Duque, Lao face criminal raps over Covid fund mess

THE Office of the Ombudsman recommended the filing of criminal charges against former Health secretary Francisco Duque and former Budget undersecretary Lloyd Christopher Lao over the alleged illegal transfer of P41 billion in procurement funds for equipment and other items during the Covid-19 pandemic.

In a 49-page decision issued on May 6 and signed on May 8 by Ombudsman Samuel Martires, the special panel of investigators also found Duque and Lao guilty of grave misconduct and conduct prejudicial to the best interest of service.

In a copy of the recommendation obtained by The Manila Times, the Ombudsman ordered both Duque and Lao to be dismissed from government service with the forfeiture of all their retirement benefits and disqualification from reemployment.

The panel of investigators was led by Mark Angelo Dolo, with members Jeffrey Ravelo, Napoleon Regan Malimas and Kathleen Sheelah Uy-Alcober.

‘I will defend it in Plaza Miranda’

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In a phone interview with The Manila Times on Saturday, Duque maintained that his actions were above board and were necessary as the country continued to grapple for supplies during the pandemic.

“My aim was to protect the lives of Filipinos, prevent the spread of Covid-19 and deaths; that’s why we rushed the procurement of personal protective equipment (PPE),” Duque said.

He said that he did not see any irregularity over the transfer of funds to the Procurement Service of the Department of Budget and Management, a government agency, noting that the Philippines has no local suppliers of PPE and that the PS-DBM had access to suppliers.

“They know where to get the PPE, and they arrived on time,” Duque said.

Duque also cited efforts by the government to prevent the spread of Covid-19, which included activating multiple testing laboratories, procuring test kits, and regularly informing the public on the dangers of the pandemic.

He said he was ready to defend the allegations leveled at him in the proper courts and even through a public forum.

“Oh yes, I can defend it even in Plaza Miranda; I only did my job: to save and protect lives and prevent deaths; we did everything,” Duque said.

Health Officer-in-Charge Albert Francis Domingo said the Health Department “respects all legal proceedings and will act accordingly.”

The case stemmed from a complaint filed by former senator Richard Gordon and Sen. Risa Hontiveros against Duque, Lao and several other officials of the Department of Health (DoH) after the investigation of the Senate Blue Ribbon Committee over the illegal fund transfer of the DoH to the PS-DBM to buy certain Covid-19 items such as PPE, reverse-transcription polymerase chain reaction (RT-PCR) test kits and alcohol, among others.

It was alleged that the transfers were approved, and disbursement vouchers were issued to the PS-DBM without the execution of a memorandum of agreements and certificates of previous liquidation.

The complaint also said that the DoH had “unjustifiably” outsourced procurement of Covid-19 related supplies to the PS-DBM despite the department’s authority and organizational structure in place to procure its own.

The Commission on Audit (CoA), in its 2021 Annual Audit Report of the DoH, also noted some non-receipt of items, misdeliveries and discrepancies between the quantities indicated in the distribution lists and actual quantities received by the recipient agencies.

The Ombudsman found that not all fund transfers involved the procurement of common use supplies and equipment (CSE), as it included other items such as cadaver bags, mechanical ventilators and nucleic acid extraction machines that were not classified as CSE.

It also said that Duque admitted during the hearing that the reason the money was moved to the PS-DBM was for it to purchase or procure the medical supplies and equipment on behalf of the DoH, with the PS-DBM being its “procuring entity.”

The Ombudsman said that the DoH has no legal obligation or compelling reason to transfer funds and outsource its procurement to the PS-DBM. It said that a circular issued by the Government Procurement Policy Board (GPPB) after the enactment of the Bayanihan to Heal As One Act allowed “procuring entities to directly negotiate or procure from a legally, technically, and financially capable supplier of goods.”

“On the contrary, it is clear from the aforementioned issuances that in times of emergencies such as the Covid-19 pandemic where urgent procurement is necessary, the contemplated set-up for procuring entities is to negotiate directly with the suppliers,” the Ombudsman said.

In ‘bad faith’

The Ombudsman said that both Duque and Lao acted in “bad faith” or “gross inexcusable negligence” in the discharge of their duties when they implemented the fund transfer despite the department having the obligation to procure directly and not through the PS-DBM.

“Respondents Duque and Lao, with conscious and deliberate disregard or reckless abandonment of their obligation to ensure that the applicable requirements for the transfer of funds be observed, effectively caused the DoH to abandon, in times of a national health emergency, its bounden duty to expeditiously acquire the needed Covid-19 supplies and equipment by undertaking the procurement itself through direct negotiation with the suppliers,” the Ombudsman said.

“Moreover, the illegal, unjustified and unwarranted transfer of funds caused the consequent imposition of service fee that effectively removed a sizeable amount of money intended for purchase of PPE, test kits and other Covid-essential goods requested by medical facilities and DoH offices and bureaus,” the Ombudsman said.

It also said that at the time of dire need, the people were looking up at the respondents’ offices for relief but instead entertained suspicions due to their failure to follow the prescribed rules and procedures, which cast the DoH, PS-DBM and the public service in bad light.

The Ombudsman also ordered that the administrative and criminal cases against undersecretaries Maria Carolina Taino, Myrna Cabotaje, Roger Tong-An and Leopoldo Vega; directors Crispinita Valdez, Napoleon Arevalo and Enrique Tayag; and chief accountant Lorica Rabago and Accounting Division officer in charge Filipina Velasquez be dismissed for lack of probable cause.

Ombudsman commended

Hontiveros commended the Ombudsman’s decision to press graft charges against Duque and Lao.

Hontiveros expressed her satisfaction with the outcome of their Senate investigations, stating that their efforts were not wasted as she warned corrupt government officials, saying their days of impunity are numbered.

Hontiveros declared this a “victory for the Filipino people” who had been betrayed. She dedicated this victory to the citizens who struggled with limited aid during the pandemic, especially the healthcare workers who endured delayed special allowances and hazard pay.
WITH A REPORT FROM JAVIER JOE ISMAEL

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