Lottery mess: NBI pushes raps vs 15 PCSO officials

MANILA, Philippines — The National Bureau of Investigation has recommended to the Office of the Ombudsman the prosecution for graft of 15 former and current officials of the Philippine Charity Sweepstakes Office (PCSO) over alleged irregularities in the operation of Small Town Lottery (STL).

Recommended for prosecution were former PCSO general manager Alexander Balutan, former chair Jorge Corpuz, current and former directors Sandra Cam, Betty Nantes, Mabel Mamba, Francisco Joaquin, Marlon Balite and Jesus Suntay.


Also recommended for prosecution were STL monitoring group members Remeliza Gabuyo, Lauro Patiag, Arnel Casas, Anna Liza Inciong, Merceditas Hinayon, Andy Gauran and Edwin Mackay.

Gabuyo, chief of the monitoring group, was accused of obstruction of justice for not providing documents that had been requested by the NBI.


Gabuyo, Cam, Balite, Patiag, Inciong and Casas were also accused of gross misconduct.

The complaint, filed on July 11 but details of which were released only on Wednesday, alleged irregularities in the use of the STL ticket printing fund for 2017 and 2018, which amounted to P637 million.

Citing Republic Act No. 1169, or the sweepstakes law, the NBI said the ticket printing cost should not exceed 2 percent of the gross receipt. It said the excess printing fund should be reverted to the PCSO charity fund, as required by law.

But in 2017 and 2018, the NBI said the PCSO “allowed STL operators to retain 0.5 percent of the printing fund and … the remaining 1.5 percent was remitted to PCSO.”

The NBI said the PCSO also did not provide a fixed number of tickets to be given free to ticket vendors, as the agency also allowed the STL operators to print their own tickets.

That means the PCSO did not incur printing expenses because it “unlawfully delegated the task to the operators,” the NBI said.

Increased operating fund

On top of this, the NBI said, the remaining 1.5 percent of the printing fund was added to the PCSO operating fund, instead of declaring it as savings and reverting it to the charity fund.


The move increased the agency’s operating fund, which was supposed to be 15 percent of the net receipt, the NBI said.

“The P245.5 million (for 2017) and P391.6 million (for 2018) should have been part of the charity fund, since the PCSO discontinued the printing of STL tickets,” it said.

“Instead the agency used the money to fund its operations, a manifest violation” of the law, the bureau said.

“The millions of pesos that were not reverted to the charity fund could have provided assistance to the Filipino people who are still in the grip of grinding poverty. Due to the acts and/or omissions of the PCSO officers and employees, the funds that should have been part of the charity fund to be enjoyed by the echelons of the society were enjoyed only by a few PCSO employees, a clear violation of the applicable laws, rules and regulations, and an infringement to the very purpose of the expansion of the STL operations,” the NBI said.

In 2016, it said, Gabuyo proposed revisions to the STL implementation rules to increase the PCSO charity fund and combat illegal numbers games in places where STL was not available.

But the revised rules were “flooded with provisions” that were contrary to the law, the NBI said.

Among the illegal provisions was that the rules would take effect immediately after the board’s approval, instead of after approval by the President.

The PCSO is an agency under the Office of the President.

DOJ investigation

Last year, President Duterte ordered a halt to PCSO operations due to alleged “massive corruption” in the agency and directed the Department of Justice (DOJ) to investigate the agency’s failure to remit the government’s share of STL income.

The DOJ then directed the NBI to investigate. The investigation led to the filing of the complaint against the 15 former and current PCSO officials and employees with the Ombudsman.

Reached for comment by the Inquirer on Wednesday, Balutan said the government put him through a lifestyle check and “found nothing.”

“Despite my success in increasing the revenue of the PCSO, there are many who are not happy with how Small Town Lottery games are being operated by the PCSO, particularly the local politicians,” Balutan said, quoting from his Dec. 26, 2019, affidavit submitted to the NBI.

He said he had no control and supervision over STL.

“The control and supervision of Small Town Lottery games were removed from the office of the general manager based on Board Resolution 0076, series of 2018,” he said. “The advisory committee for STL was placed under the direct control and supervision of the office of the chairman.”

Balutan said the change was approved by the board on March 21, 2018.

‘Are they afraid?’

In a text message to the Inquirer, Balutan said other PCSO officials, including the chair and the directors, were sent subpoenas but were “not keen to give statements, according to investigators of the NBI or the Ombudsman.”

“Are they afraid? The truth should come out,” he said.

Balutan said it was he who asked for an investigation of STL operations before he resigned.

Balutan said Gabuyo could not be charged with obstruction of justice because she turned over all the needed documents to the new general manager, Royina Garma.

“She has secured a receiving copy,” Balutan said. “Other records can be taken from the record section, not from her.”

In a statement sent to the Inquirer, Garma’s office said it respected “whatever outcome of the investigation of the NBI.”

“[The] PCSO will cooperate with the investigation because we want to let the public know that the PCSO will not tolerate any wrongdoings,” the statement said.

—With a report from Jodee A. Agoncillo

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TAGS: Alexander Balutan, graft case, NBI, Office of the Ombudsman, PCSO officials, STL irregularities
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