MANILA, Philippines – Solicitor General Jose Calida’s family-owned security firm has bagged P150.815 million in contracts from 6 government agencies, including the Department of Justice (DOJ), since he became the Philippine government’s top lawyer. 

Calida’s company, Vigilant Investigative and Security Agency Incorporated, won 10 government contracts between August 2016 and January 2018, based on award notices accessed by Rappler.

Two of these contracts, worth P12.4 million, were with the DOJ, which prepares the budget of the Office of the Solicitor General (OSG). Vigilant bagged them in 2017.

Calida, however, denied any conflict of interest. He said he resigned as chairman and president of Vigilant on May 30, 2016, or before he assumed office at the OSG in July of the same year.

Vigilant notified the Securities and Exchange Commission (SEC) on July 14, 2016, that Calida resigned as president and chairperson of the company effective June 30, 2016. 

The notification said the Solicitor General’s wife, Milagros Calida, was its new president and chairperson. Their son, lawyer Josef Calida, was its vice president and corporate secretary. Their daughter Michelle was its treasurer. 

However, SEC documents also show that Calida still owned 60% of shares in the company as of September 29, 2016.

This was at least two months after he took his oath as Solicitor General in July 2016.

Vigilant has no shareholders other than Calida and his immediate family. Based on their General Information Sheet (GIS) at the SEC as of September 29, 2016, Calida owns 60% of the company’s shares, Milagros has 10%, and their 3 children Josef, Michelle, and Mark Jorel each have 10%.

The company’s GIS on September 29, 2016, was its last publicly available GIS. The GIS is a document that a company is required to submit to the SEC every year to reflect the firm’s structure and ownership.

Calida, in his latest statement sent to the media, does not categorically deny that he still has shares in Vigilant. 

A complaint recently filed with the Office of the Ombudsman alleged that Vigilant’s contracts violate Republic Act (RA) 6713, or the Code of Conduct and Ethical Standards for Public Officials and Employees. Calida said the contracts were in line with RA 6713. 

Two legal experts told Rappler that Calida’s case can be seen in the light of the recent indictment of Davao del Norte 2nd District Representative Antonio Floirendo Jr. The Ombudsman charged Floirendo for violating not RA 6713, but RA 3019 or the Anti-Graft Law. This was because Floirendo allegedly had financial interests in the government contract of a family company.

Government contracts

In its contracts with government, Vigilant was tasked to provide security guards and other security requirements for the government agencies.

Details of Vigilant’s contracts can be found in the Philippine Government Electronic Procurement System (Philgeps), a public database that should contain all details of a bidded out project. 

Award notices posted on Philgeps show that Vigilant has won 10 awards from 6 government agencies since August 2016. 

Of these 10 award notices, Vigilant won 9 after Calida became Solicitor General.

One of Vigilant’s contracts was also posted on the website of the National Anti-Poverty Commission (NAPC), bringing to 10 the number of contracts won by Vigilant after Calida took the helm of the OSG.

Here is the list of the 6 agencies that awarded 10 contracts to Vigilant starting 2016:

1. National Economic and Development Authority or NEDA (1 contract)
2. Philippine Amusement and Gaming Corporation or Pagcor (3 contracts)
3. National Anti-Poverty Commission or NAPC (1 contract)
4. National Electrification Administration or NEA (1 contract)
5. Department of Justice or DOJ (2 contracts)
6. National Parks Development Committee or NPDC (2 contracts)

From these government contracts, Vigilant earned P150.815 million in two years.

Vigilant’s biggest contracts were those from Pagcor: P15 million in September 2016, P43.9 million in December 2016, and P23 million in March 2017. 

The contracts involve security services for Pagcor’s corporate offices and facilities, the Casino Filipino-Pavilion, and its satellite operations group. The contracts all last for 3 years.

Details

Vigilant won the contracts with Pagcor, NEDA, NEA, DOJ, and NPDC through public bidding, based on the award notices posted on Philgeps.

The NAPC project does not come up on Philgeps. There is, however, a notice of award dated August 18, 2016, uploaded on the NAPC website, showing it has awarded a P2.8-million project to Vigilant.

Vigilant got most of the projects for submitting the lowest calculated bid.

The DOJ initially rejected the bid of Calida’s company. Vigilant had to appeal to get the P5.6-million contract in January 2017, half a year after Calida started heading the OSG.

The DOJ granted its motion for reconsideration, as indicated in the notice of award on Philgeps.

The DOJ secretary back then, Vitaliano Aguirre II, said he remembers that Vigilant’s bid was “invalidated” the first time. But he claimed he was never involved in this.

In a text message to Rappler, Aguirre said: “I don’t even know that it is his company. If I remember it right, when it won in the bidding the first time, it was invalidated. I don’t know what the DOJ Bids and Awards Committee was thinking. I did not interfere in these biddings.”

When we sought his legal opinion on whether this constitutes conflict of interest, Aguirre said: “I can’t answer you. I have to know all the facts for me to form an intelligent and correct opinion.”

Conflict of interest

Is there conflict of interest when the company of a Cabinet-rank official wins millions of pesos in government contracts?

Rappler reached out to Calida and his OSG spokesperson for comment on this story, but we got no response.

In a statement sent to ABS-CBN News on Saturday evening, May 26, however, Calida addressed the two NPDC contracts, and said he resigned as chairman and president of Vigilant before he took office.

Calida said that under RA 6713, a public official shall resign from his position and/or divest himself of his shares in a private company “when a conflict of interest arises.”

Vigilant’s latest publicly available SEC papers as of September 29, 2016, show that Calida still owns 60% of its shares. Calida did not say in his statement whether or not he divested, but highlighted “and/or” as if to stress that only one of the conditions must be met.

“Clearly then, SolGen Calida complied with Section 9 of RA 6713 when he resigned as chairman and president of Vigilant before he assumed office as Solicitor General,” the statement said.

All 9 notices of award on Philgeps, excluding NAPC, listed Calida as the “contact” to Vigilant. In the latest DOJ contract, Calida’s wife Milagros signed as the president and chairperson. Undersecretary Raymond Mecate signed for the DOJ.

Related case

Calida explained in his statement that RA 6713 prohibits public officials from having financial interests in any transaction requiring the approval of their office.

“The OSG does not regulate, supervise, or license security agencies like Vigilant,” the statement said.

There is a case, however, that cites another law for a similar situation.

Recently, Ombudsman Conchita Carpio Morales charged Davao del Norte 2nd District Representative Antonio Floirendo Jr for having financial interests in transactions with government.

Morales cited not RA 6713 or the Code of Conduct and Ethical Standards, but RA 3019 or the Anti-Graft Law.

The Floirendo family-owned Tagum Agricultural Development Company (Tadeco) has a lease with the Davao Penal Colony (Dapecol) under the Bureau of Corrections.

In her indictment, Morales said Floirendo violated Section 3(h) of the Anti-Graft Law, which 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.”

Floirendo argued that he was not involved in any of the negotiations, and did not receive benefits from his relatives who earned from the deal.

But Morales said Section 3(h) is divided into two: (1) intervening in his official capacity or (2) violating a constitutional prohibition.

Morales said Floirendo violated the second mode, because according to Section 14, Article VI of the Constitution, members of Congress cannot have direct or indirect business interests in any contract with government.

This constitutional provision states:

Neither shall he, directly or indirectly, be interested financially in any contract with, or in any franchise or special privilege granted by the Government, or any subdivision, agency, or instrumentality thereof, including any government-owned or controlled corporation, or its subsidiary, during his term of office.

Section 13, Article VII of the Constitution prohibits members of the Cabinet from doing the same:

They shall not, during said tenure, directly or indirectly, practice any other profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office.

Calida is already facing a complaint before the Office of the Ombudsman over some of Vigilant’s contracts. The complainant, Jocelyn Acosta of the group Silent Majority, which supported the Liberal Party ticket in 2016, challenged Calida to show his Statements of Assets, Liabilities, and Net Worth (SALNs) to the public.

“Calida’s interest in Vigilant was stated in his SALN when he assumed office,” the OSG statement said.

Rappler has requested copies of Calida’s SALNs from Malacañang. Its records division said on Friday, May 25, that it is processing the request. – Rappler.com