In a 15-page motion to dismiss, Ombdusman Prosecutor III Jesus Micael said that "the respondents’ settlement of the city government’s obligation to the Philippine National Bank (PNB)" even resulted in savings by the city of Caloocan.
Charged along with Malonzo were Vice Mayor Oscar Malapitan and councilors Gil Calalang, Luis Chito Abel, Florencio Dolatre, Benjamin Manlapig, Edgar Erice, Craciano Gonzalvo, Angel de Guzman, and Cherry Sarmiento.
Ironically, Malapitan is now a supporter of brothers Boy and Luis "Baby" Asistio, Malonzo’s bitter political foes.
The graft charge filed by Asistio stemmed from an alleged anomalous payment of Malonzo to the Philippine National Bank for a P3.9 million loan of the city government for the construction of the Maypajo Public Market during Asistio’s administration in the early 1980s.
The city government, which was then headed by Asistio, obtained a P22.8 million loan from PNB for the construction of the market.
Later, the city sued the bank when it debited P5 million from its account and released the same directly to the contractor, Ruflex Development and Construction Company. However, in a duly-approved resolution dated March 6, 1999, the Office of the Ombudsman found that the city had authorized PNB to apply the amount as payment to the bank.
Then, the Maypajo Public Market burned down completely in 1994, the cause of which has not yet been established. Insurance proceeds from the Government Service Insurance System (GSIS) amounted to P3.7 million.
PNB pressed for payment and informed the city that with the interest and other charges, the loan had ballooned to about P37 million.
In 1997, the city government, now under Malonzo, passed and approved City Ordinance No. 0232 S1997, which authorized the payment of P5.9 million to PNB.
Asistio argued that the payment did not undergo the requisite arbitration proceedings per the compromise agreement between the city and PNB; and that the transaction resulted in a full payment of the city to Reflex Development Corp. without the corresponding work accomplishment report.
The Ombdusman, however, re-investigated the case and found nothing anomalous in the issuance of City Ordinance No. 0232.
Malonzo, together with co-accused Erice and Dolatre, on Friday attended the hearing where they were originally scheduled for arraignment.