President Benigno Aquino III’s biggest bombshell during his recent State of the Nation Address (Sona) is now a fully brewed controversy.
A single company apparently cornered the bulk of the P1 billion spent by state-owned Philippine Amusement and Gaming Corp. (Pagcor) on coffee used as perk for casino patrons in a span of 10 years, and it belonged to the wife of a businessman with ties to the agency’s embattled former chair, Efraim Genuino.
The businessman, Johnny Tan, is now one of the respondents along with Genuino in a plunder complaint filed by the agency’s new management, according to the current Pagcor chair, Cristino Naguiat Jr.
“This is scandalous, outrageous and offensively excessive,” Naguiat said of Pagcor’s P1-billion coffee billings under Genuino’s watch, a day after President Aquino divulged it in his Sona to stress the seriousness of his antigraft campaign.
Mr. Aquino “shook his head in disbelief” upon learning that Pagcor had spent such a staggering amount on coffee alone, Naguiat told the Inquirer on Tuesday.
“At first, he really could not believe it. Where can you find a coffee shop that earned P700 million?” he said.
Naguiat said Promolabels Specialty Shop, which he described as a small company owned by Carlota Cristi Manalo-Tan, bagged concessionaire contracts to put up Figaro coffee shops in seven Pagcor-operated casinos from 2001 to June last year.
He said Pagcor personnel discovered the contracts while gathering evidence for a P186-million plunder complaint now pending in the Department of Justice, in which Genuino and his “known ally” Johnny Tan were among the respondents.
In the complaint, the new Pagcor management accused Genuino et al. of using Pagcor funds to finance the election bid of the Bida party-list group in 2010.
Genuino’s daughter Sheryl was the group’s first nominee while Tan was its second, Naguiat noted.
The former Pagcor chair did not answer calls and text messages when the Inquirer sought his comment.
Monopolized
When Genuino was appointed Pagcor chair by then President Gloria Macapagal-Arroyo in 2001, the gaming firm began offering free coffee to casino patrons apparently as part of its “marketing strategy,” Naguiat recalled.
He said Carlota Tan’s company bagged three- to five-year concessionaire contracts to monopolize the operation of Figaro coffee shops in Pagcor-run casinos in the cities of Parañaque, Angeles, Tagaytay and Olongapo, as well as those at the Heritage Hotel in Pasay City, the Manila Pavilion in Manila, and the now closed Casino Filipino Silahis also in Manila.
“All the customers had to do then was to sign the order slips and have the casino managers approve it,” Naguiat said.
From close to P934,000 in 2001, he said, Pagcor’s expenses for coffee grew to over P22.2 million in the next 12 months, an increase of about 236 percent.
Pagcor’s expenses for the beverage went up to P173 million in 2006—the highest during the nine-year Arroyo administration—while the gaming firm spent over P83.4 million in the first six months of 2010 alone, he added.
Costly cup
Based on these discoveries, Naguiat said, Pagcor may file another plunder case against Genuino and other former Pagcor officials, considering that the amounts were also reflected in Commission on Audit (COA) reports.
A 2006 COA report, for example, noted that the price paid by Pagcor per cup of coffee in its casinos was 64-percent higher than that served in other Figaro branches.
“The same COA report said that based on records, the total sales of Promolabels for 2005 alone was P153 million,’’ he said.
Naguiat said Promolabels’ contract with Pagcor showed that the company was owned by a certain “Lot Manalo.’’
“When we checked with the Department of Trade and Industry, we were able to get a certification on July 6, 2011, stating that Promolabels is owned by Carlota Cristi Manalo-Tan,’’ he said.
No public bidding
“You must note that (she) only gave her nickname and maiden name in the concessionaire contract. So there was deceit there. It’s intentional,’’ Naguiat said.
While the company claimed that it was registered with the Securities and Exchange Commission, Naguiat countered that Promolabels was never registered as a corporation, as attested to by the SEC.
He said Carlota Tan’s company was awarded the contracts without public bidding.
Worse, he said, the previous Pagcor management “ordered” its casino managers to help Promolabels reach its sales quota of over P1 million a year for each coffee shop.
“This means that one (coffee shop) attendant had to make coffee sales of P90,000 a month,” Naguiat said.
Since he took over the gaming firm in July last year, Naguiat said, the new management was able to bring down coffee expenditures at the casinos.
From an average of P100 million a year in seven casinos during Genuino’s time, the bill was now down to P36 million a year in 12 Pagcor-run casinos, he reported.
Other cases
Aside from the P180-million plunder case, three other cases had been filed against past Pagcor officials in the span of a month.
On July 18, a criminal complaint accused Genuino and four others of diverting some 3,500 sacks of donated rice to bolster the mayoral bids of his two sons Erwin and Anthony during the May 2010 elections.
Last month, the new Pagcor management lodged a complaint against Genuino, his son Erwin and more than 25 others in connection with the alleged anomalous allocation of P26.7 million for the production of the 2008 movie “Baler.”
Former Sen. Nikki Coseteng and current Pagcor officials also filed graft charges against Genuino et al. in the Office of the Ombudsman for the alleged misuse of a P30-million allocation for the Philippine Aquatic Sports Association.