Wanted: Manpower, tech to catch Napoles NGOs

SEC Chairperson Teresita Herbosa admits her agency needs more manpower and a computer registration system to detect bogus NGOs

'NOT ALL.' Securities and Exchange Commission Chairperson Teresita Herbosa admits her agency can't monitor all NGOs, saying it needs more manpower and a computer registration system. Rappler photo

MANILA, Philippines – If only the government had a computerized registration system for NGOs, Janet Lim-Napoles could not have plundered as much taxpayers’ money through her dummy foundations. 

Securities and Exchange Commission (SEC) Chairperson Teresita Herbosa admitted that her agency lacks manpower and technology to detect bogus NGOs. She confirmed to the Senate a finding that emerged in past hearings: her agency often relies on a mere cursory check of documents.

During the resumption of the Senate probe into the pork barrel scam, Herbosa said the SEC only conducts a random examination of NGOs. She added that the agency probes deeper only when there is a complaint against an NGO, or if it applies for a certificate of good standing.

“We don’t have resources to monitor all organizations. We have only 8 processors to go over all those 10,000 active foundations,” Herbosa said on Thursday, January 30.

“We would need at least 54 processors instead of 8 if we will check 200 foundations a year per processor.”

Senate Blue Ribbon Committee Chairman Teofisto “TG” Guingona III said this was “the meat of the problem.”

“As we’ve seen, anybody can submit pieces of paper and [they’re] duly received. We found out it’s important to visit offices and talk to the people. You get to know if they’re legitimate or if their names were just put [as incorporators] there,” Guingona said, referring to the modus operandi in the scam. (READ: Pork Tales: A story of corruption and INFOGRAPHIC: How gov’t funds end with Napoles)

Herbosa said that while the SEC has a database to cross-check NGOs and their officers and incorporators, this is not available online. The SEC chief said her agency is only about to bid out a computer registration system.

“We will admit that had we had sufficient resources including a computer-assisted review, we will detect fraud at the first instance of registration,” she said.

“While we created a new department looking into NGOs, we have to calibrate our resources and adopt a risks-based scenario looking at troublesome ones.”

Guingona told reporters the Senate is looking into raising the budget of the SEC to address the problem.

The Senate held its 7th hearing into the multi-billion-peso pork barrel scam, where lawmakers allegedly funneled their Priority Development Assistance Fund (PDAF) to fake NGOs of alleged scam mastermind Janet Lim-Napoles in exchange for kickbacks. The focus of the hearing was NGO registration and accreditation to avoid a repeat of the scam. (READ: Why fake NGOs got away)

Senators Paolo Benigno “Bam” Aquino IV and Juan Edgardo “Sonny” Angara raised another factor why bogus NGOs get past government regulators: agencies sometimes do not coordinate and share information.

Herbosa said the SEC is already discussing the possibility of entering into a memorandum of agreement with the Commission on Audit (COA) so its database can be used for investigations.

The SEC chief also clarified that only 1% to 5% of NGOs are fake. Herbosa said there are a total of 250,000 non-stock, non-profit organizations. Of this number, 20,000 are foundations. Only 10,000 foundations are active. 

This led Aquino to say, “We should help the rest of the 95% because they are the ones doing good. In the PDAF scam, the NGOs got a negative reputation.”

‘Superagency’ to accredit NGOs?

In the hearing, the Philippine Council for NGO Certification (PCNC) raised a point it earlier made in a Rappler interview: that there are different bodies accrediting NGOs, having different standards.

The PCNC is a self-regulatory body that certifies NGOs applying for donee institution status. This means accredited NGOs can receive tax-deductible or tax-exempt contributions under the law.

PCNC Chairman Augusto Carpio said, “The government accredits NGOs. We accredit NGOs. But what is the real standard? Does it have the same value? That’s something [we have] to look at.”

Unlike the SEC, the PCNC is able to conduct a more thorough check of NGOs through accreditation teams that conduct site visits, and talk to board members, staff and beneficiaries.

Another body, the Cooperative Development Authority (CDA), is also able to monitor cooperatives because it has one specialist per congressional district. The CDA is a government agency.  

With all the agencies and groups overseeing NGOs and foundations, Guingona said some legislators are proposing the creation of a “superagency” to evaluate NGOs. He said NGOs transacting with government must undergo accreditation. 

Yet he cited the position of Caucus of Development NGO Networks (CODE-NGO) that a “superagency” would not address the problem.

Guingona said, “I tend to agree. The sheer number of NGOs is overwhelming for one agency. One agency would not be enough. It is difficult, bureaucratic to centralize something.”

Next: Rice smuggling coops

Even after the Supreme Court struck down the PDAF, senators said it was important to improve the NGO registration and accreditation system. Guingona pointed to another big controversy where cooperatives are involved: rice smuggling.

A separate Senate probe into rice smuggling found that brokers and financiers use dummy cooperatives to import rice.

COA Chairperson Grace Pulido-Tan said her agency is studying the issue. “We picked up a lot of information from the rice smuggling hearing like the use of dummy cooperatives, and the big price differences in importation.”

Guingona said his committee will next focus on the Malampaya Fund scam, where the P900-million allocation of the Department of Agrarian Reform (DAR) from the Malampaya Fund was allegedly channeled to Napoles NGOs. The funds were intended for typhoon victims.

Aquino commented on the conduct of the hearing, which lacked the drama and confrontation of the past inquiry where Napoles and her former aides were present.

“This hearing might not be as emotionally charged as past ones, but we need this to plug holes in the system.” – Rappler.com 

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