Calida, Hilbay say allowances legal

MANILA, Philippines — Solicitor General Jose Calida and his predecessor Florin Hilbay were on the same side yesterday in defending the issuance of honoraria and allowances to lawyers of their office.

In separate statements, Calida and Hilbay also cited the same laws to support their position. 

Calida said the honoraria and allowances were paid in accordance with law, particularly Section 1(i) of Presidential Decree No. 478, which defines the powers and functions of the Office of the Solicitor General (OSG), and Section 35(9), Chapter 12, Title III, Book IV of Executive Order No. 292 or the Administrative Code. 

“These provisions authorize the OSG lawyers to receive allowances and honoraria for the legal services they render without qualification as to the number of agreements with client agencies and without limitation/cap as to the amount. The authority of these agencies to pay OSG lawyers honoraria and allowances for services rendered is restated in Section 8 of Republic Act No. 9417 (An Act to Strengthen the Office of the Solicitor General),” Calida explained.

“There is therefore no basis for the reported Commission on Audit (COA) finding of alleged payment of ‘excessive honoraria and allowances,’” the OSG added.

The OSG was reacting to the 2017 COA report showing that OSG lawyers were allegedly paid excessive honoraria and allowances amounting to P10.774 million for services rendered to their client-government agencies. 

The audit report was based on COA Circular No. 85-25-E that limits the honoraria and allowances to 50 percent of an OSG lawyer’s salary. But the OSG said this limitation is not found in the laws authorizing the payment of honoraria and allowances.  

The COA circular could not prevail over the provisions of law, the OSG added. 

“The position of the OSG has always been that the COA circular, an administrative issuance, cannot override an act of Congress. The Congress controls the power of the purse and therefore has clear constitutional authority to provide exceptions to general rules,” said Hilbay.

Hilbay believes that a COA circular must yield to the power of Congress. 

“There is a reason why the right of OSG lawyers are repeated over and over again in statutes—especially to avoid the circular imposed by COA. That is a legislative judgment that the resident auditors must recognize and respect,” he explained. 

“There is a practical reason for these allowances—allow the institution to retain good lawyers. Litigation takes time and expertise needs to be developed. If OSG lawyers are so easily pirated by law firms and corporations, it will prevent the government from developing a good career bureaucracy that can litigate for the republic over long periods,” said Hilbay. 

But the COA was urged yesterday to compel Calida to return the P7.5 million in “excess” allowances he granted himself last year.

Rep. Tom Villarin of party-list group Akbayan said Calida must be required to “give back to the government what he illegally received and can’t feign ignorance as alibi.”

“His sense of entitlement and privilege got blown out of proportion to what our laws provide. It is not accidental but deliberate when he draws allowances and financial perks way beyond his annual salary,” he said.

He said personnel of the Calidas’ security agency “must be shaking in disbelief over the good fortunes of their boss now exposed.” 

“From conflict of interest over the P150-million government contracts with his family-owned security firm and now this illegal withdrawal of P7.5-million allowances. But it seems President Duterte’s ‘whiff of corruption’ test doesn’t apply to his favorite enforcer,” he added.

Villarin pointed out that aside from Calida, underlings of the solicitor general who received excess allowances must return the money to the government.

The COA report named the other recipients and their corresponding excesses as Renan Ramos (P837,252), Henry Angeles (P697,039), James Cundangan (P448,707), Raymund Rigodon (P363,894), Ma. Antonia Edita Dizon (P273,746), Perfecto Adelfo Chua Cheng (P158,501), Bernard Hernandez (P136,814), John Dale Ballinan (P99,026), Lilian Abenojar (P90,626), Leney Layug-Delfin (P70,626), Herman Cimafranca (P62,454), Danilo Leyva (P50,051), Gift Mohametano (P13,739) and Rex Bernardo Pascual (P9,394). 

P700 M paid to foreign law firms

Meanwhile, the OSG has insisted that there was nothing wrong with its use of P767.723 million in government funds for the payment of four foreign law firms tapped to represent the country in three international cases, including the arbitration case against China over the West Philippine Sea territorial dispute.

Based on COA report, a total of P149,060,125.61 was paid by the OSG to Foley Hoag LLP from 2013 to 2017 for the services of its private lawyers in connection with the Philippines’ arbitration case against China filed before the UN’s Permanent Court of Arbitration. 

Receiving the largest payment of P417,853,362.24 from the OSG was the White and Case LLP for its services in connection with an arbitration case between the Philippines and Belgian firm Baggerwerken DeCloedt en Zoon N.V. 

The Philippines was ordered by the World Bank’s International Center for the Settlement of Investment Disputes to pay Baggerwerken at least $16 million or around P800 million after the administration of Benigno Aquino III refused to honor the contract that the Department of Environment and Natural Resources entered with Baggerwerken for the P18.7-billion Laguna Lake Rehabilitation project under the administration of Gloria Macapagal-Arroyo.

In its comment on the audit report, the OSG maintained that EO 292 or the Administrative Code of the Philippines gives the OSG the “exclusive authority to engage the services of foreign counsels in international arbitral proceedings involving the Republic.”

The COA however said the legal services of private law firms Paul Hastings, Janofsky and Walker; Gibson, Dunn and Crutcher (GDC) LLP; White and Case LLP; and Foley Hoag LLP were availed of for several years despite “absence of prior acquiescence of the OSG and written concurrence of COA,” which are both required under COA No. 95-011 as amended by COA Circular No. 98-002.

The COA said the contracts were also not submitted to the auditors within five working days from their execution in violation of COA Circular No. 2009-001.

The COA report also shows that P99,569,517.99 was paid to Paul Hastings, Janofsky and Walker for the legal services it rendered from March 2009 to October 2014 in connection with an arbitration case pending in Singapore between the Philippines and the Metro Rail Transit Corp. (MRTC).

As of last Dec. 31, the COA said a total of P101,240,068.85 was paid to GDC LLP for its services from Jan. 29, 2015 to the present, for the same arbitration case between the Philippines and MRTC following the termination of contract with Paul Hastings.

The COA said the OSG did not provide the audit team with a rationale behind the termination of contract with Paul Hastings and the basis or criteria in the selection of GDC LLP as its replacement. – With Jess Diaz, Elizabeth Marcelo