Government News Analysis

Not a smart move

Smartmatic

Once again, the Philippines elections-regulator, the Commission on Elections (Comelec) – finds itself at the centre of a storm. This one involves both man and machine – more precisely, Christian Robert Lim, the organisation’s acting chairman up until today when he stepped down, and the equipment which delivers the outcome of elections in the Philippines, the Smartmatic optical-scan vote-counting machine (VCM).

It transpires that Comelec has rubber-stamped the use of these machines for next year’s Senate elections. It did that by virtually reactivating the government VCM contract which Smartmatic had for the 2016 national elections. In other words, it gave its approval without any public-bidding process; no other company – as far as anyone know – was offered the opportunity to submit a bid. Nor was there any public disclosure of the deal – the intention seems to have been to keep it under wraps.

In itself, whatever government department is involved, that would seem to be wholly irregular and have little merit in terms of transparency and good governance. In the case of Comelec and Smartmatic, however, it’s even more problematic.

These two entities are close to the bottom of the list where public trust and confidence are concerned – in short, anything involving them requires greater scrutiny, not less. In light of that, such a decision seems recklessly imprudent and lays Comelec open to allegations ranging from favouritism and providing an advantage to malpractice and possible graft. At the very least it’s been brutally dismissive of the public’s concerns.

And, frankly, Lim and his fellow commissioners – this decision was endorsed by the full Commission – should have been sensitive to those concerns. Technically, Lim may not have done anything wrong – presumably as the acting head of the Commission he has the right to allocate his budget how he sees fit – though in this case, protocol would normally demand far more openness.

After all, we’re not talking about procuring a set of filing cabinets for the office here; we’re talking about a contract that’s supposed to deliver an accurate count of the people’s vote in an important election – this one to determine 12 Senate seats. And that contract’s now just been handed to a company which enough of the country believes is incapable of fulfilling that requirement.

Comelec has spent plenty of time in the limelight of scandal and controversy and is among the least trusted of all government agencies. It may not be as bad as the Bureau of Customs but it can certainly be mentioned in the same breath. And revelations of “financial irregularities” last year which resulted in the departure of its chairman, Andres Bautista – the man Lim replaced in a caretaker role – did little to help Comelec’s image.

Meanwhile, is there a piece of equipment anywhere in the Philippines that’s shrouded in more controversy than the Smartmatic vote-counting machine? The 2019 election will be the fourth time this company’s services have been engaged – despite its worsening image. In the elections of 2010, 2013 and 2016 it was the subject of widespread allegations ranging from electronic fraud to altered or the preprogramming of results.

In 2010, immediately following that year’s vote, Smartmatic was hauled before an inquiry in the House of Representatives to explain how its Precinct Count Optical Scan (PCOS) machines were open to manipulation and why errors occurred on the time stamp of certain votes. Smartmatic dismissed this as “an unforeseen situation”.

Emmanuel Piñol – now Secretary for Agriculture – who was running for the post of North Cotabato governor, claimed that his defeat in that race was brought about by high-tech cheating and harassment of election workers in rebel-controlled areas. He told the enquiry that jamming devices were used to rig the results of the automated elections in his province.

On 29 June 2010, the Philippine Computer Society filed a complaint with the Ombudsman against 17 Comelec officials and Smartmatic-TIM Corp. for alleged “incompetence,” graft and unethical conduct.

Following the 2013 mid-term elections, it was revealed that Smartmatic’s machines failed to transmit 23% of the votes leading to calls for the provider to be blacklisted. To everyone’s dismay it was re-engaged for 2016. Lim, at the time, made the following point: “We don’t have any preference for any provider, and we have to make the decision on those who joined the bid”. Again, at the risk of sounding monotonous, with Smartmatic being the only bidder for 2019, Comelec’s decision this time round was far less onerous.

Meanwhile, right now, Smartmatic is at the epicentre of one of the biggest potential election scandals the Philippines has ever had to contemplate – whether by malfunction or manipulation the VCMs in 2016 delivered the wrong person to the Office of the Vice President.

That matter has yet to be resolved and will be once the Supreme Court decides that it’s of sufficient public interest – in fact, public disquiet – to get it on the docket and determine whether the Liberal Party candidate, Leni Robredo, the current occupant of that office, was rightfully elected or whether her challenger in 2016, former senator, Ferdinand “Bongbong” Marcos, should have been.

On top of that, there’s another case pending which cites the questionable role the VCMs played in that same election. This concerns a seat in the Philippine Senate. That seat is currently occupied by Liberal Party stalwart, Senator Leila De Lima – figuratively at least; De Lime is currently seated in a custodial cell at the Philippine National Police headquarters, Camp Crame, in Quezon City, Metro Manila, charged with very serious drug crimes.

In fact, it’s her closest challenger for that Senate seat in 2016 – Presidential Political Affairs Adviser, Francis Tolentino – who brought this latest Comelec controversy to light.

In a statement to the local media on Tuesday, Tolentino, former chairman of the Metropolitan Manila Development Authority – a cabinet-level position – said of the latest Smartmatic deal: “It is highly irregular that a contract of such national significance was consummated bereft of the acquired transparency needed by the electorate”.

The behind-closed-doors handling of this issue is certainly suspicious – particularly, given the fact that we hear about it from someone completely outside the Comelec circle. If Tolentino hadn’t made this disclosure, the first we’d probably know about it would be at the end of the year; a matter of months before the 2019 mid-terms.

In fact, we learn later, that this contract was actually approved by Comelec on 18 December last year, three weeks before Lim was due to retire, and was signed by Lim on 12 January.

Moreover, those pending cases – Marcos’s before the Presidential Election Tribunal; Tolentino’s before the Senate Election Tribunal – are not small issues and certainly they’re big enough at this stage to question whether these machines are accurate and secure. At least factor that into the decision.

But not only did Comelec not do that, it ensured Smartmatic would be the 2019 provider. Prudence, therefore, would seem to have been sacrificed for expediency – or, possibly, something even more sinister.

And it’s the last of these possibilities we’re going to look at here.

Smartmatic is a Venezuelan-owned multinational; its stock in trade is technology solutions and among those is the supply of electronic voting systems to government clients. It was founded in 2000 and rapidly rose to prominence; partly through direct funding from the Venezuelan Government.

But who in Venezuela actually owns it is unclear – according to the US Department of State they “remain hidden behind a web of holding companies in The Netherlands and Barbados”. What we do know, though, is that Smartmatic’s chairman is British lord, Mark Malloch-Brown. And what we know about him is that he has close links to former Philippine president, Benigno “Noynoy” Aquino whose Liberal Party gained power in 2010 – the year of Smartmatic’s first Philippine-election contract.

Malloch-Brown was the campaign strategist for Noynoy’s mother, Corazon Aquino, during the 1986 election that swept her to office following the ousting of Ferdinand E. Marcos. Malloch-Brown’s company at the time, consultancy Sawyer-Miller, is believed to have got that contract through some greasing of the wheels by the US Central Intelligence Agency. He wrote Corazon Aquino’s acceptance speech and, it’s understood, became close with the Aquino family.

It’s also been reported, though it’s never been confirmed, that the Smartmatic chairman met with Noynoy and other politicians during a trip to the Philippines in June 2015 – 12 months before the 2016 polls.

That aside, what is clear is that Smartmatic has a lock on contracting for Philippine elections. Actually, it’s in a virtual monopoly position. But how?

One theory is rigged bidding – with no other invited offerers, that’s something that this time around it doesn’t need to worry about. In the past though – in 2010, 2013 and 2016 – it’s been claimed that tender requirements were designed so that only Smartmatic could qualify, and that requirements that would automatically disqualify it were omitted.

For example, in the bid for the 2016 election contract, Comelec determined that the successful tender would be the company that could supply both the machines and the election-management system. That requirement made Smartmatic the only qualifier.

In 2013, one bidder was rejected because its compact-flash cards – mass-memory storage devices – didn’t match the 2010 Smartmatic machines which were to be used. Smartmatic had refused to make available their machines tech compatibility specifications claiming it was proprietary information.

This new ‘rollover’ contract with Smartmatic means, therefore, that the 93,977 machines used for the controversial 2016 vote count are to be re-deployed to count the votes in 2019. In other words, despite all the concerns, Comelec has already given them a clean bill of health.

The rationale for this, according to the Commission’s spokesman, James Jimenez, is that the Comelec deemed it favourable to avail itself of an “option to purchase” (OTP) clause in the 2016 election contract. This is what he said: “… it was decided that financially or economically speaking, the best solution is OTP”.

That’s interesting, because back in 2015, Andres Bautista said that after factoring in “costs, timeliness and technical risk”, leasing the machines “is the most viable, practical and safest option to pursue” to ensure credible elections the following year.

Then there’s also that other matter – the revelation made last August by Patricia Bautista, the estranged wife of the former Comelec chief, in which she claimed that her husband had received commissions from the law firm which represents Smartmatic in the Philippines.

This is huge business for Smartmatic; alone, the two contracts for 93,977 machines brought in for 2016 cost the government PHP8.4 billion. And what the Philippines knows from bitter experience is that where big-ticket government contracts are concerned there’s always the possibility for big-time graft. Even more reason, you might assume, for Comelec to exhibit full transparency.

But there’s something far bigger at risk here than Comelec’s and Smartmatic’s reputations – in fact, given their track record, they may be irredeemable. The real risk is to democracy itself – something Filipinos prize very highly.

The point is, there are enough doubts hanging over the accuracy of these machines, and enough allegations that they’ve been used repeatedly to influence the outcome of Philippine elections that they’ve become toxic. But then serious doubts over their use in 2010 didn’t prevent them being used in 2013; and again, serious problems with the machines in 2013 didn’t prevent them being employed in 2016. So why should serious doubts about their performance in 2016 prevent them from being rolled out again in 2019? Well apparently, according to Comelec, they shouldn’t.

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