MANILA, Philippines - Government has decided to pull out $10 million (around P428 million) or nearly half of the Presidential Commission on Good Government's (PCGG's) special legal contingency fund from the Philippine National Bank (PNB) after discovering that it had been used by the previous administration on extravagant and unliquidated foreign trips, among others.
In its resolution dated Dec. 6, 2011, the PCGG moved to withdraw the amount from its Contingency Fund deposited in an escrow account in PNB and then remit it to the Bureau of Treasury.
The decision of the five-man commission headed by PCGG Chairman Andres Bautista was reached "in order to safeguard the integrity of purpose and function of the contingency/litigation fund - while serving the Commission's concomitant mandates of supporting the Comprehensive Agrarian Reform Program (CARP) without compromising its ill-gotten wealth recovery efforts."
The PCGG Contingency Fund is part of the late strongman Ferdinand Marcos's Swiss deposits that were transferred to the Philippine government after a successful litigation at the Swiss Federal Supreme Court.
During Haydee Yorac's tenure at the PCGG, the commission authorized PNB to retain five percent of the recovered Marcos' Swiss deposits as a contingency fund to cover the litigation and administrative expenses for the recovery of the Arelma account in the United States and the Westlandesbank account in Singapore. The government is looking to recover approximately $60 million in these two cases.
The same account has a balance of $20,930,621 as of Nov. 30, 2011.
Earlier, Bautista said the PNB's dismal handling of the fund is evidenced by the depletion of the fund from $30 million to $20 million since it was created in 2004 until former PCGG Chairman Camilo Sabio left his post in September 2010.
An internal audit made by the Bautista-led PCGG disclosed that the fund even reached $39 million due to interest earnings but it was used beyond the parameters that were set for its usage.
The PCGG report disclosed that at least $4 million dollars were spent for expensive foreign travels made by officials of the PCGG ($2.3 million); Office of the Solicitor General ($1.5 million); and even PNB executives ($166,800) during Sabio's tenure.
Citing official records, the report said Sabio undertook 41 to 50 trips between September 2005 to June 2010 while former commissioner Jaime Bautista had 60 between June 2006 to May 2010-all expenses charged to the PNB-retained fund.
In requesting for funds, the chairman or officer-in-charge first writes a letter to PNB making the necessary representations and giving details on the persons making up for the delegation, inclusive dates of the trip, short description of the trip's objective, and the amount requested for.
In some instances, the PCGG learned, that aside from appropriating $1,000 per member of the delegation as representation allowance, separate contingency funds were arbitrarily determined (ranging from $1,000 to $36,000) and demanded in the PCGG letters to PNB.
While hotel accommodation shows up as an expense distinct from the requested daily subsistence allowance, which already covers for lodging expenses, travel is also made on business class even if Executive Order 298 clearly restricts travel by economy class unless authorized by the President.
Worse, the report disclosed that at least two trips charged to the PNB-retained fund was also charged to CIIF Oil Mills Group, a government-sequestered corporation which reportedly funded 10 more foreign trips for Sabio.
Aside from these apparent irregularities, a sum of $9.5 million was supposedly disbursed for attorneys' fees for the PCGG ($3.6 million) and the PNB ($5.9 million) as of September 2010.
There was also a payment of $26,755 to Sabio's brother-in-law Donald O'Buckley for consulancy services rendered from April 5 to 28, 2010 allegedly over the case of Osqugama F. Swezey, et. al. v. Merill Lynch, et. al. pending before the Supreme Court of the State of New York, County of New York.