THE EXPOSE OF MR. EDGAR SARABOSING ALLEGED GRAFT & CORRUPT ACTS Municipality of Guindulman Province of Bohol Source: COA Annual Audit Report 2008-2009 LGU-Guindulman, Bohol coa.gov.ph As Exposed by Independent Mayor Candidate Edgar Sarabosing during the campaign of the May 13, 2013 Elections. For CONSPIRING in committing the following crimes: Violation of the Built-Operate-Transfer Law (R.A. 7718); Government Procurement Reform Act (R.A. 9184), Anti-Graft and Corrupt Practices Act (R.A. 3019); Tampering of Public Records; Illegal Exaction, crimes punishable under the Revised Penal Code; and for such other offenses committed by public officers in cahoots with private individuals resulting to damage and injury to the government. THE CRIMES AS COMMITTED: 1. VIOLATING, CIRCUMVENTING the Built-Operate-Transfer Law (R.A. 7718) and The Government Procurement Reform Act (R.A. 9184) to give undue advantage to a preferred contractor. On March 7, 2008, Municipal Mayor MA. FE AÑANA-PIEZAS and private individual CHRISTOPHER TUTOR signed a BuiIt-Operate-Transfer (BOT) Contract for a 2-storey Public Market, allowing a period of FORTY-EIGHT YEARS (48 Years) thru conspired willful circumvention of the BOT Law; without thorough consultation with the public as to the advantage/ disadvantages of giving away a revenue-generating facility like a public market to a private entity for such a long period of time. The 48-Year period blatantly circumvented the BOT law, short by just 2 years but stretched closest to the 50-Year maximum period, the limit provided by the BOT law, despite the fact that proponent, in this case TUTOR (for brevity) will spend only an estimated P10-Million for the project. The building has 43 blocks on the frontage 1st and 2nd floor. Each block rented at P10,000 a month will earn a total of P430,000 a month or roughly P5 Million a year. The amount does not include the earnings derived from SELF-ADJUDICATION, a Contract Clause wherein TUTOR can allocate spaces for himself and ran a business of his own adding more profits on top of the stalls’ earnings. Under the BOT contract, TUTOR is also allowed to raise the rental fees by 10% once every five (5) years. On the other hand, LGU-Guindulman will only get a measly 5% from rentals, computed at 80% occupancy or an estimated of only P500,000 a year. During the time of the old market building, LGU-Guindulman was already earning not less than P2,000,000 a year; 400% higher that the new BOT Contract share can offer. This rough financial estimate reveals a one sided contract, crafted in favor of TUTOR, which is MANIFESTLY and GROSSLY DISADVANTAGEOUS to the local government of Guindulman, Bohol. The damage and injury to the local government would be more telling considering that LGU-Guindulman, Bohol is only a 4th Class Municipality with no industries or other sources of local income, aside from the public market facility. Another glaring circumvention of the BOT law is in the amount indicated as Project Cost pegged at only NINETEEN MILLION NINE HUNDRED THOUSAND (P19,900,000.00) PESOS; just 100 hundred thousand away from the limit of P20-Million Pesos, wherein, if a project reaches that amount, a prior review and approval is required from the Provincial Development Council (PDC) pursuant to the BOT Law; Also, the submitted Program of Work of the project indicated a cost of P35M. The contract awarded to TUTOR was only P19.9M supposedly for Phase 1, with no separate POW delineating such scope of work In government auditing parlance this is SPLITTING. It also strongly points to intentional and premeditated purpose; - to avoid submission of the Project for review and confirmation to the PDC, allowing the project to be reviewed only at the Municipal Level wherein members are coerced and controlled by Mayor PIEZAS. Proponent TUTOR is also not a contractor in the Province of Bohol and is not even a member of the government-accredited Bohol Builders & Contractors Association, his business being a HARDWARE. But in the pre-qualification and bidding, he passed as contractor. The popular knowledge of the whole people of Guindulman, Bohol is that TUTOR is merely a DUMMY of Mayor Piezas who is a certified millionaire-retiree, a former citizen of the United States of America. The INVITATION TO BID was purportedly published in a national newspaper REMATE, a tabloid circulated in Manila, but was not published in a local newspaper where the project is located. Local publication is a requirement provided in the BOT Law. Granting it met the publication requirement; curiously, it was only TUTOR who was able to get knowledge of the BOT Project for the Public Market of Guindulman, Bohol and NONE from Manila or among the more than 100 members of the government-accredited Bohol Builders & Contractors Association. TUTOR had never implemented a similar BOT Project of the same amount before but “curiously” his HARDWARE passed in the PRE-QUALIFICATION screening as contractor for a P19.9M BOT Project. The BOT law requires the prospective contractors to submit “list of on-going government and private contracts”, among other documents, to determine eligibility of bidders, but in this case it was not observed, obviously to favor bidder TUTOR. Attached herewith is the Annual Audit Report of the Commission on Audit (AAR-COA) of the Municipality of Guindulman, Bohol ending on Dec. 31, 2008 with a 13-page “Detailed Findings and Recommendations” officially confirming the anomalous acts of the respondent/s public officials and cohorts private individuals as enumerated in this complaint. (On the BOT SCHEME: Please refer to COA Annual Audit Report 2008, Part II, A.1., (a) Page 18 to 20, (a) 2. ILLEGAL EXACTION. Unauthorized collection of occupancy fees totaling Php7.8 Million. Even before the building construction was finished and without a Certificate of Completion and Acceptance, private contractor TUTOR, with the CONSENT of Municipal Mayor Piezas, collected from 43 market vendors the amount of P350,000 each purportedly as OCCUPANCY FEE totaling P7.8-Million. The OCCUPANCY FEE collection by TUTOR, at the initial stage of the construction was not stipulated in the BOT Contract therefore was UNATHORIZED but Mayor PIEZAS willfully tolerated, without lifting a finger, allowed such ILLEGAL FEES EXTRACTION, giving undue favor and financial advantage to TUTOR. The unauthorized act of collecting money from taxpayers is punishable under Paragraph 2 (a) of Article 213 of the Revised Penal Code which refers to “illegal exaction” classified as malhum prohibitum, wherein no fraud or intent to defraud is required since the mere voluntary performance of the acts enumerated would suffice. Plainly, the vendors were “fried by their own grease” (niluto sa sariling mantika) because the unauthorized collection gave TUTOR the financés amounting to P7.8M, which money, he used to construct the building that they vendors will occupy and rent later on. This was done with the CONSENT AND PARTICIPATION of Municipal Mayor Piezas. In fact, it has become a public knowledge that it was Mayor Piezas who made the final selection from the list who would be allowed as lessee in the public market. Members of the Bids and Awards Committee (BAC), all requesting confidentiality, admitted they were all afraid of the implication of the anomalous BOT transaction but they could not complain since they are under the control, coerced into signing documents by Mayor Piezas in favor of her select contractor and publicly known “dummy” TUTOR. In fact, the BAC was only convened on the day that the Pre-bid Conference should have started and the chairman and members were simply handpicked by Mayor Piezas. (Please refer to BOT SCHEME, COA Annual Audit Report 2008, Part II, A.1., (a) Page 20, 3. BOGUS BIDDING for the Construction of a Slaughterhouse, again awarded to the same contractor TUTOR. A SLAUGHTER HOUSE worth P2,294,697.00 million was also constructed by the same TUTOR HARDWARE without the benefit of a public bidding; and later on, upon orders of MAYOR PIEZAS, a belated “BOGUS” bidding was conducted to cover-up the discovered illegality. Proving further that MAYOR PIEZAS and businessman TUTOR are business partners and in collusion, another project, SLAUGHTER HOUSE worth P2.294 million located in Barangay Canhaway, Guindulman, Bohol was given to the latter, started and accomplished even before the conduct of a ”bidding”. TUTOR undertook the slaughter house construction under the pretense that the project passed or has qualified as an “adjacent/ contiguous” project of the public market, in which case, purportedly, there was no need of competitive bidding. It was later discovered and verified that it could not be “adjacent and contiguous”. The slaughterhouse is located far uphill in sitio Cambanog, Canhaway, Guindulman, Bohol; - about 12 kilometers from the public market building. Since there was a COA opinion to the contrary, the BAC, upon instruction of Mayor PIEZAS, conducted a “bogus” bidding. This time, TUTOR again participated but used another business name Davao Contractors Development Cooperative (DACODECO), yet also represented by him. Another bidder participated; a certain A.S. Obquia Construction with address at Tugas, Candijay, Bohol. This bidder “curiously” lives in the same town where TUTOR’s business address is located. As expected, TUTOR won the bidding. (Please refer to SLAUGHTERHOUSE CONSTRUCTION: COA Annual Audit Report 2008, Part II, A.1., (a) Page 21, (a) 4. TAMPERING OF PUBLIC DOCUMENTS resulting to a bloated contract price benefiting a favored contractor. Sometime in November 2008, when TUTOR was about to collect payment of the Slaughter House Contract from the LGU, a BAC member brought a communication informing the Auditor that the Program of Work previously submitted to COA ( POW dated January 26, 2008) to support the Invitation to Qualify and to Bid was not the revised copy (POW dated May 28, 2008) wherein an item, particularly Item No. 15, the Potable Water Facility component costing P359,874.90 was DELETED from the scope of work of the original POW but added to the cost of other items such as the Overhead Contingency Measures and Value Added Tax (VAT). This resulted to a BLOATED CONTRACT PRICE compared with what was originally submitted to the Auditor’s Office for bidding. This “tampering of public documents” gave undue advantage to the favored contractor DACODECO, represented by TUTOR. The Program of Work made as support for the Bid Invitations were all APPROVED and SIGNED by Mayor Piezas. All these were noticed by the Commission on Audit in Audit Observation Memorandum No. 2009-002 dated Nov. 12, 2009, see FULL REPORT. (SLAUGHTERHOUSE CONSTRUCTION: Please refer to COA Annual Audit Report 2008, Part II, A.1. (b) Page 21, (a) 5. QUESTIONABLE HIRING OF PROJECT CONSULTANT ELPEDIO OLAER, JR. WHO TURNED OUT SPEAKING FOR, PROTECTING THE INTEREST OF THE CONTRACTOR and not the LGU that paid for his services to study the BOT proposal and render recommendations. A certain Elpedio Olaer Jr. was hired as supposed consultant for the LGU-Guindulman to study the BOT proposal and render recommendations. His hiring did not undergo competitive bidding and without due screening of his expertise, experience and capability to be consultant on Built-Operate-Transfer projects as required by R.A. 9184, otherwise known as the Government Procurement Reform Act. Olaer turned out, and was noticed during the pre-bid conference to be speaking for (protecting the interest of) project proponent (TUTOR HARDWARE) and not for the LGU. Olaer’s services was also found out “not necessary” for the duties and functions assigned to him were part of the regular functions of the management (LGU). Eventually, it was discovered that Olaer was a suspended Sangguniang Bayan Secretary of the Municipality of Candijay, Bohol, and a close friend and townmate of the BOT contractor, and part of the CONSPIRACY to consummate the BOT transaction in favor of TUTOR The Commission on Audit recommended for a REFUND of the renumeration given to Olaer but the LGU had not done so. (HIRING OF PROJECT CONSULTANT: Please refer to COA Annual Audit Report 2008, Part II, A.1. (3) Page 26, 27, 28, (a) 6. PURCHASE of Two (2) Units of Municipal Ambulance. It was discovered that only One (1) unit was BRAND NEW but the other a SECOND HAND unit. In the procurement of two units Municipal Ambulance, one contract was awarded to FAST Autoworld for one unit Mitsubishi L-300 Van at P1,021,800 (Brand new, 2007 Model), but the other unit was awarded to RDAK Transport Equipment, Inc. for one unit Mitsubishi Delica Van, at P645,000.00, reconditioned, 1992 Model and this unit is now no longer usable. The purchase of a second/ reconditioned vehicle is willful violation of the National Budget Circular No. 446-A (dated January 30, 1998) prescribing for the Guidelines for the Acquisition and Rental of Motor Vehicles which provides: Section 4.) – “Generally, acquisition of BRAND NEW units by outright purchase shall be adopted as a mode of motor vehicle acquisition.” (PURCHASE OF TWO (2) UNITS AMBULANCE: Please refer to COA Annual Audit Report 2008, Part II, A.1. (c) Page 22, 23, 7. PURCHASE of second hand heavy equipments worth P7-Million awarded and paid to still unknown supplier. Again, despite the National Budget Circular prohibiting purchase of second hand heavy equipments, the local government bought second hand bulldozer, road grader, dump truck and backhoe excavator at a total cost of P7-Million Pesos. The buying of second hand heavy equipments has been condemned since it has become a public knowledge that buying surplus or reconditioned equipments offers huge commission by over-pricing and equipments’ durability does not last long, resulting to waste of public funds. Notwithstanding this public condemnation, Mayor Piezas approved the purchase under suspicious bidding process. The Invitation to Bid was not published in local newspapers and winning bidders came from Cebu City. Most of the equipments are now “non-usable” left to rust along the side of the road. (Attached photo of idle equipments as ANNEX “H”). 8. LOAN of P40-Million from Land Bank of the Philippines to pay the BOT Contractor for the front portion of the Public Market. Flooded with public backlash when awareness snowballed that the anomalous 48 Years BOT Contract was grossly disadvantageous to the local government, Mayor Piezas decided to rescind the Built-Operate-Transfer Contract and applied for a loan of P40-Million Pesos with Land Bank of the Philippines (LBP-Tagbilaran Branch). The approval of the P40-M LBP loan on April 14, 2008 confirmed the financial status of LGU-Guindulman that it has “good credit standing” with government financial institutions and that there was no need to enter into a Built-Operate-Transfer contract with any private entity being capable on its own to finance by soft loan, construction of an income generating facility like a public market. It has become clear that the BOT contract was premeditated and consummated thru CONSPIRACY of Mayor Piezas and her cohort TUTOR, and OLAER to corner such lucrative facility, for gain. The 20% Development Fund from the Internal Revenue Allotment of the LGU share from the national government was made as loan collateral. Amortization guarantee for the loan was secured thru a “Deed of Assignment” issued by the LGU in favor of LBP-Tagbilaran. The loan was not discussed in any public consultation despite the fact that it is the taxpayers that will be burdened by the loan payment. The assignment of the 20% DF to pay for the loan amortization further jeopardized many of the town’s development programs. 9. OVER-PRICED PAYMENT in favor of the BOT contractor. Out of the proceeds of the P40-Million Pesos loan from the Land Bank. BOT contractor TUTOR was paid P19.8 Million Pesos. The appraisal as to how much the LGU pay in the finished front portion of the public marker, when the BOT contract was rescinded, was not submitted for appraisal by an independent auditor or any representative of the Philippine Institute of Civil Engineers (PICE). Observers and civil engineers who viewed the standing edifice of the frontage of the public market estimated a maximum of only P90-Million total cost of the finished portion; - more than 100% overprice in the payment made to TUTOR who collected P19.8M. (BOT SCHEME: Please refer to COA Annual Audit Report 2008, Part II, A.1., (a) Page 20, PARAGRAPH 3, ); 10. REFUSAL TO MAKE PUBLIC the Expenditure and Disbursement Report of the proceeds from the P40-Million loan from Land Bank of the Philippines (LBP); As required under the law, specifically Sec. 4. of the Local Government Code (RA 7160), local government units are required to make public disclosure of income and expenditures, posted in conspicuous places or provide copies to those who may request said public documents. Mayor Piezas had willfully prevented disclosure of such financial statements. All municipal officials, despite written request for copies of the documents, refused to provide copy, with a plea for understanding since, according to them, they are under the control of Mayor Piezas. 11. STIFFLING THE PUBLIC’S RIGHT TO ACCESS OF INFORMATION. An OFFICIAL REQUEST was made in writing to the Bids, Awards Committee Chairman, to the Municipal Accountant and to the Municipal Treasurer for copies of the pertinent documents in relation to all the questionable transactions. But the documents remained a well-guarded secret. All municipal officials, in replying to the Letter had a uniform answer: “that they don’t have the documents”. __________________________________________________________________ Guides / References: Built-Operate-Transfer Law (R.A. 7718); The Government Procurement Reform Act (R.A. 9184), Anti-Graft and Corrupt Practices Act (R.A. 3019); Ethical Conduct Standards (R.A. 6713) ________________________________________________________________________________ Graft Cases can be filed @: Office of the Deputy Ombudsman for the Visayas Department of Agriculture RO-7 Compound M. Velez St., Guadalupe, 6000 Cebu City
Posted on: Sun, 30 Jun 2013 05:51:52 +0000
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