The Office of the Ombudsman has revived its investigation of Negros Oriental officials in connection with the Php 728-million Fertilizer Fund Scam in 2004.
Mary Antonette P. Yalao, vice chairman of the Special Panel on Task Force Abono Cases, directed the officials led by then Governor George Arnaiz to file their Counter-Affidavits in an Order received by the respondents last April 2012.
The investigation is based on the report of Corinne Joie M. Garillo, associate graft investigation officer of Task Force Abono, which recommended the filing of criminal and administrative charges against Arnaiz and the members of the Provincial Bids and Awards Committee, namely: Provincial Treasurer Danilo C. Mendez, Provincial Agriculturist Gregorio P. Paltinca, Provincial Accountant Teodorico Reyes, Provincial General Services Officer (now Bayawan City Vice Mayor) Ismael P. Martinez, Provincial Engineer (now retired) Susano Ruperto, Provincial Attorney Erwin Vergara, Provincial Budget Officer Marichu A. Alpuerto, Provincial Administrator (now retired) Marilou V. Kho, and an employee of the Provincial Treasurer’s Office Emmanuel G. Solis.
Lawyer Erwin Vergara said the respondents filed their counter-affidavits last June 6, 2012.
Garillo also asked the Ombudsman to place the officials on preventive suspension while they are being investigated for violation of the Anti-Graft and Corrupt Practices Act and the Government Procurement Reform Act.
Aside from the PBAC members, the Ombudsman also included Department of Agriculture officials (now retired) Regional Executive Director Eduardo B. Lecciones, Jr., Emelita B. Sanchez, Merle E. Lababit, Angel C. Enriquez, Reinerio B. Zeta and Walter Lirazan in the complaint.
Suppliers of the fertilizers and farm implements, namely: Edward C. Uy, James E. Sy, Juanito U. Lee, Uy Ching Pay, Regina Espina Sy, Jose Anuling Dy and Bonifacio Anuling Dy, who are all incorporators and officers of Joebon Marketing Corporation; Alex J. Amor, Jr., Filemon J. Verzano, Jr., Steniel C. Young, Emma B. Dayot and Nena Sobere Yu, were also recommended to be charged as private respondents in the criminal complaint.
The case stems from the purchase of fertilizers and farm implements worth Php 5 million for the agriculture and fisheries modernization program of Negros Oriental through the Department of Agriculture in 2004. The P728-million fertilizer fund, intended for the procurement of fertilizers and other farm implements for farmers all over the country, was allegedly diverted in many provinces to the campaign kitty of Pres. Gloria M. Arroyo during the 2004 national elections.
Arnaiz, meanwhile, told the MetroPost in a telephone interview that the transactions of the Provincial Bids and Awards Committee were above board.
He explained that in most provinces, the Department of Agriculture only gave liquid fertilizer supposedly worth Php 5 million in exchange for the governors’ signatures. But he said that he insisted that the DA give the money to Negros Oriental’s coffers so they could buy their own fertilizers from local suppliers.
Arnaiz also said that the money was spent only after the May 10, 2004 elections precisely to avoid any suspicion that the money would be used for President Arroyo’s campaign.
Records show that the Province received the amount of the Php 5 million in two tranches. The first tranche, worth Php 3.25 million, was used to buy 6,666 bags of organic fertilizer, 853 bags of 46-0-0 and 2,557 bags of 14-14-14 fertilizers.
A second tranche of P1.75 million was released on December 21, 2004 for the purchase of corn shellers, rice threshers and hand tractors.
The Task Force Abono, however, noted that instead of conducting a public bidding as required by law, the Provincial Bids and Awards Committee resorted to Limited Source Bidding, Selective Bidding or Personal Canvass Shopping for the purchase of the said items.
The Task Force also found that the contracts, payments and deliveries of the fertilizer was split to accommodate four suppliers.
The Task Force also found defects with some suppliers of the fertilizer and the farm implements.
It said that at the time Joebon Marketing Corporation entered into a contract with the Province, the Securities and Exchange Commission had already revoked its registration, making their transactions with the Province “highly questionable.”
Another supplier, Greenvet Trading, did not file any Income Tax Return from 2004-2006. It was also found out to be an unregistered business firm.
Some farm implements were also purchased from the Dumaguete Omega Store in March 2005 while the Request for Quotation was dated in July 2005, which is contrary to normal practice. Some items supplied were also of a different brand from what was specified.
The Task Force also found that the DPN Machine Shop was not qualified to be a supplier for a Negotiated Purchase as its declared capital is only P500,000 while the items covered by the Purchase Order was P994,000.
In sum, the Task Force said the whole procurement process was tainted with serious irregularities which could not have been done without the collusion between and among the officials and employees of the Provincial Government of Negros Oriental and the favored suppliers.