Ex-GSIS execs face graft raps over e-card

Michael Punongbayan - The Philippine Star

MANILA, Philippines – Ombudsman prosecutors have lodged graft charges against former Government Service Insurance System (GSIS) president Winston Garcia and 10 other former executives of the agency before the Sandiganbayan.

The case stems from their involvement in the allegedly anomalous awarding of contract to the Union Bank of the Philippines for an electronic membership card (e-card) project in May 2004.

The e-card project of GSIS was intended to replace the costly and inefficient system of disbursing payments through checks.

Among Garcia’s co-accused are former GSIS vice president Enriqueta Disuanco; former senior vice president Benjamin Vivas Jr.; former Board of Trustees chairman Hermogenes Concepcion Jr.; and former Board of Trustees members Elmer Bautista, Fulgencio Factoran, Floriño Ibañez, Aida Nocete, Reynaldo Palmiery, Ellenita Tumala-Martinez and Leonora Vasquez-De Jesus.

The Office of the Ombudsman said the GSIS officials awarded the multimillion-peso contract to Union Bank way before actual bidding was conducted in violation of Republic Act 9184 or the Government Procurement Reform Act.

The project was allegedly awarded even before the date of the deadline for the submission of bid proposals and before the recommendation of the committee tasked to evaluate the proposals.

The alleged irregularities in the GSIS e-card project were first raised in a 2005 Commission on Audit (COA) report. State auditors said Union Bank was given undue preference when it was chosen to implement the project.

In its decision to indict Garcia and his co-accused, the Office of the Ombudsman said a preliminary investigation found that “there is sufficient ground to engender a well-founded belief that the crime charged has been committed, and that the accused are probably guilty thereof.”

Garcia and his co-accused said the filing of charges against them was “unfortunate” because based solely on the allegedly “reckless findings” of a COA special audit team.

“This case has been languishing in the Office of the Ombudsman for more than 10 years and was only decided this year, less than a year before the May 2016 elections,” Garcia said in a statement.

“The award of the e-card project to Union Bank, which formed the basis for the charges, is the same e-card project presently implemented by the incumbent officials of GSIS despite efforts of the latter officials to look for better terms from other banks.

“It will be noted, however, that in their haste to file this case, certain procedural and jurisdictional lapses were committed which can be valid grounds for immediate dismissal. We are confident we will be vindicated before an impartial tribunal such as the Sandiganbayan,” he added.

Garcia also pointed out that the award of the e-card project to Union Bank in 2004 continues to be implemented by the GSIS up to the present without any objection from COA.

“How can the e-card project be disadvantageous to the government when until now the GSIS is still using it? They tried to replace it, but nobody is capable of providing such a system,” he said.

“In fact, the e-card project continues to be the most successful program of the GSIS, generating billions of savings and earnings when it replaced the costly check system of disbursement of loans, claims and pensions,” he added.

Garcia also claimed that the filing of the graft charge “establishes a dangerous precedent, which will place in jeopardy similar banking transactions of other government institutions and corporations.” The graft charges filed by the Office of the Ombudsman have “the effect of requiring government agencies to conduct public bidding in their choice of banks.”

“Even the present officials of GSIS, as well as those of other government institutions who have been banking with PNB or Union Bank without public bidding, can now be charged with the same offence, which respondent GSIS officials are now facing,” he said.

“The standard rule is to give discretion to government institutions in their choice of banks for deposits and disbursement of funds without the need of public bidding for as long as the banks have been approved by the BSP to handle government deposits,” he added.












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