Trillanes sought Senate probe P 1.15 Billion DOTC procurement scam

MANILA, September 23, 2011-Senator Antonio “Sonny” Trillanes IV, Chair of the Senate Select Oversight Committee on Government Procurement sought for a Senate probe on the alleged anomalous procurement of P1.15-billion worth of equipment by the Department of Transportation and Communications (DOTC) during the time of former Secretary Leandro Mendoza where he filed senate resolution number 609.

Trillanes measure directs the Senate Blue Ribbon panel and the Select Oversight Committee on Government Procurement and other relevant committees of the Senate to conduct a joint investigation into the alleged irregularities in the DOTC’s purchase of oil spill response equipment and lighthouse or aids to navigation (ATON) spare parts intended for the Philippine Coast Guard (PCG) in 2007.

“It is very alarming over allegations that those purchases were attended by numerous irregularities such as blatant violation of Republic Act 9184 – otherwise known as the Government Procurement Act of 2003 – as well as overpricing, falsification of documents, the use of fraudulent bank certifications and a tainted bidding process,” Trillanes said.

The young legislator said that his call for investigation is not only to determine compliance with RA 9184 but also to enact remedial legislation to strengthen said act and other relevant laws of the land.

Trillanes noted the allegations that the agency had used lapsed special allotment release orders (SAROs) for the purchases in the case of the questioned transactions.

The Department of Budget and Management (DBM) issued three SAROs amounting to P250 million, P300 million and P400 million, respectively, as funding for the upgrading and repair of various light stations in the country, and to cover the requirements needed for the PCG’s National Oil Spill Contingency Plan (NOSCP).

Trillanes said that under the NOSCP, the DOTC invited prospective parties to participate in the bidding of the Aids to Navigation (ATON) spare parts for the repair and maintenance of lighthouses nationwide and the Marine Environmental Protection Equipment (MEPE) and supplies.

Trillanes said that the DOTC proceeded to utilize the intended SAROs despite the fact that their validity had already lapsed in both cases, adding that the DOTC did not even bother to ask the DBM to extend the SAROs before pushing through the procurement process.

“The ATON spare parts were apparently procured even without any request and without the knowledge of the supposed end-user, the PCG.  Because of these, hundreds of millions worth of equipment and spare parts are rotting in the DOTC’s stockroom for over a year now.  Clearly, those responsible for wasting over a billion of the people’s money should be held accountable.  The money could have gone a long way in enhancing the capabilities of the PCG, if said money was spent properly.  This is clearly unforgivable.  If this is true, this is even bigger than the P728 Million fertilizer scam,” Trillanes explained. (Jason de Asis)

Agri fund ghost borrowers discovered by Drilon

MANILA, September 23, 2011-Senator Franklin Drilon, chairman of the Senate Finance Committee revealed Thursday that several “ghost” borrowers were extended loans by the Department of Agriculture have been granted billions worth of assistance under the Agricultural Competitiveness Enhancement Fund (ACEF) in 2010, a special purpose fund intended to help farmers and cooperatives, saying that the government will no longer be able to collect a total of P2.5 billion worth of loans.

Drilon cited the latest Commission on Audit (COA) report stating that hundreds of companies were extended loans by the Department of Agriculture from 2000 to 2009, a majority of which were done during the term of former President Gloria Macapagal-Arroyo, but the state auditing agency cannot locate what appeared as “ghost” borrowers.

“Since borrowing does not require collateral and has no interest, I suspected that business ventures were opened just to advance from the multi-billion government credit line, pointing out what appears as collusion between previous DA officials and recipients of the agricultural support fund,” Drilon said, saying that the government is clearly prejudiced in this case because the amount could not be collected anymore since these are clearly ghost borrowers.

The COA report on the agency noted that letters of confirmation were sent to the borrowers but these yielded negative results. Of the 264 confirmation letters sent to the borrowers, 140 did not reply for balances totaling P2.1 billion and 27 with balances of P370 million returned the letters to the COA due to various reasons.

“Beneficiaries that borrowed a total of P66.4 million, meanwhile, failed to pay back their loans due to closure of the companies affected by typhoons and firms that no longer exist. The audit agency said that P1 million in loans may not be collected anymore because of death, insufficient address or unknown identity of the borrower,” Drilon said.

During a budget hearing of the Agriculture department last year, Lyndon Tan, owner of Basic Necessity who is closely identified with former Agriculture Secretary Arthur Yap, has been identified as recipient of the P38 million loan under ACEF. He, however, was only able to pay, at that time, about P2.5 million. Later, Tan, who requested that the DA restructure his loan, was appointed as member of ACEF Executive Committee in 2008, under Yap’s watch.

“We do not want to see a repeat of this again,” Drilon said, adding that he may include the matter in the impending investigation to be conducted by the Senate regarding the alleged irregularities in farm-to-market projects executed during the latter part of the Arroyo administration.

Newspaper reported that P10 billion in ACEF funds has already dissipated, apparently due to the irregularities committed by previous Agriculture officials, politicians and businessmen supposedly favored by the Arroyo administration.

The coverage of the fund was expanded to include micro, small and medium scale agricultural enterprises, aquaculture and fisheries sectors, young entrepreneurs, out-of-school youths, graduates of agriculture-related courses, and agricultural cooperatives, among others.

In 1996 the ACEF was enacted and served as a special purpose fund created by Republic Act 8178 or Agricultural Tariffication Act which comes from all duties of the importation of agricultural products. The program was supposed to fold up in 2007, but in 2008, Congress extended the program’s implementation until 2015. (Jason de Asis)