Ombudsman indicts ex-PCGG chief, 5 others over fraudulent deal

MANILA, Philippines – Ombudsman Conchita Carpio-Morales has ordered the indictment of former Presidential Commission on Good Government chairman Magtanggol Gunigundo and 5 other former PCGG officials over a  “fraudulent” compromise agreement.

The others facing graft charges are former PCGG commissioners Reynaldo Guiao, Hermilo Rosal, Julieta Bertuben and Herminio Mendoza; and former director Mauro Estrada.

The 6 allegedly violated Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act for approving a compromise agreement that was “grossly and manifestly disadvantageous” to the government, the Ombudsman said in a statement on Thursday, September 10.

The case stemmed from a petition for forfeiture of ill-gotten wealth filed against former Muntinlupa mayor Maximino Argana in July 1987, involving 481.78 hectares of land in Famy and Pangil in Laguna.

During the trial, the Argana heirs offered a compromise settlement: the government would get 361.92 hectares or 75% of the disputed land, while the heirs would retain the remaining 199.86 hectares or 25%.

In July 1998, the anti-graft court Sandiganbayan approved the compromise agreement. But in October 1998, the PCGG and the Office of the Solicitor General (OSG) under a new set of officials, filed a Motion to Rescind Compromise Agreement and to Set Aside Judgment by Compromise on the ground of fraud and insidious misrepresentation.

In 2000, the Sandiganbayan’s Third Division promulgated a resolution granting the Motion To Rescind.

‘Tainted transaction’

The Ombudsman said in a statement that the probe conducted by its Field Investigation Office (FIO) revealed that the transaction was tainted by “fraud and misrepresentation.”

The FIO discovered that the parties deliberately omitted to disclose the property values when in fact, the parcel of property ceded to the government was valued at only P3.62 million ($77,125) based on the Comprehensive Agrarian Reform Program valuation of P10,000 ($213) per hectare.

The market value of the property retained by the Argana heirs located in the urban area was valued at P2.4 billion ($51.15 million), based on the market valuation of P2,000 ($42.63) per square meter.

Morales highlighted the Sandiganbayan’s observation that the agreement “is patently unfair” as it is “a virtual sell-out.”

“Due to the pronounced inequity in the distribution of properties between the government and the heirs under the agreement, the government stood to suffer substantial loss, hence, the contract was grossly and manifestly disadvantageous to the government,” the resolution stated.

Section 3(g) of R.A. No. 3019 prohibits the act of entering, on behalf of the government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby.

The Ombudsman said charges against Cecilio Estoesta and Zenaida Hernandez-Perez of the OSG were dismissed for lack of probable cause. – Rappler.com

$1 = P46.9