Ombudsman charges 25 individuals for P900 million Malampaya Fund scam

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(File photo) Ombudsman Conchita Carpio-Morales

Metro Manila (CNN Philippines) — A number of officials during the Arroyo administration have a lot of explaining to do at the anti-graft court. The Office of the Ombudsman on Tuesday finds probable cause to file charges against them over the P900-million Malampaya fund scam.

Former officials at the Department of Budget and Management (DBM) and Department of Agrarian Reform (DAR), and representatives of non-government organizations (NGOs) are facing plunder, graft and fund malversation charges.

Former President now Pampanga Representative Gloria Macapagal-Arroyo is not in the charge list.

The complaints against Arroyo, former Executive Secretary Eduardo Ermita, former DAR officials Dominador Sison, Jr. and Nilda Baui were dismissed due to lack of evidence.

Meanwhile, Arroyo's camp said they consider this development as the "latest victory."

"It's the perfect way to end the year and to start the new one. We hope that we have seen the last of these frivolous complaints against the former president," the former President's lawyer Laurence Arroyo said in a statement.

Former first gentleman Mike Arroyo's lawyer and spokesman Ferdinand Topacio said the latest development affirmed the cases against the former president are mere political noisemaking, "made purely for media effect by those who would profit to destroy her good name and besmirch her achievements as Chief Executive."

Under Presidential Decree 910, the Malampaya fund is a special fund to finance the government's energy resource exploration, development and exploitation programs and projects and such other purpose as may be directed by the President.

It is collected from the government's share in royalties, rentals, production share on service contracts and other payments on the exploration, development and exploitation of energy resources.

Also read: Sandiganbayan drops NBN-ZTE graft cases vs. Arroyo

Office of the Ombudsman: Funds coursed through Napoles NGO's

In a statement, the office of the Ombudsman said the respondents "are found to have acted in concert to divert the fund releases drawn from the P900 million Malampaya fund allocated by the DBM to the DAR in 2009, which was malversed and coursed through the NGOs controlled by Napoles" - for which "huge kickbacks and commissions" were paid.

Facing two counts of plunder and multiple charges of graft and malversation through falsification are:

1.   Former Budget Secretary Rolando Aureo Andaya, Jr.

2.   Former Budget Undersecretary Mario Relampagos

3.   Former Agrarian Reform Secretary Nasser Pangandaman

4.   Former Agrarian Reform Undersecretary Narciso Nieto

5.   Former Agrarian Reform Director Teresita Panlilio

6.   Former Candaba Mayor Rene Maglanque

7.   Ruby Tuason

8.   Janet Lim Napoles

9.   Jo Christine Napoles

10. James Christopher Napoles

11. Reynald Lim

12. Evelyn De Leon

13. Ronald Francisco Lim

14. Ronald John Lim

15. Eulogio Rodriguez

16. Simplicio Gumafelix

17. John Raymund De Asis

18. Rodrigo Galay

19. Alejandro Garro

20. Paquito Dinso, Jr.

21. Gerald Apuang

22. Napoleon Sibayan

23. Winnie Villanueva

24. Angelita Cacananta

25. Ronald Venancio

Records from the Office of the Ombudsman show that Andaya requested the release of Malampaya funds to aid victims of typhoons "Ondoy" and "Pepeng."

"On 08 October 2009, then Secretary Andaya submitted to the Office of the President, a request for authority to use the Malampaya fund for relief operations, rehabilitation, and reconstruction of areas affected by typhoons "Ondoy" and "Pepeng," it stated.

"Five days later, or on 13 October 2009, former President Gloria Macapagal-Arroyo issued Executive Order 848 authorizing the DBM to release the funds to the DAR as implementing agency. On 22 October 2009, Undersecretary Nieto requested Andaya for the release of P900million to provide direct assistance to farmer-beneficiaries affected by the two typhoons."

According to the Ombudsman, the fund release was based on 97 requests by mayors.

The funds, however, were allegedly entrusted by the DAR to NGOs registered and owned by Napoles' relatives, friends, household helpers, children's nannies, drivers, and other employees.

"After the receipt of the checks, the NGO representatives issued official receipts and fake liquidation documents such as reports of disbursements, delivery reports, certificates of acceptance, certificates of project completion, inspection and acceptance reports, fund utilization reports, independent auditor's reports, reports of disbursements by external accountant and lists of beneficiaries," the Office of the Ombudsman stated.

"Ombudsman investigators found that the documents were all fictitious as there were no deliveries of agricultural kits or packages. Respondents also manufactured the lists of farmer-beneficiaries and forged the signatures of the recipients."

It also said the testimony of whistleblower Benhur Luy states the respondents also received kickbacks totaling P380,275,000 for facilitating the release and the diversion of the Malampaya fund.

The Office of the Ombudsman also finds the existence of the NGOs "highly questionable," and the DAR's failure to monitor the implementation of the multi-million peso projects "highly anomalous."

Ombudsman Conchita Carpio-Morales said "the respondents' intent and purpose show cohesion and interconnection, demonstrating the attainment of the same objective through their separate acts as each contributed in the end result of defrauding the government of the P900 million Malampaya fund."

Watch: Napoles pleads 'not guilty' to graft, malversation charges

Ombudsman upholds charges against Ruby Tuason

The Ombudsman turned down socialite Ruby Tuason's request for immunity - and upheld the charges against her instead.

Morales said Tuason admitted her involvement in cooperating with Napoles to facilitate the release of funds through her brother Remy, a contact in Malacañang - and for allegedly having received kickbacks totaling P242.775 million at her house.

"In the course of preliminary investigation, Mrs. Tuason stated that, allegedly, the contact of her brother in Malacañang was certain 'Atty. Jess,' Jesus Santos, who reportedly facilitated the release of the funds," Morales said.

"I directed the field investigation office to conduct further investigation in order to determine if indeed this Jesus Santos facilitated the release of the funds and to identify the ultimate recipient of the P240 plus million that was received at the house of Mrs. Tuason which represent partial proceeds of the Malampaya fund.

Morales said if it will be established in the course of investigation on Santos that the former president benefitted from the scam, she will be invited for further inquiry.

"If things will surface that way, so be it," Morales said. "There's nothing that will prevent the office to consider inviting her. Otherwise, the dismissal of the case remains as is."

Also read: AMLC refuses to disclose details of Ruby Tuason’s bank accounts

Tuason was given immunity in the Priority Development Assistance Fund (PDAF) case against Sen. Juan Ponce Enrile.  But Morales said the Malampaya fund scam is a different case.

"She was given immunity in the PDAF case against Sen. Enrile, but she was not given immunity in this case. Because she was supposed to establish how funds went in the Malampaya case," Morales said

Morales added, the primary participation of Napoles "in the complex and well-orchestrated scheme," however, is "already established and highlighted" by the statements of whistleblowers like Benhur Luy, Commission on Audit report, Anti-Money Laundering Council inquiry report, sworn statements of mayors, municipal agricultural officers and purported farmer-beneficiaries.