Senate starts Malampaya scam probe

MANILA, Philippines - The Senate Blue Ribbon Committee on Monday began its inquiry into the alleged embezzlement of the Malampaya fund.

The first hearing focused on the findings of a Commission on Audit (COA) report on the P900-million Malampaya fund released to the Department of Agrarian Reform (DAR) that ended up in 12 dubious non-government organizations (NGOs) in 2009.

"What we know now from all the revelations in the past year, lahat po ng 12 na ito ay linked po kay Mrs. Napoles," COA chairperson Grace Pulido Tan told Sen. JV Ejercito during the televised hearing.

Tan was referring to detained businesswoman Janet Lim Napoles, the alleged pork barrel scam mastermind who also purportedly got hold of around P900 million of the Malampaya fund.

Presenting the findings of the COA report, Tan explained that the Department of Budget and Management (DBM) released the P900 million to the DAR because 97 mayors were requesting for financial assistance to farmers affected by Typhoons Ondoy and Pepeng.

But even before the DAR's fund request was approved by the DBM, Tan said the DAR already entered into various memoranda of agreements (MOAs) with the 12 NGOs.

"Maliwanag po yung paglabag sa P.D. 1445, that is the State Auditing Code of the Philippines, prohibiting any government agency from entering into a contract unless funds have been made available and authorized or appropriated for the purpose," Tan said.

The COA chief said the MOAs with the 12 NGOs were split into 97. This means each local government unit had one contract worth not more than P10 million, the upper limit of the signing authority of the DAR undersecretary.

Tan believes that the splitting of the contract was intentional.

"Ang sinasabi namin dito, sinadya na i-split 'yung mga proyekto na 'yon para hindi tumaas. Kasi 'pag tumaas sa P10 [million], [DAR] Secretary ang kailangang pumirma," she said.

'Highly irregular'

According to the COA report, the existence of the 12 NGOs is questionable and their implementation of the 97 projects costing P900 million is "highly irregular" due to various reasons.

For one, the 12 NGOs turned out to be unknown and cannot be located at their given addresses or gave non-existent addresses or those traced to vacant lots or residential houses in depressed areas. None of the NGOs also confirmed their transactions with the DAR.

And while the NGOs are located in different places, they have common accountants and notaries public. All documents purportedly signed by the 97 city and municipal mayors were all notarized by only three notaries public.

The NGOs also seem to be interrelated as checks issued to two of them were deposited in the same bank accounts.

Of the 97 mayors who allegedly requested part of the Malampaya fund, 67 categorically denied their signatures on the endorsement letters and all other relevant documents.

They also denied having knowledge on and participation in the implementation of the projects funded by the Malampaya royalties.