Pharmally exec admits company ‘swindled’ gov’t
MANILA, Philippines — In a stunning admission, one of the executives of Pharmally Pharmaceutical Corp. said her company had swindled the government by selling medical-grade face shields that were either damaged or soiled and with bogus production dates.
The trading company is at the center of a Senate investigation of alleged irregularities in the purchase of pandemic supplies and contracts by the Procurement Service of the Department of Budget and Management (PS-DBM) using at least P42 billion in pandemic funds transferred from the Department of Health (DOH).
Krizle Grace Mago, an incorporator of the company and its regulatory affairs head, confessed on Friday that she ordered the company’s warehouse workers to change production dates from 2020 to 2021 in certification documents for the face shields ordered by the DOH to be used by doctors and nurses in the front lines of the battle against COVID-19.
“That is something I cannot deny,” she told the Senate blue ribbon panel, confirming a video testimony of a warehouse worker who blew the whistle on the date switching.
Sen. Risa Hontiveros presented the unidentified male worker who spoke about the delivery of the poor-quality pandemic safety gear with falsified production dates from Pharmally.
“So, you were swindling the government?” the committee chair, Sen. Richard Gordon, asked Mago.
“I believe so, Mr. Chairman. I believe that is the case,” she replied.
On whose instructions?
It wasn’t immediately established during Friday’s hearing that the tampered face shields were part of a P37.9-million DOH contract with a joint venture between Pharmally and Business Beyond Limits for 2 million face shields.
Asked by Sen. Panfilo Lacson who gave her the instructions, Mago said: “I received the instruction from the management, particularly Mohit Dargani.”
But Dargani, who was testifying through a video call from the United States, denied that he gave the order, saying Mago might have misremembered.
“I think she’s always used to getting instructions. So she remembered me, but that’s not the case,” he said.
Despite Dargani’s remarks Mago stood by her statement. “I am not changing my testimony,” she said.
Willing to cooperate
Sen. Francis Pangilinan said Mago effectively made an admission against her own interest, “which carries weight” in legal proceedings, while Dargani made only a general denial, “which is weak.”
Asked whether there were other pandemic supplies that she was instructed to tamper with by the management, she said it was “only for this project,” but she requested to be allowed to “verify the details of other projects.”
Mago vowed to cooperate with the investigation, prompting Pangilinan and Hontiveros to move to have her placed under the protective custody of the Senate.
But Gordon said Mago must first agree to the proposed protection.
“Allow me to think about it. Let me think about it. I’m also an employee of Pharmally. So I have to consider both sides,” she responded.
It was also Mago who was found during a hearing last week to have disclosed that the company had delivered 2 million surgical masks in late March last year even before it agreed to a price with the government and that on April 6, 2020, it delivered 500,000 more before it signed its first deal with the PS-DBM.
Hontiveros earlier showed the Senate panel a video testimony of a former employee at LB2 Warehouse in Pasig City allegedly operated by Pharmally who disclosed that workers were ordered in August and September this year to replace certificates of dates for the 2020 face shields with 2021 certificates.
According to Hontiveros, this bolstered Pangilinan’s assertions in the last hearing that Pharmally delivered substandard and overpriced goods to the government using taxpayer money.
“In the certificates, the production date was supposed to be the year 2020. Then we were ordered to replace them with certificates that are updated this year. The one who ordered us was Ma’am Krizle Grace Mago,” the employee said.
He said they were instructed to deliver all the goods regardless of their condition.
“Even if the face shields were dented, the boxes were dilapidated, or there was dirt, we were asked to repack them all … even if the [foam] was yellowish already or wet because of the leaks at the warehouse,” the employee said in Filipino.
Mago confirmed that she gave those instructions.
“With regard to the changing of stickers of the items, my response is this was a supply concern, and I raised this concern to the management, and that was the solution given to us,” she said.
During the hearing, Mago also revealed that she was placed as a nominee of Business Beyond Limits OPC, the company that entered into a joint venture with Pharmally and won the P37.9-million contract for face shields ordered by the DOH on June 11.
“I was appointed — how do I say this — I was placed there for convenience,” she told the senators.
“I was placed as a nominee of that corporation, for convenience. They heeded my advice when it comes to different services,” she explained, citing her “technical expertise for services and her experience in government bidding.”
Mago said she was placed as a nominee by Sophia Mercedes Custodio, the incorporator of the one-person company.
During Friday’s hearing, the senators again zeroed in on the involvement of President Rodrigo Duterte’s longtime Chinese friend Michael Yang, who had served as his economic adviser.
Ong clams up
A Pharmally director, Linconn Ong, who previously testified that he sought Yang’s help to fulfill Pharmally’s big-ticket contracts, again clammed up when asked to disclose how much the Chinese businessman had given the company.
Yang had been consistent in denying personally loaning money to Pharmally, insisting his role was limited to introducing Ong to his friends among suppliers in China who could provide financial assistance. But Ong, who was placed under the custody of the Senate after he was cited in contempt for his evasive answers in past hearings, reiterated that Yang had given Pharmally money.
“Was it a loan or a donation?” Senate Minority Leader Franklin Drilon asked him.
“That was not a donation. On our side, I will acknowledge we have an obligation to Mr. Yang. He helped us,” Ong replied. “He helped us with access to funding.”
But Ong refused to answer when Drilon asked how much.
“It might be better to ask him that. I cannot recall. And even if I have the record, I cannot talk about it,” he said, citing a nondisclosure agreement with Yang.
Ong’s answers angered the senators, with Lacson, Pangilinan, and Drilon each threatening to have him moved from the Senate offices in Pasay City to the Pasay City Jail or New Bilibid Prison in Muntinlupa City, noting that his refusal to answer bordered on perjury.
Looking alarmed, Ong said he could not understand why he was being targeted.
“I am cooperating to the best of my ability,” he said.
The senators then tried to bargain with Ong, saying he could avoid jail time if he agreed to tell all in a closed-door executive session.
“Allow me to consult my lawyer,” he said, requesting Gordon’s panel to give him five minutes to call his counsel.