15 July 2009

Roots of Arroyo-Lopez Feud

Alfred McCoy
If everyone in the Philippines can't help but feel that there must be something wrong in the way the Lopez family and the Macapagals and Arroyos deal with each other and in different sections of the economy, a 1994 study by University of Wisconsin historian Alfred McCoy seems to offer a valid explanation.

According to McCoy, the bad feelings between the Macapagals and Lopezes started more than four decades ago, when Diosdado Macapagal, President Arroyo’s father, was elected president of the Philippines in 1961. Back then, Eugenio Lopez and his younger brother Fernando not only financed his rival’s campaign but they were maneuvering for control of Congress to position Fernando for a presidential run in 1965. Hence, President Macapagal tried to employ the full powers of the state to bring the Lopez empire down.

This explains a lot why the government strongly backed the attempt of the Social Security Service (SSS) early this year to take control of the Manila Electric Co. (Meralco), a Lopez-owned company.

According to another article by investigative reporter Greg Rushford entitled "Clan Warfare Hobbles the Philippines" which was published in the July/August edition of the Far Eastern Economic Review, criminal complaints were drawn up by Macapagal’s justice department charging the Lopez brothers with corruption in a land deal, while the Bureau of Internal Revenue went after Lopez-owned sugar mills. The Macapagal administration also tried to remove Eugenio Lopez from the board of Meralco, which was then already the largest electricity distributor in the country.

"Ultimately, the moves failed, and Macapagal was defeated in his 1965 reelection bid by a rising young politician named Ferdinand Marcos, who enjoyed the Lopez family’s support," Rushford said.

Meanwhile, Rushford pointed out, the bad blood between the family of First Gentleman Jose Miguel Arroyo and the Lopezes went even farther back—as far as the 1920s when the province of Iloilo was run by Gov. Mariano Arroyo, the grandfather of the First Gentleman. This allegation was supported by McCoy's study which showed that in 1929, Eugenio Lopez Sr. owned the local newspaper, El Tiempo, and used it to launch himself as a power broker in Iloilo City.

"Governor Arroyo’s problem was that he was taking bribes from an illegal gambling racket—although he would deny the fact that gambling was going on when the Lopez-owned El Tiempo exposed it in a series of well-documented investigative reports," Rushford said.

The ensuing battle between the Lopezes and Arroyos ended with US colonial authorities sacking Governor Arroyo, having concluded that he had indeed taken bribes from a gambling syndicate.

"This defeat, indeed destruction, of the province’s leading politician was a stunning political victory for Eugenio Lopez who, at 29, was still a neophyte publisher," according to McCoy’s study.

Rushford pointed out that the Arroyo family never regained its political clout until the future First Gentleman married Gloria Macapagal.

"Although the President and her husband have denied any ill feelings toward the Lopezes, the recent headlines in Manila suggest otherwise," Rushford said.