Nearly a year after the controversial Southeast Asian Games, the Bases Conversion and Development Authority (BCDA) and its president and CEO Vince Dizon are faced with a complaint for graft and malversation over the P11-billion New Clark sports hub in Capas, Tarlac, which was also used as a quarantine facility during the pandemic.

On Monday, October 26, the Citizens Crime Watch Association, through its president Diego Magpantay, filed before the Office of the Ombudsman a complaint against Dizon, Government Corporate Counsel Elpidio Vega, and Isaac David, the director of Malaysian firm MTD Capital Berhad – the BCDA’s partner in building New Clark.

The complaint was also filed against BCDA’s internal lawyer Elvira Estanislao.

The complaint also comes with an administrative suit against Dizon, Vega, and Estanislao for grave misconduct.

Read Rappler’s 3-part investigation on this project:

• Part 1: BCDA, Malaysian firm ink questionable P11-billion SEA Games deal
• Part 2: OGCC flagged non-bidding of BCDA’s New Clark sports facilities
• Part 3: How BCDA’s multi-billion New Clark deal slipped through

What’s the issue?

The BCDA entered into a joint venture with MTD to build New Clark. It was after MTD submitted an unsolicited proposal to build it for P8.5 billion.

The BCDA would provide the project site, and MTD would build the hub. However in the contract, as quoted by the complaint, the BCDA committed to repay MTD through a 5-year annual installment scheme worth P2.2 billion. By the end of 5 years, BCDA would have paid P11.1 billion to MTD.

The excess of around P2.5 billion was called in the contract as “reasonable cost and return.”

The complaint said that if the project is a joint venture, “the private corporation is not guaranteed to earn profits.”

For a private company partner to be eligible to earn profit, the project should have been in the form of a build-and-transfer, said the complaint. But, as pointed out to the BCDA by Rudolf Jurado, the government corporate counsel at the time of the contract review, a build-and-transfer project should have undergone public bidding.

The New Clark project was awarded to MTD through a Swiss challenge, borne out of the latter’s unsolicited proposal.

The New Clark project eventually got a favorable opinion from the Office of the Government Corporate Counsel (OGCC) because the office changed leaderships. Jurado was fired by President Rodrigo Duterte and replaced by Vega, who is included in the complaint.

The contract also gave MTD 50% share of the profits of New Clark.

“BCDA not only reimbursed MTD the full amount of P8.5 billion, it also gave MTD an additional P2.490 billion resulting in MTD’s double profit. By giving, MTD a 50% share of the profits, MTD would effectively receive profit for the third time. This is too much,” said the complaint.

The complaint said the BCDA and the OGCC, through Dizon and Vega, gave MTD unwarranted benefits to the disadvantage of the government, citing Sections 3e and 3g of the anti-graft law.

In an earlier statement, the BCDA quoted Vega’s favorable opinion – issued 8 months after the deal was already signed – which said that the BCDA should be trusted to make the “business prerogative” of choosing the framework of the project.

In a statement on Monday, the BCDA said, “This is supported by the advice of the Asian Development Bank (ADB), and the favorable opinion issued by the Office of the Government Corporate Counsel (OGCC) as early as October 2018.”

“We welcome this opportunity to explain and we are confident to present our side to the Office of the Ombudsman,” the BCDA said.

Malversation

In its 2019 audit, the BCDA was flagged by the Commission on Audit (COA) for entering into the contract without prior appropriation. This deems the contract void, said auditors.

The Citizens Crime Watch Association’s complaint said this also makes the project proponents liable for malversation.

Malversation is defined as the misappropriation of funds “through abandonment and negligence.”

“Thus when the amount of P5.488 billion was released from the government’s coffers, such release was unauthorized and illegal from the start because it was released based on a non-existing or void contract,” said the complaint. – Rappler.com