Palace misused charity funds, gave loans sans records – COA
10/17/07 Malou Mangahas, GMANews.TV/GMA News Research .

Months ahead of last week’s row over "cash gifts" for local politicians and legislators, the Commission on Audit had admonished the Office of the President, under Gloria Macapagal Arroyo, to hold its officers accountable for sundry questionable expenses in 2006.

The COA said the Palace had diverted donations for calamity areas to spruce up the Malacanang Golf Course, incurred huge amounts of unliquidated cash advances, issued loans without records, and could not explain big discrepancies between the booked and physical inventories of supplies, property and equipment.Sergio Apostol, chief presidential legal counsel, told GMANews.TV Wednesday night that incurring unliquidated cash advances “is normal" among government agencies."That can be settled easily. Perhaps, the receipts and vouchers have not yet been forwarded to COA when it made the audit. But I think the papers are already with the COA," Apostol said. Apostol declined to comment on other portions of the COA findings. He said he has not received a copy of the report.
The COA, in its official audit of the accounts and operations of the Office of the President from January to December 2006, rendered “a qualified opinion on the fairness of the financial statements" and listed 10 adverse “observations and recommendations."
In particular, the COA audit revealed that Mrs Arroyo’s office:
• Failed to settle cash advances worth P615 million made to officers and employees, local government units and government corporations;
• Granted P269 million in loans out of the President’s Social Fund “without supporting documents and disbursement vouchers;"
• Diverted P8.8 million in donations for calamity areas, including P900,000 to spruce up the Malacanang Golf Course, P3 million for hotel and conference expenses, and P4 million as “donation" to an unnamed foundation;
• “Improperly recorded" P112 million in fund transfers to local government units, government corporations and nongovernmental organizations;
• Erroneously recorded in the books of the Office of the President" the P48.9 million balance of a trust account under the name “President’s Social Fund-Livelihood Assistance Program" deposited with the Land Bank of the Philippines;
• Failed to reconcile booked and physical inventory office supplies, property, plant and equipment, worth P70 million in all;
• Understated the accumulated depreciation and depreciation expense accounts of property, plant and equipment worth P950 million;The COA said the audit sought to “ascertain the propriety of the financial transactions and determine the fairness of the presentation of the statements" of the Office of the President that consists of “the OP Proper and the agencies under it."The 60-page COA report was submitted to Executive Secretary Eduardo Ermita on June 25, 2007. The report was signed by COA Director IV Bato S. Ali Jr., Cluster I – Executive and Oversight director, while the transmittal letter to Ermita was signed by COA Commissioner and officer-in-charge Reynaldo A. Villar.Lawyer Susan D. Vargas, Malacanang’s deputy executive secretary for administration and finance, and Teresita P. Valdellon, department chief accountant, signed the “Statement of Management’s Responsibility for Financial Statements." ‘Best estimates’Vargas and Valdellon certified that “the financial statements have been prepared in conformity with generally accepted state accounting principles and reflect amounts that are based on best estimates and informed judgment of management with an appropriate consideration to materiality."Too, they wrote that, “management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition, and liabilities are recognized.
"The OP Proper, COA explained, consists of “the Private Offices, the Presidential Assistant System, the Executive Offices, the General Government Administration Staff, the Internal Administration Staff, the Internal Audit Service Unit, the Locally Funded/Foreign-Assisted Projects, and other Executive Offices."In addition, “the OP directly supervises 61 other executive offices, agencies, commissions and committees that warrant the special attention of the President."COA cited that “Article VII of the 1987 Constitution vests the executive power upon the President," who also “exercises control of all the executive departments, bureaus and offices" and “ensures that laws be faithfully executed." Unliquidated millionsFor 2006 and even two years prior, COA noted that the OP had failed to liquidate cash advances made to cash-disbursing officers worth P77 million; cash advances to officers and employees worth P29.5 million, and “other receivables" worth a whopping P508 million.In its qualified comment, the audit cited that under Section 89 of Presidential Decree 1445, “A cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served."On the other hand, COA Circular 97-002 prescribes deadlines for liquidation of cash advances, and failure to do so “shall constitute a valid cause" for withholding the salary of the accountable officers. COA has proposed that the OP “compel" these officers to settle their accounts within the prescribed period, and refrain from granting additional cash advance to those with unsettled accounts.Loans sans recordsLast year also, COA said that “loans granted under the President’s Social Fund in CY (calendar year) 2003 and January 2004 totaling P269,527,000 were not booked up, thus understating the appropriate Loan Receivable accounts while overstating the Cash in Bank account."The report explained that “one of the main funding sources of OP is its share in the net earnings of the Philippine Amusement and Gaming Corporation (Pagcor), also called the President’s Social Fund."Initially, the PSF provided funds to implement the “Isang Bayan, Isang Produkto, Isang Milyon," that Mrs Arroyo eventually institutionalized through Executive Order No. 176 issued in 2002. Under the program, “to simulate economic activity and growth of small and medium enterprises" Malacanang allotted P1 million loans for a borrower in each town and city, payable to the Land Bank.
The COA determined that loans granted totaling P216 million in 2003 and January 2004 “were not recorded in the books." Just as bad, “reports required from grantees/borrowers pursuant to the MOA (memorandum of agreement) such as accomplishment, financial and terminal reports were not submitted."Donations divertedThe diversion of donations received for calamity victims by Malacanang was also discerned by COA.In 2006, COA said the Office of the President received “from various sources" donations totaling P65,413,463.79 or P65 million, for the following purposes:
• Donation for the Southern Leyte landslide, P7.1 million
• Donation for Socio-Economic Projects of the President, P35.6 million
• Donation for Typhoon Milenyo victims, P2.7 million
• Donation for the relief and rehabilitation of affected areas in Albay province, P20 million. COA’s adverse finding follows: “We noted, however, that out of the actual expenses incurred totaling P64,079,173.40 from the donations, expenses totaling P8,807.621.75 could not be identified with any of the purposes of the donations."According to COA, Malacanang had reported using the donations thus:
• Burial expenses, P795,000
• Hotel Expenses, P815,380.15
• Maintenance of the Malacanang Golf Course, P900,000
• Summit Conferences/General Assembly, P2,295,241.60
• Donation to Foundation, P4,000,000 These expenses “out of the purposes of the donations are contrary to Section 13 of the General Provisions of the General Appropriations Act of 2005," which stipulates that “donations, whether in cash or kind, shall be deemed automatically appropriated for the purpose specified by the donor."“We recommend that management strictly use donations for the intended purposes specified by the donors," COA stated.However, it took note of the explanation given by Malacanang officials that, “some donations have (a) general purpose, so they have wider discretion of what purpose these donations shall be released."Still, COA stressed that, “the provisions of the law on donations… shall be faithfully observed."Inventory discrepanciesYet another qualified comment COA made pertained to discrepancies between physical and book inventories of supplies and equipment in the Office of the President.The audit report said that under “Construction in progress – Agency Assets," Malacanang booked a balance of P198 million, but “per physical count, it has no balance since such construction of assets was already completed."Too, the Inventory Committee of the Office of the President “failed to conduct physical count of other inventories worth P13,495,998.07," and failed to file the required semestral reports on the same.
The balance sheet of the inventories reported to COA by Malacanang included:
• Merchandise inventory worth P726,339.39
• Drugs and Medicines Inventory, P264,155.15
• Medical, Dental & Laboratory Supplies Inventory, P152,286.56
• Gasoline, Oil and Lubricants Inventory, P3,511,843.18
• Other Supplies Inventory, P8,788,899.79
• Livestock Inventory, P52,474.00
However, COA determined that:
• “There was no physical count of the Merchandise Inventory and Livestock Inventory since the balances of these were carried in the book s of accounts and non-moving since 2000."
• “Drugs and Medicines Inventory have been immediately issued upon receipt."
• “Gasoline, Oil, and Lubricants Inventory had never been inventoried semi-annually or annually."
• “In the absence of the physical count, the reliability of the balance of inventories are doubtful," COA said.Dormant accountsFinally, COA said Malacanang continues to keep in its books, as of December 31, 2006, various dormant accounts totaling P293 million dating from as far back as 1992.
The biggest item under this account pertain to “Other Investments and Marketable Securities" valued at P275.6 million.“Management reasoned that their pertinent records are no longer available due to the fire that gutted the agency’s Administration Building sometime in August 1995," COA said, “hence the difficulty or the impossibility to retrieve the required papers."
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Senators uncover $150-M ZTE-type
scam in Customs X-ray project

11/08/2007 Daily Tribune by Angie M. Rosales
What was an open secret in the Customs airport area and ports was only discovered yesterday by senators, and only by accident.
The scam smacked of yet another probable anomalous and overpriced deal, similar to the ZTE broadband scandal, that was accidentally uncovered by senators yesterday, this time involving the Bureau of Customs (BoC) on some of its China-supplied acquisitions of screening facilities.
It costs the Arroyo government an estimated $150 million in foreign loans.
In hearing the proposed P6.7-billion budget of the Department of Finance (DoF), senators pounded on BoC Commissioner Napoleon Morales as he failed to explain the efficiency of the X-ray machines that form part of the $1.109-billion
lone agreements the Arroyo government entered into with the People’s Republic of China through the Export-Import Bank (Eximbank) that included the scandalous ZTE deal.
In a document earlier submitted by DoF Secretary Margarito Teves to the blue ribbon committee, pertinent to the subpoenaed papers by the blue ribbon panel for the the ongoing ZTE inquiry, it showed that there were at least two projects for the installation of the mentioned X-ray machines dubbed as “non-intrusive container inspection system project.”
The two-phase projects to be executed by the BoC showed that the first one, signed in May 11, 2006 amounting to $50 million, had been completed while the second, signed last Jan. 17 totaling $100 million, is still ongoing.
Word has been out for sometime that the X-ray machines from China do not work and are not even being used.
Sen. Juan Ponce-Enrile, chair of the finance sub-committee A, took up the matter when Morales was being grilled on the BoC’s budget that was being discussed. He confronted the commissioner over reports of supposed malfunctions of some of the 30 units already put in place that are said to cost $2.5 million each.
“We want to verify reports that some of these X-ray units are not working well and that many of these machines will be installed in areas that cannot be justified,” the senator said.
Enrile was then berating Morales over the unabated smuggling problem despite repeated claims by the administration that no sacred cows will be spared as it launched a war against syndicated groups depriving the government in hundreds of billions of revenues.
Enrile, citing reports, said even after these giant machines had been installed in key ports in Manila and other major entry points of goods coming into the country, the bureau “has not been able to control smuggling.”
The senator also mentioned in the hearing that a certain “Francis Chua”, alleged to be an influential figure in the administration had something to do with the transaction.
What further earned the ire of the senator was when Morales could not confirm this information, much less provide more categorical answers to defend the implementation of the said projects except to say that “this is a government-to-government” undertaking.
Making matters worse for Morales was when he practically admitted that his agency’s P254 billion target collection next year may have difficulty in achieving in view of the depreciation of the peso against the dollar.
“It was pegged with the rate of exchange at P46 (against the dollar), whereas I understand today, we’re only using P43.88,” he said, explaining that revenue impact for every P1 would total to P2.7 billion or P5.5 billion for one whole year.
“(But) we have initiated alternative means,” Morales bragged when he started mentioning the said X-ray machines, only to be taken aback when Enrile met him head-on in questioning the soundness of the equipment with the information in his hands.
Morales mentioned that the X-ray units are set to be put in place in the ports of Batangas, Clark, Subic, Cebu, Cagayan de Oro, General Santos and Davao.
Sen. Edgardo Angara joined Enrile in airing his apprehension over the said deal not only in view of the controversy stirred by alleged overpricing in the aborted $330 million ZTE broadband deal.
Angara, in another Senate hearing, learned that the botched ZTE transaction was practically replaced by the $400 million cyber-education project also to be funded from the same China loan.
In an earlier budget hearing, Angara and Enrile questioned National Economic Development Authority Director General Augusto Santos who confirmed that while the ZTE broadband deal had been scrapped, the cyber education (CyberEd) project is still in the works.
Santos admitted that even as the issue of the legality of the ZTE contract is pending in the Supreme Court, President Arroyo already ordered it scrapped but “we are now pursuing other options.”
“The cyber education project is still being pursued,” Santos said, adding that it has been “favorably evaluated by the Neda Secretariat and duly approved by the Neda Board.”
Angara argued, however, that the CyberEd project would be a “completely wasteful spending of the people’s money” and he vowed funding allocations for the equally controversial loan deal.
Angara said studies made in more advanced countries showed that pupils would not gain knowledge from impersonal type of teaching through CyberEd project, adding it could not replace traditional teaching with teachers in direct contact with the students.
Angara added that the P26 billion that would be paid for the project would be wisely spent to improve existing school systems, build more schools and hire more competent teachers.

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WB stops P21.5B in RP road funding
11/20/2007 Daily Tribune

The World Bank (WB) postponed up to $500 million or P21.5 billion in potential financing for road projects, under the second and third phase of the National Roads Improvement and Management Program after discovering the first phase of the project was infested with anomalies, irregularities and corruption.
According to the WB, ‘procurement problems’ such as ‘signs of collusion and excessive pricing’ had been identified in three successive rounds of bidding in 2003 for the first phase. The WB said these contracts, worth $33 million and representing about 10 percent of the total project cost, were rejected.
The WB has already withheld the $33 million in loans to finance road-building under the first phase of the project between 2003 and 2006 amid ‘strong signs of collusion and excessive pricing.’
The first phase of the project was already 90 percent completed and the canceled contracts were meant for two provincial roads, which were to have been funded by the WB.
The Asian Wall Street Journal’s Monday issue identified state-owned China State Construction Engineering Co. as the company involved in the bid rigging.
China State Construction is one of the contractors for the Philippines’ First National Roads Improvement and Management project.
The same firm won a $5.6 million contract under the first phase of the project in 2002, but the following year, with the WB investigating issues pointing to the company having joined a cartel with other firms to rig bids for two other projects valued at $33 million, the WB decided to put a stop to this by stopping the funding.
WB vice president Jim Adams said in a statement that after an investigation, the World Bank imposed more stringent conditions on funding for the planned second stage of the project, which has since been delayed.
A Tribune source said the uproar over the anomalous project went up as high as just seated WB president Robert Zoellick who personally ordered the cancellation of the project.
The National Roads Improvement and Management Program was designed as a three-phase, nine-year project in which $150 million has already been disbursed for the first phase. Financing for the entire project is expected to reach more than $600 million.
The WB’s Department of Institutional Integrity began looking into the project in 2003 after receiving reports of bribery and rigged bidding for contracts for the project
The WB body found in October 2005, 35 instances of collusive bidding involving 16 companies working as a cartel.
Early last year, two members of the cartel were murdered while on their way to meet WB investigators, forcing the WB to pull its staff from the country.
The WB said it is currently holding proceedings against 16 firms involved in the first phase of the project to determine whether or not to pursue the remaining two phases.
Adams said that new conditions being instituted by the WB on similar projects in the country included ‘stringent anti-corruption measures’ developed jointly by the World Bank and the Philippine government.
These include independent procurement assessment and technical audit, internal controls and audits of the road management agencies, and the inclusion of a ‘citizen and road user’ monitoring group in the project management set-up.
He said remaining phases of the project had been deferred until President Arroyo’s government provided certain information sought by the lender, which has never been submitted or obtained by the WB.
Building on the experience of the first phase and the lessons learned from the INT (Department of Institutional Integrity) investigation, and in line with the World Bank’s governance and anti-corruption strategy, the Government and World Bank team jointly developed stringent anti-corruption measures for the second phase of the Program.
‘With the INT report now completed, the discussion of the Phase Two project at the Board has been deferred until the Government and the Board members receive the information they have requested,’ the international lender said in its statement.
Malaca immediately defended the country’s anti-corruption efforts but did not quite disagree with the WB’s decision.
Both Presidential Management Staff (PMS) chief, Secretary Cerge Remonde and secretary to the Cabinet Ricardo Saludo hinted that the WB action is a ‘wake-up’ call for the anti-graft bodies to do better so the anti-corruption drive of the government would be further felt.
Remonde used as example the creation of a pro-performance team by Mrs. Arroyo which aims to monitor the transparency of Chinese-funded projects and stressed that the group has already started working.
‘The creation of the pro-performance team headed by (Remonde) and composed of representatives from the private sector such as business, media, religious , youth and the academe will ensure the transparency and efficiency of road and other infra projects. The group has started working , in fact each member of the steering com has their individual set of projects to monitor to insure focus,’ Remonde said.
Saludo echoed Remonde’s claim but expressed hope that the WB would continue its strong ties with the Philippine government.
‘The government supports all efforts to curb corruption and we have many years of cooperation with the World Bank, especially in procurement reform. We expect that anti-graft agencies will look into and act on any solid evidence of corruption ,’ Saludo said.
WB stated that it remains actively engaged with government and civil society on strengthening governance and fighting corruption. With Sherwin C. Olaes and AFP

Contractors lined up for WB road deal rig probe
11/26/2007 Monday - by Angie M. Rosales Daily Tribune

The Senate will start today with contractors of multimillion-peso deals for the National Road Improvement and Management Program (NRIMP) that the World Bank (WB) had earlier suspended over allegations of corruption in its investigations into circumstances that led to the decision of the multilateral funding agency that was described as a national humiliation.
The WB had said it had shelved negotiations for the second phase of the project, worth $232 million in soft loans proposed by the government, until the government sets up measures to guarantee the project would be free from irregularities.
Opposition Sen. Loren Legarda moved for the Senate committee on economic affairs jointly with the
committees on public works and finance to invite contractors that were awarded contracts under the NRIMP projects in the Visayas and Mindanao.
“I want to know the owner of these construction companies,” Legarda was quoted as saying. She said based on the WB report suspending the NRIMP, alleged bid-rigging happened for road projects in Surigao and Negros Occidental.
Legarda said first on the Senate list was a plan to interrogate Fu Yu Cheng of the China State Construction Engineering Corp. and another company yet to be identified.
Other companies that participated in the auctions for the NRIMP were the China Road and Bridge Corp., China Geo Engineering Corp. China Wuji Co. Italian Thai Development Public Co., C.M. Pancho Construction and Cavite Ideal International Construction and Development Corp.
The Senate passed three resolutions directing the committees on economic affairs, public works and finance to conduct the investigation following a statement by the World Bank that it had put on hold the loan because of corruption and bid-rigging.
In a statement from Washington D.C., World Bank Vice President for East Asia and the Pacific Region, has said between 2003 and 2006, the World Bank rejected two large road contracts in three success rounds of bidding because of strong signs of collusion and excessive pricing.
The government, when informed of the multilateral body’s decision, tossed back the blame to the World Bank.
Budget Secretary Rolando Andaya said the WB was partly to blame for the alleged irregularities because its procurement system was prone to corruption.
Public Works and Highways Secretary Hermogenes Ebdane Jr. also said that without funding assistance from the World Bank, the Philippines would proceed with the project. The Office of the Ombudsman also announced that it was looking into the project to determine if any such irregularities existed and to file charges against those responsible.
Earlier, Legarda said that she would ask the Senate to pass remedial legislation providing for safeguards in Overseas Development Assistance (ODA) loans to prevent corruption and ensure accountability in the use of such funds for government projects.
The World Bank loan is considered an ODA since it is a “soft loan”, giving easy term of payments and lower than commercial loan rates.
In her proposed resolution for an investigation of ODA loans, Legarda noted that at least 141 ODA loans were obtained by the government worth a total of $9.5 billion as of the end of last year. ODA loan cancellations, however, amounted to $222.34 million “due to problems and bottlenecks in implementation.
Legarda also wanted to look into “tied loans” from foreign countries that obligate the recipient countries, like the Philippines, to purchase equipment, supplies and technical assistance from the lender. In the end, the recipient country ends up the loser because a great part of the loan is kicked back to suppliers, contractors and technical personnel from the lending country.
“We must see to it that our foreign loans end up to the net benefit of our people, and not just result in pink elephant projects that benefit more the lender than the borrower,” she said.
WB spokesperson for the Asia-Pacific region Peter Stephens earlier told newsmen discussions on the loan for the second phase of the NRIMP will remain on hold indefinitely until the charges of anomalous procurement during the project’s first phase have been resolved.
”The president of the World Bank has said categorically this project will not even go back to the board for consideration until all the questions have been answered and all the doubts are allayed,” Stephens said.
The World Bank’s Department of Institutional Integrity (INT) has completed a report on the corruption charges, which the international lender has forwarded to the Ombudsman.
Stephens also said that the lender’s board will need to check the phase 2 proposal to see whether all of its descriptions and processes are up to par with World Bank standards of anticorruption.
“There is no timetable (for the review). What there is, is a commitment to do it properly,” Stephens said.
A World Bank official however clarified that the international lender is not necessarily waiting for the Ombudsman to recommend that charges be filed against public officials involved, if any, in the bidding anomalies during the first phase.
“That’s a decision for the government to take… in its own time,” he said.
“When we were bidding that out, we noticed that the bids were higher and the process looked flawed so we rejected the bids… we rejected them three times and in the end we never financed those components,” Stephens said.
Because the collusion was “so stubborn and so pronounced,” Stephens said they notified the INT to investigate the incidents.
The INT then “fed information” back to the World Bank on how to prevent collusions from happening again, and also began compiling an exhaustive investigation report on what had happened and which companies and officials were involved in the collusion.

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Malaca Cash gifts, Lacson to get DBM to give copies of the P500-million Saro at its budget deliberations.
11/23/2007 Daily Tribune reports :-
Denials from Malaca and the Department of Budget and Management (DBM) that there were no funds worth P500 million that went into the bank account of businessman Reghis Romero II, withdrawn from the Bank of Commerce (BoC) Pampanga branch and distributed to some 190 congressmen and local executives last Oct. 11 in Malaca won’t suffice for senators investigating the controversial ‘cash gift’ issue.
The money trail of the alleged P500,000-cash gifts Malaca reportedly distributed to governors, mayors and congressmen, which is expected to lead to the purported P500-million housing funds released to Romero, is seen to be established soon despite DBM Secretary Rolando Andaya’s denials.
Opposition Sen. Panfilo Lacson vowed to get the DBM to furnish the Senate the copies of the P500-million Saro (special allocation release order) when the Senate begins its budget deliberations on Monday to validate his charges that the Palace distributed cash gifts to local executives following a dialog with President Arroyo more than a month ago, allegedly partly coursed through the release of funds due to Romero.
‘I intend to ask DBM to produce the Saro to check on whether it passed through HLURB (Housing and Land Use Regulatory Board), HUDCC (Housing and Urban Development Coordinating Commission) or DPWH (Department of Public Works and Highways.) I intend to pursue that’ not necessarily in the (Senate’s) hearing (on the alleged Palace payoffs) because we will not be getting anything from them (Cabinet officials) but in budget hearings.
‘We will try to secure a copy of the Saro. I will use the finance committee in the budget deliberation to secure the documents. We can refer to the documents to know the movement of money from the Bank of Commerce, from Romero’s account,’ Lacson said.
The senator’s statements came as the DBM secretary belied Lacson’s allegations on the money flow from Romero’s account, with an estimated P3 billion ‘collectibles’ of the businessman from the Arroyo government.
‘I want to see the copy of the Saro as released by DBM,’ was Lacson’s response to the denials made by the HUDCC and HLURB, maintaining the validity of his information divulged during the second public hearing by the Senate blue ribbon and local governments committee into alleged Palace payoffs, citing his source of information as ‘unimpeachable.’
‘I have no reason to doubt that which was told to me by DBM insiders that it (DBM) released the funds to the account of Mr. Romero. Whether it’s HLURB or HUDCC, I intend to find out from DBM,’ he said.
Lacson clarified that he is not trying to link Romero to the alleged payoffs by picturing him as one of the purported financiers.
The senator said Romero could even be a ‘victim’ in this case, as the businessman, in an effort to collect dues from the administration may have been compelled to provide some of the funds in the purported ‘gift-giving’ that took place right inside Palace’ premises.
‘I’m trying to connect the P500 million released by DBM to Romero as collectibles and I also know Romero is a client of BoC. That’s why I’m trying to tie this all up, the possibility of the funds distributed in Malaca coming from that. I’m treating Mr. Romero not as a suspect here but as a possible victim of extortion,’ he said.
Lacson twitted the DBM’s challenge to him in producing evidence to buttress his allegations saying the burden of proof is on the senator. ‘That’s always the challenge (of the administration whenever charged of certain irregularities). But remember, we are not in the court of law. We are here investigating, looking for facts and information. We are here in aid of legislation. We want to ferret out the truth behind the mystery of the cash gifts given in Malaca,’ Lacson stressed.
He added that every Filipino and public officials like himself should find out from where the funds came.
He said he will be submitting his requirements, among which is a copy of the Saro as released by DBM in July in the amount of P500 million, whether it’s broken down in separate tranches,’ he said.
Lacson said he had also sent a formal letter to the Philippine National Police (PNP) asking for copies of Saros released to the police agency by the DBM, saying he will be pursuing this.
For his part, Minority Leader Aquilino Pimentel Jr. expressed strong suspicion that the management of the BoC is covering up its involvement in the Palace cash gift controversy to prevent Senate probers from uncovering the source of the money and the personalities involved.
Despite the fact that the bill wrappers, used in bundling the P500,000 received by Pampanga Fr. Ed Panlilio during the Oct. 11 meeting in Malaca, bear the bank’s logo and a signature of its employee, Pimentel said he found it unbelievable that the bank could not even identify the branch where the money was deposited and withdrawn.
‘Apparently, the bank is trying to cover up this mess by its vice president’s explanation going around in circles,’ he said.
Under questioning by Pimentel during Wednesday’s hearing of the Blue Ribbon Committee and Committee on Local Government, Bank of Commerce executive vice president Arturo Manuel, Jr. confirmed that the bill wrappers used in bundling the P500,000 in P1,000 denomination given to Panlilio carried the official logo of his bank and the signature of Winona Yumul-Bondoc, a cash custodian at the mini-cash center in Angeles City. The date was also indicated - July 22, 2007.
But Manuel failed to provide the paper trail of the money - from the mini-cash center to the branch of the bank where it was delivered and withdrawn. He failed to identify the branch where the withdrawal took place, saying he could not identify the owner of the deposit, the person who withdrew the money and the teller who processed the transaction.
Manuel also told the hearing that the date appearing on the bill wrapper indicates when the money was bundled and verified by the cash custodian (Bondoc), but not when it was withdrawn.
Dumbfounded by the explanation of the bank executive’s explanation, Pimentel remarked that he could not imagine a bank releasing such a huge amount of money without having a paper trail of its movements.
Manuel pointed out that the cash movements from the mini-cash center are prompted by either an excess cash being remitted to the nearest Bangko Sentral cash office, the requisition of a branch within the area or remittance of excess cash from the mini-cash center to the head office cash center.
When Pimentel asked whether the management of the Bank of Commerce bothered to conduct an inquiry by requiring Bondoc to give an explanation, Mr. Manuel replied ‘no.’
His answer prompted Pimentel to say that the bank was being insensitive for its seeming lack of interest in unraveling its own involvement in the Palace payoff scandal.
‘My God, the whole country is agog over this thing and the Bank of Commerce does not bother about it. Why would that be the case’ Can you kindly put on record why you have a nonchalant attitude about this thing?’
Pimentel then requested the Senate investigating panels to invite Miss Bondoc to the next hearing on the case.
Meanwhile, instead of refuting the allegations head on, Malaca yesterday went ballistic and skirted the issue, accusing instead the Senate and the media for coming out with ‘unsubstantiated’ allegations that Mrs. Arroyo tapped businessman and supporter Reghis Romero II to release some P500 million for the benefit of congressmen and local executives, distributed at the height of the Chief Executive’s impeachment complaint being filed at the House of Representatives.
Both secretary to the Cabinet Ricardo Saludo and DBM’s Andaya, however failed to provide information on whether the budget agency had released P500 million and coursed to the BoC, under the account of Romero.
‘Many unsubstantiated accusations have come out of the Senate investigation and some opposition senators. These claims make headlines and besmirch reputations, even if no basis is given to support them, except unnamed, maybe non-existent sources or purported evidence to be presented at the proper time and forum,’ Saludo said.
He stressed that the Senate and media are violating the rights of individuals through baseless allegations.
‘Such baseless claims broadcast live in Senate investigations may be violating the constitutional provision that ‘the rights of persons appearing in, or affected by, such inquiries shall be respected.’ For fairness and truth, we hope our lawmakers will assess the basis of allegations before they are aired in nationally televised proceedings. It is not enough to invite the accused to clear their names; the accusers must also be told to substantiate their charges. After all, the burden of proof lies with the accusers,’ Saludo added.
In a radio interview over dzMM, Andaya claimed he had verified with his office on this alleged payment, and claimed that the DBM has not issued any payment to any private individual or the HLURB.
When asked if the DBM could have coursed the payment to Romero, through the National Housing Authority (NHA), Andaya said they have yet to verify it.
Romero is a political supporter of Mrs. Arroyo and owner of RII Builders Inc., which was awarded the multibillion-peso contract for the Smokey Mountain development and the reclamation of an initial 40 hectares of land, which was later expanded to 79 hectares, during the term of President Fidel Ramos.
With Sherwin C. Olaes
Email: collator.peedee@yahoo.co.uk