Lloyd Christopher Lao. SCREEN GRAB from PTV
MANILA, Philippines — Senate President Vicente Sotto III on Friday ordered the arrest and detention of a key figure in the senators’ investigation of billions of pesos in government pandemic supply contracts with Pharmally Pharmaceutical Corp. for failing to show up in four recent hearings of the blue ribbon committee.
Sotto told reporters that former Budget Undersecretary Lloyd Christopher Lao, who was head of the Procurement Service of the Department of Budget and Management (PS-DBM) when it awarded most of Pharmally’s supply deals in 2020-2021, provided no valid excuse for his absences.
Senate sergeant-at-arms Rene Samonte was tasked with taking Lao into custody. He said Lao may have “many addresses.”
On Thursday, the panel chair, Sen. Richard Gordon, cited Lao in contempt of the Senate for refusing to attend the hearings on Oct. 5, Oct. 19, Oct. 28 and Nov. 4, “thereby delaying, impeding and obstructing the inquiry.”
Lao, who last appeared in an online hearing on Sept. 30, quit his job at the PS-DBM in June. He was present during previous hearings but did not submit some documents sought by the committee.
May join Ong
He stopped attending after President Duterte, who had criticized the investigation, barred all executive officials and employees from further taking part in the Senate inquiry through an Oct. 4 memorandum.
Cabinet members like Health Secretary Francisco Duque III have cited the President’s directive for not attending the hearings from Oct. 5 onward. But Lao, who is no longer in government, is not covered by that memo.
On a motion by Senators Francis Pangilinan and Risa Hontiveros, the panel ordered Lao arrested by the Senate sergeant-at-arms and detained “until such time that he submits the subpoenaed documents, or otherwise purges himself of that contempt.”
Pharmally director Linconn Ong is the only company officer in Senate custody on a contempt citation for his supposed inconsistent and evasive testimony.
Two other Pharmally executives, company president Twinkle Dargani and her brother, Mohit, the corporate secretary and treasurer, are in hiding after they were also ordered arrested last month for refusing to present documents related to their transactions.
Gordon on Thursday denounced the continued absence of government officials, saying the President should be held responsible for any delay in the investigation.
His panel had released a preliminary report alleging a “grand conspiracy” with the “imprimatur” of Mr. Duterte to defraud the government of funds for pandemic response.
It recommended graft and corruption charges against Lao and other officials and Pharmally executives.
Pharmally, which had a paid-up capital of only P625,000 in 2019, was the government’s biggest supplier of pandemic goods in the past two years. It bagged P11.5 billion worth of contracts, mostly with the PS-DBM under Lao.
The PS-DBM contracted Pharmally on behalf of the Department of Health (DOH) for face masks, face shields, personal protective equipment, COVID-19 test kits and other medical items, after the DOH transferred at least P42 billion of its pandemic funds to the procurement office last year.
The transfer was flagged by the Commission on Audit for lack of supporting documents, triggering the Gordon panel’s investigation.
The Senate committee reported finding several alleged irregularities, including some Pharmally face shields that were substandard and with tampered production dates, nearly expired test kits and allegedly falsified inspection reports on the goods.
From Ong’s testimony, the senators learned about the alleged financial backing for the company by Mr. Duterte’s Chinese friend and former economic adviser Michael Yang, who denied the claim.
Defense of contracts
During his previous testimonies, Lao insisted that the PS-DBM’s contracts with Pharmally were aboveboard and that his office could only procure items based on the request and specifications set by the DOH.
Lao also rejected allegations that overpriced items were purchased from Pharmally, arguing that these were the cheapest offered at the time when there was high demand.
But he admitted possible lapses.
“When you say that there might be negligence or we were not able to exhaustively look for the cheapest supplier, there might be a possibility, given the scenario that we lack time, we lack the resources, the connection during that time,” Lao said during a hearing on Aug. 27.