Lorenzana explains helicopter fiasco

For several weeks now, people have been talking about the deal to buy MI-17 helicopters from Russia. The transaction was suddenly canceled, but only after we had made a down payment of P2 billion (roughly $37 million, at the exchange rate of the day).

For the benefit of our readers who may not be familiar with the issue and at the risk of sounding like a broken record, allow me to repeat once again what I had written about the transaction. Only by asking more questions can we determine if government, in pursuance of its responsibilities, acted in the best interests of the nation.

Last July 20, 2022 former defense secretary Lorenzana announced that in June 2022, the last month of the Duterte administration, he canceled a P12.7-billion deal with Russia to acquire the MI-17 helicopters of that country. The deal was signed and closed in November 2021 and a down payment of P2 billion was made in January 2022 with delivery of the first choppers in two years’ time.

In explaining the last minute cancellation, Lorenzana disclosed that the purchase of Russian military aircraft could have resulted in sanctions being imposed by the United States under a 2007 law, “Countering America’s Adversaries Through Sanctions Act” (CAATSA).

Last week in a text message to a mutual friend, Lorenzana, who is currently chairman of the Bases Conversion Development Authority, had this to say:

“PRRD said when the threat of being sanctioned became imminent: Del, sabihin mo sa kanila ito. Kung ibalik (reimburse) ng US yung downpayment natin, at bentahan tayo ng same number of heavy aircraft at the same price as the Russian MI-17, cancel the contract. That’s exactly what I told Secretary Austin when I was in Washington, D.C. last April. He said we will look into it. Last June, during the Singapore Shangri-La dialogue where I and Austin were invited, the Americans agreed to the deal. I reported to the President. Before the month ended I wrote a letter to the Russians that we are cancelling the contract.”

If I understand Lorenzana correctly, the US has agreed to reimburse us the P2 billion we paid to Russia and shall sell us the same number of similar equipment at the same price as the Russia MI-17 helicopters. So now, we have this verbal agreement between two individuals, one Secretary Austin and the other Secretary Lorenzana who is no longer at his DND post.

First of all, the explanation of Secretary Lorenzana does not state why we were buying military equipment from Russia, knowing full well we would face sanctions by the United States in compliance with a specific law, CAATSA. This should have been a red flag from the very beginning.

Second, who recommended the purchase of Russian helicopters? Was it the Philippine Air Force or some interested parties at the Department of National Defense or perhaps, arms dealers looking for opportunities using their local connections?

Third, after the down payment of P2 billion was made, Lorenzana was quoted as saying in March that the deal was still on. Why did we wait for the down payment to be made before coming to the conclusion that US sanctions were imminent?

Fourth, are the current officials of the DND, headed by OIC General Jose Faustino Jr., aware of the verbal agreement of Austin and Lorenzana? During the recent DND budget hearings, their answers as to the status of the P2-billion refund indicated that they were not aware of any arrangements with the United States. General Faustino last month met with US Defense Secretary Austin in Honolulu. Was this verbal commitment taken up for early implementation?

The explanation of Secretary Lorenzana leaves much to be desired.

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When Secretary Lorenzana took office in July 2016 I had the opportunity to pay him a visit at his Camp Aguinaldo office. After the usual amenities, we talked about his plans for the future. He mentioned the possible separation of the Philippine Veterans Affairs Office (PVAO) from the Department of National Defense. The organization had grown and was taking up a significant portion of the budget of the department. The separation would benefit both parties. However, the proposed change did not materialize.

In turn, I raised the “revolving door” policy of previous administrations and Lorenzana fully agreed that there should be changes. The wall at the GHQ building that held the photographs of past AFP chiefs is now full and there may not be enough space for future AFP chiefs. In May 2022, Rep. Act no. 10709 providing for fixed terms of office for key AFP officials, including the AFP chief of staff, was signed into law by president Duterte. Secretary Del Lorenzana, along with many others, was instrumental in getting the bill through the legislative mill for signature of the president.

Mandatory ROTC was another objective that I brought up during our meeting, and he was very supportive about the return of this program. While it did not happen on his watch, the groundwork had been laid for the future. Today it is a priority item of the BBM administration.

I also mentioned the need for a presidential aircraft for use of the commander-in-chief, especially on long-distance flights. For awhile, privately-owned aircraft were the mode of transport for the president. In September 2020, a G280 Gulfstream aircraft was turned over to the Philippine Air Force for use as an “airborne command center” by the president. No longer would he be relying on private transport.