Graft charges filed vs Duque, Lao over 'illegal' COVID-19 fund transfer

The Office of the Ombudsman has filed graft charges against former Health Secretary Francisco Duque III and former Budget Undersecretary Christopher Lao over an alleged illegal fund transfer during the COVID-19 pandemic.

According to the criminal information that was filed with the Sandiganbayan on Tuesday but released on Friday, the Department of Health's (DOH) transfer of P41 billion to the Procurement Service-Department of Budget and Management (PS-DBM) in 2020 during the height of the pandemic was illegal and without basis.

The fund was for the procurement of medical supplies for the pandemic, including detection kits, nucleic acid extraction machine, mechanical ventilator, personal protective equipment, surgical mask, cadaver bag, and various test kits.

The Ombudsman said Duque authorized the transfer of the fund even though it would not hasten the implementation of the project and despite the fact that the DOH had the capacity and proficiency to undertake the procurement.

The government prosecutors also said such transfer was not provided under a memorandum of agreement, and the required certifications of liquidation of previous transfers prior to the subsequent release of funds were not submitted.

These actions, the government prosecutors said, disregarded the following laws and regulations:

• Government Procurement Reform Act (RA 9184) providing that a Procuring Entity's procurement be undertaken by its Bids and Awards Committee/s
• 2016 Revised Implementing Rules and Regulations of RA 9184
• Government Procurement Policy Board (GPPB) Resolution No. 03-2020 Approving the Adoption of Efficient, Effective and Expedient Procurement Procedures During a State of Public Health Emergency
• GPPB Circular No. 01-2020 "Guidelines for Emergency Procurement under 11469 of the Bayanihan to Heal as One Act, among others

Lao, on the other hand, was charged with graft since the PS-DBM, where he served as executive director, accepted the P41-billion fund transfer and subjected the DOH procurement to a 4% service fee amounting to at least P1.65 billion.

"As a consequence of the transfer of DOH funds and tapping PS-DBM to undertake the procurement, PS-DBM subjected the procurements that it conducted on behalf of DOH to a 4% service fee amounting to P1,658,554,684.70, thereby taking from the DOH's funds the said amount of P1,658,554,684.70 intended for the urgent and immediate purchase and acquisition of detection kits, nucleic acid extraction machine, mechanical ventilator, personal protective equipment, surgical mask, cadaver bag, and various test kits for COVID-19 responses of the requesting offices and end-users; thereby causing undue injury to the DOH, its end-user offices/bureaus and the public as aforestated. Contrary to law," the charge sheet read.
 
As a result of the indictment, the Office of the Ombudsman recommended a P90,000 bail each for Duque and Lao.

The government prosecutors listed Senate Deputy Minority Leader Risa Hontiveros and former Senator Richard Gordon as among the witnesses for the prosecution. The two led the Senate investigation on the said transfer of DOH funds to PS-DBM during the previous Congress.

Duque

Sought for comment, Duque said the graft charge is baseless but expressed confidence that he would be able to prove his innocence before the Sandiganbayan.

"It is unfair and the injustice hurts, but I have full trust and confidence that I will be able to prove my innocence before the Sandiganbayan, a court of law that will clearly see that the transfer of the funds by the DOH to PS-DBM at the time of national public health emergency, when COVID supplies such as PPEs (personal protective equipment) were scarce, was lawful and proper," Duque said.

"I also have every faith that we will be able to prove that our actions were moved solely by our goal to timely procure the life saving PPEs and other COVID pandemic supplies, for the protection of the Filipinos," he added.

GMA News Online has reached out to the camp of Lao for comment and will publish the response as soon as it is available. —KBK, GMA Integrated News