Shadows over Binay’s leadership of Boy Scouts
At a glance:
- The Alphaland deal is the first scandal to hit the 100-year old organization
- BSP has to address serious financial management issues
- The BSP has evolved to accommodate more politicians as leaders of local and regional councils
- Vice President Jejomar Binay is expected to be re-elected head of the BSP
MANILA, Philippines – In a few months, the Boy Scouts of the Philippines (BSP) will elect its next set of officers. This will take place amid a scandal, the first time in its more than 100-year history that this low-key organization is buffeted by a crisis.
Ernesto Mercado, who used to be Jejomar Binay’s alter ego in the BSP, put the spotlight on this volunteer organization when he revealed a suspicious business deal with Alphaland wherein Binay, as BSP president, supposedly got close to P200 million for himself. He allegedly used this for his campaign funds in 2010 when he ran for vice president. Binay has denied this.
The BSP, for its part, has not received any return on its investment since it signed on to this deal 7 years ago. It was only belatedly, the day after Mercado exposed the anomalous deal in the Senate (on January 23, 2015), that Alphaland paid the Boy Scouts rent for the use of its auditorium in the building.
This controversy has raised questions on the integrity of the leadership of the Boy Scouts and the decision-making process and culture of the organization.
Amid this dark shadow, will the Boy Scouts change leaders in June? Will the BSP choose a new president and end Binay’s unprecedented 18-year presidency? (Since the 1930s, presidents have served from 1 to 7 years.)
Not likely. Wendel Avisado, BSP secretary-general, said: “Binay has been doing well as BSP leader so he has remained unchallenged. This [controversy] has galvanized us. We can’t allow Mercado to destroy the BSP because of politics.” Avisado also works with Binay as assistant secretary at the Housing and Urban Development Coordinating Council.
Many BSP officials remain loyal to Binay. Understandably, they do not want to be on his wrong side because he has been – and continues to be – the leading contender for the presidency.
“Binay needs the BSP for 2016 so there is really no succession planning. Nobody has dared to run against him,” said a BSP official who is familiar with the organization. “Why antagonize him? He may be the next president.”
Francisco Aniag, a Board member, was BSP senior vice president for 6 years. When Binay was absent, he would preside over meetings and, during this time, he said he aspired to become president. But, in the end, he always gave way to Binay. He had little chance of making it.
“The general thinking is: we trust the VP. Why would he do wrong by the BSP?” Aniag said.
Max Edralin, 83, the oldest member of the Board, said it is “hard to fill in Binay’s shoes. He has the clout and resources.”
Among the local councils, Cebu appears to be the most outspoken against Binay. Hernando Streegan, Cebu council chairman, was a member of the National Executive Board (NEB), the governing and policy-making body of the BSP, for 6 years, representing Eastern Visayas. He said that Binay “chooses the members of the NEB…they are his lackeys. He uses [BSP] to advance his…presidential ambition.”
“The Cebu council has never been supportive of Binay even when he ran for vice president. He even told his pointman for Cebu to campaign for Binay. We never did,” Streegan added.
Binay has also been a source of political patronage for some. For instance, the daughter of Enrique Lagdameo, BSP national treasurer for many years, is now on her 2nd term in Congress, representing Makati’s 1st district. Monique Lagdameo is a political ally of the Binays.
Hijacked by politicians?
Moreover, through the years that Binay has led the BSP, the character of the organization evolved to accommodate more politicians as leaders of local and regional councils. Close to half of the members of the NEB (19 out of 45) are current and former politicians, including congressmen, governors, mayors and councilors. (READ: Fast Facts: The Boy Scouts of the Philippines)
To name a few: Congressman Jorge Almonte (Misamis Occidental), Governor Amado Espino Jr (Pangasinan), Governor Antonio Cerilles (Zamboanga del Sur), Governor Sol Matugas (Surigao del Norte), and Mayor Jejomar Erwin “Junjun” Binay (Makati).
Relationships in the Board are generally friendly and agreeable, and deferential to Binay. As a result, decision-making has become “very informal,” BSP sources said, “out of confidence and good faith in Binay.”
Rarely are decisions questioned. They cite the case of the Alphaland deal which was not reviewed by an external corporate counsel and financial expert.
Nationwide, of the 158 regional and local councils, more than 50 are headed by politicians. In the directory of BSP key officials, it is common to find the addresses of these councils in provincial capitols and offices of mayors.
Aniag, himself a former congressman, explains that the takeover of the BSP by politicians is a function of resources. Since the BSP relies on fees to sustain itself, this is not enough to fund activities such as camping. This, the local governments can subsidize.
Weak financial management
One big task that the BSP needs to do is to put its house in order. Two successive audit reports by the Commission on Audit (COA), in 2012 and 2013, show several lapses in its financial management. Both audit reports issued a “disclaimer of opinion” because of the lack of significant information and the uncertainty of other data BSP provided.
Among others, the 2013 COA report pointed out the following:
- “doubtful” reliability and completeness of receivables worth millions of pesos
- “misstated land account balance”
- failure to use the lots “efficiently and effectively”
- “significant weaknesses in internal control practices”
- “doubtful disclosure of the Investment Property account balance” which is more than a billion pesos
We showed these COA reports to a senior auditor from the private sector with decades of experience in the profession. The auditor noted an apparent “breakdown of controls” and said the NEB should be held accountable. “They need to address the issues pointed out by COA,” the auditor said. “They seem to be remiss. Being volunteers is not an excuse to be sloppy.”
Avisado explained that the BSP is still in transition, from being a private entity to a government-owned or controlled corporation (GOCC), thus the lapses in financial management. In 2012, the Supreme Court ruled that the BSP is a GOCC and should be subject to government auditing, among other requirements.
In August 2014, Avisado wrote the COA to report on actions they had taken to comply with the audit body’s recommendations.
As a GOCC, the BSP is supervised by the Governance Commission for GOCCs (GCG) in terms of its overall performance and achieving its financial targets. However, unlike other GOCCs, President Benigno Aquino III cannot appoint the members of its board because they are chosen in an election, as provided by the BSP by-laws.
Paolo Salvosa, spokesperson of the GCG, said they had requested the BSP to comply with basic requirements such as a reorganization plan and “performance scorecard” but without success.
All GOCCs, moreover, are required to adopt a full-disclosure policy and maintain a website so that the public has access to financial reports, annual reports, compensation of all officers and other information. The BSP does not have a website but Avisado said it should be up soon.
“The BSP’s weak corporate governance is an indication of how Binay runs a national organization,” the auditor said. “This gives us a glimpse on how he is as a national leader.” – Rappler.com