PNOC-EC chairman hits cover-up of anomalies by firm’s officials

The chairman of Philippine National Oil Co.-Exploration Corp. (PNOC-EC) has assailed some of his fellow top executives for allegedly covering up anomalies in the state-run energy firm, including coal deals amounting to $10 million that it entered into during the Arroyo administration.

In a September 4 letter to President Benigno Aquino, Gemiliano “Mel” Lopez Jr. also reported that an undisclosed number of deals-related documents were missing.

“When I assumed my post (in late 2010) and upon learning that these transactions were highly anomalous, I immediately asked different groups in and out of PNOC-EC to conduct investigations. However, they were all hampered by the lack of available documents,” said Lopez, also a former Manila mayor.

He recalled that during his “first day in office, the filing cabinet of the PNOC-EC president only had biscuits and candies inside and not a single file on record.”

“To curtail the enormous losses incurred by the company, I relieved the then head of the coal transactions, Jose Anthony Villanueva, and temporarily stopped all coal importation activities until a new policy was eventually formulated,” he added.

“Curiously, the very first act of Pedro Aquino Jr., the new PNOC-EC president, was to pay the separation benefits of Mr. Villanueva at 2.5 times the monthly rate per year of service rendered.”

Ombudsman cases

Lopez noted “these cases have been formally filed in the Ombudsman and are pending preliminary investigation.”

The PNOC-EC head also chided the firm’s management for placing a half-page advertisement in the Inquirer and another broad sheet where it “cleared and acquitted the respondents in these two cases without waiting for a proper hearing and decision of the Ombudsman, which has already acquired jurisdiction” over the cases.

The August 24 advertisement, which he said was not cleared by the PNOC-EC board, “gave the impression to the public that the company’s management was covering up for its officials who have been charged with graft and corruption.”

Share value jeopardized

“In arousing public suspicion of a cover-up of anomalies in the corporation, the PNOC-EC management jeopardized the launch of the additional shares of stock, potentially causing massive pecuniary damage to the interest of the government, which is to get the highest possible price for the new offerings. Thus, the financial future of the government is also endangered,” he said.

Lopez furnished Executive Secretary Paquito Ochoa Jr. and Energy Secretary Rene Jose Almendras copies of his letter.

On August 24, Lopez wrote the PNOC-EC board a confidential memo, where he questioned the management’s claim that the “recent accusations in both print and broadcast media against several former and current PNOC-EC officers have brought into question the years of dedicated hard work and service given by the men and women of PNOC-EC.”

“How the filing of formal charges against some former and current officers of the company could put into question the integrity of all its personnel is beyond logic… The blame would be deserved if the perception is raised that the company itself is covering up the wrongdoing,” he said.

He said “transparency, responsibility and accountability are legally mandated norms of a GOCC [government-owned and -controlled corporation]. The PNOC-EC should not appear to be afraid of public scrutiny in accordance with such precepts, especially when we are under an administration that is concerned with upholding the policy of daang matuwid [straight path].”

Overpriced renovation

In July, Lopez filed graft charges in the Office of the Ombudsman against three top PNOC-EC officers for allegedly overpricing by up to 9,000 percent the renovation of the firm’s headquarters at Bonifacio Global City in Taguig City.

He named Lourdes Gelacio, vice president for corporate services; Raymundo Savella, chairman of the bids and awards committee; and Ma. Rita Dayleg, manager of the human resources and administration department, as respondents in a complaint he filed on July 16.

Gelacio, Savella and Dayleg were accused of violating Section 3 of Republic Act. No. 3019, or the Anti-Graft and Corrupt Practices Act.

Piecemeal contracts

The 2010 PNOC-EC building renovation project, which had a budget of P55 million, “showed an overprice ranging from 100 to 9,000 percent… Instead of implementing the three-phase project and awarding it to a general contractor, Gelacio’s team made piecemeal contracts for each and every aspect of the project,” Lopez said.

He said it was “very clear that the costs incurred by Gelacio’s team were grossly overpriced and prejudicial to PNOC-EC.”

‘Baseless’

In a memo to the PNOC-EC board, Gelacio dismissed the charges against her as “erroneous, baseless, unsubstantiated and malicious.”

“The procurement law was properly observed for all contracts which were awarded to the lowest technically complying bidder. All contracts passed through the bids and awards committee,” she added.

For his part, former PNOC-EC chairman and director Crismel Verano criticized the PNOC-EC management for the paid ad, saying “instead of answering all the charges point by point, they simply brushed aside the allegations.”

Questionable coal deals

In an e-mail, Verano told the Philippine Daily Inquirer that aside from the P122.4 million in losses the firm incurred in a questionable coal deal in 2009, it had “combined losses” of more than P20 million from “ghost coal deliveries,” also in the same year.

Add to that “unaccounted 149 delivery receipts worth P23.3 million that were supposedly sent to Navotas but were not accounted for by the North Harbor Terminal in 2008 and 2009,” he said.

Plunder charges

On July 31, Verano filed plunder charges against current PNOC  president Antonio Cailao and his brother-in-law,  former PNOC-EC president Rafael del Pilar, and five other top officials of the company.

Verano expressed confidence the Ombudsman would take note of the spirit of the administration’s daang matuwid (straight path) slogan “to weed out the bad from the good ones in government.”

He earlier exposed the aborted sale of PNOC-EC’s 60-percent share in the Malampaya gas venture, which he called a “surefire sale” that would have resulted in billions of pesos in losses to the government.