Luy: Napoles NGOs shifted ‘pork’ to LGUs in 2011

MANILA, Philippines - Foundations linked to detained alleged pork barrel scam brains Janet Lim-Napoles and their senator-benefactors shifted their funds to local government units (LGUs) starting in 2011.

“Pork” scam whistle-blower Benhur Luy, who headed one of the Napoles non-government organizations (NGOs) used as fund recipients and project implementers, revealed the shift toward the latter part of his testimony before the Senate on Thursday.

Responding to questions from Sen. Ralph Recto, Luy said they decided to give the funds to LGUs because liquidation of disbursements of hundreds of millions coursed through six state agencies – the usual fund conduits – had become “more difficult.”

He said Napoles, his relative and former boss, and the senator-fund givers chose the LGUs that had become the new fund conduits.

What Luy did not say was that at the time the flow of funds was shifted, the six state agencies had become “notorious,” according to the Commission on Audit, and that the COA special examination of billions in Priority Development Assistance Fund (PDAF) disbursements coursed through these agencies between 2007 and 2009 was already underway.

The six are the Department of Agriculture-office of the secretary (OSEC), Department of Social Welfare and Development-OSEC, Land Bank subsidiary National Livelihood Development Corp., National Agribusiness Corp., Technology Resource Center, and Zamboanga del Norte Rubber Estate Corp.

Another state firm, Philippine Forest Corp. which is attached to the Department of Environment and Natural Resources, and the National Commission on Muslim Filipinos (NCMF), which is under the Office of the President, were apparently used as new fund recipients after 2009.

But like the PDAF allocations covered by the special audit, the later disbursements in 2011 and 2012 were tainted by the same irregularities committed four years earlier.

Based on LGU annual audit reports (AARs) posted on the COA website and the senators’ fund allocations and project listings shown on the website of the Department of Budget and Management (DBM), a select group of towns in Bataan, Pangasinan, Nueva Ecija, Quezon, and Bulacan was chosen to receive pork barrel funds.

The audit reports support Luy’s statements before the Senate on Thursday on the shift in the flow of funds.

For instance, the 2011 AAR for Pilar in Bataan shows that the town received P20 million in PDAF from Sen. Vicente Sotto III and P10 million each from Senators Jinggoy Estrada and Ferdinand Marcos Jr.

The money ended up with People’s Organization for Progress and Development Foundation, Inc. (POPDFI), the Napoles NGO that Luy used to head before he blew the whistle on the pork barrel scam.

The audit report stated that due to the “absence of required documentation, utilization of the fund totaling P40 million could not be ascertained.”

Despite the irregularities in 2011, the following year, 2012, Estrada and Marcos, joined by Senators Ramon Revilla Jr. and Loren Legarda, allocated a total of P35 million for the town.

Pilar received P5 million from Estrada, while Revilla, Legarda and Marcos each gave P10 million. Just like the year before, the 2012 funds ended up with POPDFI.

Also last year, Dinalupihan, another town in Bataan, was the beneficiary-recipient of P23 million from Estrada, P5 million from Legarda and P10 million from Sen. Juan Ponce Enrile, for a total of P38 million.

The funds were released also to POPDFI upon the request of the four senators or their offices, the auditors’ report said.

The P38 million was used for the purchase of farming packages costing from P20,500 to P36,450 each.

Rules ignored

Auditors said procurement rules “were ignored.”

“Moreover, documentary requirements on the liquidation of funds were insufficient,” they said.

The NGO did not submit the required “final utilization report,” they added.

For the first time, the audit findings mentioned the names of Marcos and Legarda, who did not figure in the COA special audit report on PDAF disbursements for 2007-2009, except for a minor entry for Legarda.

Marcos was elected only in 2010, and was thus not covered in the special audit. In the case of Legarda, the special audit found her to have allocated P200,000 to Serbisyong Pagmamahal Foundation.

Like in Dinalupihan, the P35-million 2012 PDAF disbursements in Pilar were tainted with irregularities, according to auditors.

“Though reports of disbursements were submitted, the same were not supported by documents evidencing procurements and payments. The actual distribution of goods compared to the amount of funds transferred could not be ascertained,” the auditors’ report said.

It said the senators with the funds or their offices chose the Napoles NGO as the final recipient and project implementer.

In Nueva Ecija, the town of San Antonio received a total of P90 million from several senators last year.

The funds were transferred to Kaupdanan (Samahan) ng mga Mangunguma (Magsasaka) Foundation, Ginintuang Alay sa Magsasaka Foundation, and Countrywide and Rural Economic Development Foundation (CAREDF). Kaupdanan and CAREDF, like POPDFI, are NGOs linked to Napoles.

Though the audit report did not name the senators who gave the P90 million, the DBM website shows that San Antonio was the beneficiary of P15 million each from Estrada and Sotto, and P10 million each from Legarda, Marcos and Revilla.

The funds were transferred to the three NGOs “without complete documents,” the auditors said. As of the time of the audit, none of the three has submitted a liquidation report with supporting documents.

Also in 2012, several unnamed senators gave the town of Calasiao in Pangasinan a total of P30 million, which ended up with Kaupdanan.

Auditors found similar deficiencies: the town entrusted the money to the NGO identified with Napoles without the foundation being required to submit supporting documents such as its certificate of registration from the Securities and Exchange Commission.

No project completion report with receipts and procurement vouchers and list of beneficiaries has been submitted.

The DBM website shows that among the senators who disbursed funds to Calasiao were Marcos, who allocated P10 million, and Sotto, who gave P5 million.

Sual, another Pangasinan town, received P47 million from unnamed senators. Like in Calasiao, the money ended up with Kaupdanan.

The same irregularities were noted: the NGO did not submit supporting documents before the money transfer. No project completion report indicating purchases and list of beneficiaries has been submitted.

The DBM website shows that Estrada allocated P20 million to Sual, while Marcos gave P10 million.

Balungao, another town in Pangasinan, was the beneficiary of P10 million from Legarda and P5 million from Marcos for vermiculture or earthworm-growing projects.

Auditors reported that there was a single “nationally funded” transaction involving the purchase of vermiculture packages worth P6 million.

San Carlos City, also in Pangasinan, received P10 million from Legarda and another P10 million from Sotto last year for vermiculture projects. There is no mention of the funds in the auditors’ report.

Revilla allocated P15 million to a fourth Pangasinan town, Umigan, while Sotto gave it P5 million. No such funds were mentioned in the auditors’ report.

Marcos gave the town of Bulacan, Bulacan P10 million. Auditors apparently did not find the money in their annual audit of the town.

San Leonardo, another Nueva Ecija town, received P5 million from Enrile. The funds ended up with Ginintuang Alay sa Magsasaka Foundation. The same irregularities in the transfer of funds to an NGO were noted.

The DBM website shows that San Leonardo was given P5 million each by Sotto and Revilla for organic farming projects, and P20 million by Sen. Miriam Defensor-Santiago for a farm-to-market road.

Auditors apparently did not find these allocations in the town’s book of accounts, as they are not taken up in their report.

Tens of millions of PDAF were also given to General Nakar, Lucena City, Quezon, and Sariaya in the province of Quezon, and Javier in Leyte, but audit reports on these LGUs have not been posted in the COA website.

Among other senators, Estrada and Sotto have given funds to Quezon LGUs. In San Antonio, one Quezon town that has already been audited, Estrada allocated P7 million for organic farming. However, the audit report does not reflect the fund.

According to the COA special report for pork barrel funds disbursed in 2007-2009, 12 senators and more than 180 congressmen gave a total of P6.2 billion to 82 NGOs.

Of that amount, NGOs associated with Napoles cornered about P2.1 billion.

Estrada, Enrile, Revilla, Sotto, and Sen. Gregorio Honasan gave more than P1 billion to Napoles NGOs.

Honasan has not been mentioned in the 2012 LGU audit reports since auditors in some towns in Isabela, Batangas and Marinduque that received funds from him have not posted their findings.

Aside from these towns, he gave P30 million last year to NCMF for livelihood projects for Muslims in Taguig, Manila, Quezon City, Valenzuela, Caloocan, and Navotas in Metro Manila, and Subic, Castillejos, San Marcelino, and San Antonio in Zambales.

In 2011, NCMF handled a total of P96.5 million in PDAF. The audit report does not identify the lawmaker-fund givers.

Budget Secretary Florencio Abad once told The STAR that NCMF, which former elections commissioner Mehol Sadain heads, is not an implementing agency for lawmakers’ funds.

It is not clear why Honasan and other lawmakers were allowed to use it as a fund conduit-project implementer.