The Constitution and the pork barrel scam
Below is the speech delivered by Chief Justice Maria Lourdes Sereno during the 3rd Integrity Summit at the Makati Shangri-La on Thursday, September 19. It was originally titled, “The Constitution’s Framework for Addressing Misuse of Public Funds.”
All the recent attention being given to reports of widespread corruption involving the Priority Development Assistance Fund and associated public funds has seen the emergence of several threads of discussion.
One line of discussions has tracked the politics and culture discourses, some raising questions as fundamental as whether we have a cultural genetic defect as a people that has allowed massive public frauds to be perpetrated in our sad history.
It was even a surprise to me that some of the acknowledged best management minds in the country have offered to the public, condemnatory anthropological conclusions about the Filipino, without a management solution being offered.
Twined with these culture-heavy discussions are discussions on defects in the political system, questions on the ability of voters to make wise electoral choices, the incentives that the system has created for voting, and the payback that politicians expect to reap once they emerge victorious. This has fuelled the claimed wisdom of proposals related to electoral finance reform.
At one end of the spectrum is a call to diminish discretion on the part of both the legislature and the executive to the smallest possible space, demanding that budgeting be done on narrow and specific line items where the projects are identified with definiteness, in not only the General Appropriations Act, but also in all the other statutes relevant to the appropriation of the different kinds of revenue sources.
To my mind, there is however, a vacuum that is missing in the discussion, and that is, the Constitution’s place in addressing corruption. There is general acceptance that the Constitution contains basic principles and rules that must be followed in the protection of the rights of the human individual against the possible all-powerful incursion of the State.
What is often forgotten, however, is that the Constitution also provides a practical framework for addressing issues of governance. The constitutional framework is practical because it describes with sufficient clarity, the process by which accountability over public funds is to be ensured.
And, with respect to the constitutional requirement on fidelity over public resources, statutes have been enacted in line with the Constitution. It is my hope that with this perspective be included in the discussions, the people, including public officials, can collectively strengthen the rule of law, because henceforth its elements will be scrupulously observed on an operational level.
As a cautionary note, some of the statutory provisions herein cited have not yet been subjected to a constitutional contest, thus this paper is not to serve in any manner as a basis for arriving at a specific, binding legal conclusion on a narrow point of law.
Likewise, some of the constitutional provisions likewise cited here have not yet been subjected to judicial interpretation, thus the same cautionary note applies.
The Constitution, COA and accountability
The most important constitutional body to ensure that public funds are released and expended with fidelity is the Commission on Audit.
Under Article IX-D of the Constitution:
SECTION 2 (1). The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity. However, where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the Government and, for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto.
And in line with this duty must, under the same article:
SECTION 4. The Commission shall submit to the President and Congress, within the time fixed by law, an annual report covering the financial condition and operation of the Government, its subdivisions, agencies, and instrumentalities, including government-owned or controlled corporations, and non-governmental entities subject to its audit, and recommend measures necessary to improve their effectiveness and efficiency. It shall submit such other reports as may be required by law.
In addition, in a special section in Article VI of the Constitution on the Legislative Department, the COA is specifically given a role defined as follows:
Section 20. The records and books of accounts of the Congress shall be preserved and be open to the public in accordance with law, and such books shall be audited by the Commission on Audit which shall publish annually an itemized list of amounts paid to and expenses for each Member.
The COA is not an entirely new creation of the 1987 Constitution. It evolved from the Office of the Auditor of the Philippine Islands in 1899, into a Bureau of the Insular Auditor in 1901, to a Bureau of Audits in 1905.
The 1935 Constitution elevated the office to a constitutional body named the General Auditing Office, popularly known as the GAO. The 1973 Constitution renamed the GAO into its present form known as the COA, whose leadership was converted from a one-man Auditor General into a 3-man commission.
The 1987 Constitution retains the present form of the COA except for changes to the qualifications of the Commissioners. There are two very significant changes that the 1987 Constitution introduced.
The first was to declare and strengthen the independence of the 3 Constitutional Commissions, including COA. Not only are they declared independent, they are to be fiscally autonomous, the salaries of the Commissioners are not to be decreased during their tenure in office, and they shall have the power to promulgate rules of practice and procedure before it.
The second was to vest in the COA the “exclusive authority...to define the scope of its audit and examination, establish the techniques and methods required” for this audit and examination.
An analysis of the above provisions of the Constitution, together with some relevant provisions in the Administrative Code of 1987, will reveal that the COA has under its powers to examine, audit and settle all fund and property accounts of the State, the duty to achieve the following objectives:
(1) Determine whether or not the fiscal responsibility that rests directly with the head of the government agency has been properly and effectively discharged. This fiscal responsibility has been defined under the same Administrative Code as;
All resources of the government shall be managed, expended or utilized in accordance with law and regulations and safeguarded against loss or wastage through illegal or improper disposition to ensure efficiency, economy and effectiveness in the operations of government. The responsibility to take care that such policy is faithfully adhered to rests directly with the chief or head of the government agency concerned.
(2) Develop and implement a comprehensive audit program that shall encompass an examination of financial transactions, accounts and reports, including evaluation of compliance with applicable laws and regulations;
(3) Institute control measures through the promulgation of auditing and accounting rules and regulations governing the receipts disbursements, and uses of funds and property, consistent with the total economic development efforts of the Government;
(4) Promulgate auditing and accounting rules and regulations so as to facilitate the keeping, and enhance the information value of the accounts of the Government;
(5) Institute measures designed to preserve and ensure the independence of its representatives; and
(6) Endeavor to bring its operations closer to the people by the delegation of authority through decentralization, consistent with the provisions of the Constitution and the laws.
For the members of the audience who are running businesses, we understand how critical the role of our internal and external auditors are. We take care to ensure that our internal auditors are armed with sufficient authority in order that our business resources are used efficiently, economically, and effectively. COA performs this critical role for government.
The Commission has regular audit teams assigned to each government agency to ensure that the agencies’ financial reports are presented fairly and accurately and their financial operations are conducted in line with applicable laws and regulations.
In addition, COA has special audit teams to look into the efficiency of programs and activities and eliminate wasteful spending. It also conducts fraud audits in agencies with probable fraudulent transactions in order to safeguard public coffers.
Special and fraud audits can be conducted any time, and any concerned citizen may request such audits. In the case of requests for fraud audits, the complainant does not need to disclose his identity. In the same manner, both the Constitution and the Administrative Code with particularity, has armed the COA with the powers to:
(1) promulgate rules to prevent irregular, unnecessary, extravagant or unconscionable expenditures or uses of government resources;
(2) adopt measures to correct inadequacies of the internal control system of the audited agencies, including, when necessary, adopting special pre-audit;
(3) examine all documents filed with other agencies in connection with government revenue collection operations;
(4) exercise visitorial authority over non-government entities that are either subsized by the State, those required to pay levies, have government shares, have received counterpart funds from the government, or are partly funded by donations through government;
(5) upon direction of the President, exercise visitorial authority over non-government entities whose loans are guaranteed by the Government;
(6) assist in the collection of all debts due Government;
(7) order the retention of money by a public officer due a person who is indebted to the Government;
(8) to inspect the originals of orders, deeds, contracts or documents involving public funds and failure to do so can be the basis for disciplinary action, as well as a permanent disallowance of the claim, assessment of additional levy or government share, or withholding of government funding or donation;
(9) investigate and conduct inquiries, summon parties, and subpoena for testimony and submission of documents;
(10) punish for contempt as under the Rules of Court;
(11) conduct random and periodic inspections, including ocular ones;
(12) seize the office and the contents thereof of any local treasurer or accountable officer in cases of shortage of cash on hand, close and render his accounts to the date of taking possession and temporarily continue the public business of such office and the auditor who seizes the offices shall ipso facto supersede the local treasurer until or officer until the latter is restored or another is designated;
(13) place under constructive distraint personal property of the accountable officer upon a prima facie finding of malversation, and there is reasonable ground to believe the officer is retiring from government service, intends to leave the country or remove or hide his property.
The COA is required by the Constitution to submit annual audit reports to the President and the Congress, and such other reports that may be required by law. Such reports are available at its website. Such report is not only to cover the financial condition and operation of Government but should also recommend measures necessary to improve the effectiveness and efficiency of the audited government entities.
In exercising its audit function, the COA may deputize private auditors to conduct special audits, in the exigencies of the service.
The President, Congress, agencies and the public
It is not spelled out in the Constitution what is to be done with the COA reports. But their responses to such reports are to be the natural outcome of the inherent roles of these persons as spelled out in the Constitution.
The President, under his “faithful execution of the laws” duty under Section 5 Article VII of the Constitution, is naturally expected, through the appropriate department under his supervision and control, to act on the COA report.
The spectrum of actions he can perform under his “supervision and control” powers is wide, and for this purpose, he cannot only investigate administratively the performance of any executive department agency as a response to the report, he can execute personnel movements, and take all necessary actions to protect government assets from misuse.
The legislative department is naturally expected by the very nature of its role to enact legislative measures to ensure the lawful use of public resources, and that they are economically, efficiently and effectively used.
It is during the deliberations on the annual budget proposal of the President or on special appropriations bills that this process of examination, evaluation and deliberation is normally expected to take place. What about the public? What is its role in the context of all of the above-described roles?
Under Article XI, Section 1 of the Constitution, “[p]ublic officers and employees must, at all times, be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency xxx” But the Constitution does not restrict itself to this statement of policy. The Constitution also provides means for the people to enforce it and make it a living principle.
The Constitution empowers the people to take an active role in checking government by allowing citizens to access information of public concern. It goes further than most countries’ constitutions by including the right to be informed as part of the Bill of Rights. Article III, Section 7 states that “[a]ccess to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.”
Armed with enough information, the public may file complaints with the Ombudsman. The Constitution requires, “[t]he Ombudsman and his Deputies, as protectors of the people, [to] act promptly on complaints filed in any form or manner against public officials or employees of the Government xxx, and shall, in appropriate cases, notify the complainants of the action taken and the result thereof.” Let me stress that complaints can be filed in any form, including anonymous complaints.
Investigation and prosecution for misuse of public funds
There are several entities critical to investigation of and prosecution for illegal acts involving the misuse of public funds.
The first is the spectrum of the investigative and prosecutorial powers lodged in the President. The Administrative Code and specific statutes locate these powers in several executive units, the foremost being the Department of Justice, especially through its constituent investigative unit, the National Bureau of Investigation and the National Prosecution Service, its principal prosecutorial unit. The other is the Philippine National Police under the Secretary of Interior and Local Government.
The second set of powers of investigation and prosecution for misuse of public funds belong to the Ombudsman. Under the Constitution, the Office of the Ombudsman can:
(1) Investigate on its own, or on complaint by any person, any act or omission of any public official, employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient.
(2) Direct, upon complaint or at its own instance, any public official or employee of the Government xxx, as well as of any government-owned or controlled corporation with original charter, to perform and expedite any act or duty required by law, or to stop, prevent, and correct any abuse or impropriety in the performance of duties.
(3) Direct the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith.
(4) Direct the officer concerned, in any appropriate case, and subject to such limitations as may be provided by law, to furnish it with copies of documents relating to contracts or transactions entered into by his office involving the disbursement or use of public funds or properties, and report any irregularity to the Commission on Audit for appropriate action.
(5) Request any government agency for assistance and information necessary in the discharge of its responsibilities, and to examine, if necessary, pertinent records and documents.
(6) Publicize matters covered by its investigation when circumstances so warrant and with due prudence.
(7) Determine the causes of inefficiency, red tape, mismanagement, fraud, and corruption in the Government and make recommendations for their elimination and the observance of high standards of ethics and efficiency.
These powers laid out in the Constitution are reiterated in the Ombudsman Law. In addition, this law empowers the Ombudsman to:
(1) Administer oaths, issue subpoena and subpoena duces tecum, and take testimony in any investigation or inquiry, including the power to examine and have access to bank accounts and records; and
(2) Investigate and initiate the proper action for the recovery of ill-gotten and/or unexplained wealth amassed after February 25, 1986 and the prosecution of the parties involved therein.
The law requires the Ombudsman to “give priority to complaints filed against high ranking government officials and/or those occupying supervisory positions, complaints involving grave offenses as well as complaints involving large sums of money and/or properties.”
There are various rules that support and provide tools for the Ombudsman to fulfill its mandates. Under Republic Act 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees, public officials must give a special waiver in favor of the Ombudsman in their Statement of Assets, Liabilities and Net Worth to obtain from all appropriate government agencies, including the Bureau of Internal Revenue, such documents as may show their assets, liabilities, net worth, and also their business interests and financial connections in previous years, including, if possible, the year when they first assumed any office in the Government.
The Ombudsman may even call on the Courts to enforce its subpoena powers in the conduct of investigations. The Ombudsman can secure the attendance or presence of any absent or recalcitrant witness through application before the Sandiganbayan or before any inferior or superior court having jurisdiction of the place where the witness or evidence is found.
Another set of powers which is narrow but very powerful is the power to investigate instances of money laundering. The Anti-Money Laundering Act includes the proceeds from graft and corruption and plunder among the “dirty money” as among the instances that may be investigated by the Anti-Money Laundering Council. After its investigation, the Council may also ask the Court of Appeals to freeze such dirty money and file complaints with the Department of Justice and the Ombudsman.
A 4th set of powers lie in the Philippine State’s ability to make use of international or foreign investigative, legal and judicial assistance. For instance, our government can request from our treaty partners, the extradition of government officials, who have committed graft and corruption.
Under the United Nations Convention against Corruption, which the Philippine Senate ratified in 2006, the 167 state parties agreed to cooperate with each other in the prevention, investigation, extradition and prosecution of offenders, and the tracing, freezing and recovery of ill-gotten wealth. The state parties are also bound to provide legal assistance in gathering evidence and transmitting them to the proper courts.
Does the citizenry have a role in the same? As I earlier opined, the Constitution does not make citizens mere bystanders in making public officials account for their actions and for their use of public funds. I mentioned the right of the public to file complaints with the Ombudsman and request audits to be conducted by COA.
Any citizen, with the endorsement of a legislator, may also initiate an impeachment complaint against the President, Vice-President, Justices of the Supreme Court, Members of the Constitutional Commissions and the Ombudsman. The ability of citizens to jumpstart investigations by the Ombudsman, COA and even the DOJ, is bolstered by their right to access information that may serve as basis for the prosecution of erring officials.
The role of the judiciary
When it comes to the final adjudication of legal liability for misuse of public funds, it will be the judiciary’s role to adjudge guilt or innocence. But it can only do so on the basis of the provisions of the Constitution or the law that are alleged to have been violated, and on the basis of the admissibility and the weight of the evidence that are before it.
If the action is civil, then only a preponderance of evidence is sufficient. If it is criminal, then the crime has to be proven beyond reasonable doubt.
While the judiciary has the power to order the arrest and continued detention of the accused, the State’s prosecutors must meet the burden of proof required for the issuance of arrest warrants and denial of bail. Bail, it must be remembered, is a constitutional right of any accused prior to his conviction.
A narrow exception is when a person is charged with an offense punishable by reclusion perpetua (e.g. plunder) but only when evidence of guilt is strong. The judiciary can also order the suspension of a person’s right to travel through hold departure orders against persons charged of crimes that fall within the jurisdiction of the Regional Trial Courts.
Unlike the two political branches of government, the executive and the legislature, the judiciary is prohibited from making decisions based on political considerations, not even in order to conform to public sentiment, especially in criminal proceedings.
Thus, it is important that the public understand that it is the duty of the appropriate bodies, the executive and the Ombudsman to ensure that the law they invoke and the evidence they present suffice to authorize the judiciary to arrest, detain and convict.
The judiciary must remain deaf, even to the public clamor for conviction, and can only hear what is appropriately brought before its halls of justice. That is why it is all-important that the country must have a judiciary that is populated by independent, competent judges who live in constant mortal fear of not doing what is right.
Three Constitutional Principles that Need to be Further Operationalized.
Section 1 of Article XI of the Constitution provides:
Public office is a public trust. Public officers and employees must, at all times, be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest lives.
Thus far, we had been discussing mainly the financial auditing functions of the COA. Note however, that under the Administrative Code, the COA is to recommend measures to ensure the effectiveness and efficiency of the use of government resources. The Code of Conduct and Ethical Standards for Public Officials and Employees, RA 6713 requires all government employees to: perform and discharge their duties with the highest degree of excellence, professionalism, intelligence and skill. They shall enter public service with utmost devotion and dedication to duty. They shall endeavor to discourage wrong perceptions of their roles as dispensers or peddlers of undue patronage.
The first principle I would like to ask the audience to give some thought to developing is the principle of measuring performance, not only in terms of financial fidelity, but according to the highest standards of professionalism, intelligence and skill, according to the principles that are already in law.
All of you run your organizations to achieve Key Results Areas or Key Performance Indicators. Should not every government unit also be required to have set objectives? What role should the public play in setting out those objectives?
The second principle I would like to leave you to think about is the concept of independence of the 3 constitutional bodies — COA, the Civil Service Commission and the COMELEC — as well as the judiciary and Ombudsman.
If our democracy is to be a fully functioning one, then the political branches of government must respect the independence of these bodies, and on their part, the independent bodies, the judiciary and the Ombudsman are expected to fight against any encroachment on their independence, financial or otherwise.
To what extent is this independence enhanced or weakened by the budget process and how is this affected by the amount of resources that is allocated to them? To what extent should the citizenry demand support for these constitutional bodies and for the judiciary?
If these bodies, together with the judiciary, are to act as effective checks to wrongdoing in the political branches of government, how much, as wise executives, what would you suggest for the government to allocate to preserve their independence and enhance their professionalism? At the same time, how would you measure the performance and render accountable these non-political bodies of government?
The third principle I would like you to reflect on is whether the reporting by all branches, departments and agencies of government is the kind of reporting that you, if you were the decision-makers, would want to receive in order that you can make policy decisions and undertake management actions.
Is this reporting being taken seriously, professionally, not only by those rendering the reports, but by Congress and the President, who should be reviewing them to ensure that the Philippine ship of state is proceeding according to the constitutional plan of government? If we have GNP or GDP targets, should we not also have public service delivery targets?
How will you make democracy work?
It is not for the Chief Justice to make suggestions today, and much less give directives, to any entity, private or public, on the courses of action that they should take in light of the ongoing public discussions on the misuse of public funds.
Four consolidated petitions are before the Supreme Court involving the legality of the Priority Development Assistance Fund. These will be heard and deliberated upon and it will be through the decision of the Court in those petitions that the voices of the justices, including mine, will be heard.
However, what I have shared with the audience today is the existing structure of governance under the Constitution and related laws on investigation and prosecution for misuse of public funds, and the people’s role in light of the disclosure of such alleged misuse.
While the freedom to express outrage over perceived anomalies is part of the guaranteed freedoms of the sovereign people, it is not only this collective vocal expression but the proper functioning of the constitutional and statutory bodies that are mandated to address the misuse of public funds, that make for a truly functioning democracy, one where the rule of law prevails. Therein lies the Filipinos’ potential to experience genuine constitutionalism.
At this point, allow me to just leave the audience with several questions: What would we give up to make our democracy work? How much toil and quiet hard work will we put in so that every office charged with the duty to make our system of governance work finally function in an organized and coordinated way?
How much of this monitoring of projects, this demanding for reports, this plodding through the maze of documents that are produced, are we willing to do day in and day out until accountability is finally integrated into the very fabric of the lives of private citizens and public officials?
How deeply do we believe that we can only shape our destiny as a people if we are willing to build in with painstaking patience, every nut, screw, bolt, and brick that make for a modern, accountable government? In the end, how much do we really love our country? – Rappler.com