PCGG uncovers $9.5-M fee anomaly

MANILA, Philippines - The Presidential Commission on Good Government (PCGG) has uncovered astronomical legal fees paid for services of foreign lawyers during the administration of former chairman Camilo Sabio.

The total charges run up to about $9.5 million for a period of seven years.

Among the PCGG-retained foreign lawyers was Sabio’s American brother-in-law Donald O’Buckley, who was paid $26,755 equivalent to more than P1.2 million for legal consultancy services rendered over 23 days last year.

It was pointed out that O’Buckley’s services were unnecessary considering that the PCGG at the time had already retained the services, also at a steep cost, of a well-known New York law firm, Paul, Hastings, Janofsky & Walker, to handle the government’s claim in the so-called Arelma deposits of about $30 million in the Merrill Lynch brokerage firm that has been bought by Bank of America.

The Sabio Commission, it was learned, had entered into a retainer agreement with O’Buckley on March 30, 2010, to “provide consultancy services in the case of Osqugama F. Swezey, et. al. v. Merrill Lynch, et. al. pending before the Supreme Court of the State of New York County of New York.”

“This notwithstanding the fact that PCGG had already retained, at much cost, a well- known law firm (Paul Hastings) to represent the Republic,” a PCGG audit report said.

“A review of O’Buckley’s billing statement showed that not only were the rates relatively high ($600/hour for O’Buckley, $225/hour for a paralegal and $125/hour for an administrative assistant), the actual work done was relatively minimal, such as: ‘review online research and draft memo of paralegal’ (6 hours); ‘review of pleadings’ (6 hours); ‘legal research and sharing of information with Chairman Sabio’ (4.5 hours); ‘appearance at court to listen and observe legal arguments’ (3 hours); and ‘meeting at Philippine Consulate to discuss oral arguments and official lunch with PCGG’ (7.5 hours),” the report added.

It was learned that among the charges made by O’Buckley in his $26,755 bill was $1,200 for a two-hour dinner-strategy discussion meeting with his brother-in-law, then PCGG chairman Sabio, at the Radisson Hotel.

O’Buckley, it was learned, had also charged $600 for the photocopying of a 1,500-page document, or a charge of $2.50 per page.

The PCGG also noted the promptness in settling O’Buckley’s bill.

“Through Resolution No. 2010-020-797 dated 3 June 2010, the PCGG requested PNB to release the amount of $26,755.00 in favor of O’Buckley as payment for professional services rendered on 5-28 April 2010. He was thereafter paid,” the audit report said.

“This was unprecedented in terms of prompt payment for counsel fees and made while similar billings from other retained counsels were then (and still are) pending,” the report added.

PCGG Chairman Andres Bautista said the $9.5 million spent by the previous administration was anomalously high, considering the two foreign cases supposed to have been subject of the legal expenses charged from the PCGG’s special legal fund deposited with the PNB – set up by the late Haydee Yorac in 2004 with an initial $30 million – have yet to go to trial.

“The $9.5 million was spent when the cases have yet to go to trial proper,” Bautista said in a brief interview at the PCGG head office yesterday afternoon.

The fund was set up by the late PCGG chairman Yorac as a contingency fund to cover legal, administrative and other related expenses to pursue the $22-million West LB case in Singapore, and the $30-million Arelma account in Merrill Lynch in New York in the US.

The $9.5-million disbursement for the services of foreign lawyers and the $2.26 million in foreign travel expenses are some of the major anomalies uncovered by the PCGG that transpired during the “Sabio Commission.”