a plane and a football field away from WTC 1 and 2, later also collapsed on its footprint at the speed of gravity (i.e. free falling to the ground with no resistance from the floors below). While they have fooled 86 percent of Americans even after 11 years, the ruling cabal, Virginia, can have that fantastic degree of control of events, but truth will always out.

Now, would you wonder why BS Aquino III would defy an alliance with the Catholic Church bequeathed by Cory Aquino on the Reproductive Health bill?  That's Uncle Sam's order, you see. Only a fool would defy it at the risk of Hocus PCOS being exposed by Uncle Thomas.

(Watch Talk News TV with HTL, Saturdays, 8 to 9 p.m., with replay at 11:15 p.m. and Sundays, on GNN Destiny Cable Channel 8, this week, "9/11 Inside Job;" visit http://newkatipunero.blogspot.com)

MRT re-privatization

DIE HARD III
Herman Tiu Laurel
9/3/2012



Last time we summarized the decade-and-half experience of the BLT (Build-Lease-Transfer) MRT III contract, a history of swindle is continuing to this day. It began with tying the country to paying "subsidy" of P7 billion annually to the guaranteed profits of the original "investor consortium" of 15 percent per annum, a margin on the basis of super-bloated fares based on P60 from its South end at Taft to its North end at North Triangle, Quezon City. Then the latest phase: the re-transfer of the privatized project back into the hands of government with the buyback by the past Arroyo administration of the project which tried to avoid the increased financial burden imposed by another consortium led by powerful Goldman Sachs sued government. Now the dilemma is how to raise fares without triggering a commuters' revolt, in order to re-privatize it more profitably for the new corporations competing to take over.

Last August then DoTC Secretary Mar Roxas announced from out of the blue, the MRT 3 fare hike in 2013. That was perplexing as 2012 still had one whole quarter to go. There was no immediate trigger to cause concern in the MRT 3 issues. After seeing the rapid movement of Mar Roxas to the DILG portfolio taking over from the tragically fated Jessie Robredo and the appointment of an Aquino-Cojuangco loyal coattail hanger-on Rep. Joseph Emilio Abaya did possible explanations emerge. The inordinately early announcement of the MRT 3 fare hike for 2013 was to commit the DoTC to that fare hike and ensure that the new appointee to that post will have no more responsibility in defending that policy position. Roxas also announced that further public hearings on the issue were no longer needed and would not be called, freeing the successor to just implement the policy in 2013.

Roxas' MRT 3 fare hike announcement came five days after the loss of Robredo's plane, by that time his fate was already known. A case can be made that the preemptive announcement of the 2013 MRT 3 is connected to the sudden vacancy created in the top seat of the DILG. It was seen as the opportunity to ensconce the anointed Liberal Party 2016 candidate, and to concretize the down-to-baranggay control in preparation for the 2013 and 2016 elections. Several birds were hit with the move after Robredo's plane went into the sea like a big, gravity weighed stone falling from the sky. So much for the hero treatment for Robredo, from this perspective it was more like a hero-sandwich for the partisan political appetites of the Liberal Party plotters. Robredo was not a Liberal puppet because he was more a US puppet in the "civil society" crowd.

It was inexplicable why Robredo stayed on as long as he did in his post at the DILG despite BS Aquino III's zilch-heartedness to his confirmation, or why BS Aquino III appointed him in the first place if he was not going to cement Robredo's authority in the post. Aquino's zilch-heartedness for Robredo is also as clear in the delegation of authority over the police to BS Aquino III's beloved Rico Puno. In this country the only power greater than the presidency itself, though couched in diplomatic cloak and democratic language, is the US Embassy. Robredo is associated with the Magsaysay Foundation crowd, with the whole "Kaya Natin" of Robredo, Padaca, Among Ed crowd and the Kennedy School of Government clone Ateneo School of Government network of Harvey Keh and the Jesuits. With Robredo gone the Liberal Party faction of the Yellow movement moved their chess pieces forward.

Back to the MRT 3, ensuing from the MRT 3 2013 fare hike will be its re-privatization to a new private corporation or consortium. Why are we certain that a private corporation will be taking over after the fare hike? Because that's been announced over and over again, as in this headline by Paolo G. Montecillo of Jan. 25, 2012 reports, "MVP unit to assert right over MRT 3 deal." MPIC and MVP got this right by taking over into the company that signed the MRT 3 BLT contact with FVR — the MRT Corp. MVP's spokesman said, "it is a proposal by MPIC pursuant to the expansion rights granted to MRT Corp. under the existing BLT agreement with the national government," and MVP wants a 15-year extension with that.

Mar Roxas' fare hike will add P2 billion to the revenues of the MRT 3, and whichever companies are in on the re-privatization they will wallow in the P2 billion, plus the P5 billion continuing "subsidy" to the guaranteed profits based on the overpriced P60 fare. MVP said that  "under MPIC's proposal, the company would spend $300 million to improve the system's operations and expand its capacity." But Mar Roxas' fare hike already guarantees P2 billion or $40 million in revenues, more than enough for improvements. Again, the Filipino taxpayers and MRT commuters will be made to feed the increasing profits of the oligarchs and predatory corporations.

(Watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m. and Sunday: this week "9/11 Inside Job"; visit http://newkatipunero.blogspot.com)

MRT: Serial swindle

DIE HARD III
Herman Tiu Laurel
8/31/2012



Two weeks ago, in the midst of the Robredo plane crash frenzy, the Department of Transportation and Communications (DoTC) Secretary Mar Roxas announced, "Expect MRT fare increase in 2013," adding that, "It will be unfair for the areas in the provinces if we continue to subsidize Metro Manila as we have done so for the past 10 years," arguing, "It seems that there is a fairness issue here.  The money… can be redeployed to the countryside…" It rankles me whenever my intelligence is insulted by such ruling class ilk as Roxas who blames the people as "spoiled" for expecting low rates in public utilities, then pit metropolitan and rural Filipinos against each other to obfuscate.

From the time the BS Aquino III government debuted, it was clear that the party in power — courtesy of Hocus-PCOS — would be raising all public utility rates even if unnecessary and unjust.  Roxas' ilk, for one, has been broaching up to 200 percent fare increases since 2011. Only public indignation has kept the wolves at bay so far.

From three years of confirmed analyses, public statements of groups like the National Consumer Council of the Philippines (NCCP) that dialogued with the DoTC staff, and tracking of business news developments, it is clear that the MRT/LRT are not operationally losing propositions. What Roxas and his ilk claim as "losses" of these projects are not operational but financial costs. In all, Roxas and his cohorts in the oligarchy, in connivance with their captive politicians, particularly Fidel V. Ramos and Gloria Arroyo, are the culprits.  Thus, it is imperative to review the project histories to see through the lies.

We will focus on the MRT at this point, which is a project built by private "investor" groups  which proceeded to "securitize" the project based on the extremely "diabetic" sweetheart deal granted to them by FVR. First, the group obtained a very mind-blowing passenger load guarantee of hundreds of thousands daily based on up to P60 one-way fares signed by FVR in the mid-1990s. With this fantastically attractive contract and lucrative cash flow promised, the investor group then collateralized these to obtain funds for the project. The transnational banks and investment companies, in turn, took their pound of flesh from the fat terms the investor group got.

However, as things progressed, the time bombs in the contract began to show, as the original high fares of the MRT based on a passenger load of 20,000 daily could not even be attained, which guarantees meant that government still had to pay the investor group the exorbitant contract costs — including the horrendous financial burden from the deliberately unrealistic and one-sided terms in favor of the investors.

It then became clear that the so-called subsidy of government is going neither to the MRT operations nor to the commuters. And since the major cost of the MRT is due to the financial burdens foisted on the people from the serial swindle by the oligarchs and Ramos, the subsidy has always been going to the investor group or consortium (aka the oligarchs) and their financial brokers.

Erap partially solved the problem in 1998 ("Erap orders high fares for Edsa-MRT reduced"), which the Makati Business Club, et al., not surprisingly, frowned upon. But, too bad for them: As fares were cut from a high of P60 down to P20 for a round trip, passenger count rose from 20,000 to 200,000 and kept rising until today's high of up to 700,000 daily, cutting government subsidy to the consortium's financial exactions. The oligarchs, however, are not to be outdone.  Arnold Padilla in his Web site, "A Radical's Nut," cited DoTC and MRT officials' admission that 85 percent of the cost of the MRT today is the constantly growing financial burden by the wheeling and dealing of the oligarchs who sell and resell ownership of the projects, as well as the profits made at each stage.

The latest in the serial swindle is the MRT sale to Goldman Sachs and then to the another Group. The MRT investor-consortium had a 25-year Build-Lease-Transfer (BLT) agreement with the government, which would pay Equity Rental Payments (ERP) guaranteeing a 15-percent per annum return, as well as a maintenance fee and recovery of taxes.

In 2002, the MRT consortium members, securitized their share of the ERPs by issuing MRT III Funding Corp. (MRT3FC) bonds and shares sold to outside investors for an advance payment.  With the securitization, MRT3FC had a 77.7 percent share, Another investor, 19.9 percent, and minorities 2.4 percent. But as government had difficulty with a lease due to the financial burden, the private investor subsequently sold its interest to Goldman Sachs. Goldman Sachs and partners then sued government for $230 million, forcing the Arroyo administration to buy back bonds and shares through the Development Bank of the Philippines and Land Bank. These government financial institutions extended a $180-million loan to Global Air Services (GAS), an offshore company with $2 in capital and $400,000 in losses. GAS turned out to be a shell company which offsets the loan against the purchase price.

Then Department of Finance (DoF) Secretary Gary Teves, now director of Atok Big Wedge and Alphaland, said the deal saved the country $380 million on MRT ERPs against the cost of the buyout, when the money was actually used to buy out Goldman ($64.5 million), Presidio Capital ($26.5 million) and Ashmore ($87.6 million).

That was another layer of "transaction costs" ($3.6 million of "fees" and profits of Goldman et al.) that these parties added on the MRT, which financial burden Roxas and BS Aquino III now want to blame and impose on faultless MRT commuters.
If Roxas gets his way and raises the fares, it will be ready for the picking again by another oligarch, whose re-privatization takeover has been in the works since 2011 — a neat last chapter indeed to the serial swindle story!

(Watch Talk News TV with HTL, Saturdays, 8 to 9 p.m., with replay at 11:15 p.m. and Sundays, on GNN Destiny Cable Channel 8, also available on the Internet at http://www.gnntv-asia.com, this week on "MRT: Welfare for the Rich, Burden for the Poor;" visit http://newkatipunero.blogspot.com)

Sereno's record

DIE HARD III
Herman Tiu Laurel
8/27/2012



The appointment of Maria Lourdes Sereno as Chief Justice (CJ) lends new luster to reports of her legal opinion on the controversial Hacienda Luisita (HLI) case in 2011: "Only Associate Justice Ma. Lourdes Sereno, the President's first appointee to the high court, believed that the compensation must be pegged at the Jan. 2, 2006 rate."  That's the highest amount of compensation, totaling P10 billion, for the 4,915-hectare estate of the Aquino-Cojuangcos of BS Aquino III, which Luisita farmers obviously would not be able to afford.

The Supreme Court (SC) majority — in stark contrast to Sereno's view — based the valuation on 1989 figures, or P200 million for the entire estate, when the HLI stock option plan was implemented (and now declared illegal). Sereno's 18-year-long stint in the Judiciary, most especially these times under Aquino and the Yellows, will necessarily be colored by the legal interpretations she has made in the past. Will she ever shake off the stigma? This is the very situation that the SC petition of Adaza-Paguia-Borja-Laurel et al. (including the Tribune readers who sent in contributions for its filing in July) sought to avoid by questioning the constitutionality of the presidential appointment of the CJ.

A careful reading of the 1987 Constitution shows no provision empowering the President to appoint SC chief justices. Based on our (supposedly) democratic system's fundamental principles of "checks-and-balances" and "separation of powers," requiring an "independent Judiciary," the CJ ought to be elected by his or her peers. Even as the high court under Acting Chief Justice Antonio Carpio (who was chosen so by peers) finally issued a denial of our petition based on jurisprudence (past decisions), a Motion for Reconsideration is being prepared.  From my layman's interpretation of our counsels' position, where a clear constitutional provision was pointed out, jurisprudence should not be the basis for judging on the issue.

Else, a cloud of doubt will forever hang over any SC Chief Justice appointed by the Chief Executive hereon until the petitioners' issue is resolved satisfactorily.

It is already the impression of many people that the appointment of the new CJ also has a political agenda, involving the presidential elections of 2016.  Things are turning out to be a "Corona affair" all over again as politically charged parties clash over decisions of a chief magistrate that is seen to be beholden to the appointing power and serving as his political hatchet-person.

The partisan political angle, however, is not Sereno's only problem.  From consumer protection advocates in power, water, and other public utilities, where the oligarchy's power and control prevails over public regulatory agencies, specifically with regard to Energy Regulatory Commission (ERC) and Manila Electric Co. (Meralco) abuses, Sereno will be remembered for her total lack of sympathy for the people and her blatantly pro-power oligarchy sentiments. We wrote this in 2011 about the SC siding with both the ERC and Meralco on a 2009 P0.29 per kilowatt-hour rate hike petition on purely technical procedural grounds: "It makes everyone wonder whether PeNoy's first SC appointee, Justice Lourdes Sereno, really appreciates the substantive issue of Salus populi est suprema lex (The welfare of the people is the supreme law) when she, as ponente, faulted consumers, saying, 'They should be more vigilant in protecting their rights.'  And since consumer advocates have to pay for their own fares; solicit volunteer legal representation; and plod through deliberately obfuscated ERC rules and rulings, how can Sereno still claim that we consumers have been remiss?  We, therefore, have to ask this of the SC, the supposed last bastion of the people's hope for justice, which championed public welfare in 2003 by confirming the Return-on-Rate Base (RoRB), as well as vetoed the charging of corporate income tax to consumers and ordered the Commission on Audit (CoA) to sift through the books: Has it now been captured, too?"

In 2012 we wrote that "Sereno was ponente to an SC Second Division decision junking consumer protection groups' petition for a temporary restraining order (TRO) against the 26.9-centavo Meralco rate increase and its overcharge beyond the 12-percent RoRB affirmed by the SC in 2003, on the basis of the ERC's violation of the consumers' right to due process in refusing consumers opportunity to present their opposition. Though the high court… admitted that the ERC 'prematurely' issued the assailed decision 'since the period for the petitioners to file their comment/opposition had not lapsed then,' Sereno (as ponente) still decided against the consumer groups … in contrast to Meralco, which the ERC allowed to charge consumers its two dozen lawyers at the hearing and its P2.2-billion 'regulatory liaison' fund…"

For ordinary folks whose concerns revolve mainly around government greed and corruption, let's recall Aytch de la Cruz' 2011 report calling BS Aquino "to check on the (CoA) records where it will definitely show that the Manila International Airport Authority (MIAA) funded the $50 million (almost P1 billion) legal fees, which were in turn received by the government lawyers, among whom were retired Justice Florentino Feliciano and then lawyer Lourdes Sereno, now an associate justice who was rewarded with the high court post by Aquino, who claimed it was she who had won in the (Philippine International Air Terminals Co. Inc. International Chamber of Commerce) case against government..."

To date, Sereno has never satisfactorily explained this "windfall" from government funds when asked about her Statement of Assets, Liabilities and Networth.

And that is the kind of record the Yellows are so proud of?

(Watch Talk News TV with HTL, Saturdays, 8 to 9 p.m., with replay at 11:15 p.m. and Sundays, on GNN Destiny Cable Channel 8, this week on "Power and Economic Justice and Nationalism" with former CJ Reynato Puno and KME chairman Jimmie Regalario; visit http://newkatipunero.blogspot.com)