MANILA, Philippines – The United States government sued former Philippine elections chief Andres Bautista for money laundering and conspiracy after his estranged wife, Patricia Paz Bautista, flagged his alleged ill-gotten wealth worth P1 billion ($17.57 million).

Bautista’s allegedly anomalous dealings were related to the Philippines’ presidential elections in 2016.

The Department of Homeland Security’s Homeland Security Investigations (HSI) filed the case against Bautista at the US District Court in the Southern District of Florida on Tuesday, September 19.

The case was reported on Thursday, September 21, by the international news service MLex, “an independent media organization providing investigative reporting, exclusive news, analysis and commentary on regulatory risk.”

Bautista allegedly received bribe money from top executives of an unnamed poll technology company and its subsidiaries, in exchange for assistance in their bid to secure multimillion-dollar election contracts.

The affidavit also claimed that the top executives laundered money through US accounts, and used various overseas bank accounts of the company’s Taiwan-based vendor, to operationalize the bribery scheme.

The contracts – totaling $199 million – include the lease of over 90,000 vote-counting machines and services related to transmission of results.

The HSI said it launched a probe after Bautista’s estranged wife alerted the National Bureau of Investigation (NBI) about her husband’s alleged ill-gotten wealth.

Smartmatic has provided Comelec with poll machines and the technology since the 2010 national elections, the Philippines’ first automated polls. It is 100% privately owned and has no ties to political parties or groups, according to its website.

In a statement on Twitter on Friday, September 22. Bautista maintained his innocence. Rappler first tried to reach Bautista via the messaging platforms WhatsApp and Messenger on Thursday, September 21, but was later informed that his Philippine number was no longer in use.

“I did not ask for nor receive any bribe money from Smartmatic or any other entity,” Bautista said. “Be that as it may, I am ready to respond to the alleged charges at the proper forum and time.”

Former Comelec commissioner Christian Lim told Rappler on Thursday, September 21, also said he had no knowledge of Bautista’s dealings with companies.

“Personally, I am unaware of any of Mr. Bautista’s dealings with Smartmatic or other suppliers. Except on aesthetic issues at times, Mr. Bautista did not participate much in the steering committee,” Lim said.

Lim was the head of the Comelec steering committee for the 2016 elections, which meant he was the main commissioner in charge of this particular electoral exercise. After having retired from Comelec in 2018, Lim is now the spokesperson of Smartmatic.

Smartmatic, meanwhile, asserted there were no irregularities in the way it secured contracts.

“Winning a bid in the Philippines is never solely one individual’s preference or decision. Instead, multiple technical evaluations are conducted by committees, ensuring that the bidders comply with all the requirements specified in the terms of reference. All of these assessments are then presented to a bids and awards committee. It then recommends to the Comelec en banc, acting as a collegial body, to ultimately decide the successful bidder. Dozens of Comelec officials have a say in selecting the provider,” Smartmatic said on Friday.

“Smartmatic has adhered to the Philippine procurement law and the strict controls that the Philippine Commission on Elections imposes,” the firm added. 

What are the specifics?

In the current case against Bautista, multiple co-conspirators from the company headquartered in the United Kingdom and its subsidiaries were identified, but never name-dropped. (Smartmatic says on its website that it is based in Britain.)

These executives supposedly created numerous “slush funds” – a reserve of money used for illegal purposes – to operationalize the criminal scheme.

The affidavit also disclosed the discovery of an Excel spreadsheet that detailed an “extra fee” of $50 per vote-counting machine, and “extra fee” for other items, totaling nearly $10 million.

The Excel spreadsheet was supposedly recovered from the personal email of the director of the Taiwan-based vendor which the UK-based company partnered with to form the joint venture that won the bidding contracts.

Receiving bribe money?

The Taiwan-based vendor – through the unnamed company and its top executives – supposedly sent bribe payments from the slush funds held in foreign shell companies to Bautista’s bank account in the name of Baumann in Singapore, passing through the US financial system.

The executives and the vendor “disguised these payments totaling $1 million to Bautista as fictitious loans to Baumann, a company located outside of the Philippines, while Bautista was chairman of Comelec,” according to the affidavit.

The filing, citing bank records, said that Bautista’s bank account held in the name of Baumann received the funds in August 2016, but returned the wire transactions after the former poll chief failed to convince officials that the transfers were legitimate.

One of the co-conspirators eventually directed the president of the Taiwan-based company to send the funds through a different company.

Who is Andy Bautista?

Bautista entered Comelec in 2015, having been selected as poll chief by then-president Benigno Aquino III.

When Bautista was elections chief, Comelec insiders criticized Bautista for focusing too much on aesthetics. His controversial proposals, which majority of Comelec members voted against, included plans to spend P26.55 million ($466,700) on uniforms for election inspectors and to hold the canvassing of votes at the Manila Hotel.

One of the most persistent criticisms of Bautista – former CEO of the Kuok Group in the Philippines, the businesses of which include Shangri-La hotels and resorts – was that he knew little about the ins and outs of election processes.

By the nature of a collegial body like the Comelec, a chairman like Bautista is only the first among equals and is generally unable to make unilateral decisions within the agency.

While other Comelec chairmen are able to use their persuasion skills to sway other Comelec members, Bautista was unpopular among his peers. He was frequently outvoted by other members of the Comelec en banc who, in June 2016, even released a rare statement criticizing his “failed leadership.”

The strongest attacks against Bautista, however, came from his estranged wife Patricia Paz Bautista, who in August 2017 accused him of having nearly P1 billion in ill-gotten wealth. His publicly declared net worth that year was only P176.3 million ($3 million).

This allegation sparked a congressional investigation against him, which resulted in his impeachment. He eventually announced his resignation hours before the House handed down its decision.

Bautista is in hiding in the United States, and the NBI was hunting him as of 2019.

Before he became election chairman, Bautista practiced law for over two decades, led private firms, served as dean of a law school, and headed the Presidential Commission on Good Government, the agency tasked to go after the ill-gotten wealth of the Marcos family. – Rappler.com