12 Janet-linked NGOs cornered P900-M fund

MANILA, Philippines - Twelve bogus non-government organizations linked to detained businesswoman Janet Lim-Napoles got P900 million in Malampaya funds released to the Department of Agrarian Reform (DAR), the country’s top auditor told a Senate panel yesterday.

Testifying before the Senate Blue Ribbon committee, Commission on Audit (COA) Chairman Maria Gracia Pulido-Tan said the P900 million released in 2009 to DAR – supposedly for towns and municipalities affected by Typhoons Ondoy and Pepeng – ended up in the 12 bogus NGOs.

The committee, chaired by Sen. Teofisto Guingona III, began yesterday its investigation into the issue, which was an offshoot of the pork barrel fund controversy. Napoles, believed to have masterminded the pork barrel scam, was not invited to the hearing.

Tan said DAR sought the fund from the Department of Budget and Management (DBM) based on supposed requests from 97 mayors whose jurisdictions were badly affected by Ondoy and Pepeng.

But an audit showed that 67 of the mayors denied signing any of the letter requests, while four others confirmed signing but not their participation in any of the reported transactions. The rest of the officials did not give any explanation to COA.

In the audit, it was discovered that the request made by the DAR to the DBM preceded the letter requests from the mayors.

State auditors also discovered that DAR entered into memoranda of agreement with the 12 NGOs even before the DBM approved the release of funds, an arrangement Tan said was prohibited under the State Auditing Code of the Philippines.

Tan said a total of 97 MOAs were signed, one for each LGU. She said MOAs should have just been 12, or one for each NGO.

She expressed suspicion that the forging of 97 separate contracts was meant to facilitate the release of funds because each of these involved more or less P10 million only.

Tan explained that any contract over P10 million would have to be signed by the department secretary, while only the signature of an undersecretary is required for any deal below P10 million.

The checks released by DAR at the time were signed by then undersecretary Narciso Nieto and countersigned by then head of the finance management service Teresita Panlilio.

Tan said Nieto had clarified that it was then Agrarian Reform Secretary Nasser Pangandaman who “categorically provided” the figure of P900 million requested from the DBM. Nieto said Pangandaman gave the instruction before the latter left for a trip to the United Kingdom.

Tan noted that the supposed beneficiaries of the funds were neither registered agrarian reform beneficiaries nor voters of the concerned LGUs.

Guingona said he would invite everyone mentioned in the discussions and in the audit report on the Malampaya Fund controversy to the next hearings.

To be invited, he said, are Napoles, Pangandaman, Nieto, Panlilio and Ruby Tuason, the social secretary of former President and now Manila Mayor Joseph Estrada.

Napoles and Sen. Jinggoy Estrada had tagged Tuason as the mastermind of the Malampaya Fund scam.

Guingona said it became clear to him during the hearing that former officials of the DAR connived with the NGOs of Napoles to steal P900 million in Malampaya funds.

More agencies linked

Tan also said her agency is expected to come out next year with more reports on the possible involvement of other government agencies in the Malampaya controversy.

Citing what she called the complicated nature of their tasks, Tan said she and her team of auditors had requested for more time to complete their work, which started in 2011.

The audit report on the Malampaya Fund releases to the DAR was the first of the audits completed by the COA special audit team led by assistant commissioner Susan Garcia.

The findings on the DAR were the basis for the Senate Blue Ribbon committee’s inquiry into the use of the Malampaya Fund.

Tan noted during yesterday’s hearing that 17 agencies and LGUs received Malampaya funds from 2004 to 2012.

The Malampaya Fund represents the government’s share in the natural gas exploration project off Palawan.

From January 2002 to June 2013, Tan noted that the government received a total of P173.28 billion as its share in the Malampaya natural gas project.

As of June 30, 2013, the Malampaya Fund releases to the 17 agencies and LGUs have reached P38.8 billion.

Tan said that the audits on the Department of Agriculture, National Housing Authority and the Philippine Atmospheric, Geophysical and Astronomical Services Administration have already been completed but are still being reviewed.

She said she expects the reports on the three agencies to be out within the first quarter of 2015.

Sen. Nancy Binay asked Tan to disclose COA’s findings on the Malampaya Fund use but the latter declined to give more information, saying the audit agency – as a matter of policy – does not disclose details of its audits that are not yet complete.

More red flags

What she had offered, Tan said, was just a sneak peak into ongoing audits, some of which had shown red flags.

For instance, Tan cited the releases to the Department of Health, which went to hospitals; the Department of Public Works and Highways, to its regional offices; and the Department of National Defense, to its command centers.

The Malampaya Fund should only be used for energy-related projects, based on Presidential Decree 910, mandating the creation of a special fund out of the government share in royalties, rentals and similar payments for the exploration, development and exploitation of energy resources.

“So far, I think from the nature of the agency alone, that is a red flag. By the way, from the circumstances you can already make some kind of conclusion that you may want to pursue,” Tan said.

Of the agencies being reviewed, Tan said it appears that only PAGASA and the NEA can have energy-related projects.

The same PD, however, stated that the special fund may also be used “for such other purposes as may be hereafter directed by the President.”

The Arroyo administration was seen to have taken advantage of such provision to justify its drawing from the Malampaya Fund to bankroll non-energy programs.

Last year, however, the Supreme Court ruled that the provision in PD 910 authorizing the President to tap the special fund for purposes other than energy-related programs was unconstitutional.

“At first glance, a lot of these appear to be not energy-related, but remember at the time also there was a provision in PD 910 that gave the President the power to designate for ‘such other purposes as the President may thereafter direct,’ but which was stricken down as unconstitutional by the Supreme Court in the PDAF cases,” Tan said.

COA’s audit of the Malampaya Fund also covers releases to the Department of Transportation and Communications, Philippine Coast Guard, Department of the Interior and Local Government, National Power Corp., Department of Energy, the provincial governments of Albay and Palawan and the city governments of Tabaco and Puerto Princesa.

Invite Janet, Ruby

 Meanwhile, Estrada urged the Blue Ribbon committee to invite Napoles and Tuason to the next hearings on the Malampaya issue.

“That will not prosper if they don’t invite (these two). If they only invite COA, nothing will happen,” he told reporters in an interview at the Sandiganbayan shortly after his bail hearing.