Confirmation hearings for Aquino Cabinet

With the start of confirmation hearings fot President Aquino’s Cabinet appointments, all eyes are now turned to Congress as Cabinet nominees submit themselves one by one to the process, which by tradition has become an arduous one for the nominees, the appointing authority and the Commission on Appointments.

Education Secretary Armin Luistro was the first to go under the microscope, thanks to the readiness of Sen. Edgardo Angara, Senate education committee chair, to review his appointment and his credentials for the job.

As things turned out, Secretary Luistro did not sail through the confirmation process. There were plenty of questions and objections to his appointment – some concerning his proposed policies and background, and many coming from Senator Miriam Defensor-Santiago. Based on reports, the education nominee may need a pole vault to hurdle the stumbling blocks to his appointment..   

All of us, in our respective ways, have a keen interest in these confirmation hearings, whether it be out of concern for nominees whom we find deserving of confirmation, or because of a nominee whom we consider ill-fitted or unworthy of the position to which he/she has been appointed. 

The biggest reason for concern is that at the end of the process, the President will get enough confirmed appointments sufficient to form a cohesive and credible administration.  

Cayetno Paderanga Jr. as Neda: Questionable integrity

It was as an interested citizen and as a form of public service, that I have written to Senate President Juan Ponce Enrile, chairman of the Commission on Appointments, to register my formal opposition to the nomination of Mr. Cayetano Paderanga Jr. as NEDA Director General and Economic Planning Secretary of our Republic.

I oppose his nomination on the following grounds:

First, as a matter of public interest, and given the high importance of the position of NEDA Director-General and economic planning secretary, I feel duty-bound to divulge to the honorable commission my personal knowledge of his work as chief executive officer of one Philippine corporation, wherein Mr. Paderanga was found to be derelict of his duties and unheeding of the law governing the payment of taxes to the government and was asked by the board to resign.

Mr. Paderanga was with the company (CIBI Information Inc.) for nine years, coinciding with the time when I was chairman of the company. In an internal review of the tax liabilities of the company for the years 2004, 2005 and 2006, the auditors discovered that the company failed to remit to the BIR the amount of P2,694,494.25 in value added tax (VAT), expanded withholding tax (EWT) and withholding tax compensation (WTC). This resulted in the company having to spend, among others, P1,304,801.78 by way of 20 percent interest.

As CEO, Paderanga’s failure to remit to the BIR the proper taxes is a criminal offense under Title X, Chapter II, Sec 255 and 256 of the Tax Code, both on the part of the officers responsible for the failure and of the company itself.

Taking the criminal law lightly is just one of several transgressions and omissions during Paderanga’s watch. He also appointed his brother in law as legal consultant at a salary of P90,000 per month, without disclosing to the board their relationship. When we questioned the rather extravagant fee versus hiring a law firm on a monthly retainer, his only response was to volunteer that he would personally pay part of his salary.

Likewise noteworthy, in 2007 when the company changed its external auditor, SGV’s findings necessitated a restatement of the company’s net income in 2006 from a net income of P848,012.00 to a net loss of P1,060,677.00.  The company’s reported deficit was also restated to reflect correction of prior year’s accounting entries from a deficit of P4,953,634 to a larger deficit of P6,292,327. It is incredible that Mr. Paderanga did not spot this considering he is a CPA.

The fact that these revisions had to be made in the company’s financial records say a lot about how the company was being managed during his years in at the helm..

4. Paderanga’s dismissal as CEO of CIBI has been reinforced by the disclosure of Ms. Vivian Yuchengco that Mr. Paderanga was also dismissed as president of the Philippine Stock Exchange primarily because of his failure to report for work on the normal hours expected of a President.

5. In the world of business, no one would hire someone who had been dismissed twice for cause. For Paderanga, who is both an economist and a certified public accountant, I would have thought that elementary integrity should be the last thing that Paderanga would be accused of. But contrary to the expectations of his employers and colleagues, it has turned out to be his Achilles heel.

6. Finally, as a former member of the cabinet with knowledge of the workings and demands of ministerial responsibility, I believe leadership of the NEDA is one of the most sensitive and important in the Cabinet because the economic planning secretary is the president’s principal economic adviser and will be instrumental in shaping the economic policies of the government. The office plays a crucial role in reviewing important economic projects, particularly those requiring foreign funding and assistance.

 It was precisely because of NEDA’s importance that Mr. Romulo Neri got embroiled in the ZTE scandal and continues to be under a cloud up to now. And it is because of the questions raised on the Paderanga appointment that some foreign agencies have already informally said that they would be uncomfortable discussing official development assistance (ODA) with him in charge.

 I concluded my letter to the CA chairman with these words:

“I respectfully submit that if Mr. Paderanga was wanting as a CEO in the private sector and did not comply with basic laws and tenets of openness and transparency in a company, it would be irresponsible to entrust the NEDA to his charge. With honest governance as a major emphasis of the Aquino administration, he is clearly a poor fit as planning secretary.

 If the Commission deems it appropriate or necessary, I am prepared to attend the Commission’s hearings on this particular appointment.”

A matter of public interest

Some friends and colleagues have asked me why I am going through all the trouble to take a stand on Mr. Paderanga’s nomination. I will say this: I believe that appointees to sensitive posts in government should be fully vetted in order to avoid the kind of mishaps and embarrassments that have occurred in the hostage-taking crisis.

For the same reason that the Commission on Appointments needs to review every key appointment to the cabinet and the bureaucracy, we the citizenry also have a duty to support and assist the process of review and approval.

The window of review is a cautionary reprieve from a bad appointment. We are wise to use it judiciously and thoroughly.  

 There is a sound reason why the confirmation process - from Presidential nomination to confirmation by the CA - is a contentious and exacting process. It is a constitutional device to limit the presidential appointing power, so that its nominees are fully qualified and have broad appeal.

In the last analysis, however, the CA review of appointments is important and vital to our democracy. The process is straightforward and fair. If the nominee is truly qualified for the job, and has no baggage that disqualifies him for public office, he or she will be confirmed.