Joc-joc fertilizer scam and Jenny Napoles: More of the same

 

MANILA, Philippines – Non-government organizations (NGOs) linked to the intricate web of pork barrel abuse by lawmakers appear to have learned some lessons from the fertilizer scam involving former Agriculture Secretary Jocelyn “Joc-Joc” Bolante in 2004.

These lessons may have allowed them to refine and enhance their scheme, making them more brazen, even overshadowing the amount involved in the 2004 controversy.

The Bolante fertilizer scam, which was investigated by the Senate Blue Ribbon, involved P728 million in Department of Agriculture (DA) funds under the Ginintuang Masaganing Ani misused by legislators in collusion with their partners—private suppliers and foundations that were recipients of the funds.

It was believed the farm fund was used to finance the political allies of former President Gloria Macapagal-Arroyo for the May 2004 polls.

The Senate Blue Ribbon and the Senate committee on Agriculture described the fertilizer scam then as  “premeditated, systematic and agricultural theft” tantamount to “the rape of the nation.”

The mechanics and circumstances surrounding the fertilizer scam and the current pork barrel misuse are uncannily identical:

• Then as of now, the supposed beneficiaries of the agri-fund—the farmers—did not receive fertilizers and farm inputs. In the fertilizer scam, money was siphoned off to the campaign kitty of Arroyo’s allies and dubious NGOs. The scam purportedly totaled P3 billion in all, still paling in comparison to the P6.156-billion Priority Development Assistance Fund (PDAF) found by the Commission on Audit to have been misused for the period 2007-2009 by NGOs. In the pork barrel mess, beneficiaries were fabricated, with one NGO lifting names from board passers in government licensure examinations.
• It involved a sharing system for all the participants in the division of the spoils. In the fertilizer scam, 25% goes to the DA; 30% to the LGUs; 20% to the supplier of farm inputs; and 25% to the runners. In the pork barrel scam, 40%-50% went to the lawmakers and the rest went to the NGO and its conspirators.
• Both scams involved “runners,” with specific areas of operation, targeting the LGUs and soliciting their signatures. In the pork barrel scam, however, some of the lawmakers denied signing any Memoranda of Agreement (MOA), saying their signatures were forged.
• In the fertilizer scam, one company, Feshan Phils Inc, was in the middle of the controversy through dealer Marites Aytona (mistakenly identified earlier as the owner).* Feshan either delivered overpriced liquid fertilizer or did not deliver at all. The Senate concluded, “Feshan Philippines Inc is linked and connected with Undersecretary Jocelyn Bolante.” In the pork barrel scam, Janet Lim-Napoles, is at the center of the mess.
• Aytona’s trusted aide, Jose Barredo, spilled the beans on the fertilizer scam before the Senate probe. In Napoles’ case, a relative, Benhur Luy, became the whistle blower.
• In the fertilizer scam, lawmakers and LGUs were already pre-identified as recipients of the fund. In the pork barrel scandal, lawmakers have pre-identified the NGOs that were beneficiaries of their own pork barrel.
• The names of some lawmakers were used as supposed recipients of the fertilizer fund. In the pork barrel scandal, many LGU officials are claiming their signatures were forged as recipients.
• Like Bolante who went into hiding to avoid arrest, Napoles is also on the lam. She remains a fugitive, as of this posting.

Ignored solutions

During the Senate probe on the fertilizer scam, two summonses were issued to Napoles to testify, but the declaration of a state of national emergency by former President Arroyo then to temper protests against her administration, scuttled her appearance in the Senate.

Thus, she was excluded from the Blue Ribbon and the Senate agriculture committee report that recommended the filing of plunder charges against Bolante, former Agriculture Secretary Luis Ramon Lorenzo, and former assistant secretary for field operations Ibarra Poliquit. Several unnamed individuals and 6 private respondents were also included in the charge. The case against them is pending before the Sandiganbayan.

In her counter-affidavit in connection with the serious illegal detention case filed by Luy, Napoles submitted published reports showing she was not among those indicted in the fertilizer scam. It was part of a bid to disprove Luy’s allegations that she was involved in the scam involving pork barrel coursed through the DA.

The two committees, in their 2006 report, recommended that a law be passed to “tighten the regulation and registration of foundations, NGOs, associations, and people’s organizations.” It noted that these groups “have become agents for money laundering transactions.”

But as the pork barrel scandal has shown, the probe on the fertilizer scam did not deter the NGOs from being active players in the misuse of public funds, with the complicit participation of lawmakers.

Coverage of corruption

Despite the revelations on the fertilizer scam involving the DA budget, NGOs remained as convenient conduits—this time for the PDAF allocations and various infrastructure, including local projects of lawmakers. This, despite the fact that NGOs are not legally allowed to receive government funds in the absence of an appropriation law or ordinance to this effect.

NGOs have become emboldened to carry out dubious schemes, and they attempted to cover their tracks. But the cover-up was poorly carried out.

For the audit period 2007-2009, the COA found out that a total of P6.156 billion contracted to 82 NGOs were replete with violations, among them:

• Absence of public bidding in the award of projects to NGOs which were pre-selected by the lawmakers
• MOAs entered into with the NGOs violated COA circulars prescribing inspection, evaluation and monitoring of projects; violation of equity rule, which prescribes that the NGOs should shoulder 20% of the project cost
• A number of NGOs, along with their supposed suppliers, gave fictitious addresses. Some of the addresses were residences of the NGO incorporators.
• A number of NGOs do not have permits to operate
• Interlocking interests among the NGOs, with officers and incorporators also officers in different NGOs
• Fake or fabricated farmer-beneficiaries

In a feeble attempt to cover up the misuse of funds, the NGOs employed private suppliers who were also found by COA to have provided questionable documents.

Worse, other suppliers denied entering into transactions with the NGOs. At least 41 private suppliers have denied to COA entering into transactions with 17 NGOs with project costs amounting to P352.136 million.

On the other hand, 230 suppliers with transactions amounting to P689.818 million could not be located or have non-existent addresses, the COA found out. These fictitious suppliers include those provided by NGOs linked to Napoles.

Of the suppliers that exist, the COA found out they either have no permit to operate, submitted questionable documents like Tax Identification Numbers and Authority To Print (ATP) receipts/invoices supposedly issued by the Bureau of Internal Revenue (BIR). In some cases, same ATPs are used by different suppliers.

Wider net of accomplices

In its 2006 report, the Senate Blue Ribbon and the Agriculture committees also asked the Ombudsman to check the paper trial involving private individuals involved in the fertilizer scam and for the BIR to investigate the private entities for possible tax evasion.

With the wider net of accomplices uncovered by the COA, these two agencies will have to cast a wider net to catch the thieves. – Rappler.com

 

*Editor’s note: An earlier version of this report identified Marites Aytona as the owner of Feshan Phils Inc. She was only a dealer. We regret the error.