Senate panel uncovers P20-M donation to PMS

The Senate inquiry into the P12-million donation scam involving the education department produced more questions than answers yesterday after executives of the Land Bank of the Philippines revealed huge funds were also granted to other government agencies, including the Presidential Management Staff (PMS).

Land Bank vice president for public affairs Julio Climaco told senators the PMS, headed by then Secretary Leonora de Jesus, had requested and received P20 million from the bank in 1998. The Asia Pacific Economic Conference (APEC) secretariat and the Department of Science and Technology (DOST) also received P6 million and P2 million, respectively.

The donation to the PMS was intended to assist calamity victims in various parts of the country while the APEC fund was for the summit in Manila and at the Subic freeport zone in November 1996, and the DOST fund for support of research projects.

Land Bank president Margarito Teves, in an interview after the hearing, said the bank could not say if the money was actually spent for their intended programs.

"We really have no idea how the donations were spent," Teves said.

Earlier, the Senate Blue Ribbon Committee directed state-owned Land Bank to submit a list of government agencies that have availed themselves of loan donations.

Committee chairman Aquilino Pimentel said yesterday he has invited De Jesus to appear before senators next week to shed light on how the P20 million was spent. De Jesus is currently the chairman of the Housing and Urban Development Coordinating Council.

The Senate body is conducting an inquiry into alleged irregularities involving the release of donation funds for the purchase of luxury vehicles for Department of Education, Culture and Sports (DECS) officials.

Eyebrows were further raised after Land Bank officials said they were told the money would be used to buy computers for office use.

Teves said Land Bank is currently drafting guidelines to account for all cash and material donations.

Under the law on fund appropriation, all donations made by government financial institutions must be fully documented and reported to the budget department, the National Treasury and Congress.

Education officials have insisted the transaction was aboveboard.

During yesterday’s hearing, Land Bank officials clarified that the donation to DECS amounted to only P12 million not P24 million as earlier disclosed by Education Secretary Andrew Gonzalez.

Land Bank Pasig branch mangaer Laila Martin explained that the additional P12 million was actually the interest earned by earlier deposits by DECS, while Land Bank National Capital Region vice president Simeona Guevarra testified that the donation was intended for the purchase of office equipment, particularly for the DECS payroll division.

Bank’s explanation falls short – Pimentel

Pimentel said yesterday the initial inquiry by his panel has confirmed that Land Bank donated P24 million, which was eventually used for the purchase of some 24 vehicles for top officials.

In a statement, Pimentel said the first P12 million was covered by a resolution from the bank’s board of governors, but it was not clear whether the other P12 million had the official sanction of the same governing board.

"Land Bank or DECS officials have not presented any documents to support the remittance of the next tranche of the P12-million donation," he said.

Pimentel said the P12 million was used for the purchase of vehicles for the education secretary, undersecretaries, assistant secretaries and other central office officials.

"When the DECS requested the Land Bank for more donations to defray the cost of vehicles for regional directors, the bank agreed to give the department P12 million, but in quarterly installment of P3 million instead of a one-shot release," he said.

Pimentel said the committee has also established that DECS requested a donation from Land Bank as some kind of incentive considering that 65 to 70 percent if its P90-million budget for this year alone passes through the bank.

He said DECS has some 52 deposit accounts in Land Bank alone and the rest of its funds is deposited with three other banks, namely: the Philippine National Bank; Philippine Veterans Bank; and Development Bank of the Philippines.

"DECS officials sought the cash donation as supplemental source of income outside the regular budget since huge deposits in Land Bank are in the form of checking accounts and therefore do not earn interest," Pimentel said.