Senate Report On Fertilizer Fund Scam 14th Congress

.

~.

j. ,

FOURTEENTH,CONGRESS OF THE REPUBLIC OF THE PHILIPPINES Second Regular Session

. ':

~ . i

'

) ) )

4 1:fX Z(!,

COMMITTEE REPORT NO.

. . i s

,

.

ji 1

:;s

25

Submitted by the Committee on Accountability of Public Officers and Investigations (Blue Ribbon) on

n.

Re: Proposed Senate Resolution No. 637, Proposed Senate Resolution No. 702 and Privilege Speech of Sen. Jinggoy Ejercito Estrada titled, "A Clarion Call to Conscience" delivered on 10 November 2008

Recommending its approval.

Sponsor: Senator Richard J. Gordon

MR. PRESIDENT:

The Committee on Accountability of Public Officers and Investigations (Blue Ribbon) has conducted an inquiry, in aid of legislation, on the following referrals:

Proposed Senate Resolution No. 637, introduced by Senator Mar Roxas, entitled:

2

A RESOLUTION DIRECTING THE APPROPRIATE SENATE COMMITTEES TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, ON THE ENFORCEMENT OF THE CONTEMPT AND ARREST ORDER ISSUED BY THE SENATE AGAINST FORMER DEPARTMENT OF AGRICULTURE UNDERSECRETARY JOCELYN BOLANTE AND FOR OTHER PURPOSES

Proposed Senate Resolution’ No. 702, introduced by Senator Mar Roxas, entitled: A RESOLUTION DIRECTING THE SENATE TO CONVENE ITSELF AS A COMMITTEE OF THE WHOLE TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, ON THE ALLEGED PHP 728 MILLION FERTILIZER FUND SCAM PRIMARILY FOR THE PURPOSE OF GIVING THE FILIPINO PEOPLE, THROUGH THE SENATE COMMITTEE OF THE WHOLE, THE RIGHT TO HEAR THE TESTIMONY OF FORMER DEPARTMENT OF AGRICULTURE UNDERSECRETARY JOCELYN BOLANTE ON THE MATTER UPON HIS DEPORTATION TO THE PHILIPPINES AND AFTER THE ISSUANCE OF THE PROPER INVITATION AND/OR COMPLIANCE WITH SUCH OTHER LEGAL PROCESSES THAT MAY BE WARRANTED FOR THE SENATE TO ACQUIRE JURISDICTION OVER HIS PERSON

and the Privilege Speech of Sen. Jinggoy Ejercito Estrada delivered on 10 November 2008, entitled: “A CLARION CALL TO CONSCIENCE”

The Committee has the honor to submit its Report, after conducting an inquiry, to the Senate.

b

3

Recommending the adoption of the recommendations contained herein.

COMMITTEE REPORT INTRODUCTION

THE WOLF PACK

Beware offalse prophets who come to you in sheep’s clothing, but underneath are ravenous wolves. Matthew 7: 15

This is a tale of how a group of people - like a wolf pack, was able to rob the government blind. This is a story, so shocking to the conscience, that would result in gross injustice if institutions, like the Ombudsman, continue to turn a blind eye to clear acts of plunder and money laundering by powerful and influential government officials and their pack of wolves. This wolf pack did not only rob the government. Worse, it plundered a vulnerable sector in this country, the farmers. They did this during the election year of 2004.

How did this wolf pack operate? How were they able to plunder such large amounts from the government’s coffers with impunity?

4

First, they needed a very well-connected person: a very powerful official who knew that funds were available and were going to be released. This functionary was so influential that he could ensure the release of a Special Allotment Release Order (SARO) and a Notice of Cash Allotment (NCA) on the same day. He was so influential that he was, he claimed,

appointed to his position without his even applying for it. He was so influential and powerful that even if the original request for this project was only for P28M, he was instead able to have P728M released.' He was so cunning that he was able to determine that the fertilizers had to be in liquid form to ensure the product's ease of movement, perishability, nontraceability after use, and effortless dilution. He crossed all the

T'sand

dotted all the 1's. He was one who had power to create funding, spot where it could be sourced, and create opportunities for patronage

- very useful

during an election cycle. It was a prerequisite that this person possess sufficient talent and intelligence, and the willingness to use them in a wrong way. The endeavour would not be a success without this influential person. He was so powerful that he could make people look the other way. He was

the Alpha wolf.

Second, they needed enablers: indispensable assistants who were willing to do the dirty job within the department. These people were smart CR 54, page 30

T

5

enough to do the paperwork, to get the job done, and scared enough not to double-cross their principalls.

Third, they needed an operator to organize the cabal to ensure that the criminal design was executed like clockwork. Name-dropping skills were also required so he could hoodwink or convince others that he not only had the connections but also the wherewithal to pull the operation off.

Fourth, to do this nefarious deed, they needed a financier, sleek and experienced in government contracts and who knew how government funding worked, who was willing to advance the money, to ante up, and to ensure that there was money to start the operation. She had to show the front money. This financier also had to be willing to lend her credit line at the shipping companies in order to ship the fertilizer. She had to be willing

to follow up with the supplier to ensure that the deliveries were made. She had to be willing to help the supplier open a bank account where the money from the provinces were to be deposited, and lend her own cashier to encash checks, and to exercise supervision and control over the operations.

Fifth, they needed a willing supplier who had enough fertilizer stock to dispose and to have that stock overpriced to the detriment of government.

6

They needed a supplier who was prepared to lend her company’s name to launder money and to allow the operators to manipulate her books to conceal the overprice.

Sixth, they needed a foundation willing to lend its name for a fee and enter into agreements with the various Regional Field Units (RFUs) of the Department of Agriculture (DA). They needed a wolf in sheep’s clothing. They needed a foundation that would lend credibility to the dubious operations and that could become a conduit for illegal payments as well. They also needed a foundation that they could use in order to circumvent the safeguards provided by government procurement rules.

Seventh, they needed a group of “pups,” secondary operators or underlings who were more than willing and able to go around the country to talk to politicians and convince them that the scheme was both workable and profitable. They needed minions that would show blind obedience to the orders of their masters and ensure that the proceeds of the criminal enterprise were secured and divvied up.

Lastly, they relied on the usual bureaucratic ineptitude and apathy where departments, like the Department of Budget Management (DBM) and the DA, release massive amounts of public funds but woefully fail to

7

/

monitor how these huge outlays are spent. A complacent, passive DBM and others in the bureaucracy who look the other way due to apathy and loose monitoring using a mind-set that accepts things as they are

-

numbed to corruption

- were indispensable ingredients that ensured the

scheme’s success,

Moreover, a very

slow and very

phlegmatic

Ombudsman and Anti-Money Laundering Council (AMLC) secured the plunderer’s triumph.

This is a story too of patronage and how deleterious it has become to our system of governance. Here, those who are closer to the ones in power get more support and/or resources, especially during times of election. The report submitted by the DA shows the disparities in the distribution of the fertilizer funds (Annex A). The Alpha wolf stepped forward to be in charge of the allocations of funds in a clear case of perpetuating the patronage system. If one belonged to the administration, more was given to you; otherwise, you either got a minimum or none at all. Some politicians were listed as beneficiaries but did not receive anything by way of fertilizer or of

“SOP”; some accepted the goods but did not necessarily enrich themselves; others accepted both the “SOP” and the fertilizer; others did not accept any funds at all because it was not what was needed by their constituents; others had their names used without their consent.

8

Clearly, funds were taken out of government coffers for campaign purposes. The stealing became easier because they were dealing with perishables or consumables (fertilizers). Only a corrupt mind, with such attention to detail, could have orchestrated and perpetuated this.

THE REPORT

This report can be characterized as part of a very long odyssey that commenced four or so years ago. During the 13‘hCongress, P.S. Res. 327 was filed by Senator Ramon B. Magsaysay entitled, “RESOLUTION TO CONDUCT AN INQUIRY ON THE ALLEGED MISMANAGEMENT AND USE OF THE FERTILIZER FUND OF AGRICULTURE’S

MASAGANANG

ANI

THE DEPARTMENT OF PROGRAM

TO

THE

DETRIMENT OF FILIPINO FARMERS WITH THE END IN VIEW OF CHARTING EFFECTIVE POLICIES AND PROGRAMS FOR

THE

AGRICULTURE SECTOR.”

The Resolution sought to have the Senate conduct an inquiry in order to look into the alleged misuse and misapplication of government funds, i.e., the purchase of fertilizers that not only were overpriced but inappropriate for the intended purpose as well.

9

After a series of numerous hearings (six in all), and dialogues with farmer organizations, the Committee on Agriculture and Food and the Committee on Accountability of Public Officers and Investigations (Blue Ribbon) under Senators Ramon B. Magsaysay and Joker P. Arroyo, respectively, submitted Committee Report No. 54 (CR 54).

Among many of their findings, they discovered that massive corruption accompanied the procurement and distribution of fertilizers all over the country. Commissions were offered to some, demanded by, and given allegedly to, elected and appointed government officials. There were supposed recipients who did not receive a drop of the liquid fertilizers. The

g728M in funds purportedly used for the purchase and distribution of fertilizers to farmer beneficiaries were used instead primarily for the reelection efforts of administration candidates.

As the door was closing on the 13'h Congress, the Senate approved CR54, which found, among others, that:

1) Some politicians' names were used to legitimize the operations;* 2) The fertilizer project was a scam;3 and

3) There was massive overpricing in the fertilizer costs.4

CR54, page 31 CR 54, page 26 CR 54, pp. 28-29

10

Through CR 54, the Senate also recommended and approved the following, inferalia:

1) The filing of criminal charges against Secretary Luis Lorenzo, Undersecretary(Usec.) Secretary

lbarra

Jocelyn

Poliquit,

I.

Bolante,

(Asec.)Assistant

Undersecretary(Usec.)

Belinda

Gonzales, Assistant Secretary(Asec.) Jose Felix Montes and all Regional Directors of the DA who participated illegally in all the transactions related to the P728M fertilizer

and

2) Citing for Contempt of the Senate Sec. Luis Lorenzo and Asec. lbarra Poliquit, as well as ordering the enforcement of the contempt citation against Usec. Jocelyn I. Bolante.'

Normally, the work of a Committee is done after it has made its recommendations through its Committee Report and having it approved by the Senate in plenary session. But this work was not yet over; it could not have been finished because the mastermind and architect of the whole scheme had not appeared to testify in the Senate. Despite numerous invitations to and subpoenas issued against Usec.Bolante, he did not honor nor heed any of them. He was cited for contempt for his repeated insolence. He was never around during any of the hearings. Finally, he fled

r 7

/ CR54, page 33

' CR54, page35

to the United States where he sought asylum. There were disturbing developments that led many, especially the previous Congress, to believe that there was an active attempt to obscure the trail left by the conspirators. There was an invocation of Executive Order 464 (EO 464) by officials, e.g., Asec. lbarra Poliquit, in order not to testify. The Supreme Court, however, has since declared Sections 2(b) and 3 of EO 464 unconstitutional insofar as covered officials were concerned. The Supreme Court was clear that executive privilege does not refer to categories of persons but refers instead to categories of information. Bolante’s sojourn to the U.S. was deemed to be a deliberate attempt to escape the jurisdiction of the Senate, and his flight a clear indication of

guilt.

THE 14THCONGRESS AND THE BLUE RIBBON COMMITTEE HEARINGS

During the 14‘h Congress, two proposed resolutions were filed: Proposed Senate Resolution No. 637 and Proposed Senate Resolution No. 702, both authored by Senator Mar Roxas. A privilege speech was delivered by Sen. Jinggoy Ejercito Estrada entitled, “A Clarion Call to Conscience”. All three were related to the P728M alleged fertilizer scam and the rolektatus of Bolante.

12

In the meantime, Bolante’s petition for asylum in the United States was denied after a protracted process. He was finally deported back to the Philippines. It was not until November 13, 2008 that Bolante, at last, appeared in the Senate.

Eight (8) public hearings have been conducted. Witnesses who answered the summons of the Committee, with corresponding dates, are listed below: November 13,2008

Mr. Jocelyn “JOC-JOC” I. Bolante

November 25,2008

Mr. Jocelyn “JOC-JOC” I. Bolante; Mr. lbarra Trinidad C. Poliquit; Atty. Reynaldo A. Villar; Mr. Felix S. Montes; Mayor Raymar A. Rebaldo of Kalibo, Aklan and DA Regional Directors, namely: Dir. Cipriano G. Santiago, Dir. Gumersindo D. Lasam, Engr. Redentor S. Gatus, Engr. Abelardo R. Bragas, Dir. Antonio G. Gerundio, Dir. Jose V. Dayao, Dir Larry P. Nacionales, Dir. Ricardo Oblena, Dir. Leo P. Cafieda, Dir. Oscar

0. Parawan, Dir. Lealyn S. Ramos, Dir. Roger C. Chio, Dir. Abusama M. Alid, Dir. Ricardo C. Regis and Dir. Cesar D. Rodriguez.

13

November 28,2008

Mr. Jocelyn “JOC-JOC”I. Bolante, Mr. lbarra Trinidad C. Poliquit, Dir. Flerida Jimenez (Commission on Audit (COA)), Asec. Dennis Araullo, Dir. Cipriano G. Santiago, Dir. Gumersindo D. Lasam, Dir. Larry P. Nacionales, Dir. Ricardo Oblena, Dir. Leo P. Cafieda, Dir. Oscar 0. Parawan, Dir. Roger C. Chio, Dir. Cesar D. Rodriguez, Dir. Rodolfo Guieb, Dir. Reinerio Belarmino Jr., Dir. Hector Sales, Dir. Eduardo Lecciones, Dir. Sumil Sekah, Mayor Raymar Rebaldo (Kalibo, Aklan), Ms Catherine Buntua, Ms. Grace Lucero, Mr. Raul Arcilla, Ms. Thet De Guzman, Ms. Nelia C. Villeza (COA),

Ms. Emma T. Rogino (COA) and Atty. Marvin Aceron (Counsel for the DA Regional Directors) and Mr. Jose Barredo Jr.

December I O , 2008

Mr. Jocelyn “JOC-JOC”I. Bolante, Atty. Vicente Aquino (AMLC), Mr. lbarra Trinidad C. Poliquit, Usec. Belinda A. Gonzales, Dir. Flerida Jimenez (COA), Ms Carmen Antasuda (COA), Mr. Reden

H. Antolin

(FESHAN

Phils., Inc. (FESHAN)), Mr. Salvador lsiderio (COA), and Ms. Emma T. Regino (COA).

December 17,2008

Mr. Jocelyn “JOC-JOC”I. Bolante, Mr. lbarra Trinidad C. Poliquit, Usec. Belinda A. Gonzales, Atty. Michael Reysio-Cruz (Counsel for Usec.

14

Gonzales), Dir. Flerida Jimenez (COA), Ms. Emma T. Regino (COA), Auditor Carmen Antasuda (COA), Atty. Salvador lsiderio (COA), Mr. Jesus M. Tanchanco (COA), and Ms. Leonicia Marco-Llarena (Dane Publishing House, Inc. (DANE)).

December 22,2008 Ms. Marites Aytona, Ms Julie Gregorio (FESHAN), Mr. Redentor H. Antolin (FESHAN), Ms. Leonicia Marco-Llarena (Dane Publishing House Inc.), and Mr. Jose Barredo Jr.

January 20.2009 Mr.

Jocelyn

I.

Bolante,

Solicitor

General

(SolGen)

Agnes

Devanadera, Assistant Sol. Gen. Roman Del Rosario, Sol. Ma. Christina Lim, Atty. Vicente Aquino (AMLC), Dir. Flerida Jimenez (COA), Dit-. Salvador lsiderio (COA), Ms. Emma T. Regino (COA), Ms. Carmen Antasuda (COA), Ms. Malaine P. Baui (Manager, LANDBANK Elliptical Road Branch), Ms. Raquel C. Paz (former Manager, LANDBANK Elliptical Road Branch), Ms. Julie M. Gregorio (FESHAN), Mr. Redentor H. Antolin (FESHAN), Ms. Leonicia Llarena (Dane Publishing House, Inc.), Ms. Ma. Antonina Karganilla (Just Call), Mr. Jose Rizalde Perez (Quick Trans Cargo Moving, Inc.), Mr. Bonifacio Dinglasan (Constar), Ms. Marilyn Araos, Ms

7

15

Marites Aytona, Mr. Jaime Paule, Mr. Jose B. Barredo Jr., and Mr. Natalio Castillo Jr.

Januaw 26,2009 Mr. Jocelyn I. Bolante, Dir. Flerida Jimenez (COA),

Ms. Emma T.

Regino (COA), Ms. Malaine P. Baui (Manager, LANDBANK Elliptical Road Branch), Ms. Raquel C. Paz (former Manager, LANDBANK Elliptical Road Branch), Ms. Julie M. Gregorio (FESHAN), Mr. Redentor H. Antolin (FESHAN), Mr. Jaime Paule, Ms. Marites Aytona, Ms. Leonicia MarcoLlarena (Dane Publishing House, Inc.), Ms. Bing Salvador (Procurement Officer, Aytona's Office), Ms. Cecile Clemente, Mr. Joselito Flordeliza, Ms. Aines Librodo (Aboitiz Transport, Inc.), Ms. Marilyn

U. Araos,

Mr. Natalio

Castillo Jr., and Mr. IAigo Lim.

HOW THE WOLF PACK ROBBED GOVERNMENT

FORMER UNDERSECRETARY JOCELYN 1. BOLANTE

Mr. Jocelyn 1. Bolante was a former Undersecretary at the DA. He

was one of the first appointees of Gloria Macapagal-Arroyo when she took the reins of government on January 20, 2001 and was the first appointee of

16

the Macapagal-Arroyo administration to the DA.7 He was a very powerful undersecretary, possessing various delegated powers from Sec. Leonard0 Montemayor and Sec. Luis Lorenzo (Annex B and Annex N). He sat on various boards like the Government Service Insurance System (GSIS) and the now- defunct Livelihood Corporation (Annex C). Indeed, he was so well-connected that even after his stint at the DA, he was appointed as a trustee of the GSIS, widely known as one of the more financially rewarding government corporation board memberships. One can only imagine how much he was being compensated at the GSIS (Annex

D).He was

entitled

to a staff of about seven (7) people, the highest-paid being compensated at

@54,401 a month, as certified by GSIS Vice-president, Human Resources Office Ma. Liza V. Fresnido (Annex E).

He was cited for contempt of the Senate previously, and upon his arrival in the Philippines was arrested by the Senate Sergeant-at-Arms. He was brought to the hospital for confinement and a hearing was soon scheduled in order to complete the unfinished work of the 13‘h Congress, and to afford Bolante the chance to cleanse and purge himself of his contumacious conduct.

Bolante’s role in the @ 728M Fertilizer Scam

’CR 54, page 18

17

In the hearings, Bolante kept on repeating that his role in the P728M project was merely to “download” the money to the DA regional offices for distribution, that the P728M project was a regular Farm Inputs and Farm Implements (FIFI) project of the government and that, therefore, all that was needed to be done was to get the funds from the DBM and distribute them.* We find this assertion to be incredible and unworthy of belief.

The finding of the 13‘hCongress that Bolante was the architect of the program and that everything emanated from him, is convincing. We quote its findings: “(l)n the fertilizer fund scam, Usec. Bolante is the declared architect. He designed it. He was its brains. It was he who worked with the DBM for the immediate release of the fund. It was him who prepared and submitted names who would become the fertilizer fund’s proponents (see Annex

F). It was

Usec. Bolante who sent letters to various congressmen

and local officials informing them of the availability of funds under the DA’s GMA Project (see Annex G). It was he who directed these officials to coordipate with his office to discuss all the requirements to facilitate the said project fund. Usec. Bolante in the words of his then Chief of Staff, lbarra Poliquit, had a hand in determining how the GMA fund works and will be spent. And that although the DA has a list of officials whose “proposed

8

TSN, HSGayapa, IV-I, December 10,2008, 1:11 pm, p. 6; TSN, BRHGonzales, V-I, December 10, 2008, pp. 5-6

18

projects” were to be funded by the fertilizer fund, Bolante was given the authority to drop them and replace them with ~ t h e r s . ’ ’ ~

Morever, that Bolante had control of the program from inception to implementation is seen from the following:

1) He provided the pro-forma Memorandum of Agreements (MOAS) for the DA RFUs to follow (Annex H);”

2) He wrote to the beneficiaries regarding approvals of their supposed requests(Annex 1);”

3) He signed purchase orders for Region XI (Annex J);

4) He called Dir. Oblena of Region VI to specify which nongovernmental

organization

(NGO) (in this

case,

National

Organization for Agricultural Enhancement and Productivity, Inc., which Mr. Jaime Paule represented according to Ms. Marites Aytona) monies were to be given;12

CR 54, pp. 19-20 “TSN, Solidum, 111-3, December I O , 2008, 5:33 pm, p.3 11 TSN, BRHGonzales, V - I , December 10,2008, 1:21 pm, p. 5 ’*Gordon to Oblena,TSN, JMBAISA, Xll-I, November 25, 2008, 12:21pm, p 6

19

5) The Regional Directors (RDs) did not possess sufficient power to distribute the largesse on their own because their authority to sign was limited only to purchases not exceeding P I M (see Annex B);

6) Apparently, even the choice of fertilizer type - liquid foliar primarily

used for ornamental plants and not for boosting rice and corn production

- was imposed upon the recipients. According to Rep.

del Rosario, “So hindi ko naman sasabihin sa iyo kung iyong 30-

30-40 kung hindi personally inofer sa akin. Only na hindi tayo nagkasundo because nag-insist ang agent niyo na ang bibilhin na fertilizer ay iyong mga liquid fertilizerxxx. So iyong problem natin na hindi tinanggap iyong offer niyo sa akin na five million because sabi ko nga na hindi pumayag si Ms Aytona na magiging Urea or 1846 ang bibilhin na fertilizer na iyon ang kailangan ng mga farmers namin. I’m talking about Capiz sa Roxas City. So nag-iinsist sila sa liquid fertilizer. That is why hindi tayo nagkasundo, I

no.13

During the hearing of 28 November 2008, DA Asec. Dennis Araullo, then RD of RFU IV-A said that his office received an Advice of SubAllotment together with the Memorandum Letter Request of Poliquit, approved by Bolante, specifying the amount and intended recipient of funds. His office received eight advices of sub-allotments from March to 13

TSN, November 18, 2008/NCS XI-1-2, Mouse of Representatives Committee on Agriculture hearing

20

April 2004 totalling P40M. He also said that he received a Memorandum from Bolante authorizing him to enter into MOAS with local government units (LGUs) and NGOs to implement the DA program, and that he could not do anything but follow the instructions of Bolante. This was echoed by DA Regional Directors Lasam (II), Oblena (VII), Caneda (VIII), Lecciones

(VII), Sekah (XII), Parawan (IX) and Rodriguez (CAR) - who were all present at the hearing.14 Bolante’s control was thus total and allencompassing.

Bolante claimed that the P728M fertilizer program was a regular, habitual and customary activity of the DA. Again, he dissembles. During the 13‘h Congress, then DA Sec. Domingo Panganiban testified that except for

a few DA officials, no one in the department had any knowledge of the P728M fertilizer program.15 Moreover, during the hearings, the then RDs of the DA said that it was the first time for them to undertake such a program. Dirs. Caieda of Region VIII and Chi0 of Region XI asserted that such program was not done the year previous nor was it done the following year. Dir. Chi0 had been an officer for fifteen years at the DA, and this was his first and only experience with such a program. This somehow buttresses

CtSotto, 111-1, November 28, 2008, 1239pm,p6-9; RJOrtiz, IV-I, November 28, 2008, 1249pm, p l ; RJOrtiz, IV-I, November 28,2008, 1249pm, p 6; MHBALAGNE, V - I , November 28, 2008, 1259pm, p4-8 CR 54,p. 27

21

the belief that the program was designed for no other purpose than political, electoral purposes.16

Bolante’s mendacity does not end there:

1) He claimed to not have any idea as to who recommended him to

the post of DA Undersecretary. He supposedly merely received a call from the Presidential Management Staff informing him of his nomination.”

Did he not even ask or try to find out who

recommended him? Wasn’t he even the least surprised to be nominated/appointed to that post when his previous experience does not even relate primarily to agriculture? This is a highly incredible story. He asks too much of his listeners

- he asks that

not only belief be suspended, but that reality be suspended as well;

2) With respect to his appointment to the board of trustees of the GSIS, he claimed that he was merely nominated by Chairman

Bernardino Abes to serve based on his qualifications, and that he did not know how,much he received in terms of salary, allowances and other emoluments. However, he failed to acknowledge that he

I6(TSN, SNTUPA2,V-1, November 18,2008,10:31am, p 5; TSN, JADELACRUZX-1, November 30,2008, 11:31 am, p. 2: TSN, CTSOTTO, 111-1, November 25, 2008, 10:41 am, pp. 2-3 I7TSN,CGCASTRO, IX-I, November 13,2008, l l : l l a m , p. 3

22

was appointed by no less than the President of the Philippines (as required by the Charter of the GSIS), the same President that appointed him to his previous post in government. He had also forgotten, perhaps conveniently, that his highest paid staff member was entitled to a salary of @54,000 per month; thus, making incredible the GSIS certification that Bolante was only being paid about W5,OOO a month.18

3) He claimed to only having four bank accounts, when asked during a hearing; but in a case pending at the Court of Appeals, it can be

gleaned from court documents that there were instead about thirty two (32) bank accounts.

4) He flew to and entered the U.S. to escape appearing before the

Senate and would have in all probability indefinitely stayed in the US had the US government not revoked his visa and detained him by virtue of the Senate's issuance of an arrest warrant against him. In a measure of further desperation, he sought political asylum claiming that his life was threatened. He had reached the end of the proverbial rope. He had no more place to hide. He was hell bent on not appearing in the Senate. He was so dogged in that determination that he chased all avenues possible to prevent his attendance at the Committee hearings. Alas for him, the U.S.

I8TSN, PLMANUEL,IX-I,November25,2008, 1141arn, p. 5; TSN, MHULEP, VI-2, November25 2008, I l l p m , p. 10; TSN,MHBALAGNE, Vll-2, November25,2008,12lpm, pp. 1-2

23

disapproved the request; it did not believe his assertion of danger to his life. He was deported back and arrived in the country: rode a wheelchair and rubbed his chest, boarded an ambulance, had himself brought to a hospital, and then finally appeared before the Committee acting gaunt, requesting meekly for permission to eat and take his medicine as the hearing went on. But it was noticed that despite claims of illness, he not only survived but appeared to become stronger, like a bull, at the end of an almost eleven (11) hour hearing

5) Usec. Belinda Gonzales tesitified that she was instructed by Bolante to attend a meeting in Makati, and while she remembered meeting Mr. Jaime Paule in that meeting, Bolante claimed to not remember any of the persons who were there present - even though he remembered what the conversation was all about: the complaint of the group present about monetary advances having been made allegedly to a person close to the then-Secretary: a Jess Varela. It is uncharacteristic for a former President of a private company to not remember such important and basic details. memory.

His lack of candor instead betrays a case of selective

24

All told, the fertilizer program scam would not have been made possible had it not been for the participation of many, nay, all of those who have been mentioned here in this Report, but most especially without the participation of the one who started the ball rolling.

FORMER ASEC.IBARRA POLIQUIT As established by CR 54 of the 13‘h Congress, the degree of participation of former Asec. lbarra Poliquit is as follows:

“Former Undersecretary lbarra Poliquit, per the records submitted by the Commission on Audit, assisted Undersecretary Bolante in the approval of projects that would be accorded the fertilizer fund. A substantial number of requests for the approval to issue suballotment advise (SAA) with corresponding cash allocation to DA-RFUs for the implementation of the GMA Farm Inputs and Implements Program would indicate Undersecretary Poliquit as the requesting party. In one hearing, from the documents submitted by the COA, it was noted that lbarra Poliquit, then Assistant Secretary for the Field Operations requested for the transfer of P 89 million in Region IV alone; P5 million in Region V; and P22 million in Region Vll.”’g

Also, during the 13‘h Congress investigations into the fertilizer fund scam, he invoked EO 464 to evade the Senate investigations. It should be noted that his being Vice President of the GSlS is not within the 19

Committee Report No. 54, 1 March 2006, 13IhCongress of the Senate, pp. 20-21

25

contemplation and coverage of EO 464. “But Poliquit sought refuge in the oppressive Executive Order and clothed himself to be within its ambit and protection. It should be stated that Poliquit was served four subpoenas and one invitation relevant to the hearings of the fertilizer mismanagement issue.”20

During the 14thCongress investigations, Poliquit tried to downplay his participation by saying that: “1 was appointed as Assistant Secretary for Field Operations and my tasks included to endorse requests for funding to the DA Secretary, to the Undersecretary for Field Operations and the Undersecretary for Finance and Administration.

All of them have the

authority to approve or disapprove the requests for funding and they also had the prerogative to increase or decrease the amounts of,funds being requested for.”21

Yet, it is a fact, that endorsement still constitutes a discretionary act. Poliquit had a choice whether or not to endorse the requests for funding. And Poliquit endorsed numerous requests for funding (see Annex I), thus perfecting the scheme of Bolante.

2o 21

Committee Report No, 54, 1 March 2006, 13IhCongress of the Senate, p. 36 CGCastro XI-I November 28, 2008 1 5 9 p.m. pp. 8-9.

26

Discretion is defined as:

“... the carrying out of public functions, the faculty or right which the law confers to act officially under certain circumstances according to the dictates of other’s own conscience or judgment without the imposition of the judgment or conscience of others. When applied to public functionaries, it means a power or right conferred upon them by law of acting, under certain circumstances, uncontrolled by the judgment or conscience of others. If the law imposes a duty upon a public officer and gives him the right to decide how or when the public duty shall be performed, such duty is discretionary. A discretionary duty is that which by its nature requires the exercise of judgment.”22

UNDERSECRETARY BELINDA GONZALES During the public hearing conducted by the Committee of the Whole on January 31, 2006, then DA Asec. and now Usec. Belinda Gonzales, specifically mentioned that it was the office of then Usec. Bolante that ordered the release of funds to the recipients stated in the list of fertilizer fund beneficiaries.

When asked who decided as to who the beneficiaries of the P 100 million agrarian reform funds would be and how the listing of the regional field units would be decided or made, Usec. Gonzales at first testified that

22

Agpalo, Ruben E., Administrative Law, Law on Public Officers and Election Law, pp 16-17, Rex Bookstore, 2005 citing Republic v. Capulong, 199 SCRA 134 (1991) and Mario v. Capulong, 222 SCRA 593

27

she received a memorandum from the office of Bolante to release the amount to a specific region.23

However, as the hearing continued, Usec. Gonzales said it was not a memorandum but a Memorandum of Agreement that was sent to her office for ~ b l i g a t i o n . ~ ~

Usec. Gonzales confirmed that it was the office of Bolante who decided on the listings of the P-100 million. Usec. Gonzales said she received verbal instructions from Bolante over the phone: “I got instruction

from Usec. Bolante that this will be transferred - the I00 million will be transferred to the different regional offices.

I”’

Usec. Gonzales further testified that after that instruction, a Memorandum of Agreement was prepared for the regional offices, that is, an agreement between the DA-Office of the Secretary and the DA regional offices for the transfer of funds.26

’’TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, Aliccatimbang VII-I January 31, 2006 11:47 a.m. page 2 TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, Aliccatimbang VII-I January 31, 2006 11:47 a.m. page 2 25 TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, P. Mayor VIII-I January 31, 2006 11:57 a.m. page I 26 TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, P. Mayor Vlll-I January 31,2006 11:57 a.m. page 1 24

28

Usec. Gonzales said that while these agreements had blanks and were unsigned, she used them as basis for the allocation of the amounts per region, Her reason for using the same as bases was that these contracts came from the office of B ~ l a n t e . ’ ~

Usec. Gonzales further said that the amounts were deposited at the

LANDBANK. She said: “Weissued a notice of transfer allocation signed by

Usec Bolante and then Secretary Lorenzo.

JJ

28

Usec. Gonzales said they issued Journal Entry Vouchers (JEVs) for the P 100 rnilli~n.’~

JAIME LEONZON PAULE

Mr. Jaime Leonzon Paule is a major character in this production. During the hearings, he repeatedly denied his role in the scam and denied knowing any, and/or being a part, of the cast of characters. He insisted that he had nothing to do, in any manner, with the subject matter of this 27

TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, P. MayorVIII-I January 31, 2006 11:57 a.m. page 3 28 TSN, Committee of the Whole [Senate Resolution No, 47- The General Appropriations for FY 20061, P. Mayor VIII-1 January 31, 2006 1157 a.m. page 4 29 TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, MayorVIII-I January 31,2006 11:57 a.m. pages44

29

in~estigation.~' Ms. Leonicia Marco-Llarena, however, testified that it was he who approached her to seek financing for the fertilizer project. She further testified that she accommodated him by issuing checks payable to FESHAN.31

Also, Ms. Marites Aytona testified that it was Paule who gave her directions on what to do and where to go, among other

instruction^.^^ She

was acting as Paule's employee in all these undertakings.

Further, Ms. Marilyn Araos testified that Paule was her employer and that he directed her to open an account with the LANDBANK.

Even assuming arguendo, that all three are pointing to him in order to save their own skins and downplay their roles and participation in this most nefarious scheme, there is the disinterested testimony of Mr. Natalio Castillo, Jr. showing Mr. Paule's principal role in the scheme. Mr. Castillo had nothing to do with the project, he had no face to save, no participation to negate, no posterior to protect. He was offered the project and he

declined. He was neither invited nor subpoenaed by this Committee. In short, he had nothing but a story, likely a truthful one, to tell. Mr. Castillo, a delegate to the 1971 Constitutional Convention, is one man who came up to bat and did his share in nation-building. He didn't have to. He could have

v

30

Opening Statement, Mr. Jaime L. Paule, read in full at the January 20, 2009 hearing ' 3 TSN, Mhulep, X&?,January 20, 2009, 12:08PM,p. 20 "TSN, M.R. CATADMAN, XV-1, January 20,2009, 12:38PM, p. 11

30

just stayed home and kept quiet. While others were scrambling to invoke their rights against self-incrimination in the face of increasing pressure, here was a man who invoked instead, in his own words, his “right to speak.”33He abided by his God and did not resort to convenient silence. It has been said that, “witnesses are weighed not numbered and testimony of

a single witness may suffice for conviction if otherwise trustworthy and reliable”.34 Furthermore, what happened and what was discovered during the 26 January 2009 hearing shattered all of Mr. Paule’s denials - or at the very least, his assertion that he did not know any of the other persons being investigated. The Committee Chairman revealed a photograph (Annex K), taken during the 50ih birthday party of Ms. Leonicio Marco-Llarena held on August 23, 2004, showing, collectively posing for posterity around the same table, the main characters of this saga: Llarena, Gregorio, Antolin, Araos and Paule himself. He had after all met and knew all of the other participants

- contrary to

his earlier denials. In his defense, he asserted

that the photograph may have been doctored given the current state of technology35

- a statement the Committee takes exception

to. The

implication that the Committee is a party to a manipulation of evidence is not only insulting, but downright contumacious.

33

TSN, Slidum, IX-2, January 20,2009, 2:38PM, p.10

34

Naval and de Leon vs. Panday, Encinas and Lacson, AM No. RTJ-95.1283, December 21, 1999, citing People v Daraman, 294SCRA27 [1998], citing People v Nulla, 153 SCRA471 [I9871

35

TSN, MhSantos, 11-1, January 26, 10:59am, p, 8

31

LEONlClA MARCO-LLARENA

Ms. Leonicia Marco-Llarena, the owner of DANE, claimed during the hearings that her only role was to issue accommodation checks and that she did so in order to help Mr. Jaime Paule. “Nagpautang lamang sa

pamamagitan ng tseke at ang dealing niyo lamang ay kay Mr Paule at

never sa FESHAN?” “Yes, sir.”36 But her role, as can be seen in many instances, seems bigger than what she claimed. She allowed the use of her credit line at the shipping companies in order to ship the bottles of fertilizer; her office followed up regularly with FESHAN regarding fertilizer deliveries; and, she called LANDBANK to provide introductions for Ms. Marilyn Araos, Ms. Deonilla “Julie” Misola-Gregorio and others before the opening of the Araos account used to launder the funds3’ If her role was only to lend money to, or to accommodate, or to help Mr. Jaime Paule, why would she have gone to all these lengths?

Furthermore, in the submitted microfilm copies of the LANDBANK Araos account checks issued to Ms. Llarena, or encashed by her cashier, Minda Bombase, why was the total amount roughly W6.5M, when what was supposedly owed her was only about Q14M? For someone who claims minimal participation - merely introducing Ms. Gregorio, Ms. Araos and Mr. Redentor Antolin to the LANDBANK bank manager - her knowledge of how the Araos account checks were issued and for what purpose is amazing. It

r“

J 36

TSN, Jglrobles, V-I, December 22, 2008, Il:lOam, p, 9; underscoring ours ”TSN, MPMendoza, XVlll-2, January 20, 2009, 5:43PM, p. 9

32

could only have meant that she had knowledge of, and perchance some control over, the Araos account

sikot nyan.” “Opo.”

disbursement^.^^ ‘At alam mo ang pasikut-

“At saka itong transaksyon na ito based on the checks

ay matagal na itong nangyari.” ”Opo. O P O . ’ ~All ~ in all, the Araos account checks either issued to, encashed, or negotiated by Llarena and her trusted cashier at Dane Philippines - Minda Bombase -totalled about M6M.

DEONILLA “JULLIE” MISOLA-GREGORIO

Ms. Deonilla “Jullie” Misola-Gregorio is the owner and President of FESHAN, which supplied the fertilizers. While she initially claimed that she sold the fertilizers for only P600 per liter/bottle, she recanted that statement by subsequently admitting that she had actually sold it for only @I50 per liter/bottle. As the fertilizers were sold to government for a whopping @I500 per literlbottle, there clearly was an incredible mark-up of 1000%. This price of PI50 was confirmed by the COA when it conducted a canvass of fertilizer prices4’ She futher admitted availing herself of a tax amnesty, as taught by Ms. Marities Aytona she claimed, by inserting false statements in her application for tax amnesty, i.e., making it appear that she sold @105M worth of fertilizers, when in fact she sold only about 812M to 13M. She allowed the opening of the Araos account in FESHAN’s name at the LANDBANK, which she claims was totally controlled by persons (Ms. Marilyn Araos, et al) other than her (although Ms. Araos claims that aside

c‘/

f 38

TSN, JMBAISA, XII, January 26, 2009, 12:39pm, pp. 3-9 ”TSN, Aliccatimbang, Xlll-I, January 26, 2009, 12:49pm, p. 1 40 TSN, RLTumampos, Vll-I, January26, 2009,11:29 am, p. 12

33

from the initial four checks she pre-signed, she would go to

Ms.Gregorio to

sign numerous other check^).^' PREVIOUSLY, SHE SAID

...

LATER ON, SHE SAID ...

That I hesitated t o appear on said scheduled hearings not only because i was short of time to produce the documents required o f me but because there were pleas and request from Ms. Aytona to ease the issue o f over-pricing and I know that if I reveal to the Committee the actual participation of Feshan Phils. Inc. In the sale of fertilizer, I might earn the ire of some people involved in the transaction (Supplemental Sworn Statement, January 20,2009) THE SENATE PRESIDENT. Sin0 nag-issue ng

That to show further that Ms. Aytona was

purchase order?

the one who directly dealing with me,

MS. GREGORIO. Sa office Ms. Llarena.

PO

- tao PO ni

demands to pay were sent to her as shown in attached Summary of Actual Delivery faxed to hr office on September

THE SENATE PRESIDENT. Sa pangalan ng kumpanya n’ya o tao n’ya?

17,2004 marked as Annex “N”

xxx

20,2009)

(Supplemental Sworn Statement, January

MS. GREGORIO. Staff PO ni Ms. Llarena THE SENATE PRESIDENT. Ano’ng pangalan? MS. GREGORIO. Matagal nap o kasi ’yon. I

cannot remember anymore. (RPAlgerVII-1 December 22, 2008 11:30 A.M. pp 10- 12)

That since I was in the trading business, Ms. Necy and I discussed the possibility of buying/selling fertilizer as Ms. Necy had expressed her desire t o buy fertilizer from

us; and we indeed were able to arrive a t the following terms and conditions: xxx (Gregorio, Sworn Statement, December 22,

41

That this state of affairs, Ms. Aytona called up our office with the information that she was looking for a supplier of fertilizer and she had information that our company had all the necessary accreditation/permits to sell fertilizer That thereafter, we met a t a restaurant in Quezon City where we discussed some details of the transaction where Ms.

Opening Statement of Ms Deonilla “Julie” Misola-Gregorio, read in full at the January 20, 2009 hearing

34

2008 Hearing).

Aytona mentioned the name of Ms. Leonicia Llarena who would pay for all i sitting stoclts of fertilizer provided that sale was on credit (Supplemental Sworn Statement, Janua 20,2009)

It was sold a t P150.00/bottle of the

The selling price of fertilizer was P600.00 per bottle and the landed cost was P463.00 per bottle (TSN, December 22,2008

voluminous orders and one of the considerations was that there would be

Hearing).

no more promotional or marketing expenses to be incurred (Supplemental Sworn Statement submitted to the Blue Ribbon Committee on January 20,2009

I received P50 Million from Ms Llarena as proceeds of the sale of fertilizer and such other matters material and relevant thereto (TSN, December 22,2008 Hearing).

Feshan never received any payment beyond what was specified in the MOA and delivery receipts which showed a tt of P13,513,800.00 (Supplemental Swor Statement submitted to the Blue Ribbo Committee on January 20,2009).

-Ms Gregorio said that the total amount of the checks issued by Ms Llarena was P12 Million plus the cash paid by Ms Llarena of P38 Million, which totalled P50 Million (Spot Report, 22 December 2008 Hearing).

RENDENTOR ANTOLIN Mr. Redentor Antolin was the vice-president of FESHAN. Although he initially did not help in clarifying the facts by downplaying his role, he later

Y

35

joined Ms. Julie Gregorio as she clarified her role and as she submitted needed documents.

JOSELITO FLORDELIZA Mr. Joselito Flordeliza was/is the President of National Organization for Agricultural Enhancement and Productivity, Inc. (Foundation), which was chosen to be an implementor of the project. He was promised 3% of the monies that would pass through the F~undation.~’ The Araos account at the LANDBANK shows payments to him in the amount of @456,208.00.It must be said that while he was cooperative, he was grossly negligent in running the affairs of the Foundation- directly resulting in the use of the organization for criminal purposes.

MARITES A. AYTONA Ms. Marites A. Aytona’s fingerprints were all over the place and her role appears all encompassing: she dealt with the Foundation’s accreditations; she went out to the regions to talk to beneficiaries and congressmen. She was identified by Rep. Antonio A. del Rosario, 1‘‘ District, Capiz as the person who offered him a 30% cut of any allocated fertilizer fund amounts as commission or “SOP,” an allegation she

(TSN, RLTUMAMPOS, X-2, January 20, 2009, 2:48PM, pp. 2-4; TSN, Caturla Xlll-2, January 20, 2009 4:53PM, pp. 3-5)

36

subsequently denied.43She was Ms. Marilyn Araos's former employer and was Mr. Jaime Paule's employee. She gave instructions to Mr. Jose Barredo Jr. regarding where to go and how much to deliver, as she took in other messengers/runners, including her own brother.44 She also did the project studies and is alleged by Ms. Gregorio to have helped her in solving the problem of how to falsify the entry of P105M in FESHAN's books when in fact she only sold P13M worth of fertilizer, etc. All told, Ms. Aytona figured practically in every facet of the operation. She was the one who knew everyone else: she introduced Ms. Araos to Mr. Paule, she dealt with Ms. Gregorio in the supply of fertilizers, she got instructions from Mr. Paule, she gave instructions to Mr. Barredo, she brought Ms. Gregorio and Mr. Antolin to Ms Llarena, and she contacted, and finalized the agreement to use the Foundation with, Mr. Joselito Flordeliza. She was the hub of the wheel.

MARILYN U. ARAOS Ms. Marilyn U. Araos admitted that she was an employee of Mr Jaime Paule, a claim which he denies. She also admitted that she opened the LANDBANK account upon the instructions of Mr. Paule, and that she was threatened with dismissal from employment if she did not do as i n ~ t r u c t e dWhile . ~ ~ she claimed that aside from the signing of checks she

43

(TSN, House Committee on Agriculture and Food Hearing, 18 November 2008, EPT /X-3) (TSN, Aliccatimbang 1-3, January 20, 2009, 5:53PM, p. 7) "TSN, RPAlger, XVII-1, January 20, 2009, 12:58PM, pp. 7-9

44

37

had nothing more to do with the LANDBANK account opened under her name,46it is apparent that she had encashed, at least, five checks totalling @3,172,995 (Annex L). Moreover, for someone whose only supposed area of assignments were Regions Ill and IV,4 7 .it .IS cause for wonder as to why she had been signing so many other Order Slips for other regions as well: Regions I I , V, VI, XI, and Xlll (Annex M). While Ms. Araos initially sought to invoke her right to silence and her right against self-incrimination, her candid responses to the questions propounded to her provided the Committee with a clearer picture of how the scheme was set in motion. She also provided a photograph of the party where she and the others were present.

HOW THE PACK OPERATED Mr. Jose Barredo Jr., a resource person and self-confessed runnerlfixerlmessenger of the whole operation described how the scheme operated during the investigations of the 13‘h Congress:

1. Ms. Marites Aytona and Mr. Barredo spoke to the officials in the chosen localities: in his words: “we told them there were funds for fertilizer and Aytona offered SOPS or commissions of 30%. Mayor Castillo

46

47

P

5

Million,

Mayor

Pagdanganan

Sinumpaang Salaysay of Marilyn U. Araos, January 26, 2009 Sinumpaang Salaysay of Marilyn Araos, January 26, 2009

@

3

Million,

38

Congresswoman Nicolas @3 Million. Nicolas refused the fertilizer, she chose cash instead;”

2. Once the LGU agreed, either (a) a MOA was prepared for execution

by the LGU and the DA RFU covering the area. Ms. Aytona then had the MOA notarized and brought to Bolante’s office, upon which funds were released to the DA RFU. Once the money was released to the DA RFU, Ms. Aytona or Mr. Barredo contacted FESHAN for delivery

,500 per litedbottle. of the bottled fertilizers at a cost of @I

3. The LGU then signed a delivery receipt and sales invoice from FESHAN. The DA-RD then prepared a check for the concerned LGU in accordance with the MOA, which the LGU used to pay FESHAN. Ms. Aytona then asked FESHAN to deposit in Mr. Barredo’s account,

monies for the “SOP” of the LGU officials.

4. The LGU representative then accompanied Mr. Barredo to the bank to withdraw the “SOP.” Mr. Barredo was paid a @lO,OOO salary and promised a 3 4 % commission as “SOP” for his efforts.48

Although this was was known as early as the 13‘h Congress, this was but a segment of the entire operation. Ms. Marites Aytona admitted, in her testimony, that this mode of operation only grossed between P30 to 48

Sinumpaang Salaysay, Jose Barredo, read in full at the February 2, 2005 hearing in the 13‘h Congress; Committee Report No. 54

39

However, the bank records of the Foundation, as submitted by Mr. Joselito Flordeliza, showed that more or less P56.6M passed through the Foundation's accounts.

At the same time, the Committee hearings enabled the current Congress to trace the malversation of an even greater amount - about R153M

- in this fertilizer distribution scheme. (Still and all, this is just a

fraction of the total P728M that was budgeted for this scheme.)

The

Committee hearings also provided a more complete and clearer picture of the scheme's operation and uncovered the participation of other key personalities, as follows:

On March 16, 2004, then DA Sec. Luis Lorenzo, affirming a previous delegation of authority pursuant to DA General Memorandum Order No. 2 (Series of 2001) issued by then DA Sec. Leonard0 Montemayor, assigned Usec. Jocelyn Bolante the authority to assess, evaluate and approve all requests for fund assistance under the Farm Inputs Program with LGUs and to deputize the DA RDs to enter into MOAS with concerned LGUs participating in that program (Annex N). Coincidentally, this was during the

2004 election season when there was a need to raise funds to help administration candidates and allies. Apparently, someone high up in the government totem pole came up with a scheme to use fertilizer funds for

49

TSN, Caturla, Xlll-2, January 20, 2009, 4:53pm, p. 6

40

electoral

3, 2004

purpose^.^' Notice must also be made that as early as February - the same day that the related SARO was issued and which

pre-dated Sec. Lorenzo’s delegation of authority to Bolante

- Bolante

was already issuing a funding request for the fertilizer scheme (Annex 0). Subsequent to that time, Ms. Marites Aytona was already offering Rep. del Rosario a 30% cut of any allocated fertilizer funds as “SOP.” At the same time, this illegal election fund-raising activity also presented an opportunity for corrupt individuals to also simultaneously enrich themselves. (It is

evident that these individuals had connections high up in the hierarchy for how could they have knowledge and access to SAROs and NCAs released by the DBM (as discussed below), if such were not the case?)

At the same time, Mr. Jaime Paule was part of a well-connected group that paid “advances” to a group supposedly close to DA Sec. Lorenzo. Those “advances” were supposed to ensure that Mr. Paule’s group would be able to corner lucrative projects that the DA was to undertake. Somewhere along the way, however, the recipients of those “advances” failed to deliver the projects to Mr. Paule’s group as promised proving that no honor can possibly exist among thieves. The group of Mr Paule subsequently met with Usec. Bolante at a Makati hotel to complain about broken promises and to seek assistance regarding, “papaano sila But, could a meeting to air out complaints also turn out to

(CR 54) 51TSN,MPMendoza, 111-1, December 17, 2008, 1 : O l pm, p. 10

50

41

be a meeting of a cabal to craft a plan and strategy on how to profit from an impending P728M release of funds?

Apparently, something productive turned out as a result of that meeting for Mr. Paule started seeking the assistance of Mr. Natalio Castillo Jr., and other possible investors, to secure financing for the

Mr

Castillo, wanting to verify Mr. Paule’s credibiliy even asked him how sure Mr. Paule was that he had control of the project. Mr. Paule then showed

Mr. Castillo a copy of a SARO for P728M (Annex P) and an NCA representing about 40% of the SARO’s value.53 Mr. Paule even said that, “kausap ko si Jocioc B ~ l a n t e ”When . ~ ~ Mr. Castillo turned down Mr. Paule’s offer, Mr. Paule asked Mr. Castillo about the possibility of having Mr. Paule referred to a foundation that would implement the said project.55

A foundation was then found

-

the National Organization for

Agricultural Enhancement and Productivity, Inc., which Mr. Joselito Flordeliza had previously organized in order to obtain projects from the DA designed to help farmers and to help tide himself over during a period of ~ n e m p l o y m e n t For . ~ ~ a promise of a 3% share of whatever funds would pass through the Foundation (made to him by Ms. Marites Aytona), Mr Flordeliza agreed. Thereafter, he turned over all control and supervision of the Foundation to Ms. Aytona

- and to whomever she was

TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 6 53 TSN, SNTUPAZ, XI-2, January 20, 2009, 2:58PM, p. 2 54 TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 8 ”TSN, SNTUPAZ, XI-2, January 20, 2009, 2:58PM, p. 3 56TSN,Caturla, Xlll-2, January 20, 2009, 4 5 3 PM, p. 3 52

reporting. All

42

that Mr. Flordeliza was asked to do was to sign the papers or documents involving the use of the Foundation and required in the pursuit of the activity. Mr. Flordeliza remembers signing about six to seven M O A S . ~ ~

Meanwhile, Ms. Aytona, through the direction of Mr. Paule, started going around the country to have the Foundation accredited with several RFUs of the DA so that it could qualify as an implementor of the fertilizer distribution scheme, and to talk to possible LGU benefi~iaires.~'

The group of Mr. Paule and Ms. Aytona then found a fertilizer supplier in FESHAN, owned by Ms. Julie Gregorio. They bought all of Ms. Gregorio's liquid fertilizer stock. Ms. Gregorio admitted that she sold each liter/bottle of fertilizer to the group at P I 5 0 each,5gwhich was later on resold to the government for P1,500 (as found by the commission on Audit) or a mark-up of 1,000%. They found also a financier to provide initial funding for the scheme in the person of Ms. Llarena, who issued checks amounting to P12,695,800.00 payable to FESHAN." And so the ball kept rolling.

57 TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 3 58TSN,SNTUPAZ, XI-I, January 20, 2009, 11:58AM, p. 6; TSN, M.R. CATADMAN, XV-I, January 20, 2009, 12:38PM, p. 11 59TSN,GUINHAWA, 111-2, January 20, 2009, 1:38PM, p. 3 60TSN,CGCastro XIV-1, January 20, 2009, 12:28PM, pp. 13-14

43

The group faced a predicament, however: where could they deposit the proceeds of the sale of all fertilizer stock to facilitate the malversation and launder the malversed funds? And how do they do it?

The group of Mr. Paule, Ms. Aytona (and now including Ms. Llarena and Ms. Gregorio) thus decided that the best way would be to have FESHAN enter into a Memorandum of Agreement with Araos Trading - an inactive but DTI registered firm organized by Ms. Marilyn Araos, Mr. Paule's employee.61 In that agreement, Araos Trading was tasked to sell the fertilizer

on behalf of FESHAN, who, strangely, would be prevented

from intervening in any of the Araos Trading's activities in pursuit of their agreement.62The Memorandum of Agreement was signed by Ms. Araos and Ms. Gregorio, and witnessed by Mr. Redentor Antolin and Ms. A y t ~ n aA. ~bank ~ account was then opened in the name of FESHAN at the LANDBANK Elliptical Road Branch, where the sole signatory was Ms. Araos. Ms. Gregorio claimed that at no time did she know how that account was used, and how much money went into it. It turns out that about P153M went into and out of that account until it was closed in 2006.64 The FESHAN fertilizer sale proceeds were deposited in this account, making it the primary banking facility used to launder and legalize the money that was realized from said sales.

61TSN,CGCastro, XIV-2, January 20,2009, 503pm, pages 10-11 TSN, JMBAISA, XVI-1, January 20, 2009, 12:48PM, p. 7 63 TSN, Gregorio, JADelacruz, IX-I, January 26, 2009, 1209pm, p.3 64TSN,RPAlger, XVII-1, January 20, 2009, 12:58PM, pp. 1-6 62

44

All in all, we were thus able to trace the E30M to 40M which

Ms.

Aytona admitted passed through the F ~ u n d a t i o n (more , ~ ~ accurately, the

P56 million that passed through the Foundation account) and the E153M that passed through the Araos LANDBANK account. These only account for P209M, which begs the question, “where is the rest?” Where is the bigger P519M amount? Where did it pass through, and how was it disposed? Who were involved in its disposition?

Our journey will never end if we assign ourselves that function today. We have found enough evidence for the prosecution arm of the government - the Ombudsman and the Department of Justice (DOJ) - to go forward. We are practically delivering to them the testimony and other records we have uncovered on a silver platter. All they have to do is plod on and do their constitutionally assigned task. After nearly 1,300 days since the Magsaysay resolution66they can do no less. The work involved was not easy. We felt, from the very beginning that it would be folly for us to expect many witnesses to break down and confess to everything. Alas,

such things only happen in movies and in Perry Mason television episodes. That being said, however, we have in our hearings elicited sufficient facts to conclude that undeniably many acts were committed that would subject

the actors to criminal prosecution. 65 66

TSN, MelNovero, XIV-1, December 22, 2008, 12:40 pm, p. 4 PS Res. No. 327, 13Ih Congress

45

It may be said that these events could not have possibly happened without the instigation, cooperation, or blessing of officers, and other persons very high up in the' bureaucracy and many have been already mentioned in the previous Congress's report (CR 54). We, in this report, have dealt with those that have appeared before us or upon whom our jurisdiction was able to reach, even as we adopt likewise the findings of CR54 of the 13'h Congress.

RECOMMENDATIONS 1. We recommend that the following be further investigated and /or charged:

A. Former Undersecretary Jocelyn 1. Bolante 1. PLUNDER

Section 2 of RA 7080 otherwise known as AN ACT DEFINING AND PENALIZING THE CRIME OF PLUNDER defines the crime of Plunder as: Section 2. Definition of the Crime of Plunder; Penalties - Any public officer who, by himself or in connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination or series of overt or criminal acts as described in Section l(d) hereof, in the aggregate amount or total value of at least Fifty million pesos (Php 50,000,000.00), shall be guilty of the crime of plunder and shall be punished by reclusion perpetua to death. Any person who participated with the said public officer in the commission of an offense contributing to the crime of plunder shall likewise be punished to such offense. In the imposition of penalties, the degree of participation and the attendance of mitigating and extenuating circumstances as

46

provided by the Revised Penal Code, shall be considered by the court. The court shall declare any and all ill-gotten wealth and their interests and other incomes and assets including the properties and shares of stock derived from the deposit or investment thereof forfeited in favor of the State.

Bolante is a principal since he cooperated in the commission of the offense by another act without which it would not have been accomplished as established by: The findings of Committee Report No. 54: “6. Strong probable criminal culpability is established, hence, criminal and administrative charges must be filed against: a. Undersecreta y Jocelyn Bolante,

xxx They must be charged for violating the Law on Plunder and violating the Anti-Graft and Corrupt Practices Act (Section 3 [e], Republic Act 3019). In the investigation conducted, from the testimonies of the witnesses who appeared before the committees and the records of the Commission on Audit, there appears massive misappropriation, diversion of funds, malversation of public and raids of the farmers’ money. In the case of Bolante, testimonies to the effect that he received, directly or indirectly, commission and percentage of pecunia y benefit from suppliers in connection with the contracts and transactions pertaining to the fertilizer funds have been adduced during the public hearings.’67

The findings of Task Force Abono: “8. The following persons are liable for their participation in the misuse of the P 14 million fertilizer funds disbursed for the purchase of the subject farm implements:

A. Public Officials I. Jocelyn “JOG-JOC”l. Bolante (former DA Undersecretay ) - For approving the issuance of Sub-Allotment Advise (SAA) and changing some of the original proponents listed in the Annex “A” of SARO E-04-00164 dated Februay 3. 2004; he also authorized the Landbank to debit MDS Account for LCV; he directed the distribution of the P723 million fertilizer funds; x x x JOmbudsman,Task Force Abono lnvestiqation Report p 17. 20 June 2006)

“Vll. RECOMMENDATlONS xxx 9. WHEREFORE, premises considered the undersigned investigators respectfully recommend: 61

13IhCongress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, p 33, 01 March 2006

47

xxx That a criminal complaint for violation Sections 3 (e) and (g) of Republic Act 3019 be filed against the following public and private Subjects: Jocelyn “Joc-JOC”Bolante, xxxide

Testimony of Regional Director Oblena connecting former Usec. Bolante to the National Organization of Agricultural Development and Productivity as found in Transcript of Stenographic Notes of the 2nd hearing: (Chairman Gordon to Oblena, JMBaisa, Xll-I, November 25, 2008 12:21 p.m., pp. 1-3.):

“THE CHAIRMAN. No, no, no. We’re going to that. I was going to go to the others. As I’ve told Senator Lacson early on, we were going to go to the others.

“I just want to get an answer from you. Sin0 ang nag utos sa iyo at papaano ginawa ang pag uutos sa iyo? We have to be fair here, hindi pwedeng hearsay, hindi pwedeng sabi nya, “0 ganito.” Sino? Sabi ng lawyer mo tell the truth. That’s amazing. (Laughter) “Sorry. We have to break the ice right now, “0,sige, go ahead. “MR. OBLENA. Nasabi ko na PO kanina, ang ating Usec. “THE CHAIRMAN. Very good. Okay, si Usec. Bolante ang tinutukoy mo. “Okay, papaano ka in-inform ni Usec. Bolante na palitan iyong NGO mo? “SEN. LACSON. What mode of communication? “THE CHAIRMAN. Telepono, sulat, text, telegram? Smoke signal? 0 may nagsabi para sa kanya? Mensahero? “MR. OBLENA. Natawagan PO niya ako.”

2. TECHNICAL MALVERSATION

Article 220 of the Revised Penal Code defines technical malversation or the illegal use of public funds or property as follows: Article 220. Illegal Use of public funds or property. -Any public officer who shall apply any public fund or property under his administration to any public use other than for which such fund or property were appropriated by law or ordinance shall suffer the penalty of prision correccional in its minimum period or a fine ranging from one-half to the total of the sum Ombudsman, Task Force Abono investigation Report, p 21, 20 June 2006

48

misapplied, if by reason of such misapplication, any damage or embarrassment shall have resulted to the public service. In either case, the offender shall also suffer the penalty of temporary special disqualification.

If no damage or embarrassment to the public service has resulted, the penalty shall be a fine from 5 to 50 per cent of the sum misapplied.

There appears to be technical malversation when former Usec. Bolante himself admitted in his 28 November 2008 testimony that the SARO required the purchase of farm inputs. However, instead of farm

inputs being purchased, the money allotted for the farm inputs were used to buy shredders instead.69 Clearly shredders are farm implements and not farm inputs; moreover, they are not the farm implements as defined under the Ginintuang Masaganang Ani program. Bolante is a principal by direct participation since he personally took part in the execution of the act as established by:

The findings of Task Force Abono: “Vll. RECOMlVIENDATlONS xxx 9. WHEREFORE, premises considered the undersigned investigators respectfully recommend:

That criminal complaint for violation of Article 220 of the Revised Penal Code be filed against the following public officials: Jocelyn “Joc-JOC”Bolante, x x x”~’

Testimony of former Usec. Bolante, SNTUPAZ XIV-1 November 28, 2008 2:28 P.M. pp. 1-8:

SNTUPAZ XIV-1 NOVEMBER 28,2008,2:29 P.M. pp 5-8 to RPAlger XV-1 November 28,2008,2:39 P.M., pp. 1 1-3 70 Ombudsman, Task Force Abono Investigation Report, p 21, 20 June 2006 69

49

“THE CHAIRMAN. Opo. Ulitin ko lang PO, mabilis lang. Samakatuwid ‘yong pong sinasabi natin - nabasa ninyo na PO yan? Ano PO ang sinasabi diyan sa SARO? “For the purpose of farm inputs,” hindi P O ba? ‘‘BOLANTE. Nakalagay PO dito. “for the purchase of farm inputs’’ as indicated in Annex “A”. “THE CHAIRMAN. Farm inputs. Opo. Ngayon PO mayroong pong advice ang SARO naman dito, “Please be advised that the amount of P728 million only was released to your agency. Details as follows: SARO Number, funding source, authorized...”- ang purpose “to cover the purchase of farm inputs” as indicated in Annex “A”. Opo? “BOLANTE. That is what is written in this document that you have given. “THE CHAIRMAN. Opo. Samakatuwid ‘yong 728 million pinabili para sa farm inputs pero maraming bumili ng bulldozer, may gumamit ng kalsada, may gumamit ng - hindi bulldozer, tractor at lahat, hindi ba? May mga shredders, tama PO ba ‘yon? Alam ninyo PO ba ang ibig sabihin ng technical malversation? Alam PO ba ninyo ang ibig sabihin ng technical malversation? Papaliwanag ko lang PO. Technical Malversation PO under our Revised Penal Code is, “an offender is a public officer“ kayo PO ay public officer. “He applies public funds or property under his administration to some public use” ginagamit para sa publiko, “public use for which public funds or property were applied is different from the purpose for which they were originally appropriated by law or by ordinance’: Ang original intention PO nito is para sa tinatawag nating hindi PO implements per0 inputs, hindi PO ba? “BOLANTE, Ang sa pagkakaintindi ko P O farm inputs - since the source of the fund ay nanggaling P O sa rice and corn at sa HVCC, it can actually be used for farm implements likewise. “THE CHAIRMAN. That is according to you? ‘BOLANTE. Right. That is my understanding PO. “THE CHAIRMAN. Parang yan ang research ninyo? Siguro ipatanong ninyo sa inyong abogado dahil ’yong farm inputs malinaw sinabi ninyo kanina pesticide, insecticide, madaling buhatin, pampataba ng lupa. ‘Yong farm implements PO malaki ang diprensya noon, bumibili kayo ng traktora, bumibili kayo ng ibang bagay at dalawang dokumento ‘yong kinuha ninyo na inauthorize kayo for farm inputs. lsang SARO galing sa DBM at saka Notice of Cash Allocation na pang inputs.”

Testimony of COA Director Flerida Jimenez November 25, 2008, 10:31 am, pg. 6):

(TSN,Caturla, 11-1,

“MS. JIMENEZ. Tama PO ‘yan, Your Honor. Na-account PO namin ‘yong 728 million per0 hindi PO ang ibig sabihin ay tama ‘yong pinagkagastusan ng 728. “SEN. ESCUDERO. Do you confirm, Ma’am, that based on your COA report, there are some items that are overpriced by 700 to 1,000 to 1,250 percent, that the foliar fertilizer was diluted in some respects, in fact, up to 42 percent, that the

50

farmer-beneficiaries listed as supposed to be recipients of the fund, at least, to the tune of 56 percent did not comply with certain circulars as to being qualified to receive such a fund from government? “MS. JIMENEZ. Tama PO yon lahat, Your Honor. “SEN. ESCUDERO. So, accounted man, illegal, bawal, at puwede nating sabihing labag sa batas ang ginawang pagre-release. “MS. JIMENEZ. May mga nakita PO kaming diperensiya, Your Honor, sa audit namin. I’

3. MONEYLAUNDERING

Section 4 of Republic Act 9194 or AN ACT AMENDING REPUBLIC ACT

NO. 9160,

OTHERWISE KNOWN AS

THE

“ANTI-MONEY

LAUNDERING ACT OF 2001 defines money laundering as: Section 4. Money Laundering Offense. - Money laundering is a crime whereby the proceeds of an unlawful activity as herein defined are transacted, thereby making them appear to have originated from legitimate sources. It is committed by the following: (a) Any person knowing that any monetary instrument or property represents, involves, or relates to, the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property. (b) Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above. (c) Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.

Clearly, the FESHAN account opened with the LANDBANK Elliptical Road Branch had been used to launder dirty money. Money stolen from the government amounting to P153M passed through that account. The

$/

51

opening and maintenance of that FESHAN account at LANDBANK were indispensable to the operations of the syndicate in this fertilizer fund scam. Bolante is a principal since he cooperated in the commission of the offense by another act without which it would not have been accomplished as established by: The findings with regard to his degree of participation in the fertilizer fund scam as found in Committee Report No. 54 in the 13'h Congress: "In the fertilizer fund scam, Undersecretaty Bolante is the declared architect. He designed it. He was its brains. It was he who worked with the DBM for the immediate release of the fund. It was him who prepared and submitted names who would become the fertilizer fund's proponents. It was Undersecretary Bolante who sent letters to various congressmen and local officials informing them of the availability of funds under the DA's GMA Project. It was him who directed these officials to coordinate with his office to discuss all the requirements to facilitate the said project fund. Undersecretary Bolante in the words of his then Chief of Sfae lbaira Poliquit, had a hand in determining how the GMA Project fund works and will be spent. And that although the DA has a list of officials whose "proposed projects" were to be funded by the fertilizer fund, Bolante was given the authority to drop them and replace them with others."7' "RECOMMENDATlONS

"7. Evidence submitted by the Commission on Audif, and the affidavifs and sworn testimonies of Antonio Salas and Board Member Rebecca Aquino, statements of Afty. Francisco Chavez and all farmers who appeared before the committees indicate the involvement of certain local government officials on the misuse and abuse of the fertilizer funds purportedly for their own benefit. It is therefore recommended that the Ombudsman together with the Anti-Money Laundering Council scrutinize the voluminous documents and trace its flow from the Regional Field Units of the Department of Agriculture to the local officials and file charges against them, whether elected or appointed, for violation of the Anti-Graft and Corrupt Practices Act. x x x ' " ~

4. False testimonylPerjury

71

131h Congress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, pp 19-20,Ol March 2006 72 131hCongress of the Republic of the Philippines, Zd Regular Session, Committee Report No. 54, pp. 34, 01 March 2006

52

A case had previously been filed against Bolante with the DOJ for violations

of

Article

Testimony/Perjury)

183

of

and Article

the

Revised

150 of the

Penal Revised

Code

(False

Penal Code

(Disobedience to Summons issued by the National Assembly).

B. FORMERASEC.IBARRA POLIQUIT 1. PLUNDER

He is a principal

since he cooperated in the commission of the

offense by another act without which it would not have been accomplished as established by: The findings of Committee Report No. 54: “Former Undersecretary lbarra Poliquit, per records submitted by the Commission on Audit, assisted Undersecretary Bolante in the approval of projects that would be accorded the fertilizer fund. A Substantial number of requests for the approval to issue sub-allotment advise (SAA) with corresponding cash allocation to DA-RFUs for the implementation of GMA Farm Inputs and Implements Program would indicate Undersecretary Poliquit as the requesting party. In one hearing, from the documents submitted by the COA, it was noted that lbarra Poliquit, then Assistant S‘ecretafy for Field Operations requested for the transfer of P89 million in Region IV alone; P5 million in Region V; and P22 million in Region Vll.”73

“RECOMMENDATIONS “7. Evidence submitted by fhe Commission on Audit, and the affidavits and sworn testimonies of Antonio Salas and Board Member Rebecca Aquino, statements of Atty. Francisco Chavez and all farmers who appeared before the committees indicate the involvement of certain local government officials on the misuse and abuse of the fertilizer funds purportedly for their own benefit. It is therefore recommended that the Ombudsman together with the Anti-Money Laundering Council scrutinize the voluminous documents and trace its flow from the Regional Field Units of the Department of

73

13IhCongress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, pp 20-21, 01 March 2006

53

Agriculture to the local officials and file charges against them, whether elected or appointed, for violation of the Anti-Graft and Corrupt Practices Act. x x x ’ ” ~

“6. Strong probable criminal culpability is established, hence, criminal and administrative charges must be filed against: xxx

c. Undersecretarylbarra Poliquit xxx

“Theymust be charged for violating the Law on Plunder and violating the Anti-Graft and Corrupt Practices Act (Section 3 [e],Republic Act 3019).

7n the investigation conducted, from the testimonies of the witnesses who appeared before the committees and the records of the Commission on Audit, there appears massive misappropriation, diversion of funds, malversation of public and raids o f the farmers’ money. In the case o f Bolante, testimonies to the effect that he received, directly or indirectly, commission and percentage of pecuniary benefit from suppliers in connection with the contracts and transactions pertaining to the fertilizer funds have been adduced during the public hearings.”75

The findings of Task Force Abono: “8. The following persons are liable for their participation in the misuse of the P 14 million

fertilizer funds disbursed for the purchase o f the subject farm implements: A. Public Officials xxx 6. lbarra Poliquit (DA Assistant Secretary) - for issuing a memorandum to Dir. Dennis 5. Araullo authorizing the latter to pay DA’s obligations to LCV thereby

actively parficipated in the misuse of the fertilizerfunds; XXX7+j

“VII.RECOMMENDATIONS

WHEREFORE, premises considered the undersigned investigators respectfully recommend: “9.

xxx

a criminal complaint for violation Sections 3 (e) and (g) of Republic Act 3019 be filed against the following public and private Subjects: x x x, lbarra Poliquit, X X X IOmbudsman, ~ ~ Task Force Abono lnvestiaation Report, P 21

b) That

20 June 2006)

74

13‘hCongress of the Republic of the Philippines, Znd Regular Session, Committee Report No. 54, pp 34, 01 March 2006 75 13‘hCongress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, p. 33,

01 March 2006 76 Ombudsman,

Task Force Abono Investigation Report, p. 18,20 June 2006

Ombudsman, Task Force Abono Investigation Report, p 21, 20 June 2006

’ I

54

To corroborate these findings: “SEN. LACSON. Pakibasa n’yo muna PO. Pakibasa nyo muna buo. “BOLANTE. Yeah From the Assistant Secretary for Field Operations, Memorandum for the Undersecretary. The subject is Request for Approval to issue the Sub-allotment Advise, or what we call the SAA, with corresponding cash allocation to RFU13 for the implementation of the farm input/farm implements programs. (Reading) “May we request for the approval to issue sub-allotment advice in the total amount of 13 million with corresponding cash for the above-mentioned purpose, broken down as follows: The province of Agusan del Sur, 5 million; Municipality of Nasipit, Agusan del Norte, 3 million; Butuan, 5 million for a total of 13 million. Said funds shall be covered by SARO, E-04-00164 dated February 3, 2004. “For your consideration and further instruction. lbarra T.C. Poliquit

Approved by authority Of the Secretary Jocelyn 1. Bolante Under~ecretary’”~

2. TECHNICAL MALVERSATION

He is a principal by direct participation since he personally took part in the execution of the.act as established by: The findings of Task Force Abono: “9. WHEREFORE, premises respectfully recommend;

considered

the

undersigned

investigators

“a) That criminal complaint for violation of Article 220 of the Revised Penal

Code be filed against the following public officials: x x x lbarra Poliquit xxx”’’

’* MPMendoza X-I November 25,2008 11:51 A.M. p 1 79

Ombudsman, Task Force Abono investigation Report, p 21, 20 June 2006

55

Testimony of former Usec. Bolante, SNTUPAZ XIV-1 November 28,2008 2:28 P.M. pp. 1-8

“THE CHAIRMAN. Opo. Ulitin ko lang PO, mabilis lang. Samakatuwid ’yong pong sinasabi natin - nabasa ninyo na PO yan? Ano PO ang sinasabi diyan sa SARO? “For the purpose of farm inputs,”hindi PO ba? “BOLANTE. Nakalagay PO dito. “for the purchase of farm inputs” as indicated in Annex ‘2”. “THE CHAIRMAN. Farm inputs. Opo. Ngayon PO mayroong pong advice ang SARO naman dito, “Please be advised that the amount of P728 million only was released to your agency. Details as follows: SARO Number, funding source, authorized...”- ang purpose “to cover the purchase of farm inputs” as indicated in Annex “A”. Opo? “BOLANTE. That is what is written in this document that you have given. “THE CHAIRMAN. Opo. Samakatuwid ‘yong 728 million pinabili para sa farm inputs per0 maraming bumili ng bulldozer, may gumamit ng kalsada, may gumamit ng - hindi bulldozer, tractor at lahat, hind; ba? May mga shredders, tama PO ba ‘yon? Alam ninyo PO ba ang ibig sabihin ng technical malversation? Alam PO ba ninyo ang ibig sabihin ng technical malversation? Papaliwanag ko lang PO. Technical Malversation PO under our Revised Penal Code is, “an offender is a public officer” kayo PO ay public officer. “He applies public funds or property under his administration to some public use” ginagamit para sa publiko, “public use for which public funds or property were applied is different from the purpose for which they were originally appropriated by law or by ordinance”. Ang original intention PO nito is para sa tinatawag nating hindi po implements per0 inputs, hindipo ba? “BOLANTE. Ang sa pagkakaintindi ko PO farm inputs - since the source of the fund ay nanggaling PO sa rice and corn at sa HVCC, it can actually be used for farm implements likewise. “THE CHAIRMAN. That is according to you? “BOLANTE. Right. That is my understanding PO. “THE CHAIRMAN. Parang yan ang research ninyo? Siguro ipatanong ninyo sa inyong abogado dahil ‘yong farm inputs malinaw sinabi ninyo kanina pesticide, insecticide, madaling buhatin, pampataba ng lupa. ‘Yong farm implements PO malaki ang diprensya noon, bumibili kayo ng traktora, bumibili kayo ng ibang bagav at dalawang dokumento Yong kinuha ninyo na in-authorize kayo for farm inp& lsang SARO galing sa DBM at saka Notice of Cash Allocation na pang inputs.

To corroborate the statement of Boiante:

56

MR. POLlQUlT. Sir, l would like to clarify or state the function of the Assistant Secretary for Field Operations. It is my duty also to indorse request for funding for the approval of the DA Secretary or the Undersecretary for Field Operations. SEN. LACSON. l know that. l readyour affidavit. MR. POLIQUIJ. Yes. So, that’s the function. I merely implement it or acted on my function.’”’

C. Ms. LEONICIAMARCO-LLARENA

1. PLUNDER She is a principal since she personally took part in the execution of the act as established by: 0

Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, 1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the early part of March 2004, l received a call from Ms. Aytona through my office coordinator Mae Espiritu, that l have. to be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Antolin, my vice president and l arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Philippines, Incorporated to be the sole signatory in said account and a Memorandum of Agreement the pertinent portions of shich are quoted below: “The Second Party shall supply and deliver the subject fertilizer on credit at PI50 per bottle as per proposal dated February 4, 2004 and hereto attached as Annex “A” “Number three. That the First Party shall issue the check payments to the Second Party for whatever deliveries to be made by the latter; “Number four. That by reason of this Joint Venture Agreement, the Second Party shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be MPMendoza X-I November 5, 2008 11:51 A.M pp2-3

57

secured by the First Party, which amount shall be paid upon collection of the covering purchase orders; “Number five. That the Second Party shall furnish to the First Party all the necessary documents needed to implement the completion of the whole projects like business permits, sales invoices, official receipts, and so forth; “Number six. That the First Party shall protect the interest of the Second Party in all projects to be undertaken during the effectivity of this agreement; “Number seven. The Second Party shall not be, however, allowed to intervene in all transactions and activities to be undertaken by the first party except othetwise, if her presence is needed. “THE SENATE PRESIDENT. Who is the First Party “MS. GREGORIO. The First Party is Araos Trading. “THE SENATE PRESIDENT. Araos Trading, Okay. “MS. GREGORIO. Opo.

7 n compliance with said MOA, Ms. Aytona, through her duly authorized representative, received from our office bank sales invoices, delivery receipt and official receipts on March 12-16, 2004 and April 2004.”

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms.Raquel Paz as found in the Transcript of Stenographic Notes of the 7th hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5: “THE CHAIRMAN. Okay.

,

. .nandito ba ‘yung bank manager?

“MS. GREGORIO. Nandyan. “THE CHAIRMAN. Sinong nakiia n‘yo - - nataiandaan n’yo ba nung pinirmahan ‘yan, ‘yang MOA na? “MS. PAZ. No, sir, Your Honor, hind; ko PO nakita na.. . “THE CHAIRMAN. Kayo ba ‘yung unang bank manager nung panahon na ‘yan? ”MS. PAZ. Yes, Your Honor. Hindi ko PO nakita ’yung pinirmahan nilang MOA. Basta PO ang pinresent (present) nila sa ’kin is the Secretary’s Certificate signed by the corporate secretary and attested by president PO of the.. . “THE CHAIRMAN. When you say “si1a”sino ‘yong mga ‘yon? “MS. PAZ. Si Marilyn Araos PO. “THE CHAIRMAN. lturo mo sa ‘kin si Marilyn Araos “MS. PAZ. ‘Yung nasa ... “THE CHAIRMAN. Tumayo ka nga.

58

“MS. PAZ. Nasa may right side PO ni Ms. Llarena “THE CHAIRMAN. “MS. PAZ. Araos).

Tapikin mo. Puntahan moY tapikin mo para sigurado tayo.

(At this juncture, witness approached and touched the shoulder of Ms

“THE CHAIRMAN.

S‘ya si Marilyn Araos. S’yang kasama. Sin0 pa ang kasama?

“MS. PAZ. Si Maritess Aytona. “THE CHAIRMAN. Puntahan mo si Maritess Aytona na kasama s’ya dun sa bangko. “MS. PAZ.

(Witness approached and tapped the shoulder of Ms. Aytona).

“THE CHAIRMAN. S’ya ‘yan Secretary’s Certificate.

si Maritess Aytona, kasama dun nung pinrisinta ‘yung

“MS. PAZ. Ang pagkakatanda ko P O . . .(Off-mike) “THE CHAIRMAN, Mike please. Hiramin mo muna kay Mr. Jocjoc Ang pagkakatanda ko PO, Your Honor, meron din “MS. PAZ. mga officials ng Feshan.

PO

silang kasama na

“THE CHAIRMAN. Sin0 PO ‘yon? “MS. PAZ.

Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio.

“THE CHAIRMAN. Julie Gregorio “MS. PAZ.

Opo, nandun PO s’ya.

“THE CHAIRMAN. “MS. PAZ.

Pakituro mo kung sin0 dit0 si Julie Gregorio?

(Witness approached likewise Ms. Gregorio and tapped her shoulder)

‘Yan si Julie Gregorio. Sin0 pa’ng nakakita mong nando’n na “THE CHAIRMAN. andito ngayon? Tumayo nga lang ‘yung mga Feshan officials. (At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of the Chairman). Sin0 pa? Sila lang PO kasi ‘yung talagang nakita ko. Hindi ko “MS. PAZ. kasama pa PO kasi silang iba. “THE CHAIRMAN.

PO

-

- may mga

00.

Per0 PO sila PO kasi ‘yung mga hinihingan ko ng mga identification cards “MS. PAZ. para PO i-confer dun sa signatures appearing on the Secretary’s Certificate. “THE CHAIRMAN. identification cards. “MS. PAZ.

At saka PO si Marlyn Araos.

“THE CHAIRMAN. “MS. PAZ.

So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng

At saka si Marlyn Araos..

Opo.

”THE CHAIRMAN.

., .nagbigay sila ng card

59

“MS. PAZ.

Opo.

“THE CHAIRMAN. Okay. Pakibalik langpo kayo dun sandali. Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang (signatory) puwede lang do’n, di ba si Marlyn Araos lang? “MS. PAZ.

Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. “MS. PAZ.

Si Marlyn Araos ang pangalan nya.

Opo.

“THE CHAIRMAN. “MS. PAZ. sa bank.

signatoring

So, s’ya lang ang nakakapirma?

S’ya PO Yung authorized based on the Secretary’s Certificate provided PO

“THE CHAIRMAN. Ang mga accounts na it0 umaabot ng humigit kumulang sa P I 5 0 million ang lumabas-pumasok dito. ‘Yan ang computation namin.. . “MS. PAZ.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

Yes, Your Honor, ‘yun PO ‘yung ipinrisinta (present) sa amin.

“THE CHAIRMAN.

“MS.PAZ.

Kalian sinarhan itong account na ito?

Sometime in July 2006, Your Honor.

“THE CHAIRMAN. account., . “MS. PAZ.

At itong account na it0 ay sarado na.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

...mga gano’n kalaki.

Sometime 2006 itong account na it0 isinara, wala ng pera, zero

Yes, Your Honor.”

Admission of Marilyn Araos regarding the circumstances of the account as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15: “THE CHAIRMAN. Ms. Marilyn Araos, pa’no ka nagkaron ng ganyang halagang 153 million pinapasok ‘yung pera sa ‘yo? “MS. ARAOS. Your Honor hindi ko sa ...

PO

alam na gano’n kalaking amount ang pumasok

“THE CHAIRMAN. Basta pumipirma ka lang. “MS. ARAOS. Yes. Your Honor.

xxx

60

“MS. ARAOS. Sorry PO. Ang sabi n’ya PO kasi sa akin nung nasa Land Bank PO kami actually silang dalawa PO ni Ms. Llarena ang unang nakita ko sa Bangko pagpasok. “THE CHAIRMAN. So, si Gregorio at saka si Llarena. “MS. ARAOS. Yes, opo. “THE CHAIRMAN. Pagkatapos? “MS. ARAOS. And then nung “THE CHAIRMAN. Ba’t ka nagpunta doh? Sino’ng nagsabing pumunta ka ro’n? “MS. ARAOS. As per instruction din PO ni Mr. Paule. “THE CHAIRMAN. Mr. Paule toldyou to go to the bank. “MS. ARAOS. Yes, Your Honor. “THE CHAIRMAN. All right. And then what happened? Nakita mo si Llarena, nakita mo si Gregorio, then what happened? “MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko, so sabi sa ‘kin ni Ms. Gregorio-nagtanong PO ako kung ano’ng ginagawa ko dit0 kasi hindi ko po talaga alam, as per instruction’lang ni Mr. Paule, magmi-meet kayo ro’n ni Ms. Llarena and Ms. Gregorio. So, nung nando’n na PO ako sa bangko pagpasok ko, nakita ko PO silang dalawa nagu-usap together with Ms. Raquel, ‘yung bank manager PO. So nung pagpasok ko PO, Your Honor, nakita ko silang dalawa, ‘yun nga PO nagtanong ako kay Ms. Gregorio kung ano’ng ginagawa ko rito. So, ang sabi n’ya, “Mag open tayo ng account.” “THE CHAIRMAN. Sino, si Ms. Gregorio? “MS. ARAOS. Yes, Your Honor “THE CHAIRMAN. 00. “MS. ARAOS. And then ang sabi n’ya sa ‘kin, ‘Ikaw ang magiging signatoty.”

2. MONEYLAUNDERING

She is a principal since she cooperated in the commission of the offense by another act without which it would not have been accomplished as estdblished by: 0

Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,

61

1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio dated January 20, 2009; “GREGORIO. x x x In the early part of March 2004, I received a call from Ms. Aytona through my office coordinator Mae Espiritu, that I have to be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Antolin, my vice president and I arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Philippines, Incorporated to be the sole signatory in said account and a Memorandum of Agreement the pertinent portions of shich are quoted below: “The Second Party shall supply and deliver the subject fertilizer on credit at PI50 per bottle as per proposal dated February 4, 2004 and hereto attached as Annex “A” “Number three. That the First Party shall issue the check payments to the Second Party for whatever deliveries to be made by the latter;. “Number four. That by reason of this Joint Venture Agreement, the Second Party shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be secured by the First Party, which amount shall be paid upon collection of the covering purchase orders; “Number five. That the Second Party shall furnish to the First Party all the necessary documents needed to implement the completion of the whole projects like business permits, sales invoices, official receipts, and so forth; “Number six. That the First Party shall protect the interest of the Second Party in all projects to be undertaken during the effectivity of this agreement; “Number seven. The Second Party shall not be, however, allowed to intervene in all transactions and activities to be undertaken by the first party except otherwise, if her presence is needed. “THE SENATE PRESIDENT. Who is the First Party “MS. GREGORIO. The First Party is Araos Trading. “THE SENATE PRESIDENT. Araos Trading, Okay. “MS. GREGORIO. Opo. “In compliance with said MOA, Ms. Aytona, through her duly authorized representative, received from our office bank sales invoices, delivery receipt and official receipts on March 12-16, 2004 and April 2004.“

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVll-I January 20, 2009, 12:58 p.m., pp.1-5: “THE CHAIRMAN.

.. .nandito ba ’yung bank manager?

62

Okay. “MS. GREGORIO. Nand‘yan. “THE CHAIRMAN. Sinong nakita n’yo ‘yang MOA na?

- natatandaan

n’yo ba nung pinirmahan ‘yan,

“MS. PAZ. No, sir, Your Honor, hindi ko PO nakita na.. . “THE CHAIRMAN. Kayo ha ‘yung unang hank manager nung panahon na ‘yan? Yes, Your Honor. Hindi ko po nakita ’yung pinirmahan nilang MOA. “MS. PAZ. Basta PO ang pinresent (present) nila sa ‘kin is the Secretary’s Certificate signed by the corporate secretary and attested by president PO of the... “THE CHAIRMAN. When you say “si1a”sino ‘yong mga ‘yon? “MS. PAZ. Si Marilyn Araos PO. “THE CHAIRMAN. lturo mo sa ‘kin si Marilyn Araos. “MS. PAZ. ‘Yung nasa ... “THE CHAIRMAN. Tumayo ka nga. “MS. PAZ. Nasa may right side PO ni Ms. Llarena “THE CHAIRMAN. “MS. PAZ. Araos).

Tapikin mo. Puntahan mo’t tapikin mo para sigurado tayo.

(At this juncture, witness approached and touched the shoulder of Ms

”THE CHAIRMAN.

S’ya si Marilyn Araos. S’yang kasama. Sin0 pa ang kasama?

“MS. PAZ. Si Maritess Aytona “THE CHAIRMAN. “MS. PAZ.

Puntahan mo si Maritess Aytona na kasama s’ya dun sa hangko.

(Witness approached and tapped the shoulder of Ms. Aytona).

“THE CHAIRMAN. S’ya ‘yan si Maritess Aytona, kasama dun nung pinrisinta ‘yung Secretary’s Certificate. “MS. PAZ. Ang pagkakatanda ko P O . . .(Off-mike) “THE CHAIRMAN. Mike please. Hiramin mo muna kay Mr. Jocjoc “MS. PAZ. Ang pagkakatanda ko PO, Your Honor, meron din PO silang kasama na mga officials ng Feshan. “THE CHAIRMAN. Sin0 PO yon? “MS. PAZ.

Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio.

“THE CHAIRMAN. Julie Gregorio. “MS. PAZ.

Opo, nandun PO sya.

“THE CHAIRMAN. “MS. PAZ.

Pakituro mo kung sin0 dit0 si Julie Gregorio?

(Witness approached likewise Ms. Gregorio and tapped her shoulder).

63

“THE CHAIRMAN. ’Yan si Julie Gregorio. Sin0 pa’ng nakakita mong nandoh na andito ngayon? Tumayo nga lang ’yung mga Feshan officials. (At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of the Chairman). Sin0 pa? Sila lang po kasi ‘yung talagang nakita ko. Hindi ko “MS. PAZ. kasama pa po kasi silang iba. “THE CHAIRMAN.

PO -

- may mga

00.

Per0 po sila po kasi ‘yung mga hinihingan ko ng mga identification cards “MS. PAZ. para PO i-confer dun sa signatures appearing on the Secretary’s Certificate.

“THE CHAIRMAN. identification cards. “MS. PAZ.

At saka PO si Marlyn Araos.

“THE CHAIRMAN. “MS. PAZ.

At saka si Marlyn Araos

Opo.

“THE CHAIRMAN. “MS. PAZ.

So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng

.. .nagbigay sila ng card,

Opo.

“THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandal;. Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang (signatory) puwede lang do’n, di ba si Marlyn Araos lang? “MS. PAZ.

Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN.

“MS. PAZ.

Si Marlyn Araos ang pangalan n’ya

Opo.

“THE CHAIRMAN. “MS. PAZ. sa bank.

signatoring

So, s’ya lang ang nakakapirma?

S’ya po ‘yung authorized based on the Secretary‘s Certificate provided po

Ang mga accounts na it0 umaabot ng humigit kumulang sa PI50 “THE CHAIRMAN. million ang lumabas-pumasok dito. ‘Yan ang computation namin.. . “MS. PAZ.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

.

Yes, Your Honor, ‘yun PO ‘yyung ipinrisinta (present) sa amin

“THE CHAIRMAN. “MS. PAZ.

At itong account na it0 ay sarado na.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

.. .mga gano’n kalaki.

Kalian sinarhan [tong account na ito?

Sometime in July 2006, Your Honor:

64

“THE CHAIRMAN. account.. . “MS. PAZ. b

Sometime 2006 itong account na it0 isinara, wala ng pera, zero

Yes, Your Honor.”

Being a beneficiary of the account up (see ANNEX L)

.-1

and about W6Million

3. FALSETESTIMONY/PERJURY IN SOLEMN AFFIRMATION

The Revised Penal Code defines false testimony/perjury in solemn affirmation as follows: ARTICLE 183. False testimony in other cases and perjury in solemn affirmation. -The penalty of arrest0 mayor in its maximum period to prision correccional in its minimum period shall be imposed upon any person who, knowingly making untruthful statements and not being included in the provisions of the next preceding articles, shall testify under oath, or make an affidavit, upon any material matter before a competent person authorized to administer an oath in cases in which the law so requires. “Any person who, in case of a solemn affirmation made in lieu of an oath, shall commit any of the falsehoods mentioned in this and the three preceding articles of this section, shall suffer the respective penalties provided therein.”

The elements of perjury are:

1, The accused made a statement under oath or executed an affidavit upon a material matter; 2.The statement or affidavit was made before a competent officer authorized to receive and administer oath;

3. In that statement or affidavit, the accused made a wilful and deliberate assertion of a falsehood; and 4. The sworn statement or affidavit containing the falsity is required by law or made for a legal purpose

Taking into consideration the testimonies of Ms. Marites Aytona, Mr. Jose B. Barredo, Jr.,

Ms. Leonicia Marco-Llarena and Ms. Julie M.

65

Gregorio, the fact has been established that all of these witnesses have committed false testimony/perjury in solemn affirmation. Pointed out were the allegations in Ms. Leonicia Marco-Llarena’s affidavit which were in contradiction or inconsistent with that of Ms. Gregorio’s affidavit.” According to

Ms

Llarena, she personally did not make any direct

dealings with Feshan Philippines nor with Ms. Gregorio. Ms Llarena said she never went to the office of Feshan Philippines.”

Ms. Llarena further said the first time she saw Ms. Gregorio was when the latter, together with Ms. Aytona and Mr. Antolin, came to visit her office.83 On the other hand, Ms. Gregorio in her sworn affidavit alleged that

Ms. Llarena, which Gregorio referred to as Ms. Necy, had expressed to her her desire to buy fertilizers from Feshan Philippines. According to Ms. Gregorio, she and Ms. Necy in fact were able to arrive at certain terms and conditions.

4. DISOBEDIENCE TO SUMMONS ISSUED BY THE NATIONAL ASSEMBLY

Article 150. Disobedience to summons issued by the National Assembly, its committees or subcommittees, by the Constitutional Commissions, its committees, subcommittees or divisions. -The penalty of arresfo mayor or a 81

TSN, JADela Cruz, 11-1, December 22, 2008, 10:40 a.m. TSN, Ctsotto, VI-I, December 22, 2008, 11:20 a.m. 83TSN,CGCastro, Vlll-I, December 22, 2008, 11:40 a.m. 82

,

66

fine ranging from two hundred to one thousand pesos, or both such fine and imprisonment, shall be imposed upon any person who, having been duly summoned to attend as a witness before the National Assembly (Congress), its special or standing committees or subcommittees, the Constitutional Commissions and its committees, subcommittees, or divisions, or before any commission or committee chairman or member authorized to summon witnesses, refuses, without legal excuse, to obey such summons, or being present before any such legislative or constitutional body or official, refuses to be sworn or placed under affirmation or to answer any legal inquiry or to produce any books, papers, documents, or records in his possession, when required by them to do so in the exercise of their functions. The same penalty shall be imposed upon any person who shall restrain another from attending as a witness, or who shall induce disobedience to a summons or refusal to be sworn by any such body or official. ( A s amended by Com. Act No. 52.)

Ms. LLarena disobeyed the subpoena for the December

10,

2008 hearing. (ANNEX Q)

D. Ms. DEON~LLA “JULIE”MISOLA-GREGORIO 1. PLUNDER She is a principal since she personally took part in the execution of the act as established by:

* Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, 1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio dated January 20, 2009: “MS. GREGORIO. _ _ _ (7) The second party shall not be, however, allowed to intervene in all transactions and activities to be undertaken by the first pady except otherwise, if her presence is needed. “THE SENATE PRESIDENT. “MS. GREGORIO.

Who is the first party?

The first party is Araos Trading.

“THE SENATE PRESIDENT.

Araos Trading, okay,

“MS. GREGORIO. Opo. In compliance with said MOA, Ms. Aytona, through her duly authorized representative, received from our office blank sales invoices, delivery receipts and official receipts on March 12-16, 2004 and April 2004.

“Soon, Ms. Aytona, through the order slips dulq signed either by Marilyn Araos, Cecile Clemente and Bing Salvador started picking up from my warehouse the

67

corresponding fertilizer from March 15, 2004 to May 29, 2004 through their corresponding trucking services. "In the meantime, the Land Bank checks representing the payment were delivered to our office either by the employee of Ms. Llarena or Ms. Aytona except the P500,OOO.OO cash which was delivered to me personally by Marilyn Araos, a representative of Ms. Aytona on April 7, 2004. "On December 23, 2008, one day after I testified, I was conscientiously moved to spill the beans so I requested Land Bank at Quezon City Extension Office, Elliptical Road, Diliman, Quezon City, to furnish me copies of the bank statement of the account opened on Mach 9, 2004 by Feshan through Ms. Araos. Luckily, on January 15, 2009, said bank furnished me 41 pages of the Bank Statement. It was my first time to have access on that account and I found out that the amount of P152, 776,208.00 was deposited from March 9, 2004 to January 31, 2006. "The foregoing constitutes the true and actual participation that transpired between Feshan and Ms. Aytona/Ms. Llarena/Ms. Araos regarding this transaction and for this purpose I hereby state categorically the following: (a) Feshan, nor any of its officers or employees, were never knowingly involved in any scheme or device to defraud the government. While it acknowledges its grievous error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the company name, commercial documents, and its fertilizer license, as well as allowing the use of its corporate papers in opening a bank account for the benefit of persons not connected with Feshan, its actions were guided solely by its desire to dispose of its fertilizer stocks and to minimize the losses it was then suffering from the fertilizer line of its business. (b) Feshan was never a party to any overpricing of the fertilizer in question. The MOA and Order Slips are hard evidence to support this. It was sold at P150.00/bottle because of the voluminous orders and there would be no more promotional or marketing expenses to be incurred. (c) Feshan never received any payment beyond what was specified in the MOA and delivery receipts which showed a total of P13, 513,800.00. (d) Feshan nor any of its officers/employees never received any monies from Land Bank of the Philippines Current Account No. 1032-IC-0331-101604 opened on March 9, 2004, nor benefited from the same in any way, form or manner. (e) While the names of the alleged recipients of the fertilizers were specified in the order slips, there was no way for Feshan or its officers to confirm the truthfulness or accuracy of the same, nor was there any need to do the same since Feshan had executed a MOA undertaking..."

(Annex R) e

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7'h hearing: RPAlger XVII-1 January 20, 2009, 1 2 5 8 p.m., pp.1-5: "THE CHAIRMAN. Mike please. Hiramin mo muna kay Mr. Jocjoc "MS. PAZ. Ang pagkakatanda ko kasama na mga officials ng Feshan. "THE CHAIRMAN. Sin0 PO 'yon?

PO,

Your Honor, meron din

PO

silang

68

“MS.’ PAZ.

Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio

“THE CHAIRMAN. Julie Gregorio. “MS. PAZ.

Opo, nandun PO s’ya

“THE CHAIRMAN. “MS. PAZ. shoulder).

Pakituro mo kung sin0 dit0 si Julie Gregorio?

(Witness approached likewise Ms. Gregorio and tapped her

“THE CHAIRMAN. ‘Yan si Julie Gregorio. Sin0 pa’ng nakakita mong nando’n na andito ngayon? Tumayo nga lang ‘yung mga Feshan officials. (At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of the Chairman). “Sin0 pa? “MS. PAZ. Sila lang PO kasi ’yung talagang nakita ko. Hindi ko PO - - may mga kasama pa PO kasi silang iba. “THE CHAIRMAN.

00.

”MS. PAZ. Per0 PO sila PO kasi ‘yung mga hinihingan ko ng mga identification cards para PO i-confer dun sa signatures appearing on the Secretary’s Cerfificate. “THE CHAIRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng identification cards.”

Admission of Marilyn Araos regarding the circumstances of the account as found in the Transcript of Stenographic Notes of the 7Ih hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15: Ms. Marlyn Araos, pa’no ka nagkaro’n ng ganyang halagang “THE CHAIRMAN. PI53 million pinapasok yung pera sa’yo? Your Honor, hindi ko PO alam na gano’n kalaking amount ang

“MS. ARAOS. pumasok sa.. . “THE CHAIRMAN. “MS. ARAOS.

Basta pumipirma ka lang.

Yes, Your Honor.

“THE CHAIRMAN.

Pirma ka lang ng pirma,

xxx “THE CHAIRMAN.

Uh-huh.

”MS. ARAOS. So, sabi ko PO, I refused, Your Honor, s’yempre, hindi ko PO kasi - - naman ako ‘yung may-ari nung Feshan Philippines, how come na ako PO ang magiging sole signatory nila. “THE CHAIRMAN.

Uh.

69

So - - and then

“MS. ARAOS. kasi.. . “THE CHAIRMAN.

PO

yon.

Na-threat

PO

ako kasi, Your Honor,

Ano’ng tinreten (threaten)? Ano’ng ibig sabihin na na-threat

ka? “MS. ARAOS. Na-threat PO kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung hindi ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko. “THE CHAIRMAN. So, nagtatrabaho ka hay Paule? “MS. ARAOS.

Yes, Your Honor.

“THE CHAIRMAN.

“MS. ARAOS.

Commission lang PO. Commission saan? Commission ng ano?

‘‘THE CHAIRMAN. “MS. ARAOS.

Commission PO dun sa account na binigay n’ya sa ‘kin.

“THE CHAIRMAN. ”MS. ARAOS.

‘Yung account na tinutukoy natin?

No, hindi PO.

“THE CHAIRMAN. “MS. ARAOS.

“MS. ARAOS.

. . .taga-kuha ng mga proponent?

Sa LGU, Your Honor.

“THE CHAIRMAN.

Sa LGU.

Opo.

“THE CHAIRMAN. do’n? “MS. ARAOS.

Ah, ikaw ang taga-Region 111 and IV ...

Yes.

“THE CHAIRMAN.

“MS.ARAOS.

Ano?

Binigyan n’ya PO ako ng assignment sa Region 111 and IV.

“THE CHAIRMAN.

“MS.ARAOS.

May sweldo ka kay Paule?

So, may commission ka do’n. Magkano ang commission mo

One percent lang PO, Your Honor.

“THE CHAIRMAN. One percent. Kung ano’ng mapirmahan ng proponent-LGU ‘yon ang makukuha mo, one percent? “MS. ARAOS.

Yes, Your Honor.

“THE CHAIRMAN. Okay, Nung pumirma ka, pa’no mo ngayon, wini-withdraw ‘yung pera? Sino’ng nagsasabi sa yong mag-withdraw ng pera? “MS. ARAOS.

Hindipo kasi ako nagwi-withdraw, Your Honor, eh.

“THE CHAIRMAN. ”MS. ARAOS.

0 papano?

Wala PO akong winithdraw (withdraw).

“THE CHAIRMAN.

0, eh, ikaw ang nakapirma doon, eh.

70

“MS. ARAOS. Yes, Your Honor, per0 ang tao PO kasi ni Ms. Gregorio ang nagwi-withdraw. Hindi ko PO talaga alam, Your Honor, kung sino’ng nagwiwithdraw. Kasi nung nasa bangko PO ako, Your Honor, hindi ko PO nahawakan ang checkbook. Pinapipirma lang PO nila ako ng four blank checks ni Ms. Gregorio ang then nung that time PO nung pumirma na ko - - may trabaho PO kasi ako no’n kaya ang sabi ko, “Ma’am, baka puwede mauna na ‘ko,” kasi sabi ko, “Meron pa PO akong aasikasuhin sa labas.” So, nung pinirmahan ko PO ‘yung tseke sa kanila. Hindi ko na po alam kung sin0 ang humawak. “THE CHAIRMAN. Napakatapang mo naman na pipirma ka ng blank check na hindi mo account. “MS. ARAOS. Eh, ‘yun nga PO, Your Honor, sabi ko PO nung una ako po’y nathreaten dahil that time, Your Honor, kasi wala PO akong trabaho... Magkano ang nakuha mo sa totality nung one percent?

“THE CHAIRMAN.

Sa LGU PO kasi ’yung hinawakan ko, Your Honor, sa Region 111 “MS. ARAOS. PO, tatlong municipalities. “THE CHAIRMAN. “MS. ARAOS.

Magkano ‘yon?

Hindi ko PO matandaan kung magkanong exact amount.

“THE CHAIRMAN. “MS. ARAOS.

More or less PO, ‘yung dun sa Region Ill and IV nasa 15 M

“THE CHAIRMAN. “MS. ARAOS.

PO.

Fifteen million. So, one percent ang nakuha mo do’n?

Yes, Your Honor.

“THE CHAIRMAN. “MS. ARAOS.

Subukan mo.

Checking account.

Opo.

“THE CHAIRMAN. So, ang pinirmahan mo checking - - binigyan ka ka’gad ng checkbook ni Raquel? “MS. ARAOS. Ah, hindi PO, Your Honor, pinapirmahan pa n’ya pa ‘ko ng signature card at saka deposit slip. And then I asked the manager PO kung ano pang kailangan. So, ang sabi n’ya sa ‘kin, “Wala na, wala na tayong... “THE CHAIRMAN. So, hindi nakatapos ang bangko sa araw na ‘yon sapagkat nagpirma ka lang ng signature check at saka ‘yung record mo.. . “MS. PAZ.

Yes, Your Honor.

“THE CHAIRMAN. blank checks?

So, pagkatapos no’n nakita mong pumirma s’ya ng apat na

Hindipo, YourHonor. Kasipo ang lastpo ‘yung inabot ko lang PO “MS. PAZ. sa kanyang checkbook, ni-receive n’ya PO ‘yon dun sa acknowledgement receipt.”

2. MONEYLAUNDERING

71

She is a principal since she personally took part in the execution of the act as established by: Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘hhearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, 1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio dated January 20, 2009; “MS. GREGORIO. . . . (7) The second party shall not be, however, allowed to intetvene in all transactions and activities to be undertaken by the first party except otherwise, if her presence is needed. “THE SENATE PRESIDENT. “MS. GREGORIO.

Who is the first party?

The first party is Araos Trading.

“THE SENATE PRESIDENT.

Araos Trading, okay.

“MS. GREGORIO. Opo. In compliance with said MOA, Ms. Aytona, through her duly authorized representative, received from our office blank sales invoices, delivery receipts and official receipts on March 12-16, 2004 and April 2004. ,

.

“Soon, Ms. Aytona, through the order slips duly signed either by Marilyn Araos, Cecile Clemente and Bing Salvador started picking up from my warehouse the corresponding fertilizer from March 15, 2004 to May 29, 2004 through their corresponding trucking services. “In the meantime, the Land Bank checks representing the payment were delivered to our office either by the employee of Ms. Llarena or Ms. Aytona except the P500,OOO.OO cash which was delivered to me personally by Marilyn Araos, a representative of Ms. Aytona on April 7, 2004. “On December 23, 2008, one day after I testified, 1 was conscientiously moved to spill the beans so I requested Land Bank at Quezon City Extension Office, Elliptical Road, Diliman, Quezon City, to furnish me copies of the bank statement of the account opened on Mach 9, 2004 by Feshan through Ms. Araos. Luckily, on January 15, 2009, said bank furnished me 41 pages of the Bank Statement. It was my first time to have access on that account and I found out that the amount of P152,776,208.00 was deposited from March 9, 2004 to January 31, 2006. “The foregoing constitutes the true and actual participation that transpired between Feshan and Ms. Aytona/Ms. Llarena/Ms. Araos regarding this transaction and for this purpose I hereby state categorically the following: (a)

Feshan, nor any of its officers or employees, were never knowingly involved in any scheme or device to defraud the government. While it acknowledges its grievous error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the company name, commercial documents, and its fertilizer license, ,as well as allowing the use of its corporate papers in opening a bank account for the benefit of persons not connected with Feshan, its actions were guided solely by its desire to dispose of its fertilizer stocks and to minimize the losses it was then suffering from the fertilizer line of its business.

72

Feshan was never a party to any overpricing of the fertilizer in question. The It was sold ai MOA and Order Slips are hard evidence to support this. Pl50.00/bottle because of the voluminous orders and there would be no more promotional or marketing expenses to be incurred. Feshan never received any payment beyond what was specified in the MOA and delivery receipts which showed a total of P13,513,800.00. Feshan nor any of its officerdemployees never received any monies from Land Bank of the Philippines Current Account No. 1032-IC-0331-101604 opened on March 9, 2004, nor benefited from the same in any way, form or manner. While the names of the alleged recipients of the fertilizers were specified in the order slips, there was no way for Feshan or its officers to confirm the truthfulness or accuracy of the same, nor was there any need to do the same since Feshan had executed a MOA undertaking...”

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5: “THE CHAIRMAN: Pakituro mo kung sin0 dit0 si Julie Gregorio? (Ms. Paz likewise approached Ms. Gregorio and tapped her shoulder.) “THE CHAIRMAN: ‘Yan si Julie Gregorio. Sin0 pa’ng nakikita mong nando’n na nandito ngayon? Tumayo nga lang ‘yung mga Feshan officials. (At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of the Chairman). “Sin0 pa? “MS. PAZ. Sila lang PO kasi yung talagang nakita ko. Hindi ko kasama pa PO kasi silang iba.

PO

- may mga

“THE CHAIRMAN. 00. “MS. PAZ. Per0 PO sila PO kasi ‘yung mga hiningan ko ng mga identification cards para PO i-compare dun sa signatures appearing on the Secretary’s Certificate. “THE CHAIRMAN . So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng identification cards. “MS. PAZ. At saka PO si Marilyn Araos.”

Sinumpaang Salaysay of Marilyn Araos submitted on January26, 2009

3. TAXEVASION

73

The National Internal Revenue of 1997 defines tax evasion as follows: SECTION 254. Attempt fo Evade or Defeat Tax. - Any person who willfully attempts in any manner to evade or defeat any tax imposed under this Code or the payment thereof shall, in addition to other penalties provided by law, upon conviction thereof, be punished by a fine of not less than Thirty thousand pesos (P30,OOO) but not more than One hundred thousand pesos (P100,OOO) and suffer imprisonment of not less than two (2) years but not more than four (4) years: Provided, That the conviction or acquittal obtained under this Section shall not be a bar to the filing of a civil suit for the collection of taxes.

Taking into consideration the testimony of Ms. Julie M. Gregorio, President of FESHAN, the fact has been established that she did not pay

the 'proper taxes for the fertilizer transactions. Instead, she availed herself of tax amnesty and paid only about half a million pesos In her testimony, Ms. Julie Gregorio said that her company, FESHAN, was able to sell a total of FIFTY MILLION PESOS worth of fertilizers to Ms.

(Ms. Gregorio pointed to Ms. Llarena as the one Leonicia Mar~o-Llarena.'~ who paid for the f e r t i l i ~ e r . ) ~ ~

Ms. Gregorio said the payment was made in checks amounted to TWELVE MILLION PESOS and the remaining THIRTY EIGHT MILLION PESOS was paid in cash.86 But according to the COA report, about ONE HUNDRED FIVE MILLION PESOS of fertilizers were bought from FESHAN.87

84TSN,LDGalapon, IX-I, December 22,2008, 1150 a.m. "TSN, LDGalapon, IX-I, December 22, 2008, 11:50 a.m. 86TSN,LDGalapon IX-I, December 22,2008, 11:50 a.m.; TSN, L.Sapida, X - I , December 22,2008, 12:OO 87

noon TSN, LDGalapon, IX-I, December22, 2008, I t 5 0 a.m.

74

It was pointed out to Ms. Gregorio that the report of the COA found that out of the 728 Million Pesos, FESHAN got a total transaction of ONE HUNDRED FIVE MILLION PESOS worth of fertilizers.88 However, Ms. Gregorio said the total transaction FESHAN had was only FIFTY MILLION PESOS more or less.89

Ms. Gregorio denied any knowledge as to who received or to where the remaining FIFTY FIVE MILLION PESOS went.” Ms. Gregorio claimed that she paid the proper taxes.” In answer to a query she admitted that FESHAN’s actual sale was only FIFTY MILLION PESOS worth of fertilizers. However, FESHAN received a total amount of ONE HUNDRED FIVE MILLION PESOS from the DA. In other words, there was an excess of FIFTY FIVE MILLION PESOS.” Ms. Gregorio explained that the ONE HUNDRED FIVE MILLION PESOS was entered in FESHAN’s book of accounts as Ms. Gregorio further explained she was advised to enter the ONE HUNDRED FIVE MILLION PESOS in their book of accounts and applied for tax a m n e ~ t y . ’ ~

88

TSN, Guinhawa, XI-I, December 22, 2008 12:lO p.m. TSN, Guinhawa, XI-I, December 22,2008, 12:lO p.m. ”TSN, Guinhawa, XI-I, December 22, 2008, 12:lO p.m. 91 TSN, L.Sapida, X-I, December22, 2008, 12:OO nn ”TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m. 93 TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m. g4TSN,MTCajandab, 1-2, December22, 2008, 1:20 p.m. 89

75

Ms. Gregorio disclosed that it was Ms. Aytona who told her to hire an accountant. It was this accountant who advised Gregorio to enter in their book of accounts the ONE HUNDRED FIVE MILLION PESOS instead of the FIFTY MILLION PESOS only.95

Ms. Gregorio further revealed that Ms. Aytona and the accountant were the ones who made the c o m p ~ t a t i o n . ~ ~ Ms. Gregorio affirmed that the real or actual sale of FESHAN was only FIFTY MILLION PESOS though the actual amount received was ONE

H U N D R E D FIVE MtLLlON PESOS.” Ms. Gregorio said that her corporation did not pay the income tax covering the said transaction. She disclosed that they availed of the tax amnesty since the 105 million pesos was not the actual sales they had.g8 In spite of all these, however, note must be made that Ms Gregorio recanted later her statement and said that in reality she sold the fertilizer

50 per bottle/liter. only for @I Ms. Gregorio also revealed that a bank account was opened in the name of FESHAN at the Land Bank of the Philippines, Elliptical Road Branch, Quezon City on March 2004. However, Ms. Gregorio had no access or control over the said account because the signatory thereto was

95TSN,MTCajandab, 1-2, December 22, 2008, 1:20 p.m. 96 TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m. 97 TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m 98 TSN, MTCajandab, 1-2, December22, 2008, 1:20 p.m.

76

Ms. Marilyn Araos, a former employee of Ms. Marites Aytona. It was in this account which the 105 million pesos was deposited.” Gregorio’s acts, with the assistance of Aytona, in manipulating or cooking the books paved the way for their applying- successfully- for a tax amnesty and availing themselves of the benefits of such. That she paid only P500,OOO.OO when in fact more was due government because of what appeared in her books(P105 plus million) makes the case for violation of the NIRC- paying less than what was due.

4. Disobedience to Summons issued

by t h e National

Ass e m bl y

She failed to appear at the hearings of December 10 and 17, 2008 despite due notice and receipt of subpoena.

It must be noted, in all fairness however, that Ms. Gregorio was a cooperative witness: she told the Committee the facts regarding the overprice of the fertilizers upon which we were able to dig deeper; and, she signed a waiver to all records in the LANDBANK FESHAN account. Without that waiver, the Committee would never have been able to determine the real amount that was laundered through it, and would not have been able to find out who the payees/ beneficiaries were. Her recantation revealed

the lies, the fiction, the falsities, and other fairy tales foisted

”TSN, JADela Cruz, 11-2, December 22, 2008, 1:30 p.m

77

Committee. Her recantation broke the ramparts of false narratives pcit up against the truth. Credit thus is given her for her assistance in preseri.ling lo us a clearer picture of the activities of the cabal. Whether it was pangs of conscience, a sudden sense of civic-spiritedness, or an epiphany on ilie way to Damascus that made her change her mind and retract is something we need not divine now. Suffice it to say that her help has been tremendous. The prosecution arm of the governmerit is urged to take cognizance of this fact.

E.MR. REDENTOR ANTOLIN 1. PLUNDER

He is a principal since he personally took part in the execution of the act as established by: Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, 1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the early part of March 2004, l received a call from Ms. Aytona through my office coordinator Mae Espiritu, that l have to be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Antolin, my vice president and l arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Philippines, lncorporated to be the sole signatory in said account and a Memorandum of Agreement the pertinent portions of which are quoted below: “The Second Party shall supply and deliver the subject fertilizer on credit at P I 5 0 per bottle as per proposal dated Februaty 4, 2004 and hereto attached as Annex “A” “Number three. That the First Party shall issue the check payments to the Second Party for whatever deliveries to be made by the latter;

78

“Number four. That by reason of this Joint Venture Agreement, the Second Party shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be secured by the First Party, which amount shall be paid upon collection of the covering purchase orders; “Number five. That the Second Party shall furnish to the First Pariy all the necessary documents needed to implement the completion of the whole projects like business permits, sales invoices, official receipts, and so forth; ”Number six. That the First Party shall protect the interest of the Second Party in all projects to be undertaken during the effectivity of this agreement; “Number seven. The Second Party shall not be, however, allowed to intetvene in a// transactions and activities to be undertaken by the first party except otbewise, If her presence is needed. “THE SENATE PRESIDENT. Who is the First Party? “MS. GREGORIO. The First Party is Araos Trading “THE SENATE PRESIDENT. Araos Trading, Okay. “MS. GREGORIO. Opo. “In compliance with said MOA, Ms. Aytona, through her duly authorized representative, received from our office bank sales invoices, delivery receipt and official receipts on March 12-16, 2004 and April 2004.”’00

“x x x That on or about March 8, 2008, my office coordinator, Anna Marie Espiritu reminded me about the call made by Ms. Aytona about the Memorandum of Agreement which must be signed at the Land Bank in Quezon City with a message also that she had already signed that Memorandum of Agreement and that she would appreciate if l can also affix my conformity thereto x x x

;4ccordingly, on March 8, 2004, l went to the bank together with my Vice President Mr. Redentor Antolin; “When we arrived thereat, Ms. Llarena and Ms. Araos were already there and we were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Phils., Inc. to be the sole signatory in said account and a Memorandum of Agreement x x xllof

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5: “(Ms. Paz likewise approached Ms. Gregorio and tapped her shoulder.) 100

TSN, January 20, 2009, 1:48 p.m., pp. 1-6 Sworn Statement of Deonilla “Julie”Misola-Gregorio

‘01 Supplemental

79

“THE CHAIRMAN: ‘Yan si Julie Gregorio. Sin0 pa’ng nakikita mong nando’n na nandito ngayon? Tumayo nga lang Lung mga Feshan officials. “(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of the Chairman). “Sin0 pa? “MS. PAZ. Sila lang PO kasi ’yung talagang nakita ko. Hindi ko kasama pa PO kasi silang iba.

PO

- may mga

“THE CHAIRMAN. 00. “MS. PAZ. Pero PO sila PO kasi ‘yung mga hiningan ko ng mga identification cards para PO i-compare dun sa signatures appearing on the Secretary’s certificate. “THE CHAlRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng identification cards.

“MS.PAZ. At saka PO si Marilyn Araos. ” Admission of Marilyn Araos regarding the circumstances of the account as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15: “THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandali. Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang (signatoty) puwede lang doh, di ba si Marlyn Araos lang? “MS. PAZ.

Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. “MS. PAZ.

Si Marlyn Araos ang pangalan n’ya.

Opo.

“THE CHAIRMAN. “MS. PAZ. sa bank.

signatoring

So, s’ya lang ang nakakapirma?

S’ya PO ‘yung authorized based on the Secretary’s Certificate provided PO

Ang mga accounts na it0 umaabot ng humigit kumulang sa PI50 “THE CHAIRMAN. million ang lumabas-pumasok dito. ’Yan ang computation namin.. .

“MS.PAZ.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

Yes, Your Honor, Yun PO ‘yung ipinrisinta (present) sa amin

“THE CHAIRMAN. “MS. PAZ.

At itong accounf na if0 ay sarado na.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

...mga gano’n kalaki.

Kalian sinarhan itong account na ito?

Sometime in July 2006, Your Honor.

80

“THE CHAIRMAN. account.. . “MS. PAZ.

Sometime 2006 itong account na ito isinara, wala ng pera, zero

Yes, Your Honor.

Ms. Marlyn Araos, pa‘no ka nagkaro’n ng ganyang halagang PI53 “THE CHAIRMAN. million pinapasok ‘yung pera sa’yo? You’re under oath. Na-oath nab a ‘to kanina? 0 sige. “MS. ARAOS. pumasok sa.. .

Your Honor, hindi ko

“THE CHAIRMAN.

Basta pumipirma ka lang.

“MS. ARAOS.

PO

alam na gano’n kalaking amount ang

Yes, Your Honor.

“THE CHAIRMAN.

Pirma ka lang ng pirma.

xxx “THE CHAIRMAN.

‘

Uh-huh.

“MS. ARAOS. So, sabi ko PO, I refused, Your Honor, s’yempre, hindi ko PO kasi naman ako ‘yiing may-ari nung Feshan Philippines, how come na ako PO any magiging sole signatory nila.

-

“THE CHAIRMAN. ”MS. ARAOS.

Uh.

So - - and then PO ‘yon. Na-threat PO ako kasi, Your Honor, kasi

“THE CHAIRMAN.

Ano’ng tinreten (threaten)? Ano’ng ibig sabihin na na-threat ka?

“MS. ARAOS. Na-threat PO kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung hindi ko pipirmahan ang bangko PO, tatanggalin ako sa frabaho ko.”

2. MONEY LAUNDERING

He is a principal since he personally took part in the execution of the act as established by: Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, 1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the early part of March 2004, I received a call from Ms. Aytona through my office coordinator Mae Espiritu, that I have io be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Antolin, my vice president and I arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were

I

/

Jf

81

made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Philippines, Incorporated to be the sole signatory in said account and a Memorandum of Agreement the pertinent portions of which are quoted below: “The Second Party shall supply and deliver the subject fertilizer on credit at PI50 per bottle as per proposal dated February 4, 2004 and hereto attached as Annex Y ”:. “Number three. That the First Party shall issue the check payments to the Second Party for whatever deliveries to be made by the latter; “Number four. That by reason of this Joint Venture Agreement, the Second Party shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be secured by the First Party, which amount shall be paid upon collection of the covering purchase orders; “Number five. That the Second Party shall furnish to the First Party all the necessary documents needed to implement the completion of the whole projects like business permits, sales invoices, official receipts, and so forth; “Number six. That the First Party shall protect the interest of the Second Party in all projects to be undertaken during the effectivity of this agreement; “Number seven. The Second Party shall not be, however, allowed to intervene in all transactions and activities to be undertaken by the first parfy except otherwise, if her presence is needed. “THE SENATE PRESIDENT. Who is the First Party? “MS. GREGORIO. The First Party is Araos Trading “THE SENATE PRESIDENT. Araos Trading, Okay. “MS. GREGORIO. Opo. “In compliance with said MOA, Ms. Aytona, through her duly aufhorized representative, received from our office bank sales invoices, delivery receipt and official receipts on March 12-16, 2004 and April 2004.”’02

‘k x x That on or about March 8, 2008, my office coordinator, Anna Marie Espiritu reminded me about the call made by Ms. Aytona about the Memorandum of Agreement which must be signed at the Land Bank in Quezon City with a message also that she had already signed that Memorandum of Agreement and that she would appreciate if I can also affix my conformity thereto x x x “Accordingly, on March 8, 2004, I went to the bank together with my Vice President Mr. Redentor Antolin; “When we arrived thereat, Ms. Llarena and Ms. Araos were already there and we were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Phils.. lnc. to be the sole sianatorv in said account and a Memorandum of Agreement x x

102

103

TSN, January 20, 2009, 1:48 p.m., pp. 1-6 Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio

j

82

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7th hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5: “(Ms. Paz likewise approached Ms. Gregorio and tapped her shoulder.) “THE CHAIRMAN: ‘Yan si Julie Gregorio. Sin0 pahg nakikita mong nando’n na nandito ngayon? Tumayo nga lang ‘yung rnga Feshan officials. “(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of the Chairman).

“Sin0pa? kasi ‘yung talagang nakita ko. Hindi ko PO - may mga kasi silang iba.

“MS. PAZ. Sila lang kasama pa PO

PO

“THE CHAIRMAN. 00.

“MS.PAZ. Per0 PO para

PO

sila PO kasi ‘yung mga hiningan ko ng mga identification cards i-compare dun sa signatures appearing on the Secretary’s Certificate.

“THE CHAIRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng identification cards. “MS. PAZ. At saka PO si Marilyn Araos.”

Being a beneficiary of the account up to and about P=456,000. “THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandal;. Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang (signatory) puwede lang do’n, di ba si Marlyn Araos lang? “MS. PAZ.

Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. “MS. PAZ.

Si Marlyn Araos ang pangalan n’ya,

Opo

“THE CHAIRMAN. “MS. PAZ. sa bank.

signatoring

So, s’ya lang ang nakakapirma?

S’ya PO ‘yung authorized based on the Secretary’s Certificate provided

PO

“THE CHAIRMAN. Ang mga accounts na ito umaabot ng humigit kumulang sa PI50 million ang lumabas-pumasok dito. ‘Yan ang computation namin.. . “MS. PAZ.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

. ..mga gano’n kalaki.

Yes, Your Honor, Yun PO ‘yung ipinrisinta (present) sa amin.

“THE CHAIRMAN.

At itong account na it0 ay sarado na.

83

“MS. PAZ.

Yes, Your Honor.

“THE CHAIRMAN. “MS. PAZ.

Sometime in July 2006, Your Honor.

“THE CHAIRMAN. account ... “MS. PAZ.

Kalian sinarhan itong account na ;to?

Sometime 2006 itong account na it0 isinara, wala ng pera, zero

Yes, Your Honor.

Ms. Marlyn Araos, pa’no ka nagkaro’n ng ganyang halagang PI53 “THE CHAIRMAN. million pinapasok ‘yung pera sa’yo? You’re under oath. Na-oath na ba ‘to kanina? 0 sige. “MS. ARAOS. pumasok sa. ..

Your Honor, hindi ko

“THE CHAIRMAN.

Basta pumipirma ka lang.

“MS. ARAOS.

PO

alam na gano’n kalaking amount ang

Yes, Your Honor.

“THE CHAIRMAN.

Pirma ka lang ng pirma,

xxx “THE CHAIRMAN.

Uh-huh.

So, sabi ko PO, I refused, Your Honor, s’yempre, hindi ko

“MS. ARAOS.

- naman ako ’yung may-ari nung Feshan Philippines, how come na ako

PO

kasi ang

PO

magiging sole signatory nila. “THE CHAIRMAN. MS. ARAOS.

Uh,

So - - and then PO ‘yon. Na-threat PO ako kasi, Your Honor, kasi

THE CHAIRMAN.

Ano’ng tinreten (threaten)? Ano’ng ibig sabihin na na-threat ka?

Na-threat po kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung hindi MS. ARAOS. ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko.”‘04

F. MS. MARILYN ARAOS I.PLUNDER

She is a principal since she personally took part in the execution of the act as established by: Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, lo+

Transcript of Stenographic Notes of the 7thhearing: RPAlger XVII-1 January 20, 2009 1258 pp. 5-15

84

1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla "Julie" Misola-Gregorio dated January 20, 2009;

"GREGORIO. x x x In the early part of March 2004, l received a call from Ms. Aytona through my office coordinator Mae Espiritu, that l have to be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Anfolin, my vice president and I arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made to sign a Secretary's Certificate whereby Ms. Araos was authorized by Feshan Philippines, lncorporated to be the sole signatory in said account x x x " ' ~ ~

Feshan, nor any of its officers or employees, were never knowingly involved in nay scheme or device to defraud the government. While it acknowledges its grievous error in allowing Ms. Aytona/Ms. LlarenaIMs. Araos to use the company name, commercial documents, and its fertilizer license, as well as allowing the use of its corporate papers in opening a bank account for the benefit of persons not connected with Feshan, its actions were guided solely by its desire to dispose of its fertilizer stocks and to minimize the losses it was then suffering from the fertilizer line of its business."'06

(a)

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, 'Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7'h hearing: RPAlger XVII-1 January 20, 2009, 1258 p.m., pp.1-5: "THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandal;. Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring (signatory) puwede lang doh, di ha si Marlyn Araos lang? "MS. PAZ.

Yes, Your Honor, si Marilyn Araos PO.

"THE CHAIRMAN. "MS. PAZ.

Opo.

"THE CHAIRMAN. "MS. PAZ. sa bank.

Si Marlyn Araos ang pangalan n'ya

So, s'ya lang ang nakakapirma?

S'ya PO Yung authorized based on the Secretary's Certificate provided

PO

Ang mga accounts na it0 umaabot ng humigit kumulang sa "THE CHAIRMAN. PI50 million ang lumabas-pumasok dito. 'Yan ang computation namin.. ."

.

105

Admission of Marilyn Araos regarding the circumstances of the account as found in the Transcript of Stenographic Notes of the 7'h hearing: RPAlger XVII-1 January 20, 2009 1258 pp. 5-15:

TSN, Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 '06TSN, MELNovero IV-2 January 20, 2009, 1:48 p.m., pp. 1-6

85

“MS. ARAOS. Aminado po ako doh, a l o po ‘yong pumipirma

“THE CHAIRMAN. 00.Sino’ng nagsabi sa ‘yong pumirma ka doh? “MS. ARAOS. According PO ‘to kay Ms. Gregorio.

xxx “THE CHAIRMAN, ...at ... “MS. ARAOS. Ni Mr. Paule rin PO.

xxx “THE CHAIRMAN.

...dun sa account na yon?

xxx “MS. ARAOS. Yes, Your Honor.

xxx “MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita ko silang dalawa, ‘yun nga PO nagfanong ako kay Ms. Gregorio kung ano’ng ginagawa ko rito. So, ang sabi niya, “Mag-open tayo ng account.”

Admission of Ms. Araos in her participation in the commission of the crime under instructions from Mr. Jaime Paule as found in the Transcript of Stenographic Notes Lpamorca XI-I January 26, 2009 12:29 p.m., pp. 3-8: ”MS. ARAOS. x x x inutusan ako ni Tito Jim na magpakita kina Tita Julie or Julie Gregorio at kay Tita Necy Llarena. Tinatanong ko kung saan kami magkikifa at sinabihan ako ni Tito Jim na pumunta ako sa Land Bank of the Philippines, Elliptical Circle Branch x x x Duon katatagpuin sila Tita Julie Gregorio at Tita Necy Llarena. “Nang dumating ako doon x x x sinabihan ako ni Tita Julie Gregorio na magbubukas siya ng account sa pangalan ng Feshan at gagawin daw akong sole signatory. x x x sinabihan ako ni Tifa Julie na /yon daw ang pinagkasunduan nilang dalawa ni Tito Jim or Jimmy Paule.

xxx Sinabihan din ako ni Tito Jim ng umagang iyon pagkatapos kong pumirma ng signature card na iyon, yung account na iyon na binuksan ko sa Land Bank Nlipfical, ay papasukan din ng collection ko sa mga LGUs na naka-assign sa akin sa Region 111 and IV.”

Ms. Araos gave us a more lucid picture of the whole operation by her

candid responses to questions propounded to her. She likewise subniilted a critical photograph, as an attachment to her affidavit, which showed the attendance of almost all the main characters in this saga: Mr.Jaime Pa~ile,

86

Ms. Leonicia Marco-Llarena, Ms. Julie Gregorio, Mr. Redentor Antolin, and

herself, in a party hosted by Ms. Llarena and which belied Mr.Paule’s claim that he did not know any of the other persons subject of this investigation. The prosecution arm of government is urged to take notice of these matters.

2. MONEYLAUNDERING She is a principal since she personally took part in the execution of the act as established by: Julie Gregorio’s Testimon as found in the Transcript of ‘ . ’ Stenographic Notes of the 7 hearing. Guinhawa 111-2 January 20, 2009, 1:38 pm pp, 5-7 and MELNovero IV-2 January 20, 2009, 1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio dated January 20, 2009:

tl

“GREGORIO. x x x In the early part of March 2004, I received a call from Ms. Aytona through my office coordinator Mae Espiritu, that l have to be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Antolin, my vice president and I arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Philippines, Incorporated to be the sole signatory in said account and a Memorandum of Agreement x x x x ” ‘ ~ ’

(a)

“Feshan, nor any of its officers or employees, were never knowingly involved in nay scheme or device to defraud the government. While it acknowledges its grievous error in allowing Ms. AytonaIMs. Llarena/Ms. Araos to use the company name, commercial documents, and its fertilizer license, as well as allowing the use of its corporate papers in opening a bank account for the benefit of persons not connected with Feshan, its actions were guided solely by its desire to dispose of its fertilizer stocks and to minimize the losses it was then suffering from the fertilizer line of its business.”f08

lo7TSN,Guinhawa 111-2 January 2 0 , 2009, 1:38 pm pp. 5-7 108 TSN, MELNovero IV-2 January 20, 2009, 1:48 p.m., pp, 1-6

87

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7’h hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5: “THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandali. Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring (signatory) puwede lang doh, di ba si Marlyn Araos lang? “MS. PAZ.

Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. “MS. PAZ.

Opo

“THE CHAIRMAN. “MS. PAZ. sa bank.

Si Marlyn Araos ang pangalan n’ya,

So, s’ya lang ang nakakapirma?

S’ya PO ‘yung authorized based on the Secretary’s Certificate provided

PO

Ang mga accounts na if0 umaabot ng humigit kumulang sa “THE CHAIRMAN. PI50 million ang lumabas-pumasok difo. ‘Yan ang computation namin. ..”

Admission of Marilyn Araos regarding the circumstances of the account as found in the Transcript of Stenographic Notes of the 7*h hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15: “MS. ARAOS. Aminado PO ako do’n, ako PO ‘yung pumipirma THE CHAIRMAN. 00.Sino’ng nagsabi sa ‘yong pumirma ka doh? MS. ARAOS. According PO ‘to kay Ms. Gregorio

xxx THE CHAIRMAN.

...at ...

MS. ARAOS. Ni Mr. Paule rin PO.

xxx THE CHAIRMAN. _..dunsa account na ‘yon?

xxx MS. ARAOS. Yes, Your Honor.

xxx MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita ko silang dalawa, ‘yun nga PO nagtanong ako kay Ms. Gregorio kung ano’ng ginagawa ko rito. So, ang sabi niya, “Mag-open fayo ng account.”

88

G.Ms. MARITESS AYTONA 1. PLUNDER She is a principal she personally took part in the execution of the act as established by: Julie Gregorio's Testimony as found in the Transcript of Stenographic Notes of the 7thhearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, 1:48 p.m., 'pp. 1-6; and Supplemental Sworn Statement of Deonilla "Julie" Misola-Gregorio dated January 20, 2009: TSN, Guinhawa 111-2 Januaw 20, 2009, 1:38 pm p p . 5-7 "GREGORIO. x x x Ms. Aytona approached me in the early part of Februaty, 2004 with the information that she had already verified our eligibility to sell fertilizer and asked me if l would be willing to sell the fertilizer on credit. Soon, she scheduled an appointment with me and discussed further some details of the transaction. She mentioned to me that her business partner, Ms. Llarena would issue checks to cover the cost of the fertilizer I would be selling. She accompanied me to the office of Ms. Llarena at Dane Publishing House in Quezon City for me to personally assess and evaluate her financial capability. Convinced that she could indeed be able to pay a// the sitting stocks l had at that time, the transaction was consummated. Any businessman for that matter would grab the tempting offer and would even consider it as good luck. In the early part of March 2004, l received a call from Ms. Aytona through my office coordinator Mae Espiritu, that l have to be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Antolin, my vice president and I arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made to sign a Secretary's Certificate whereby Ms. Araos was authorized by Feshan Philippines, lncorporated to be the sole signatory in said account and a Memorandum of Agreement x x x x"'*'

"MS.GREGORIO. Opo. In compliance with said MOA, Ms. Aytona, through her duly authorized representative, received from our office blank sales invoices, delivery receipts and official receipts on March 12-16, 2004 and April 2004. Soon, Ms. Aytona, through the order slips duly signed either by Marilyn Araos, Cecile Clemente and Bing Salvador started picking up from my warehouse the corresponding fertilizer from March 15, 2004 to May 29, 2004 through their corresponding trucking setvices. In the meantime, the Land Bank checks representing the payment were delivered to our office either by the employee of Ms. Llarena or Ms. Aytona except the P500,OOO.OO 109

TSN, Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7

89

cash which was delivered to me personally by Marilyn Araos, a representative of Ms. Aytona on April 7, 2004. “On December 23, 2008, one day after I testified, l was conscientiously moved to spill the beans so l requested Land Bank at Quezon City Extension Office, Elliptical Road, Diliman, Quezon City, to furnish me copies of the bank statement of the account opened on Mach 9, 2004 by Feshan through Ms. Araos. Luckily, on January 15, 2009, said bank furnished me 41 pages of the Bank Statement. It was my first [/me to have access on that account and l found out that the amount of P152,776,208.00 was deposited from March 9, 2004 to January 31, 2006. “The foregoing constitutes the true and actual participation that transpired between Feshan and Ms. Aytona/Ms. Llarena/Ms. Araos regarding this transaction and for this purpose l hereby state categorically the following: Feshan, nor any of its officers or employees, were never knowingly involved in nay scheme or device to defraud the government. While it acknowledges its grievous error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the company name, commercial documents, and its fertilizer license, as well as allowing the use of its corporate papers in opening a bank account for the benefit of persons not connected with Feshan, its actions were guided solely by its desire to dispose of its fertilizer stocks and to minimize the losses it was then suffering from the fertilizer line of its business. Feshan was never a parfy to any overpricing of the fertilizer in question. The MOA and Order Slips are hard evidence to support this. It was sold at Pl50.00/bottle because of the voluminous orders and there would be no more promotional or marketing expenses to be incurred. Feshan never received any payment beyond what was specified in the MOA and delivery receipts which showed a total of P13,513,800.00. Feshan nor any of its officers/employees never received any monies from Land Bank of the Philippines Current Account No. 1032-IC-0331-101604 opened on March 9, 2004, nor benefited from the same in any way, form or manner. While the names of the alleged recipients of the fertilizers were specified in the order slips, there was no way for Feshan or its officers to confirm the truthfulness or accuracy of the same, nor was there any need to do the same since Feshan had executed a MOA undertaking.. .’’‘o

0

Existence and circumstances relating to the bank account confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5: “MS. PAZ. Yes, Your Honor. x x x ang pinresent (present) nila sa ‘kin is the Secretary’s Certificate signed by the corporate secretary and attested by president PO of the... “THE CHAIRMAN. When you say “sila”sino yong mga ‘yon? “MS. PAZ. Si Marilyn Araos PO. xxxx

110

TSN, MELNovero IV-2 January 20,2009, 1:48 p.m., pp. 1-6

90

“MS. PAZ. Si Maritess Aytona. xxxx ”MS. PAZ. Ang pagkakatanda ko PO, Your Honor, meron din PO silang kasama na mga officials ng Feshan. “THE CHAIRMAN. Sin0 PO ’yon? “MS. PAZ.

Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio

xxxx “MS. PAZ. Per0 PO sila PO kasi ‘yung mga hinihingan ko ng mga identification cards para PO i-confer dun sa signatures appearing on the Secretary’s Certificate.”

2. MONEY LAUNDERING

She is a principal since she personally took part in the execution of the act as established by: Julie Gregorio’s Testimony as found in the Transcript of Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009, 1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla ”Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the ear/y part of March 2004, I received a call from Ms. Aytona through my office coordinator Mae Espiritu, fhat I have to be present at the Land Bank Quezon City Extension office on March 8, 2004 to open an account in accordance with what had been previously agreed upon. When Mr. Antolin, my vice president and l arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan Philippines, lncorporated to be the sole signatory in said account x x x””‘

“Feshan, nor any of its officers or employees, were never knowingly involved in nay scheme or device to defraud the government. While it acknowledges its grievous error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the company name, commercial documents, and its fertilizer license, as well as allowing the use of its corporate papers in opening a bank account for the benefit of persons not connected with Feshan, its actions were guided solely by its desire to dispose of its fertilizer stocks and to minimize the losses it was then suffering from the fertilizer line of its business.”“2 111

112

TSN, Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7 T S N , MELNovero IV-2 January 20, 2009, 1:48 p.m., pp. 1-6

91

Existence and circumstances relating to the bank account ccmfirmed by the Land Bank Elliptical Road Manager, Ms. Raquel Paz as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009, 1.258 p.m., pp.1-5: “MS. PAZ. Yes, Your Honor. x x x ang pinresent (present) nila sa kin is the Secretary’s Certificate signed by the corporate secretary and attesfed by president PO of the.. .

THE CHAIRMAN, When you say “Si1a”sino yong mga yon?

MS. PAZ. Si Marilyn Araos PO.

xxxx MS. PAZ. Si Maritess Aytona

xxxx MS. PAZ. Ang pagkakatanda ko mga officials ng Feshan.

PO,

Your Honor, meron din

PO

silang kasama na

THE CHAIRMAN. Sinopo yon? MS. PAZ. Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio.

xxxx MS. PAZ. Per0 PO sila PO kasi yung mga hinihingan ko ng mga identification cards para PO i-confer dun sa signatures appearing on the Secretary’s Certificate.”

3. TAXEVASION She provided invaluable assistance to Gregorio in cooking the corporate books in order for the latter to take advantage of a tax amnesty, aside from lowering the income figures.

Ms. Gregorio disclosed that it was Ms. Aytona who told her to hire an accountant. It was this accountant who advised Gregorio to enter in their book of accounts the ONE HUNDRED FIVE MILLION PESOS instead of the FIFTY MILLION PESOS only.113

‘I3

TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m

92

Ms. Gregorio further revealed that Ms. Aytona and the accountant were the ones who made the omp put at ion.''^ Ms. Gregorio affirmed that the real or actual sale of FESHAN was only FIFTY MILLION PESOS though the actual amount received was ONE HUNDRED FIVE MILLION PESOS.115

4. FALSE TESTIMONY/PERJURY IN SOLEMN AFFIRMATION

While she claimed to be a mere footsoldier, the other participants of the operation, e.g., Ms. Julie Gregorio, Ms. Leonicia Marco-Llarena, and

Ms. Marilyn Araos claimed instead that far from being a mere footsoldier, Ms. Aytona was a principal player and had a far greater role in implementing the scheme. It was also pointed out that the allegations in Ms. Marites Aytona's were in contradiction or inconsistent with those stated in Mr. Jose Barredo's affidavit.'16 In contradiction to Mr. Barredo's claim, Ms. Aytona said she did not recruit Boy Barredo. Instead, it was Mr. Barredo who called her up about the project and signified his intention to join a foundation or to be an agent

7

TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m. TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m Il6TSN, JADela Cruz, 11-1, December 22, 2008, 10:40 a.m

93

of a supplier of fertilizer. It was she who recommended Mr. Barredo to the foundation under Mr. Jimmy P a ~ 1 e . l ’ ~ Ms. Aytona stressed she did not receive any instruction from Mr. Barredo although sometimes the two of them went to DA regional offices for the accreditation of the foundation.’” Mr. Barredo, on the other hand, denied approaching Ms. Aytona. He said it was Ms. Aytona who gave him written instructions regarding the fertilizer project and it was she who had his calling cards made.’lg

5. DISOBEDIENCE TO SUMMONS ISSUED BY THE NATIONAL ASSEMBLY

Ms. Aytona failed to appear at the hearings of December 10, and 17, 2008 despite due notice and receipt of summons.

H. MR.JAIMEPAULE 1. PLUNDER ‘

He is a principal since he personally took part in the execution of the

act as established by:

117

TSN, JADela Cruz, 11-1, December 22, 2008, 10:40 a.m. TSN, MPMendoza, 111-1, December 22, 2008, 1050 a.m 119 TSN, MPMendoza, 111-1, December 22, 2008,10:50 a.m.

118

94

Admission of Marilyn Araos regarding the circumstances of the account as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15: ”MS. ARAOS. Aminado

PO

ako doh, ako PO ‘yung pumipirma.

“THE CHAIRMAN. 00.Sino‘ng nagsabi sa ‘yong pumirma ka doh? ”MS. ARAOS. According PO

40

kay Ms. Gregorio.

xxx

...at.. ,

“THE CHAIRMAN.

“MS. ARAOS. Ni Mr. Paule rin PO.

xxx “THE CHAIRMAN. ...dun sa account na yon?

xxx “MS. ARAOS. Yes, Your Honor.

xxx “THE CHAIRMAN. Ba‘f ka nagpunfa doh? Sino’ng nagsabing pumunta ka ro’n? “MS. ARAOS. As per instruction din PO ni Mr. Paule. “THE CHAIRMAN. Mr. Paule told you to go to the bank. “MS. ARAOS. Yes, Your Honor.

xxx “MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita ko silang dalawa, ‘yun nga PO nagtanong ako kay Ms. Gregorio kung ano’ng ginagawa ko rito. So, ang sabi niya, “Mag-open tayo ng account.”

xxx Na-threat PO kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung ‘‘MS. ARAOS. hind; ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko. “THE CHAIRMAN. “MS. ARAOS.

Yes, Your Honor.

“THE CHAIRMAN. “MS. ARAOS.

So, nagtatrabaho ka kay Paule?

May sweldo ka kay Paule?

Commission lang PO.”

Mr. Paule started seeking the assistance of Mr. Natalio Castillo Jr., and other possible investors, to secure financing for the project.”’ Mr Castillo, wanting to verify Mr. Paule’s credibiliy ‘”TSN, RLTUMAMPOS, X-2, January 20,2009, 2:48PM, p. 6

95

even asked him how sure Mr. Paule was that he had control of the project. Mr. Paule then showed Mr. Castillo a copy of a SARO for P728M (see Annex P) and an NCA representing about 40% of the SARO’s value.12’ Mr. Paule even said that, “kausap ko si Jocioc Bolante”.

2. MONEY LAUNDERING He is a principal since he personally took part in the execution of the act as established by:

Admission of Marilyn Araos regarding the circumstances of the account as found in the Transcript of Stenographic Notes of the 7‘h hearing: RPAlger XVII-1 January 20, 2009 1258 pp. 5-15:

“MS. ARAOS. Aminado PO ako do’n, ako po ‘yung pumipirma. “THE CHAIRMAN. 00.Sino’ng nagsabi sa ‘yong pumirma ka doh? “MS. ARAOS. According PO ‘to kay Ms. Gregorio.

xxx “THE CHAIRMAN.

...at ...

“MS. ARAOS. Ni MI: Paule rin po

xxx ”THE CHAIRMAN.

...dun sa account na ‘yon?

xxx

“MS.ARAOS. Yes, Your Honor. xxx “THE CHAIRMAN. Ba’t ka nagpunta doh? Sino’ng nagsabing pumunta ka ro’n? “MS. ARAOS. As per instruction din PO ni Mr. Paule. “THE CHAIRMAN. Mr. Paule told you to go to the bank. “MS. ARAOS. Yes, Your Honor. ”’TSN, SNTUPAZ, XI-2, January 20, 2009,2:58PM, p. 2 TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 8

96

xxx “MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita ko silang dalawa, ‘yun nga PO nagtanong ako kay Ms. Gregorio kung ano’ng ginagawa ko rito. So, ang sabi niya, “Mag-open tayo ng account.”

xxx

“MS.ARAOS. Na-threat PO kasi ako ni MK Paule na ang sabi n’ya sa ‘kin kung hindi ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko. “THE CHAIRMAN. “MS. ARAOS.

Yes, Your Honor.

“THE CHAIRMAN. “MS. ARAOS.

So, nagtatrabaho ka kay Paule?

May sweldo ka kay Paule?

Commission langpo.”

3. FALSE TESTIMONY/PERJURY

IN SOLEMN AFFIRMATION

Mr. Paule may be liable as he denied that he knew anything about the scheme when in fact, he talked to Mr. Castillo and invited the latter to be its financier.

He denied knowing Ms Araos,Iz4 he denied that Araos

was his employee or that she was not introduced to him during the 50th birthday party of Ms LlarenalZ5when, in fact, the contrary was true.

Mr. Paule had repeatedly denied, in his affidavit and testimony, before the Committee that he knew any one of the persons involved in the scam. But the photograph taken during M s Llarena’s 50th birthday and the testimony of four witnesses, at least, belie his assertion. His presence was

lZ3

TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 6

124

TSN,mhSantos,ll-1, January 26, 2009, 10:59AM,p.6

125

TSN, Caturia, Ill-I, January 26, 2009,11:09AM, p. 4-5

97

there for all to see. I-le was seated together with Antolin, Gregorio, and Araos. (see Annex K)

Paule testified that the first time he came across and got to know Ms Aytona was in 2008 at the DPWH, Region IV-A office when he attended a bidding,lZ6when in fact they had met and got to know each other in 1999 yet."'

I . UNDERSECRETARY BELINDA GONZALES I.PLUNDER She is a principal since she cooperated in the commission of the offense by another act without which it would not have been accomplished as established by: The findings of Committee Report No. 54: "In the Committee of the Whole public hearing of January 31, 2006, Undersecretary Belinda Gonzales specifically mentioned that it was the Office of Undersecretary Jocelyn Bolante who ordered the release of funds to the recipients stated in the list. 'I got instructions from Usec Bolante that this-f 100 Mil/ion-will be transferred to the different regional offices. "Secretary Luis Lorenzo end Undersecretary Belinda Gonzales sewed as cosignatories of Bolante in transferring the money from the Department of Agriculture to the regional field units (RFUs) and to local governments. Assistant Secretary Jose Felix Montes served as the program's spokesperson. "

126

TSN, RLTUMAMPOS, X-!, January 20, 2009, 11:4XAM, p.2-4

127

Karagdagang Sinumpaang Salaysay, Ms Aytona, December 22,2008

98

0

The findings of Task Force Abono:

“6.10 It may be stressed that the DA officials who directed the disbursement and realignment of the P723 million fertilizer fund were Jocelyn “Joc-JOC”1. Bolante, lbarra T. C. Poliquit and Belinda Gonzales. These public officials appeared to have full control of the distribution of the fertilizer funds as they even disregarded fhe original lisf of proponenfs listed in Annex “A” of the SARO. They, together with those who participated with them, should be held liable for violation of Section 3(e) of Republic Act 3019 and Article 220 of the Revised Penal Code.”

2. TECHNICAL MALVERSATION She is a principal by direct participation since she personally took part in the execution of the act as established by: 0

The findings of Committee Report No. 54:

7n the Committee of the Whole public hearing of January 31, 2006, Undersecretary Belinda Gonzales specifically mentioned that it was the Office of Undersecretary Jocelyn Bolante who ordered the release of funds to the recipients stated in the list. ‘I got instructions from Usec Bolanie that this-P 100 Million-will be transferred to the different regional offices. “Secretary Luis Lorenzo and Undersecretary Belinda Gonzales served as cosignatories of Bolanfe in transferring the money from the Department of Agriculture to the regional field units (RFUs) and to local governments. Assistant Secretary Jose Felix Montes served as the program’s spokesperson. ” ’

The findings of Task Force Abono: “6.10 It may be stressed that the DA officials who directed the disbursement and realignment of the P723 million fertilizer fund were Jocelyn “Joc-JOC”1. Bolante, lbarra T. C. foliquif and Belinda Gonzales. These public officials appeared to have full control of the distribution of the fertilizer funds as they even disregarded the original list of proponents listed in Annex “A” of the SARO. They, together wiih those who participated with ihem, should be held liable for violation of Section 3(e) of Republic Act 3019 and Article 220 of the Revised Penal Code.”

Testimony of former Usec. BolantelZ8: “THE CHAIRMAN. Opo. Ulitin ko lang PO, mabilis lang. Samakatuwid ’yong pong sinasabi natin - nabasa ninyo na PO ‘yan? Ano PO ang sinasabi diayn sa SARO? “For the purpose of farm inputs, “hindi PO ba?

TSN, SNTUPAZ XIV-1 November 28, 2008 2:29 P.M. pp. 5-8

99

“BOLANTE. Nakalagay Annex ‘X”.

PO

dito, “for the purchase of farm inputs” as indicated in

“THE CHAIRMAN. Farm inputs. Opo. Ngayon PO meron pong advice ang SARO naman dito, “Please be advised that the amount of P728 million only was released to your agency. Details as follows: SARO Number, funding source, athorized ...” - ang purpose “to cover the purchase of farm inputs” as indicated in Annex ‘X“. Opo? “BOLANTE. That is what is written in this document that you have given. “THE CHAIRMAN. Opo. Samakatuwid ‘yong 728 million pinabili para sa farm inputs per0 maraming bumili ng bulldozer, may gamarnit ng kalsada, may gumamit ng - hindi bulldozer, tractor at lahat, hindi ha? May mga shredders, tama PO ba ‘yon? Alam ninyo PO ba ang ;big sabihin ng technical malversation? Alam PO ba ninyo ang ibig sabihin ng technical malverstation? Papaliwanag ko lang PO. Technical malversation PO under our Revised Penal Code is, “an offender is a public officer“ kayo PO ay public officer. “He applies public funds or property under his administration to some public use” ginagamit para sa publiko, “public use for which public funds or property were applied is different from the purpose for which they were originally appropriated by law or ordinance.” Ang original intention PO nito is para sa tinatawag nating hindi PO implements per0 inputs, hindi PO ba? “BOLANTE. Ang sa pagkakaintindi ko PO farm inputs - since the source of the fund ay nanggaling PO sa rice and corn at saka sa HVCC, it can actually be used for farm implements likewise. “THE CHAIRMAN. That is according to you? ‘BOLANTE. Right. That is my honest understanding PO. “THE CHAIRMAN. Parang ‘yang ang research ninyo? Siguro ipatanong ninyo sa inyong abogado dahil ‘yong farm inputs malinaw sinabi ninyo kanina pesticide, insecticide, medaling buhatin, pampataba ng lupa. ‘Yong farm implements PO malaki ang diperensya noon, bumibili kayo ng traktora, bumibili kayo ng ibang bagay at dalawang dokumenfo ‘yong kinuha ninyo na in-authorize kayo for farm inputs. lsang SARO galing sa DBM at saka notice of cash allocation na panginputs. “BOLANTE. Your Honor, you also mentioned about the farm-to-market road as explained by the Honorable Senator Migz Zubiri. Actually, they made a formal request for the reallocation of the fund from farm inputs to the farm-to-market road and it was duly approved by the DBM. Hence, it was implemented. So, what we did was to transfer the fund to the DPWH which was the implementing agency. “THE CHAIRMAN. 0, baligtad na ngayon. DBM na ngayon ang nagiimplemenf? “BOLANTE. No, what I mean is that “THE CHAIRMAN. Nagbago. Binago na ninyo ‘yong Revised Administrative Code. “BOLANTE. No. what l mean is to -- for the change what I could recall was for the change of the use of that 5 million allocated to Senator Migz Zubiri, there was a formal request made as a matter of procedure to the DBM and the DBM upon the endorsement of the DA approved the request of then Congressman Migz Zubiri, And so on the basis of the approval, we transferred the fund to DPWH which implemented the farm-to-market road. “THE CHAIRMAN. May I ask COA, pwede ba ‘yon? pwede, alam ko, pwede i-realign, hindi ba?

Kapag may allotment

100

Your Honor, the case of the funds supposed to be under the “MS. JIMENEZ. proponents of Senator Zubiri.. . “THE CHAIRMAN. taking it..

Hindi

PO.

I am not asking about Senator Zubiri.

I am

“THE CHAIRMAN. ...I am faking it as a general statement here na ‘yung SARO and the NCA say for farm inputs. ‘Yung case ni Senator Zubiri if he got the permission.. . “MS. JIMENEZ.

Yes.

...that means pinayagan. Per0 ‘yung iba maraming binili, “THE CHAIRMAN. implements, puwede ho ba ‘yon? Your Honor, dit0 sa case ng 728, ang alam ho iang naming “MS. JIMENEZ. na nabili nila na implements are the shredder, shredder lang PO. “THE CHAIRMAN. Hindi ho, merong mga pumps ang alam ko, eh. May mga pumps, may mga tractors. Di ba dit0 sa Paraiiaque merong - - sa ibang lugar, diba?

“MS. JIMENEZ.

Shredder PO ‘yon

“THE CHAIRMAN. Are shredders inputs?

Dit0 nga PO di namin s’ya kinlasify (classify) as input. Kasi “MS. JIMENEZ. dun sa definition ng.. . “THE CHAIRMAN. Assuming that you’re correct na shredders lang, shredders inputs or implements? “MS. JIMENEZ. “THE CHAIRMAN.

are

lmplements Implements. So, is there a violation of the law there?”

Testimony of COA Director Flerida JimenezlZ9: “MS. JIMENEZ. Tama PO ‘yan, Your Honor. Na-account PO namin ‘yong 728 million per0 hindi PO ang ibig sabihin ay tama ‘yong pinagkagastusan ng 728. “SEN. ESCUDERO. Do you confirm, Ma’am, that based on your COA report, there are some items that are overpriced by 700 to 1,000 to 1,250 percent, that the foliar fertilizer was diluted in some respects, in fact, up to 42 percent, that the farmer-beneficiaries listed as supposed to be recipients of the fund, at least, to the tune of 56 percent did not comply with certain circulars as to being qualified to receive such a fund from government? “MS. JIMENEZ. Tama PO ‘yon lahat, Your Honor. “SEN. ESCUDERO. So, accounfed man, illegal, bawal, at puwede nating sabihing labag sa batas ang ginawang pagre-release. “MS. JIMENEZ. May mga nakita namin. ” 129

PO

kaming diperensiya, Your Honor, sa audit

TSN,Caturla, 11-1, November25, 2008, 10:31 am, pg. 6

101

J. JOSELITO FLORDELIZA 1. MONEYLAUNDERING

He may be liable for money laundering as he allowed the use of his Foundation and the Foundation’s account as conduits for to illegallyobtained monies from go~ernment’~’: “THE CHAIRMAN. Can you please name the foundation? Please press the microphone. “MR. FLORDELIZA. National Organization for Agricultural Enhancement and Productivity Incorporated. “THE CHAIRMAN. Are you awa‘re that this is the foundation that Ms. Aytona is alleging to have represented as a proponent? You are aware? “MR. FLORDELIZA. Yes, Your Honor. “THE CHAIRMAN. And you are coming here on your own free will, right? Please press the microphone. “MR. FLORDELIZA. Yes, Your Honor. “THE CHAIRMAN. Now, in the course of being utilized by Ms. Aytona as the proponent, how did it happen? Did she come to you? “MR. FLORDELIZA. She was introduced to me by Mr. Castillo. “THE CHAIRMAN. Mr. Castillo introduced Ms. Aytona to you? Pinakilala kayo? “MR. FLORDELIZA. Yes, Your Honor. “THE CHAIRMAN. Nung pinakilala kayo, anong sinabi nila? “MR. FLORDELIZA. There is no specifics, Your Honor. “THE CHAIRMAN. 0 tapos, anong nangyari? “MR. FLORDELIZA. At that time, I told them na kasi during that time, Your Honor, I’ve already a permanent employment. “THE CHAIRMAN. Yes

130

TSN, RLTumampos,X-2, January 20,2009,2:48pm,pp. 2-4

102

“MR. FLORDELIZA. So, I told them that I could no longer personally monitor or handle those projects. But they told me that you do not need to because we will handle all the documentation and all we need is your foundation and your-the signature is required. “THE CHAIRMAN. And would you have been paid for that? “MR. FLORDELIZA. Yes, Your Honor. “THE CHAIRMAN. And how much was the fee offered to you? “MR. FLORDELIZA. I was proposed a fee of 3 percent for the project. “THE CHAIRMAN. Three percent for evety order made? “MR. FLORDELIZA. For whatever amount is .... “THE CHAIRMAN. And were you paid for that? “MR. FLORDELIZA. Yes, Your Honor, I think so. “THE CHAIRMAN. You were paid. “MR. FLORDELIZA. Yes, sir. “THE CHAIRMAN. How much were you paid, if you will recall? “MR. FLORDELIZA. I could not remember the exact amount, Your Honor, but I believe I signed something like six or seven MOAS.”

The crime of plunder may absorb the other crimes found to have been committed here. But that is not for us to decide. The prosecution service and the courts will have to decide that as the case, we hope, progresses. However, there is a need to show the whole panoply of malfeasance, misfeasance or nonfeasance committed if only to show the people the many wrongdoings perpetrated upon them.

As a last word on the witnesseslresource persons: the comportment and demeanour of the witnesseslresource persons in this investigation not only was frustrating, it was downright insulting.

103

Here was Bolante, not submitting to any of the subpoenas then issued, flying to the US, and appearing only because he was deported back to the Philippines. On his way out of the airport, he rides a wheelchair, clutching his chest. He is brought by an ambulance to the hospital, where he has himself confined. He appears before the Senate acting gaunt, meekly asking permission to eat and take medicines while the hearing is ongoingand only to tell lies.

Most of the other witnesses would not appear immediately after service

of a subpoena, some had to be threatened with an arrest and detention before appearing. Mr. Paule shows up only after the threat of detention at the Pasay City Jail was issued. Some would wait until a testimony of another is heard before they made themselves available. Most would submit their affidavits on the very hearing day itself, forcing the Committee to analyze the statements on the fly. They fall sick, they have themselves

confined in hospitals, they hide until they are found. We found this practice to be not only in bad taste, but in bad faith as well. The excuses made for

their non-appearance are myriad, and the deviousness displayed appalling. They wrestled with the Committee hoping that the Blue Ribbon would tire, would forget about them, would surrender. They discounted the zeal and passion the Committee had in unearthing the facts, forgetting that while they could run, they couldn't hide. Your Committee on Public Accountability and Investigations commits that we will strive, we will seek, we will find, and we'will not yield.

104

None, save for Mr. Castillo, came on his own to do his duty as a goocl citizen to help uncover the truth, and to aid the Senate in its legishtive work. Mr Castillo hardly hesitated when informed that he mighi: be asked to testify before the Committee; he readily performed his civic duty, without the presence or assistance of counsel.

He felt he didn't need one, for he

believed that the unvarnished truth with him was more than enough io accompany and protect him. Many crimes, many wrongdoings could be solved in this country if only many of our citizens act commendably and perform their responsibility by volunteering to tell ,the truth in nmny proceedings and investigations.

II. We recommend the passage of the following proposed measures:

A.AMLA AMENDMENTS To protect its asset recovery program and to curb and discourage all forms of money laundering. Republic Act No. 9160 as amended by Republic Act No. 9194 otherwise known as The Anti-Money Laundering Act of 2001, allows the Anti-Money Laundering Council (AMLC) to file before the Court of Appeals an ex parfe application before the Court of Appeals to freeze any monetary instrument or property that is in any way related to any unlawful activity13' as defined by the Anti-Money Laundering

131 Section 3

(i)'Unlawful activity' refers to any act or omission or series or combination thereof involving or having direct relation t o the following: (1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal

Code, as amended; (2) Sections 4, 5, 6, 8, 9, 10, 12, 13, 14, 15, and 16 of Republic Act No. 9165, otherwise Iknown as the Comprehensive Dangerous Drugs Act of 2002;

105

Law.

The Court of Appeals may issue a freeze order upon the finding of

probable cause. The freeze order issued by the Court of Appeals shall only be for a period of twenty (20) days unless extended by the Court.

In relation to this, on 15

December 2005, the Supreme Court issued Supreme Court Administrative Memorandum No. 05-11-04-SC otherwise known as Rules of Procedure in Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary Instrument, Property, or Proceeds Representing, Involving, Or Relating to an Unlawful Activity or Money Laundering Offense Under RA 9160 as Amended.

The Supreme Court Memorandum provides that there can be a non-extendible six (6) month extension of the freeze order. Section 53 (b) of the Rule provides: Extension. - On motion of the petitioner filed before the expiration of twenty days from issuance of a freeze order, the court may for good cause extend its effectivity for a period not exceedingsix months.

Thus, there are instances when due to negligence, lack of interest or by inability

to come up with a solid case due to sheer volume of evidence, the AMLC, Office of the Ombudsman or the Office of the Solicitor General fails to file an attachment case under Rule 57 of the Rules of Court and/or file a case under RA 1379 otherwise known as An Act Declaring Forfeiture in Favor o f the State any

(3) Section 3 paragraphs 6 , C, E, G H and I of Republic Act No. 3019, as amended; otherwise known as the Anti-Graft and Corrupt Practices Act; (4) Plunder under Republic Act No. 7080, as amended; (5) Robbery and extortion under Articles 294, 295. 296, 299, 300, 301 and 302 o f the Revised Penal Code, as amended; ( 6 ) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. 1602; (7) Piracy on the high seas under the Revised Penal Code, as amended and Presidential Decree No. 532; (8) Qualified theft under Article 310 of the Revised Penal Code, as amended; (9) Swindling under Article 315 of the Revised Penal Code, as amended; (10) Smuggling under Republic Act Nos. 455 and 1937; (11)Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000; (12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the Revised Penal Code, as amended; including those perpetrated by terrorists against non-combatant persons and similar targets; (13) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code o f 2000; (14) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.

106

Property found to Have Been Unlawfully Acquired by any Public Officer or Employee and Providing for the Proceedings Therefor praying at the same time for a preliminary attachment. When any of these three agencies fail to file any of the two actions, the freeze order will automatically lapse giving the owners of the accounts a free hand to dispose of the money or property as they wish. Once the alleged offenders take hold of the accounts or property suspected to be related to money laundering, then the Republic of the Philippines is immediately deprived of the possibility to recover unlawfully acquired assets and is prejudiced by the loss of property. Therefore, in the best interest of the Republic, it is very much needed to amend Section 10 of AMLA to be able to protect its asset recovery program and to curb and discourage all forms of money laundering. The proposed amendment seeks to extend the extension period of the freeze order from an additional six (6)

months as provided by the Supreme Court Memorandum to two (2) years. However, the two (2) year freezing should be applied for, every six (6) months in order to show that there is no grave abuse of discretion on the part of AMLC. Once the Republic has duly applied for attachment and forfeiture under RA 1379 in cases where the public officer is the alleged offender, then there will no longer be any need for the freeze order.

Amendment: Extend the extension period of the freeze order from an additional six months to two years. The two year freeze should be applied for every six months to show that there is no grave abuse of discretion on the part of AMLC.

B. PROCUREMENT ACT AMENDMENT

107

In the case of the fertilizer fund scam, a number of foundations, people’s organizations, NGOs and associations have become agents of money laundering transactions. Amendment: Include private institutions, NGOs, people’s organizations

and other private entities

that

receive

government monies in the coverage of the Procurement Act.

C. AMLA RULES REVISION The Rules

of the AMLA provide for absolute secrecy in its

investigations,

thwarting

sometimes

investigations

of

Congress into misfeasance, malfeasance, and non-feasance of public officers. Amendment:

Revise the

Rules,

as

written

by

the

Congressional Oversight Committee on the Anti-Money Laundering Congress

Law, to some

reinstate the

powers

of

provision

inquiry

relevant

allowing to

its

investigations.13*

D. AMENDMENT TO THE BANK SECRECY ACT

RA 1405 has often been a stumbling block in finding the prosecution 132

of

offenders.

Since

public

officers

Letter Of 21 January 2009 already sent to Senator Edgardo J Angara, Chairperson for the Senate

and

108

employees have chosen their profession and they are bound by the Constitution to be accountable to the people, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest lives, it is but proper that the right to secrecy of their bank deposits be relaxed a bit. Amendment: Amending the Bank Secrecy Act to include in the exception public officers charged before the Courts for violations of Sections 3(b) and (c), under Corrupt Practices

of Public Officers.

E.AMENDMENT

TO

THE

RULES

OF

PROCEDURE

GOVERNING INQUIRIES IN AID OF LEGISLATION RE DIRECT CONTEMPT In the recent past, the power to immediately cite persons in contempt has been frustrated due to the absence of a provision of Direct Contempt in the Senate Rules of Procedure Governing Inquiries in Aid of Legislation Amendment: Include the provision on Direct Contempt, Indirect Contempt and Arrest in the Rules of Procedure Governing Inquiries in Aid of Legislation.

109

F. SUGGESTED STANDARD PROVISION TO BE ADDED TO THEGAAEVERYYEAR Amendment: Include a provision in the GAA that will penalize officials and employees for failure to submit quarterly financial and narrative accomplishment reports.

111. We urge the Ombudsman to decide on the cases which have been

pending with them for nearly 1,300 days. The Ombudsman has mofu proprio powers to conduct an investigation into wrongdoings of government officers. Had it exercised its powers more aggressively, the resolution of the Fertilizer scam and other issues related to it could have been yesterday's news. Alas, such is not the case here. And so now is the time for the law enforcement agencies and the prosecution arms of government to perform what it was originally tasked to do. IV. We recommend that an amendment to the Constitution be made

making the Ombudsman an elective rather than an appointive position. We can ensure its independence from the Executive, more than what we have now, by making the position subject to elections. We need an Ombudsman beholden only to the people. The mode of election, and or nomination of candidates for this position, e.g., candidates who may he vetted first by the Supreme Court before they are allowed lo run, need

not be decided right now. But this issue has to be discussed and there is

110

no better time than today. Needles to say, any changes to our exkting Charter must be made only after the 2010 elections.

'

CONCLUSION '

Insofar as this aspect of the Bolante case and his ilk are concerned

our task has ended. We thank the Magsaysay and Arroyo Committees for starting the work that led to this current effort towards uncovering more personalities, and more acts - no less egregious, no less criminal. We are confident that our efforts have revealed many pieces of this fertilizer puzzle.

But while this report is complete and this closure final insofar as this (Bolante) aspect of the case is concerned, we do not discount that there might still be out there things that remain for us to ascertain, e.g., former DA Sec. Luis P. Lorenzo Jr. has not testified yet. Has he stayed abroad to hide or has he resided overseas because he could not stomach what was happening in his department?

Agencies of the Executive Department, such as the DBM, including then Secretary Emilia Boncodin were so grossly remiss in their duties. That

g728M was released without their knowledge is difficult to believe. At the very least, it could have exercised enough supervision over such a gargantuan amount to ensure that it was not wasted or stolen.

111

The Executive Department should have supervised its agents and subordinates well, rewarding those who do good work and punishing those who do badly, rather than, for example, allowing the appointment of Poliquit in December 2005 to a cushy position as GSlS Vice President even as the controversy remained unresolved. It should first have ensured that the investigation was concluded before such promotion was made. And for promoting Belinda Gonzales to the post of DA Undersecretary, without a very thorough vetting process that could have bared the s c a m the Executive here committed twice the sin of omission. As early as the 13''

Congress, the Senate had found that the

President herself "must be held accountable in the mismanagement of the fertilizer fund and take it upon herself to institute measures to correct the flaws in her a d m i n i ~ t r a t i 0 n . I ~ ~

The President is the Chief Administrative Officer of the Government. While the Constitution is not explicit about this position, by reason of her being the Chief Executive and the head of government, she exercises and wields all administrative powers inherent in her position.

133

Committee Report No. 54, 13IhCongress, p. 36

112

A corollary rule to the control powers of the President is the "Doctrine of Qualified Political Agency." As the President cannot be expected to exercise all her control powers at all times and in person, she will have to delegate some of them to her Cabinet members. The Doctrine of Qualified Political

Agency

provides

that

all

executive

and

administrative

organizations are adjuncts of the Executive Department. The heads of the various executive departments are assistants and agents of the Chief Executive, Except in cases where the Chief Executive is required by the Constitution or law to act in person or the exigencies of the situation demand that she acts personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments. Thus, the acts of the Secretaries of such departments, performed and promulgated in the regular course of business, unless disapproved or reprobated by the Chief Executive, are presumptively the acts of the Chief Executive.'34

Thus, while the Committee found no evidence directly linking the President to the fertlizer scam, the acts of the former Undersecretary of the DA, Mr. Jocelyn lsada Bolante and his cohorts, now Undersecretary Belinda Gonzales and now GSIS Vice President lbarra Poliquit, are deemed acts of the President since they acted within the scope of their authorities given to them by then Secretary Luis Lorenzo, Jr. Since there 134

Agpalo, Ruben E., Administrative Law, Law on Public Officers and Election Law, p.28, Rex Bookstore, 2005 citing Juat v. Land Tenure Administration, 1 SCRA 361 (1961) and Carpio v. Executive Secretary, 206 SCRA 290 (1992)

113

was no reprobation or disapproval coming from President Gloria Macapagal-Arroyo regarding their actions, it can easily be inferred that the President acquiesced to such acts.

Does anyone really believe that

Bolante, et. al., would have been able to malverse such a gargantuan amount and continue to evade all sorts of liability without the acquiesence of Malacanang?

The President's knowledge as to the fertilizer fund scam controversy had, in fact, been alluded to by former

DBM Secretary Emilia Boncodin in

her testimony during the 13'h Congress: "When asked if the fertilizer fund request made by Usec. Bolante for the Department of Agriculture was upon the instruction of the President, Secretary Boncodin replied with, 'I would imagine so. !>,I35

lnspite of that knowledge, there was no close monitoring of how the money was spent, and, more importantly, whether the funds were spent wisely and well. The omission was so appalling that the people involved were allowed to get away with it. Despite storm clouds appearing in the horizon, promotions and new appointments were instead made. The gathering storm should have been a warning that something was amiss. The exposure that first appeared in the media should have been impetus

!7

Committee Report No. 54, 1 March 2006, 13th Congress of the Senate, p. 13

114

enough to act, to investigate, to correct, to punish. None was done even after the Senate during the 13'h Congress issued its findings in CR 54.

The AMLC was slow, the Bureau of Internal Revenue was absent, the DBM allowed it, the President and the DA Secretary did not move.

What we have heard instead from the administration is deafening silence. No investigation, no condemnation, not a whisper, not a whimper, nary a sound

- not even a slap on the wrist. This lack of supervision, this

negligence in monitoring, this lack of accountability, this omission was so gross; it was tantamount to bad faith, even criminal neglect.

This is not the first corrupt operation that has been committed and, if the leaders in the Executive Department are not careful and more circumspect, more deliberate, and more judicious in the release of funds, this will not be the last. This lack of monitoring by officials in the administration resulted in such wastage of vast amount of funds- akin to a faucet leak which every one notices but which no one bothers to report for repairs- with the water continually running until the water runs out.

This dearth of monitoring efforts led to a maldistribution of resources: favored (or priority) ones getting more than others. While many government

115

agencies have to wrestle with others to get their fair share of inadequate resources, here the favorites get the lion's share without even having to go through the bureaucratic maze all in the name of greed and re-election. Worse, the absence of close supervision facilitated the malversation of public funds and allowed the conspirators to divert funds that had been allocated for, and should have otherwise gone to the benefit of, the farmers-constituents of the different LGUs and congressional districts. Upon the release of a huge amount of money, bells and whistles should have gone off in the DBM, warning them, telling them to monitor closely the manner by which the funds were to be distributed. They should have required regular reporting of how the money was spent, even before the COA came in. It was just but responsible. This way, no releases should

have been allowed without first accounting for the past expense. The DBM, in this case, has underserved the people.

Particularly egregious are the acts of Jocelyn Bolante. He claimed to have exerted efforts to stamp out corruption at the DA by drafting a memo to Sec. Lorenzo to report allegations of corruption. However, no copy of

any such memo was ever presented to us, and Sec. Lorenzo, in a phone call, even denies having ever received such a memo. At the same time, even assuming the truth of Bolante's claim, he should not have stopped at just drafting a memo for Sec. Lorenzo, after he was informed of the existence of a syndicate in the DA, if he was true to his duty. He should have filed and pursued a case with the Ombudsman or investigated until all

116

people in the group were exposed and punished. The allegations of bribery, told to him, were so serious and so grave, that he should have acted with great dispatch. By his inaction, he failed to live up to the precepts of the Code of Conduct and Ethical standards for Public Officials and Employees, that “they shall enter public service with utmost devotion and dedication to duty. (Section 4(b), RA 6713) Worse, our hearings have established that Bolante, far from crusading against corruption, was instead himself engaged in a systematic scheme of corruption. By his acts he failed to live up, nay he violated his Rotary creed: what he said was not the TRUTH, what he did was not FAIR to the Filipino, what he did was not BENEFICIAL to all. He must have been able to rise up the Rotary International hierarchy by masquerading himself as a person who believed in its tenets, but in reality was violating them. He has brought shame to himself, to his family, and to his organization. He has done disservice to the nation, and has wronged his country.

We dread to see again the unleashing of packs of wolves feasting upon already-scarce resources of government. In all probability, there were other wolf packs involved in the disposition of the remaining P535M in fertilizer funds that have yet to be traced. The practice of allowing the appearance/insertion of “lump sums” in budget, especially in re-enacted ones; the non-transparency of these items’ usage especially as they refer to projects already completed during the year previous, will give a free rein to these sharks, sensing blood, turning into a feeding frenzy- especially

/

117

during times of elections and natural disasters. How many times have we seen this? How many times do we still have to suffer for this?

The Ombudsman failed to do its duty when no resolution was made on this case even after more than a thousand days. We denounce its inaction in the strongest possible terms. Instead of being part of the solution to corruption and justiying the existence of its office, it has instead become part of the problem, worsened the climate of corruption, and given cause for its abolition. By its blatant inaction and callous behaviour, it would seem as if it has been coopted by the corrupt. It seems that instead of apprehending the caravans of thieves, the Ombudsman has turned a blind eye and has allowed them to go on their merry way.

The gross inaction by the Ombudsman is one that must not be allowed or tolerated by the people and by the leaders of this country. Certainly, and at the very least, the Senate will not tolerate the Ombudsman’s criminal negligence. The Senate’s primary constitutional function is to pass laws; surely we can concentrate on that. We cannot punish corrupt officials, we cannot send them to jail. However, when the people’s cry for justice and resolution to these problems remain unheeded, unanswered, and unaddressed by the Ombudsman, we will cast shame on the shameful, step up to the plate, and act.

118

To be sure, there are already serious and mounting calls for her resignation, and we support them. This Committee and this Senate are done repeatedly reminding her to act and discharge ier duty. The Senate will not .hesitate to exercise its power of the purse as well as other legislative and constitutional powers to enact wholesale reforms in the Office of the Ombudsman and remove its occupants, if not effect its de facto abolition. The Ombudsman must be held accountable for allowing

people to get away with crime.

Our people are losing their patience. One time on a

street of

Tagaytay, a farmer, selling her produce, approached the Committee Chairman to tell him “sir napapanood namin kayo, ipakulong nyo yang Bolante na yan. Hirap na hirap na kami dito, at yang mga taong yan ay nagpapasasa lang pala sa kaban ng bayan,” and that the Senate dispense with the formalities and just send the scoundrels straight to jail. Who can fault her? Our farmers and other needy sectors are being used by the corrupt as cover for their crimes. Our farmers are already on the streets. We must not stand idle. As if stealing from government wasn’t bad enough, the nefarious acts of these corrupt people ended up victimizing the farmers: the real, direct and true victims of this scam.

119

Again and again we read or hear of reports of graft here and corruption there

- the recent World Bank report on collusion in the bidding

process has again put our country’s integrity in question. The Philippines has also been rated the most corrupt Asian economy by the Political and Economic Risk Consultancy (PERC). If we do not put a stop to corruption, we will be doomed to perpetual notoriety

- a reputation most unfair to our

people, millions of whom will be forced to find their future in foreign shores.

The anger of the people is palpable in the streets and in the fields. A social volcano is smouldering and unless we do something soon, it is bound to explode. It is hoped that we do not come to that

- we still are a

country of laws and not of men. But we must heed the voice of our people if we are to remain a Republic of the people.

Although it is our devout wish that there be less investigations by the Senate, there remains a duty to look at, and pursue the truth about serious allegations of many irregularities in government: the collusion among contractors and government officials in World Bank-financed infrastructure projects, the bribery allegations surrounding our drug enforcement agencies, the ZTE broadband scandal, and procurement anomalies in the Armed Forces of the Philippines, to name a few. We must get the rascals out of government.

120

We must stop the “coarsening of our political culture” that is facilitated by those who choose to be “silent witnesses to evil deeds.” ‘We will not accept scandalous behavior in government and in society.

We will,

instead, raise the standard of duty and accountabilty in our country.

The Blue Ribbon Committee will not hesitate to exercise political will in investigating and exposing malfeasance, misfeasance and nonfeasance. Those who are summoned must be forewarned that no one should trifle with the Senate and the Blue Ribbon Committee lest they be cited for contempt and get their just deserts. Fiatjusfifia ruat coelum.

Moreover,

because

of

continued

Ombudsman

inaction, the

Committee has been forced to break ground and file cases (and when justified, will continue to file cases) against corrupt government officials, as it has done against Bolante. The Committee Chairman is rather surprised that the case the Committee filed with the DOJ against the fertilizer fund conspirators has yet to proceed. If the information we have is correct, they are awaiting our Committee Report. Why they have to wait, why they cannot investigate on their own utilizing our leads or the information we have discovered, escapes us.

121

Why have there been so many brazen shootings and murders within the DA over the years? We, therefore, find it a moral imperative to call on the appropriate agencies to resolve and to report on the slayings of Marlyn Esperat and Teofilo Mojica and the shooting of Estelita Jardino.

Ms.

Esperat filed a case against officials of the DA regarding the P544M allegedly scammed out

of government. It is reported that because of this,

she was murdered in front of her children in cold blood. Mr. Mojica, was shot in the head, as were his wife, child, and niece in the early morning of last September 13. His murder has been connected with another anomaly in the DA, involving the misuse of P168M for fertilizers. They would have died in vain if we do not investigate, in aid of legislation, these tragedies, and what led to the murders.

The public, for a long time, has demanded closure to this issue. We have done our part. Now, let the prosecution arm of government do theirs. Lest this be misconstrued as passing the buck, we do this only because the Constitution and our laws, through the principle of separation of powers, have assigned the subsequent function of prosecution to other agencies of government.

In conclusion, the totality of what we have seen, heard, read and ferreted out in the Committee's inquiry provides us not just details of specific wrongs and mistakes committed by certain persons in the fertilizer

122

fund mess. They also point to the bigger picture of corruption and greed that is so prevalent in national life not only today, but which has been intensifying over decades.

The bigger picture shows us the distressing spectacle of veritable wolfpacks preying with impunity on government projects, having access to colossal sums of public money, using power and influence without compunction, and perverting public office into an opportunity for abuse and gain. A host of individuals endeavour to gain at all costs: through lying, cheating, killing, and stealing. Many more are voting for the wrong people and for the wrong reasons.

These irregularities uncovered at the DA have been painful and costly to the nation. But they do not stop there. Indeed, at the very same time that

we were conducting our Blue Ribbon inquiry, other Congressional committees were similarly engaged by scandals and irregularities in other agencies and sectors of public life.

Since the object of our inquiry is to come up with legislation that can effectively combat the menace of graft and corruption in our country, we feel the need to say something here about the formidable challenge we face.

123

Let us not pretend that when the international media tags the Philippines as one of the most corrupt countries in the world, it's only the grafters among us who are under indictment. The label shames us all.

Nor is our problem only the way that others see us. Our people are coming dangerously close to believing that nothing can be done about corruption and greed in our country, that everyone's on the take, that it permeates all branches of government, and that working for a larger common good is impossible - and that Senate inquiries like ours will come to nothing.

We can no longer be silent and callous witnesses to rampant acts of corruption and remain blase and unaffected by the many storms of scandals that continually pummel our body politic. We can no longer tolerate the practice of the art of equivocation and pretense that breeds only suspicion and lies. Constant conflicts continue to sap our moral stamina and instigate our cynicism. A significant number believe the worst: that we have a flawed socio-political culture where judges and justices toe the administration line, where military officials will always say yes to those in power to ensure future employment in government. Independence of thought, belief, and judgment has become a rarity. Everyone is cowed by power, money, pelf, and influence.

124

The Senate must not allow this public cynicism to have the last word. But if we are to combat this culture of corruption and dispel this cynicism, we have to develop what one writer has called "a concept of enough." We have to say that this menace must be stopped for the sake of our own survival as a nation.

Change cannot be done overnight, or from a single inquiry, or a piece of legislation. But we believe that every step we take in the fight for integrity in government is a step forward to better governance. We believe that when we succeed in one resolute action to stop graft, we could set off or and inspire others to do the same. And sooner or later the time will come when all these efforts will gather together to become an irresistible force that will shatter the wall of graft and corruption in our country.

To this work and this goal, we in the Blue Ribbon Committee are committed!

Respectfully submitted:

B

an Investigations (Blue Ribbon)

125

Members: /-

-

7

GR

OR10 B. HONASAN II

REVILLA JR.

PA

MIRIAM DEFENSOR SANTIAGO

\MAR R O X ~ S

ANTONIO “SONNY” F. TRILLANES IV

< LOREN B. LEGARDA

MANUEL “LITO” M. LAPID

FRANCIS “CHIZ” G. ESCUDERO

FRANCIS N. PANGILINAN

COMPANERA PIA S. CAYETANO

JOKER P. ARROYO

ALAN PETER TOMPANERO”

s. CAYETANO /

126

Ex-OfficioMembers:

JUAN MIGUEL F. ZUBlRl Majority Floor Leader

AQUlLlNO Q. PIMENTEL JR. Minority Floor Leader

HON. JUAN PONCE ENRILE President Senate of the Philippines Pasay City

127

ACKNOWLEDGEMENT

The Chairman would like to thank the Senators who attended and participated in the hearings. Appreciation is likewise expressed here to his colleagues for allowing the Chair to conduct the hearing in a manner that allowed the individual Senators to ask their questions and pursue their points to its logical conclusions sans strict time limitations. Appreciation is also expressed here to the staff of the Senators who paid good attention to the proceedings, taking copious notes and guiding their principals well so that questions were not repeated and the manner of questioning not repetitive. We treated the witnesses fairly, we conducted the hearings in a very deliberate, determined, and conscientious manner. The process worked.

Our thanks to the Blue Ribbon staff for their tireless dedication and hard work. Their industry and competence, their enthusiasm and perseverance, their integrity and uprightness make us proud. There is still hope in our civil service after all.

/

Separate concurring and dissenting'opinian:

I

Pursuant to section 22' of the Rules of Procedure, I respectfully submit the following concurring and dissenting opinion;

I The instant proceeding is the sequel of an earlier inquiry on the same subject matter during the 13" Congress, Commi!iee Report No. 54thereofwas prepared by Senator Ramon B. Magsaysay, Jr. chair of the lead Committee on Agriculture and Food, and myself as chair ofthe Blue Ribbon Committee. It was approved unanimously by the Senate. A cursory reading, because of time conswaints, of this current 124 page Committee Report indicates that the findingsthereon appear not inconsistent with the earlier Committee Report No. 54.

There is no cogent reason not to extend my concurrence. I1 The C o e i t t e e Report recommends' amendments to the Anti-Money Laundering Law and the inter-related Bank Secrecy Law.as well aa the Procurement Law. The AMLA and the Procurement Law are fresh laws, enacted by the 12thCongress. The AMLA particularly was the subject 'ofintense, long-dpvn out, non-partisan debate and deliberation because bf its potential adverse effects on ow banking system and as a handy tool for harassment. '

We have to move .with caution on this one. The problem is not with the law itself but in

its enforcement.

I am constrhed to submit a qualified dissent on the remedid~legislation.

m Sen.Gordon deserves to be commended for the str~ght-forwakdmanner he handled and closed this inquiry, Rispectfully submitted, 24 February 2009

JOmB P. ARROYO