THE Office of the Ombudsman yesterday issued two decisions finding former executives of the Procurement Service of the Department of Budget and Management (PS-DBM) and Pharmally Pharmaceutical Corp criminally and administratively liable for irregularities in the procurement of P4.165 billion worth of COVID-19 test kits in 2020.
In an 87-page ruling in the criminal aspect of the case, Ombudsman Samuel Martires approved the filing of three counts of violation of the Anti-Graft and Corrupt Practices Act (RA 3019) against former PS-DBM executive director Lloyd Christopher Lao, former director Warren Rex Liong, and procurement management officer Paul Jasper de Guzman.
Also indicted as private respondents on all three counts were Pharmally president Twinkle Dargani, treasurer and secretary Mohit Dargani, directors Linconn Ong and Justine Garado, and board member Huan Tzu Yen.
Facing one graft charge each are PS-DBM director Christine Marie Suntay, procurement management officer Webster Laureñana, PS-DBM officers August Ylagan and Jasonmer Uayan, and Pharmally employee Krizle Grace Mago.
“Wherefore, finding probable cause, let the corresponding information be filed before the proper court, against the …respondents for conspiring and conniving with each other in awarding, with manifest partiality and in bad faith the contracts … to Pharmally Pharmaceutical Corp causing undue injury to the government in the total amount of P4,165,300,000,” the Ombudsman declared.
The charges stemmed from complaints filed by former senator Richard Gordon and incumbent Sen. Risa Hontiveros.
In separate 76-page decision covering administrative charges, the Ombudsman found Lao, Liong, de Guzman, and Laureñana guilty of grave misconduct, gross neglect of duty, serious dishonesty, and conduct prejudicial to the best interest of the service.
On the other hand, Ylagan, Uayan, and Suntay were found guilty of gross neglect of duty and conduct prejudicial to the best interest of the service.
The Ombudsman ordered all of them dismissed from any government post they are holding, with additional penalties of forfeiture of all retirement benefits, and perpetual disqualification from reemployment in government service.
As being stripped of a government post no longer applies due to retirement, separation, or resignation, the Ombudsman said the penalty shall be converted into fine equivalent to respondents’ one year salary deductible from any amount due them.
Martires said he will implement the directive against Liong who is the sitting overall deputy ombudsman. Liong was appointed to the post by former President Rodrigo Duterte in November 2020.
Both rulings were based on findings of fraud, gross negligence, and willful intent to violate procurement rules as well as undue preference of Pharmally despite its glaring lack of track record and shortage of paid-up capital at only P625,000 when it won billions in government contracts.
“As shown in the Articles of Incorporation, Pharmally was incorporated on 04 September 2019 or barely seven months prior to the initial delivery of test kits and yet, the procurement contract … worth over P4 billion was awarded to it,” the panel of investigators said.
“Public respondents favored Pharmally over One Top Medical Systems Resources which offered the same prices as Pharmally, and Biosite Medical Instruments Inc. which was one of the suppliers listed in the directory of the Bayanihan Act,” they added.
However, the Ombudsman cleared officials and employees of the Department of Health and the Research Institute for Tropical Medicine (RITM) of any liability in relation to the said transactions, namely DOH Procurement Service director Crispinita Valdez, RITM Research Division head Amado Tandoc III, supervising science research specialist Lei Anna Dancel, senior research specialists Dave Tangcalagan and Jhobert Bernal, medical technologist Punzalan, bacteriologist Rose Marasigan, and RITM officer Maria Carmela Reyes.
Budget Secretary Pangandaman said the department will comply with the Ombudsman’s decision and has directed PS-DBM executive director Dennis Santiago to enforce the decision concerning Liong, Laurenana, Ylagan, Uayan, and Suntay.
The DBM said it will also comply with the decision on Lao who is formerly part of the agency.
ACCOUNTABILITY
Hontiveros said the filing of charges against the key players in the overpriced purchase should serve as a warning to people who have intentions of stealing from the government coffers.
“This is an important step to hold accountable all those behind these irregularities,” Hontiveros said in Filipino.
She said the Ombudsman validated the draft committee report of the Senate Blue Ribbon Committee which recommended the filing of charges against government officials involved in the anomalous transactions. The panel. Then headed by Gordon, held a number of lengthy hearings on the issue in 2020 and 2021.
Sen. Francis Escudero said he was wondering why the persons involved were not charged with plunder “given the amount involved which clearly exceeds the threshold of P50M for plunder.”
Former Senate President Franklin Drilon said the Ombudsman’s decision “marks a significant step towards holding those responsible accountable for their actions.”
Drilon was instrumental in exposing Lao’s corruption schemes during the Senate hearings.
Drilon has said Pharmally bagged billions in contracts despite requirements that negotiated procurement can be entered into only with persons who have technical, legal and financial capabilities. Pharmally’s paid up capital was only P625,000 but it was able to bag billions of pesos worth of medical supplies through PS-DBM. From zero declared income in 2019, Pharmally recorded a gross income of P384.04 million and a net income of P264.65 million in 2020, Drilon revealed during the hearings.
Drilon expressed hope that the Ombudsman’s efforts will lead to the unmasking of every individual involved in the misuse of COVID-19 supplies including Lao’s backer.
‘PRESSURE’
Lawyer Ferdinand Topacio, legal counsel of the Pharmally executives, said “we are greatly saddened by the indictment” of his clients.
“Coming as it does on the wake of their persecution by the rabid then-Senator Richard Gordon, who has turned the Senate inquiry against them into the worst version of the Inquisition, a kangaroo court and a Court of the Star Chamber combined. In fact, the draft report written by Mr. Gordon was rejected by his colleagues,” Topacio said.
He maintained the pieces of evidence submitted by his clients “point to the fact that there was no overpricing, non-deliveries and ghost deliveries, or any anomalies of any kind.”
“That is why we were surprised at this sudden turn of events. While we respect the resolution of the Ombudsman, we hope it is not true, as we have heard, that pressure was brought to bear by some politicians in an attempt to redeem themselves or to boost their political stock,” he added.
Topacio said they will exhaust all remedies “to assail the indictments” and prove that his clients have done nothing wrong. — With Raymond Africa
