Ombudsman Conchita Carpio Morales ordered the filing of graft charges against former Agriculture Secretary Luis Ramon Lorenzo, Jr., and officials of the Quedan and Rural Credit Guarantee Corporation (Quedancor) and Metro Livestock Incorporated, in connection with the implementation of the Quedancor Swine Program (QSP).
Lack of Public Bidding in the QSP Guidelines
In a Resolution dated July 12, 2013, Ombudsman Morales found probable cause to indict Lorenzo, Quedancor President and CEO Nelson Buenaflor, Quedancor Governing Board members/representatives Wilfredo Domo-ong, Romeo Lanciola, Nellie Ilas, and Jesus Simon for violation of Section 3(e) of Republic Act (RA) No. 3019 (Anti-Graft and Corrupt Practices Act).
Established in 2004, the QSP is a credit program intended to support swine raisers in their swine fattening and breeding activities.
Under the program, a farmer-borrower may apply for a loan with Quedancor, the proceeds of which were not given in cash but in the form of input supplies like hogs, gilts, feeds, medicines and technical assistance which were to be claimed through a purchase order issued by a Quedancor district office and presented to one of the accredited Input Suppliers.
The Resolution stated that the non-compliance with the required public bidding resulted in damages because Quedancor lacked recourse against the suppliers for late deliveries or non-deliveries since the suppliers were not made to post a performance bond or contractor’s surety bond which is required under R.A. No. 9184 (Government Procurement Reform Act).
“[I]nput supplies amounting to P47,465,614 were not delivered to the borrowers as of year-end 2005 despite the advance payment therefor by the Quedancor to the I[nput] S[uppliers],” the Resolution underscored, citing the COA report.
The Resolution characterized the procurement of swine inputs as a contract of sale between Quedancor and Metro Livestock, and hence should have been subjected to competitive bidding under R.A. No. 9184.
It cited the Commission on Audit (COA) 2005 report that classified the QSP as a ”loan in kind” wherein the borrowers had no freedom to choose the suppliers as they did not have any control over the supposed monetary proceeds of the loan.
The COA report pointed out the procedures undertaken by Quedancor that necessarily made it the “purchaser” of the swine inputs, such as entering into contracts with the input suppliers using Quedancor’s own purchase orders, approval of government vouchers, drawing of checks against the account of Quedancor, and process of approval of Quedancor officials.
With respect to respondents’ reliance on an Opinion of the Office of the Government Corporate Counsel (OGCC) that there was no procurement involved in the QSP, the Resolution explained that (i) the OGCC Opinion was issued two years after the QSP consolidated guidelines were issued and thus could not have been relied upon by the Quedancor officials in approving the program, and (ii) the OGCC Opinion was based on the misrepresentation that Quedancor’s role was limited only to accrediting the input suppliers.
Ineligibility of Metro Livestock
Likewise charged for violation of Section 3(e) of RA No. 3019 were Rhomady Bernabe, Quedancor Regional Assistant Vice President for Regional Office No. 4, along with Metro Livestock General Manager Joel Salazar, Metro Livestock incorporators/directors Excel Salazar, Francis Edison Peña, Teresa Adille and Santiago Baldado.
The Resolution found that Metro Livestock was allowed to participate in the QSP even if it failed to comply with the accreditation and eligibility requirements such as the two-year prior operation, and the necessary license from the appropriate government agency like the Livestock Development Division of the Bureau of Animal Industry.
Quedancor awarded purchase contracts in the form of purchase orders to Metro Livestock in the amount of P48,606,750 in Mindoro province alone, despite it having a paid-up capital of only P62,500.
Other Respondents Cleared
Meanwhile, the charges as against Susana Leones, Celia Tan, Don Jomar Olegario, Meynardo Morilla, Mary Jean Aguila Dela Cruz, Enrique Hoseña, Lita Cabungcal, Marilyn Jayagan and Lorenzo Toleos were dismissed for lack of probable cause, while that against Ruben Conti and Guillermo Cua were dismissed in view of their death in 2008.