DOTC scam traced to Napoles

Janet Lim-Napoles INQUIRER FILE PHOTO

MANILA, Philippines—In what looked like a dress rehearsal for the P10-billion pork barrel scam a few years later, two alleged accomplices at the Department of Transportation and Communications (DOTC) of suspected pork barrel scam mastermind Janet Lim-Napoles approved a P407-million supply contract with Napoles’ trading firm for the purchase of computers and mobile communication equipment that turned out to be “ghost” deliveries.

Rene Maglanque and Domingo A. Reyes Jr. separately signed a series of purchase orders designating Jo Chris Trading—a company owned by Napoles and run by her eldest daughter after whom it is named—as the sole supplier of ACU-1000 (which interconnect various communication devices) and Vipernet laptops and desktops for distribution to politicians between 2002 and 2004, according to documents obtained by the Inquirer.

The then DOTC Secretary Leandro Mendoza, who passed away last year, also signed on the purchase orders, the documents showed.

Main conduits

According to Levito Baligod, the counsel for the pork barrel scam whistle-blowers who exposed this precursor scam, his clients identified Maglanque and Reyes as Napoles’ “main conduits” in her transactions with the DOTC.

“We believe that the massive funds she was able to obtain from the DOTC beginning in 2002 enabled her to perfect her modus operandi which she used in the pork barrel scam,” the lawyer said.

In the midst of speculations last week about the names contained in Napoles’ tell-all affidavit on the pork barrel scam, some of the scam whistle-blowers released a document that named more lawmakers that they said they had dealt with while they were under the employ of Napoles in her JLN Corp.

The document pertained to a P407-million information technology project of the DOTC in 2002 and 2004 that Napoles allegedly cornered and which was endorsed by nine former and current legislators that included an aunt of President Aquino and the son of former President Gloria Macapagal-Arroyo.

Baligod said that based on the testimony of the former Napoles employees, the supply contract for the IT equipment involved “ghost deliveries.” They claimed Napoles simply made up the list of beneficiaries and faked the delivery receipts.

Curiously, Maglanque and Reyes, who were both DOTC assistant secretaries, signed the documents for the purchase orders as undersecretaries/officers in charge for staff services.

Maglanque ran for and won the post of mayor of Candaba, Pampanga, under the ruling Liberal Party in 2013. His campaign streamers welcoming Napoles’ family to Candaba for his oath-taking in June 2013 gave away his ties to the businesswoman. (The Napoleses did not show up at the oath-taking.)

Reyes, who whistle-blowers said was called “Domeng” by Napoles, is one of the several retired generals Mendoza appointed to the DOTC when he took over the department in 2001.

Baligod noted that Napoles’ alleged swindling operations at the DOTC was preceded by her anomalous supply contracts with the military (Napoles and her husband were among several people who were charged by the Ombudsman for the military’s purchase of substandard Kevlar helmets worth P3.8 million), which in turn foreshadowed the key role she allegedly played in the P728-million fertilizer scam allegedly masterminded by former Agriculture Undersecretary Jocelyn “Joc-joc” Bolante in which her Jo Chris Trading supplied substandard farm inputs.

Two justifications

The DOTC purchase orders cited two provisions to justify the designation of Jo Chris Trading as the sole supplier of the IT equipment. The first was Section 50-C of the implementing rules and regulations of Republic Act No. 9184, or the Government Procurement Reform Act, which allowed direct contracting to exclusive dealers or manufacturers who do not have subdealers selling at lower prices or whose products have no cheaper substitutes in the market.

The second was Section 35.1.2 b of the IRR of Executive Order 40-2001 (the consolidated state procurement rules) which allows the procurement of small additions or no more than 10 percent of the existing fleet from preselected suppliers “who are well-established and provide satisfactory after-sales service.”

Denials by lawmakers

But some of the lawmakers who were identified as having lobbied for the distribution of communication and computer equipment to select cities, provinces and municipalities, are adamant that they never had a hand in choosing Napoles as the supplier of the equipment or in monitoring their distribution which they claimed was the DOTC’s responsibility as the project’s implementing agency.

‘Ask DOTC’

Sen. Cynthia Villar, who said she was answering for herself and her husband, former Sen. Manuel Villar, said it was the DOTC that bought and distributed the computers and that as lawmakers, they were duty-bound to see to it that their constituents got a share of what she claimed to have been an annual allocation.

“Let them ask the DOTC. We do not know its supplier. Should we have asked (DOTC) for the price and the supplier of the computers they were giving us? They might not give us,” said Villar.

“Now they are saying Napoles was the supplier. We do not know Napoles, That was 2002, nobody knew Napoles in 2002. How will we know it was evil?” said Villar.

At the time, Villar was the Las Piñas representative and part of the minority bloc in the 12th Congress. Documents supplied by Baligod showed that minority bloc members received about P130 million worth of computers from the DOTC between 2002 and 2003 through Deputy Speaker Carlos Padilla, who was then minority leader.

Minority used

Villar’s husband, who was a senator at the time, was named in the documents as a recipient of P60 million worth of computers for distribution to several regions in the country.

In a phone interview, Padilla said that it appeared that the minority bloc was used as a front to release the DOTC funds to Napoles.

Padilla said that a purchase order releasing P10 million of his pork barrel funds to Napoles for the purchase of computers was suspicious considering that it was released on July 6, 2004, or more than a month after his third and final term as Nueva Vizcaya representative lapsed.

“I was the lone senatorial bet of Ping Lacson who was running for president in 2004. How could I be the recipient of the government’s generosity when we were one of its biggest critics?” asked Padilla.

Fraudulent releases

Padilla also alleged that the release of the DOTC computers was fraudulent. He cited a purchase order signed by Mendoza and Reyes as having released P10 million worth of computers from Jo Chris Trading to his district on July 16, 2004, or more than a month after his third and final term as representative of Nueva Vizacaya expired. Unlike the P407 million DOTC computer program (which was part of the regular agency outlay), this one was sourced from his pork barrel or Priority Development Assistance Fund (PDAF) with the special allotment release order issued on June 21, 2004.

“I was no longer a congressman then. So why were the funds released? I repeat: Not a single centavo of my PDAF has been set aside through the DOTC,” said Padilla.

COA findings

Padilla’s claim of fraud appears to be supported by partial Commission on Audit (COA) findings during the period.

In March 2005, the COA’s provincial auditor in the Autonomous Region in Muslim Mindanao (ARMM) gave credence to the claim by Mayor Abdulsali Asmadun of Lugus, Sulu, that he never received any communication equipment worth P13.372 million from the DOTC.

Asmadun told the COA that his signature on the acknowledgment receipt presented by the DOTC was forged and that this was “intended to deceive and cause further problems in the future.” Both the mayor and the COA provincial auditor called on the COA central office to investigate the ghost delivery.

More ghost deliveries

In June 2006, then barangay (village) captain Romanito D. Verecio denied receiving P4.925 million worth of computers from the DOTC in 2003.

In March 2007, the COA Visayas cluster reported that documents showing P6 million worth of computers were delivered by the DOTC to Barangay Baybay, Makato, Aklan, in 2003 were erroneous and fraudulent. The invoice receipt had the wrong barangay captain while the real chief denied having received any equipment from the DOTC.

More than a decade after these ghost deliveries, the COA has yet to come out with a full fraud audit report on the ghost deliveries of P407 million worth of computer and communication equipment.

Aside from Villar and Padilla, the other lawmakers noted as recipients of the DOTC computers were former Senators Tessie Aquino-Oreta (an aunt of the President), Robert Jaworski and the late Robert Barbers (who died in December 2005); former Representatives Zenaida Ducut of Pampanga (currently chair of the Energy Regulatory Commission); Majority Leader Neptali Gonzales II and former Malabon-Navotas Rep. Felipe Sandoval II; and former Pampanga Rep. Juan Miguel Arroyo (who was given the computers during his term as Pampanga vice governor).

Maglanque has not answered calls and texts from the Inquirer.

COA documents requested

Michael Sagcal, a spokesman for the DOTC, on Tuesday said that the department had requested documents from the COA so it could “review the processes conducted and how the projects were implemented.”

He said the DOTC had communicated this request to the COA “in the middle” of 2013 but so far the department has yet to receive the documents.

“We will follow this up so we can settle the matter,” he added.

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