Prospero Pichay Suspended for LWUA Purchase of Thrift Bank

On 20 May 2011 (Friday) the Office of the Ombudsman ordered the suspension of Prospero Pichay, chairman of the Local Water Utilities Administration (LWUA), over the agency's purchase of the cash-strapped thrift bank, Express Savings Bank Inc (EXSBI) in 2008, which caused the government to lose P480-million.

Included in the criminal charges that Finance Secretary Cesar Purisima filed on 5 April 2011 are members of the LWUA boards Renato Velasco, Susana Dumlao Vargas, Bonifacio Mario Pena Sr., and Daniel Landigan for anomalous acquisition of a troubled thrift bank.

LWUA is a GOCC specialized lending institution for the promotion, development and financing of local water utilities, not of thrift banks, and as depository of the reserves for capital improvement of local water utilities.

EXSBI is a Laguna-based thrift bank with an authorized capital stock of P100 million divided into one million common shares, 86.7 percent of which were originally controled by the family group of Valenzuela Mayor Sherwin Gatchalian.

According to the Monetary Board, it suffered deficiencies since 2005. By the end of 2009, it posted a capital deficiency of more than P51 million. Without even obtaining the requisite approvals from the Department of Finance, the Office of the President, and the BSP Monetary Board, LWUA pushed through with the acquisition of 485,337 shares of stock, representing around 60 percent of EXSBI outstanding capital stock worth P80-million. [Source: SUNNEX: "Ombudsman suspends ex-lawmaker," SunStar Manila 20 May 2011]

The Office of the President, under former president Gloria Macapagal-Arroyo, approved the bank acquisition four months after LWUA got the bank. The Commission on Audit reported that the LWUA investments on the bank were contrary to the 2009 budget.

KUDOS
LWUA employees led by Rustico Tutol must receive heartfelt gratitude from the Filipino people for their courage in bringing up this corrupt transaction to the court of justice.

UPDATES
Ombudsman, under Acting Ombudsman Orlando Casimiro, Orders on July 4 Pichay Dismissal and Perpetual Disqualification From Public Office. [Source]
Suspension TRO Denied by Appeals Court
The Office of the Ombudsman ordered the dismissal of Pichay from service. Subsequently, the Office of the President ordered LWUA to implement the Ombudsman order. http://www.sunstar.com.ph/breaking-news/2011/07/18/palace-sacks-lwua-chief-pichay-167503

Former AFP Chief Abadia Faces Perjury Conviction on SALN

The Office of the Ombudsman asked the Sandiganbayan First Division to declare former Armed Forces of the Philippines Chief of Staff Lisandro Abadia guilty of perjury for misrepresenting his 1992 statement of assets, liabilities, and net worth (SALN) to mask a P2.55-million rise in the value of his properties.

In 1992, his SALN declared P2,550,000 as "proceeds from the sale of realy property" identified in and covered by Transfer Certificate of Title (TCT) No. 2264, registered in the Cebu Province Registry of Deeds in the names of "Spouses Lisandro C. Abadia and Violeta C. Abadia" but... here's the but... remained in registry until 25 June 2006, 14 years later. The new land title issued thereafter, based on the sale signed between the Abadias and spouses Emilio C. Rafots Sr. and Erlinda M. Rafols, which turned out to be signed on 30 September 2002, 10 years after Abadia declared it as sold. And more than these, the property's official value only appeared as P200,000 in his 1992 SALN, covering P2.35 million in hidden income or cash assets. [Read more.]

Sources

_____: "Ex-AFP chief faces perjury conviction over SALN," ABS-CBN News.com 21 February 2011

Philippine Public Works Save P577M Through Public Bidding

Secretary Rogelio Singson of the Department of Public Works and Highways (DPWH), under the new Aquino administration in the Philippines, saves 577 million pesos for the country when it removed all negotiated contracts outstanding from the previous Arroyo government, and put the projects into public bidding instead. [Read more.]

Malacañang Initiates GOCC Governance Day

President Benigno Simeon C. Aquino III received on 28 January 2011 dividend checks worth over 29 million pesos from 19 Government Owned and Controlled Corporations (GOCCs). Topping the list of billionaire GOCCs were the Bangko Sentral ng Pilipinas (BSP), Land Bank of the Philippines (LBP), Bases Conversion and Development Authority (BCDA) and the Development Bank of the Philippines (DBP).

PCDA, AFP Rot Uncovered

The Senate Blue Ribbon Committee uncovered on 27 January 2011 (Thursday) the so-called Provision for Command-Directed Acitivities (PCDA), a name that sounded much like a pork barrel but that the AFP Chief of Staff controlls, and is being used to address his personal needs. This fund receives contribution from the J staff of the General Headquarter (GHQ) at Camp Aguinaldo (that the military refers to as the "White House"), the official residence of the Staff Chief.

In his testimony befor the committee, former AFP budget officer and retired Lt. Col. George Rabusa testified that his office is required to raise P40 million a month under the PCDA to fund the military chief's personal needs. And since the J staff contributions fall short, the major services in the Navy and the Army as well as key budgetary units like the AFP medical centers augment the shortfall in order to meet this P480 million requirement a year. The Vice Chief of Staff and the next lower ranked officers also benefited from PCDA. GMANews.TV reported the monthly allowance as P10 million with half of it used for personal needs. Vice Chief of Staffs supposedly received P1 million a month.

In fact, when former AFP Chief of Staff Angelo Reyes retired in 2001, he received from PCDA a send-off among of P50 million, according to Rabusa. A practice that has been in the military for the last 20 years. In his 20 months as military chief, he probably received around P100 million, Rabusa computed.

SOURCES
De Santos, Jonathan: "Ex-military chief's P50M 'send-off' gift exposed," SunStar Manila 28 January 2011
LBG/KBK: "Witness: Reyes got P50-M 'pabaon' when he retired from AFP," GMANews.TV 27 January 2011

General Garcia Won an Ombudsman Deal

Former Ombudsman Simeon Marcelo suggested to PNoy to intervene and move to nullify the deal that Retired Major General Carlos Garcia obtained with the Ombudsman to plea guilty to lesser charges of direct bribery and money laundering before the Sandiganbayan in exchange with walking away from the non-bailable case of plunder charges over the P303.27 million he stole from the government when he was military comptroller assigned to Camp Crame. In the deal, he agreed to return a portion of the money. He walked out free from jail on 17 December 2010 after posting a P60,000 bail. Special prosecutor Wendell Sulit defended the deal as it will allow the government "immediate control of Garcia's assets and save the state from a long legal process," TJ Burgonio of Philippine Daily Inquirer reported.

This is a tragic blow to the fight against graft and corruption. And if the Ombudsman proves to have shady motives behind this deal, the Philippine judicial system and the interest of the Filipino people will be in serious trouble.

Philippines Gets White in OECD List

The Organization for Economic Cooperation and Development (OECD) placed the Philippines in its "white list" as Department of Finance passed regulations allowing a swap of bank information between counterpart banks in keeping with the international convention on tax standards. Countries in the list are those who have substantially implemented these tax standards. Based in Parish, France, OECD was founded in 1961, and currently has 33 member countries, which the country is still not among them. Among Asian countries, only Japan and Korea so far qualified for membership. [Related Reports: Agence France-Presse: "Philippine targets cheats' offshore bank accounts," msn News 30 September 2010]