Ombudsman indicts Floirendo for graft over Tadeco deal

Lian Buan
The Ombudsman finds probable cause to file graft charges against Rep Antonio Floirendo Jr for having financial interest in the government's deal with Tagum Agricultural Development Company

MANILA, Philippines – Ombudsman Conchita Carpio Morales indicted Davao del Norte 2nd District Representative Antonio Floirendo Jr of graft stemming from the complaint filed against him by longtime friend-turned-foe House Speaker Pantaleon Alvarez.

Morales, in a resolution dated Monday, September 18, found probable cause to file graft charges against Floirendo for having financial interest in the government’s deal with Tagum Agricultural Development Company (Tadeco).

Floirendo owns P7.5 million worth of shares in Tadeco, which is owned by his family. Tadeco has been leased 5,000 hectares of the Davao Penal Colony (Dapecol) utilized for banana plantation.

Morales agreed with Alvarez’ argument that Floirendo violated Section 14, Article VI of the Constitution which bars senators or congressmen from having direct or indirect business interests in any contract with government.

The Tadeco deal with Dapecol, under the Bureau of Corrections (Bucor), was first signed in 1969. When the joint venture agreement (JVA) was renewed for another 25 years in 2003, Floirendo was already serving as Representative of Davao del Norte.

Section 3(h) of graft law

Thus, the Ombudsman said, Floirendo is liable of violating Section 3(h) of the graft law which defines as a corrupt act any interest in a government contract that is not allowed under the constitution.

Floirendo had argued that there is no conflict of interest on his part.

“Respondent was neither involved nor had any participation in the negotiation of the 2003 agreement… nor did he receive any financial benefits from his relatives,” he said in his counter-affidavit.

But for the Ombudsman, that there is no conflict of interest is not the issue.

As she explained, Section 3(h) of the graft law can be divided into two.

The provision prohibits “directly or indirectly having financing or pecuniary interest in any business, contract or transaction in connection with which he intervenes or takes part in his official capacity, or in which he is prohibited by the Constitution or by any law from having any interest.”

First offense is the conflict of interest or a public official’s intervention, and the 2nd offense is the prohibition by the Constitution.

“He is charged under the 2nd mode of Section 3(h) in which mere prohibition by the Constitution or by law of financial interest in a contract suffices. That he did not intervene or act in his official capacity in the negotiation leading to forging of the contract is immaterial,” Morales said.

Floirendo had also invoked the wisdom of the Consititutional Commission and cited transcript of the deliberations where the framers said Section 14, Article VI does not cover “every interest, however miniscule, indirect or incidental.”

But she corrects him, saying that the line cited by Floirendo only refers to sectoral or party list representatives, which he is not.

By indicting Floirendo, Morales put at risk many lawmkers for possible liabilities in their own financial interests in government projects.

“While indeed this Office understands that indeed such an interpretation of the Constitution will open members of the House of Representatives to possible indictment, the duty of this Office is to apply the law. To do otherwise is to supplant the wisdom of the people who approved the Constitution with its own,” she said.

Tadeco deal

The Tadeco deal was earlier declared illegal by Solicitor General Jose Calida in a legal opinion requested by Alvarez. Calida cited violation of the Public Land Act and exceeding the prescribed 50-year period of government lease among others.

The present contract will last until 2029, which means the lease would reach 60 years since 1969.

The Department of Justice (DOJ) is also conducting its own review, but has yet to issue findings.

Alvarez also filed a House Resolution seeking an investigation into the deal which he says puts the government at a loss of as much as P106,167,191 per year.

BuCor gets a P26,541,809 cut per year from Tadeco’s earning.

Alvarez and Floirendo are longtime friends from Davao and both close allies of President Rodrigo Duterte.

Their disagreements repotedly started from a spat of their respective girlfriends but Alvarez has denied this.

Morales’ indictment is still subject to a motion for reconsideration should Floirendo choose to appeal. – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.