Pork Barrel for Dummies: A How-To Guide to Scamming 10 Billion in the Ph

Janet Lim Napoles, the businesswoman at the center of the alleged pork barrel scam, is in hiding. The authorities are hunting her down because a Makati court issued an arrest warrant for her and brother Reynald Lim for illegal detention charges filed by scam whistle-blower Benhur Luy. The court recommended no bail.

Napoles is also accused of setting up bogus non-government organizations (NGOs) that received some P10 billion in pork barrel fund allocations of some lawmakers.

Consequently, a freeze order was issued against the bank accounts of members of Napoles’ family, those of her relatives, and of NGOs that she allegedly used to divert P10 billion pesos to those bank accounts.

The Department of Justice has launched a probe on this pork barrel scam. The NBI, in attempting to unravel the mystery of how graft and corruption works on the Priority Development Assistance Fund (PDAF), the official name of the congressional pork barrel, came up with a simple, straightforward video flowchart I saw online 2 days ago. It shows how a scammer can short-circuit the normal process.

But first, what is the normal process? The PDAF is a lump sum appropriation in the national budget. For this year, it has a funding of nearly P25 billion. It allocates P200 million a year for each senator and P70 million for each member of the House of Representatives. The process starts when a senator or congressman makes a request for the release of his allocation. A project list accompanies the request. Projects are drawn from a Menu specified in the annual budget law.

The request is sent to the House appropriations committee or the Senate finance committee, as appropriate. The respective committee chair of either chamber then endorses it to the Senate president or the Speaker, who thereafter forwards it to the Department of Budget and Management (DBM).

The DBM checks if the project list conforms to the Menu in the budget law. It then releases the fund to the implementing agency identified by the lawmaker, who is furnished a copy of the release document known as Special Allotment Release Order (SARO).

The lawmaker is really not supposed to interfere in project implementation. But in reality, he chooses the NGO that receives his fund and implements his project. Consequently, the implementing agency, when it receives the PDAF fund, simply turns around and transfers the money to the NGO identified by lawmaker. The transfer is presumably covered by a memorandum of agreement signed among the lawmaker, his implementing agency and his chosen NGO. (Jess Diaz, The Philippine Star) This is where everything goes wrong. Auditors may conduct a post-project implementation examination. But by this time the fund had already been misused.

Now, with the presence of the scammer, the normal process is not merely short-circuited (defeated, lent worthless) but tremendously automated in favor of a corrupt lawmaker because he can sit in the comfort of his office while all the transactions take place.

As the NBI flowchart showed, the scammer goes to the implementing agency and offers it 10-15% of the fund. He then tells the lawmaker that everything is go and promises him 40-50%. He goes to his contact at DBM to check the list of projects conforms to the Menu in the budget law. The DBM releases the fund to the implementing agency and is furnished a SARO. The implementing agency transfers the fund to the NGO.

Simple.