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Pork scam sharing: Senators got 50%

Marvin Sy (The Philippine Star) - September 13, 2013 - 12:00am

MANILA, Philippines - Senators pocketed half of the funds allocated for every project arranged by businesswoman Janet Lim-Napoles, a whistle-blower in the pork barrel scam told a Senate panel yesterday.

In his first public appearance, Benhur Luy detailed how lawmakers had conspired with Napoles in skimming billions of pesos from their congressional Priority Development Assistance Fund (PDAF) by allowing bogus non-government organizations or foundations identified with the businesswoman to serve as project conduits.

Luy said the senators would receive at least half of their share in advance – or even before the Department of Budget and Management (DBM) released their special allotment release orders or SARO – from Napoles’ own pocket. Of the other half, 10 percent allegedly went to implementing agencies and the rest to Napoles.

Luy said he did not see any of the senators suspected of involvement in the pork barrel scam personally receive money from Napoles. He said the lawmakers would normally send their staff to pick up the money.

Luy said the legislators would call up Napoles to tell her of their submission of listed projects.

Napoles and her people would then check the “menu” of the DBM for projects and programs that may be funded by the PDAF, including the government agencies that may implement the projects.

After examining the list of projects and their corresponding costs, Luy said that they would submit these to the chiefs of staff of the legislators in the form of draft letters.

The letters were then copied or rewritten by the staff of the legislators for submission to the appropriations committee of the House of Representatives and to the committee on finance of the Senate as required by the rules governing PDAF releases.

These are then endorsed by committee chairpersons to the DBM to facilitate the release of SARO to implementing agencies.

Luy said that Napoles had a contact or contacts in the DBM from whom she would get confirmation for receipt of endorsements and the release of corresponding SAROs.

He said that even before the confirmation of endorsements, legislators would call up Napoles to follow up on the fund releases.

Once confirmation from the DBM was received, Luy said Napoles would advance half of the share of legislators since she was “very liquid.”

Luy, a medical technician by profession, said he began working for Napoles – his cousin – in 2002. He said he had thought his cousin would be needing his service for her drug testing company.

 

Sole mastermind

 

Luy also told the Senate Blue Ribbon committee chaired by Sen. Teofisto Guingona III that he had no doubts Napoles masterminded the pork barrel anomaly.

“There was no other mastermind. She was the mastermind because she was my boss,” he said.

He said it was for this reason that he was objecting to proposals to make her state witness. Luy was under heavy security provided by the Senate when he testified yesterday.

Asked by Sen. Juan Edgardo Angara if he had any idea if Napoles had received instructions from government officials or people in high places in her anomalous activities, Luy said he had none.

Luy said he became a trusted employee of Napoles because of his skills in balancing the books of the company and in liquidating funds.

As a personal assistant of Napoles, Luy said that his work involved the recording of all the transactions of the office.

Among the documents that he had personally handled were disbursement reports, which contained voucher numbers, recipients and receivables.

Luy said his reports were all checked by Napoles’ daughter Jo Christine and Napoles’ brother Reynald Lim and then approved by Napoles herself.

He said they would withdraw large amounts in cash – sometimes as much as P75 million in one day – and keep them in her house before these were spent or distributed.

Luy managed to keep a record of all the transactions when he copied the files from the office’s computers while they were in the process of upgrading them.

For the senators, Luy said payments were made either in cash or manager’s checks.

In the case of the congressmen, Luy said that the payments were done through fund transfers to their respective bank accounts.

According to Luy, Napoles made it a point to also give chiefs of staff a share, ranging from one to five percent of the total amount as gratuity or tip.

Luy explained that Napoles had to go through the chiefs of staff of some legislators, with whom she did not have direct contact.

In many cases, Luy said Napoles would haggle to bring down the 50 percent share of the legislators.

Luy said that they would make it appear that the one to five percent of the amount agreed would be for the payment of taxes.

The NGOs of Napoles were headed by various members of Napoles’ staff such as her driver, maid, relatives and even Luy himself.

Luy said the NGOs initially organized by Napoles were the Masaganang Ani Para sa Magsasaka Foundation Inc., People’s Organization for Progress and Development Foundation Inc., and the Philippine Social Development Foundation Inc.

The three had been tagged in the P728-million fertilizer fund scam during the Arroyo administration. Their being linked to the fertilizer scam prompted Napoles to organize new NGOs.

 

Hesitant

 

Justice Secretary Leila de Lima, who appeared as a resource person for yesterday’s hearing, said that she had initially resisted the idea of bringing Luy and the other whistle-blowers to the public hearing at the Senate.

De Lima had actually written Guingona requesting that Luy and the other whistleblowers be excused from yesterday’s hearing.

She cited their right against self-incrimination as some of the whistle-blowers have yet to qualify as state witnesses, so their testimony before the Senate could be used against them if they end up being charged.

De Lima said that most of the whistle-blowers were also concerned about their security as well as those of their families.

“Their situation is bound to drastically change once they are subjected to the intense scrutiny, grueling examination and public exposure that is expected here in this proceedings,” De Lima said.

There is also the confidentiality of information in criminal investigations of law enforcement agencies before the accused is actually charged in court, she said.

De Lima said the exposure of the witnesses in such a venue may preempt the prerogative of the Office of the Ombudsman to exercise full jurisdiction over matters of confidentiality regarding the case.

However, De Lima said that she decided to reconsider her stand because she felt their appearance would serve public interest.

“Maybe it is in the public interest to hear a representative voice from the whistle-blowers and hear from him first hand what until now has only been coursed through media,” De Lima said.

“The small group of witnesses, only a handful, became the open source of forbidden secrets that outraged the public. Undoubtedly, we owe a large part of what we know now to them,” she added.

“However, despite being the source of our information, the whistle-blowers are far from feeling heroic, mainly they are afraid of becoming the instruments who can bring down some of the most powerful political figures in the country, if not the whole pre-modern system of patronage politics as we know it,” she said. “They are the cause, if I can say, perhaps of the sleepless nights of certain politicians and government bureaucrats today.”

 

Asset recovery

 

Angara, meanwhile, sought queries from De Lima whether the Anti-Money Laundering Council (AMLC) had flagged down bank accounts mentioned by Luy and other lawmakers in their affidavits.

De Lima replied that there is an ongoing bank inquiry into Napoles’ accounts.

Some of the banks concerned already complied with the order to submit all the copies of the transactions based on the account numbers provided by the whistle-blowers, including Luy, the justice secretary said.

“Is it just the bank accounts specified by the whistle-blowers or also those (accounts) of individuals who received the cash? Does it go that far? Since Benhur revealed that no senator accepted through banks,” Angara noted.

Angara said he is concerned over AMLC’s focus on Napoles’ accounts, and not on those with whom she transacted. De Lima pointed out that the Napoles group had also deposited money in the accounts of some lawmakers.

“What we want is that there will be restitution or recovery of the laundered money since these are hard-earned taxes of our citizens… It should have been spent properly. Eventually, it might take us five or 10 years but there should be a way of getting these back,” Angara said.

Angara questioned why the DOJ has not yet worked on going after accounts of those individuals who had received kickback money.

De Lima said “asset recovery” is one of the actions being looked into by the DOJ, but the department has just started to freeze Napoles’ accounts.

Luy said Napoles’ office had vouchers in triplicate copies – white for Napoles’ files, yellow for accounting records c/o Luy, and pink for persons who received the money.

Sen. Francis Escudero, for his part, moved to summon officials of Metrobank to explain why they had failed to alert the AMLC of Napoles’ huge bank transactions.

“Surely, this must have raised a red flag. Will you withdraw and just withdraw P75 million in one branch?” Escudero said.

 

Significant

 

Meanwhile, Malacañang said it considers the appearance of Luy at the Senate hearing a “significant” development.

In a press briefing yesterday, Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang also dispelled speculations they had an emergency meeting on the issue as President Aquino went to the New Executive Building and joined several Cabinet members in his office.

“Remember there is an investigation going on separately from that. And what comes out in the Senate hearing is not necessarily going to be – it’s a different track… So the Senate hearing is helpful in the sense that it informs the public about some of the issues that are going on,” Carandang said.

The National Bureau of Investigation and the Inter-Agency Anti-Graft Coordinating Council (IAAGCC) are looking into the alleged misuse of PDAF separately.

“As the President said, we’re going to be reaching some conclusions very soon. But, let’s remind everyone, the Senate process is separate from the IAAGCC’s  investigation process,”  Carandang said.

“The public clamor to do something about what seems to have been corruption in the PDAF is loud and clear… Our lawmakers hear it, our executive hears it, and I think very soon we can have some serious discussions about how to go about satisfying the public demand,”  Carandang said.

“But remember, it’s not a simple issue. I’m not defending PDAF, but what I’m saying is that there are certain consequences to abolishing PDAF. And we need to be responsible for making sure that those consequences do not hurt ordinary people,” he said.

Carandang said the hearings at the Senate were “very healthy” and should strengthen rather than destroy the legislative and executive branches of government.

“And, at some point, we will all get together, and the public will know how we plan to find ways to prevent the kind of corruption that we’ve seen in the budgeting process in general, and in PDAF in particular,” he said.

Carandang said it would be up to the public to judge the lawmakers but it must be noted that the senators who had been allegedly involved recused themselves from the hearings.

Carandang said he could not actually predict if there would be a crisis but all processes under the democracy were working.

“All of this came out because COA (Commission on Audit) did its job, and did a special audit, and continues to audit government finances. Not only did they audit, but they put those results out in public, which is what they are supposed to do,” he said.

“As a result of the findings of COA, an investigation was begun by our Department of Justice and by the Ombudsman. And, as the President said, in due time the investigation should result in charges being filed against people who have some culpability here,” he said.

Carandang also denied that the development had prompted the President to call an emergency meeting.

He said they just had lunch in his office before attending a meeting with the President separately. Those present were Executive Secretary Paquito Ochoa Jr., Cabinet Secretary Jose Rene Almendras, Foreign Affairs Secretary Albert del Rosario, Budget Secretary Florencio Abad, Transportation Secretary Joseph Emilio Abaya, presidential spokesman Edwin Lacierda, Presidential Adviser on the Peace Process Teresita Deles, among others.

“So it was really lunch – informal lunch. There was discussion about many of the issues – about the hearings that are going on right now, we discussed that a little bit. We discussed the incident in Zamboanga. We discussed even energy issues and some economic issues. After which, the President went back to his office,” he said. – With Christina Mendez, Aurea Calica, Cecille Suerte Felipe

ANGARA CARANDANG DE LIMA LIMA LUY NAPOLES PUBLIC SENATE
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