The failure of the Ombudsman to indict former AFP comptroller Maj. Gen. (retired) Jacinto Ligot for graft based on the findings of the Anti-Money Laundering Council that he amassed P740 million in just four years smacks of a “consistent pattern of cover-up” in the anti-graft agency, Senator Franklin M. Drilon said Sunday, Feb. 20.

In an interview over dzBB’s Nimfa Ravelo, Drilon said also expressed disgust over the tacit cooperation of these banks where Ligot, his wife and relatives had deposited huge amounts of money for allowing themselves to be “instruments of corruption”.

“There is a rule among banks known as KYC, or know your customer,” he said in Pilipino. “So how come these banks didn’t bother to check where such big sums of money deposited by Ligot and his family came from?” he added.

Drilon reiterated that Special Prosecutor Wendell Barreras-Sulit should be held culpable for the letting another key figure in the AFP corruption being probed by Congress, Maj. Gen. (retired) Carlos Garcia, get away with more than P128 million which he managed to withdraw from various banks before the AMLC could issue a freeze order.

Drilon said Sulit and her team of prosecutors should have demanded that Garcia give back the money to the government during their plea bargain deal negotiations, and her failure is sufficient ground for an administrative case to be filed against her before the Office of the President.

“The Special Prosecutor is an appointee of the President, and it is the appointing authority who is also vested with the disciplinary authority,” Drilon, a former Justice Secretary, said.

The Ilonggo senator said the failure of the Ombudsman and the Special Prosecutor under it to prosecute Ligot for graft arising from unexplained wealth is obviously part of an “overall cover-up plan”.

“It’s hard to say who hatched this plan,” he said. “But what is clear is that there is a consistent pattern of covering up these misdeeds,” he added.

Drilon said Sulit and her team of special prosecutors ought to go on leave, or even resign, if there is any “delicadeza” left in them. “But it seems ‘delicadeza’ is no longer in their vocabulary,” he said.

During last Friday’s Blue Ribbon committee hearing, Sulit claimed she had never seen the AMLC report about the bank deposits of Ligot and family.

However, AMLC Executive Director Vicente Aquino said two investigators from his agency had hand-carried the report and delivered it personally to Ombudsman Merceditas Gutierrez in May 2008.

Drilon said he didn’t see any motive on the part of the AMLC to be making up this story. (30)

The Office of the Ombudsman is now hard put to explain why it failed to file a graft case against former AFP comptroller, retired Major General Jacinto Ligot, despite the clear evidence submitted by the Anti Money Laundering Council (AMLC) showing he and his family had amassed P740 million in bank deposits over a four-year period.

Upon questioning by Senator Franklin M. Drilon during the Blue Ribbon committee hearing on the Garcia plea bargain agreement on Friday, Special Prosecutor Wendell Barreras-Sulit it was the first time she came to know about the existence of these deposits which is why no graft case, considered a “predicate case” before money laundering charges could be pursued, was ever filed against Ligot.

AMLC Director Vicente Aquino said the AMLC submitted a report about the frozen bank deposits of the Ligot family to Ombudsman Merceditas Gutierrez personally sometime in 2008. The AMLC report showed that Ligot and family had managed to withdraw P666.6 million from these accounts before a freeze order was issued.

An AMLC investigator, Alice Valderrama-Torres, said she and fellow investigator Atty. Roland Villaluz handed over the documents to Gutierrez at her office. Torres told the committee it was during lunch break that she and Villaluz submitted the report to Gutierrez.

Nothing happened after that, Drilon said.

“Well, because no graft case has been filed, there can be no anti-money laundering case that can be filed because there is no predicate crime, which the Anti-Money Laundering Council can rely on,” Drilon said.

Drilon said that as a result of this negligence, the AMLC was unable to pursue a money laundering case against Ligot in the absence of a “predicate case” for the crime of graft.

The AMLC tracked movements in the bank accounts of Ligot, his wife, children and relatives. In a span of four years between 2001 and 2004, a total of P740 million was deposited in these accounts even though Ligot admitted earning only P360,000 annually from his salary as AFP comptroller. The rest of his family did not have substantial incomes from their professions or businesses, Ligot admitted.

Philippine Daily Inquirer

First Posted 08:40:00 02/12/2011

Filed Under: Legislation, Benigno Aquino III, comelec, RP peace process

MANILA, Philippines—Civic and religious groups led by three former senators and bishops are urging the President to certify as urgent a gun control bill to stem the rising incidence of crimes in the streets.

In a signed statement, the group calling itself Mga Tagatulak ng Kapayapaan (Peace Movers) called on President Aquino to consolidate two gun control bills pending in the House of Representatives and the Senate into one measure and certify it as urgent. The group sent a letter through Presidential Communications Operations Office Secretary Herminio Coloma.

The group is referring to the Citizen Protection Act of 2010 filed in the House of Representatives and Senate Bill 129 to regulate the carrying of firearms.

Comelec-style ban

Both bills have something in common: To make the Comelec (Commission on Elections) gun ban in public permanent during election and off-election periods. Anti-gun advocates and even the Philippine National Police (PNP) have pointed out that Comelec gun bans enforced by the police during elections have brought down crime.

“As a crime prevention measure, the consolidated bill will make the harmless act of carrying a gun by unauthorized persons in public places a criminal offense before such harmless act turns into a violent crime,” the group said.

They also said that the possession in public places of firearms and deadly weapons “should be authorized only for those directly and primarily engaged in police, military, or security services who are in uniform and on duty, and even then only to enforce the law under strict and clearly defined guidelines.”

Signatories

The group argued that the consolidated gun control bill “will not in any way impair the privilege of responsible and qualified citizens to keep licensed firearms at home for protection or sport.”

Leading the signatories of the letter are former Senators Ramon Magsaysay, Aquilino Pimentel Jr. and Wigberto Tañada.

Members of the religious who signed the statement Archbishop of Manila Gaudencio Cardinal Rosales, Cebu Archbishop Emeritus Ricardo Cardinal Vidal and Catholic Bishops Conference of the Philippines president Nero Odchimar. Other signatories were Reynaldo “Nandy” Pacheco, founder of the Gunless Society, and Manolo Dayrit, chair of the Ang Kapatiran Party.

There are at least one million licensed firearms in the country with around half in the National Capital Region. During the campaign period for the 2010 national elections, the PNP arrested some 3000 people for violating the gun ban

“This development also shrouds me with pride. People power began here in our country 25 years ago this month. We taught the world that tyrants might rule with guns, tanks and artillery. But more powerful than military might is the outpouring of people’s discontent in the streets. As we prepare to celebrate the 25th year of EDSA, I hope we can draw strength from that pride, and use our energies to rebuild our nation and lift it from the tentacles of corruption that grew massive during the last nine years.”

Granting the CESB autonomy to control and supervise third-level career executive service cannot be provided by law and the legislature cannot pass a law that would diminish the powers of the Civil Service Commission (CSC) which has proper jurisdiction over career service, Drilon said.

The grant of authority to CESB, which was created by Presidential Decree No. 1 issued in September 1972 and later amended by PD No. 336 issued November 1973 and PD No. 367 on January 1974, was based on the 1973 Constitution which provides that “the CSC shall, subject to limitations as may be provided by law, establish a career service and adopt measures to promote morale, efficiency and integrity in the civil service.”

Nothing in the 1987 Constitution, however, allows limitations on the CSC’s power because the phrase “subject to such limitations as may be provided by law” was deleted, Drilon stated.

While the law can create a policy-making board for career executive system, such body must always be still under the control and supervision of the CSC as the central personnel agency of the government. Otherwise, the legislature would in effect pass a law that would diminish the powers of the CSC under the 1987 Constitution.

“The limitation on the powers of the CSC found in the 1973 Constitution was not reiterated in the 1987 Charter,” Drilon said in interpellating Senate Bill No. 2671 that proposes revisions to the current career executive service, adding that Sections 2 and 3, Article IX of the 1987 Constitution never mentioned CESB and full authority relative to civil service was vested in the CSC.

The measure, authored by Senator Antonio Trillanes IV, proposes a Career Executive System Board which shall be the policy-making body for the career executive system and prescribe entrance to career executive service rank or third-level of the career service.

“The CSC, by virtue of the constitutionally-granted powers and functions, should exercise full plenary authority to identify, administer and supervise all three levels of the career service,” Drilon said.

It can be noted that the Public Attorney’s Office raised a howl over a CESB resolution rendering the tenure of PAO officials temporary because they are non-career executive service officers and they are required to meet certain eligibility requirements other than being lawyers.

Drilon also warned that the measure, once passed into law, could be struck down by the Supreme Court for constitutional infirmity.

As such, Drilon said he will propose amendments to the Senate measure to align it with the 1987 Constitution, adding that the actions of CESB could not take effect without prior approval from the CSC and that the commission shall have direct supervision and control over CESB.

He walked, he saw, and he swung into action.

Senator Franklin M. Drilon spent a busy weekend talking with officials of various government agencies to discuss how to speed up the clean-up of the Iloilo River after he saw that this waterway had become heavily silted during an early morning brisk walk on Trenas Blvd. , or better known as “Boardwalk”, last Saturday.

“I was surprised to see fishermen stand just waist-deep in the middle of the river tending to their nets,” he said. “It dawned upon me the river had become so shallow because of siltation.”

After his walk, Drilon sat down for coffee at a riverside coffeeshop run by businessman Rolando Layson and saw what contributed to the siltation: a cluster of bamboo fishpens upstream of the Carpenter Bridge in Molo district and shanties on the riverbanks.

City Mayor Jed Patrick Mabilog, who is a nephew of Drilon, was with him.

Right there and then, things swung into action as Drilon placed a few calls and met with officials and business leaders.

“The situation is bad,” he said. “When I was a teen-ager, I used to swim across the Iloilo river and it was deep.”

The Ilonggo senator called up DPWH Usec Raul Asis before he could take a shower after his work-out to request the agency to deploy dredging equipment to scoop out the silt. He spoke with business leaders to get their cooperation on the clean-up efforts for the river.

On Sunday morning, he summoned DENR Regional Executive Director Julian Amador and his key deputies to talk about demolishing the illegal structures on the riverbanks. The DENR has exclusive jurisdiction over foreshore areas along the riverbanks.

Mabilog asked the DENR to issue notices to vacate the riverbanks after finding out that only two applicants for foreshore lease permits have been granted. By an unofficial count, there are more than 75 illegal occupants on government property along the river, among which are Ryan’s Restaurant and Barbecue Park owned by City Councilor Edward Yee.

Drilon also spoke with the Iloilo manager of the Philippine Ports Authority (PPA) for the removal of sunken ship derelicts along the Iloilo River, presenting an unsightly view of the historic port and obstructing the river flow.

“Let’s start from square one on this,” Drilon said after finding out that government agencies have neglected to keep the waterway clear of illegal structures over the last 17 years or so.

In 1993, Drilon had embarked on a river clean-up drive that included the removal of squatter houses in the Lapaz and Lapuz parts of the Iloilo River. He also allocated funds for the construction of a bridge on the old railway bridge at the back of the Hall of Justice.

Under the administration of then City Mayor Jerry Trenas, the city government had begun removing fishpens from the river, but only from the stretch between the Carpenter Bridge and the Iloilo Port.

Drilon said the shanties and fishpens he saw upstream of the Carpenter Bridge will also have to go.

For his part, Mabilog vowed to carry out demolition activities of identified illegal structures as soon as he receives official directives from DENR to clear the foreshore areas. ICPO OIC-Director S/Supt. Marieto Valerio pledged the cooperation of the police in undertaking such demolition activities.

Drilon and Mabilog agreed to hold another meeting, this time with members of the Iloilo River Development Council, on March 5 to discuss technical reports and adopt a plan of action to hasten the rehabilitation of the waterway.

Read more:

http://www.scribd.com/doc/47643263/Drilon-quizzes-govt-prosecutor-on-plea-bargain-deal

Sponsorship Speech on GOCC Governance Act of 2011

(S.B. No. 2640, An Act To Promote Financial Viability And Fiscal Discipline In Government-Owned Or Controlled Corporations And To Strengthen The Role Of The State In Its Governance And Management To Make Them More Responsive To The Needs Of Public Interest And For Other Purposes)

Mr. President, Distinguished Colleagues:

INTRODUCTION            Since the 1970s, the Philippine Government has been establishing Government Owned and Controlled Corporations, or GOCCs, to accomplish development objectives, particularly economic and social services, and infrastructure development. Many of these GOCCs took on a life of their own, and pursued objectives independently of any government policy. A number of them are plagued by incompetence and corruption, becoming a burden and a drain on our meager public resources.

            Today, we have 157 GOCCs. Many of them operate like independent republics. Some of them have burdened this Government with tons of indebtedness, with NFA’s P177 B debt on top of the list. Others, like the MWSS, have awarded themselves with so many bonuses that they have run out of the alphabet in labeling these bonuses.

President Benigno S. Aquino III, in his first State of the Nation Address, shocked the nation when he revealed the outrageous bonuses at the MWSS. In the words of the President: “Ang karaniwang manggagawa hanggang 13th month pay plus cash gift lang ang nakukuha. Sa MWSS, aabot sa katumbas ng mahigit sa tatlumpung buwan ang sahod kasama na ang lahat ng mga bonuses at allowances na nakuha nila.”

 President Aquino’s SONA formed the basis for our filing of P.S.R. No. 66, directing the Senate Committee on Finance, jointly with the Committee on Government Corporations and Public Enterprises, to conduct inquiries, in aid of legislation, into the activities of the GOCCs.

The nation was outraged when we exposed, in the course of our inquiry, the staggering salaries, bonuses, and allowances of some GOCC officers and directors, and the hundreds of millions of pesos worth of stock option plans and profit share denominated as Directors’ Fees in private corporations where pension funds were invested.  We confirmed that members of the Board of Directors of certain GOCCs have allocated for their benefit obscene bonuses that went as high as the equivalent of 26 months, despite the poor financial condition and staggering losses – Php3.5 Billion in the case of MWSS – - of these corporations.  We also discovered excessively generous and scandalous retirement schemes.  For example, in the case of Manila Economic and Cultural Office, or MECO, Directors can retire after only two (2) years of service, with a retirement pay of Php600,000 per year of service.

Mr. President, public office is a public trust. The need has never been more apparent than now to address the issue of such excessive and unwarranted monetary remuneration including benefits and perks accruing to the Board of Directors and top officials of GOCCs.  We must exact transparency and accountability from our public officials, who have not faithfully discharged their duties as managers of public enterprises designed to contribute to national progress.

The inability of public enterprises, such as GOCCs, to contribute to development arose not only from their inefficiencies due to their monopoly or protected status but also because of lax governance and oversight. The checks-and-balances that come with private ownership – - that is, the pressures that shareholders and external directors can exert on managers to improve efficiency, that capital markets can exert on companies to allocate scarce resources economically and to operate within “hard budget” constraints, and that managers who are responsible to shareholders and outside directors can exert on workers to improve productivity – - are all usually missing from public enterprises. 1

            The need for much-needed reforms in the government corporate sector to make it effective vehicle in achieving social and economic progress becomes more apparent once we take into account the role that GOCCs play in our economy. 

In 2009, total expenditures of GOCCs are equivalent to 28% of the total expenditures of the national government.  GOCC assets, at P5.557 trillion in 2009, also exceed NG Assets at P2.879 trillion.   The 2009 Annual Financial Report of the Commission on Audit also indicates that out of the P475.296 billion Inter-Agency Receivables of the National Government, 91% or P433.383 billion are due from GOCCs.  

In its 2009 consolidated audit report on GOCCs, the COA reported that subsidy income provided to GOCCs by the NG and other government agencies amounted to approximately P7.6 billion in 2009, but taxes paid by the GOCCs amounted only to approximately P6.7 billion, which is even lower by 17.26 percent from prior year’s levels. In addition, while the GOCCs declared a total dividend of approximately P14.6 billion. This amount is still P249.95 million less than the 2008 level.

As a result of the inquiry on GOCCs operations and compensation structure, this Senate Bill No. 2640 is now being submitted for consideration to this Chamber.

Reinventing public enterprises in any country should begin with a comprehensive performance review and the formulation of a government strategy for reform. Governments are unlikely to be successful in restructuring public enterprises unless they develop a strategy that sets out a clear vision for how GOCCs are expected to contribute to development and defines clear missions and performance criteria for each public enterprise. 2

The proposed GOCC Governance Act intends to rationalize the structure, existence and operations of the GOCCs.  It is designed to reform the government corporate sector, improve corporate governance of GOCCs, and exact from them efficient and effective public service.

We outline below the bill’s most significant features.

1. COVERED PUBLIC ENTERPRISES.

Apart from Government Owned or Controlled Corporations, which generally refers to corporate entities where at least a majority of the outstanding capital stock is owned by the government, the bill also covers Government Instrumentalities with Corporate Powers (GICP) / Government Corporate Entities (GCE), which, as defined by the Supreme Court in MIAA vs. Court of Appeals (GR No. 155650, July 20, 2006), refers to an instrumentality of government, which is neither a corporation nor an agency integrated within the departmental framework, but vested by law with special functions or jurisdiction, endowed with some, if not all corporate powers, administering special funds, and enjoying operational autonomy usually through a charter. Examples of GICP / GCE would be MWSS, LWUA, PDIC.

2. GOVERNING BODY.

There are 157 GOCCs in our bureaucracy today. Not a single government office supervises them. A governing body for GOCCs, to be called Governance Commission for Government Owned or Controlled Corporations (GCG), is created under the bill. The GCG shall be composed of the Secretaries of the DBM, DOF & NEDA, and two (2) private sector representatives. The GCG is, among others, authorized to identify other necessary skills and qualifications required for Appointive Directors and recommend to the President a shortlist of suitable candidates for Appointive Directors; evaluate the performance and determine the relevance of the GOCC, and recommend to the President the reorganization, merging, streamlining, abolition or privatization of a GOCC under a clear set of standards defined in the bill; and coordinate and monitor the operations of GOCCs to ensure alignment and consistency with national development policies.

3. GOCC COMPENSATION AND POSITION CLASSIFICATION SYSTEM.

SB 2640 provides for the creation of a Compensation and Position Classification System, specific to GOCCs.  It recognizes that GOCCs are a special group, which requires a special classification system different from that provided under the Salary Standardization Law (SSL).  A constant issue in the compensation of GOCC directors, officers and employees is the request for exemption from the SSL wherein a GOCC will claim that the qualifications and jobs performed by its directors, officers and employees are different from those performed by other “government employees”.  These exemptions, in the form of grant of authority to the Board to fix the salaries, compensations and benefits of its personnel –which always includes fixing benefits for the board members themselves-  have resulted into exorbitant and excessive compensations, bonuses and allowances granted by some GOCCs to its employees, officers and directors. 

At least 27 GOCCs have been granted exemption from the SSL by their charters. Once the Compensation and Position Classification System for GOCCs is in place, no GOCC shall be exempted from the system. Thus, excessive pays, allowances, bonuses and the like will no longer be possible. The GCG may recommend, subject to the approval of the President, additional allowances or bonuses for certain position titles, giving due consideration to the necessity for such allowances and the good performance of the GOCC.

4. FIT AND PROPER RULE.

Section 19 of the bill provides that all members of the Board and the Chief Executive Officer shall be qualified by the “fit and proper” test to be determined by the GCG.  To maintain the quality of management of the GOCCs, the GCG, in coordination with the relevant government agencies, shall subject to the approval of the President, prescribe, pass upon and review the qualifications and disqualifications of individuals appointed as directors or elected Chief Executive Officer of the GOCC, and shall disqualify those found unfit. Further, the members of the Board of GOCCs shall serve for one year only, mirroring the best practices in private corporations while instilling greater accountability in their public corporate counterparts.

Directorships and senior managerial positions in GOCCs are often viewed as political patronage positions for retired military and high level civil servants or for relatives and friends of powerful political leaders. The appointment of non-experts and inexperienced policy directors in institutions that require decision makers with indispensable and specific skill sets lead GOCCs to operate with soft budget constraints, leading to inefficiency, low levels of productivity, and financial losses. 3

5. CONCEPT OF CORPORATE OPPORTUNITY.

The proposed law adopts the concept of “corporate opportunity” under the Corporation Code.  It sets forth the manner in which directors or officers, who breach their fiduciary duty, are to be made liable for the profits which they have misappropriated to themselves to the prejudice of the GOCC.  This bill imposes an obligation on the part of the directors or officers to remit to the GOCC any such benefit or profit.  If they fail to do so, they shall be required to restitute such amounts without prejudice to any administrative, civil or criminal action filed against them. The penalty of imprisonment and a fine twice the amount is imposed on the officers or directors if they fail to restitute such amounts.

The bill also stresses the role of the GOCC directors and officers as mere trustees with respect to the monies or properties of the GOCC. Being mere trustees, they cannot appropriate for themselves any of the realized profits or benefits made from the investment of the GOCC to private corporations or other GOCC’s.  We have seen this happen in the case of the Social Security Commission where the Commissioners appropriated for themselves millions in stock options and directors’ fees which rightly belonged to the trust funds of the Social Security System.  As spelled out in the bill, such monies or properties belong to the GOCC and not the director or officer handling such.

6. PER DIEMS, ALLOWANCES AND BONUSES.

Finally, the bill provides for limitations on the per diems, allowances and bonuses which directors may receive or appropriate for themselves.  The bill makes it clear that directors are not entitled to compensation as directors, but may be entitled to reasonable per diems only.  The bill limits the bonuses a director may receive, to not more than two (2) months salary of the CEO of the GOCC. In case of outstanding performance on the part of the director and the GOCC, the President of the Philippines is authorized to approve additional bonuses.          

SB 2640 is a legal and political framework for GOCC management to help it determine the nature of the relationship that exists between various public authorities and the conditions that will enable them to achieve their goal with efficiency. Our role is to establish effective and appropriate legal and regulatory frameworks that simplify and streamline legal structures for GOCC operations, specify obligations, protect the rights of stakeholders, and create standards and procedures for effective internal and external auditing, transparent and accurate accounting, and public financial disclosure. 4

CONCLUSION

Mr. President, SB 2640 establishes the framework for reforms in the GOCCs. The days when the 157 GOCC boards can act independently of the national government are finally over. We are confident that once this bill becomes a law, the excesses and abuses we saw in the operation of the GOCCs will all be a thing of the past.  Indeed, what we hope to see are Government Owned or Controlled Corporations operating profitably and contributing significantly to the welfare of our people, with the end in view of improving the quality of public services and substantially contributing to national development.

            Thank you Mr. President.

I was pleasantly surprised at how the Dinagyang has achieved world-class level performances for its tribes. Each edition of Dinagyang is a unique experience, a wonderful spectator event.

The visit became more meaningful because I witnessed the conferment of the President’s sister, Ms. Ma. Elena “Ballsy” Aquino-Cruz, as an “Adopted Daughter” of Iloilo City. I’ve always felt proud about Iloilo’s heritage, and I am happy to share it with Ballsy.

Although it was still dark when we arrived at the beautiful airport in Cabatuan, I was amazed to see the quickening pulse of a growing economy as we drove to the city. Everywhere you looked, new buildings were being constructed, and more businesses have set up shop.

A very prominent addition to the economic landscape is the Plazuela de Iloilo owned by media mogul and banker Roger Florete. The business process operations (BPO) building of the Ayala group is approaching completion. Edgar Sia, the young food magnate behind the success of “Mang Inasal”, is also building a condominium in Barangay San Rafael, Mandurriao.

To me, these are clear signs that my hometown is waking up and moving to catch up on the development front. And I’m extremely happy because several infrastructure projects that I helped bring to Iloilo are being acknowledged as “triggers” for this brisk pace in economic growth.

The new airport is one. The flood control project is another. There are two bridges that tremendously eased traffic congestion in the city. A third one is being lined up in the Arevalo district. The passenger terminal for the Iloilo City port is also a major infrastructure to promote tourism.

The impact of these projects is readily apparent. The airport elicits “wows” from first-time visitors to Iloilo as one of the best, if not the best, regional hubs in the country. A few weeks ago, many parts of the country experienced floods due to incessant rains lasting several days, but Iloilo City remained “dry” because of the new floodway project. In the past, large parts of the city would submerge after heavy rainfall lasting just a day.

The Dinagyang Festival showcases Iloilo’s rich cultural and historical heritage, and it can definitely serve as anchor for the city’s bid to become a premier tourist and investment destination in the years ahead. It is also drawing praise as a model for public-private partnership, which is the advocacy of the Aquino government for economic development. A strong sense of community has always been an outstanding attribute of Ilonggos.

It’s an exciting period for Iloilo, and as an Ilonggo, I will continue to push for more investments to help it unleash its full potential.