Ex-PS-DBM, Pharmally execs face graft trial

Ombudsman deputy sacked; Chiz asks, why not plunder?

MANILA, Philippines — The Office of the Ombudsman has ordered the dismissal from service and the filing of graft charges against former and incumbent officials of the Procurement Service of the Department of Budget and Management (PS-DBM) in connection with the alleged anomalous purchase of billions of pesos worth of medical supplies from start-up company Pharmally Pharmaceutical Corp. at the height of the COVID pandemic in 2020.

In an 87-page resolution released yesterday, the ombudsman’s special panel of investigators found probable cause to charge before the Sandiganbayan former PS-DBM executive director Christopher Lloyd Lao, former PS-DBM procurement group director and current Overall Deputy Ombudsman Warren Lex Liong and PS-DBM procurement management officer Paul Jasper de Guzman of three counts each of violation of Section 3 (e) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.

Senators lauded the ombudsman’s ruling, but one of them, Sen. Francis Escudero, and a former colleague Richard Gordon said the charges should have been plunder, a non-bailable offense.

“I have yet to see or read the resolution but I wonder why plunder charges were not recommended, given the amount involved which clearly exceeds the threshold of P50 million for plunder,” Escudero said. “The wheels of justice may be slow but continue to grind nevertheless,” he added.

Also ordered charged were Pharmally executives, namely president Twinkle Dargani, treasurer and secretary Mohit Dargani, directors Linconn Ong and Justine Garado and board member Huang Tzu Yen.

Other PS-DBM officials, namely director IV Christine Marie Suntay, officer-in-charge Procurement Division chief Webster Laureñana and employees August Ylagan and Jasonmer Uayan, together Pharmally employee Krizle Grace Magno, were ordered charged with one count each of the same graft offense.

Section 3(e) of RA 3019 prohibits public officials from giving unwarranted benefits, advantage or preference to a private party, or from causing any party, including the government, undue injury.

In another ruling released yesterday, the ombudsman has also ordered the dismissal from service of Lao, Liong, De Guzman and Laureñana for administrative offenses of grave misconduct, gross neglect of duty, serious dishonesty and conduct prejudicial to the best of interest of the service.

Also ordered dismissed from the service were Ylagan, Uayan and Suntay for gross neglect of duty and conduct prejudicial to the best interest of the service.

The dismissal order carries the accessory penalties of forfeiture of all their retirement benefits and perpetual disqualification from re-employment in government service.

The decision stated that in case the concerned PS-DBM officials are no longer in office, the dismissal order is convertible to a fine equivalent to their salary for one year “payable to the Office of Ombudsman, and may be deductible from respondents’ retirement benefits, accrued leave credits or any receivables” from their respective offices.

The secretary of the DBM has been directed to implement the dismissal order against the concerned PS-DBM officials, while the dismissal of Liong, who holds the second highest post in the Office of the Ombudsman, shall be personally implemented by Ombudsman Samuel Martires.

Dismissed

On the other hand, the ombudsman has dismissed the administrative charges against several officials of the Department of Health (DOH) due to insufficiency of evidence, except for assistant secretary for Public Services Team Nestor Santiago Jr., who was found guilty of simple neglect of duty and was ordered to pay a fine equivalent to his salary for one month.

The rulings, dated Aug. 14, were approved by Martires on Aug. 18.

Martires had earlier ordered the six-month preventive suspension of ODO Liong and the other PS-DBM officials as the probe on the Pharmally controversy began.

In a phone interview with The STAR yesterday, Martires said the suspension order, supposedly in effect until September, is now considered moot as it has been superseded by the dismissal order.

Martires, meanwhile, said the respondents may still file their respective motions for reconsideration on both or either of the rulings, though this cannot bar the ombudsman’s Office of the Special Prosecutor from filing the graft cases before the Sandiganbayan.

The ombudsman’s investigation stemmed from the complaint filed by Sen. Risa Hontiveros and former senator Richard Gordon before the ombudsman last year, following months of hearings by the Senate Blue Ribbon committee on the alleged anomalies in the awarding of contracts totaling P11.5 billion to Pharmally for the supply of face shields, face masks, test kits and other medical items for the government’s pandemic response.

PS-DBM awarded the contract despite Pharmally’s lack of sufficient capital. The procured items were also found to be overpriced and some were already expired upon delivery.

The ombudsman’s resolutions, however, only focused on the award of three supply contracts amounting to P4.165 billion to Pharmally for the procurement of reverse transcription-polymerase chain reaction (RT-PCR) test kits.

The first supply contract amounting to P600 million was for the procurement of 8,000 units of BGI Real Time Flourescent RT-PCR test kits, the second – amounting P688 million – was for the procurement of 2,000 units of A Star Fortitude RT-PCR test kits while the third contract worth P2.877 billion was for the procurement of another batch of BGI Real Time Flourescent RT-PCR test kits covering 41,400 units.

The ombudsman identified Liong as the one who recommended the awarding of the three contracts to Pharmally despite several irregularities, while Lao was the one who approved the evaluation reports and the awarding of contracts.

The ombudsman found anomalies in the awarding of the contract to Pharmally despite its lack of track record and its measly paid-up capital of P625,000.

The ombudsman also noted that Pharmally was established only in September 2019, merely seven months prior to the awarding of the contracts in April to June 2020.

“Obviously, Pharmally’s paid-up capital of P625,000.00 vis-a-vis the total contract amount of P4,165,300,000.00 would show that Pharmally is way beyond its financial capability to acquire the test kits from foreign manufacturers or suppliers,” the ombudsman said.

“More so, Pharmally’s working capital of P599,540.00 and its Annual Income Tax Return show that it has no gross income and even incurred a net loss of P25,550.00 in the year 2019. Pharmally is, therefore, not financially feasible to be awarded the multi-billion peso contract,” it added.

Furthermore, the ombudsan’s investigation also revealed that PS-DBM still proceeded with the awarding of the two contracts to Pharmally even if the latter  failed to submit proof of ISO certification of BGI Biotechnology Wuhan Co. Ltd., the manufacturer of Pharmally’s proposed BGI Real Time Flourescent RT-PCR test kits.

As for the contract for the supply of A Star Fortitude RT-PCR test kits, the ombudsman said PS-DBM still proceeded with the transaction despite receiving information that Pharmally “had no commercial relationship with MIRXES, the sole manufacturer of said test kit brand.”

In a statement, Gordon said he is “partially elated” with the ombudsman’s ruling, because those recommended for charges do not include former president Rodrigo Duterte, presidential adviser Michael Yang and the latter’s associate Lin Wei Xiong and wife Rose.

But Gordon said he was “thankful that the ombudsman is making an effort.”

Gordon was chairman of the Senate Blue Ribbon committee that investigated the Pharmally anomaly in 2021.

“It is my aspiration that the Ombudsman cast a wider net that will corral all participants in this brazen abuse of power.

In an interview with ABS-CBN News Channel (ANC) , Gordon also questioned why the Ombudsman only recommended the filing of graft.

“Are we gonna see a plunder case here? Because this is a case where P11 billion was awarded to a corporation with a capital of about P650,000. That’s a violation of the procurement law...So the ruling has to be explained  to the public very well,” Gordon said.

Former Senate president Franklin Drilon thanked the ombudsman for its decision, calling it “a clear indication that our institutions will not tolerate corruption, especially in times of crisis.”

But he said there is a need to identify the others involved in the anomaly, which took place at the height of the pandemic.

“It only goes to show that any form of corruption will be met with severe consequences. Our duty is to ensure that public funds are utilized for the benefit of the people, particularly during emergencies,” he added.

Hontiveros, for her part, said the ombudsman’s order validated the findings of the Senate when it investigated the Pharmally mess in 2021.

“This is a big step toward our quest for accountability and justice against those behind this despicable misuse of the government’s limited funds in the middle of a global pandemic,” Hontiveros said in Filipino. –  Marc Jayson Cayabyab