Former NABCOR president Alan Javellana (left) and former ZREC head Salvador Salacup answer questions from senators during the Senate hearing on the pork barrel scam yesterday. MANNY MARCELO

MANILA, SEPTEMBER 9, 2013 (PHILSTAR ) By Marvin Sy - Some senators had personally signed liquidation reports for projects funded by their pork barrel, indicating their direct hand in implementing projects as well as in choosing which non-government organizations (NGOs) would receive funds as project partners.

This became evident yesterday from the accounts of Agriculture Assistant Secretary Salvador Salacup, former head of the Zamboanga del Norte Rubber Estate Corp. (ZREC), and Allan Javellana, former president of National Agribusiness Corp. (NABCOR) at the resumption of the Senate Blue Ribbon committee’s hearing on the pork barrel scam.

The two government-owned and controlled corporations (GOCCs) are subsidiaries of the Department of Agriculture (DA).

NABCOR and ZREC were among the government agencies that received congressional pork barrel allocations from senators and congressmen. The funds were eventually transferred to NGOs linked to businesswoman Janet Lim-Napoles, the alleged mastermind of the multi-billion peso pork barrel scam.

Pork barrel is officially called Priority Development Assistance Fund (PDAF).

Napoles is in detention at Fort Sto. Domingo in Sta. Rosa, Laguna for an illegal detention case filed by her former employee and main whistleblower Benhur Luy.

During the hearing, Salacup and Javellana explained it was the NGOs and not the GOCCs which implemented PDAF-funded projects.

The two confirmed pronouncements from Commission on Audit (COA) Chairman Grace Pulido-Tan that GOCCs received endorsements or letters from legislators directing the transfer of their PDAF to specific NGOs.

“There were just letters. A letter of instruction that funds of PDAF will be transferred to the foundations identified,” Salacup said.

Salacup also told the committee that project proposals contained “notations on the working financial plans by the legislators.”

The letters were issued either by the legislators themselves or their authorized representatives.

Salacup said Sen. Jinggoy Estrada assigned a certain Mr. Dinglasan as his authorized representative while Senate Minority Leader Juan Ponce Enrile had a certain Mr. Evangelista as representative.

He said that a letter from the office of Enrile signed by a certain Atty. Lucila Reyes mentioned Mr. Evangelista as Enrile’s representative.

In the case of Estrada, Salacup said there were communications that the senator had personally signed.

Sen. Ramon Revilla Jr., APEC party-list Rep. Edgar Valdez and Buhay party list Rep. Rene Velarde Jr. had signed the documents themselves, according to Salacup.


Asked by Blue Ribbon committee chairman Sen. Teofisto Guingona III if he did not see anything suspicious about the process, Salacup said that he had no reason to question them because all of the documentary requirements were in order.

Salacup noted that the NGOs were all registered with the Securities and Exchange Commission, and had the necessary documents from the Bureau of Internal Revenue. They also had mayor’s permits and certified financial statements.

Javellana said NABCOR followed the same procedures and received the same type of letter from legislators.

Salacup said ZREC had introduced a “second mechanism” to check if the funds for projects being implemented by the NGOs were properly liquidated.

Salacup said that funds were released in four tranches, with independent auditors handling liquidation of every release.

“Each tranche’s liquidation was noted by the legislator or his duly appointed representative,” he said.

Salacup said that as early as 2007, when COA was reviewing the ZREC, his treasurer Ed Nolasco told him about government auditors expressing “a lot of observations.”

“So I told him (Nolasco) to work on it, check that properly. I believe he wrote a letter to the legislators to put a stop to using ZREC as a conduit,” Salacup said.

ZREC and NABCOR were not included in the Department of Budget and Management’s PDAF project menu for the period 2007 to 2009, meaning they were not specifically identified as among the authorized implementing agencies.

DBM undersecretary Mario Relampagos noted that only DA appeared in the list, but stressed he “didn’t see any impediments for government corporations to engage in government projects.”

Sen. Francis Escudero pointed out that there are only two modes provided by the Government Procurement Policy Board and the COA in awarding projects to NGOs – either through public bidding or negotiated procurement.

Salacup admitted that he was not aware of these rules, while Javellana said that he had relied on the endorsements from legislators.

“Forgive me, sir, but I cannot accept that officials would have been ignorant of existing (rules) as early as June 2007. In fact, I’m particularly raising this because if it’s a negotiated procurement, the NGO is required to come up with the performance or security bond equivalent to the amount of the project, so that in case the NGO disappears, we won’t be left hanging,” Escudero said.

“Again a clear violation of existing laws and regulations that you simply awarded it to these NGOs. Now if you’re partnering with them, who introduced them to you? The legislator?” Escudero asked.

Salacup and Javellana said the selection of NGOs was based on endorsements from lawmakers.

“And based on that endorsement, you took it hook, line and sinker and implemented it just like that?” Escudero said.

COA director Susan Garcia said that the authorized implementing agencies should have validated the NGOs – or the DA should have monitored the implementation of the projects.

Escudero noted that ZREC and NABCOR were able to enjoy retained earnings equivalent to three percent of all projects implemented using the PDAF.

Unaware NGOs fake

Salacup also said they had no idea they were dealing with bogus groups.

“Based on the certifications of the legislators, it didn’t cross my mind that the NGOs were fake,” he said.

Salacup said the present ZREC management should pursue cases against the concerned NGOs.

Javellana said that he was shocked on hearing reports about the fake NGOs.

“At that time there was no malice at all in going into partnership with them. We could have done better validating all these things and (performing) due diligence on all these documents,” Javellana admitted.

But Guingona said he was wondering why the former NABCOR head could not remember details of his office’s dealings with the legislators and the NGOs despite his admission that he had met with Napoles twice at the coffee shop of the Discovery Suites in Pasig City to discuss a possible investment in NABCOR.

Javellana said the meeting was not about any of the projects of Napoles’ NGOs but was a discussion on the operations of NABCOR as a GOCC.

Javellana said that his meeting with Napoles was part of his effort to invite joint venture investors into the company.

At the time, Luy was already doing business with NABCOR as the president of some NGOs endorsed by the legislators.

Javellana said that at that time he was not aware of the connection between Napoles and Luy.

NABCOR’s former vice president for administration and finance Rhodora Mendoza confirmed that Luy was a frequent visitor to their office.

During the hearing, Mendoza named all of the legislators whose PDAF ended up in Napoles NGOs.

She said she was “very sure” about Revilla, Estrada and Enrile. After checking her emails through a laptop provided by the committee, Mendoza identified the House members with dealings with the GOCC as Conrado Estrella III, Erwin Chiongbian, Rodolfo Plaza, Victor Ortega, Samuel Dangwa, Edgar Valdez, Mark Douglas Cagas IV, Rizalina Lanete, Arthur Pingoy Jr. and Rodolfo Valencia.

From 2006 to 2008, NABCOR received a total of P1.2 billion in PDAF.

Asked by Osmeña if he was not surprised by the huge amount of PDAF coming his way, Javellana said he was but that he had no choice but to implement the projects.

“Actually I was surprised. Numerous requests started coming in. I asked guidance from the DA (former Secretary Arthur Yap) and he just told me to implement it because that was requested by the legislators,” Javellana said.

ZREC, for its part, received around P230 million to P240 million from 2007 to 2009.

Under investigation

At Malacañang, presidential spokesman Edwin Lacierda said other NGOs not linked to Napoles are also under investigation.

He said President Aquino has already tasked the Inter-Agency Anti-Graft Coordinating Council (IAAGCC) to also investigate other NGOs mentioned in the 2007-2009 special audit report of the COA.

So far only NGOs linked to Napoles are in the crosshairs of investigators.

“They will investigate, aside from the Napoles case, the PDAF, the other things revealed in 2007-2009 report,” Lacierda said.

The IAAGCC is headed by Ombudsman Conchita Carpio-Morales, Justice Secretary Leila de Lima and COA Chairman Tan.

Aside from Napoles, a certain Godofredo Roque was also identified as one of those running questionable NGOs involved in PDAF misuse. Several other names were also listed in the COA special audit report.

Lacierda also cleared Interior and Local Government Secretary Manuel Roxas II of any link to PDAF anomaly.

Lacierda said the blame should be on NGO Kalookan Assistance Council Inc. for its failure to disclose details of the P5 million it received from Roxas.

“I think the answer should be coming from KACI. They have to explain to COA why did they use part of the funds provided by (then) Senator Mar Roxas at the time as financial assistance to their own employees,” he said in a news briefing.

“Any suggestion that Secretary Mar Roxas is involved in any scam is malicious,” Lacierda stressed.

“I don’t know why this is being made an issue. In his years of public service, Secretary Mar Roxas has never been tainted with any allegation of anomaly,” he said.

“That’s why he was surprised that there was a statement that he was not prepared to provide documents. He is willing to provide all the documents. This is only a P5-million fund that was being stated,” Lacierda stressed.

Earlier, Lacierda gave assurance that Cabinet officials were not interfering in the investigation into the pork barrel scam being conducted by the National Bureau of Investigation.

He said the NBI was conducting a thorough, exhaustive and impartial investigation into the issue.

“They are still doing case build-up,” Lacierda said when asked why it was taking the NBI so long to file a case.

Deputy presidential spokesperson Abigail Valte, for her part, rebuffed claims by the Senate minority bloc that only implementing agencies and local government units should be blamed for PDAF misuse.

“Legislators, under the PDAF system, are the ones tasked to identify projects or beneficiaries out of their allocations. As such it is expected that they have done their due diligence on their projects,” Valte said in a text message to reporters.

Members of the Senate minority had said it was not their responsibility to check the legitimacy of NGOs. With Aurea Calica, Delon Porcalla, Aie Balagtas See, John Unson, Danny Dangcalan

Chief News Editor: Sol Jose Vanzi

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