Despite alarms raised by state auditors
over five years, pork barrel funds still went to the same questionable
NGOs through a single government corporation, to the tune of P1.5
billion, according to a review of Commission on Audit (COA) documents.
The biggest chunk of the pork was funneled to an NGO headed by Benhur
K. Luy, the whistleblower in the recently exposed alleged scam that
reportedly defrauded the government of an estimated P10 billion in "pork
barrel" funds.
Luy's NGO, the Social Development Program for
Farmers Foundation, Inc. (SDPFFI), is one of the groups linked to the
scam. Documents obtained by GMA News Research shows that the group
received about P225 million through the National Agribusiness
Corporation (NABCOR), the corporate arm of the Department of Agriculture
that was set up to assist small agribusiness ventures.
Last
year, Agriculture Secretary Proceso Alcala stopped the flow of cash from
NABCOR to the questionable NGOs. The move ended a pattern of what the
COA has cited as anomalous transactions from 2006 to 2011, involving
NGOs and players in both the executive and legislative branches of
government.
Based in Biñan, Laguna, SDPFFI was formed in July
2004. Listed as its president and board chairman in Its 2012 general
information sheet is Luy, who exposed the alleged scam.
In his
affidavit, Luy claimed to be an employee of a company owned by
businesswoman Janet Lim Napoles, whom he accused of engaging in illegal
business transactions with the government.
In a joint sworn
statement on March 2013, the parents and siblings of Luy said that
Benhur oversaw the implementation of anomalous government-funded
projects through foundations such as SDPFFI allegedly being used by
Napoles.
In an interview with GMA News, Napoles denied the accusations and implicated Luy instead.
COA objections vs SDPFFI
Year after year, the Commission on Audit (COA) issued the same
observations about the transactions of NABCOR, a government-owned and
controlled corporation attached to the Department of Agriculture (DA).
In its reports, the COA said the funds seemed to be going to
questionable NGOs and POs. And yet, year after year the money kept
coming, with NABCOR unable to provide satisfactory answers to the
government auditing agency.
As the corporate arm of DA, NABCOR
is the leading government corporation in countryside agribusiness
enterprises for small farmers and fisherfolk. Since 2006, it had been
releasing funds to various foundations for a wide range of projects.
In the case of SDPFFI, P160.54 million from the Priority Development
Assistance Fund or PDAF, more commonly known as lawmakers' pork barrel
funds, was released to the group in 2008. The following year, it
received another P64.75 million
Documents show that the
Laguna-based NGO was implementing projects in Sarangani, Agusan del Sur,
Benguet, South Cotabato, Pangasinan, Lanao del Sur, and Masbate. This
is a violation of COA's Circular 2007-001, which requires NGOs and POs
to be "based in the community where the project shall be implemented."
Non-compliance with the requirement disqualifies an NGO or PO from
obtaining government funds. But in its answer to the 2008 audit,
NABCOR justified its actions, saying that proper coordination was
observed in the "tripartite project" involving the participation of
legislators, SDPFFI and NABCOR itself.
To support this
explanation, NABCOR submitted a list of projects implemented by the
foundation as proof of its track record. However, COA rejected this
justification, saying "the submission of the list of projects
implemented by the NGOs/ POs does not cure" the deficiency it had
identified with SDPFFI.
According to the group's articles of
incorporation, it was formed to carry out community development programs
through the establishment of training centers for the poor and for
out-of-school youth.
SDPFFI's corporate records submitted to
the Securities and Exchange Commission (SEC) shows that Luy is also
among its seven incorporators. Besides Luy, three are based in Manila,
while the three others are in Zamboanga City.
One of the
foundation's purposes is to "acquire loans and other financial
accommodations from the government and private institutions" for its
activities and projects.
For a foundation receiving millions in
funds from the government, it is interesting to note that SDPFFI only
has capital totaling P100,000 from the contribution of its members. Its
2011 financial statement shows that it only has P1 million in assets and
zero excess funds.
COA requires a foundation to put up the
equivalent of 20 percent of the total cost of the project it would
undertake as its own equity participation.
Pork from six legislators
Despite COA's observations in 2008, SDPFFI received millions of pesos
more the following year. In its 2009/ 2010 audit, COA said the money
came from the PDAF of six legislators, listed in the table below.
Table 1: PDAF received by SDPFFI in 2009
| SOURCE OF FUND | AMOUNT RELEASED |
| ERWIN CHIONGBIAN | 13,822,500 |
| RODOLFO PLAZA | 9,700,000 |
| SAMUEL DANGWA | 7,760,000 |
| ARTHUR PINGOY | 2,910,000 |
| ROBERT RAYMUND ESTRELLA | 20855000 |
| RIZALINA SEACHON-LANETE | 9,700,000 |
| TOTAL | 64,747,500 |
Source: Commission on Audit
"The office of the legislators nominated SDFFI for the implementation
of livelihood projects," COA's report stated. Again, auditors listed the
NGO's faults: non-submission of documentary requirements, foundation
not based in communities where projects are to be implemented,
foundation's financial standing deficiencies.
GMA News tried to
reach the six former legislators to get their side on the issue. When
the camp of Chiongbian was contacted last week, his nephew, Sarangani
Gov. Steve Chiongbian Solon, said his uncle was in the US and would
issue an official statement later.
Seachon-Lanete refused to
comment, saying her camp is now preparing a statement on the issue.
Plaza, Dangwa, Pingoy and Estrella, meanwhile, could not be reached for
comment as of this posting.
Aside from the institutional
problems of SDPFFI, government auditors also questioned nearly the
entire amount released to the group. The COA disclosed that purchases of
fertilizers, knapsack sprayers, gardening and agricultural production
packages, and other agricultural kits amounting to P64.73 million were
not covered by a contract or purchase order.
COA also noted
that the schedule of fund releases for projects was not followed.
Instead of four scheduled payments (15 percent upon signing of MOA, 35
percent upon submission of accomplishment and disbursement reports, 40
percent upon completion of at least three-fifths of the total project,
10 percent upon submission of terminal report), actual payments were
made in two releases (15 percent upon MOA signing, 85 percent upon
project completion). The only exceptions were the releases for
Chiongbian, which complied with the schedule, and Estrella who made
three releases.
The government auditing agency could not
confirm that SDPFFI maintained separate bank accounts, as the foundation
failed to submit the required documents. In addition, checks released
to the foundation amounting to P15.16 million were not crossed for
deposit to its bank accounts, while checks amounting to P26.53 million
were not presented for audit.
The COA ended its 2009/ 2010 report on SDPFFI with the note that it had yet to hear from NABCOR about the findings.
In an interview with GMA News, Agriculture Secretary Proceso Alcala
said that because of the COA audit reports, the DA no longer released
funds to NGOs and POs through NABCOR starting 2012. Alcala added that DA
itself has had liquidation problems with NABCOR.
26 foundations received questionable funds
From 2006 to 2011, the government's audit arm identified at least 26
foundations involved in irregular transactions involving pork barrel
funds. At least 12, including SDPFFI, had received government funds more
than once, as seen in the table below.
Table 2: Foundations and the pork they received
| FOUNDATION | AMOUNT |
| AARON FOUNDATION PHILIPPINES INC. | 97,000,000 |
| BUHAY MO MAHAL KO FOUNDATION INC. | 31,525,000 |
| BUKID-TANGLAW LIVELIHOOD FOUNDATION INC. | 8,730,000 |
| CENTER FOR MINDORO INTEGRATED DEVELOPMENT FOUNDATION | 9,700,000 |
| CENTER FOR MINDORO INTEGRATED DEVELOPMENT FOUNDATION INC. | 4,850,000 |
| CENTER FOR MINDORO INTEGRATED DEVELOPMENT FOUNDATION INC. | 4,850,000 |
| DR. RODOLFO A. IGNACIO SR. FOUNDATION INC. | 9,700,000 |
| GABAY AT PAG-ASA NG MASA FOUNDATION INC | 52,865,000 |
| GABAY SA MAGANDANG BUKAS FOUNDATION INC. | 2,910,000 |
| GABAYMASA DEVELOPMENT FOUNDATION INC. | 23,280,000 |
| IKAW AND AKO FOUNDATION INC. | 19,400,000 |
| INFINITE COMMUNITY INTEGRATED DEVELOPMENT SUPPORT FOUNDATION INC. | 26,190,000 |
| INFINITE COMMUNITY INTEGRATED DEVELOPMENT SUPPORT FOUNDATION INC. | 24,250,000 |
| INTERACTIVE TRAINING OPPORTUNITY ON NEEDS ALLEVIATION (ITO NA!) MOVEMENT INC. | 4,365,000 |
| INTERACTIVE TRAINING OPPORTUNITY ON NEEDS ALLEVIATIONS (ITO NA!) MOVEMENT INC. | 5,383,500 |
| KAAGAPAY MAGPAKAILANMAN FOUNDATION INC. | 57,230,000 |
| KAAGAPAY MAGPAKAILANMAN FOUNDATION INC. | 4,850,000 |
| KAAGAPAY MAGPAKAILANMAN FOUNDATION INC. | 1,042,750 |
| KABUHAYAN AT KALUSUGANG ALAY SA MASA FOUNDATION | 50,440,000 |
| KABUHAYAN AT KALUSUGANG ALAY SA MASA FOUNDATION INC | 65,960,000 |
| KABUHAYAN AT KALUSUGANG ALAY SA MASA FOUNDATION INC. | 63,341,000 |
| KAGANDAHAN NG KAPALIGIRAN FOUNDATION INC. | 109,061,950 |
| KAISA'T KAAGAPAY MO FOUNDATION INC. | 55,290,000 |
| KAPUSO'T KAPAMILYA FOUNDATION INC. | 12,610,000 |
| KAPUSO'T KAPAMILYA FOUNDATION INC. | 76,455,400 |
| KAPUSO'T KAPAMILYA FOUNDATION INC. | 4,850,000 |
| KASANGGA SA MAGANDANG BUKAS FOUNDATION INC. (KMBFI) | 56,551,000 |
| MASAGANANG ANI PARA SA MAGSASAKA FOUNDATION INC. | 112,083,500 |
| MASAGANANG ANI PARA SA MAGSASAKA FOUNDATION INC. | 9,700,000 |
| PANGKABUHAYAN FOUNDATION INC. | 24,250,000 |
| PANGKABUHAYAN FOUNDATION INC. | 9,457,500 |
| PEOPLE'S ORGANIZATION FOR PROGRESS & DEVELOPMENT FOUNDATION INC. | 24,250,000 |
| SAGIP-BUHAY PEOPLE SUPPORT FOUNDATION INC. | 29,100,000 |
| SOCIAL DEVELOPMENT PROGRAM FOR FARMERS FOUNDATION INC. | 160,535,000 |
| SOCIAL DEVELOPMENT PROGRAM FOR FARMERS FOUNDATION INC. | 64,747,500 |
| ST. JAMES THE APOSTLE MULTIPURPOSE COOPERATIVE | 9,700,000 |
| ST. JAMES THE APOSTLE MULTI-PURPOSE COOPERATIVE | 9,700,000 |
| THE LIKHAAN GROUP INC. | 4,365,000 |
| THE LIKHAAN GROUP INC. | 4,850,000 |
| THE LIKHAAN GROUP INC. | 9,215,000 |
| USWAG GUIMARAS FOUNDATION | 2,546,250 |
| USWAG GUIMARAS FOUNDATION INC. | 13,580,000 |
| USWAG PILIPINAS FOUNDATION INC. | 12,804,000 |
| VARIOUS NGOS AND POS | 146,038,499 |
| TOTAL | 1,529,602,849 |
Source: GMA News Research, using data from the Commission on Audit
The anomalies continued despite the revised, and more
stringent, COA guidelines on the release of funds to NGOs/ POs issued in
2007, in the aftermath of the commission's discovery of the fertilizer
fund scam.
Since the 2009 General Appropriations Act
(GAA), the government has also made it a policy not to allow NGOs/ POs
to participate in projects if they have unliquidated fund releases.
Government agencies are also tasked by law to ensure that the NGOs/ POs
they deal with are legitimate.
COA's objections to NABCOR's
transactions with questionable NGOs/ POs stem from violations of legal
requirements that should have rendered them ineligible to receive
government funds. The deficiencies and transaction irregularities
include the following:
-
non-submission of project proposals
-
lack of proof of good financial standing for three years preceding the date of project implementation
-
incapability of a foundation to put up its own equity participation without using funds, i.e. government funds, allocated to it
-
non-compliance with COA rule that an NGO/ PO must be based in the community where its project is to be implemented
-
non-submission of required documents for audit
-
liquidation deficiencies
-
non-compliance with bidding requirements
In its latest COA audit covering transactions in 2011, released this
year, the same set of complaints appear, with the COA still unsatisfied
with NABCOR's explanations.
Seven foundations run by the same people
Among the COA's findings, one observation stood out: at least seven
foundations allegedly involved in irregular transactions with the
government are being run by the same individuals.
"Marilou L.
Antonio was the Project Coordinator of Buhay Mo Mahal Ko Foundation,
Inc. and Ikaw at Ako Foundation, Inc. and Chief Finance Officer of
Kabuhayan at Kalusugang Alay Sa Masa while Marilou C. Ferrer was the
Project Coordinator of Kapuso't Kapamilya Foundation, Inc. and Corporate
Secretary of Kabuhayan at Kalusugang Alay sa Masa," COA observed in
2007.
In a 2008 audit, COA disclosed that Antonio, Ferrer and
Godofredo G. Roque were also incorporators of Gabay at Pag-asa ng Masa
Foundation, Inc., Kasangga sa Magandang Bukas Foundation, Inc. and
Kaagapay Magpakailanman Foundation, Inc.
Table 3: Foundations with interlocking officers
| FOUNDATION | AMOUNT RECEIVED |
| BUHAY MO MAHAL KO FOUNDATION, INC. | 31,525,000 |
| KAPUSO'T KAPAMILYA FOUNDATION, INC. | 93,915,400 |
| IKAW AT AKO FOUNDATION, INC. | 19,400,000 |
| KABUHAYAN AT KALUSUGANG ALAY SA MASA FOUNDATION | 179,741,000 |
| GABAY AT PAG-ASA NG MASA FOUNDATION, INC. | 52,865,000 |
| KASANGGA SA MAGANDANG BUKAS FOUNDATION, INC. | 56,551,000 |
| KAAGAPAY MAGPAKAILANMAN FOUNDATION, INC. | 63,122,750 |
| TOTAL | 497,120,150 |
Source: GMA News Research, based on data from the Commission on Audit
Altogether, these foundations received PDAF amounting to almost half a billion pesos in the years audited by COA.
The three foundations that received the biggest government funds were
PDAF recipients on three different years, despite COA's observations of
their involvement in irregular transactions with NABCOR.
Fertilizer fund mess
Irregularities in government transactions, particularly in the agriculture sector, with NGOs/ POs are nothing new.
COA's 2008 release of a special audit on the P728 million Ginintuang
Masaganang Ani (GMA) farm input fund, which uncovered what is now known
as the fertilizer fund scam, has led to the revision and tightening of
guidelines on government transactions with foundations.
The
Senate probed the fertilizer scam, conducting inquiries in 2005, 2006
and 2008. The report it released in February 2009 recommended the filing
of charges, but only against officials no higher than an agriculture
undersecretary.
A plunder complaint against former President
Gloria Macapagal-Arroyo in relation to the scandal was filed in June
2011 before the Department of Justice (DOJ). The following month, the
Ombudsman ordered the probe on Mrs. Arroyo's alleged involvement in the
case, which has yet to reach the preliminary investigation stage.
Inaction on the fertilizer fund scam was one of the charges leveled
against former Ombudsman Merceditas Gutierrez in two impeachment charges
against her. In 2011, the House impeached Gutierrez, who resigned
before she could face trial in the Senate.
To date, the fertilizer fund scam has yet to be resolved. — RSJ/YA/HS, GMA News
