DFA, BSP contractor tagged in Kenyan scandal

MANILA, Philippines – The European company that printed the P100 “Arrovo” bills in November 2005 that was tapped by the Department of Foreign Affairs (DFA) and the Bangko Sentral ng Pilipinas (BSP) to produce hi-tech electronic passports was involved in an overpriced passport project in Kenya four years ago.

Sources in the printing industry revealed Francois-Charles Oberthur Fiduciaire’s $34-million contract to supply passport-making equipment was scrapped by the Kenyan government in 2004 on questions over the increased cost and absence of bidding in the awarding of the contract.

The anomaly was discovered by then Kenyan President Mwai Kibaki who ordered the suspension of four senior government officials from the finance and home affairs ministries, as well as the director of the government information technology service and a senior state lawyer involved in the project.

Francois-Charles Oberthur Fiduciare had figured in the embarrassing printing of 80 million P100 bills that misspelled President Arroyo’s surname to “Arrovo” in November 2005.

The political opposition claimed the mistake was intentional, pointing out “rovo” in Spanish means robbery.

As many as 2.092 million pieces of the P100 bills had been circulated before the error was discovered.

The BSP, on the other hand, failed to call the attention of the firm and did not even bother to disqualify the printer from government contracts following the mistake.

Instead, BSP even allowed an Oberthur unit to participate in and bag a government contract to produce electronic passports for the Philippines’ DFA last January, sources said.

The DFA and BSP claim that the e-passports to be manufactured by Oberthur Technologies will come equipped with a tamper-proof microchip that will contain the identification and personal information of the bearer.

Jeff Constantino of the anti-corruption group Legal Management Society monitoring the alleged questionable moves to produce the electronic passports said the BSP should be questioned on its “cozy relationship” with Oberthur.

“Why do they continue to deal with Oberthur despite its unsavory track record, having printed the Arrovo bills and its known history abroad?” Constantino asked.

Constantino said the BSP and DFA should also be questioned on why they wanted to implement a modernized passport issuance project even as there are pending cases before the Supreme Court questioning the validity of the machine-readable passport system.

Constantino explained that the selection of Oberthur was just one of the highly questionable moves taken by the DFA in its push to establish a system for the issuance of machine-readable passports (MRPs) and then upgrade to e-passports.

Constantino said the system was supposed to have been undertaken by a private sector funded, build-operate-transfer (BOT) scheme under the private consortium BCA International when the DFA suddenly terminated the contract in the middle of project implementation.

Constantino warned that the DFA and the BSP could be cited for contempt by the Supreme Court, which is still resolving the case filed by BCA International against the DFA for the cancellation of its contract.

It was learned that BCA International won the bidding for the MRPs in 1999 and was awarded the contract in 2000.

Despite the delays caused by the DFA raising issues during the project implementation, BCA was able to finish the first phase of the project.

The DFA, through Foreign Affairs Secretary Alberto Romulo, terminated the contract during the second phase, citing BCA’s failure to prove its financial resources to complete the project.

BCA said that they have already answered questions on their financial resources during the pre-bidding and bidding processes.

The College Editors Guild of the Philippines (CEGP) earlier filed graft cases against DFA and BSP officials for pursuing a government-funded MRP program last year.