PEA director quits, others ordered to go on leave by GMA

A director of the controversial Public Estates Authority has resigned as President Arroyo ordered yesterday the squabbling PEA board to go on leave while the Presidential Anti-Graft Commission (PAGC) investigates allegations of overpricing in the construction of a segment of the President Diosdado Macapagal Boulevard (PDMB).

PEA deputy general manager for finance, legal and administration Theron Lacson was designated officer-in-charge.

PEA board member Jose Marie Gerochi, one of the seven members of the board, resigned Sept. 20 but Malacañang has not yet acted on it. Gerochi was an agriculture official during the time of Agriculture Secretary Arturo Tanco under the late dictator Ferdinand Marcos.

However, PEA general manager Benjamin Cariño told The STAR that the members of the board voluntarily decided to go on indefinite leave even without Malacañang’s order.

"We decided to go on leave because there were many insinuations that there would be tampering of records. We did this to pave the way for an impartial investigation," Cariño said. He said the board made the decision yesterday morning.

Malacañang also forwarded to the PAGC for investigation the 50-page complaint of the PEA board against board member Sulficio Tagud Jr. for his alleged extortion activities, including the P14 million he had reportedly asked from the J.D. Legaspi Construction (JDLC).

Tagud started the exposé on the alleged irregularities involving 2.3 kilometers of the 5.1-kilometer PDMB.

Meanwhile, PEA chairman Ernest Villareal challenged Tagud "to come out with his evidence once and for all so the people may know the truth."

Villareal said PEA has "nothing to hide" and "it’s high time to stop destroying characters and reputations through the media."

At Malacañang, Press Secretary Ignacio Bunye said it was up to PAGC chairman Dario Rama to determine whether prima facie evidence exists for filing of graft charges against any of the PEA officers.

The three-member anti-graft body was the proper forum to investigate the allegations against PEA board members implicated in the alleged irregularities, Bunye quoted the President as saying.

Malacañang released yesterday a copy of Gerochi’s letter of resignation dated Sept. 20 addressed to Mrs. Arroyo.

"I am doing this Madam President in the higher interest of good governance, transparency, and principled leadership. I have every hope that this will pave the way for the impartial investigation into the facts and circumstances regarding the PDMB project of PEA," Gerochi said in his resignation letter.

"Having been a part of your administration, I share your earnest desire that the truth come out and those involved be prosecuted and brought to justice –a strong republic deserves no less," Gerochi said.

Bunye said the President wants "an independent and impartial investigation" of the complaints against the PEA construction project. He said the PAGC probe does not preclude any investigation by the Senate and the House.

The President did not specify a timetable within which the PAGC has to complete its investigation and said, "This matter is very serious and very urgent. So it goes without saying that the PAGC should investigate this with dispatch."

Bunye said presidential actions on the PDMB would not stop at the PEA board but would also include subsequent moves on the Government Service Insurance System (GSIS), which was implicated in the scandal for extending a P1-billion loan to the PEA, part of which went to pay the JDLC.

The seven-member PEA board was composed of Villareal, Cariño, Rodolfo Tuazon, Angelito Villanueva, Martin Sanciego, Gerochi and Tagud. All of them were appointees of Mrs. Arroyo.

Cariño was only appointed last March by the President as PEA general manager, a position that automatically made him a board member.

Bunye admitted that there were suggestions to the President to rename the PDMB and use its original name, the Central Boulevard. He said the President did not immediately comment on the recommendations.

In a statement, Villareal said the PEA has "answered Tagud’s accusations point by point but the accuser continues to give media interviews without presenting any concrete evidence."

He said that the PEA has already asked the Commission on Audit "to conduct a probe of his claims" even before Tagud exposed to the media the alleged scam.

"If we wanted to hide anything, we would not have asked for a COA audit in the first place. I understand Mr. Tagud was aware of this audit. That’s why we were surprised by his sweeping accusations," he said.

PEA employees said they welcomed the President’s move and "saluted her for being decisive."

But the employees appeared to have a low morale because the PDMB controversy was the second scandal to rock the PEA after the PEA-Amari.

Requesting anonymity, an employee said he expects that the investigation will be done "impartially and swiftly, where those who are innocent will be cleared and those who are guilty are punished."

Another employee, who belongs to the management staff, said this latest PEA scandal should also be a lesson to contractors "who feel they have unlimited access to the agency so that PEA’s integrity will not be further compromised."

The employees shared Tagud’s fear that the documents pertaining to JDLC’s contract might be tampered with.

"We hope that the documents pertaining to this particular transaction are all intact for the world to see," several employees said.

Before noon yesterday, two employees from the Office of the Ombudsman went to PEA to gather pertinent documents and information regarding the alleged scam.

Tagud told The STAR that Mrs. Arroyo should also order management staff to go on leave.

"The problem is the management. They misled the board (in the contract of JDLC)," he said.

Tagud alleged that members of the management worked in collusion with Villareal and Tuazon.

"As chairman, Mr. Villareal managed the agenda and made sure that the problems were reviewed," Tagud said. On the other hand, it was Tuazon who "played along with (the management) by becoming their advocate," he said.

Tagud said it was Tuazon who "tried to muscle the support of the board" into approving several cost adjustments last Aug. 13 and the P42-million cost adjustment on April 19.

Aside from Cariño, Tagud also named Lacson and Deputy General Managers for Project Development and Operations Manuel Beriña Jr., PEA legal officer Cristina Mortel, and "all those under them" as the ones who should also be ordered to go on leave.

"It is they who have direct responsibility in the project," Tagud said. Tagud said he would definitely file a plunder case against those involved in the alleged scam but did not say when.

JDLC built the 2.3-kilometer segment of the 5.1-kilometer PDMB on the Manila Bay reclamation area and runs parallel with Roxas Boulevard in Pasay City. The eight-lane boulevard hoped to decongest traffic on the busy Roxas Boulevard and be the "gateway" to PEA’s flagship project called Bay City. Formerly known as Boulevard 2000, it involves a total of 1, 500 hectares of reclaimed land in Manila Bay.

Last week, Tagud had revealed that JDLC’s contract was overpriced by as much as P600 million. The original contract price was P584.3 million. With the additional works and variations, JDLC’s contract now amounts to P837.3 million.

But the rest of the PEA board led by Villareal said that JDLC’s contract was aboveboard and that Tagud had used wrong figures and comparisons as basis for his claim.

Villareal had said Tagud exposed the scam to pre-empt a possible investigation into the director’s alleged extortion activities.

Speaking publicly for the first time since the controversy erupted, suspended PEA official Pelagio Lalap said the President’s order for the board to go on leave was "good sign that would lead to an impartial investigation" into Tagud’s allegations.

Lalap, an assistant general manager for finance, has been accused by Legaspi of extorting some P18.2 million in connection with the PDMB and the Bay Boulevard project, an adjacent project to the PDMB.

In his affidavit submitted to the board Tuesday, Legaspi said Lalap had told him that he was extorting money allegedly on behalf of Tagud.

Of the amount, Legaspi said he paid Lalap P2.1 million in cash and issued undated checks worth P2.1 million and P14 million. However, Legaspi said he also issued a stop order payment on the checks last Aug. 23.

PEA director Tuazon, in a separate affidavit, also said that Lalap had admitted to him that he extorted money from the contractor on behalf of Tagud, on the mere condition that it be kept among themselves.

Lalap allegedly told Tuazon that out of the P2.1 million cash, P300,000 was given to him by Tagud.

Lalap had also allegedly admitted that he gave the P14-million check to Tagud who handed it to "a third person" whom Lalap refused to identify, Tuazon said.

Lalap has been placed by the board on a 90-day preventive suspension in connection with another extortion charge filed by PEA’s security agency contractor.

But the beleaguered executive vehemently denied all the allegations against him.

"They were harassing me, coercing me," Lalap told The STAR in a telephone interview Tuesday night.

He said he was set to file a case of "grave threats, coercion, and possibly even libel" against the people who have talked against him in the media. He did not name them. Lalap added that he was only being used by certain people.

"They wanted me to join them. But it was against my conscience," Lalap said. He did not elaborate.

He said these individuals may have wanted his "cooperation" because he had "all the files for disbursements and all other documents they might use."