SHE KNOWS: Having walked the corridors of power for two decades, President Gloria Arroyo cannot be unaware of the administrative flaw that IT engineer Rodolfo Noel Lozada Jr. called “systemic dysfunction” resulting from official greed and corruption.

Presiding over a corrupt bureaucracy, President Arroyo cannot be unaware that, as Lozada told the Senate last Friday, the going rate for kickbacks in government projects is at least 20 percent.

Having had dealings with former Comelec chairman Benjamin Abalos, the President cannot be unaware of reports that he was demanding a hefty commission (almost as much as the project cost!) in the National Broadband Network project.

Having been married to Jose Miguel Arroyo for the past 40 years, Mrs. Arroyo cannot be unaware that her husband is being linked negatively to the NBN deal and other scandal-tainted projects.

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UNPERTURBED: Yet, while the Senate and the entire nation were in rapt attention as Lozada detailed a shameless rip-off in the $329-million NBN deal, she was reported by her propagandists as visiting the provinces unperturbed.

Of course, this supposed detached attitude is not true. We are sure she and her husband were nervously devouring updates on what was going on in the Senate and elsewhere.

The projecting of a lack of presidential concern is unfortunate. It is damaging to her image and sets a bad example to the bureaucracy.

She could have displayed her famous temper that flares when things go wrong. But then, how could she have pretended to show anger and order the prosecution of the thieves around her?

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LIGHT & LIBERATION: Had the President paused from her escapist peregrination in the provinces and tuned in to the Senate inquiry, she could have found a hint of a way out from her predicament.

She could have discovered a path parallel to the road to Damascus that Lozada has taken.

This talented technocrat finally found the futility of running away from the truth. The moment Lozada set his mind to unburdening himself of his NBN and similar baggage, he found light and liberation.

This unshackling of his spirit was evident in the way he faced the Senate panel and the TV public, in his forthright responses, and in his enviable lightness of heart when he lapsed into self-deprecating humor.

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THERE'S THE LAW: Our tough President could have learned a lesson or two from Lozada's soft “mea culpa” when a female hound of the Palace seated among the senators read to him a recollection of his bureaucratic sins.

We cannot go on pretending that everything is fine and dandy. We cannot insist that so-called economic growth is sufficient justification for the massive corruption all around.

Even for public officials who seem not to believe in God and conscience anymore, there is still the law and public opinion to contend with.

What are we supposed to do when somebody holding the key to a closet of electoral skeletons demands a $130-million commission on a project whose clean cost is only $132 million?

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SPONSOR-DRIVEN: Elaborating on the systemic dysfunction, Lozada lamented that government procurement is now supply- or sponsor-driven. There is no checks and balance in the system, he added.

He said contracts are tailor-made to suit the offer or qualifications of the supplier or sponsor, not the need of the end-user.

“Our need should be the basis of our procurement but now it is supply-driven,” he said. “If someone in the government knows a supplier they will now tailor a project to fit the supplier.”

(As if the senators -- who were overly kind to the witness supplying them with ammunition against the Arroyo administration -- did not already now this fact of life in government.)

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FLEXIBILITY: Having lived with the leeches and crocodile in government, Lozada has developed some flexibility. He said that while there are “prohibited” levels of kickbacks, he could live within a “permissible” level.

Asked if a $130-million overprice for a project costing $132 million was permissible, he said that should be prohibited. What would be permissible? He said maybe around $65 million!

This remark disturbed some listeners, who thought they had before them a simon-pure crusader who would not brook any form of corruption. Government personnel are prohibited by law from accepting commissions, big or small.

It also became clear that his job for then NEDA director-general Romulo Neri was to study proposals and work out compromises when more than one sponsor with connections are following up the same contract.

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MODERATE GREED: In the NBN project, it seems that Neri, having come from the stable of then Speaker Jose de Venecia, wanted the Speaker's son Joey to get the contract under a Build-Operate-Transfer scheme.

But when Abalos, oozing with influence, came with another idea under a Government-to-Government agreement with China, Neri and his consultant friend were caught in a dilemma.

Lozada's win-win solution -- worked out on instructions of Neri to “moderate their greed” -- was for (1) Joey to get the contract, with (2) Abalos given the supply contract for his Chinese friends.

But the problem, according to Lozada, was that Abalos was insisting on a $130-million commission. Neri's consultant said that was just too much.

The Arroyos were initially reported to favor a BOT deal, because it would not involve government having to spend (which is not true). But something happened that tilted everything to Abalos and his Chinese friends.

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