August scourge: Floods and...

DIE HARD III

Herman Tiu Laurel

8/10/2012

The rains, floods and landslides have been the scourge of our lives for two weeks now, but the sun will shine again even after the low pressure areas and Typhoon "Saola" shall have passed as did "Ondoy" and "Sendong" in years past. The damage estimates will be in the hundreds of millions or a few billions of pesos; and the nation's life will move on.

But there is a scourge that has stayed with us for over 10 years now like a permanent devastating storm staying steady upon this land. Wreaking havoc year in and year out, the pestilence of oppressively exorbitant power costs that continue to rise unabated, despite all the reasons for these to naturally come down, has inflicted hundreds of billions of economic losses each year.

The rains and flooding of our country's hydroelectric dams should have naturally lowered power rates as nature's way of compensating for the damage of the floods — but no, in this August rainy season, our power rates will still go up!

A headline just three days ago ("Meralco rates to rise in August") carried dominant power firm Manila Electric Co. (Meralco)'s announcement that "the increase in the generation charge this month was the result of the eight-day shutdown of the Malampaya gas pipeline, which affected one-third of the total power supply in Luzon in July." But what's the real score?

Currently minority stockholders of Meralco, the Lopezes locked in Meralco's power supply to power plants they own even after selling the company's lion's share to the other oligarchs, to ensure that they would continue to enjoy the fruits of the sweetheart deal they dealt for themselves.

Meralco admitted that "it sourced 45.6 percent of its requirements from three independent power producers (IPPs) — the Sta. Rita and San Lorenzo gas plants (both Lopez-owned) and the Quezon Power Philippines Ltd. — which increased their rates by a combined 48 centavos per kilowatt-hour (kWh) to P5.58 per kWh," which was why "without the gas from the Malampaya… the Lopez Group's First Gas resorted to the use of more expensive liquid condensate fuel to ensure a continued generation supply to Meralco."

Now why wasn't Meralco made to shift primarily to cheap hydroelectric power? The first typhoons this year entered the Philippines in June and the dams were already filled.

In that same report, Meralco admitted that state-owned National Power Corp. (Napocor), from which it gets 41.7 percent of its supply, had reduced its power sold to Meralco by P0.66 per kWh; and yet the private power company said it "failed to offset the increases in the Wesm (Wholesale Electricity Spot Market) and IPP charges." Now how on earth would a reduction of P0.66 per kWh fail to offset the P0.48 per kWh increase by the Lopez gas-powered IPPs? Here's why: Meralco said it sourced 12.6 percent of its supply from Wesm at a cost of P14.70 per kWh. Isn't the Wesm supposed to help promote competitiveness and lower prices? Instead, it always contributes to increasing the prices because its "market operations" ensure the IPPs' windfall.

A Wesm Web site explains, "The Wesm is designed to encourage competition in generation while at the same time providing incentives for the effective operation and development of the transmission networks, coupled with locational price signals to encourage the economically correct geographic placement of any future planned generation," obviously using language designed for arbitrary interpretations and selective allocation. Thus, in the past years Wesm prices have gone up to P60 per kWh as it did sometime in 2008 or 2009 when government attempted (through the spot market) to recover its losses from Gloria Arroyo's favors to the power oligarchs. Since the Wesm share in the total price would only be around 10 percent, it will simply go unnoticed if media do not report on it. But as the public has now wised up, people like us now monitor it. However, for the most part, there are a number of media outlets that the oligarchs still completely control to hoodwink the innocents.

Like other social networks, one news Web site raps for the power oligarchs. Our student volunteer, Richard, sent us two disinformation pieces on the power issue from Rappler. The first was a few weeks ago when it featured a very expensive animation on the high power rates, which blamed everything on Napocor, while totally omitting any mention of Meralco; the power oligarchs' corruption of Congress to pass the Electric Power Industry Reform Act (Epira); the illegal change from the 12-percent Return-on-Rate Base to the 17-percent Performance Based Regulation formula of computing power rates; the 500 percent to 900 percent overprice in the assets of Meralco; the manipulations in the Wesm; or the overpricing of Malampaya gas for power, ad nausea. The second is an interview with Energy Secretary Rene Almendras, painting him as a "straight shooter" who is into "depoliticizing energy" while staying completely silent on the nationwide protests against his subservience to the power oligarchs or of Mindanao's total rejection of his actuations in the region's 1st quarter 2012 power crisis.
Energy Chief Rene Almendras was supposed to have been replaced by Aug. 1, but he seems to be staying longer while undergoing an image remake. Why? Our Energy Department insiders say Almendras and Cailao still have to sell off (or privatize) the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) and Malampaya's remaining 14-year contract to Shell-Texaco; likewise the privatization of four power barges; as well as the Agus-Pulangi hydroelectric complex in Mindanao (deemed imperative by Osmeña and company)

Malacañang seems powerless against these masters of Almendras. They must be more powerful than the rains or typhoons that have passed.

(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 Consumer Struggle Updates" with Jojo Borja, Butch Junia and lawyer Luke Espiritu; visit http://newkatipunero.blogspot.com)

Arthur vs St. Heidi

DIE HARD III

Herman Tiu Laurel

8/6/2012

I wrote column entitled "A Trojan Horse" in the Feb. 7, 2011 the Tribune describing what I saw as the insertion of a virus in the Commission on Audit (CoA) intended for political demolition jobs, done by the lobbyists of the Yellow cabal.

When CoA Commissioner Heid Mendoza testified before the Senate impeachment court that Chief Justice Renato Corona had $28 million in his FCDU (foreign currency deposit) account by totaling transactions of several years as if it were one sum, every Filipino should have realized that they were looking at that virus of an accountant and auditor that the "civil society" or the Yellows canonized. It had to take Ombudsman Conchita Carpio-Morales to restore some credibility to the government's "hidden" dollar account of Corona in admitting that the total deposit was only $2 million is the whopper of an arithmetic of Heidi Mendoza is discounted.

If the whopper of a story of Heidi Mendoza at the Senate impeachment hearings is not enough to convince some Saint Heidi Mendoza worshippers (as there are still a few I encounter who wonder why anyone should doubt her sainthood as the Ateneo School of Government, the Inquirer and the Philippine Star, and ABS-CBN had already anointed her) then they should get to know Arthur Benasa, a 40-year veteran of CoA and retired the past 10 years from the institution he had devoted a lifetime serving.

Mr. Benasa, an impecunious 71 year old, had gotten in touch with me through Linggoy Alcuaz whom he sought out in mid-2011 in a media Kapihan to present his case against the sainthood of Heidi Mendoza. I noted Mr. Benasa's arguments at that time but never had an opportunity to take up his cause after I had written my piece on the matter and moved on to the many other issues that confront the public constantly.

With the recent controversy over the revival of certain settled issues affecting the City of Makati by none other that Saint Heidi Mendoza, I was reminded of Mr. Benasa's criticisms of Saint Heidi Mendoza. It was fortunate I had his cell phone number still and called to invite him to discuss his issues on our Global News Network (GNN) cable TV program. Before finally agreeing to join my show Benasa called to clarify a few things: first, what is my take on the Reproductive Health (RH) bill. This was, of course, not relevant but given the venerable status of the man I believed I understood. I said that I'm against the RH bill for reasons not similar to the Catholic Church's arguments, Benasa felt at ease as he wanted assurance that we are like minded, as he is firmly against the RH bill. Then he explained the next condition for joining the show, "no politics" as he didn't want to "dilute his pure intentions." I assured him that we were likely like-minded in pursuing truth about the real Heidi Mendoza.

I jokingly added that maybe we are alike in that we both have little money, and he laughed and felt comfortable enough to admit that he needed taxi fare to be sure to make it to the station on time. I figured the distance from Sucat to Makati and back would require about P500 and sent this to his bank account. He arrived that afternoon at the studio ahead of me, with a folder of documents he was all prepared to discuss in detail. On the show the first thing I asked was why he was so incensed with Heidi Mendoza as to go to all this trouble crusading in media for and meeting journalists like me to tell his story. He explained that when he heard Heidi Mendoza lie and malign the CoA as an institution and literally everyone with it as corrupt, and the consequence of that slander which he heard and read from the news that the public had taken to stoning CoA shuttle buses: That was the tipping point.

Mr. Benasa declared outright that Heidi Mendoza lied through her teeth in her testimonies to the Senate in the Gen. Garcia plea bargain hearings when she claimed under oath: 1) she headed a special six-member team the CoA to investigate Garcia's transactions; she was only a member of the team and never a team leader (though she tried to arrogate this unto her self); 2) that she submitted an official audit report; as a mere member she could not singularly submit a report; 3) she said the chairman, commissioners and directors did not support her when she was provided a vehicle, office and more than P200,000 as a member of the team to conduct the audit (which she refused to be audited on claiming it was confidential), and Benasa claims he had evidence to show this money was also spent in bars; and due to all these she inflicted to much damage on the CoA as an institution and the countless personalities quietly serving to the best of their capabilities.

In the latter part of the interview Benasa added another important item, the claim of Heidi Mendoza that $5,000 of a UN fund to the PNP was missing, and the UN headquarters had to call Manila to belie that claim and state that there was not such missing fund. Benasa ended with an ominous caution to the government on Heidi Mendoza saying, "You know the illusion of grandeur of this may not be controlled… and illusion is always without limit."

(TNT with HTL, Tuesday, 8 to 9 p.m., with replay at 11 p.m., and Sun 8am on GNN, Destiny Cable Channel 8: this week ""True up or throw up" power rates; visit http://newkatipunero.blogspot.com) 

Lie-bored and Shanghaied

PEOPLE'S STRUGGLE
Herman Tiu Laurel
7/23-29/2012



First we are “Lie-bored”: On June 27, the international media reported that Barclays Bank had been fined by U.S. and U.K. regulators £ 290-M or $ 451-M for manipulating Libor (London Interbank Offered Rate) between 2005 and 2009. It had been falsifying its submissions to the Libor setting mechanism on such its cost of borrowing from other banks to boost its standing, its high ratings to lower its interest costs. Libor is calculated by the BBA (British Bankers’ Association) and published by Thomson Reuters financial information group daily after 11:00 AM (London Time), fixing rates for three currencies: the U.S. Dollar, British Pound Sterling and the Japanese Yen. Evidence of the rate fixing included e-mails of Barclays executives, The Globe and Mail reports: “The scandal – complete with e-mails showing bankers boasting of manipulating interest rates and congratulating each other with offers of champagne – has triggered fierce criticism about the financial industry in general and Barclays in particular.”

Barclays dragged in other major banks, exposing what seems to be industry practice. Barclays’ manipulation from 2005 on also means this was done with knowledge of various authorities. The British paper Financial Spectator reports, “… the bank confirms that it had close contact with the Bank of England and other authorities regarding the liquidity crisis in October 2008. … Paul Tucker, the deputy governor of the Bank of England (BoE) …. advised that a number of senior figures within Whitehall were concerned (about) Barclays' Libor submissions ... Mr Diamond (Barclays’ head) explained this by advising Mr. Tucker that he believed other banks were ‘posting rates at levels that were not representative of where they would have to undertake business’", i.e. other banks were also falsifying to window dress their submissions. Now, the BoE and other major banks are dragged into the scandal.

Filipinos victims
The Barclays’ scandal is just the tip of the iceberg. One website reflecting my sentiment aptly called “Hang the Bankers”, reports other global banks being investigated and sued on Libor fixing: HSBC, Lloyds and Royal Bank of Scotland, JP Morgan, Citibank, et al. Interest rate “rigging” comes in many forms, while these commercial banks do it and can be found criminal in the act, governments like the U.S. of A. can rig it and its accepted as law, as the almost 0% interest rate in the U.S. for its bankers is today. For Filipinos who labor to pay interest on everything with interest rates from just over 4% that the BSP (Banko Sentral ng Pilipinas) is paying for example to keep local banks’ moneys from OFWs and other inflows parked with it, to the $ 36-B U.S. bonds costing as much, to commercial rates of up to 10% or consumer finance that is much, much higher, the news of such bank manipulations of interest rates such as Barclays should cause an epiphany, and call for independence from Western banking enslavement.

Ten million Filipinos labor overseas, often in horrendous conditions, to send a few dollars home. Twenty-million Filipino families, labor daily to eke out a living to pay for food, water, electricity and other basics. Over and above everything they also pay for one thing that they never even completely understand – financial interest on everything. Paying interest for the P 5.1-Trillion National Debt that continues growing in interest, P 2-Trillion National Budget it includes P 800-B automatically appropriated for debt payment half of which is interest payments, interest on securitized projects of the PPP (Public Private Partnership projects), the MRT, the CCT, the power companies such as Meralco and the water companies such as Manila Water and Maynilad, ad nausea. The basic facts of Filipino life today are Death, Taxes, and Interest Rates on debt; then these global banks manipulate the interest rates for their advantage at the expense of Third World nations and folks.

The world is shanghaied
The July 18 financial headlines blared: “HSBC banks on Mexican drug cartels, terror funds“ after the US Senate initiated probes and finding the global banking giant HSBC (which began in the 19th Century as a British “opium bank” profiting from the Opium Trade in China). HSBC, euphemistically put, “exposed the United States and other countries, including India, to major risks of money laundering, terrorist financing and drug trafficking with its lax controls”. It’s US division provided money and banking services to some Saudi Arabia and Bangladesh banks that helped fund Al-Qaeda and other terrorist groups in India. “HSBC used its US bank as a gateway into the US financial system for some HSBC affiliates around the world to provide US dollar services to clients while playing fast and loose with US banking rules,” Senator Carl Levin, chairman of the Senate Permanent Sub-committee on Investigations, said.

What was HSBC’s response? “We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong,” said HSBC spokesman Robert Sherman. Some of its top executives were set to resign, but is that really punishment or is it just graceful exit and then reassignment? Again, what is being uncovered is just the tip of the financial iceberg. The U.S. investigation uncovered most shocking things of HSBC’s illegal activities, i.e. finding that HSBC allowed Mexican drug cartels to launder billions of dollars through its US operations. The Mexican affiliate of HSBC transported $7 billion in physical from HSBC-US from 2007 to 2008. “In an age of international terrorism, drug violence in our streets and on our borders, and organized crime, stopping illicit money flows that support those atrocities is a national security imperative,” noted Senator Carl Levin. An HSBC official resigns as head of it “compliance office” over drug money scandal but he will stay with the bank in a new capacity.

Whitewash will follow
The US Congress is also investigating the “Lie-bor” scandal but already Obama’s Justice Department Secretary Eric Holder has proposed “immunity” for the culprits. Glen Ford writes in ICH (Information Clearing House) that “Obama’s Justice Department Rushes to the Rescue of LIBOR Criminals … The Justice Department claims to be building criminal and civil cases in the LIBOR scandal ,…But that’s all a front, a farce. … He packed his administration with ’banksters’ (banker-gangsters), passed his own bailout and, in collaboration with the Federal Reserve, channeled at least $16 trillion dollars into the accounts of U.S. and even European banks – … His Attorney General, Eric Holder, a corporate lawyer to the core, is busily staging a pre-emptive LIBOR prosecution of bankers in order to shield them from legal action by a host of other government agencies…” The same strategy will apply in the HSBC case eventually and the guilty will eventually be let off. It will be no different from the 2008 financial scandals where the villains not only continue to operate but get huge bonuses still.

Western Banksters mock AMLA
Last June 11, 2012 I wrote a piece entitled “Lawmakers, Lawbreakers” and this is what I said, “The AMLA (Anti-Money Laundering Act) is a law inspired and lobbied for by the U.S. through the Philippine legislature, supposedly to track illegal and terrorist money. Guess what? The biggest illegal funds transactions in the world is the $ 500-B annual drug money transfers which include the Philippines as one of the biggest source. We have no data on the Philippines but we can see how the West and the U.S. banks break the global anti-money laundering rules. Read ‘Western banks, Immune, Enjoy Biggest Slice Of Drug Money Profits’ posted in The Agonist, and ‘American Banks “High” On Drug Money’ - about exposes of Martin Woods an expert at “sniffing out dirty money passing through International Banking Systems’. The U.S. and its Western allies as the originator of the global anti-money laundering rules and regulations also have its banks as the world’s also chief violators.” Law-abiding citizens of the World and the Philippines today should learn its lesson in the chicanery, hypocrisy and misanthropy of the Western financial system.

The Philippines and Filipinos have been Lie-bored and Shanghaied all the past decades and if it wants to end these financial victimization it must turn back the clock and restore the era of “Filipino First” financial policies from the time of President Carlos P. Garcia and Central Bank Gov. Mike Cuaderno of “currency and capital controls” and maybe, moving forward to the future, reinstate the primacy of public or National Banking over private and international banking.

(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., this week “New Sin Tax: Sin against Filipinos”; visit http://newkatipunero.blogspot.com)