Midnight deal

Accusations of so-called midnights deals have been made against almost every exiting administration of this country.

The Ramos administration, for instance, was accused of signing a midnight contract two days before former president Joseph Estrada assumed office in 1998. The P53-billion Municipal Telephone Project was later scrapped by Estrada.

The administration of former president Gloria Macapagal- Arroyo was also not spared by  former president Benigno “Noynoy” Aquino who fired nearly 1,000 officials appointed by his predecessor during the presidential election period, revoking 977 midnight appointments by GMA after March 10, 2010 or two months before the national elections. Then chief presidential legal counsel Eduardo de Mesa said the appointments were made contrary to the principle that within the presidential election period, an outgoing administration must act only as a caretaker administration.

Under Sec. 15, Article VII of the 1987 Constitution, two months immediately before the next presidential elections and up to the end of his term, a president or acting president shall not make appointments, except temporary ones to executive positions when continued vacancies therein will prejudice public service or endanger public safety.

The Supreme Court later affirmed President Noynoy’s executive order against GMA’s midnight appointments.

In 2011, the Presidential Commission on Good Government (PCGG) sought to reverse the sale of a P4.3-billion state-owned lot in Pasig City to a private company, claiming the transaction was a midnight deal of the Arroyo administration and was a grossly disadvantageous sale allegedly initiated, negotiated, and executed during the final eight months of GMA’s term.

Two days before President Duterte assumed office, midnight deals were allegedly approved involving the grant by the Department of Environment and Natural Resources (DENR) of extensions or expansion of operations of the mineral production sharing agreements or MPSAs of several mining companies during the term of the late president Benigno Aquino.

A controversy involving midnight appointments also hit the Aquino administration following the compulsory retirement of Supreme Court Chief Justice Reynato Puno on May 17, 2010 or just a few days after the May 2010 presidential elections, although the Supreme Court ruled that the constitutional prohibition against appointments two months before any presidential election is confined to appointments made by the executive department.

But issues involving midnight appointments are not new. It has been reported that as far back as Dec. 29 and 30, 1961, then President Carlos P. Garcia gave his successor a headache when he made 350 appointments in his last hours as president. The so-called midnight appointments were revoked by his successor, Diosdado Macapagal, whose decision was upheld by the Supreme Court in the famous Castillo vs Aytona case. (Source: quezon.ph)

While the Constitution is clear in terms of prohibitions against midnight executive appointments by the President two months before any presidential elections, it is silent in so far as what constitutes midnight deals or contracts.

As early as last September, Sen. Win Gatchalian sounded the alarm over the possibility of the government entering into a midnight deal given that talks on extending the service contract involving the Malampaya gas-to-power project moved faster after businessman Dennis Uy’s entry into the operations of the Malampaya gas field.

Uy’s Udenna Corp. effectively has a 90 percent operating interest in the Malampaya service contract after acquiring both Chevron Malampaya and Shell Philippines Exploration.

But Energy Secretary Alfonso Cusi denied irregularities in his department’s review of Uy’s acquisition, saying the acquisition deal was a private transaction.

Gatchalian, however, said the law requires that government must first give its approval before the rights stipulated under the service contract can be transferred or assigned. The service contract is expiring in 2024, but talks on extending the contract are already ongoing, further fuelling the senator’s suspicion.

Even in the United States, cnn.com reported that former president Trump’s administration finalized more federal rules in its last year than any other recent president of the country.

However, the US Congressional Review Act allows lawmakers to eliminate recently finalized regulations quickly, but within a limited time. In the early months of the Trump administration, Congress used the law to eliminate 14 Obama-era rules, while during the Biden administration, Senate Democrats passed resolutions to eliminate only three Trump rules during the allowable period

If the carrying of guns are prohibited as early as January this year, except for bonafide police, military, and members of law enforcement agencies in complete uniform and while on duty, a little less than a month before the start of the campaign period for nationally elected positions and more than two months before the campaign period for locally elected positions, shouldn’t there be also a stricter scrutiny of contracts or deals entered into by outgoing administrations beginning January of the presidential election year? Is the carrying of guns outside of one’s residence a bigger threat than midnight deals entered into by outgoing presidents?

Just recently, the National Telecommunications Commission (NTC) was accused of rushing the award of television broadcasting frequencies previously held by ABS-CBN Broadcasting Corp. to persons or entities close to the Duterte administration.

But NTC deputy commissioner Edgardo Cabarrios said the decision was done for the public good considering that the frequencies have been unutilized for more than a year since these were recalled from ABS-CBN, and leaving the frequencies unassigned and unutilized would be a waste of limited public resources.

To refresh our memories, the House Committee on Legislative Franchises on July 10, 2020, rejected ABS-CBN’s bid to have its congressional franchise to operate a broadcasting station renewed. ABS-CBN’s franchise expired on May 4, 2020. On Sept. 10, 2020, the NTC recalled all channels and frequencies assigned to ABS-CBN saying it could not renew the company’s certificate of public convenience and necessity (CPCN), nor could it grant it provisional authority to operate without a valid and subsisting franchise from Congress.

According to Cabarrios, while there is no required timeframe for assigning unused frequencies, waiting for them to be assigned until the next administration would already be too long.

Last Jan. 25, the NTC said it granted frequencies (Channel 16 and Channel 2) previously assigned to ABS-CBN to Advanced Media Broadcasting System, a company owned by Manny Villar. The company applied for frequencies as early as 2006. The commission likewise awarded ABS-CBN’s Channel 23 to Aliw Broadcasting, which filed its application in 2007. Meanwhile, Channel 43 was given to Swara Sug Media Corp., which is the legal operating name of Sonshine Media Network Inc. of Pastor Apollo Quiboloy, and which filed its application in 2007.

Infrastructure think tank Infrawatch PH said NTC’s award of frequencies to the media companies were almost midnight deals given that the Duterte administration is already in its final months.

If the NTC waited for more than a year before making a move on ABS-CBN’s previous frequencies, couldn’t it have waited a few more months? In the case of the awardees, if they were willing to wait for 15 or 16 years to finally have radio frequencies to operate broadcasting stations, can’t they wait a few more months?

There is no hard and fast rule in terms of determining when a contract or a deal is a “midnight” deal or not. Questioning it before the courts or the Supreme Court, for that matter, would be a futile exercise because the laws and the Constitution are silent on this matter unless the contracts are prejudicial to the government. The courts would also just defer to the decision of the NTC on the ground that the NTC would be in the best position to determine when and to whom frequencies should be assigned, being the administrative agency mandated with such technical task, assuming of course that the commission followed its procedural rules.

It will be interesting to know how this question will be resolved by the next administration, politically at that.

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