World Bank urged to take closer look at textbook scam

The World Bank was urged to formally investigate the alleged fraudulent procurement of textbooks from the Vibal Group of Bidders under the bank’s Second Social Expenditure Management Project.

Lawyer Harry Roque, counsel of Rex Bookstore Inc., said there is an obvious irregularity when WB executives involved in the procurement reversed the ruling of the Philippine government’s Inter-Agency Bids and Awards Committee (IABAC) and the recommendation of the Department of Education (DepEd) technical working group that disqualified the Vibal Group and two of its subsidiaries in the book procurement bidding.

Sen. Panfilo Lacson, likewise, advised the WB to take a closer look into the irregularities in the procurement of textbooks for the bank’s project, instead of disputing the reports on the anomaly.

Lacson said if the World Bank is serious in eliminating corruption in bank-funded projects, it should probe the contracts involving the Vibal Group.

"If the World Bank indeed treats cases involving allegations or signs of fraud or corruption in projects it financed as a very serious issue, then the contracts of Vibal during the past so many years is worth looking into," Lacson said in a press statement.

Roque said the reversal of the ruling of the IABAC and the DepEd was made by Rekha Menon, a senior economist of the WB, who allegedly did not consult the bank’s legal department.

Menon, together with Fadia Saadah, WB sector manager for health, nutrition and population; and Dominique Aumentado, Philippine procurement specialist; are the respondents in the complaint filed by Roque before the World Bank Department of Institutional Integrity.

"Our complaint will speak for itself. How could a senior economist (of WB) issue a legal opinion on the matter when it should be the legal department that is doing this?" Roque said.

He contradicted the statement of Joachim Von Amsberg, WB country director for the Philippines, East Asia, and the Pacific, that it was the Philippine government that made the final selection in the bidding.

"With the WB opinion issued by Menon, reversing the IABAC ruling and the DepEd recommendation, the WB virtually made the final selection."

Lacson had also sought a Senate investigation on the government’s textbook procurement program, whose records show Vibal and the firm’s sister companies have cornered three-fourths of the contracts under the WB program since 1999.

"How come a single bidder was able to obtain more than 75 percent of the contracts under the WB program? Is that a healthy sign of a fair, open and transparent competition? There’s definitely something wrong here and I am intent on looking into the bottom of it," he said.

Lacson disputed the claim of Von Amsberg that "the increase in bidders has made it difficult for bidders to collude." He said the increase was artificial and ironically the result of big-time suppliers colluding with each other.

Lacson said a complaint recently filed against Vibal before the WB Department of Institutional Integrity should speak for itself, adding that his concern is to eliminate corrupt practices in the procurement of textbooks to improve the quality of educational materials being used in the Philippine school system.

"These textbook procurements may be under WB guidelines but we (government) also have to abide by the procurement laws of our country," he added, referring to Philippine laws that penalize collusion.

Roque said Von Amsberg should have been aware of the existence of the complaint before issuing a statement clearing the Vibal Group.

He said the contention of Von Amsberg that the increase in the number of bidders will prevent irregularities is not an assurance that fraud can be prevented.

"We should also look into the personalities and entity behind the number of bidders, and in this case, Vibal is clearly in the shadows of the additional bidders," Roque added.

He said this was the reason why Vibal and its subsidiaries were disqualified from the bidding. "They have interlocking officers that thereby constitutes conflict of interest."

Earlier, Lacson asked the DepEd to investigate how a monopoly has marred the bidding procedures for its textbook procurement program, especially those involving foreign loans.

The DepEd is asking Congress to allocate some P2.064 billion for textbooks for 2007.

"If the monopoly is not addressed, following the pattern, the Vibal Group stands to corner some P1.5 billion," Lacson said.

Citing records brought to his office, Lacson said the Department of Budget and Management (DBM) awarded almost P500 million worth of textbook contracts to two disqualified bidders last September.

Citing figures from the DBM Procurement Service, Lacson said the contracts involved the supply and delivery of textbooks and teachers’ manuals on Sibika Grades 1-3; Heograpiya, Kasaysayan at Sibika (HeKaSi) Grades 4-6; and Araling Panlipunan Years I-IV.

He said the government awarded the contracts to Watana Phanit Printing and Publishing Co. Ltd.; Vibal Publishing House Inc.; and Daewoo International Corp. last Sept. 25.

But as early as Feb. 28 this year, the Inter-Agency Bids and Awards Committee had already disqualified Vibal and Watana from the bidding due to "conflict of interest."

Lacson said that Watana Phanit, SD Publishing, Alkem and JTW are all partners of the Vibal Group, resulting in unfair competition in favor of the Vibal Group.

Worse, he said the World Bank came to the rescue of Vibal by choosing to disregard the violations.

"This is a blatant and gross violation of procurement laws. Somebody definitely made money out of this deal and I am not talking about suppliers of the textbooks but of some people in government," he said.