CIFs and the scourge of IUEEU expenditures

CIFs or “confidential and intelligence funds” are all over the news, and we are becoming aware of the creative ways by which public officials spend taxpayers’ money. Less known is a 2012 Commission on Audit (COA) circular that was expressly crafted to define, disallow, and prevent what it calls “irregular, unnecessary, excessive, extravagant, and unconscionable” (or IUEEU) expenditures of public funds.

One wishes the burst of adjectives in this circular, which resonates a deep exasperation with corruption in government, were enough to put things in order. But that’s not the way reform works. Defining the problem and framing the appropriate law is just the start. The hard work begins with giving teeth to the law and supporting the efforts of independent bodies like the COA to keep the government honest and trustworthy.

Our government institutions are modern in form yet remain stubbornly traditional in substance. Our written laws conform with the best that one can find in the developed world. But the actual conduct of our governmental affairs is hopelessly pegged to the practical requirements of a patronage-driven political system.

The fault is not in our laws, but in the highly unequal nature of our society, that we have remained basically feudal. Those who run our government have all the power to do as they please with the people’s money as long as they abide by the unspoken rules of camaraderie in their respective chambers and jurisdictions.

Do we wonder why in a legislature packed by more than 300 elected representatives of the Filipino people, only a handful of conscientious members see it as their duty to question how the people’s money is being spent? The reason is quite simple. When it comes to the national budget, our legislators’ principal concern is to secure their constituents’ share of the public pie, the bigger the better.

This is what enables them to fulfill what is expected of them while in public office—to dispense public resources as personal patronage, and reward those who remain loyal to them through successive election cycles. This attitude makes the government nothing more than a gigantic dispensary of all kinds of benefits and assistance—not as rights due to all citizens, but as favors selectively doled out by politicians.

The system operates at all levels of government, from the barangay unit all the way to Malacañang. Where institutions are strong, patronage politics is kept in check. But in our society, our agencies know better than to antagonize politicians who command sizable electoral support. They learn to bend to the requirements of political power.

In the past, legislators found a way to appropriate public funds and “park” these in various government agencies as allotments whose use is to be determined later by the sponsoring congressman or senator. These funds went by different names—“congressional insertions,” “countrywide development funds,” etc.—but everyone understood them as “pork barrel,” meaning, appropriations for unspecified projects. Following the pork barrel scandals associated with Janet Lim Napoles, who operated a string of bogus nongovernment organizations that facilitated the monetization of the budgetary allotments reserved for countless legislators, the Supreme Court declared all pork barrel funds as illegal.

The high court’s decision stripped congressmen and senators of the power to have any say in the actual release and use of appropriated funds after the General Appropriations Act has been passed. Some politicians were jailed for a while, but it would have been naïve for the Supreme Court to believe this would effectively put an end to the practice. The pork barrel is the oxygen of political patronage, and it comes in many forms. Anyone with the patience to scrutinize the annual national budget line by line will have no trouble spotting allocations that allow a wide latitude for discretionary spending.

So-called “confidential and intelligence funds” or CIFs are the rough equivalent of pork barrel funds allotted to national government agencies. These are allotments that, by their nature, do not require full disclosure of how they are actually used. In theory, requests for CIFs are supposed to be supported by a “physical and financial plan” containing a list of activities and programs to be undertaken and estimated amounts allotted for each. Precisely because they are confidential, these plans are not expected to be detailed. And even more, it would not be easy to audit them.

But some forms of expenditure are so glaring that it’s impossible for any auditor who’s not intentionally looking the other way to miss them. Such were the expenditures of the Office of the Vice President in the last six months of 2022, after Sara Duterte assumed the position. Duterte had requested P250 million in confidential funds—a budget item that did not exist during Leni Robredo’s term as VP—and received P125 million just before the year ended. It took her just 11 days to use up all that money. Given that government offices typically switch to Christmas mode from Dec. 15 onwards, is it unreasonable to suppose that these funds were “confidentially” doled out as Christmas gifts to loyal followers?