Ombudsman accused of sitting on swine scam

MANILA, Philippines – A law professor from the University of the Philippines has accused the Office of the Ombudsman of sitting on another agricultural fund scam involving the government’s swine program, and claimed billions worth of funds from the program had been used for the administration’s campaign kitty in the 2004 elections.

“In 2005, the COA (Commission on Audit) recommended that actions be taken against those who were found remiss in the discharge of their duties (regarding the swine scam). Until today we have not heard about this controversy,” Harry Roque said in an interview over several television stations yesterday.

Roque, of the UP Law Center, said Ombudsman Merceditas Gutierrez should have ordered an investigation into the swine fund scam three years ago, when the COA submitted the report.

The report revealed that the Department of Agriculture (DA) and government-owned Quedan and Rural Credit Guarantee Corp. (Quedancor) had been involved in P1.1-billion worth of “ghost deliveries” of swine to marginalized farmers in 2004.

Quedancor, a government-owned lending agency for marginalized farmers, acted as the program distributor.

A year after the DA implemented its program in 2004, COA initially discovered P700-million worth of deliveries, which ballooned to P1.1-billion after another year of auditing.

Roque said the amount was taken from the P1.66-billion fund intended for hog distribution to marginalized farmers. The amount was part of the P2.25-billion fund intended for the Swine Program.

Roque said the COA discovered farmers who supposedly received the hogs were paid P200 to P300 to sign documents to indicate they received the livestock.

Roque, however, declined to elaborate on how the funds were diverted and used for election spending.

But he pointed to Agriculture Secretary Arthur Yap for denying allegations of his involvement in the scam.

Yap was a board member of Quedancor in 2004, being the then head of the National Food Authority (NFA) when the alleged irregularities in the swine program took place.

Roque revealed Executive Order 322 was issued in July 2004, which transferred Quedancor to Malacañang from the DA.

“That explains why (Ombudsman) Gutierrez is not acting on it (allegations of corruption),” Roque claimed.

Roque, however, did not provide other specifics on the purported EO but stressed the transfer of the jurisdiction of Quedancor makes Malacañang liable for other irregularities in the firm since 2004.

Aside from the supposed ghost distribution in the Swine Program, the COA report indicated the supposed suppliers of the hogs – Briks Agri-Livestock, Silverstock Resources Corp., and Metro Livestock – did not go through bidding.

The COA report showed Briks supplied P583-million worth of hogs, Silverstock P480 million, and Metro Livestock P383 million.

The three companies had no track record and were “curiously incorporated” only in 2003, a year before the Swine Program was implemented, the COA report said. They were not accredited hog suppliers by the Bureau of Animal Industry, according to the COA report.

Roque added he has information that a controversial consultancy firm was involved in the swine program scam but declined to reveal the name of the firm.

“I would wait until actual whistleblowers come out, and it’s only a matter of time,” he said.

Roque said he was tipped about the COA report on the Swine Program by “well-meaning people” from Quedancor “who cannot take the scam any longer.”

He said the concerned Quedancor informants stated “they felt bad because the money they administered as an office went to support a presidential candidate.”

On the other hand, Secretary Yap said he had the allegations investigated when he assumed office in October 2006, and sent the findings and recommendations of COA to the Office of the Ombudsman for study.

Agriculture Undersecretary Bernie Fondevilla defended Yap, pointing out the controversy took place even before his boss took over DA succeeding Luis “Cito” Lorenzo Jr.

Investigation

Fondevilla added the swine program was conceptualized and implemented in 2003 when Lorenzo was the DA Secretary.

He said Yap had the issue investigated after receiving the COA report revealing the anomaly.

Fondevilla added Yap even sought the help of the National Bureau of Investigation (NBI) to conduct an inquiry to identify other people possibly involved in the scam.

The investigation resulted in the relief of Quedancor president and chief executive officer Nelson Buenaflor on top of a deeper probe by the Office of the Ombudsman, Fondevilla said.

Through a memorandum of agreement due for signing this month, Fondevilla said the DA and Quedancor will tap the legal expertise of the Office of the Government Corporate Counsel (OGCC) to pursue the collection of payments and file cases against those involved in the anomaly.

“Hence, it is absurd for anyone to accuse Secretary Yap of any involvement in this COA-reported Quedancor anomaly,” Fondevilla said.

Fondevilla said Quedancor had formed a Swine Program Task Force to validate the extent of the irregularities.

The task force was assigned to explore available options to mitigate financial losses to Quedancor and study possible legal actions against input suppliers and grower-borrowers believed involved in defrauding the program, and initiate the collection of repayments, he said.

As to the fate of Buenaflor, Fondevilla said the Quedancor board forced him to go on leave starting May 22 last year to allow an equitable investigation into his involvement.

“Effective the same date, Quedancor had also stopped accepting new applications for lending under the swine program to prevent further financial hemorrhage to the corporation,” Fondevilla said.

He said Quedancor limited itself to renewals of current accounts under the swine program.

Agricultural Alliance of the Philippines (AGAP) party-list Rep. Nicanor Briones also defended Yap, pointing out the scam was uncovered after he assumed the DA portfolio.

Sen. Ramon Revilla Jr., for his part, urged the Ombudsman to pursue the investigation into the swine scam.

“It is only proper that the Commission on Audit recommends to the Ombudsman the filing of appropriate charges against those involved in the so-called swine scam. If the reports are true, it is a pity that a supposed program to benefit indigent hog raisers has become a venue for a billion peso corruption,” Revilla said.

Revilla said he will support any move to investigate the issue before the Senate.

Senate Minority Leader Aquilino Pimentel Jr. on the other hand, said the swine scam is not an urgent issue that needs investigation by the Senate.

Pimentel, however, joined opposition Sen. Panfilo Lacson in criticizing the administration for the new anomaly.

Lacson, for his part, said he is not surprised that another issue is hounding the Arroyo administration. -With Reinir Padua, Marianne Go, Christina Mendez, Ding Cervantes