The Senate blue ribbon committee has recommended the filing of plunder cases against former President Gloria Arroyo and former Philippine Charity Sweeps-takes Office (PCSO) general manager Rosario Uriarte for the misuse of some P244.5 million of the lotto agency’s intelligence funds, Sen. Teofisto Guingona III, chair-man of the Senate body, said.
Additionally, Arroyo and Uriarte should likewise be charged with technical malversation for using confidential or intelligence funds as “blood money” for two overseas Filipino workers (OFWs) sentenced to death in Kuwait, Guingona said.
The Senate committee report, at the same time, did not find any violation of the Constitution in the donations of vehicles to various Catholic priests since the donation was for a public, and not a religious, purpose and that these were not for the personal use of any religious leader.
While they were public officers, Arroyo and Uriarte teamed up to rob PCSO of at least P244.5 million.
“Arroyo made mere marginal notes and caused the release of millions of pesos to her partner, Uriarte who was in charge with the disbursement, use, and liquidation of excessive amounts of intelligence funds,” according to the report.
Uriarte’s memorandums of request for millions of pesos cited the need to address threats against the operations of the PCSO.
However, her own certifications immediately revealed that the funds were allegedly also used to address terrorism, bomb threats, and bilateral security relations, the report stated.
“Because of the excessive amounts released, the blue ribbon committee asked for proof of lawful use of public funds. However, neither Gloria Arroyo nor Rosario Uriarte ever presented the actual receipts and documents to prove that these funds were indeed used lawfully,” Guingona said.
The committee in the report stated strongly belief there is probable cause that intelligence funds were iillegally diverted into the pockets of Arroyo.
Despite facing a possible case for plunder, not a single receipt has been presented by Arroyo or Uriarte to save themselves, the report added.
The committee emphasized the fact that particularly for the year 2010, an election year, the PCSO used up P137.5 million of the P150 million that was approved by the former president at the beginning of the year.
“For the same year, PCSO’s intelligence fund budget was larger than the intelligence fund budget of the Philippine Army, ISAFP-GHQ, DND, Navy, and the NBI,” the report added.
The report also stated other findings of the Senate committee after the hearings it held on the issue: the PCSO during Arroyo’s term spent excessively for public relations and advertising based on findings of the Commission on Audit together with the testimonies during the hearings.
Billions were spent on promoting betting in lotteries that could have been spent more wisely on charity, according to the report.
The extravagant expenses for the sole purpose of promoting legal gambling are superfluous and pointless by the fact that there will always be people who will do anything to take a stake for the chance of winning big, it added.
On the equipment lease agreement (ELA) for PCSO’s online lottery system, the report said the hearings held on the PCSO irregularities revealed that a company named International Totalizator System (ITS) initially offered to sell lotto equipment to PCSO for $25 million.
“However, instead of buying the equipment from ITS, the PCSO conducted a public bidding to lease – not buy – the same equipment from private suppliers. The decision to lease instead of purchase continues to impose a great financial burden to the Philippines. Instead of spending $25 million to purchase the machines, the government instead has paid the private suppliers approximately $148 million in rental fees and will continue to pay exorbitant amounts until the contract ends in 2015,” the report added.
Despite proper bidding, the resulting award of the contract not only to the winning bidder but also the two other losing bidders is questionable, it added.
The report recommended that the Ombudsman holds further investigation on the transaction.
There have been unaccountable remittances of the Small Town Lottery (STL) share to Congressmen and to the Philippine National Police (PNP), the report averred.
It found mismanagement in the execution of PCSO’s ambulance program as local government units (LGUs) of a higher class category were prioritized compared to the lower class category of LGUs.
Co-minggling of funds by PCSO was also revealed which violated the PCSO Charter that provides that apportioning of net receipts into three funds: the prize fund, the charity fund, and the operating dund.
The Contractual Joint Venture Agreement (CJVA) between TMA Group of Companies (TMA) and the PCSO entered into for the purpose of establishing the first thermal coating plant in the Philippines should be cancelled for being grossly prejudicial to the Philippines, the report added.
Violations of the Anti-Graft and Corrupt Practices were in fact committed by members of the former board of the PCSO.
When the Prime Gaming Philippines (PGPI) purchased the property of TF Ventures – a company partly owned by Manuel Morato – the latter was relieved of the burden of paying for the corporate debts owned by TF Ventures to the banks, it said.
It can be inferred that PGPI’s resulting assumption of the debts of Morato’s company is partly an act of gratitude extended to Morato, who was a member of the Board that approved the Equipment Lease Agreement of PGPI’s related company, PGMC.
Further investigation must be pursued on possible conflicts of interest by Morato and his dealing with PGPI.
The report also raised possible election Offenses committed by Morato.
Also among the recommendations of the report were:
* The PCSO Charter must contain penal provisions, imposing criminal, civil, and administrative liabilities for acts in violation of the charter, committed by its employees and private individuals;
* The PCSO management must improve its accounting system to ensure that no further unlawful co-minggling of funds shall occur in the future;
* PCSO funds must be allocated only to various national programs which are relevant to the mandate of the agency.The current board of the PCSO must immediately undetake an extensive assesment and evaluation of the programs and projects to ensure that public funds are used within the scope of this agency’s mandate;
* The Commission on Audit should come up with new auditing guidelines for confidential and intelligence funds which should include, among others, the following provisions: a requirement to submit, in classified and sealed envelopes, the vouchers/receipts/other documents evidencing the expenses charged against a specific allocation of confidential or intelligence fund, a certification by the officer in charge of liquidation that these envelopes can be accessed for lawful purposes, a sealed copy of the proposals/requests submitted in support of the request for confidential or intelligence funds, which may be accessed for lawful purposes.
* A law must be passed establishing a Treasury Single Account which can help government track and discover, on a timely basis, transactions which may appear irregular based on the frequency of fund releases and the amount of the said releases.
* The PCSO’s budget for public relations/advertising purposes should not exceed 1.8% of its gross sales. The PCSO is not a private corporation that needs a huge advertising budget.
* Passage of a law that would augment PhilHealth funds with PCSO funds.
* PCSO should stop giving shares of the proceeds of its operations to the PNP because it is not primarily mandated to implement projects within the mandate of the PCSO.
* Shares from PCSO’s operations that are released to congressional and/or other local government units should be strictly regulated. Without proper liquidation, future releases should not be made; and
* The PCSO management should ensure that the strictest standards are established and observed to ensure that public funds are devoted only for public and non-secular purposes.
Let this serve as a reminder to all that public funds are sacred as it is imbued with public interest. Public funds could only be spent for authorized public purposes and can never be used as a private piggy bank.
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