MANILA, Philippines – It was the end of another grueling week for the Visayan Forum (VF), an internationally acclaimed anti-human trafficking organization that has seen the most gripping raids on prostitution brothels and slavery dens.
But nothing prepared it for that Friday afternoon, August 31, when a raid startled its gated compound. Upon the request of VF's biggest funder, the United States Agency for International Development (USAID), Philippine investigators seized VF's office in Cubao, Quezon City over fraud charges.
Who would have thought this would happen 4 years ago, when the US State Department even named VF's founder, Cecilia Flores-Oebanda, as one of its “heroes” in fighting modern-day slavery?
But money could destroy the strongest of ties. The USAID complained against VF over P210-M (US$5.1-M) in donations that the non-government organization (NGO) allegedly misused out of a P300-M (US$7.3-M) port project. The project was meant to shelter human trafficking victims in airports and harbors.
In a fraud accusation that the National Bureau of Investigation (NBI) filed before the Department of Justice (DOJ) on behalf of USAID, the evidence against VF includes 35 boxes of allegedly fake documents, with around 10 folders per box and around 100 documents per folder. These would be around 35,000 documents that VF allegedly falsified to justify over P200-M in donations for trafficking victims, according to the NBI.
The case – perhaps the first that the USAID filed against a Philippine NGO – is unprecedented.
The NGO has denied the charge, citing its 21-year track record against the $32-B global and illegal trade.
It is, in any case, a possible setback in the Philippines' anti-human trafficking crusade. VF, after all, has played a major role in upgrading the country's performance against human trafficking – a US yardstick on whether to continue aiding a developing country.
Prostitution, forced labor, and other forms of modern-day slavery remain insurmountable problems in the Philippines, as a United Nations envoy warned Friday, November 9.
Tables turned on VF after Daniel Altman, a special agent-in-charge from USAID's Office of the Regional Inspector General, wrote NBI a letter weeks before the raid. Altman wanted “assistance” from the NBI to probe how VF spent USAID's donations from 2005 to 2011, said NBI anti-graft chief Rachel Marfil Angeles in an interview with Rappler. (Editor's note: Angeles is now on study leave.)
Upon receiving Altman's letter, Angeles said the NBI met with a representative of the USAID inspector general, as well as two key personalities privy to VF's disbursement of funds. One of them was an auditor from the Cavite-based firm BF Medina, while the other was Oebanda's former bookeeper, Maria Analie Villacorte.
Secretly, the NBI monitored VF's Quezon City office days after the meeting. And then with the help of the external auditor, Angeles said, undercover agents scoured VF's two buildings that had 3 floors each. The NBI unearthed "fake documents" in the surveillance that took almost a month.
“We were able to gather information of the fabrication of the receipts to support the discrepancies in the budget proposals submitted by Visayan Forum to USAID,” Angeles said.
In its surveillance, the NBI discovered 32 boxes of allegedly falsified receipts, kept and even labeled in a room in VF's office.
Some came from companies that "were already closed," while others bore the letterhead not of commercial entities but of VF itself, according to Angeles. She said a number of receipts also had scotch tape marks, indicating these were tampered with.
She said these corroborated BF Medina's independent audit from March to July this year. It was USAID that requested the audit and VF chose BF Medina from a list of proposed auditors.
The NBI applied for a search warrant based on the audit report and the surveillance operations.
Their evidence convinced the Quezon City Regional Trial Court Branch 98 to seize the VF office. On August 31, Judge Evelyn Corpus-Cabochan issued a search warrant against Oebanda as well as occupants and employees of VF.
The warrant said there are “good and sufficient reasons to believe” that the NGO was “in possession or have in their control falsified documents which were used, and are being used, to defraud the donors” of USAID.
The court said possessing these allegedly fake papers could violate Article 172 (2) of the Revised Penal Code, which penalizes the falsification of private documents.
The Quezon City RTC then ordered the seizure of books of accounts, ledgers, and vouchers; desktops and laptops of VF's finance manager, finance officer, bookkeeper, and administration officer; and unused pre-printed official receipts, official receipts and cash vouchers that can be bought from bookstores, and VF cash vouchers and stationeries.
The warrant allowed a search within 10 days, but the NBI wasted no time once it got the court's go-signal. On the same afternoon the warrant was released, at around 4 pm, the entire command of the NBI's anti-graft division, composed of 15 agents, raided VF's office in Quezon City.
“There were many people,” Angeles said, citing the report of agents who conducted the raid. “At that time, Visayan Forum was interviewing new employees, because a lot have been resigning already. When we were there, there were also new recruits.”
Current and former VF employees, who refused to be named, said the raid shocked people in their office. "Matinding demoralization ang nangyari... kasi parang ang tanong, 'Kriminal ba kami? Bakit kami ginaganito?'" a current staff member said. (There was much demoralization... because the question was, “Are we criminals? Why are they doing this to us?")
Their boss, the 53-year-old Oebanda, was as shocked, according to her lawyer Laurence Arroyo. “The first time that Visayan Forum became aware that there was such an issue, was on August 31, during the raid already of the NBI,” the lawyer told Rappler.
So when Arroyo rushed to the VF office upon learning about the raid, he said he initially was doubtful about it. He called Oebanda, who was not in the office then. “I said, 'This is crazy that a raid has been conducted and, according to them, because of some falsified documents against USAID.'”
“'Call USAID. Do they know about this?' I said if USAID found out about it, they themselves might get surprised,” Arroyo said in a mix of English and Filipino.
He said Oebanda tried to call USAID, but VF's former partner didn't pick up its phone. Arroyo could not do anything, and the raid pushed through as ordered by the court.
NBI agents found more documents than those initially discovered, according to Angeles. The operation yielded a total of 35 boxes of allegedly fake documents.
What made the raid easy, said Angeles, was that VF kept all the boxes in one room. She said the boxes even had the label “USAID Port Project.”
'Snakes in backyard'
Two days after the raid, Oebanda e-mailed her staff an apology, a copy of which was obtained by Rappler.
“I know that you are all (traumatized about) what happened last Friday. I'm sorry that you (were) put in that situation. Everything is okay now. Definitely this is a big demolition job (against) us, and we are working on it,” Oebanda said in her e-mail on a Sunday morning, September 2.
A former communist leader known as Kumander Liway, Oebanda implied that traffickers masterminded the exposé. “Unfortunately, they used the USAID auditing to attack us within. I think they were working on this for a long time,” she said.
“I (was) too busy attacking the trafficker outside the organization, but (didn't realize) that they (had) already penetrated us,” Oebanda added. “This will prove our strength as organization and will expose the snakes in our backyard. I can (feel) their sting for a long time but can't really see them.”
Arroyo said VF confirmed, a day or two later, that it was USAID that requested the raid. “We called USAID...there was a letter from USAID to NBI, asking for their assistance,” the lawyer recounted.
The VF camp eventually filed a motion to quash the search warrant, which is pending before the Quezon City RTC. If the court grants this, VF may regain custody of the confiscated documents.
Arroyo said the evidence for the search warrant was weak. “We want to cross-examine the bookkeeper, the auditor, and the two NBI agents. Give us a chance,” he explained.
Earlier, Arroyo said the former bookkeeper, Villacorte, appeared to have falsified receipts and admitted to doing it. “Now she wants to point fingers at others,” he said.
Villacorte has accused Oebanda of instructing her to falsify documents, but Arroyo said VF "categorically" denies this.
“She thinks that a case will not be filed against her if she does it,” said the lawyer, referring to Villacorte's possible motive. “She is trying to absolve herself of liability by pointing to others.”
Meanwhile, the falsification case is under preliminary investigation at the DOJ under Assistant State Prosecutor Merba Waga. She refused to grant Rappler an interview or provide a copy of the formal complaint.
But sources said Waga will have to spend weeks examining the 35 boxes of documents and meeting with USAID agents before a case can be filed in court. This is on top of her other duties as prosecutor.
The case is expected to take long. A source estimates a case could be filed before a court early next year.
The NBI, however, is confident about its witnesses and the confiscated documents. “More serious charges could follow,” Angeles said.
VF, on the other hand, said: “We will vindicate ourselves in our courts of law.”
VF added USAID has suspended aid for the organization.
USAID, however, said it remains “committed to assisting the Philippines in its efforts to prevent human trafficking, to protect those that fall prey to this modern day form of slavery, and to prosecute those who are found guilty of this heinous act” – albeit through other means.
What is clear, for now, is a story of friends turned enemies, with trafficking victims as casualties. – Rappler.com
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