A SUBCOMMITTEE of the House committee on appropriations which is conducting an inquiry into the Pharmally scandal yesterday issued a show-cause order against Lloyd Christopher Lao, former chief of the Procurement Service-Department of Budget and Management (PS-DMB); Warren Rex Liong, former PS-DBM overall deputy ombudsman; and other fellow former officials of the department.
Lao and his former colleagues are in danger of being cited in contempt and ordered detained at the House if they will continue to snub the congressional hearing on the P47.6 billion anomalous transaction.
“For a guest speaker whose presence is very vital, very important in the conclusion of this certain inquiry, without giving justification as to his absence, I think we can request a show-cause order,” said Lanao del Sur Rep. Zia Alonto Adiong, who moved for the issuance of a show-cause order. “So that this committee may be appraised on what are the grounds, what are the reasons, justifications on why he — I don’t know if deliberately or not deliberately — skip this committee hearing when he was in fact given a formal invitation and there was no reply.”
Adiong’s motion was seconded by Manila Rep. Benny Abante and carried by the subcommittee which is headed by Iloilo Rep. Janette Garin, a health secretary under the last Aquino administration.
Last June 3, Former Health Secretary Francisco Duque III told lawmakers that former President Rodrigo Duterte was the one who ordered the controversial transfer of P47.6 billion from the Department of Health (DOH) to the PS-DBM for the purchase of COVID-19 supplies in 2020.
The Office of the Ombudsman last month ordered the filing of a graft case against Duque and Lao for the fund transfer. It also found Duque and Lao guilty of grave misconduct, gross neglect of duty and conduct prejudicial to the service.
The Ombudsman’s investigation stemmed from a 2020 Commission on Audit (COA) report and the complaint filed by Sen. Risa Hontiveros and former senator Richard Gordon in 2022 following months of hearings by the Senate Blue Ribbon committee.
In 2021, then Senate minority leader Franklin Drilon said Duterte made the order “to provide it legal cover, because under the law and the Constitution, only the President can direct the transfer of funds from one agency to another in the Executive Branch.”
In its 2020 annual audit report, the COA flagged several “deficiencies” in the DOH’s utilization of P67.32 billion in COVID-19 funds, including the unspent P11.89 billion for the procurement of medical equipment and supplies, payment of benefits of health workers and the P41.46 billion transferred to PS-DBM without the required Memorandum of Agreement (MOA) and other supporting documents.
In their complaint, Hontiveros and Gordon noted that out of the funds received by PS-DBM from DOH, P11.5 billion was paid to Pharmally Pharmaceutical Corp. for the supply of face shields, face masks, test kits and other medical items for the government’s pandemic response.
Pharmally, which was financed by Duterte’s then economic adviser Michael Yang, a Chinese citizen, was then questioned because the supply contracts were awarded to it despite the company’s lack of sufficient capital.
Last month, the Ombudsman also affirmed an earlier ruling finding probable cause to file graft cases before the Sandiganbayan against Lao, Liong and former PS-DBM procurement management officer Paul Jasper de Guzman, along with other officials.
Pharmally president Twinkle Dargani, treasurer and secretary Mohit Dargani, directors Linconn Ong and Justine Garado and board member Huang Tzu Yen were also ordered charged.
Garin said there should have been a memorandum of agreement on the purchase of the medical equipment and supplies as they are not “common use” office supplies like pen and paper, contrary to the assertions made by Duque in previous hearings.
The country incurred some P190 billion in debt in its campaign to mitigate the ill effects of the COVID-19 pandemic.
