Special Prosecutor Dennis Villa Ignacio and Deputy Ombudsman for the Military Orlando Casimiro issued the indictment in connection with two loans approved by the AFP-RSBS and granted by the agency to Marilaque Land Inc. (MLI): A P197-million corporate guarantee and an P80-million short-term loan.
In a 15-page resolution, investigators said they discovered that the RSBS executive committee had "disapproved" the MLI loan proposal. Despite this, the RSBS board of trustees, chaired then by Abadia, proceeded to grant the loans even "without the approval of the secretary of national defense."
Investigators Ma. Teresa Lee-Rafols, Eugene Parrone and Gerald Varez said Abadia and retired Gen. Jose Ramiscal conspired with seven others and "allowed themselves to be persuaded and influenced by Abadia into approving the loan."
Abadia defended the RSBS transactions, saying the case is "merely harassment" over "old, resurrected and rehashed issues" which constitute nothing more than a "complaint for political purposes with no regard for truth."
The Office of the Ombudsman, however, remained adamant about the charges despite Abadia’s claims of harassment: "(The) MLI loan was a losing proposition from the very start, yet the RSBS board of trustees went on to grant the loan proposal of MLI despite its dim and questionable prospects."
Records show that, in December 2001, RSBS approved the dacion en pago (payment through assets) sought by MLI as its mode of payment of P134.2 million of its debts to RSBS, even though MLI’s assets in Northpoint Estates in the town of Mexico, Pampanga were only valued at P113.9 million — creating a debt payment shortfall of P20.3 million.
By approving the loan of MLI without taking into consideration the heavy and serious negative impact of the loan on RSBS, "the board of trustees had placed the system and the government in a very disadvantageous position," the Ombudsman said.
Indicted along with Abadia and Ramiscal were Arnulfo Acedera and Lt. Generals Clemente Mariano and William Hotchkiss III, Vice Adm. Eduardo Santos, Rear Admirals Octavio Dauz and Luisito Fernandez and M/Sgt. Jose Trompeta.
Besides the RSBS graft case, Abadia is also facing separate charges before the Sandiganbayan. The government filed a civil suit for Abadia’s forfeiture of P11.2 million in allegedly ill-gotten wealth, after his declared total income during his tenure was shown to be only P2.3 million.