No short cuts

Every incoming administration of this country has the power and the responsibility to review each and every contract entered into by the previous administration to determine not only if these have followed the prescribed rules, but also to see if public interest will be served by their execution and if public funds will not be wasted.

One such contract involves the provision of information and communications technology systems allowing mobile and online betting for lotto, digit, and small-town lottery or STL games of the Philippine Charity Sweepstakes Office (PCSO).

According to court records, PCSO chairman Anselmo Pinili signed on April 12, 2021 a P5.8-billion contract for the installation and operation of a mobile and online betting system for the said lottery games by a Filipino-Chinese gaming technology joint venture.

But the PCSO board of directors had reportedly been warned by the agency’s legal department against the implementation of the integrated sales agency agreement with SmartInfo-China LotSynergy due to serious legal and technical issues.

According to mobilotto.com.ph, SmartInfo Philippines is the holder of letters patent from the Intellectual Property Office of the Philippines for its mobile online betting system and method, which is the heart and core of PCSO’s nationwide online mobile terminal project. The company is also a smart card solutions provider and has government military projects, telecommunications, supply of smart cards and solutions, e-pass, government security projects, among others.

It is likewise the strategic partner of Datatrail Corp. for the alien certificate of registration identity card project of the Bureau of Immigration, which automated the process of alien registration and was awarded original proponent status by the Laguna Lake Development Authority for the LLDA permitting, monitoring and enforcement system automation project.

China LotSynergy, meanwhile, is the biggest lotto company in China offering lottery equipment, systems, games, solutions, among others. It is said to be the leading manufacturer of video lottery terminals and is the exclusive business partner of Global Fun Ghana for Ghana’s national lottery business, the exclusive provider for both the sports and welfare lottery market in Cambodia, to name a few.

Unfortunately, while they appear to be legitimate and reputable companies, issues have been raised against its contract with PCSO, including its failure to follow to procedures laid out for public-private partnership (PPP) projects, such as evaluation and approval by the National Economic and Development Authority Investment Coordination Committee (ICC) and the NEDA board.

For public-private partnerships between government agencies and private sector proponents with project cost of more than P300 million, they need to secure as a general rule approval by NEDA, whether such project is solicited or unsolicited, as provided for under the Build-Operate-Transfer (BOT) law.

Even the Office of the President, through Executive Secretary Salvador Medialdea, in a memorandum last June 14, 2021, said that while the PCSO had the authority to determine the systems or platforms it will adopt, the agency has to secure a favorable finding from the Office of the Government Corporate Counsel or OGCC especially on a number of technical and operational expertise as well as financial discretion issues.

The OGCC, in a letter dated July 13, 2021, meanwhile said that it defers to the PCSO management and board of directors’ discretion to check on these issues, which the OGCC had raised in three separate opinions given by the latter.

PCSO officers have said that an earlier award to the joint venture of Pacific Online Systems Corp., Philippine Gaming Management Corp. and US-based International Lottery and Totalizator Systems, Inc. of a P5.8-billion Philippine lottery system contract already included a component for the installation of mobile lotto betting systems.

This would render the system of SmartInfo and China LotSynergy redundant, they pointed out.

Among those pushing for the contract’s implementation are Pinili, who reportedly will be named acting general manager because Royina Garma has already been removed from office recently, and PCSO director Ramon “Ike” Seneres, who is the chairperson of the agency’s oversight committee on product development and marketing management on business proposals.

Meanwhile, the career and professional assistant general managers are said to be rallying against the implementation of the contract because they might be the ones left to clean up the mess just in case Pinili is replaced by the incoming Marcos administration.

As political appointees, members of the PCSO’s board of directors, including Pinili, are coterminous with the Duterte administration. They are expected to tender their courtesy resignations to give the new administration a free hand in naming its new team for PCSO.

The outgoing president himself dismissed the appointees of his predecessor in PCSO to rid the agency of corruption.

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The unincorporated joint venture of SmartInfo and China LotSynergy actually went to court at the Mandaluyong RTC Branch presided by Judge Rizalina Capco-Umali  to compel the PCSO to implement the controversial contract.

The petition for mandamus and write of preliminary mandatory/prohibitory injunction and/or temporary restraining order specifically sought to compel then GM Garma and the PCSO to issue the necessary notices, orders, papers to allow the JV to implement the integrated sales agency agreement (ISAA) relative to the nationwide online mobile terminal project executed between petitioners and the PCSO and to prevent Garma and the PCSO from altering, amending, cancelling, revoking  or terminating the said ISAA.

But Judge Umali, in a hearing on the petition, reportedly gave SmartInfo, which was in a rush obviously due to the change of administration after noon of June 30 this year, a choice of either to wait for her to come back from her leave which will last for several weeks or to transfer the case to the Mandaluyong RTC executive judge.

However, acting Mandaluyong RTC executive judge Ofelia Calo also declined to take on the case from on-leave Judge Capco-Umali. Instead Calo gave the case to Capco-Umali’s pairing judge, Aileen Saquing-Agacita of Mandaluyong RTC Branch 213. The latter, a former Valenzuela City prosecutor, was just recently appointed to her post.

Failure to comply with government rules on the approval of projects and contracts can subject the public officials and personnel concerned to administrative and criminal penalties, due to violation of anti-graft laws, among others.

Whoever will take over PCSO will have to review this contract carefully, regardless of the outcome of the court case.

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