The smoking gun came straight from the horses’ mouth.

Firms previously engaged in and eventually banned from World Bank-funded projects had confirmed that politicians and rebel groups get a share in road projects, causing costs to skyrocket.

At least one admitted that a cartel involving national politicians operates at the Department of Public Works and Highways.

These were based on the WB’s Notice Sanction Proceedings, which Senator Panfilo Lacson provided to the Senate. The document recorded interviews of the WB’s Integrity Vice Presidency, also referred to as the INT, with various individuals involved in the controversial road project.

The WB has blacklisted seven firms, two of them Filipino contractors, after it established that they take part in collusive schemes. The controversy has dragged the name of First Gentleman Miguel Arroyo.

One high-ranking executive of a foreign construction firm confirmed with investigators of the INT that money was paid to a former lawmaker to help the company corner projects. The company was one of those that WB debarred.

“I met him in his office and paid him some money. He was a very strong politician…I agreed to pay 10 percent of the contract price. Also promised to pay DPWH staff…Cannot tell you names,” the WB document quoted the executive.

The construction official mentioned Tito Miranda as a member of the cartel manipulating the bidding. Miranda is connected with the DPWH unit that oversees projects financed by another multilateral lender, the Japan Bank for International Cooperation.

Miranda has denied the allegation.

Asked if he had shelled bribes, the construction executive said he has to “negotiate with the mayor, governor and congressmen to do work in their areas.”

He added: “If you do not cooperate with these politicians they arrange for your contracts to be terminated.”

The WB probers observed that the executive appeared “to be very shocked and flustered” when asked if he had met with other bidders to discuss bids in projects.

“What do you know? You obviously know a lot,” the executive told the probers.

He confirmed one project where another local contractor did not follow an agreed arrangement and “dived” in the bid. “I cannot tell you more. It is too dangerous.”

Pressed for more details, the executive said he approached one congressman several times “if he could assist me get the contract.” Then he declined to provide more details. “I cannot tell you more, it is too dangerous,” he told the investigators.

Told that the WB’s investigating team had been aware days before the road project’s bid opening that the executive’s company would bag one project, the executive could only say, “You know all.”

Ten percent

The executive said that protection money for rebel groups and bribes for politicians and public works officials constitute about 10 percent of the contract price.

“Again, I take all the risks. There is corruption, there is the (New People’s Army), there (are) Muslim extremists. I cannot tell you the names, the politicians are very powerful,” the WB document quoted him.

The executive also confirmed attending meetings at the Diamond Hotel in Manila where collusion were discussed and finalized, according to some of those interviewed by the WB.

He begged off from spilling more information for fear of his life. “I have told you that we have to do business. Some companies leave because they cannot do it anymore. I have to stay and do it. I cannot tell you anymore, it will be too dangerous for me.”

The executive said he wanted to go back to his home country “because the pressure here is too great.”

He said the Philippines is a “feudal society” and that “corruption is a result of the system here, doesn’t matter who is the President, soon all is corrupt.”

Politicians, rebels

Another official of one of the blacklisted firms told the INT that politicians and members of the rebel group NPA extort money. They said they “cannot do anything about it.”

The official likened politicians and NPAs as one and the same in nature.

The official said that congressmen meddle in locally-funded projects but not in foreign-funded ones. He was quoted as saying that congressmen should spare public works projects and let the DPWH do its job.

As for collusion among the bidders, the interviewee said he was made aware of such scheme from one losing bidder. “He (the interviewee) however attached a low value to it and stated that losing bidders in the Philippines always complain about winner and get involved in an intrigue,” the WB report indicated.

The official said he had heard meetings taking place before bid opening for purposes of pre-arranging the winning bidder. But such meetings only involve locally-funded projects the official said.

At one point during the interview, the company official threatened to terminate the WB interview.