Successor sues Pichay over P2.3-B fund mess

By: - Deputy Day Desk Chief / @TJBurgonioINQ
/ 01:06 AM June 02, 2012

The acting chair of the Local Water Utilities and Administration (LWUA) has filed another graft charge against his predecessor, Prospero Pichay Jr., and other officials for misuse of P2.3-billion funds in 2009 and 2010.

Pichay, a former congressman who was dismissed as LWUA chief by the Ombudsman in July 2011 over another graft case, said he would answer the charges in court.


Rene Villa, in a second complaint filed with the Ombudsman this week, alleged that Pichay and other officials authorized some P1.17 billion financial assistance to three water districts in Abra, Leyte and Quezon, through a board resolution in February 2009, using corporate funds.

Then in 2010, they released another P1.17 billion to the water districts, he said.


Quoting the Office of the Government Corporate Counsel, Villa said the partial releases to the water districts using corporate funds were “not legally in order.”

He said financing should have come from the Non-LWUA Initiated Funds (NLIFs), which are sourced from the Philippine Amusement and Gaming Corp., local government units and the private sector.

Besides, he added, LWUA continued to release money to the water districts even though no funds from the President’s social fund (PSF) came in to replenish its corporate funds, as promised.

“The transactions with water districts by virtue of the various memoranda of understanding were manifestly and grossly disadvantageous to the LWUA, considering that its corporate funds were used for a purpose for which it was not intended, and therefore violated Section 3(g) of the Anti-Graft and Corrupt Practices Act,” Villa said in the complaint filed on Thursday.

Also named respondents were Eduardo A. Bangayan, Enrique Senen G. Montilla III and Aurelio O. Puentevella, then members of the Board of Trustees; Eleanor de Jesus, then treasury department manager; Wilfredo M. Feleo, then acting deputy administrator, and Daniel I. Landingin, then acting LWUA administrator.

Apart from graft, they were also charged with illegal use of public funds under the Revised Penal Code and gross neglect of duty, grave misconduct and conduct prejudicial to the best interest of service.

LWUA is a government-owned and controlled corporation tasked to oversee the development of water supply systems in cities and municipalities outside of Metro Manila, and armed with a specialized lending function.


“We’ll face that,” Pichay, who was dismissed last year over the agency’s alleged unauthorized investment in a rural bank, said by phone.

Pichay justified their action in the new case, saying “subsidies” from the national government, not corporate funds, were extended to the water districts. He said that even if corporate funds were used, if covered by a board resolution, this was above-board.

“The money was used to subsidize poor municipalities. It didn’t go to my pocket. That’s not graft,” he said.

It was the second graft case filed by Villa against Pichay this week.

First posted 12:52 am | Saturday, June 2nd, 2012

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TAGS: Anti-Graft and Corrupt Practices Act, Local Water Utilities and Administration, LWUA, Prospero Pichay Jr., rene villa
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