Chavit, Savellano misused P26M tobacco funds – Ombudsman

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The two former governors of Ilocos Sur released a total of P26M to a private entity as financial assistance from funds intended for tobacco farmers

EMPTY-HANDED. The tobacco fund is intended to help improve the lives of tobacco farmers. They remain poor despite billions of pesos received by Ilocos Sur. Photo by Aries Rufo

MANILA, Philippines – Graft charges will be filed against two former governors of Ilocos Sur for allegedly misusing more than P26 million of the province’s share in the tobacco excise tax 12 years ago.

In a resolution dated July 3, Ombudsman Conchita Carpio-Morales ordered the filing of 3 counts of graft against Luis “Chavit” Singson, who served at the capitol 1998-2001, and 2 counts against Deogracias Victor Savellano, who served 2001-2003.

Morales said they violated Section 3(e) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.

Estelita Cordero, chairperson of the Save Ilocos Sur Alliance (SISA) Foundation, filed the complaint with the Ombudsman. She alleged that a total of P26,060,500 was released as financial assistance to Multi-Line Food Processing International Inc (MFPII) during the terms of the two governors.

The financial assistance was taken from the province’s share in the proceeds from the national government’s tobacco excise tax collection, as provided in RA 7171 (An Act to Promote the Development of the Farmers in the Virginia Tobacco Producing Provinces).

A special report by Newsbreak showed that the Ilocos Sur provincial government under Singson and Savellano in fact either misused, misappropriated, or failed to account for at least P1.3 billion of its tobacco fund from 1999 to 2005.

READ: P1 billion in tobacco fund misused

Ilocos Sur is among the 4 tobacco-producing provinces that have been sharing in 15 percent of the tobacco excise tax proceeds from the national government since 1993. Half of the fund goes to Ilocos Sur.

MFPII, a private entity, was not qualified to receive assistance from the tobacco fund. However, Singson and Savellano entered into several memoranda of agreement (MOA) with the company. They entered succeeding MOAs and released the funds without inspecting or auditing the projects funded under the initial MOA.

Singson entered into 4 MOAs with MFPII on February 5, February 20, May 28, and June 2001. The amounts of P9.18 million, P4 million, P3 million, and P8 million were released to fund unspecified livelihood projects.

Savellano issued the check for the last MOA that Chavit signed. When Savellano assumed the governorship, he entered into another MOA with MFPII on December 27, 2001, giving the group financial assistance worth P1,880,500 to fund “livelihood production/payment of accounts payable.” The check was issued the following day.

The Ombudsman’s 31-page resolution said Singson and Savellano “acted with manifest partiality, evident bad faith or gross inexcusable negligence” when they entered into those MOAs and released public funds that gave unwarranted benefits to MFPII.

“MFPII cannot be considered an NGO/PO as to warrant the grant of financial assistance from the government,” the resolution said.

The documents examined by investigators showed that “the funds were intended to be used in maintaining the operation of the plant – from the payment of its utilities and supplies down to the salary of its employees” which “plainly signifies that MFPII was not in a stable financial condition to sustain its operations, let alone implement a socio-economic or service-based project” for the benefit of tobacco farmers.   

MFPII “ceased its operations barely four months after the last release of funds in its favor, ironically, due to lack of funds,” investigators found. –


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