Graft charges await Duque, Lao over transfer of ₱41.46 B for Covid supplies
The Office of the Ombudsman (OMB) has found probable cause to charge in court former Department of Health (DOH) secretary Francisco T. Duque and Procurement Service-department of Budget and Management (PS-DBM) undersecretary Lloyd Christopher A. Lao with graft in the alleged illegal transfer of ₱41.46 billion for purchases of Covid-19 supplies and equipment in 2020.
Probable cause “refers to reasonable grounds, based on factual circumstances, that a crime has been committed and that the person accused is likely responsible.”
In a separate ruling, the OMB found Duque and Lao guilty of grave misconduct and conduct prejudicial to the best interest of the service. They were ordered dismissed from the service with forfeiture of all retirement benefits and perpetual disqualification from reemployment in the government service. In the event that dismissal can no longer be enforced, the penalty should be converted to a fine equivalent to their salaries for one year and payable to the Ombudsman, the OMB ruled.
In both rulings, the complaint against DOH Undersecretaries Ma. Carolina V. Taino, Myrna C. Cabotaje, and Roger O. Tong-an; Director IV Crispinita A. Valdez; Undersecretary for Finance Leopoldo J. Vega; Director IV Napoleon L. Arevalo; Director IV Enrique A. Tayag; Chief Accountant Lorica C. Rabago; and Officer-in-charge of FMS Accounting Division Filipina V. Velasquez was ordered dismissed.
The decisions were signed by Ombudsman Samuel R. Martires on May 8, 2024.
The graft complaint against Duque and Lao arose from the investigation of the Senate Committee on Accountability of Public Officers and Investigations (Blue Ribbon) on the 2020 Commission on Audit (COA) Report filed by Senators Richard J. Gordon and Risa N. Hontiveros.
From March to December 2020, the DOH made a total of ₱41,463,867,117.52 fund transfers to the PS-DBM for the procurement of Covid-19 supplies and equipment such as personal protective equipment (PPES), RT-PCR detection kits, automated nucleic acid extraction machine, mechanical ventilator, face shields and surgical masks, cadaver bags, and many other items.
However, state auditors noted that the fund transfers were made without memorandum of agreements (MOAS) and Certificates of Previous Liquidation.
“Clearly, there was non-compliance with the parameters and conditions required for DOH'S transfer of funds and outsourcing of procurement to PSDBM. The questioned action therefore was without legal basis, unwarranted, and unjustified,” the OMB said in its decision.
Worse, the DOH even had to pay a four percent service fee or an equivalent of ₱1,658,554,684.70 since it outsourced its procurement of Covid-19 supplies to the PS-DBM even though it had the organizational structure in place to procure its own, it said.
It also said the imposition of the service fee was “unwarranted” especially since the fund transfers were invalid, unjustified, and illegal.
“This means that the medical facilities, hospitals, personnel and communities under the DOH, some even indicating Emergency Procurement as method of procurement in their requests, have consequently been deprived of sizeable number of Covid-19 supplies and equipment that could have been utilized during the pandemic,” it added.
Duque was faulted by the prosecutors for transferring the funds to the PS-DBM even though the DOH had the capability to undertake the procurement itself. On the other hand, Lao accepted the transfer of funds for procurement of items that were not in their inventory. The Ombudsman also accused Lao of displaying “an intransigent refusal to abide by the rules despite being called to do so.”
“Respondents Duque and Lao, with conscious and deliberate disregard or reckless abandonment of their obligation to ensure that the applicable requirements for the transfer of funds be observed, effectively caused the DOH to abandon, in times of a national health emergency, its bounden duty to expeditiously acquire the needed Covid-19 supplies and equipment by undertaking the procurement itself through direct negotiation with the suppliers,” the OMB said.