Gatchalian urges raps vs. Cusi over Udenna-Chevron Malampaya deal

Senator Sherwin Gatchalian on Wednesday called for the resignation of Energy Secretary Alfonso Cusi over the over the approval of the Udenna-Chevron deal on the sale of Malampaya Consortium shares.

In a privilege speech following a Senate inquiry on the controversy, Gatchalian also called for the filing of appropriate charges against the secretary and several other officials of the Department of Energy.

In his privilege speech, Gatchalian said Cusi and key officials of the DOE are “criminally and administratively liable for graft, gross neglect of duty, and grave misconduct and should immediately resign from their posts,” “for railroading the approval of the sale of participating interest of Chevron in Malampaya gas field.”

“I call on Secretary Cusi and his erring subordinates to immediately resign. With all that has happened, the Filipino people can no longer trust you to faithfully safeguard our country’s precious energy resources,” the senator said.

Gatchalian chairs the Senate Committee on Energy.

“I call on the Office of the Ombudsman and the Civil Service Commission to promptly file administrative and criminal charges against Secretary Alfonso Cusi, who approved the deal, and other DOE officials who evaluated the Chevron-UC Malampaya deal and recommended its approval,” he said.

Other officials recommended to be charged are Energy Undersecretary Donato Marcos, officer-in-charge Undersecretary Roberto Uy, Assistant Secretary Leonido Pulido III, Assitant Secretary Gerardo Erguiza Jr., Director Cesar dela Fuente III, Director Arthur Tenazas, Director Araceli Soluta, OIC Assistant Director Guillermo Ansay, DOE Compliance Division chief Thelma Cerdeña, R.J.A Delos Santos, and Demujin Antiporda.

GMA News Online has reached out to Cusi and the DOE’s media affairs team for comment, but no response yet has been received as of posting.

The planned takeover of Malampaya facility by Davao-based businessman Dennis Uy’s Udenna Group is the subject of the graft complaint filed before the Office of the Ombudsman against Cusi, Uy, and officials of Chevron Philippines and Shell Philippines Exploration B.V.

In his privilege speech, Gatchalian said that DOE officials violated laws to give a seal of approval to the sale of the 45% participating interest in the Malampaya gas project of Chevron Malampaya LLC Philippines, now known as UC 38 LLC, to UC Malampaya, an indirect subsidiary of Udenna Corporation.

At the onset of the Senate inquiry into the $565 million or more than P40 billion Chevron-UC Malampaya deal, DOE officials prescribed prior government approval as dictated by Presidential Decree No. 87 and Department Circular 2007-04-0003 on such transaction only to retract late last year after financial evaluation of UC Malampaya yielded the findings that it has a negative $137.2 million working capital or negative P6.9 billion, the senator said.

With this, the senator said that Cusi and his subordinates are liable for the following: gross neglect of duty and grave misconduct in evaluating and approving this transaction; Anti-Graft and Corrupt Practices Act for knowingly approving the transfer of the 45% participating interest in SC 38 to UC Malampaya – an entity that is clearly not qualified, and in so doing providing an unwarranted benefit, advantage, or preference to UC Malampaya through manifest partiality, evident bad faith, or gross inexcusable negligence in evaluating and approving the deal.

If found guilty, they could face dismissal from public service, imprisonment of six years and one month to 15 years and perpetual disqualification from public office, Gatchalian said.

The senator reiterated his earlier allegation that the approval of the transaction was “lutong makaw,” which means rigged or pre-arranged.

In the light of this incident, Gatchalian said amendments to strengthen PD 87 are in order and to also ensure that future service contractors and DOE officials will not repeat the same mistakes.

“The law is the law. Anyone who violates it must be punished to its full extent. I call on the proper authorities to promptly file administrative and criminal cases against Secretary Alfonso Cusi, who approved the deal, and other DOE officials who evaluated the Chevron-UC Malampaya deal and recommended its approval,” Gatchalian said.

Malampaya powers more than four and a half million homes and businesses in Mega Manila alone. Six out of every ten light bulbs in Meralco’s franchise area are powered by Malampaya gas. It contributes almost 20% of the entire country’s power generation mix.

The Senate Energy panel’s series of inquires stemmed from Uy’s Malampaya Philippines Pte. Ltd. buyout in 2020 of the 45% Chevron Philippines’ stake in the offshore gas field in Palawan. It has since been renamed UC MPPL or UC Malampaya.

Udenna has since refuted claims that the government would be financially disadvantaged after it acquired controlling stakes in the Malampaya gas-to-power facility off Palawan.

The Senate also approved Gatchalian's resolution to file complaints against Cusi and other DOE officials over the Malampaya deal.

"Looking at the voting pattern earlier, indeed there is a majority of our colleagues about this matter and feels strongly that cases should be pursued and that cases should be filed and that these cases will be a chance for the individual to answer themselves and to defend themselves in the proper venue," said Gatchalian.

"So I am proposing, this is in line with the speech to file a sense of the Senate, and the title of this resolution is a 'resolution expressing the sense of the Senate to file the appropriate criminal and administrative charges before the Office of the Ombudsman and the Civil Service Commission against Secretary Alfonso Cusi and other Department of Energy officials for approving and recommending approval of the Chevron Philippines- UC Malampaya transaction contrary to law and regulation," he added.

Those who abstained from the resolution were Senate Majority Leader Juan Miguel Zubiri, Senators Ramon Revilla Jr., Bato dela Rosa, and Francis Tolentino. —NB/KBK, GMA News