HOUSE TO PLUG AFP FUND LOOPHOLES / SENATORS: CITE REYES FOR CONTEMPT
MANILA, FEBRUARY 6, 2011 (STAR) By Jess Diaz - The House of Representatives is planning to tighten controls on the use of billions in taxpayers' money that it appropriates yearly for the Armed Forces of the Philippines (AFP).
Aurora Rep. Juan Edgardo Angara yesterday said he wo [Photo at left) uld recommend to the House leadership and the committee on appropriations that the next AFP budget be closely scrutinized for loopholes in the use of funds.
"We must plug these loopholes to prevent further wastage of public funds. These loopholes have apparently given rise to the so-called 'provisions for command-directed activities' or PCDA," he said.
Angara said the notorious "conversions," or program funds that are converted into cash and made part of PCDA and pocketed by senior officers, should be banned.
He added that lawmakers and the military should learn their lessons from the revelations of retired Lt. Col George Rabusa, former AFP budget officer, about corruption and wastage of taxpayers' money in the AFP.
According to Rabusa, the three major services – Army, Navy and Air Force – regularly contributed tens of millions to the PCDA, which served as a slush fund of the military leadership.
He said the PCDA was the source of "pasalubong" and "pabaon" in the millions for incoming and outgoing AFP chiefs of staff.
Rabusa named retired generals Angelo Reyes and Diomedio Villanueva as among those who received "pabaon" or sendoff money.
Reyes has denied his former budget officer's claim.
Villanueva, on the other hand, refused to comment on the allegations made by Rabusa.
On vacation in his hometown of Tagudin, Ilocos Sur, Villanueva begged off from giving interviews, pointing out that he is still grieving over the death of his wife last week.
Rabusa said Villanueva received the biggest "pabaon" of former AFP chiefs at P160 million.
Former AFP chief Roy Cimatu received P80 million while former Defense secretary Angelo Reyes got P50 million.
Rabusa added part of the PCDA funds came from "savings" from appropriations for salaries for soldiers.
He said Congress allots funds based on "troop ceilings" or the number of officers and soldiers that a command or battalion should have.
Usually, Rabusa said, the ceiling is not met, meaning there are many unfilled positions, for which the legislature has already allocated funds.
These funds are "converted" into cash and made part of the PCDA, he added.
Rabusa claimed that budget officers like him and auditors shared in the converted funds, an assertion supported by former state auditor and now AFP corruption witness Heidi Mendoza.
Angara said the House appropriations committee and the Department of Budget and Management should make sure that there are warm bodies to be paid their salaries before appropriating compensation funds.
"I think that we should not appropriate funds based on 'troop ceilings' not only in the AFP but in other agencies as well, including the Philippine National Police (PNP)," he said.
Angara said it is not a remote possibility that funds for salaries in the PNP are also based on troop ceilings.
He said the procurement system in the AFP should also be streamlined in the wake of Rabusa's revelation that the military lost about $2 million in the acquisition of an unmanned aerial vehicle that an Israeli supplier allegedly did not deliver.
Rabusa claimed that some senior officers received commissions in dollars from the deal.
Sources in the House appropriations committee told The STAR yesterday that appropriations for salaries in the AFP are not the only source of savings that are converted into PCDA funds and shared by senior offices.
Another source is the POL (petroleum, oil and lubricants) budget for AFP vehicles and equipment, including trucks, tanks and planes, a committee member said.
"POL funds, which amount to billions, are easier to convert into cash than PS (personnel services, the budget language for salaries). For instance, if a commander reports that his trucks transported troops to the hinterlands so many times and spent this much for fuel and maintenance, who will verify that?" the source said.
The congressman said President Aquino is aware of POL conversions "because he closely examined POL appropriations and questioned military officers about them during budget hearings when he was a member of the House."
Anti-corruption mechanisms
Malacañang, on the other hand, enjoined the troops to report any misuse of funds in the military.
Executive Secretary Paquito Ochoa Jr. assured all members of the military that the administration of President Aquino had "put in place mechanisms to protect the AFP coffers from abuse," just like what had transpired in the latest congressional hearings.
"But this I ask from our troops: be vigilant and report the misuse of funds by your superiors," Ochoa said.
Ochoa vowed to ensure that all "transactions are transparent and honest, (and) that supplies and equipment intended for our soldiers reach them."
He said the government would also ensure the safety of the witnesses "so they can continue to aid us in finding the truth."
An administration lawmaker proposed the AFP should temporarily "outsource" its work on its finances by tapping volunteer private sector auditors and financial experts to help put its books in order.
Ang Kasangga party-list Rep. Teodorico Haresco said tapping the services of financial experts from the private sector was not meant to supplant the work of government auditors or duplicate the congressional inquiries or any other government investigation into the alleged massive corruption in the military
"It's sort of a 'rescue outsourcing' but only temporarily until acceptable and stringent financial systems are put in place," he said.
Haresco, a reservist Marine officer, said seeking outside help is not exactly new. He recalled that reserve officers who are also certified public accountants did weekend work in the Marines to straighten out their financial books.
He said the Marines are relatively few and most were busy in combat duties, leaving the administrative and accounting functions in neglect.
While corruption may not be eliminated 100 percent, Haresco said the systems, safeguards, procedures and protocols to be adapted from the private sector would make it hard for corruption in the military.
He said such a move of tapping experts from the private sector would not only greatly reduce corruption but also help the AFP make the most out of their relatively small budget.
No such thing as PCDA
The Department of National Defense (DND), on the other hand, said the AFP does not have records of guidelines governing the use of UN funds disbursed to the Philippine peacekeeping team before 2005, the year when reforms were made to improve its financial system.
It was also disclosed that the military does not have any records on the so-called PCDA, the alleged source of sendoff money for retiring military chiefs.
The DND's Special Investigating Committee revealed this yesterday during the pre-investigation conference.
The committee was formed to look into the allegations of former state auditor Heidi Mendoza who claimed that some P200 million in UN funds ended up in a private bank account, P50 million of which was missing.
Mendoza was head of the team commissioned by then Ombudsman Simeon Marcelo to audit military funds in 2004.
She said former military comptroller Carlos Garcia was clearly involved in the diversion of the UN funds. Garcia is facing plunder raps for allegedly stealing around P300 million from state coffers.
Defense officials had asked AFP resource management office chief Maj. Gen. Pedro Soria on how the UN funds have been used before 2005.
Soria said he could not provide details since his office could not find any records on how the UN reimbursements were used before that year.
Because there are no records, the military has no information as to how the UN reimbursements were spent, Soria pointed out.
Data from the AFP resource management office showed that as of Jan. 31, the UNRF balance stands at P83.807 million.
Soria admitted the excess UN funds have not been remitted to the national treasury. He said the practice was meant to ensure the availability of funds for the immediate needs of the peacekeeping contingent.
He said there were times when expenditures of the peacekeepers were higher than the amount remitted by the UN.
The unused funds that were not remitted to the treasury were carried over to the following year, making the UN remittances appear like a revolving fund.
For this year, an amount of P125.42 million serves as "beginning balance" or funds carried over from 2010. The programmed expenditure stands at P41.62 million for a balance of P83.8 million.
Soria explained the UNRF covers expenses like allowance of soldiers, combat clothing, equipment, training, construction and repairs, and medicine.
He said the UN funds were received by the Department of Foreign Affairs (DFA) and deposited to the United Coconut Planter's Bank. The funds were channeled to the AFP through the Land Bank of the Philippines.
Soria admitted that they are not aware of the actual amounts given by the UN.
"We just got information from the (AFP) finance office that such amount was deposited. As to how it got to us, we don't know," he said. "We don't know how much the UN gives us."
Soria said they are only notified about the fund transfer though a credit memorandum, a certification that certain funds have been placed to an account.
Defense Assistant Secretary Fernando Manalo, member of the investigating committee, said officials of the DFA should be summoned to explain how the UN funds are processed.
Soria admitted the AFP has no records on how the PCDA was used before 2005.
"We did not have any records that the PCDA was really under the OPB (operating program budget)," he said.
Patrick Velez, head of the DND investigating committee, cited the need to look for the records as these would be helpful in the conduct of their probe.
"It appears that there are no records prior to 2005. We have to track back how the documents are transferred from one officer… to another," he said. "If there are no documents, it is incumbent for us to have an inventory of the records."
Manalo said they would have to rely on the records provided by Rabusa.
In a press briefing after the conference, Velez said they are not yet assuming that the documents on the PCDA and UNRF are missing.
"We will subpoena all these documents. Apparently… there are some difficulties locating these documents but if you would understand there are duplicate documents, now you can get that from COA (Commission on Audit)," he said.
Velez said unless they would get these documents, they could not make any conclusions or recommendations that would be beneficial to the military and to the public.
"We have already asked the DND Secretary to summon the accounting service, the J3 (AFP deputy chief for operations) and we will coordinate with COA also," he said.
Velez said they are hopeful that their inquiry would pave the way for reforms in the system. –With Delon Porcalla, Paolo Romero, Alexis Romero, Teddy Molina
Senators: Cite Reyes for contempt (The Philippine Star) Updated February 06, 2011 12:00 AM Comments (31)
MANILA, Philippines – Sen. Miriam Defensor-Santiago led other lawmakers in filing a manifestation to declare former Armed Forces chief Angelo Reyes (Photo left, courtesy of Inquirer) and his lawyer in contempt for evading the congressional inquiry.
Santiago issued a manifestation pointing out the motion to inhibit by Reyes' counsel Bonifacio Alentajan.
Santiago said Alentajan's motion calling for four senators to inhibit from the hearing is unlawful.
She argued the motion is not allowed under the Senate Rules of Procedure governing inquiries in aid of legislation.
"In filing this motion, counsel merely manifests his gross ignorance of the law, sufficient to disqualify him from law practice in the Senate," Santiago stated in the manifestation.
She said the motion made by Alentajan "is a foolish attempt to restrict the power to conduct inquiries in aid of legislation specifically granted by the Constitution."
"Thus, the motion is unconstitutional," she added.
On the manifestation to cite Reyes and Alentajan in contempt, the senators invoked Section 18 of the Senate Rules of Procedure in accusing Reyes of false testimony and evading answering significant questions during the hearing.
Reyes had been called to appear before the Blue Ribbon committee to testify on the plea bargaining agreement that allowed former military comptroller Carlos Garcia to plead guilty to a lesser offense and post bail.
Garcia has been accused of the capital offense of plunder before the Sandiganbayan.
During the hearing, Reyes refused to answer some of the questions thrown to him by the members of the Blue Ribbon committee, prompting the senators to decide to place the former defense chief in detention for contempt.
In the case of Alentajan, the senators argued the lawyer should be cited for contempt for filing his motion to inhibit, which they said was uncalled for.
"Counsel for a witness should conduct himself in a professional, ethical, and proper manner," stated the manifestation made by Santiago to be signed by Senators Jinggoy Estrada, Francis Escudero and Antonio Trillanes IV.
Santiago, Estrada and Escudero have given their respective statements denying the motion of Alentajan to inhibit from the hearings.
Garcia, who repeatedly invoked his right against self-incrimination during the hearings, is also facing the threat of contempt from the senators.
Blue Ribbon committee chairman Sen. Teofisto Guingona III said Reyes would again be invited for tomorrow's hearing.
Guingona said the manifestation of the four senators as well as the motion to cite Garcia in contempt would be taken up in a caucus of the committee members after tomorrow's hearing.
'Tyrannical' Senate
Alentajan, for his part, said the move to cite him in contempt reflects the abuse of power on the part of the four senators.
"Through that (resolution), you will see how tyrannical they are. Don't we have rights anymore?" Alentajan said. "Is it contemptuous to fight for your rights?"
Alentajan said he was merely asserting the right of Reyes to due process and equal protection of the law.
He said Santiago, Estrada, Trillanes and Escudero "have lost their cold neutrality" in denying his motion for them to inhibit in the hearings.
"If they are reasonable, they should inhibit themselves. They have said a lot about Reyes," he said.
Alentajan though admitted he is not sure if Reyes would attend the Senate hearing on Monday.
"We will have to see. I have not received the invitation," Alentajan said.
Garcia, on the other hand, caught the ire of several senators during last Thursday's hearing when he repeatedly refused to answer the questions about the allegations made by his former subordinates, retired military budget officer Lt. Col. George Rabusa and Lt. Col. Ramon Antonio Lim.
Rabusa and Lim revealed before the committee the extent of corruption in the Armed Forces of the Philippines (AFP) and linked Garcia to the anomalies as the military comptroller.
Guingona, however, said the issue is not yet closed, hinting that more revelations are still to come in the next few days of the hearing.
The Department of Justice (DOJ) had placed Rabusa under the Witness Protection Program (WPP).
Justice Secretary Leila de Lima said the Senate would take Rabusa into protective custody for the meantime pending approval of his WPP application.
Rabusa has already revealed what he knows about corruption in the military while another witness, former state auditor Heidi Mendoza, has already begged off from testifying further.
At the conclusion of last Thursday's hearing, Mendoza appealed to the Senate to spare her from having to go through yet another hearing.
Mendoza was supposed to be the center of the Senate hearing in order to shed light about her findings while she was still working for the Commission on Audit (COA).
She previously testified in the House of Representatives, detailing how millions in reimbursements from the United Nations to the AFP went missing.
While Mendoza appears to be out of tomorrow's hearing, Guingona said the hearings are far from over.
Guingona said he expects to have the colleagues of Mendoza from the COA as resource persons in tomorrow's hearing, which would focus on the commission.
He declined to identify the auditors and refused to comment on the possibility that the additional witnesses would corroborate the testimony given by Mendoza at the House of Representatives.
"These are new people in the area of the COA," Guingona said. - With Alexis Romero, Sandy Araneta, Roel Pareño
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