COA joins fray in Corona trial

Eleven years after the fact?

The Commission on Audit (COA) has disallowed the P34.7-million payment that the city government of Manila paid in 2001 to Cristina Corona, the wife of Chief Justice Renato Corona, for a lot in Sampaloc, Manila, citing among other grounds, overpricing and failure to submit some requirements, documents obtained by the Inquirer showed.

A notice of disallowance, dated March 19, 2012, issued by the COA’s Manila city auditor has asked Manila Mayor Alfredo Lim to direct at least eight former City Hall officials and Cristina Corona, who received the payment “in trust” for Basa-Guidote Enterprises Inc. (BGEI), to settle the matter immediately.

The notice was signed by Roberto Limcolioc, the audit team leader, and Elinore Lavilla, the supervising auditor.

The audit disallowance was apparently the result of an audit by a team that evaluated an earlier notice of suspension, dated March 5, 2002, on the payment for the purchase of Lot 1-A-3 with an area of 1,020.7 square meters belonging to the BGEI, a corporation that is the subject of an ownership dispute between Cristina Corona and the rest of the Basa side of family.

According to the Deed of Absolute Sale executed on March 26, 2001, the city government purchased the property to use as a relocation site for stall holders of the old Sampaloc market who were displaced by the construction of the MRT Line 2 project.

Wave of persecution

The defense panel in Corona’s impeachment trial viewed with suspicion the notice issued by the Manila city auditor disallowing the 2001 sale of the BGEI property to the city government.

“The notice of disallowance is suspect. Why was it issued 11 years after the transaction? My understanding of the law and rules on the matter is that COA has only three years to issue a notice of this nature,” said defense counsel Ramon Esguerra.

He noted that the parties affected have six months to appeal the notice, and could question the notice all the way “up to” the Supreme Court.

“The lot is now where the Sampaloc market is. The sale is more than consummated. Is this not another wave of persecution?” Esguerra said.

Defense lawyer and spokesperson Tranquil Salvador III said that before anything else, the Manila government should rescind its contract with BGEI.

The defense lawyers also said the development would have little impact on Corona’s impeachment trial.

According to Esguerra, the COA move does not have any bearing on the trial and defense case “unless the purpose is to further muddle the issues.”

Salvador said it would even “reinforce our position that Basa-Guidote has funds received from the city government.”

Reasons for disallowance

The COA 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.

It said audit disallowance not appealed within six months from receipt would become final and executory as prescribed by Presidential Decree 1445.

The COA auditors evaluated an earlier notice of suspension, issued on March 5, 2002, by the city auditor’s office, which listed several requirements.

The team then concluded that the P34.7-million payment was disallowed because of noncompliance/submission as required by the earlier 2002 suspension 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.

Irregularities found

The notice also said that further examination of the documents on the transaction revealed several irregularities.

First, it said the person who received the check in payment for the purchase of the lot did not submit a duly notarized Special Power of Attorney recently issued by BGEI as proof of her authorization.

Cristina Corona had submitted a BGEI’s Secretary’s Certificate issued by Asuncion Basa, BGEI 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.

Second, there was a significant difference in the purchase price compared to the values prevailing at the time.

It said that based on the declaration of the real property value—land issued by the Department of Assessment under Tax Declaration 96-00134, the  adjusted market value of the whole property under TCT 76220 with a total land area of 1,230.10 sq m was P16,141,739.53, or P13,122.30 per sq m as the city purchased only a portion of it.

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

Third, the payment for the purchase of the property was charged against the Continuing Appropriations for the Engineering Sevices/Department for Engineering and Public Works for the construction of the new Sampaloc market.

Taxes not withheld

It said that City Council Ordinance 7975 enacted on Dec. 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 No. 7160, or the Local Government Code.

Fourth, 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 subject property in the name of the city. The required value-added tax was also not withheld.

Sale remains valid

A source privy to the prosecution’s evidence in the Corona impeachment trial said the sale would not be affected by the COA disallowance because the rescission of any transaction that is disallowed is not within the authority of the COA.

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

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

“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 said.

First posted 11:44 pm | Saturday, March 24th, 2012