Senate told PCSO exec Manuel Garcia got P1.5B in kickbacks

A former promotions manager of the Philippine Charity Sweepstakes Office (PCSO) may have collected about P1.5 billion in kickbacks from the agency’s ad placement contracts during the Arroyo administration.

Senators on Wednesday came to this conclusion about Manuel Garcia after two advertising executives testified that his kickbacks from advertising placement contracts ran up to 40 percent, less taxes.

Garcia demanded commissions in exchange for his recommendation to the past PCSO board to approve the contracts, the executives said.

“I congratulate Mr. Garcia for being a billionaire,” Senate President Juan Ponce Enrile chuckled at the opening of the blue ribbon committee’s inquiry into the alleged misuse of PCSO funds.

Garcia, who has been dropped from the PCSO rolls, was not present at the hearing because only current PCSO board members, led by Chair Margarita Juico, were invited.

“We have proved corruption in the PCSO because of the P1.5 billion alleged as kickbacks from advertising placements,” said Sen. Teofisto Guingona III, chair of the committee.

The committee has issued a subpoena for Garcia, as well as for former PCSO General Manager Rosario Uriarte, “in view of the gravity of the case,” Guingona said.

Alexander Quisumbing, chair and CEO of Quizgem, and Ludovico Yuseco, manager of Cross-Channel Advertising, confirmed to the committee that Garcia had a 40-percent share from the contract price, less the 12-percent value-added tax and the 10-percent withholding tax.

If, for instance, a contract was worth P1 million, 22 percent or P220,000 would be deducted, leaving a balance of P780,000. Forty-percent of this P780,000 would go to Garcia as his commission, the executives said.

Affidavits

Quisumbing confirmed what he stated in his May 18 affidavit that he gave Garcia some P16.1 million from 2006 to 2008.

Yuseco also confirmed his May 18 affidavit that he gave the former PCSO advertising and promotions manager some P12.6 million from 2008 to 2010.

The two believed they had given a bigger amount to Garcia, saying they lost some deposit slips to Tropical Storm “Ondoy” in 2009.

From 2001 to 2010, the PCSO budget for advertising totaled P7.3 billion, including P1.065 billion in 2009, and P1.075 billion in 2010, according to the Commission on Audit (COA).

Using the computation of the witnesses, Sen. Franklin Drilon said the net of the P7.3-billion budget minus 25 percent (taxes) would be P4.5 billion, and 40 percent of this amount would be P1.8 billion.

“We’re talking here of approximately P1.8 billion [in commission] from 2001 to 2010,” Drilon said, prompting Enrile to remark that Garcia now belonged to Forbes Magazine’s list of billionaires.

Initial kickback

Sen. Panfilo Lacson, however, said it would not be accurate to say that Garcia had received P1.8 billion, since he initially demanded a 20-percent kickback in the first few years of the administration.

Drilon said: “Maybe P1.5 billion. We’re talking here of P1.5 billion commission of Mr. Garcia. This is very serious.”

Charges were filed against Garcia in the Office of the Ombudsman in connection with this, but “there is no movement,” Quisumbing said.

Enrile said: “Maybe the commissioner of internal revenue should listen to this story. This is a good case for giving an example.”

Quisumbing and Yuseco said the amounts, either in cash or checks, were deposited in Garcia’s accounts in banks in Metro Manila, including one at the Banco de Oro branch on Quezon Avenue in Quezon City.

“Actually he wanted me to bring the money to the PCSO, but I didn’t want to go to the PCSO and bring all that money,” Quisumbing said.

An amused Lacson remarked: “In other words, Mr. Garcia was too lazy to count cash. That’s the kind of hubris they had at the time.”

Quisumbing said Garcia would ask for his “share” three days after Quizgem received the payment from the PCSO. But there were instances when Garcia would ask for advances.

“It was already an income as far as we’re concerned. It was demanded of us to enable to get the recommending approval of our ad proposals,” he said.

The advertising executives said they would submit proposals for ad placements to the PCSO general manager every quarter, and it was Garcia who would recommend these proposals.

“Once we start collecting, he would start demanding from us,” Quisumbing said. He said he did not dare bring this matter to the attention of the higher-ups because “I was all alone.”

Garcia went on leave early this year using a medical certificate issued by a doctor in the House of Representatives. Still he was “dropped from the rolls” because the new board didn’t find the certificate credible, according to PCSO General Manager Jose Ferdinand Rojas II.

Yuseco said he started dealing with Garcia in 2003, and at the time, the latter asked for only a 20-percent share until sometime in 2005 or 2006 when he demanded a 40-percent commission. “Whatever he asked of us, we were obliged to give,” he said.

Asked by Drilon if his company reflected its payments to Garcia in its income tax, Yuseco said: “My accountant took care of that.”

Too much to bear

At the weekly Fernandina media forum in Greenhills, San Juan City, a teary-eyed Uriarte said all allegations of corruption against the previous PCSO management were lies and meant to “demonize” the institution’s image.

“I was hesitant to speak out because I didn’t want to glorify their baseless accusations. But all these lies spreading are already too much to bear,” Uriarte said in Filipino reading a prepared statement.

She threatened to file charges against incumbent PCSO officials. She said she was ready to face the Senate investigation.

Former PCSO Chair Manuel “Manoling” Morato, who arrived late at the forum, called Juico a social climber. With a report from Niña Calleja