2022 corporate political donations: Villanueva got money from gov’t contractor; Ejercito, Padilla donors exceed limits

The Omnibus Election Code prohibits donations from “natural or juridical persons who hold contracts or subcontracts to supply the government… with goods or services or to perform construction or other works.” Meanwhile, Comelec Resolution No. 10772 only allows domestic companies to make donations not exceeding 5% of its taxable income.

By Elyssa Lopez

Philippine Center for Investigative Journalism

In last year’s national elections, Sen. Joel Villanueva reported receiving P20 million in campaign donation from a corporation holding an active government contract, based on government documents.

The Omnibus Election Code prohibits candidates from receiving donations from “natural or juridical persons who hold contracts or subcontracts to supply the government or any of its divisions, subdivisions or instrumentalities, with goods or services or to perform construction or other works.”

Senators Joseph Victor “JV” Ejercito and Robinhood “Robin’’ Padilla, along with losing candidate Richard Gordon, also reported receiving corporate donations that exceeded limits set in Comelec Resolution No. 10772 and the Corporation Code of the Philippines.

The 2022 elections saw the first implementation of the revised Corporation Code of the Philippines, setting clear guidelines on corporate donations. Based on the Comelec resolution that was issued based on the new law, the donation should not exceed 5% of the corporate donor’s taxable income the year before the elections.

New San Jose Builders has project with NHA

In 2021, New San Jose Builders Inc. (NSJBI) was awarded a P2.147-billion contract to build a 19-story office of the National Housing Authority (NHA) in Quezon City, according to data from the Philippine Government Electronic Procurement System (Philgeps).

The following year, it raised P20 million for Villanueva – the single biggest corporate donation to a senatorial candidate – according to the statements of contributions and expenditures (SOCEs) that the senator submitted to the Commission on Elections (Comelec).

The company supported only Villanueva among the senatorial candidates. The reelectionist senator won a fresh term in the 19th Congress.

NSJBI’s contract with NHA is effective from 2021 to 2025, according to Philgeps data. So when the company donated to Villanueva’s campaign purse last year, the contract was in effect. It continues to be so.

Whether Villanueva and NSJBI are liable under the election code is up to the Comelec to investigate, former elections commissioner Luie Guia told the Philippine Center for Investigative Journalism (PCIJ).

“Assuming that to be facts, the [Omnibus Election Code] is very clear: anyone that holds contract or subcontract with the government, or with any of its instrumentalities ay prohibited sa pag-donate sa isang candidate,” Guia said.

“In this case, this is a criminal offense and Comelec is duty-bound to hold those who might have committed violations of the election laws to account,” he added.

Guia said both the corporate donor and the recipient, in this case Senator Villanueva, should be held liable for the breach. PCIJ sought confirmation from Comelec if it has investigated the matter. It has yet to respond.

PCIJ also reached out to Senator Villanueva but he and his office have yet to respond. NSJBI has yet to respond to PCIJ’s e-mailed questions as of this posting.

The NHA is an agency under the Department of Human Settlements and Urban Development  (DHSUD), which oversees the regulation and policymaking for all housing, human settlement, and urban development concerns in the country.

A year after NSJBI  won the NHA contract, Acuzar was appointed DHSUD secretary by President Ferdinand “Bongbong’’ Marcos Jr. He took his oath in July last year.

Acuzar is better known as the owner of the famous heritage destination Las Casas Filipinas de Acuzar in Bataan, which is owned by NSJBI. Acuzar is also the chairman of the firm, according to NSJBI’s website.  He is the brother-in-law of Paquito “Jojo” Ochoa Jr., who served as executive secretary of then President Benigno Aquino Jr. from 2010 to 2016.

His construction company, which is also a real estate developer with interests in condominium development and tourism, has had brushes with controversy.

In 2014, the Government Service Insurance System (GSIS) acquired one of NSJBI’s condominium properties after it defaulted on a bank loan. Tenants of the property filed a case against the company in the Supreme Court, arguing that the firm failed to inform them that the property was used as collateral.

The firm’s projects included the P7.65-billion Iglesia ni Cristo-owned Philippine Arena in Bulacan, touted as the “world’s largest indoor arena’’ that can seat 55,000.  In 2017, the Bureau of Customs called out NSJBI for failing to pay P1 billion in customs duties for the materials it imported for the construction of the arena.

3 other corporations exceed donation limit

PCIJ’s analysis of the senatorial candidates’ SOCEs also shows that three other corporations that donated to Ejercito and Padilla, along with losing candidate Richard Gordon, exceeded limits set in Comelec Resolution No. 10772.

Comelec Resolution No. 10772 issued in March 2022 allows domestic companies to make “reasonable donations’’ to candidates not exceeding 5% of its taxable income in the taxable year preceding the elections.

It was based on the Corporation Code of the Philippines, a law enacted in the middle of the campaign period for the midterm elections in 2019 and whose impact was expected to be felt in 2022.

Creative Pacific Corporation made the largest in-kind corporate donation to Richard Gordon by paying for P9 million worth of the reelectionist senator’s flights during the 90-day grueling senatorial campaign. The amount exceeded the company’s reasonable donation pegged at P1.5 million.

The company was reported to be a partner of the pharmaceutical firm IP Biotech Group in the construction of emergency quarantine facilities during the outbreak of the Covid-19 pandemic in the country in 2020.

Gordon, who lost in last year’s elections, chairs the Philippine Red Cross which conducted testing for the disease and established isolation facilities and emergency field hospitals.

Auszeal Inc., a frozen food importer, chipped in P5 million to Ejercito’s campaign, an amount that was thrice more than its allowable donation of P1.4 million. Ejercito won a fresh term in the Senate.

Tapa King Inc., the company behind the fast food restaurant of the same name, contributed P5 million to the campaign kitty of Padilla, who topped the senatorial race. Under the Comelec resolution, it was allowed to donate only P297,845.

See table below below on corporate donations in the 2022 senatorial elections:

PCIJ tabulated corporate contributions based on the candidates’ SOCEs.

Two of the top domestic corporate contributors were omitted from the analysis as they were not found in the online database of the Securities and Exchange Commission (SEC).

The Comelec cap applies only to corporate donations, but not to individual donations. Election watchdogs have long sought campaign contribution limits for individuals to level the playing field for all candidates.

Violation of Resolution No. 10772 is considered an election offense and punishable by imprisonment of not less than one year but not more than six years.

PCIJ’s analysis is corroborated by a study conducted by election watchdog Legal Network for Truthful Elections (Lente).

In a February 2023 paper on political finance reform, it found that eight corporate donors to party-list groups in the 2022 vote exceeded limits.

Lente policy consultant and election lawyer Izah Katrina Reyes said it is imperative that the public, government and civil society groups keep tabs on donors’ compliance with the Comelec resolution, lest it would give rise to possible conflict of interest.

“What we see is that there is a tendency for campaign contributors to be able to dictate or influence the candidates should they win the election. So when you are a business interest, whether you are an individual or a corporation with large contributions, then this particular influence is magnified,” Reyes told PCIJ.

In its paper, Lente also pushed for the regulation of private funding or corporate donations during elections to avoid occasions of corruption and undue influence.

For years, candidates, at least according to their declarations to the Comelec, have mostly relied on family wealth or tycoons’ contributions to fund their campaigns. History has shown some of these donors have gone on to benefit from the winning candidate.

Other top corporate donors

The enactment of the Corporation Code of the Philippines was expected to increase candidates’ access to resources in the 2022 elections. Analysts initially feared it would balloon spending.

“The worst thing that can happen is that there’s an individual contributor and then corporate [contribution to a candidate], then [that’s] double [contribution coming from the same interest], yun ‘yung ballooning [of spending],” said Ona Caritos, Lente executive director.

In all, however, PCIJ’s analysis showed that individual donors still dominated campaign donations in the 2022 elections.

Companies hardly flexed their financial muscle in the last elections. Only 57 companies made contributions to the senatorial candidates, totaling P113 million, or about 7% of the candidates’ total spending.

Caritos said it may be too early to feel the impact of the law. The corporate donors were also mostly small or medium-sized businesses. There were food businesses, and ad agencies that contributed in-kind donations in the form of meals, or ad placements.

Sen. Sherwin Gatchalian received P9.9 million – the second biggest corporate donation – from Foodsphere Inc., the company behind the production of the popular food brand CDO.

Aside from Creative Pacific Corporation, Gordon also received an in-kind donation from mining firm Paramount Nickel Inc., which paid for P6 million worth of the candidate’s flights.

Aside from the P171-million donation made by Bagumbayan–Volunteers for a New Philippines partylist to Gordon’s campaign, the Creative Pacific Corp. and Paramount Nickel Inc. made the most contributions to the former senator.

Mandate Publications and Printing Express also contributed P5 million each to Villanueva, but these could not be found in SEC’s online database.

For this report, PCIJ included all corporate contributions for presidential and senatorial candidates, based on their campaign contributions and expenditures. Companies that were not found on the database of the SEC were also included to provide a holistic picture of the spending.

PCIJ omitted in the analysis Sen. Jinggoy Estrada’s declarations in his SOCE that GMA Network and ABS-CBN contributed to his campaign. The Right to Know, Right Now Coalition had already earlier reported that it may be an error of reporting on the part of his staff.

For election lawyer Donnah Guia Lerona-Camitan, domestic corporations’ minor participation in election fundraising could mean that they do not find political spending a good business practice.

“Donations serve to align political candidates with corporate interests yet also entangle corporations in political affairs. At times, these donations sit in tension with stated corporate values and commitments,” she said.

Campaign finance reform needed for stricter implementation of election laws

Companies may have found themselves adjusting with the rules, Lente wrote in its report.

In the SOCEs of some candidates, for example, a company name is declared as the donor but this is closely followed by the name of an individual related to the company. Most likely, this individual is an owner, or holds an executive position in the company.

Reyes said candidates may also still be figuring out how to declare some of the contributions they receive.

“We’re after truthfulness [in SOCEs] so talagang kung sino ‘yung nagbigay, who spent for it, whose money is it, that’s what we really want declared. So kapag nagkakaroon ng ambiguity as to [which] personalities, then it’s bad kasi it would go against the truthfulness of it [the SOCE],” Reyes added.

Lente has long campaigned for a limit on campaign donations from both companies and individuals.

After all, “it’s a democracy, and [elections] should be funded by more people,” said Reyes.

Stakeholders suggest that SOCEs be made public as a countermeasure to the weak implementation of campaign finance laws. It’s been extensively reported that the campaign finance office of the Comelec is understaffed and underfunded.

A public disclosure of SOCEs would allow people to assess campaign contributions and expenditures.

Guia shared that in the past, complaints for overspending backed by strong evidence led to conviction of the candidates.

“That is one thing the public can contribute to ensuring the integrity of the election process: if there’s a complaint, make Comelec unable to have a lackadaisical attitude on [handling] these cases [by providing clear evidence for the election offense],” Guia added. END