Zaldy Co 2.0? Congressman Gardiola’s scheme to purchase and promote DPWH initiatives

EXCLUSIVE: Contractor-turned-lawmaker Gardiola pays off funds gatekeepers to get initiatives, then resells them to contractors for revenue, based on Rappler’s investigation

(Half 1)

Philippine congressman Edwin Gardiola purchases Division of Public Works and Highways (DPWH) initiatives, sells them to contractors and different prepared patrons at a markup, and gives commissions to Home members who comply with park the stated offers of their districts. 

Rappler was in a position to verify such info after exhaustive interviews with a number of sources, together with former and present lawmakers and their high employees, and native politicians in Batangas — the place he’s from — who’re educated about how the congressman operates.

“Edwin Gardiola is the most important contractor in Congress, particularly now that Zaldy Co shouldn’t be in Congress,” Batangas 1st District Consultant Leandro Leviste informed Rappler, referring to the resigned party-list consultant who’s now the face of the flood corruption scandal that has triggered the nation’s largest anti-government protests in years. Like Co, Gardiola represents a party-list group, Building Employees Solidarity (CWS).

“Whereas the general public is aware of rather a lot now about Zaldy Co, Gardiola is larger than Zaldy Co in Batangas and plenty of different provinces and presumably the most important purchaser of initiatives on the DPWH,” he claimed.

Gardiola-linked corporations have amassed billions of pesos in authorities initiatives over time. A spike within the contracts that they had secured — P17 billion since 2023 — had been famous when Gardiola was vice chairperson of the Home appropriations committee from 2022 to 2025.

Because of the extremely delicate nature of the story, solely Leviste and former Mataasnakahoy mayor Jay Ilagan agreed to go on report. 5 different sources agreed to be quoted solely on situation of anonymity. 

Rappler contacted Gardiola every day for his aspect of the story from November 10 to 13. We messaged him and his two daughters on Viber, however we didn’t obtain a reply. We tried to name them, however the telephones simply stored on ringing. We known as his Home of Representatives workplace, however the attending employees stated they didn’t have the authority to talk on his behalf.

In our newest try and name Gardiola earlier than the publication of this report, his cellphone was already turned off, whereas his daughters didn’t choose up the cellphone. We are going to replace this story as soon as he responds.

How the modus works

The modus operandi was defined to Rappler by two extremely credible Home insiders from totally different sides of the political fence who’ve had firsthand encounters with Gardiola. In separate interviews, each offered strikingly related accounts of Gardiola’s scheme. 

That is the step-by-step information of the way it works:

1. Mission lists are created. The DPWH district engineer and employees draft technical lists of potential initiatives; the district congressman, who in principle is conscious of their constituency’s wants, additionally has a want checklist of initiatives.
2. The road objects are inserted in varied funds channels. This may be via the President’s funds proposal known as the Nationwide Expenditure Program, as ready by the DPWH with the Division of Finances and Administration; interval of amendments within the Home and the Senate (in previous years, the Home might do that via the secretive small committee); and the bicameral convention committee.
3. Funder will get initiatives from gatekeepers. Senators, Home leaders, and DPWH insiders who’ve the ability to make insertions within the funds at varied phases can provide their insertions to Gardiola, whom our sources known as a “funder.” He’s made conscious the place the initiatives may be secured. 
4. Funder buys the initiatives. Gardiola, based on our sources, allegedly pays anyplace from 15% to 25% of the challenge worth to the gatekeeper who has management over the NEP/GAB line merchandise. A profitable transaction ensures his proper to regulate who wins the challenge. 
5. Funder determines the place to “park” the challenge. Gardiola allegedly pays the district congressman a parking price of 5% so the road merchandise is positioned in that district’s funds, and in order that the district congressman gained’t “steal” or intervene with the challenge. 
6. Funder resells the initiatives at a markup. Gardiola allegedly finds contractors who’re prepared to pay for the initiatives he secured, however he supposedly sells them at a markup. This ensures that he already earnings from the challenge after handing money advances to gatekeepers in authorities. If he can not promote it, he can implement the challenge as a result of he has building corporations as effectively. 
7. Contractors who purchase the initiatives from the funder win the bidding. The contractor who agreed to participate in Gardiola’s alleged scheme takes half within the rigged bidding. As a funder, he makes positive that contractors who paid him get the challenge with the assistance of his DPWH community — district and regional engineers, and nationwide executives. 
8. Extra actors take extra slices. In some circumstances, different individuals additionally get their cuts. They’re the district engineer, bids and award committee members, and “shedding bidders” whose staged participation creates the phantasm of a correct procurement course of. 
9. Contractors attempt to protect revenue. Firms that already shelled out 30% of the challenge worth to Gardiola nonetheless need to discover a technique to make a revenue. The result’s a substandard implementation of the contract. For instance, out of the P100 million allotted for a flood management construction, solely half, possibly even much less, really go to the execution of the challenge. 

Gardiola the contractor

The 2 sources’ explanations align with private tales of different sources interviewed by Rappler. 

Former Mataasnakahoy mayor Jay Ilagan, who’s a political foe of the Gardiolas, informed Rappler in October that, earlier than their falling out in 2013, the congressman had admitted to him how he operates.

“He buys initiatives, and sells them to contractors. He doesn’t have gear, solely his siblings do,” Ilagan informed Rappler in October. 

The latter’s declare is debatable. Rappler’s investigation in August uncovered 5 corporations linked to Gardiola which might be accredited by the Philippine Contractors Accreditation Board (PCAB).

Two of those corporations are owned by his brothers: 

• Elmer Gardiola is the vice chairman of Newington Builders, an organization with a AAA license from PCAB;
• Earel Gardiola, now vice mayor of Mataasnakahoy, is the founder and was the president of Lourel Improvement Company, which holds an AA license.

Each corporations have amassed billions of pesos in authorities initiatives over time. A spike within the contracts gained has been famous since Gardiola turned congressman and appropriations committee vice chair from 2022 to 2025 — P17 billion since 2023.

There are three different companies linked to Gardiola:

• S-Ang Building (owned and operated by his spouse and daughter)
• Redinex Building (owned by his niece)
• Lara Builders (owned by his daughter-in-law)

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Parallels to Co

Zaldy Co additionally has contractor-siblings. His brother, former Ako Bicol congressman Christopher Co, is the founding father of Hello-Tone. His sister, Albay Vice Governor Farida Co, is the founding father of FS Co Builders and Provide. Each are high contractors within the Bicol area. 

Zaldy is related probably the most with Sunwest, the development agency he constructed from the bottom up. He divested his shares in 2019, however Rappler’s investigation earlier in 2025 discovered that he, his spouse, and his kids stay useful house owners via their ties to Sunwest’s sister corporations. 

Sunwest has raked in a minimum of P38 billion in authorities initiatives since 2016, together with P23.6 billion since 2022, coinciding with the time Co turned chairman of the Home appropriations committee. Co has been accused of constructing doubtful congressional insertions, together with in localities the place flood management initiatives by Sunwest turned out to be substandard.

Sunwest began turning into an influence participant in the course of the Gloria Macapagal-Arroyo presidency. Are Co and Gardiola contemporaries? A report by the Philippine Middle for Investigative Journalism locations Co’s corporations and Gardiola’s companies on the time — JSG Building and E. Gardiola Building — within the high 10 of contractors with the best worth of DPWH contracts secured.

The 2 politicians have shut ties. When Gardiola’s daughter Kaila acquired married in Italy in 2024, Zaldy flew from the Philippines to attend the ceremony. Zaldy’s spouse Mylene served as one of many newlyweds’ godparents alongside then-speaker Martin Romualdez and Finance Secretary Ralph Recto, based on a household pal who spoke with Rappler and who had entry to the marriage invitation.

Gardiola solely turned a congressman in 2022. The truth that he was in a position to conduct this scheme, regardless of being initially an outsider in Batasan, is noteworthy. 

A supply believes he wouldn’t have been in a position to function with out the blessing of Co, who, on the time, was the chairperson of the Home appropriations committee. Mission allocations of party-list representatives are decided by the Home management, significantly the appropriations chair. Rappler reached out to Co’s lawyer for his aspect of the story.

Congressional insiders disenchanted with Gardiola’s actions confirmed Gardiola tried to reel them in to be a part of the modus.

Talking completely with Rappler, they insisted they refused to be complicit. (To be concluded) – Rappler.com