Calida: No conflict of interest in gov’t contracts even if I did not divest
MANILA, Philippines – Solicitor General Jose Calida maintained on Monday, May 28, there was no conflict of interest in his family-owned security agency bagging P150.8 million worth of contracts from at least 6 government agencies.
Calida said he is neither liable under the Code of Conduct of Public Officials nor the anti-graft law. (READ: Roque: No conflict of interest in Calida firm bagging gov't contracts)
Vigilant Investigative and Security Agency Incorporated or Vigilant is a security firm owned by Calida. The solicitor general resigned as president and chairman of the company in June 2016, but remained as holder of 60% of company shares, while the remaining 40% is evenly spread out among his wife Milagros and their 3 children.
Since Calida took over the Office of the Solicitor General (OSG) on July 30, 2016, Vigilant bagged 10 contracts from 6 government agencies, including the Department of Justice. On Monday, House opposition lawmakers said Vigilant also bagged the contract for the security of the House of Representatives, which would bring the contracts to 11.
“That he has not yet divested his interest in said enterprise is of no moment since the requirement of the law is either to resign from the management of the enterprise and/or divest himself of his interest in it,” reads the statement that Calida’s camp sent to media Monday night.
Calida claimed that the issues surrounding his security agency are just “attacks” against him by those who disagree with his successful ouster of Chief Justice Maria Lourdes Sereno.
Calida also said that the P150.8 million did not go to his company, but to the salaries of his employees and the cost of administration. “Clearly, after all of these are settled, only a small percentage is left as agency fee,” he said.
Here are Calida’s legal arguments on questions on conflict of interest:
1. Is it prohibited by the Code of Conduct of Public Officials?
What the law says: Section 6 of the Code of Conduct of Public Officials states that “a public official or employee shall avoid conflicts of interest at all times.”
The law adds: “When a conflict of interest arises, he shall resign from his position in any private business enterprise within thirty (30) days from his assumption of office and/or divest himself of his shareholdings or interest within sixty (60) days from such assumption.”
Calida’s response: Calida highlighted the law’s use of “and/or,” saying that the interpretation of “or” in a law means the person is given the option to select one “to the exclusion of others.”
Because he has already resigned – one of the options – Calida said he does not have to divest anymore.
“As held in Rabe v. Flores (A.M. No. P-97-1247, May 14, 1997), “in the absence of any showing that a business interest will result in a conflict of interest, divestment of the same is unnecessary,” the Solicitor General said.
2. Is it prohibited by the anti-graft law?
What the law says: Section 3(h) of the anti-graft law prohibits public officials from “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.”
In September 2017, Ombudsman Conchita Carpio Morales indicted Davao del Norte 2nd District Representative Antonio Floirendo Jr under Section 3(h) for having committed the second type of violation, the one pertaining to the constitutional prohibition.
Section 14, Article VI of the Constitution prohibits members of Congress from having direct or indirect business interests in any contract with government.
Section 13, Article VII of the Constitution prohibits members of the Cabinet from doing the same. Calida as a solicitor general has a Cabinet rank.
Calida’s response: “Article VII, Section 13 of the 1987 Constitution does not apply to Solgen Calida for the simple reason that he is not a member of the Cabinet, although he is conferred Cabinet rank by RA 9417 and is invited to Cabinet meetings by the President,” his statement said.
Calida added that “he does not head an executive department and his appointment, unlike those of Cabinet members, did not require Commission on Appointments confirmation.”
3. Are the DOJ contracts proper?
Issue: The OSG is an autonomous body, but it is attached to the DOJ for budgetary purposes. Vigilant got the January 2017 DOJ contract worth P5.6 million by filing an appeal, after its bid was invalidated the first time.
The reasons for the initial invalidation of the bid are unknown for now, but resigned justice secretary Vitaliano Aguirre II said: “I don't know what the DOJ Bids and Awards Committee was thinking. I did not interfere in these biddings."
Calida’s response: Calida reiterated that the OSG is attached to the DOJ only for budgetary purposes. Calida said that the Administrative Code of 1987 declares the OSG as an “independent and autonomous office attached to the DOJ.”
“There is no doubt that by specifically making the OSG ‘independent and autonomous,’ the Administrative Code of 1987 intended the OSG to be free from the control and influence of the DOJ, and to have the right to govern itself independently from the DOJ,” Calida said.