Ombudsman charges 5 ex-congressmen for PDAF scam

Resolutions and orders are to be forwarded to the AMLC for immediate action on possible violations of the Anti-Money Laundering Act

Rappler.com

7:45:9am March 3, 2016

12:13:6am March 4, 2016

PROBABLE CAUSE. From left to right: former congressman Rozzano Rufino Biazon, Rodolfo Valencia, Marc Douglas Cagas IV, Arrel Olaño, and Arthur Pingoy Jr

PROBABLE CAUSE. From left to right: former congressman Rozzano Rufino Biazon, Rodolfo Valencia, Marc Douglas Cagas IV, Arrel Olaño, and Arthur Pingoy Jr

MANILA, Philippines – Ombudsman Conchita Carpio Morales affirmed the findings of probable cause to indict 5 former members of the House of Representatives and several others in connection with the multi-million-peso Priority Development Assistance Fund (PDAF) scam.

The 5 are as follows:

Rozzano Rufino Biazon (Muntinlupa City)

Rodolfo Valencia (1st district of Oriental Mindoro)

Marc Douglas Cagas IV (1st district of Davao del Sur)

Arrel Olaño (1st district of Davao del Norte)

Arthur Pingoy Jr (2nd district of South Cotabato)

In 5 separate orders, Morales directed the filing of informations before the Sandiganbayan for graft and corruption, malversation, and bribery against the 5 congressmen and officials of the Energy Regulatory Commission (ERC), including ERC Chairperson Zenaida Ducut, the Department of Budget and Management (DBM), Technology Resource Center (TRC), National Business Corporation (Nabcor) and representatives of non-governmental organizations (NGOs), including alleged pork barrel scam mastermind Janet Lim Napoles. 

The pork barrel scam involved lawmakers who endorsed their PDAF to fake NGOs associated with Napoles in exchange for hefty kickbacks. The funds were allocated to government agencies and corporations. Lawmakers endorsed their development funds whose releases were facilitated by agents or their own staff.

The 5 cases stemmed from separate complaints filed by the National Bureau of Investigation (NBI) and lawyer Levito Baligod, former counsel of star witness Benhur Luy.

Biazon

In affirming the June 22, 2015 Resolution, Morales dismissed the motions for reconsideration filed with her office, saying there is no merit in the "motions for reconsideration as the grounds raised do not warrant a reversal or modification of the assailed Resolution.”

Biazon, according to the Office of the Ombudsman anomalously used his 2007 PDAF by endorsing P3 million to the Philippine Social Foundation Inc (PSFI), an NGO associated and controlled by Napoles with Evelyn de Leon as its president. Biazon also received P1.95 million in “rebates” through his agent, Zenaida Ducut, a former congresswoman and chairman of the ERC.

Biazon faces charges for malversation, violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act, and direct bribery, a statement from the Ombudsman said. 

Ducut, De Leon, Napoles, DBM Undersecretary Mario Relampagos, Dennis Cunanan and Antonio Ortiz of the Technology Resource Center, and several others also face malversation and graft charges. Napoles faces a separate charge for corruption of public officials.

Records show that P3 million was covered by a Special Allotment Release Order (SARO) issued by the DBM in October 2007 sourced from Biazon’s PDAF. Biazon identified TRC as the implementing agency and PSFI as NGO-partner in a purported project for financial assistance for farm implements, livelihood materials and training. These turned out be “ghost” projects since no deliveries were made.

Morales said the findings in the COA audit report confirm the whistleblowers’ testimonies.

No motion for reconsideration on the June 22, 2015 resolution was filed by Biazon, Ortiz and De Leon, a press statement from the Ombudsman said.

Valencia's misused PDAF

Valencia was charged with 3 counts of malversation and 3 counts of violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act in connection with his misuse from 2007 to 2009 of his PDAF amounting to P7 million. His other co-accused include Celia Cuasay, Allan Javellana, Victor Roman Cacal, Napoles, Relampagos, Ortiz, and Cunanan.

Valencia argued that “he is neither the custodian nor controller of the funds, nor the head of the agency who has the power to authorize the payment of PDAF funds.”

In junking his appeal, Morales was firm and said that “the indictment against them stands,” explaining that for the finding of probable cause to stand, it is sufficient for the prosecutor to think that the respondents are "probably guilty".

Valencia’s PDAF from 2007 to 2009 was released by the DBM through 3 SAROs and facilitated through the TRC and Nabcor as implementing agencies (IAs). The funds were released to the Masaganang Ani Para sa Magsasaka Foundation Inc (MAMFI) as NGO-partner through several memoranda of agreement (MOA).

During his term as congressman, Valencia continuously endorsed the implementation of his PDAF-funded livelihood and agricultural projects through questionable NGOs associated with or controlled by Napoles. The PDAF was anomalously used for livelihood and agricultural projects, skills training, and distribution of livelihood kits. 

The COA Special Audit revealed that the implementing agencies, including Nabcor and TRC, did not actually implement Valencia’s PDAF-funded agricultural and livelihood projects, and that the NGOs were dubious or non-existent. 

The Ombudsman said that the findings in the 2007 to 2009 COA report jibe with the whistleblowers’ testimonies and are validated by the COA audit results.

Witnesses Benhur Luy, Marina Sula, and Merlina Suñas claimed that the foundations endorsed by Valencia were all Napoles dummies. They said the payoffs for the kickbacks usually took place at the JLN office in Ortigas with Celia Cuasay, acting as Valencia’s representative, receiving the money.

The Ombudsman also said that “Valencia received total commissions, rebates or kickbacks amounting to at least P2.4 million from his PDAF-funded projects in 2008.”

Cagas IV and co-accused

For his part, Cagas IV faces charges for two counts of malversation and two counts of violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act. His co-accused include Ducut, Ortiz, Cunanan, Napoles, Relampagos, Jesus Castillo, Margarita Guadinez, Ireneo Pirater, Jocelyn Deiparine, John Raymond de Asis, Noel Macha, and several others.

In his defense, Cagas said he "could not have misappropriated or consented to the misappropriation of his PDAF" as he had no control over it. Nor was he accountable for the funds, he said. He said in his motion for reconsideration the disbursement and use of his PDAF are "not within his official functions as a lawmaker.”

Releases from Cagas' PDAF from 2007 to 2009 amounted to P11 million. These were covered by two SAROs and engaged Nabcor and TRC as implementing agencies. He tapped supposed NGO partners, People Organization for Progress and Development Foundation Inc (POPDFI) and Social Development Program for Farmers Foundation Inc (SDPFFI) to implement projects like the distribution of agricultural production and livelihood packages in the form of fertilizers, seeds, and sprayers.

These supposed NGOs were fictitious, according to the COA special audit, while the implementing agencies did not implement the projects. The documents submitted by the NGOs to prove project implementation were also found to have been fabricated.

According to Luy’s records, Cagas IV received total commissions, rebates, or kickbacks amounting to at least P5.5 million from his PDAF-funded projects from 2007 to 2008. These kickbacks were paid also at the Napoles office in Ortigas through his representative, Ducut. She got the payoffs in person or via fund transfers.

Olaño's case

Former congressman Olaño faces charges for 3 counts of malversation, 3 counts of violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act, and direct bribery. 

His co-accused in the malversation and graft charges are Napoles, De Leon, Relampagos, Cunanan, Francisco Figura, Maria Rosalinda Lacsamana, Marivic Jover, Maurine Dimaranan, Rosario Nuñez, Lalaine Paule, Marilou Bare, Mylene Encarnacion, Eulogio Rodriguez, Consuelo Lilian Espirutu and several others, the Ombudsman said. 

Napoles also faces a separate charge for corruption of public officials under Article 212 of the Revised Penal Code.           

Olaño said he was "not aware" that PSDFI and Countrywide Agri and Rural Economic Development (CARED) were affiliated with Napoles. He also said “there is no evidence of the receipt of kickbacks.”

But these were dismissed by the Ombudsman.    

Olaño ’s PDAF amounted to P7.97 million issued through several SAROs. He allegedly received commissions and kickbacks amounting to at least P3.175 million from Napoles.

As in the cases of the other respondents, the projects that involved financial assistance for farm implements, livelihood materials and training turned out to be inexistent. The findings in the COA audit report also confirmed the whistleblowers’ testimonies, the Ombudsman said.

Pingoy's case

Pingoy and Ducut face charges for two counts of direct bribery, 4 counts each for malversation and violations of Section 3(e) of the Anti-Graft and Corrupt Practices. His co-accused in the malversation and graft charges are Napoles, Cunanan, De Leon, Relampagos, Javellana, Ortiz, Rhodora Mendoza, Maria Ninez Guanizo, Roman Cacal, John Bernardo and several others. 

Napoles also faces two counts of corruption of public officials.

Pingoy argued in his motion for reconsideration that “he was not obliged to validate the existence of the NGOs” and that his “signatures were forged.”

Pingoy released at least P20.91 million through several SAROs, 3 of which were coursed through the TRC, while the last was implemented through Nabcor, and were facilitated by fake NGOs, PSDFI and SDPFFI.

The Ombudsman also found that the former congressman received commissions and kickbacks amounting to P7.05 million from Napoles, also via Ducut.

The Ombudsman ruled that the projects on financial assistance for farm implements, livelihood materials, and training turned out to be “ghost” projects, as confirmed by the whistleblowers’ testimonies and COA audit report.

Copies of resolutions and orders in the 5 cases should be forwarded to the Anti-Money Laundering Council (AMLC) for immediate action on possible violations of the Anti-Money Laundering Act, Morales said. – Rappler.com