P1.2B chopper deal crooked, says BIR whistle-blower

A P1.2-billion military contract for the purchase of refurbished helicopters was tailor-made for a specific company to ensure that it would win the deal, a Bureau of Internal Revenue (BIR) officer who helped facilitate the transaction has alleged.

Rhodora Alvarez, a BIR revenue district officer who claimed to have been involved in the negotiations, accused Department of National Defense (DND) officials of adjusting the terms of reference and contract requirements for the purchase of 21 helicopters in order to favor Rice Aircraft Services Inc. (Rasi), which thrice had failed the bidding.

The contract was eventually awarded to a joint venture of Rasi and Eagle Copters, Ltd.

Blue ribbon probe

At a hearing of the Senate blue ribbon committee on Wednesday, Alvarez identified Undersecretary Fernando Manalo and Assistant Secretary Patrick Velez of the DND special bids and awards committee as the officials involved in customizing the contract to favor Rasi.

Rasi delivered seven of the 21 UH-1 helicopters that had been contracted, but some of them allegedly only have limited use because of defects, putting the lives of Air Force men at risk, said Sen. JV Ejercito.

Manalo and Velez immediately disputed Alvarez’s allegations and said they can present documents of their own to disprove her claims.

Manalo alleged that Alvarez was fabricating stories because she had tried but failed to extort money from Rasi, after failing to explain to the company the allegedly huge expenses she had incurred in facilitating the deal.

“In the statement given by Rice Aircraft Services, Ms Rhodora is trying to extort money from Rice. When Rice discovered a huge amount she spent that she could not explain, she demanded 15 percent, otherwise she would have the contract canceled,” he said.

As for the allegations that DND officials customized the terms of reference for Rasi, Manalo said these were part of Alvarez’s lies.

According to Manalo, Alvarez had been introduced to him as the local representative of Rasi and was one of those defending the project on the company’s behalf.

Velez, meanwhile, said he had never had meetings with Rasi representatives outside of the office.

He said the items changed in the terms of reference, which Alvarez cited in her testimony, were not mandatory requirements and only necessary in certain instances.

In her testimony, Alvarez said that she came to be involved in the helicopter deal after she met and befriended Rasi’s former country manager, Thach Nguyen.

She said that after she helped Nguyen to obtain clearances, the latter began confiding in her about the helicopter contract and bringing her along to meetings at the DND.

Eventually, she became involved in negotiating the helicopter deal on behalf of Rasi and worked closely with Manalo and Velez, Alvarez said. She said she also worked later with Robert Rice, the Rasi president.

Unpaid

Alvarez said she was not paid for these services and even used her own car.

“My intention really at the start was service. I just want our country to have the best 21 refurbished helicopters,” she said.

Alvarez alleged that the contract provision for a pre-delivery inspection was removed in the terms of reference by Manalo and Velez, with the concurrence of the defense secretary, she said.

Had the inspection been required, authorities would have found that Rasi’s units were not compliant with the required specifications and the aircraft would not have been delivered to the country, she said.

According to Alvarez, the initial plan was for the supplier to deliver six refurbished helicopters, make seven helicopters operational, and upgrade eight helicopters.

But since Rasi could not deliver on this plan, the deal was adjusted to the delivery of 21 helicopters, she said.