Insider tags defense exec in ‘anomalous’ P1.2-B chopper deal

Carmela Fonbuena

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Insider tags defense exec in ‘anomalous’ P1.2-B chopper deal
Senators find it questionable why the US company Rice Aircraft Services still won the contract after joining and failing in 3 public biddings

MANILA, Philippines – A whistleblower appeared on Wednesday, May 20, at the Senate blue ribbon committee hearing to accuse Defense Undersecretary for Finance Fernando Manalo of conspiring with other defense officials and military officers to award the P1.2-billion chopper deal to a favored company.

The joint venture of the United States-based Rice Aircraft Services Incorporated (RASI) and Canada-based Eagle Copters Ltd. won the contract to supply the Philippine Air Force with 21 refurbished choppers, which the Senate is now investigating for alleged anomalies.

Former government employee Rhodora Alvarez, who participated in meetings with bidding officers, said Manalo used to be an agent of the US-based company and facilitated a “donation” of one chopper. He supposedly tailor-fitted the P1.2-billion contract to make sure only RASI could meet the specifications of the Department of National Defense (DND). 

Manalo denied he was ever an agent of RASI or that he favored the company to win the contract. He said Alvarez was making the allegations to extort money from the supplier.

“I categoricaly deny all allegations of financial impropriety, kickback, or any form of financial inducement that I allegedly received from RASI,” Manalo said in a statement at the start of the hearing.

Beyond the allegations, here are the established facts:

  • RASI joined 3 public biddings for the contract, but repeatedly failed to meet basic documentary requirements. It still managed to win the contract when the defense department opted for a negotiated bid, an option that is allowed after 3 failed biddings. The US-based company participated as a joint venture with the Canadian company.
  • The joint venture of RASI and Eagle Copters were only able to deliver 7 of the 21 choppers. In the wake of the controversy, the DND terminated the contract, meaning it won’t anymore accept and pay for the rest of the choppers. RASI is appealing the ruling.
  • At least 4 of the 7 choppers delivered from August to December 2014 already showed engine defects. The engine of at least one Huey had to be changed entirely. Two had engine leaks, while another chopper wouldn’t start.

Senators Joseph Victor Ejercito, Teofisto Guingona III, and Francis Escudero found it questionable why RASI still won the contract after joining and failing to win the 3 public biddings. 

“Bakit sa huli, RASI pa rin in spite of the 3 setbacks? I agree with Senator Escudero’s concern. Gusto ko malaman ilan ang nagiging failed bidding. That would be very vital in this hearing,” Ejercito said.

(Why is it that in the end it was still RASI that got the contract in spite of 3 setbacks? I want to know how many biddings fail like this.)

“It does raises some eyebrows,” added Guingona. 

Ejercito also criticized why the DND would buy 50-year-old choppers that he said pilots were afraid to fly.  

DND has launched its own probe. Defense Undersecretary Pio Lorenzo Batino told the Senate committee that he will be leading the probe.

Colorful narrative, questionable motive

Alvarez gave the committee a colorful narrative that began when she met a RASI representative she identified as Thack Nguyen. She was then an employee of the Bureau of Internal Revenue (BIR) and he needed a BIR document, a requirement in joining the P1.2 billion project.

FRIENDS: Whistleblower Rhodora Alvarez presents before the Senate Blue Ribbon Committee her photo with former RASI representative Thack Nguyen

Alvarez said she and Nguyen became friends and he would eventually bring her to meetings with defense officials and officers of the Air Force.

Aside from Manalo, she tagged Assistant Secretary Patrick Velez, Brigadier General Conrado Parra Jr, and Major Oliver Casuncad as among those who participated in the alleged conspiracy.

They supposedly guided RASI from the beginning to make sure that it would get the contract. This means making sure the public bidding would fail so they could proceed with a negotiated bid. She said there was at least one occasion when Manalo, who was frustrated by the delays, threatened RASI to terminate the contract.

As early as the first bidding, she said the terms of reference was already tailor-fitted for RASI.

Escudero sought for a deeper probe into the propensity of the DND to go into negotiated bids and emergency procurements.

“There were some questions raised during actual bid proceeding itself. Those questions were asked. When they asked the question if they can go to a joint venture, then yes. I have no relationship, text message, or opportunity at all to interact with Rice,” said Assistant Secretary Velez.

Alvarez denied she worked for RASI. She supposedly only joined the meetings because she was interested in helping the Philippine Air Force acquire the much-needed choppers. 

The senators would later question why she had not signed an affidavit before testifying before the Senate.

But Alvarez showed intimate knowledge about the contract with RASI and Manalo acknowledged that she participated in the bidding. Manalo said she was introduced to him as RASI representative.

She spoke of RASI supposedly submitting a falsified document, which sent Velez cursing in rage in front of Alvarez. In spite of this, Alvarez said the DND did not blacklist RASI.

“Sometimes people misunderstand my enthusiasm,” Velez said. He said he had questions about RASI’s contracts with Tunisia, but he said he was unable to verify it and thus was not a ground for blacklisting the firm.

Alvarez said RASI also sent Parra’s brother and his family to the United States upon his request. Parra dismissed it as “malicious allegation.” He said his brother had been in the US for a long time now.

Nguyen is no longer an employee of RASI. He was supposedly jailed in the US because he presented himself as a State Department official. –

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