COA disallows payment of P34.7 M for Basa-Guidote property

MANILA, Philippines—The Commission on Audit has belatedly disallowed the P34,703,800 payment made by the Manila city of government to Chief Justice Renato Corona’s wife Cristina for purchase of a lot owned by Basa-Guidote Enterprises Inc. in 2001 for lack of various requirements and overpricing, among other things, documents obtained by the Inquirer showed.

A Notice of Disallowance dated March 19, 2012 issued by the COA/Office of the City Auditor and signed by Roberto Limcolioc, audit team leader, and Elinore Lavilla, supervising auditor, asked Manila Mayor Alfredo Lim to direct at least eight former top City Hall officials and Cristina to settle immediately the disallowance.

The notice said that audit disallowance not appealed within six months from receipt of the notice shall become final and executory as prescribed under Sections 48 and 51 of Presidential Decree No. 1445 (Ordaining and Instituting a Government Auditing Code of the Philippines).

The notice listed the nine persons liable as Joselito Atienza, former Manila Mayor; Gloria Quilantang, former officer-in-charge (OIC) of the City Accountant’s Office; Alicia Moscaya, former City Budget Officer; Liberty Toledo, former city treasurer; Magdiwang Recato, former City Engineer; Heidi Rosero, former OIC, Internal Audit Division; Emmanuel Sison, former Secretary of the Mayor; Melchor Monsod, former City Legal Officer; and Cristina Corona – ITF-BGEI, payee.

The COA auditors evaluated an earlier Notice of Suspension dated March 5, 2002 issued by their office on the payment for the purchase of Lot 1-A-3 with a lot area of 1,020.7 sq. m. that was used as relocation site for stallholders of the new and old Sampaloc markets  displaced by the construction of the MRT Line 2 project per Deed of Absolute Sale executed on March 26, 2001.

They said the P34.7 million was disallowed in audit because of non-compliance/submission in said notice of the following :

•   Original Copy of the Deed of Absolute Sale approved and duly registered with the Registry of Deeds of Manila, or the decision of the Court in case of eminent domain;

•   Transfer Certificate of Title duly entered in favor of the City Government of Manila;

•   Recommendation of the Appraisal Committee as to reasonableness of the price, duly approved by the authorities concerned and noted by the previous owner; and

•   Copy of the latest Tax Declaration transferred from the owner-vendor to the City of Manila.

The notice of disallowance stressed that the non-submission of the required documents violated the  provisions of the presidential decree.

The notice likewise said that further examination of the documents on the transaction revealed the following irregularities:

•   The person who received the check in payment for the purchase of lot did not submit a duly notarized Special Power of Attorney (SPA) recently issued by BGEI as proof of her authorization.

Cristina submitted a BGEI Secretary’s Certificate issued by Asuncion Basa, corporate secretary, dated June 19, 1987 showing her as an exclusive agent for a sale that took place on March 26, 2001.

However, there was no BGEI board resolution submitted in support of the Secretary’s Certificate, and that the authority did not include the claiming and depositing of the check under the personal account of the exclusive agent.

•   There was a significant difference in the purchase price compared  to the values prevailing at that time.

It said that based on the declaration of the Real Property Value-Land issued by the Department of Assessment under Tax Declaration No. 96-00134, the Adjusted Market Value of the whole property under TCT No. 76220 with a total land area of 1,230.10 sq. m. was P16,141,739.53 or P13,122.30 sq. m. while the city purchased only a portion of it.

Also, the Zonal Value of the property located along Legarda Street, as determined by the Bureau of Internal Revenue was only P21,000 per sq. m. in 2001 and the market value of adjacent lots was P3,858.

•   The payment for the purchase of the property was charged against the Continuing Appropriations for the Engineering Sevices/Department for Engineering and Public Works (DEPW) for the construction of the new Sampaloc market.

It said that City Council Ordinance No. 7975 enacted on December 21, 1999 and approved by Atienza on Jan. 24, 2000 appropriated P30 million for the expropriation of 4,643.70 sq. m of land along Legarda street.

As such, there was no resolution of the City Council authorizing Atienza to enter into a contract of sale as required under Section 22 of Republic Act 7160, or the Local Government Code.

•   The city failed to withhold the Capital Gains Tax equivalent to 6 percent of the contract price from the payment to the seller which could have facilitated the transfer of the title of the property to the city. The required Value Added Tax was not likewise withheld.

A source privy to the evidence of the prosecution in the impeachment trial of Corona in the Senate said the effect of a disallowance is to make the persons responsible for the ‘disallowed’ transaction personally liable to the extent of money paid out of the coffers of government.

“Kung magkano ang nilabas, that is the extent of the liability of the officer involved,” the source said.

The source, however, said the sale was not affected by COA’s disallowance because the rescission of any transaction disallowed is not within the ambit of COA.

While COA can recommend to void the sale, it does not have the power to set aside a sale.

“Rescission can take place through another venue and action, undertaken by the Ombudsman or by the Solicitor-General, for instance,” the same source said.

“Applying the rule to this case, the sale  remains valid but due to the numerous irregularities attending it, as contained in the COA report, Atienza and the other public officers will be held personally liable for the return of the P34 million to the city government,” the  source added.

Meanwhile, Marikina Rep. Romero Quimbo, the prosecution’s spokesperson, said Atienza’s testimony, presented to show that the amounts found in Corona’s accounts were not ill-gotten, may have backfired on the defense.

“It completely unmasked the various conflicting claims and falsehoods peddled by the chief justice outside the courtroom with the testimony of the defense witnesses,” Quimbo said.

Quimbo said that contrary to Corona’s claims that he never interfered with the property dispute of his wife’s family, Atienza testified that the chief justice actually negotiated the sale, and that one document sent by the city government of Manila was actually received by him, as shown by a receiving copy notation with his signature.

The defense said Corona borrowed P11 million from the BGEI which he used to buy the P11 million worth La Vista property.

“We don’t believe this actually took place since by the time he got the supposed loan in 2003, the corporation was no longer in existence,” Quimbo said.

He said the testimony of Atienza only showed how deep Corona’s involvement was to this questionable transaction if indeed the Chief Justice allowed that the P34.7 million proceeds from sale of a BGEI property be deposited in his own personal account to be able to hide the money from the other Basa claimnants.

“Naging indispensable participant siya in depriving his wife’s other relatives from uncovering the money hidden in his own personal bank account,” Quimbo said.

“Throughout this, he showed that he is not an uninvolved participant, but a main player in the scheme,” he added.