'Water boy' Prospero Pichay: The first agency head to be dismissed for alleged corruption under the new administration. Photo courtesy of www. texaninthephilippines.com

When former Congressman and ‘showman’ Prospero Pichay Jr. accepted the chairmanship of the Local Water Utilities Administration (LWUA) a year after losing badly in the 2007 national elections, people thought that this was an extremely small consolation prize from then President Gloria Macapagal-Arroyo. It was a very low-profile position for one who had risen so far and hitherto enjoyed high profile positions with the blessing of his boss.

Pichay had at first refused to be appointed to the LWUA board on August 28, 2008. Yet just one week later he changed his mind and proudly announced how he had accepted his appointment “as the government’s water boy for LWUA board membership with a nomination to be elected as chairman.” 

On his defeat, Pichay had first been offered the post as administrator of the Overseas Workers Welfare Administration (OWWA). But organizations of migrant workers and recruitment agencies vigorously opposed this plan. 

Going to the LWUA appeared a major step back for him given Pichay had been the representative of Surigao del Sur’s first district for nine years (1998-2007). While there, he had been chair of the House Committee on National Defense (2001-2004), before subsequently heading up the House contingent to the Commission on Appointments (2004-2007).

The big spender

Pichay was a high-profile congressman from Mindanao who wore expensive suits, rode classy SUVs and seemingly got almost everything he wanted – from money, women and government largesse. He was into all kinds of business deals including sports financing (chess, basketball, surfing), music recording (Megabuck Productions) and the media (the Remate tabloid and radio DZME). He even ran two Beechcraft aircraft.

Two of Pichay’s former employees who spoke to the Philippine Public Transparency Reporting Project (PPTRP) upon condition of anonymity were full of praises and called him “a gallant and benevolent boss” who “never failed” to share the spoils of his efforts.

“When he was at the Commission on Appointments, we were always awash with food and small but frequent ‘bonuses’ that not all government employees from other agencies would have. He took care of us as he took care of his people in his district and all his businesses. I do not know though if he did the same at the LWUA. We lost our jobs after he ran for the Senate and lost,” said the first former employee who says he is now with a “poorer boss.”

The other former employee was more open in saying that “Sir Butch was the classic macho congressman who never ran out of cash as he even helped finance the radio station DZME and the Remate tabloid before he ran for the Senate. 

“Imagine someone like him dared run in the elections by spending so much,” the former employee told PPTRP. “We were actually shocked and awed that he had so much money for advertisements in almost all the media,” he said.

According to some reports, when Pichay unsuccessfully ran for the Senate in 2007, he allegedly spent at least PhP 151.73 million (USD 3.61 million) for political advertisements –five times the estimated value of his net worth. 

“After the elections, he concentrated on his other businesses but was actually lobbying for a government post. He did not want to get into a GOCC [government-owned and controlled corporation]. Sir Butch wanted high a post that had plenty of funds and one that would continue to boost his high-profile ways,” the former employee said. 

With nowhere to go, Pichay eventually accepted the appointment to a GOCC – the LWUA – probably assuming he could continue operating in the way he was used to as the country’s “chief water boy” and “providing every town and barangay in the country with a water supply system.”

Start of the fall

Yet Pichay’s position in the bureaucracy was first shaken by allegations made by former military budget officer and whistleblower George Rabusa on February 7, 2011 during the Senate Blue Ribbon Committee investigations into claimed army corruption. 

Rabusa alleged that Pichay visited the office of then Armed Forces Chief of Staff Angelo Reyes at least three times during which Pichay received PhP 1.5 million (USD 35,714) in gifts.

Pichay however denied the charge and threatened to sue Rabusa for libel and slander. 

But the LWUA chief was not prepared for a bigger looming problem brewing within the water agency itself.

“Pichay’s entry to LWUA was expected but we were wary,” said Carmen Amores, a member of the LWUA Employees' Association for Progress (LEAP). 

“But since we were kind and law-abiding, we contended that he was ‘innocent until proven guilty’ and even welcomed him on his first day here. Despite us being a smaller agency in Pichay’s eyes compared to his first choice that was OWWA…. it could have eventually come to him that LWUA as a political stepping stone, was much more viable than OWWA.”

The new LWUA chairman immediately showered employees with large bonuses. 

“We were surprised to get bonuses that were unheard of in 35 years of LWUA’s existence. But we immediately felt that Pichay was trying to buy our souls. Many LWUA employees thanked him profusely, but not us. That was the agency’s money, and he and his coterie of consultants and contractuals also got benefits. He was also a rabid credit-grabber. He claimed that benefits we got that were stipulated in our collective negotiation agreement (CAN, the public sector workers’ counterpart to the private sector’s collective bargaining agreement or CBA),” Amores told PPTRP. 

But the LEAP also observed that he was also kind to his “own people”. 

“The LWUA was transformed into a ‘Pichay employment agency.’ While he was entitled to only two confidential staff, he took in around 20 consultants via job orders and co-terminous arrangements – even placing some in positions without approval from the Department of Budget and Management (DBM). He even attempted to put in someone who lived in Australia. He failed that but was able to put in COOP-NATCO party-list director Hamilcar Rotaquio into the agency’s PhP 50 million watershed development project,” said Rustico Tutol, another LEAP member.

The former LWUA head was also generous to media. 

“A certain Rita Gaddi was taken in as LWUA media consultant. And that wasn’t all. There were about 40 media people who collected allowances from the LWUA media center. This may explain why there is a PhP 24 million (USD 571,428) media affairs item in our 2011 budget, up from the PhP 20 million (USD 467,190) figure for 2010. In fact, before his suspension, negative news on Pichay were always ‘killed’ shortly after they come out in the media,” Tutol alleged.

Abusive lifestyle of the LWUA chief 

LWUA has an active public sector union committed to watch and protect the agency from corruption and abuse of power. JES AZNAR (www.jesaznar.com)

When PPTRP asked the LEAP how Pichay conducted affairs in the LWUA, the organization members could only say that he was “lavish as lavish can be!”

“Pichay occasionally came to the office in a helicopter that shook the 40-year old LWUA building. Other times he came in a Ford Expedition. In fact, he had a number of vans purchased for the agency’s trustees that had the approval of then Executive Secretary Eduardo Ermita. Last year, he tried to allocate PhP 2 million (USD 47,619) for supposed aerial surveys of the nation’s water districts. But we suspected that it would be for his own helicopter fuel needs and exposed the intention to the media. He never got it,” Tutol said.

The LWUA chief even wanted monthly birthday bashes where he could invite his Cabinet and Congressman friends and their hangers-on and embarked on “building improvement projects” and “art dealerships.” 

“Pichay used LWUA funds to buy a combo and disco lights set from ‘exclusive distributors’ so that then Secretary Gabriel Claudio and his Double Vision band could have good instruments to play with the ‘proper ambiance for singing and dancing.’ Pichay always brought his trophy wife Carla Lopez-Pichay in almost all LWUA affairs,” Amores said.

The LEAP also pointed to Pichay’s building improvement projects that allegedly violated Administrative Order 105 which orders all government agencies to implement austerity measures. 

“We were particularly incensed that Pichay’s first project – upgrading the LWUA dorm into a 5-star hotel. The dorm was losing PhP 1 million (USD 23,809) a year due to subsidized rates for visiting water district personnel. The dorm upgrading was supposed to be finished in October 2009 but is yet to be completed as of today,” Amores said.

According to LEAP, Pichay “openly violated LWUA financial and regulatory policies or amending the same to suit his whims.”

“What Pichay wanted, he got his lapdogs on the LWUA Board to do. If he was not satisfied, he publicly humiliated top officials to bend to his will. In fact, he filed a libel case against me. This is why when we got hold of documents on the 2009 investment of PhP 780 million (USD 18.57 million) of LWUA funds in the anomalous purchase of the Express Savings Bank Inc. (ESBI), we went to the Office of the Ombudsman in September 2010 to file charges of plunder, malversation, misappropriation , conspiracy, and violation of the code of ethics against Pichay. He was practically plundering agency funds,” Tutol said.

The Ombudsman preventively suspended Pichay for six months on May 20, 2011. Nearing two months later, on July 5, the Ombudsman finally ordered his dismissal and disqualification from public office and that of three other LWUA executives in connection with the illegal use of LWUA’s PhP 780 million to purchase ESBI.

“But there is much more still for the government lawyers to investigate such as the illegal formation of ‘subsidiary’ LWUA Consult Inc. (LCI) that only duplicates functions of the LWUA and skims off projects and funds from the agency coffers,” Tutol said.

When PPTRP sought some information on LCI, surprisingly, among its Board of Directors are Pichay, Daniel Landingin, Emmanuel Malicdem, Wilfredo Feleo, Arnaldo Espinas and Edwin Ruiz who were all ranking officials of the LWUA at the time LCI was incorporated in 2009.

“That clearly showed duplication of functions and they even had double compensation via extraordinary and miscellaneous expenses (EME). It was just too much. They made LWUA declare that it was incapable of doing projects and then recommended that LCI implement the projects. But the people in the LCI were organic to the LWUA. Pichay was getting PhP 250,000 and PhP 200,000 monthly allowances from LWUA and LCI, over and above his other perks. His gang of officials also continue to get hefty perks at the LCI aside from full benefits at the LWUA as of today,” Tutol claims

LEAP on a roll versus corruption

While Pichay was the first agency head dismissed for alleged corruption under the Aquino administration, it was not the first time that LEAP has ousted a LWUA official for violating relevant laws of the land.

“We are a responsible public sector union. So we are for good governance; we follow our code of ethical standards; we pursue transparency, fairness and justice side-by-side with employee rights and industrial peace. When these principles are violated by the powers that be, we act accordingly -- at the right time. We have been able to take out corrupt officials from the LWUA in the past. This is why we could not let Pichay get away with his impunity,” Amores said.

The first official driven out from the LWUA was Engr. Porthos Alma Jose. 

“We ousted Administrator Alma Jose for graft and corruption, incompetence and mismanagement. He was a former LWUA consultant who became our administrator, thanks to Tingting Cojuangco in 1987,” Amores said. 

Atty. Rodolfo de Jesus was the next LWUA official who was removed for abuse of authority, harassment of employees, illegal use of government vehicles and claims for Representation and Transportation Allowance (RATA), fraud, dishonesty, and union-busting.

Employees’ union as whistleblower

Amores and Tutol aver that among LEAP’s roles in government and society are to be a watchdog, a fearless whistleblower, and the agency's consistent conscience.

“We are employees who serve the public and protect government at the same time. That is why as a union we worked hard to get the observer status in the LWUA bids and awards committee (BAC) so that we can stop sloppy bid document preparation, haphazard bid evaluation, illegal composition of the BAC and other monkey business of corrupt officials in the process of procurement,” Amores said. 

“Our only lament is that the big-time Pichay procurements happened before we were able to get our slot in the BAC. But we are still going to make Pichay and his gang accountable via the Senate Blue Ribbon Committee and the new LWUA board,” Tutol told PPTRP.

The LEAP is also pursuing leads to questionable “emergency procurements.” 

“We have yet to get to the paper trail since the documents are being hidden by Pichay loyalists in the agency. But we have not lost hope since the new Board of Trustees appointed by President Noynoy Aquino led by Atty. Ephyro Luis Amatong has vowed to pursue the administration’s thrust for good governance, accountability and transparency in the water supply development agency,” Amores said.

The newly-constituted LWUA Board of Trustees composed of Amatong, Antonieta Fortuna-Ibe, Eduardo Santos and Carlos Primo David is currently reviewing all the Board decisions and ongoing status of all projects done under Pichay’s watch.

“But of course, we will not be cowed by anything now. We will continue to go through so much due to Pichay’s brazen impunity. We will continue to work to make him accountable and help in cleaning up the mess that he left at the LWUA. If new anomalies arise, we will not hesitate to blow the whistle since that is part of our duty as government workers. That is another reason why we have the LEAP in the first place,” Tutol said. Philippine Public Transparency Reporting Project

(The author is a freelance writer and researcher on government policies and trends.)