US supplier accuses whistle-blower of extortion

THE US-BASED supplier for a P1.2-billion helicopter contract with the Philippine military yesterday accused the whistle-blower in the supposed anomalies in the deal of extortion and alleged that when she failed to get what she wanted, she made things difficult for the company.

Matthew Rice, project manager of Rice Aircraft Services Inc. (Rasi), told the Senate blue ribbon committee yesterday that Bureau of Internal Revenue employee Rhodora Alvarez worked as the company’s agent in the Philippines and asked for a 15-percent commission from the helicopter contract with the Department of National Defense (DND).

He cited an e-mail from Alvarez making the demand.

Robert Rice, Rasi president, said he had been willing to pay Alvarez for work she had done for the company, but she had to account for the funds it had sent to her. But she instead tried to extort money from them, he alleged.

“I pay my bills. I do what I said I was going to do, but she started to extort (money from) me,” Robert said.

The joint venture of Rasi and Eagle Copters Ltd. bagged the P1.2-billion contract for 21 refurbished helicopters.

Trading accusations

Alvarez denied the accusation and insisted on her earlier allegation that the military contract for the purchase of refurbished he- licopters was tailor-made for the company, which she claimed was not qualified to supply the aircraft.

But as Rice and Alvarez traded accusations, Sen. Teofisto Guingona III, blue ribbon committee chair, said that regardless of the motives involved, there was a need to look at whether there were irregularities in the purchase of the helicopters.

“Our goal here is to find out… Was the law followed? Were the procedures followed in the purchase of the helicopters?” Guingona said.

He also said he would call Defense Secretary Voltaire Gazmin to the hearing to shed light on changes to the contract.

His committee has conducted four hearings on the issue, with the first three delving mostly into Alvarez’s alle- gations. It was only yesterday that Rasi was able to present a lengthy rebuttal.

According to Matthew, Alvarez had worked for Rasi to help secure the P1.2-billion contract with the DND.

He said Alvarez was a majority shareholder of Rasi Supply and Maintenance Philippines, which she opened so Rasi could send her funds for the operating expenses for the delivery of the aircraft.

In October last year, Alvarez told Rasi that she wanted a 15-percent commission, Matthew said. But Rasi refused her request, as it was too much.

After this, Alvarez said she wanted a 3-percent commission and later on demanded reimbursement for more than $200,000 that she said she had spent in helping Rasi get the contract.

Rasi refused and later said she was asked, but failed to, account for how the funds Rasi sent her had been used.

“Once we denied her that payment, she revoked our performance bond [in the Philippines],” Matthew said.

He said Rasi had sent to Alvarez $121,000 and another $110,000 for the performance bond, which it had to pay upon getting the contract.

He further alleged that Alvarez created work stoppage for Rasi at Clark Freeport Zone and threatened its local crew that she would charge them with tax evasion if they would report for work.

Guingona expressed concern at the bidding processes in the DND, noting that out of 32,000 contracts in 2014, only 420 passed through competitive bidding.

In 2013, only 650 of 35,000 contracts also underwent competitive bidding.

Defense Undersecretary Fernando Manalo said the bulk of the procurements were done by the military’s many battalions, which are authorized to undertake small value procurements. Each battalion has a procurement officer and almost all of its transactions are of small value. These procurements are justified, Manalo said.