SEC admits failure to detect ‘fraud’ in Napoles’ NGOs | Inquirer News

SEC admits failure to detect ‘fraud’ in Napoles’ NGOs

By: - Reporter / @MAgerINQ
/ 10:27 AM January 30, 2014

FILE PHOTO/INQUIRER.net

MANILA, Philippines –  The Securities and  Exchange Commission  (SEC)  admitted on  Thursday  that  its lack of  resources had  prevented them to immediately detect  “fraud” in   the registration of  alleged bogus nongovernment organizations (NGOs)  linked to jailed businesswoman  Janet  Lim-Napoles.

When  the  P10  billion  “pork barrel”  scam  broke out last year, SEC  chairperson  Teresita  Herbosa  told the Senate blue ribbon committee  that they  immediately conducted an  investigation on the NGOs that were allegedly  used  as conduits of  lawmakers’ Priority Development Assistance Fund or pork barrel funds.

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“In fact your honor, we had already started since early last year when this matter was first talked about in the media, we had already conducted an investigation on all the foundations (mentioned) in those reports and we did already send people to go to the addresses of the so- called incorporators of those foundations to check whether they are really legitimate persons…”

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Herbosa said, responding to queries of the committee chair Senator  Teofisto Guingona III.

“We will admit that had we had sufficient resources including computer assisted review, we’d probably been able to detect fraud in procuring registration at the very first instance when they filed applications with us.”

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“But as I said, because we’re based on a disclosure system, we only rely on the documents submitted,” the  SEC chief added.

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Despite this, Herbosa said, they could still detect “certain batches of fraud” simply based on the application being submitted to their office.

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“For example, we’ve noticed or even in stock corporations, there could be instances where the TIN is fake or a person would have presented to us several TINs depending on what application they are filing or sometimes they don’t indicate the specific addresses. Things like that which we can see even in  pre-registration,” she said.

At present, Herbosa said, their corporate and governance and finance department has only eight examiners assigned to process 10,000 active foundations.

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“That’s really a challenge…I think that’s the meat of the problem ,”  Guingona  said.

“Per our computation, if it’s going to be 200 corporations  in a year to be processed by one examiner, we would need at least  54 processors  instead of  eight,”  the SEC chief said.

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Janet Napoles and the pork barrel scam

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