RECYCLABLOG 4: Disiniland: Welcome to the Magic!

Kleptocracy: government by those who seek chiefly status and personal gain at the expense of the governed.

Did you know that this word was introduced to the English language because of the Marcoses?  

The Marcoses are in the Guinness Book of Records as the biggest thieves in modern world history and journalists at the time of his ouster could not describe in a single word, the manner by which the Marcoses systematically looted the country. They also inspired and unfortunately for us, inculcated a brand of economics that plagues us until today: crony capitalism. Here is just a sample of Marcosian kleptocracy and crony capitalism. The aftershocks, in the instituted corruption and debts for onerous business deals made at the time of his regime, we still feel today.

Don’t look for Mickey Mouse in this place, but you may find a rat or two. There is no Space Mountain nor Star Tour either, but an entire country was taken for one big ride. And maybe you don’t get a photo-op infront of the Cinderella Castle, but you can marvel at its biggest attraction:  a colossal white elephant that rises on a cliff and overlooks the South China Sea, the Bataan Nuclear Power Plant.  Welcome to Disiniland!

Herminio Disini was a frequent golfing buddy of Ferdinand Marcos whose wife was a cousin of Imelda’s and a former governess of the First Couple’s three children. This distinction was pixie dust to Herminio Disini as he magically transformed a small-time business of making cigarette filters into a conglomerate empire of 33 separate enterprises: the Herdis Group of Companies, with assets totalling over $200 million (pre-devaluation) in a span of just six years. His best wheeling and dealing trick of course, was the Westinghouse deal for the Bataan Nuclear Power Plant. Westinghouse hired Disini as their SSR (Special Sales representative: well, really, a prettier way of saying “grease-man”) to sell the nuclear power plant project to Marcos. The nuclear power plant was actually Marcos’s knee-jerk reaction to the energy crisis in the early ‘70s. A panel appointed by Marcos and the head of the Philippine National Power Corporation recommended purchase of a General Electric reactor. But Marcos overruled the panel’s choice in favor of the much more expensive reactor from Westinghouse. Westinghouse, through Disini, submitted a four-page “proposal” letter to Marcos and made a brief presentation to the president and his cabinet. GE, meanwhile, had submitted an extensive, three-volume proposal (well obviously, pick the one that’s easier to read!). The original contract price with Westinghouse was $500 million for 2 reactors but after construction began, this ballooned to $ 2.8 BILLION for ONE reactor. Well, the ingredients were all too familiar: a multi-million dollar government project, a foreign contractor, a juicy commission, an arrogant president and a bagman. The last two skimmed off a reported $80 million in commissions (again pre-devaluation so let’s put it at around $480 million adjusted for inflation).  But that wasn’t all. Many of Disini’s other companies bagged a multitude of contracts from this mother deal. Among these, an exclusive Westinghouse distributorship contract with Asia Industries, a company of the Herdis Group; a contract with one of Disini’s small construction firms to be the chief contractor for building the nuclear reactor, even if the company had no experience in nuclear reactor construction; and an insurance policy on the nuclear plant worth $688 million, the largest ever written in the Philippines (My, My! Hermi come on down! You’re the biggest winner in “The Price is Right!”). From the very start, the project was mired in controversy. Westinghouse and Marcos had to deflect concerns about the safety of the plant which was sited five miles from the foot of Pinatubo (geez!) and  in the middle of the Pacific “fire rim” earthquake zone of high seismic activity. The Philippine Atomic Energy Commission initially refused to give a construction permit, although Marcos had already began construction anyway. The Commission’s head, Librado Ibe, eventually issued the permit after much wining and dining by Westinghouse plus intense pressure from Energy Minister Geronimo Velasco. It was signed just a week after the Three Mile Island nuclear accident in Harrisburg, Pennsylvania after which Commissioner Ibe promptly moved to the U.S. (presumably nowhere near Pennsylvania).

The nuclear power plant was completed in 1984. Marcos was overthrown and the Aquino government mothballed the power plant after a team of international nuclear experts declared it unsafe to operate. The Philippines finally paid off its debt to the project with a final payment of $15 million dollars made April 2007.The Bataan Nuclear Power Plant never produced a single watt of electricity.  Herminio Disini left the country two years before Marcos was ousted. He bought a castle in Vienna. He has a pending case in the Sandiganbayan  for bribery. Philippine officials cannot find him. Repeat after me: We will now learn after our monumental mistakes, we will now learn,…oops, we did it again.

Source: http://indiosbravos.blog.com/2011/04/17/recyclablog-4-disiniland-welcome-to-the-magic/