Alcala tied to garlic racket

By: Nancy C. Carvajal - 10 years ago

Agriculture Secretary Proceso Alcala INQUIRER FILE PHOTO

MANILA, Philippines–At least P200 million was paid to officials of the Bureau of Plant and Industry (BPI) over the past five years in exchange for import permits for garlic that went mostly to one group accused of manipulating supply that led to a surge in prices in 2014, a report of the National Bureau of Investigation showed.

A whistle-blower implicated Agriculture Secretary Proceso Alcala in the racket.

In a sworn statement, Lilybeth Valenzuela, a garlic importer, said former BPI Director Clarito Barron had told importers that they must have Alcala’s blessings so they could be issued the import permits.

“You should have connections to Alcala. If you have no blessings from Alcala, your company will not be issued an import permit,” Valenzuela quoted Barron as telling her and others seeking import permits.

The NBI said Barron was paid P60,000 per import permit by garlic importers.

Justice Secretary Leila de Lima said that the NBI was looking into the allegations against Alcala.

“It’s an ongoing investigation. We will look into all allegations, including that against (Agriculture) Secretary Alcala, but for the meantime the evidence is sufficient for the others,” De Lima said in the press conference.

The Inquirer could not reach Alcala Wednesday night for his side.

127 charged

The NBI on Wednesday charged 127 people, including former and current BPI officials as well as traders, in the Office of the Ombudsman and the Department of Justice (DOJ) with direct bribery, profiteering, price manipulation, falsification and obstruction of justice.

De Lima, who announced the results of the investigation, said charged separately were Barron; Merle Bautista Palacpac, officer in charge of the Plant Quarantine Service; and Luben Quijano Marasigan, former chief of the BPI’s Plant Quarantine Service.

Barron, Marasigan and Palacpac—signatories to the import permits issued to the supposed hoarders of garlic—were charged with violating the Anti-Graft and Corrupt Practices Act.

The NBI antigraft division, headed by Romy Asis, was tasked by De Lima with conducting the investigation after the price of imported garlic had gone up to P300 a kilo and the price of the local variety rose to P180 a kilo in the middle of last year from the average prices of P60 to P90.

In the complaint it filed in the Office of the Ombudsman, the NBI said importers paid Barron P60,000 per import permit.

3,652 permits

“The issuance of plant quarantine clearance (import permit) for garlic from 2010 to 2014 shows that 3,652 permits were issued and out of these 2,469 were issued to Vieva (Vegetables Importers Exporters and Vendors Association in the Philippines Inc.),” the NBI report said.

Barron was also charged with direct bribery based on Valenzuela’s sworn affidavit.

In her affidavit, Valenzuela said she personally handed P240,000 over to Barron for payment of four import permits in his office in Malate, Manila, in 2012.

“I remember that sometime in October 2012 I personally gave P240,000 [to Barron] for just one company for four permits,” Valenzuela said.

“I gave the amount in Barron’s BPI office in San Andres, Manila. Many of us were queuing just outside his office. Then, one by one, the representative of each company entered the office and handed over the money to him,” Valenzuela said.

She added that she often saw in Barron’s office Lilia M. Cruz, who uses the alias Leah Cruz, head of Vieva.

Collusion

NBI investigators said that because of the collusion between the head of Vieva and BPI officials, the traders were able to manipulate garlic prices.

“The evident partiality of the BPI officials in the issuance of import permits and giving undue advantage to Vieva have resulted in a situation wherein the garlic traders and importers were able to control the supply as well as the price of garlic,” the NBI report said.

Vieva received 68 percent of the import permits.

“A perusal of the documents obtained from BPI revealed that the import permits were issued only to either members of Vieva or to entities affiliated with the same. Nonmembers or nonaffiliated importers were seldom given the import permits, specifically for fresh garlic. The denial of the issuance of the import permits to non-Vieva members or affiliates was without sufficient reasons, despite full compliance of the applicants with the requirements set forth [under the law],” the NBI said.

Unwarranted benefits

“Premises establish that subject officers and employees of BPI committed the acts penalized by Section 3(e) of the Anti-Graft and Corrupt Practices Act by willfully giving the importers under the Vieva Philippines, headed by subject Lilia Matabang Cruz aka Leah Cruz, unwarranted benefits, advantage and preference in the performance of their function as the issuing authority of import permits and plant quarantine certificates,” the NBI said in its findings and recommendations.

Dummy companies

The NBI said Cruz operated a multimillion-peso garlic and onion import business using dummy companies owned by her drivers, clerks and house helpers.

De Lima said the NBI would file separate criminal charges today (Thursday) for violation of Republic Act No. 7581 (The Price Act), Article 186 of the RPC (monopolies and combinations in restraint of trade), Article 178 of the RPC (using fictitious names and concealing true names) and Presidential Decree No. 1829 (penalizing obstruction of apprehension and prosecution of criminal offenders) against Cruz and other traders named in the NBI report.

Awaiting copy

When reached for comment, Agriculture Undersecretary Emerson U. Palad said the Department of Agriculture (DA) was still waiting for a copy of the complaints.

“Once we have them, we still have to study these documents before we can make any comment,” Palad said.

In July 2014, Alcala announced that the DA had released a new set of guidelines for garlic importation amid efforts to prevent a repeat of a price spike in the middle of last year.

The DA also released a special order for the creation of a technical committee, which is tasked with monitoring and prescribing measures on shortage and undue price increases of basic necessities.

Back then, Alcala said the DA “strictly enforced measures” to promote locally grown garlic, which he noted enjoyed a production boom, especially in northern Luzon.

The agriculture chief added that, at the same time, the DA had tightened importation guidelines to prevent “the unbridled entry of imported garlic into the local market.”

Other raps vs Alcala

In 2013, pork barrel scam whistle-blower Merlina P. Suñas implicated Alcala as a key facilitator in funneling government funds to two dummy nongovernment organizations (NGOs) allegedly formed by Janet Lim-Napoles: Agri and Economic Program for Farmers Foundation Inc. and Kaupdanan para sa Mangunguma Foundation Inc.

The DA allegedly released P89.2 million from the pork barrel of eight congressmen to an alleged dummy agency.

In an affidavit to the Senate blue ribbon committee in May last year, Napoles said that the DA was on the “shopping list” of the Department of Budget and Management where lawmakers could place their PDAF.

“It’s at the office of Ofelia Agawin where the authenticity of the Saro (special allotment release order) is confirmed. Once the accreditation of a foundation is approved… only then would Secretary [Proceso] Alcala sign,” Napoles said.

Nailing cartel, thanks to NBI

Later that year, lawyer Argee Guevarra filed a plunder complaint in the Office of the Ombudsman against Alcala and then National Food Authority administrator Orlan Calayag over the importation in early 2013 of 205,700 metric tons of milled rice, which was alleged to be overpriced by P457.2 million.

The Samahang Industriya ng Agrikultura (Sinag) welcomed the NBI’s move, considering that local garlic producers “are still struggling to recover from the 20-year policy of wanton importation and smuggling in lieu of domestic production.”

“We thank the NBI for nailing this garlic cartel,” Sinag chair Rosendo So said in a statement.

So said the umbrella group has long blamed unscrupulous traders and smugglers, who are in cahoots with “misguided” government officials for last year’s price spike.

“With less than 15 percent of the country’s garlic requirements produced locally, importers and traders that form the garlic cartel continue to dictate prices since there’s no local production to counter the steep price of imported and/or smuggled garlic,” he said.

Retail prices of garlic skyrocketed last year and a government investigation found that some traders were involved in price manipulation.

In September last year, the DOJ reported the findings of its Office for Competition that conducted an investigation of the price increases.

Summarizing the findings, De Lima said that “there was no shortage of supply and, in fact, there were more than adequate stocks of garlic; majority of the ‘import permits’ issued was granted only to one preferred group; that due to a cornering of supply, this group can dictate the high prices.”–With a report from Ronnel W. Domingo and Inquirer Research