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FOURTEENTH,CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
Second Regular Session ) 4 1:fX Z(!, ji 1 :;s

COMMITTEE REPORT NO. 25

Submitted by the Committee on Accountability of Public Officers

and Investigations (Blue Ribbon) on n.
Re: Proposed Senate Resolution No. 637, Proposed Senate
Resolution No. 702 and Privilege Speech of Sen. Jinggoy
Ejercito Estrada titled, "A Clarion Call to Conscience" delivered
on 10 November 2008

Recommending its approval.

Sponsor: Senator Richard J. Gordon

MR. PRESIDENT:

The Committee on Accountability of Public Officers and Investigations

(Blue Ribbon) has conducted an inquiry, in aid of legislation, on the

following referrals:

Proposed Senate Resolution No. 637, introduced by Senator Mar Roxas,

entitled:
 2

A RESOLUTION DIRECTING THE APPROPRIATE SENATE

COMMITTEES TO CONDUCT AN INQUIRY, IN AID OF
LEGISLATION, ON THE ENFORCEMENT OF THE
CONTEMPT AND ARREST ORDER ISSUED BY THE
SENATE AGAINST FORMER DEPARTMENT OF
AGRICULTURE UNDERSECRETARY JOCELYN BOLANTE
AND FOR OTHER PURPOSES

Proposed Senate Resolution’ No. 702, introduced by Senator Mar Roxas,

entitled:

A RESOLUTION DIRECTING THE SENATE TO CONVENE

ITSELF AS A COMMITTEE OF THE WHOLE TO CONDUCT
AN INQUIRY, IN AID OF LEGISLATION, ON THE ALLEGED
PHP 728 MILLION FERTILIZER FUND SCAM PRIMARILY
FOR THE PURPOSE OF GIVING THE FILIPINO PEOPLE,
THROUGH THE SENATE COMMITTEE OF THE WHOLE,
THE RIGHT TO HEAR THE TESTIMONY OF FORMER
DEPARTMENT OF AGRICULTURE UNDERSECRETARY
JOCELYN BOLANTE ON THE MATTER UPON HIS
DEPORTATION TO THE PHILIPPINES AND AFTER THE
ISSUANCE OF THE PROPER INVITATION AND/OR
COMPLIANCE WITH SUCH OTHER LEGAL PROCESSES
THAT MAY BE WARRANTED FOR THE SENATE TO
ACQUIRE JURISDICTION OVER HIS PERSON

and the Privilege Speech of Sen. Jinggoy Ejercito Estrada delivered on 10

November 2008, entitled:

“A CLARION CALL TO CONSCIENCE”

The Committee has the honor to submit its Report, after conducting

an inquiry, to the Senate. b

 3

Recommending the adoption of the recommendations contained

herein.

COMMITTEE REPORT

INTRODUCTION

THE WOLF PACK

Beware offalse prophets who come to you in sheep’s

clothing, but underneath are ravenous wolves.
Matthew 7: 15

This is a tale of how a group of people - like a wolf pack, was able to

rob the government blind. This is a story, so shocking to the conscience,

that would result in gross injustice if institutions, like the Ombudsman,

continue to turn a blind eye to clear acts of plunder and money laundering

by powerful and influential government officials and their pack of wolves.

This wolf pack did not only rob the government. Worse, it plundered a

vulnerable sector in this country, the farmers. They did this during the

election year of 2004.

How did this wolf pack operate? How were they able to plunder such

large amounts from the government’s coffers with impunity?

 4

First, they needed a very well-connected person: a very powerful

official who knew that funds were available and were going to be released.

This functionary was so influential that he could ensure the release of a

Special Allotment Release Order (SARO) and a Notice of Cash Allotment

(NCA) on the same day. He was so influential that he was, he claimed,

appointed to his position without his even applying for it. He was so

influential and powerful that even if the original request for this project was

only for P28M, he was instead able to have P728M released.' He was so

cunning that he was able to determine that the fertilizers had to be in liquid

form to ensure the product's ease of movement, perishability, non-

traceability after use, and effortless dilution. He crossed all the T'sand
dotted all the 1's. He was one who had power to create funding, spot where

it could be sourced, and create opportunities for patronage - very useful

during an election cycle. It was a prerequisite that this person possess

sufficient talent and intelligence, and the willingness to use them in a wrong

way. The endeavour would not be a success without this influential person.

He was so powerful that he could make people look the other way. He was

the Alpha wolf.

Second, they needed enablers: indispensable assistants who were

willing to do the dirty job within the department. These people were smart

CR 54, page 30
T
 5

enough to do the paperwork, to get the job done, and scared enough not to

double-cross their principalls.

Third, they needed an operator to organize the cabal to ensure that

the criminal design was executed like clockwork. Name-dropping skills

were also required so he could hoodwink or convince others that he not

only had the connections but also the wherewithal to pull the operation off.

Fourth, to do this nefarious deed, they needed a financier, sleek and

experienced in government contracts and who knew how government

funding worked, who was willing to advance the money, to ante up, and to

ensure that there was money to start the operation. She had to show the

front money. This financier also had to be willing to lend her credit line at

the shipping companies in order to ship the fertilizer. She had to be willing

to follow up with the supplier to ensure that the deliveries were made. She

had to be willing to help the supplier open a bank account where the money

from the provinces were to be deposited, and lend her own cashier to

encash checks, and to exercise supervision and control over the

operations.

Fifth, they needed a willing supplier who had enough fertilizer stock to

dispose and to have that stock overpriced to the detriment of government.

 6

They needed a supplier who was prepared to lend her company’s name to

launder money and to allow the operators to manipulate her books to

conceal the overprice.

Sixth, they needed a foundation willing to lend its name for a fee and

enter into agreements with the various Regional Field Units (RFUs) of the

Department of Agriculture (DA). They needed a wolf in sheep’s clothing.

They needed a foundation that would lend credibility to the dubious

operations and that could become a conduit for illegal payments as well.

They also needed a foundation that they could use in order to circumvent

the safeguards provided by government procurement rules.

Seventh, they needed a group of “pups,” secondary operators or

underlings who were more than willing and able to go around the country to

talk to politicians and convince them that the scheme was both workable

and profitable. They needed minions that would show blind obedience to

the orders of their masters and ensure that the proceeds of the criminal

enterprise were secured and divvied up.

Lastly, they relied on the usual bureaucratic ineptitude and apathy

where departments, like the Department of Budget Management (DBM)

and the DA, release massive amounts of public funds but woefully fail to

7
 /

monitor how these huge outlays are spent. A complacent, passive DBM

and others in the bureaucracy who look the other way due to apathy and

loose monitoring using a mind-set that accepts things as they are -

numbed to corruption - were indispensable ingredients that ensured the
scheme’s success, Moreover, a very slow and very phlegmatic

Ombudsman and Anti-Money Laundering Council (AMLC) secured the

plunderer’s triumph.

This is a story too of patronage and how deleterious it has become to

our system of governance. Here, those who are closer to the ones in power

get more support and/or resources, especially during times of election. The

report submitted by the DA shows the disparities in the distribution of the

fertilizer funds (Annex A). The Alpha wolf stepped forward to be in charge

of the allocations of funds in a clear case of perpetuating the patronage

system. If one belonged to the administration, more was given to you;

otherwise, you either got a minimum or none at all. Some politicians were

listed as beneficiaries but did not receive anything by way of fertilizer or of

“SOP”; some accepted the goods but did not necessarily enrich

themselves; others accepted both the “SOP” and the fertilizer; others did

not accept any funds at all because it was not what was needed by their

constituents; others had their names used without their consent.

 8

Clearly, funds were taken out of government coffers for campaign

purposes. The stealing became easier because they were dealing with

perishables or consumables (fertilizers). Only a corrupt mind, with such

attention to detail, could have orchestrated and perpetuated this.

THE REPORT

This report can be characterized as part of a very long odyssey that

commenced four or so years ago. During the 13‘hCongress, P.S. Res. 327

was filed by Senator Ramon B. Magsaysay entitled, “RESOLUTION TO

CONDUCT AN INQUIRY ON THE ALLEGED MISMANAGEMENT AND

USE OF THE FERTILIZER FUND OF THE DEPARTMENT OF

AGRICULTURE’S MASAGANANG ANI PROGRAM TO THE

DETRIMENT OF FILIPINO FARMERS WITH THE END IN VIEW OF

CHARTING EFFECTIVE POLICIES AND PROGRAMS FOR THE

AGRICULTURE SECTOR.”

The Resolution sought to have the Senate conduct an inquiry in order

to look into the alleged misuse and misapplication of government funds,

i.e., the purchase of fertilizers that not only were overpriced but

inappropriate for the intended purpose as well.

 9

After a series of numerous hearings (six in all), and dialogues with

farmer organizations, the Committee on Agriculture and Food and the

Committee on Accountability of Public Officers and Investigations (Blue

Ribbon) under Senators Ramon B. Magsaysay and Joker P. Arroyo,

respectively, submitted Committee Report No. 54 (CR 54).

Among many of their findings, they discovered that massive

corruption accompanied the procurement and distribution of fertilizers all

over the country. Commissions were offered to some, demanded by, and

given allegedly to, elected and appointed government officials. There were

supposed recipients who did not receive a drop of the liquid fertilizers. The

g728M in funds purportedly used for the purchase and distribution of

fertilizers to farmer beneficiaries were used instead primarily for the re-

election efforts of administration candidates.

As the door was closing on the 13'h Congress, the Senate approved

CR54, which found, among others, that:

1) Some politicians' names were used to legitimize the operations;*

2) The fertilizer project was a scam;3 and

3) There was massive overpricing in the fertilizer costs.4

CR54, page 31
CR 54, page 26
CR 54, pp. 28-29
 10

Through CR 54, the Senate also recommended and approved the

following, inferalia:

1) The filing of criminal charges against Secretary Luis Lorenzo,

Undersecretary(Usec.) Jocelyn I. Bolante, (Asec.)Assistant

Secretary lbarra Poliquit, Undersecretary(Usec.) Belinda

Gonzales, Assistant Secretary(Asec.) Jose Felix Montes and all

Regional Directors of the DA who participated illegally in all the

transactions related to the P728M fertilizer and

2) Citing for Contempt of the Senate Sec. Luis Lorenzo and Asec.

lbarra Poliquit, as well as ordering the enforcement of the

contempt citation against Usec. Jocelyn I. Bolante.'

Normally, the work of a Committee is done after it has made its

recommendations through its Committee Report and having it approved by

the Senate in plenary session. But this work was not yet over; it could not

have been finished because the mastermind and architect of the whole

scheme had not appeared to testify in the Senate. Despite numerous

invitations to and subpoenas issued against Usec.Bolante, he did not honor

nor heed any of them. He was cited for contempt for his repeated

insolence. He was never around during any of the hearings. Finally, he fled

/
r 7
CR54, page 33
' CR54, page35
to the United States where he sought asylum. There were disturbing

developments that led many, especially the previous Congress, to believe

that there was an active attempt to obscure the trail left by the conspirators.

There was an invocation of Executive Order 464 (EO 464) by officials, e.g.,

Asec. lbarra Poliquit, in order not to testify. The Supreme Court, however,

has since declared Sections 2(b) and 3 of EO 464 unconstitutional insofar

as covered officials were concerned. The Supreme Court was clear that

executive privilege does not refer to categories of persons but refers

instead to categories of information.

Bolante’s sojourn to the U.S. was deemed to be a deliberate attempt

to escape the jurisdiction of the Senate, and his flight a clear indication of

guilt.

THE 14THCONGRESS AND THE BLUE RIBBON COMMITTEE HEARINGS

During the 14‘h Congress, two proposed resolutions were filed:

Proposed Senate Resolution No. 637 and Proposed Senate Resolution

No. 702, both authored by Senator Mar Roxas. A privilege speech was

delivered by Sen. Jinggoy Ejercito Estrada entitled, “A Clarion Call to

Conscience”. All three were related to the P728M alleged fertilizer scam

and the rolektatus of Bolante.

 12

In the meantime, Bolante’s petition for asylum in the United States

was denied after a protracted process. He was finally deported back to the

Philippines. It was not until November 13, 2008 that Bolante, at last,

appeared in the Senate.

Eight (8) public hearings have been conducted. Witnesses who

answered the summons of the Committee, with corresponding dates, are

listed below:

November 13,2008

Mr. Jocelyn “JOC-JOC”

I. Bolante

November 25,2008

Mr. Jocelyn “JOC-JOC”

I. Bolante; Mr. lbarra Trinidad C. Poliquit; Atty.

Reynaldo A. Villar; Mr. Felix S. Montes; Mayor Raymar A. Rebaldo of

Kalibo, Aklan and DA Regional Directors, namely: Dir. Cipriano G.

Santiago, Dir. Gumersindo D. Lasam, Engr. Redentor S. Gatus, Engr.

Abelardo R. Bragas, Dir. Antonio G. Gerundio, Dir. Jose V. Dayao, Dir

Larry P. Nacionales, Dir. Ricardo Oblena, Dir. Leo P. Cafieda, Dir. Oscar

0. Parawan, Dir. Lealyn S. Ramos, Dir. Roger C. Chio, Dir. Abusama M.

Alid, Dir. Ricardo C. Regis and Dir. Cesar D. Rodriguez.

 13

November 28,2008

Mr. Jocelyn “JOC-JOC”I. Bolante, Mr. lbarra Trinidad C. Poliquit, Dir.

Flerida Jimenez (Commission on Audit (COA)), Asec. Dennis Araullo, Dir.

Cipriano G. Santiago, Dir. Gumersindo D. Lasam, Dir. Larry P. Nacionales,

Dir. Ricardo Oblena, Dir. Leo P. Cafieda, Dir. Oscar 0. Parawan, Dir.

Roger C. Chio, Dir. Cesar D. Rodriguez, Dir. Rodolfo Guieb, Dir. Reinerio

Belarmino Jr., Dir. Hector Sales, Dir. Eduardo Lecciones, Dir. Sumil Sekah,

Mayor Raymar Rebaldo (Kalibo, Aklan), Ms Catherine Buntua, Ms. Grace

Lucero, Mr. Raul Arcilla, Ms. Thet De Guzman, Ms. Nelia C. Villeza (COA),

Ms. Emma T. Rogino (COA) and Atty. Marvin Aceron (Counsel for the DA

Regional Directors) and Mr. Jose Barredo Jr.

December I O , 2008

Mr. Jocelyn “JOC-JOC”I. Bolante, Atty. Vicente Aquino (AMLC), Mr.

lbarra Trinidad C. Poliquit, Usec. Belinda A. Gonzales, Dir. Flerida Jimenez

(COA), Ms Carmen Antasuda (COA), Mr. Reden H. Antolin (FESHAN

Phils., Inc. (FESHAN)), Mr. Salvador lsiderio (COA), and Ms. Emma T.

Regino (COA).

December 17,2008

Mr. Jocelyn “JOC-JOC”I. Bolante, Mr. lbarra Trinidad C. Poliquit,

Usec. Belinda A. Gonzales, Atty. Michael Reysio-Cruz (Counsel for Usec.

 14

Gonzales), Dir. Flerida Jimenez (COA), Ms. Emma T. Regino (COA),

Auditor Carmen Antasuda (COA), Atty. Salvador lsiderio (COA), Mr. Jesus

M. Tanchanco (COA), and Ms. Leonicia Marco-Llarena (Dane Publishing

House, Inc. (DANE)).

December 22,2008

Ms. Marites Aytona, Ms Julie Gregorio (FESHAN), Mr. Redentor H.

Antolin (FESHAN), Ms. Leonicia Marco-Llarena (Dane Publishing House

Inc.), and Mr. Jose Barredo Jr.

January 20.2009

Mr. Jocelyn I. Bolante, Solicitor General (SolGen) Agnes

Devanadera, Assistant Sol. Gen. Roman Del Rosario, Sol. Ma. Christina

Lim, Atty. Vicente Aquino (AMLC), Dir. Flerida Jimenez (COA), Dit-.

Salvador lsiderio (COA), Ms. Emma T. Regino (COA), Ms. Carmen

Antasuda (COA), Ms. Malaine P. Baui (Manager, LANDBANK Elliptical

Road Branch), Ms. Raquel C. Paz (former Manager, LANDBANK Elliptical

Road Branch), Ms. Julie M. Gregorio (FESHAN), Mr. Redentor H. Antolin

(FESHAN), Ms. Leonicia Llarena (Dane Publishing House, Inc.), Ms. Ma.

Antonina Karganilla (Just Call), Mr. Jose Rizalde Perez (Quick Trans Cargo

Moving, Inc.), Mr. Bonifacio Dinglasan (Constar), Ms. Marilyn Araos, Ms

7
 15

Marites Aytona, Mr. Jaime Paule, Mr. Jose B. Barredo Jr., and Mr. Natalio

Castillo Jr.

Januaw 26,2009

Mr. Jocelyn I. Bolante, Dir. Flerida Jimenez (COA), Ms. Emma T.

Regino (COA), Ms. Malaine P. Baui (Manager, LANDBANK Elliptical Road

Branch), Ms. Raquel C. Paz (former Manager, LANDBANK Elliptical Road

Branch), Ms. Julie M. Gregorio (FESHAN), Mr. Redentor H. Antolin

(FESHAN), Mr. Jaime Paule, Ms. Marites Aytona, Ms. Leonicia Marco-

Llarena (Dane Publishing House, Inc.), Ms. Bing Salvador (Procurement

Officer, Aytona's Office), Ms. Cecile Clemente, Mr. Joselito Flordeliza, Ms.

Aines Librodo (Aboitiz Transport, Inc.), Ms. Marilyn U. Araos, Mr. Natalio

Castillo Jr., and Mr. IAigo Lim.

HOW THE WOLF PACK ROBBED GOVERNMENT

FORMER UNDERSECRETARY JOCELYN 1. BOLANTE

Mr. Jocelyn 1. Bolante was a former Undersecretary at the DA. He

was one of the first appointees of Gloria Macapagal-Arroyo when she took

the reins of government on January 20, 2001 and was the first appointee of
 16

the Macapagal-Arroyo administration to the DA.7 He was a very powerful

undersecretary, possessing various delegated powers from Sec. Leonard0

Montemayor and Sec. Luis Lorenzo (Annex B and Annex N). He sat on

various boards like the Government Service Insurance System (GSIS) and

the now- defunct Livelihood Corporation (Annex C). Indeed, he was so

well-connected that even after his stint at the DA, he was appointed as a

trustee of the GSIS, widely known as one of the more financially rewarding

government corporation board memberships. One can only imagine how

much he was being compensated at the GSIS (Annex D).He was entitled

to a staff of about seven (7) people, the highest-paid being compensated at

@54,401 a month, as certified by GSIS Vice-president, Human Resources

Office Ma. Liza V. Fresnido (Annex E).

He was cited for contempt of the Senate previously, and upon his

arrival in the Philippines was arrested by the Senate Sergeant-at-Arms. He

was brought to the hospital for confinement and a hearing was soon

scheduled in order to complete the unfinished work of the 13‘h Congress,

and to afford Bolante the chance to cleanse and purge himself of his

contumacious conduct.

Bolante’s role in the @ 728M Fertilizer Scam

’CR 54, page 18

 17

In the hearings, Bolante kept on repeating that his role in the P728M

project was merely to “download” the money to the DA regional offices for

distribution, that the P728M project was a regular Farm Inputs and Farm

Implements (FIFI) project of the government and that, therefore, all that

was needed to be done was to get the funds from the DBM and distribute

them.* We find this assertion to be incredible and unworthy of belief.

The finding of the 13‘hCongress that Bolante was the architect of the

program and that everything emanated from him, is convincing. We quote

its findings: “(l)n the fertilizer fund scam, Usec. Bolante is the declared

architect. He designed it. He was its brains. It was he who worked with the

DBM for the immediate release of the fund. It was him who prepared and

submitted names who would become the fertilizer fund’s proponents (see

Annex F). It was Usec. Bolante who sent letters to various congressmen

and local officials informing them of the availability of funds under the DA’s

GMA Project (see Annex G). It was he who directed these officials to

coordipate with his office to discuss all the requirements to facilitate the

said project fund. Usec. Bolante in the words of his then Chief of Staff,

lbarra Poliquit, had a hand in determining how the GMA fund works and will

be spent. And that although the DA has a list of officials whose “proposed

8
TSN, HSGayapa, IV-I, December 10,2008, 1:11 pm, p. 6; TSN, BRHGonzales, V-I, December 10,
2008, pp. 5-6
 18

projects” were to be funded by the fertilizer fund, Bolante was given the

authority to drop them and replace them with ~ t h e r s . ’ ’ ~

Morever, that Bolante had control of the program from inception to

implementation is seen from the following:

1) He provided the pro-forma Memorandum of Agreements (MOAS)

for the DA RFUs to follow (Annex H);”

2) He wrote to the beneficiaries regarding approvals of their

supposed requests(Annex 1);”

3) He signed purchase orders for Region XI (Annex J);

4) He called Dir. Oblena of Region VI to specify which non-

governmental organization (NGO) (in this case, National

Organization for Agricultural Enhancement and Productivity, Inc.,

which Mr. Jaime Paule represented according to Ms. Marites

Aytona) monies were to be given;12

CR 54, pp. 19-20

“TSN, Solidum, 111-3, December I O , 2008, 5:33 pm, p.3
11
TSN, BRHGonzales, V - I , December 10,2008, 1:21 pm, p. 5
’*Gordon to Oblena,TSN, JMBAISA, Xll-I, November 25, 2008, 12:21pm, p 6
 19

5) The Regional Directors (RDs) did not possess sufficient power to

distribute the largesse on their own because their authority to sign

was limited only to purchases not exceeding P I M (see Annex B);

6) Apparently, even the choice of fertilizer type - liquid foliar primarily

used for ornamental plants and not for boosting rice and corn

production - was imposed upon the recipients. According to Rep.

del Rosario, “So hindi ko naman sasabihin sa iyo kung iyong 30-

30-40 kung hindi personally inofer sa akin. Only na hindi tayo

nagkasundo because nag-insist ang agent niyo na ang bibilhin na

fertilizer ay iyong mga liquid fertilizerxxx. So iyong problem natin

na hindi tinanggap iyong offer niyo sa akin na five million because

sabi ko nga na hindi pumayag si Ms Aytona na magiging Urea or

1846 ang bibilhin na fertilizer na iyon ang kailangan ng mga

farmers namin. I’m talking about Capiz sa Roxas City. So nag-i-

insist sila sa liquid fertilizer. That is why hindi tayo nagkasundo,

I
no.13

During the hearing of 28 November 2008, DA Asec. Dennis Araullo,

then RD of RFU IV-A said that his office received an Advice of Sub-

Allotment together with the Memorandum Letter Request of Poliquit,

approved by Bolante, specifying the amount and intended recipient of

funds. His office received eight advices of sub-allotments from March to

13
TSN, November 18, 2008/NCS XI-1-2, Mouse of Representatives Committee on Agriculture hearing
 20

April 2004 totalling P40M. He also said that he received a Memorandum

from Bolante authorizing him to enter into MOAS with local government

units (LGUs) and NGOs to implement the DA program, and that he could

not do anything but follow the instructions of Bolante. This was echoed by

DA Regional Directors Lasam (II), Oblena (VII), Caneda (VIII), Lecciones

(VII), Sekah (XII), Parawan (IX) and Rodriguez (CAR) - who were all

present at the hearing.14 Bolante’s control was thus total and all-

encompassing.

Bolante claimed that the P728M fertilizer program was a regular,

habitual and customary activity of the DA. Again, he dissembles. During the

13‘h Congress, then DA Sec. Domingo Panganiban testified that except for

a few DA officials, no one in the department had any knowledge of the

P728M fertilizer program.15 Moreover, during the hearings, the then RDs of

the DA said that it was the first time for them to undertake such a program.

Dirs. Caieda of Region VIII and Chi0 of Region XI asserted that such

program was not done the year previous nor was it done the following year.

Dir. Chi0 had been an officer for fifteen years at the DA, and this was his

first and only experience with such a program. This somehow buttresses

CtSotto, 111-1, November 28, 2008, 1239pm,p6-9; RJOrtiz, IV-I, November 28, 2008, 1249pm, p l ;
RJOrtiz, IV-I, November 28,2008, 1249pm, p 6; MHBALAGNE, V - I , November 28, 2008, 1259pm,
p4-8

CR 54,p. 27
 21

the belief that the program was designed for no other purpose than

political, electoral purposes.16

Bolante’s mendacity does not end there:

1) He claimed to not have any idea as to who recommended him to

the post of DA Undersecretary. He supposedly merely received a

call from the Presidential Management Staff informing him of his

nomination.” Did he not even ask or try to find out who

recommended him? Wasn’t he even the least surprised to be

nominated/appointed to that post when his previous experience

does not even relate primarily to agriculture? This is a highly

incredible story. He asks too much of his listeners - he asks that

not only belief be suspended, but that reality be suspended as

well;

2) With respect to his appointment to the board of trustees of the

GSIS, he claimed that he was merely nominated by Chairman

Bernardino Abes to serve based on his qualifications, and that he

did not know how,much he received in terms of salary, allowances

and other emoluments. However, he failed to acknowledge that he

I6(TSN, SNTUPA2,V-1, November 18,2008,10:31am, p 5; TSN, JADELACRUZX-1, November 30,2008,

11:31 am, p. 2: TSN, CTSOTTO, 111-1, November 25, 2008, 10:41 am, pp. 2-3

I7TSN,CGCASTRO, IX-I, November 13,2008, l l : l l a m , p. 3

 22

was appointed by no less than the President of the Philippines (as

required by the Charter of the GSIS), the same President that

appointed him to his previous post in government. He had also

forgotten, perhaps conveniently, that his highest paid staff member

was entitled to a salary of @54,000 per month; thus, making

incredible the GSIS certification that Bolante was only being paid

about W5,OOO a month.18

3) He claimed to only having four bank accounts, when asked during

a hearing; but in a case pending at the Court of Appeals, it can be

gleaned from court documents that there were instead about thirty

two (32) bank accounts.

4) He flew to and entered the U.S. to escape appearing before the

Senate and would have in all probability indefinitely stayed in the

US had the US government not revoked his visa and detained him

by virtue of the Senate's issuance of an arrest warrant against him.

In a measure of further desperation, he sought political asylum

claiming that his life was threatened. He had reached the end of

the proverbial rope. He had no more place to hide. He was hell

bent on not appearing in the Senate. He was so dogged in that

determination that he chased all avenues possible to prevent his

attendance at the Committee hearings. Alas for him, the U.S.

I8TSN, PLMANUEL,IX-I,November25,2008, 1141arn, p. 5; TSN, MHULEP, VI-2, November25 2008,

I l l p m , p. 10; TSN,MHBALAGNE, Vll-2, November25,2008,12lpm, pp. 1-2
 23

disapproved the request; it did not believe his assertion of danger

to his life. He was deported back and arrived in the country: rode a

wheelchair and rubbed his chest, boarded an ambulance, had

himself brought to a hospital, and then finally appeared before the

Committee acting gaunt, requesting meekly for permission to eat

and take his medicine as the hearing went on. But it was noticed

that despite claims of illness, he not only survived but appeared to

become stronger, like a bull, at the end of an almost eleven (11)

hour hearing

5) Usec. Belinda Gonzales tesitified that she was instructed by

Bolante to attend a meeting in Makati, and while she remembered

meeting Mr. Jaime Paule in that meeting, Bolante claimed to not

remember any of the persons who were there present - even

though he remembered what the conversation was all about: the

complaint of the group present about monetary advances having

been made allegedly to a person close to the then-Secretary: a

Jess Varela. It is uncharacteristic for a former President of a

private company to not remember such important and basic

details. His lack of candor instead betrays a case of selective

memory.
 24

All told, the fertilizer program scam would not have been made

possible had it not been for the participation of many, nay, all of those who

have been mentioned here in this Report, but most especially without the

participation of the one who started the ball rolling.

FORMER
ASEC.IBARRA
POLIQUIT

As established by CR 54 of the 13‘h Congress, the degree of

participation of former Asec. lbarra Poliquit is as follows:

“Former Undersecretary lbarra Poliquit, per the records

submitted by the Commission on Audit, assisted
Undersecretary Bolante in the approval of projects that
would be accorded the fertilizer fund. A substantial
number of requests for the approval to issue sub-
allotment advise (SAA) with corresponding cash
allocation to DA-RFUs for the implementation of the GMA
Farm Inputs and Implements Program would indicate
Undersecretary Poliquit as the requesting party. In one
hearing, from the documents submitted by the COA, it
was noted that lbarra Poliquit, then Assistant Secretary
for the Field Operations requested for the transfer of P 89
million in Region IV alone; P5 million in Region V; and
P22 million in Region Vll.”’g

Also, during the 13‘h Congress investigations into the fertilizer fund

scam, he invoked EO 464 to evade the Senate investigations. It should be

noted that his being Vice President of the GSlS is not within the
19
Committee Report No. 54, 1 March 2006, 13IhCongress of the Senate, pp. 20-21
 25

contemplation and coverage of EO 464. “But Poliquit sought refuge in the

oppressive Executive Order and clothed himself to be within its ambit and

protection. It should be stated that Poliquit was served four subpoenas and

one invitation relevant to the hearings of the fertilizer mismanagement

issue.”20

During the 14thCongress investigations, Poliquit tried to downplay his

participation by saying that: “1 was appointed as Assistant Secretary for

Field Operations and my tasks included to endorse requests for funding to

the DA Secretary, to the Undersecretary for Field Operations and the

Undersecretary for Finance and Administration. All of them have the

authority to approve or disapprove the requests for funding and they also

had the prerogative to increase or decrease the amounts of,funds being

requested for.”21

Yet, it is a fact, that endorsement still constitutes a discretionary act.

Poliquit had a choice whether or not to endorse the requests for funding.

And Poliquit endorsed numerous requests for funding (see Annex I), thus

perfecting the scheme of Bolante.

2o Committee Report No, 54, 1 March 2006, 13IhCongress of the Senate, p. 36

21
CGCastro XI-I November 28, 2008 1 5 9 p.m. pp. 8-9.
 26

Discretion is defined as:

“... the carrying out of public functions, the faculty or right which
the law confers to act officially under certain circumstances
according to the dictates of other’s own conscience or judgment
without the imposition of the judgment or conscience of others.
When applied to public functionaries, it means a power or right
conferred upon them by law of acting, under certain
circumstances, uncontrolled by the judgment or conscience of
others. If the law imposes a duty upon a public officer and
gives him the right to decide how or when the public duty shall
be performed, such duty is discretionary. A discretionary duty
is that which by its nature requires the exercise of judgment.”22

UNDERSECRETARY BELINDA GONZALES

During the public hearing conducted by the Committee of the Whole

on January 31, 2006, then DA Asec. and now Usec. Belinda Gonzales,

specifically mentioned that it was the office of then Usec. Bolante that

ordered the release of funds to the recipients stated in the list of fertilizer

fund beneficiaries.

When asked who decided as to who the beneficiaries of the P 100

million agrarian reform funds would be and how the listing of the regional

field units would be decided or made, Usec. Gonzales at first testified that

22 Agpalo, Ruben E., Administrative Law, Law on Public Officers and Election Law, pp 16-17, Rex
Bookstore, 2005 citing Republic v. Capulong, 199 SCRA 134 (1991) and Mario v. Capulong, 222
SCRA 593
 27

she received a memorandum from the office of Bolante to release the

amount to a specific region.23

However, as the hearing continued, Usec. Gonzales said it was not a

memorandum but a Memorandum of Agreement that was sent to her office

for ~ b l i g a t i o n . ~ ~

Usec. Gonzales confirmed that it was the office of Bolante who

decided on the listings of the P-100 million. Usec. Gonzales said she

received verbal instructions from Bolante over the phone: “I got instruction

from Usec. Bolante that this will be transferred - the I00 million will be

transferred to the different regional offices. I”’

Usec. Gonzales further testified that after that instruction, a

Memorandum of Agreement was prepared for the regional offices, that is,

an agreement between the DA-Office of the Secretary and the DA regional

offices for the transfer of funds.26

’’TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061,
Aliccatimbang VII-I January 31, 2006 11:47 a.m. page 2
24
TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061,
Aliccatimbang VII-I January 31, 2006 11:47 a.m. page 2
25
TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, P.
Mayor VIII-I January 31, 2006 11:57 a.m. page I
26
TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, P.
Mayor Vlll-I January 31,2006 11:57 a.m. page 1
 28

Usec. Gonzales said that while these agreements had blanks and

were unsigned, she used them as basis for the allocation of the amounts

per region, Her reason for using the same as bases was that these

contracts came from the office of B ~ l a n t e . ’ ~

Usec. Gonzales further said that the amounts were deposited at the

LANDBANK. She said: “Weissued a notice of transfer allocation signed by

28
Usec Bolante and then Secretary Lorenzo. JJ

Usec. Gonzales said they issued Journal Entry Vouchers (JEVs) for

the P 100 rnilli~n.’~

JAIME LEONZON PAULE

Mr. Jaime Leonzon Paule is a major character in this production.

During the hearings, he repeatedly denied his role in the scam and denied

knowing any, and/or being a part, of the cast of characters. He insisted that

he had nothing to do, in any manner, with the subject matter of this

27
TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061, P.
MayorVIII-I January 31, 2006 11:57 a.m. page 3
28
TSN, Committee of the Whole [Senate Resolution No, 47- The General Appropriations for FY 20061, P.
Mayor VIII-1 January 31, 2006 1157 a.m. page 4
29
TSN, Committee of the Whole [Senate Resolution No. 47- The General Appropriations for FY 20061,
MayorVIII-I January 31,2006 11:57 a.m. pages44
 29

in~estigation.~'
Ms. Leonicia Marco-Llarena, however, testified that it was

he who approached her to seek financing for the fertilizer project. She

further testified that she accommodated him by issuing checks payable to

FESHAN.31

Also, Ms. Marites Aytona testified that it was Paule who gave her

directions on what to do and where to go, among other instruction^.^^ She

was acting as Paule's employee in all these undertakings.

Further, Ms. Marilyn Araos testified that Paule was her employer and

that he directed her to open an account with the LANDBANK.

Even assuming arguendo, that all three are pointing to him in order to

save their own skins and downplay their roles and participation in this most

nefarious scheme, there is the disinterested testimony of Mr. Natalio

Castillo, Jr. showing Mr. Paule's principal role in the scheme. Mr. Castillo

had nothing to do with the project, he had no face to save, no participation

to negate, no posterior to protect. He was offered the project and he

declined. He was neither invited nor subpoenaed by this Committee. In

short, he had nothing but a story, likely a truthful one, to tell. Mr. Castillo, a

delegate to the 1971 Constitutional Convention, is one man who came up

to bat and did his share in nation-building. He didn't have to. He could have
v
30
Opening Statement, Mr. Jaime L. Paule, read in full at the January 20, 2009 hearing
3 TSN, Mhulep, X&?,January 20, 2009, 12:08PM,p. 20
'

"TSN, M.R. CATADMAN, XV-1, January 20,2009, 12:38PM, p. 11

 30

just stayed home and kept quiet. While others were scrambling to invoke

their rights against self-incrimination in the face of increasing pressure,

here was a man who invoked instead, in his own words, his “right to

speak.”33He abided by his God and did not resort to convenient silence. It

has been said that, “witnesses are weighed not numbered and testimony of

a single witness may suffice for conviction if otherwise trustworthy and

reliable”.34

Furthermore, what happened and what was discovered during the 26

January 2009 hearing shattered all of Mr. Paule’s denials - or at the very

least, his assertion that he did not know any of the other persons being

investigated. The Committee Chairman revealed a photograph (Annex K),

taken during the 50ih birthday party of Ms. Leonicio Marco-Llarena held on

August 23, 2004, showing, collectively posing for posterity around the same

table, the main characters of this saga: Llarena, Gregorio, Antolin, Araos

and Paule himself. He had after all met and knew all of the other

participants - contrary to his earlier denials. In his defense, he asserted

that the photograph may have been doctored given the current state of

technology35 - a statement the Committee takes exception to. The

implication that the Committee is a party to a manipulation of evidence is

not only insulting, but downright contumacious.

33
TSN, Slidum, IX-2, January 20,2009, 2:38PM, p.10

34
Naval and de Leon vs. Panday, Encinas and Lacson, AM No. RTJ-95.1283, December 21, 1999, citing
People v Daraman, 294SCRA27 [1998], citing People v Nulla, 153 SCRA471 [I9871

35
TSN, MhSantos, 11-1, January 26, 10:59am, p, 8
 31

LEONlClA MARCO-LLARENA

Ms. Leonicia Marco-Llarena, the owner of DANE, claimed during the

hearings that her only role was to issue accommodation checks and that

she did so in order to help Mr. Jaime Paule. “Nagpautang lamang sa

pamamagitan ng tseke at ang dealing niyo lamang ay kay Mr Paule at

never sa FESHAN?” “Yes, sir.”36 But her role, as can be seen in many
instances, seems bigger than what she claimed. She allowed the use of her

credit line at the shipping companies in order to ship the bottles of fertilizer;

her office followed up regularly with FESHAN regarding fertilizer deliveries;

and, she called LANDBANK to provide introductions for Ms. Marilyn Araos,

Ms. Deonilla “Julie” Misola-Gregorio and others before the opening of the

Araos account used to launder the funds3’ If her role was only to lend

money to, or to accommodate, or to help Mr. Jaime Paule, why would she

have gone to all these lengths?

Furthermore, in the submitted microfilm copies of the LANDBANK

Araos account checks issued to Ms. Llarena, or encashed by her cashier,

Minda Bombase, why was the total amount roughly W6.5M, when what

was supposedly owed her was only about Q14M? For someone who claims

minimal participation - merely introducing Ms. Gregorio, Ms. Araos and Mr.

Redentor Antolin to the LANDBANK bank manager - her knowledge of how

the Araos account checks were issued and for what purpose is amazing. It

r“
J
36
TSN, Jglrobles, V-I, December 22, 2008, Il:lOam, p, 9; underscoring ours
”TSN, MPMendoza, XVlll-2, January 20, 2009, 5:43PM, p. 9
 32

could only have meant that she had knowledge of, and perchance some

control over, the Araos account disbursement^.^^ ‘At alam mo ang pasikut-
sikot nyan.” “Opo.” “At saka itong transaksyon na ito based on the checks
ay matagal na itong nangyari.” ”Opo. O P O . ’ ~All
~ in all, the Araos account

checks either issued to, encashed, or negotiated by Llarena and her trusted

cashier at Dane Philippines - Minda Bombase -totalled about M6M.

DEONILLA “JULLIE” MISOLA-GREGORIO

Ms. Deonilla “Jullie” Misola-Gregorio is the owner and President of

FESHAN, which supplied the fertilizers. While she initially claimed that she

sold the fertilizers for only P600 per liter/bottle, she recanted that statement

by subsequently admitting that she had actually sold it for only @I50 per

liter/bottle. As the fertilizers were sold to government for a whopping @I500

per literlbottle, there clearly was an incredible mark-up of 1000%. This price

of PI50 was confirmed by the COA when it conducted a canvass of

fertilizer prices4’ She futher admitted availing herself of a tax amnesty, as

taught by Ms. Marities Aytona she claimed, by inserting false statements in

her application for tax amnesty, i.e., making it appear that she sold @105M

worth of fertilizers, when in fact she sold only about 812M to 13M. She

allowed the opening of the Araos account in FESHAN’s name at the

LANDBANK, which she claims was totally controlled by persons (Ms.

Marilyn Araos, et al) other than her (although Ms. Araos claims that aside

f
c‘/
38
TSN, JMBAISA, XII, January 26, 2009, 12:39pm, pp. 3-9
”TSN, Aliccatimbang, Xlll-I, January 26, 2009, 12:49pm, p. 1
40
TSN, RLTumampos, Vll-I, January26, 2009,11:29 am, p. 12

from the initial four checks she pre-signed, she would go to
sign numerous other check^).^'
PREVIOUSLY, SHE SAID ...
THE SENATE PRESIDENT. Sin0 nag-issue ng
purchase order?
MS. GREGORIO. Sa office PO - tao PO ni
Ms. Llarena.
THE SENATE PRESIDENT. Sa pangalan ng
kumpanya n’ya o tao n’ya?
xxx
MS. GREGORIO. Staff PO ni Ms. Llarena
THE SENATE PRESIDENT. Ano’ng pangalan?
MS. GREGORIO. Matagal nap o kasi ’yon. I
cannot remember anymore.
(RPAlgerVII-1 December 22, 2008 11:30
A.M. pp 10- 12)
That since I was in the trading business,
Ms. Necy and I discussed the possibility of
buying/selling fertilizer as Ms. Necy had
expressed her desire t o buy fertilizer from
us; and we indeed were able to arrive a t
the following terms and conditions:
xxx
(Gregorio, Sworn Statement, December 22,
41
Opening Statement of Ms Deonilla “Julie” Misola-Gregorio, read in full at the January 20, 2009 hearing
33
Ms.Gregorio to
LATER ON, SHE SAID ...
That I hesitated t o appear on said
scheduled hearings not only because i was
short of time to produce the documents
required o f me but because there were
pleas and request from Ms. Aytona to
ease the issue o f over-pricing and I know
that if I reveal to the Committee the
actual participation of Feshan Phils. Inc. In
the sale of fertilizer, I might earn the ire of
some people involved in the transaction
(Supplemental Sworn Statement, January
20,2009)
That to show further that Ms. Aytona was
the one who directly dealing with me,
demands to pay were sent to her as
shown in attached Summary of Actual
Delivery faxed to hr office on September
17,2004 marked as Annex “N”
(Supplemental Sworn Statement, January
20,2009)
That this state of affairs, Ms. Aytona called
up our office with the information that
she was looking for a supplier of fertilizer
and she had information that our
company had all the necessary
accreditation/permits to sell fertilizer
That thereafter, we met a t a restaurant in
Quezon City where we discussed some
details of the transaction where Ms.

2008 Hearing).
The selling price of fertilizer was P600.00
per bottle and the landed cost was P463.00
per bottle (TSN, December 22,2008
Hearing).
I received P50 Million from Ms Llarena as
proceeds of the sale of fertilizer and such
other matters material and relevant
thereto (TSN, December 22,2008 Hearing).
-Ms Gregorio said that the total amount of
the checks issued by Ms Llarena was P12
Million plus the cash paid by Ms Llarena of
P38 Million, which totalled P50 Million
(Spot Report, 22 December 2008 Hearing).
RENDENTOR ANTOLIN
Mr. Redentor Antolin was the vice-president of FESHAN. Although he
initially did not help in clarifying the facts by downplaying his role, he later
34
Aytona mentioned the name of Ms.
Leonicia Llarena who would pay for all i
sitting stoclts of fertilizer provided that
sale was on credit
(Supplemental Sworn Statement, Janua
20,2009)
It was sold a t P150.00/bottle of the
voluminous orders and one of the
considerations was that there would be
no more promotional or marketing
expenses to be incurred (Supplemental
Sworn Statement submitted to the Blue
Ribbon Committee on January 20,2009
Feshan never received any payment
beyond what was specified in the MOA
and delivery receipts which showed a tt
of P13,513,800.00 (Supplemental Swor
Statement submitted to the Blue Ribbo
Committee on January 20,2009).
Y
 35

joined Ms. Julie Gregorio as she clarified her role and as she submitted

needed documents.

JOSELITO FLORDELIZA

Mr. Joselito Flordeliza was/is the President of National Organization

for Agricultural Enhancement and Productivity, Inc. (Foundation), which

was chosen to be an implementor of the project. He was promised 3% of

the monies that would pass through the F~undation.~’

The Araos account

at the LANDBANK shows payments to him in the amount of @456,208.00.It

must be said that while he was cooperative, he was grossly negligent in

running the affairs of the Foundation- directly resulting in the use of the

organization for criminal purposes.

MARITES A. AYTONA

Ms. Marites A. Aytona’s fingerprints were all over the place and her

role appears all encompassing: she dealt with the Foundation’s

accreditations; she went out to the regions to talk to beneficiaries and

congressmen. She was identified by Rep. Antonio A. del Rosario, 1‘‘

District, Capiz as the person who offered him a 30% cut of any allocated

fertilizer fund amounts as commission or “SOP,” an allegation she

(TSN, RLTUMAMPOS, X-2, January 20, 2009, 2:48PM, pp. 2-4; TSN, Caturla Xlll-2, January 20, 2009
4:53PM, pp. 3-5)
 36

subsequently denied.43She was Ms. Marilyn Araos's former employer and

was Mr. Jaime Paule's employee. She gave instructions to Mr. Jose

Barredo Jr. regarding where to go and how much to deliver, as she took in

other messengers/runners, including her own brother.44 She also did the

project studies and is alleged by Ms. Gregorio to have helped her in solving

the problem of how to falsify the entry of P105M in FESHAN's books when

in fact she only sold P13M worth of fertilizer, etc. All told, Ms. Aytona

figured practically in every facet of the operation. She was the one who

knew everyone else: she introduced Ms. Araos to Mr. Paule, she dealt with

Ms. Gregorio in the supply of fertilizers, she got instructions from Mr. Paule,

she gave instructions to Mr. Barredo, she brought Ms. Gregorio and Mr.

Antolin to Ms Llarena, and she contacted, and finalized the agreement to

use the Foundation with, Mr. Joselito Flordeliza. She was the hub of the

wheel.

MARILYN U. ARAOS

Ms. Marilyn U. Araos admitted that she was an employee of Mr

Jaime Paule, a claim which he denies. She also admitted that she opened

the LANDBANK account upon the instructions of Mr. Paule, and that she

was threatened with dismissal from employment if she did not do as

i n ~ t r u c t e dWhile
. ~ ~ she claimed that aside from the signing of checks she

43
(TSN, House Committee on Agriculture and Food Hearing, 18 November 2008, EPT /X-3)
44(TSN, Aliccatimbang 1-3, January 20, 2009, 5:53PM, p. 7)
"TSN, RPAlger, XVII-1, January 20, 2009, 12:58PM, pp. 7-9
 37

had nothing more to do with the LANDBANK account opened under her

name,46it is apparent that she had encashed, at least, five checks totalling

@3,172,995 (Annex L). Moreover, for someone whose only supposed area

of assignments were Regions Ill and IV,4 7 .it .IS cause for wonder as to why

she had been signing so many other Order Slips for other regions as well:

Regions I I , V, VI, XI, and Xlll (Annex M). While Ms. Araos initially sought to

invoke her right to silence and her right against self-incrimination, her

candid responses to the questions propounded to her provided the

Committee with a clearer picture of how the scheme was set in motion. She

also provided a photograph of the party where she and the others were

present.

HOW THE PACK OPERATED

Mr. Jose Barredo Jr., a resource person and self-confessed

runnerlfixerlmessenger of the whole operation described how the scheme

operated during the investigations of the 13‘h Congress:

1. Ms. Marites Aytona and Mr. Barredo spoke to the officials in the

chosen localities: in his words: “we told them there were funds for

fertilizer and Aytona offered SOPS or commissions of 30%. Mayor

Castillo P 5 Million, Mayor Pagdanganan @ 3 Million,

46
Sinumpaang Salaysay of Marilyn U. Araos, January 26, 2009
47 Sinumpaang Salaysay of Marilyn Araos, January 26, 2009
 38

Congresswoman Nicolas @3 Million. Nicolas refused the fertilizer, she

chose cash instead;”

2. Once the LGU agreed, either (a) a MOA was prepared for execution

by the LGU and the DA RFU covering the area. Ms. Aytona then had

the MOA notarized and brought to Bolante’s office, upon which funds

were released to the DA RFU. Once the money was released to the

DA RFU, Ms. Aytona or Mr. Barredo contacted FESHAN for delivery

of the bottled fertilizers at a cost of @I

,500 per litedbottle.

3. The LGU then signed a delivery receipt and sales invoice from

FESHAN. The DA-RD then prepared a check for the concerned LGU

in accordance with the MOA, which the LGU used to pay FESHAN.

Ms. Aytona then asked FESHAN to deposit in Mr. Barredo’s account,

monies for the “SOP” of the LGU officials.

4. The LGU representative then accompanied Mr. Barredo to the bank

to withdraw the “SOP.” Mr. Barredo was paid a @lO,OOO salary and

promised a 3 4 % commission as “SOP” for his efforts.48

Although this was was known as early as the 13‘h Congress, this was

but a segment of the entire operation. Ms. Marites Aytona admitted, in her

testimony, that this mode of operation only grossed between P30 to

48
Sinumpaang Salaysay, Jose Barredo, read in full at the February 2, 2005 hearing in the 13‘h Congress;
Committee Report No. 54
 39

However, the bank records of the Foundation, as submitted by Mr.

Joselito Flordeliza, showed that more or less P56.6M passed through the

Foundation's accounts.

At the same time, the Committee hearings enabled the current

Congress to trace the malversation of an even greater amount - about

R153M - in this fertilizer distribution scheme. (Still and all, this is just a
fraction of the total P728M that was budgeted for this scheme.) The

Committee hearings also provided a more complete and clearer picture of

the scheme's operation and uncovered the participation of other key

personalities, as follows:

On March 16, 2004, then DA Sec. Luis Lorenzo, affirming a previous

delegation of authority pursuant to DA General Memorandum Order No. 2

(Series of 2001) issued by then DA Sec. Leonard0 Montemayor, assigned

Usec. Jocelyn Bolante the authority to assess, evaluate and approve all

requests for fund assistance under the Farm Inputs Program with LGUs

and to deputize the DA RDs to enter into MOAS with concerned LGUs

participating in that program (Annex N). Coincidentally, this was during the

2004 election season when there was a need to raise funds to help

administration candidates and allies. Apparently, someone high up in the

government totem pole came up with a scheme to use fertilizer funds for

49 TSN, Caturla, Xlll-2, January 20, 2009, 4:53pm, p. 6

 40

electoral purpose^.^' Notice must also be made that as early as February

3, 2004 - the same day that the related SARO was issued and which
pre-dated Sec. Lorenzo’s delegation of authority to Bolante - Bolante
was already issuing a funding request for the fertilizer scheme (Annex 0).

Subsequent to that time, Ms. Marites Aytona was already offering Rep. del

Rosario a 30% cut of any allocated fertilizer funds as “SOP.” At the same

time, this illegal election fund-raising activity also presented an opportunity

for corrupt individuals to also simultaneously enrich themselves. (It is

evident that these individuals had connections high up in the hierarchy for

how could they have knowledge and access to SAROs and NCAs released

by the DBM (as discussed below), if such were not the case?)

At the same time, Mr. Jaime Paule was part of a well-connected

group that paid “advances” to a group supposedly close to DA Sec.

Lorenzo. Those “advances” were supposed to ensure that Mr. Paule’s

group would be able to corner lucrative projects that the DA was to

undertake. Somewhere along the way, however, the recipients of those

“advances” failed to deliver the projects to Mr. Paule’s group as promised -

proving that no honor can possibly exist among thieves. The group of Mr

Paule subsequently met with Usec. Bolante at a Makati hotel to complain

about broken promises and to seek assistance regarding, “papaano sila

But, could a meeting to air out complaints also turn out to

50(CR 54)
51TSN,MPMendoza, 111-1, December 17, 2008, 1 : O l pm, p. 10
 41

be a meeting of a cabal to craft a plan and strategy on how to profit from an

impending P728M release of funds?

Apparently, something productive turned out as a result of that

meeting for Mr. Paule started seeking the assistance of Mr. Natalio Castillo

Jr., and other possible investors, to secure financing for the Mr

Castillo, wanting to verify Mr. Paule’s credibiliy even asked him how sure

Mr. Paule was that he had control of the project. Mr. Paule then showed

Mr. Castillo a copy of a SARO for P728M (Annex P) and an NCA

representing about 40% of the SARO’s value.53 Mr. Paule even said that,

“kausap ko si Jocioc B ~ l a n t e ”When

. ~ ~ Mr. Castillo turned down Mr. Paule’s

offer, Mr. Paule asked Mr. Castillo about the possibility of having Mr. Paule

referred to a foundation that would implement the said project.55

A foundation was then found - the National Organization for

Agricultural Enhancement and Productivity, Inc., which Mr. Joselito

Flordeliza had previously organized in order to obtain projects from the DA

designed to help farmers and to help tide himself over during a period of

. ~ ~ a promise of a 3% share of whatever funds would

~ n e m p l o y m e n t For

pass through the Foundation (made to him by Ms. Marites Aytona), Mr

Flordeliza agreed. Thereafter, he turned over all control and supervision of

the Foundation to Ms. Aytona - and to whomever she was reporting. All
52 TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 6
53 TSN, SNTUPAZ, XI-2, January 20, 2009, 2:58PM, p. 2

54 TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 8

”TSN, SNTUPAZ, XI-2, January 20, 2009, 2:58PM, p. 3

56TSN,Caturla, Xlll-2, January 20, 2009, 4 5 3 PM, p. 3
 42

that Mr. Flordeliza was asked to do was to sign the papers or documents

involving the use of the Foundation and required in the pursuit of the

activity. Mr. Flordeliza remembers signing about six to seven M O A S . ~ ~

Meanwhile, Ms. Aytona, through the direction of Mr. Paule, started

going around the country to have the Foundation accredited with several

RFUs of the DA so that it could qualify as an implementor of the fertilizer

distribution scheme, and to talk to possible LGU benefi~iaires.~'

The group of Mr. Paule and Ms. Aytona then found a fertilizer supplier

in FESHAN, owned by Ms. Julie Gregorio. They bought all of Ms.

Gregorio's liquid fertilizer stock. Ms. Gregorio admitted that she sold each

liter/bottle of fertilizer to the group at P I 5 0 each,5gwhich was later on re-

sold to the government for P1,500 (as found by the commission on Audit)

or a mark-up of 1,000%. They found also a financier to provide initial

funding for the scheme in the person of Ms. Llarena, who issued checks

amounting to P12,695,800.00 payable to FESHAN." And so the ball kept

rolling.

57 TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 3

58TSN,SNTUPAZ, XI-I, January 20, 2009, 11:58AM, p. 6; TSN, M.R. CATADMAN, XV-I, January 20,
2009, 12:38PM, p. 11
59TSN,GUINHAWA, 111-2, January 20, 2009, 1:38PM, p. 3
60TSN,CGCastro XIV-1, January 20, 2009, 12:28PM, pp. 13-14
 43

The group faced a predicament, however: where could they deposit

the proceeds of the sale of all fertilizer stock to facilitate the malversation

and launder the malversed funds? And how do they do it?

The group of Mr. Paule, Ms. Aytona (and now including Ms. Llarena

and Ms. Gregorio) thus decided that the best way would be to have

FESHAN enter into a Memorandum of Agreement with Araos Trading - an

inactive but DTI registered firm organized by Ms. Marilyn Araos, Mr.

Paule's employee.61 In that agreement, Araos Trading was tasked to sell

the fertilizer on behalf of FESHAN, who, strangely, would be prevented

from intervening in any of the Araos Trading's activities in pursuit of their

agreement.62The Memorandum of Agreement was signed by Ms. Araos

and Ms. Gregorio, and witnessed by Mr. Redentor Antolin and Ms.

A y t ~ n aA. ~bank
~ account was then opened in the name of FESHAN at the

LANDBANK Elliptical Road Branch, where the sole signatory was Ms.

Araos. Ms. Gregorio claimed that at no time did she know how that account

was used, and how much money went into it. It turns out that about P153M

went into and out of that account until it was closed in 2006.64 The

FESHAN fertilizer sale proceeds were deposited in this account, making it

the primary banking facility used to launder and legalize the money that

was realized from said sales.

61TSN,CGCastro, XIV-2, January 20,2009, 503pm, pages 10-11

62 TSN, JMBAISA, XVI-1, January 20, 2009, 12:48PM, p. 7
63 TSN, Gregorio, JADelacruz, IX-I, January 26, 2009, 1209pm, p.3

64TSN,RPAlger, XVII-1, January 20, 2009, 12:58PM, pp. 1-6

 44

All in all, we were thus able to trace the E30M to 40M which Ms.
Aytona admitted passed through the F ~ u n d a t i o n (more
, ~ ~ accurately, the

P56 million that passed through the Foundation account) and the E153M

that passed through the Araos LANDBANK account. These only account

for P209M, which begs the question, “where is the rest?” Where is the

bigger P519M amount? Where did it pass through, and how was it

disposed? Who were involved in its disposition?

Our journey will never end if we assign ourselves that function today.

We have found enough evidence for the prosecution arm of the

government - the Ombudsman and the Department of Justice (DOJ) - to

go forward. We are practically delivering to them the testimony and other

records we have uncovered on a silver platter. All they have to do is plod

on and do their constitutionally assigned task. After nearly 1,300 days

since the Magsaysay resolution66they can do no less. The work involved

was not easy. We felt, from the very beginning that it would be folly for us

to expect many witnesses to break down and confess to everything. Alas,

such things only happen in movies and in Perry Mason television episodes.

That being said, however, we have in our hearings elicited sufficient facts

to conclude that undeniably many acts were committed that would subject

the actors to criminal prosecution.

65 TSN, MelNovero, XIV-1, December 22, 2008, 12:40 pm, p. 4

66 PS Res. No. 327, 13Ih Congress
 45

It may be said that these events could not have possibly happened
without the instigation, cooperation, or blessing of officers, and other

persons very high up in the' bureaucracy and many have been already

mentioned in the previous Congress's report (CR 54). We, in this report,

have dealt with those that have appeared before us or upon whom our

jurisdiction was able to reach, even as we adopt likewise the findings of

CR54 of the 13'h Congress.

RECOMMENDATIONS

1. We recommend that the following be further investigated and /or

charged:

A. Former Undersecretary Jocelyn 1. Bolante

1. PLUNDER

Section 2 of RA 7080 otherwise known as AN ACT DEFINING AND

PENALIZING THE CRIME OF PLUNDER defines the crime of Plunder as:

Section 2. Definition of the Crime of Plunder; Penalties - Any public officer

who, by himself or in connivance with members of his family, relatives by affinity
or consanguinity, business associates, subordinates or other persons, amasses,
accumulates or acquires ill-gotten wealth through a combination or series
of overt or criminal acts as described in Section l(d) hereof, in the
aggregate amount or total value of at least Fifty million pesos (Php
50,000,000.00), shall be guilty of the crime of plunder and shall be punished by
reclusion perpetua to death. Any person who participated with the said public
officer in the commission of an offense contributing to the crime of plunder shall
likewise be punished to such offense. In the imposition of penalties, the degree of
participation and the attendance of mitigating and extenuating circumstances as
 46

provided by the Revised Penal Code, shall be considered by the court. The court
shall declare any and all ill-gotten wealth and their interests and other incomes
and assets including the properties and shares of stock derived from the deposit
or investment thereof forfeited in favor of the State.

Bolante is a principal since he cooperated in the commission of the

offense by another act without which it would not have been accomplished

as established by:

The findings of Committee Report No. 54:

“6. Strong probable criminal culpability is established, hence, criminal and administrative
charges must be filed against:
a. Undersecreta y Jocelyn Bolante,
xxx
They must be charged for violating the Law on Plunder and violating the Anti-Graft and
Corrupt Practices Act (Section 3 [e], Republic Act 3019).
In the investigation conducted, from the testimonies of the witnesses who appeared
before the committees and the records of the Commission on Audit, there appears
massive misappropriation, diversion of funds, malversation of public and raids of the
farmers’ money. In the case of Bolante, testimonies to the effect that he received,
directly or indirectly, commission and percentage of pecunia y benefit from suppliers in
connection with the contracts and transactions pertaining to the fertilizer funds have
been adduced during the public hearings.’67

The findings of Task Force Abono:

“8. The following persons are liable for their participation in the misuse of the P 14 million
fertilizer funds disbursed for the purchase of the subject farm implements:

A. Public Officials
I. Jocelyn “JOG-JOC”l. Bolante (former DA Undersecretay )
- For approving the issuance of Sub-Allotment Advise (SAA) and changing
some of the original proponents listed in the Annex “A” of SARO E-04-00164
dated Februay 3. 2004; he also authorized the Landbank to debit MDS
Account for LCV; he directed the distribution of the P723 million fertilizer
funds;
x x x JOmbudsman,Task Force Abono lnvestiqation Report p 17. 20 June
2006)

“Vll. RECOMMENDATlONS
xxx
9. WHEREFORE, premises considered the undersigned investigators respectfully
recommend:
61
13IhCongress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, p 33,
01 March 2006
 47

xxx
That a criminal complaint for violation Sections 3 (e) and (g) of Republic Act 3019 be
filed against the following public and private Subjects: Jocelyn “Joc-JOC”Bolante, xxxide

Testimony of Regional Director Oblena connecting former Usec.

Bolante to the National Organization of Agricultural Development
and Productivity as found in Transcript of Stenographic Notes of
the 2nd hearing: (Chairman Gordon to Oblena, JMBaisa, Xll-I,
November 25, 2008 12:21 p.m., pp. 1-3.):

“THE CHAIRMAN. No, no, no. We’re going to that. I was going to go to the others. As
I’ve told Senator Lacson early on, we were going to go to the others.

“I just want to get an answer from you. Sin0 ang nag utos sa iyo at papaano ginawa ang
pag uutos sa iyo? We have to be fair here, hindi pwedeng hearsay, hindi pwedeng sabi
nya, “0 ganito.” Sino? Sabi ng lawyer mo tell the truth. That’s amazing. (Laughter)

“Sorry. We have to break the ice right now,

“0,sige, go ahead.

“MR. OBLENA. Nasabi ko na PO kanina, ang ating Usec.

“THE CHAIRMAN. Very good. Okay, si Usec. Bolante ang tinutukoy mo.

“Okay, papaano ka in-inform ni Usec. Bolante na palitan iyong NGO mo?

“SEN. LACSON. What mode of communication?

“THE CHAIRMAN. Telepono, sulat, text, telegram? Smoke signal? 0 may nagsabi
para sa kanya? Mensahero?

“MR. OBLENA. Natawagan PO niya ako.”

2. TECHNICAL
MALVERSATION

Article 220 of the Revised Penal Code defines technical malversation

or the illegal use of public funds or property as follows:

Article 220. Illegal Use of public funds or property. -Any public officer
who shall apply any public fund or property under his administration to any
public use other than for which such fund or property were appropriated by
law or ordinance shall suffer the penalty of prision correccional in its
minimum period or a fine ranging from one-half to the total of the sum

Ombudsman, Task Force Abono investigation Report, p 21, 20 June 2006

 48

misapplied, if by reason of such misapplication, any damage or

embarrassment shall have resulted to the public service. In either case,
the offender shall also suffer the penalty of temporary special
disqualification.
If no damage or embarrassment to the public service has resulted, the
penalty shall be a fine from 5 to 50 per cent of the sum misapplied.

There appears to be technical malversation when former Usec.

Bolante himself admitted in his 28 November 2008 testimony that the

SARO required the purchase of farm inputs. However, instead of farm

inputs being purchased, the money allotted for the farm inputs were used to

buy shredders instead.69

Clearly shredders are farm implements and not farm inputs;

moreover, they are not the farm implements as defined under the

Ginintuang Masaganang Ani program.

Bolante is a principal by direct participation since he personally took

part in the execution of the act as established by:

The findings of Task Force Abono:

“Vll. RECOMlVIENDATlONS
xxx
9. WHEREFORE, premises considered the undersigned investigators
respectfully recommend:

That criminal complaint for violation of Article 220 of the Revised Penal Code be
filed against the following public officials: Jocelyn “Joc-JOC”Bolante, x x x”~’

Testimony of former Usec. Bolante, SNTUPAZ XIV-1

November 28, 2008 2:28 P.M. pp. 1-8:

69 SNTUPAZ XIV-1 NOVEMBER 28,2008,2:29 P.M. pp 5-8 to RPAlger XV-1 November 28,2008,2:39
P.M., pp. 1 1-3
70
Ombudsman, Task Force Abono Investigation Report, p 21, 20 June 2006
 49

“THE CHAIRMAN. Opo. Ulitin ko lang PO, mabilis lang.

Samakatuwid ‘yong pong sinasabi natin - nabasa ninyo na PO yan? Ano PO ang
sinasabi diyan sa SARO? “For the purpose of farm inputs,” hindi P O ba?

‘‘BOLANTE. Nakalagay PO dito. “for the purchase of farm inputs’’ as

indicated in Annex “A”.

“THE CHAIRMAN. Farm inputs. Opo. Ngayon PO mayroong pong advice ang
SARO naman dito, “Please be advised that the amount of P728 million only was
released to your agency. Details as follows:
SARO Number, funding source, authorized...”- ang purpose “to cover the
purchase of farm inputs” as indicated in Annex “A”. Opo?

“BOLANTE. That is what is written in this document that you have given.

“THE CHAIRMAN. Opo. Samakatuwid ‘yong 728 million pinabili para sa farm
inputs pero maraming bumili ng bulldozer, may gumamit ng kalsada, may
gumamit ng - hindi bulldozer, tractor at lahat, hindi ba? May mga shredders,
tama PO ba ‘yon? Alam ninyo PO ba ang ibig sabihin ng technical malversation?
Alam PO ba ninyo ang ibig sabihin ng technical malversation? Papaliwanag ko
lang PO. Technical Malversation PO under our Revised Penal Code is, “an
offender is a public officer“ kayo PO ay public officer. “He applies public funds or
property under his administration to some public use” ginagamit para sa publiko,
“public use for which public funds or property were applied is different from the
purpose for which they were originally appropriated by law or by ordinance’: Ang
original intention PO nito is para sa tinatawag nating hindi PO implements per0
inputs, hindi PO ba?

“BOLANTE, Ang sa pagkakaintindi ko P O farm inputs - since the source of

the fund ay nanggaling P O sa rice and corn at sa HVCC, it can actually be
used for farm implements likewise.

“THE CHAIRMAN. That is according to you?

‘BOLANTE. Right. That is my understanding PO.

“THE CHAIRMAN. Parang yan ang research ninyo? Siguro ipatanong ninyo
sa inyong abogado dahil ’yong farm inputs malinaw sinabi ninyo kanina
pesticide, insecticide, madaling buhatin, pampataba ng lupa. ‘Yong farm
implements PO malaki ang diprensya noon, bumibili kayo ng traktora, bumibili
kayo ng ibang bagay at dalawang dokumento ‘yong kinuha ninyo na in-
authorize kayo for farm inputs. lsang SARO galing sa DBM at saka Notice of
Cash Allocation na pang inputs.”

Testimony of COA Director Flerida Jimenez (TSN,Caturla, 11-1,

November 25, 2008, 10:31 am, pg. 6):

“MS. JIMENEZ. Tama PO ‘yan, Your Honor. Na-account PO namin ‘yong 728
million per0 hindi PO ang ibig sabihin ay tama ‘yong pinagkagastusan ng 728.

“SEN. ESCUDERO. Do you confirm, Ma’am, that based on your COA report,
there are some items that are overpriced by 700 to 1,000 to 1,250 percent, that
the foliar fertilizer was diluted in some respects, in fact, up to 42 percent, that the
 50

farmer-beneficiaries listed as supposed to be recipients of the fund, at least, to

the tune of 56 percent did not comply with certain circulars as to being qualified
to receive such a fund from government?

“MS. JIMENEZ. Tama PO yon lahat, Your Honor.

“SEN. ESCUDERO. So, accounted man, illegal, bawal, at puwede nating

sabihing labag sa batas ang ginawang pagre-release.

“MS. JIMENEZ. May mga nakita PO kaming diperensiya, Your Honor, sa audit
namin. I’

3. MONEYLAUNDERING

Section 4 of Republic Act 9194 or AN ACT AMENDING REPUBLIC

ACT NO. 9160, OTHERWISE KNOWN AS THE “ANTI-MONEY

LAUNDERING ACT OF 2001 defines money laundering as:

Section 4. Money Laundering Offense. - Money laundering is a crime

whereby the proceeds of an unlawful activity as herein defined are
transacted, thereby making them appear to have originated from
legitimate sources. It is committed by the following:
(a) Any person knowing that any monetary instrument or property
represents, involves, or relates to, the proceeds of any unlawful
activity, transacts or attempts to transact said monetary instrument or
property.

(b) Any person knowing that any monetary instrument or property involves
the proceeds of any unlawful activity, performs or fails to perform any
act as a result of which he facilitates the offense of money laundering
referred to in paragraph (a) above.

(c) Any person knowing that any monetary instrument or property is

required under this Act to be disclosed and filed with the Anti-Money
Laundering Council (AMLC), fails to do so.

Clearly, the FESHAN account opened with the LANDBANK Elliptical

Road Branch had been used to launder dirty money. Money stolen from

the government amounting to P153M passed through that account. The

$/
 51

opening and maintenance of that FESHAN account at LANDBANK were

indispensable to the operations of the syndicate in this fertilizer fund scam.

Bolante is a principal since he cooperated in the commission of the

offense by another act without which it would not have been accomplished

as established by:

The findings with regard to his degree of participation in the

fertilizer fund scam as found in Committee Report No. 54 in the
13'h Congress:

"In the fertilizer fund scam, Undersecretaty Bolante is the declared architect. He
designed it. He was its brains. It was he who worked with the DBM for the immediate
release of the fund. It was him who prepared and submitted names who would become
the fertilizer fund's proponents. It was Undersecretary Bolante who sent letters to various
congressmen and local officials informing them of the availability of funds under the DA's
GMA Project. It was him who directed these officials to coordinate with his office to
discuss all the requirements to facilitate the said project fund. Undersecretary Bolante in
the words of his then Chief of Sfae lbaira Poliquit, had a hand in determining how the
GMA Project fund works and will be spent. And that although the DA has a list of
officials whose "proposed projects" were to be funded by the fertilizer fund, Bolante was
given the authority to drop them and replace them with others."7'

"RECOMMENDATlONS

"7. Evidence submitted by the Commission on Audif, and the affidavifs and sworn
testimonies of Antonio Salas and Board Member Rebecca Aquino, statements of Afty.
Francisco Chavez and all farmers who appeared before the committees indicate the
involvement of certain local government officials on the misuse and abuse of the fertilizer
funds purportedly for their own benefit. It is therefore recommended that the
Ombudsman together with the Anti-Money Laundering Council scrutinize the voluminous
documents and trace its flow from the Regional Field Units of the Department of
Agriculture to the local officials and file charges against them, whether elected or
appointed, for violation of the Anti-Graft and Corrupt Practices Act. x x x ' " ~

4. False testimonylPerjury

71
131h Congress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, pp
19-20,Ol March 2006
72
131hCongress of the Republic of the Philippines, Zd Regular Session, Committee Report No. 54, pp.
34, 01 March 2006
 52

A case had previously been filed against Bolante with the DOJ for

violations of Article 183 of the Revised Penal Code (False

Testimony/Perjury) and Article 150 of the Revised Penal Code

(Disobedience to Summons issued by the National Assembly).

B. FORMERASEC.IBARRA
POLIQUIT

1. PLUNDER

He is a principal since he cooperated in the commission of the

offense by another act without which it would not have been accomplished

as established by:

The findings of Committee Report No. 54:

“Former Undersecretary lbarra Poliquit, per records submitted by the Commission on

Audit, assisted Undersecretary Bolante in the approval of projects that would be
accorded the fertilizer fund. A Substantial number of requests for the approval to issue
sub-allotment advise (SAA) with corresponding cash allocation to DA-RFUs for the
implementation of GMA Farm Inputs and Implements Program would indicate
Undersecretary Poliquit as the requesting party. In one hearing, from the documents
submitted by the COA, it was noted that lbarra Poliquit, then Assistant S‘ecretafy for
Field Operations requested for the transfer of P89 million in Region IV alone; P5 million
in Region V; and P22 million in Region Vll.”73

“RECOMMENDATIONS
“7. Evidence submitted by fhe Commission on Audit, and the affidavits and sworn
testimonies of Antonio Salas and Board Member Rebecca Aquino, statements of Atty.
Francisco Chavez and all farmers who appeared before the committees indicate the
involvement of certain local government officials on the misuse and abuse of the fertilizer
funds purportedly for their own benefit. It is therefore recommended that the
Ombudsman together with the Anti-Money Laundering Council scrutinize the voluminous
documents and trace its flow from the Regional Field Units of the Department of

73
13IhCongress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, pp
20-21, 01 March 2006
 53

Agriculture to the local officials and file charges against them, whether elected or
appointed, for violation of the Anti-Graft and Corrupt Practices Act. x x x ’ ” ~

“6. Strong probable criminal culpability is established, hence, criminal and administrative
charges must be filed against:
xxx
c. Undersecretarylbarra Poliquit
xxx
“Theymust be charged for violating the Law on Plunder and violating the Anti-Graft and
Corrupt Practices Act (Section 3 [e],Republic Act 3019).

7n the investigation conducted, from the testimonies of the witnesses who appeared
before the committees and the records of the Commission on Audit, there appears
massive misappropriation, diversion of funds, malversation of public and raids o f the
farmers’ money. In the case o f Bolante, testimonies to the effect that he received,
directly or indirectly, commission and percentage of pecuniary benefit from suppliers in
connection with the contracts and transactions pertaining to the fertilizer funds have
been adduced during the public hearings.”75

The findings of Task Force Abono:

“8. The following persons are liable for their participation in the misuse of the P 14 million
fertilizer funds disbursed for the purchase o f the subject farm implements:

A. Public Officials
xxx
6. lbarra Poliquit (DA Assistant Secretary) - for issuing a memorandum to Dir.
Dennis 5. Araullo authorizing the latter to pay DA’s obligations to LCV thereby
actively parficipated in the misuse of the fertilizerfunds;
XXX7+j

“VII.RECOMMENDATIONS

“9. WHEREFORE, premises considered the undersigned investigators respectfully

recommend:
xxx
b) That a criminal complaint for violation Sections 3 (e) and (g) of Republic Act
3019 be filed against the following public and private Subjects: x x x, lbarra
Poliquit, X X X IOmbudsman,
~ ~ Task Force Abono lnvestiaation Report, P 21
20 June 2006)

74
13‘hCongress of the Republic of the Philippines, Znd Regular Session, Committee Report No. 54, pp
34, 01 March 2006
75
13‘hCongress of the Republic of the Philippines, 2ndRegular Session, Committee Report No. 54, p. 33,
01 March 2006

76 Ombudsman, Task Force Abono Investigation Report, p. 18,20 June 2006

’
I Ombudsman, Task Force Abono Investigation Report, p 21, 20 June 2006
 54

To corroborate these findings:

“SEN. LACSON. Pakibasa n’yo muna PO. Pakibasa nyo muna buo.

“BOLANTE. Yeah From the Assistant Secretary for Field Operations,

Memorandum for the Undersecretary. The subject is Request for Approval to
issue the Sub-allotment Advise, or what we call the SAA, with corresponding
cash allocation to RFU13 for the implementation of the farm input/farm
implements programs.

(Reading)
“May we request for the approval to issue sub-allotment advice in the total
amount of 13 million with corresponding cash for the above-mentioned purpose,
broken down as follows: The province of Agusan del Sur, 5 million; Municipality
of Nasipit, Agusan del Norte, 3 million; Butuan, 5 million for a total of 13 million.
Said funds shall be covered by SARO, E-04-00164 dated February 3, 2004.

“For your consideration and further instruction.

lbarra T.C. Poliquit

Approved by authority
Of the Secretary

Jocelyn 1. Bolante
Under~ecretary’”~

2. TECHNICAL
MALVERSATION

He is a principal by direct participation since he personally took part

in the execution of the.act as established by:

The findings of Task Force Abono:

“9. WHEREFORE, premises considered the undersigned investigators

respectfully recommend;

“a) That criminal complaint for violation of Article 220 of the Revised Penal
Code be filed against the following public officials: x x x lbarra Poliquit xxx”’’

’* MPMendoza X-I November 25,2008 11:51 A.M. p 1

79
Ombudsman, Task Force Abono investigation Report, p 21, 20 June 2006
 55

Testimony of former Usec. Bolante, SNTUPAZ XIV-1

November 28,2008 2:28 P.M. pp. 1-8

“THE CHAIRMAN. Opo. Ulitin ko lang PO, mabilis lang.

Samakatuwid ’yong pong sinasabi natin - nabasa ninyo na PO yan? Ano PO ang
sinasabi diyan sa SARO? “For the purpose of farm inputs,”hindi PO ba?

“BOLANTE. Nakalagay PO dito. “for the purchase of farm inputs” as indicated in

Annex ‘2”.

“THE CHAIRMAN. Farm inputs. Opo. Ngayon PO mayroong pong advice ang
SARO naman dito, “Please be advised that the amount of P728 million only was
released to your agency. Details as follows:
SARO Number, funding source, authorized...”- ang purpose “to cover the
purchase of farm inputs” as indicated in Annex “A”. Opo?

“BOLANTE. That is what is written in this document that you have given.

“THE CHAIRMAN. Opo. Samakatuwid ‘yong 728 million pinabili para sa farm
inputs per0 maraming bumili ng bulldozer, may gumamit ng kalsada, may
gumamit ng - hindi bulldozer, tractor at lahat, hind; ba? May mga shredders,
tama PO ba ‘yon? Alam ninyo PO ba ang ibig sabihin ng technical malversation?
Alam PO ba ninyo ang ibig sabihin ng technical malversation? Papaliwanag ko
lang PO. Technical Malversation PO under our Revised Penal Code is, “an
offender is a public officer” kayo PO ay public officer. “He applies public funds or
property under his administration to some public use” ginagamit para sa publiko,
“public use for which public funds or property were applied is different from the
purpose for which they were originally appropriated by law or by ordinance”. Ang
original intention PO nito is para sa tinatawag nating hindi po implements per0
inputs, hindipo ba?

“BOLANTE. Ang sa pagkakaintindi ko PO farm inputs - since the source of the

fund ay nanggaling PO sa rice and corn at sa HVCC, it can actually be used for
farm implements likewise.

“THE CHAIRMAN. That is according to you?

“BOLANTE. Right. That is my understanding PO.

“THE CHAIRMAN. Parang yan ang research ninyo? Siguro ipatanong ninyo sa
inyong abogado dahil ‘yong farm inputs malinaw sinabi ninyo kanina pesticide,
insecticide, madaling buhatin, pampataba ng lupa. ‘Yong farm implements PO
malaki ang diprensya noon, bumibili kayo ng traktora, bumibili kayo ng ibang
bagav at dalawang dokumento Yong kinuha ninyo na in-authorize kayo for farm
inp& lsang SARO galing sa DBM at saka Notice of Cash Allocation na pang
inputs.

To corroborate the statement of Boiante:

 56

MR. POLlQUlT. Sir, l would like to clarify or state the function of the Assistant
Secretary for Field Operations. It is my duty also to indorse request for
funding for the approval of the DA Secretary or the Undersecretary for Field
Operations.

SEN. LACSON. l know that. l readyour affidavit.

MR. POLIQUIJ. Yes. So, that’s the function. I merely implement it or acted on
my function.’”’

C. Ms. LEONICIAMARCO-LLARENA

1. PLUNDER

She is a principal since she personally took part in the execution of

the act as established by:

0 Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla
“Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the early part of March 2004, l received a call from Ms. Aytona
through my office coordinator Mae Espiritu, that l have. to be present at the Land Bank
Quezon City Extension office on March 8, 2004 to open an account in accordance with
what had been previously agreed upon. When Mr. Antolin, my vice president and l
arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We
were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by
Feshan Philippines, Incorporated to be the sole signatory in said account and a
Memorandum of Agreement the pertinent portions of shich are quoted below:

“The Second Party shall supply and deliver the subject fertilizer on credit at PI50
per bottle as per proposal dated February 4, 2004 and hereto attached as Annex “A”

“Number three. That the First Party shall issue the check payments to the
Second Party for whatever deliveries to be made by the latter;

“Number four. That by reason of this Joint Venture Agreement, the Second Party
shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be

MPMendoza X-I November 5, 2008 11:51 A.M pp2-3

 57

secured by the First Party, which amount shall be paid upon collection of the covering
purchase orders;

“Number five. That the Second Party shall furnish to the First Party all the
necessary documents needed to implement the completion of the whole projects like
business permits, sales invoices, official receipts, and so forth;

“Number six. That the First Party shall protect the interest of the Second Party in
all projects to be undertaken during the effectivity of this agreement;
“Number seven. The Second Party shall not be, however, allowed to intervene in
all transactions and activities to be undertaken by the first party except othetwise, if her
presence is needed.

“THE SENATE PRESIDENT. Who is the First Party

“MS. GREGORIO. The First Party is Araos Trading.

“THE SENATE PRESIDENT. Araos Trading, Okay.

“MS. GREGORIO. Opo.

7 n compliance with said MOA, Ms. Aytona, through her duly authorized
representative, received from our office bank sales invoices, delivery receipt and official
receipts on March 12-16, 2004 and April 2004.”

Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms.Raquel
Paz as found in the Transcript of Stenographic Notes of the 7th
hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5:

“THE CHAIRMAN. , . .nandito ba ‘yung bank manager?

Okay.

“MS. GREGORIO. Nandyan.

“THE CHAIRMAN. Sinong nakiia n‘yo - - nataiandaan n’yo ba nung pinirmahan ‘yan,
‘yang MOA na?

“MS. PAZ. No, sir, Your Honor, hind; ko PO nakita na.. .

“THE CHAIRMAN. Kayo ba ‘yung unang bank manager nung panahon na ‘yan?

”MS. PAZ. Yes, Your Honor. Hindi ko PO nakita ’yung pinirmahan nilang MOA. Basta
PO ang pinresent (present) nila sa ’kin is the Secretary’s Certificate signed by the
corporate secretary and attested by president PO of the.. .

“THE CHAIRMAN. When you say “si1a”sino ‘yong mga ‘yon?

“MS. PAZ. Si Marilyn Araos PO.

“THE CHAIRMAN. lturo mo sa ‘kin si Marilyn Araos

“MS. PAZ. ‘Yung nasa ...

“THE CHAIRMAN. Tumayo ka nga.

 58

“MS. PAZ. Nasa may right side PO ni Ms. Llarena

“THE CHAIRMAN. Tapikin mo. Puntahan moY tapikin mo para sigurado tayo.

“MS. PAZ. (At this juncture, witness approached and touched the shoulder of Ms
Araos).

“THE CHAIRMAN. S‘ya si Marilyn Araos. S’yang kasama. Sin0 pa ang kasama?

“MS. PAZ. Si Maritess Aytona.

“THE CHAIRMAN. Puntahan mo si Maritess Aytona na kasama s’ya dun sa bangko.

“MS. PAZ. (Witness approached and tapped the shoulder of Ms. Aytona).

“THE CHAIRMAN. S’ya ‘yan si Maritess Aytona, kasama dun nung pinrisinta ‘yung
Secretary’s Certificate.

“MS. PAZ. Ang pagkakatanda ko P O . . .(Off-mike)

“THE CHAIRMAN, Mike please. Hiramin mo muna kay Mr. Jocjoc

“MS. PAZ. Ang pagkakatanda ko PO, Your Honor, meron din PO silang kasama na
mga officials ng Feshan.

“THE CHAIRMAN. Sin0 PO ‘yon?

“MS. PAZ. Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio.

“THE CHAIRMAN. Julie Gregorio

“MS. PAZ. Opo, nandun PO s’ya.

“THE CHAIRMAN. Pakituro mo kung sin0 dit0 si Julie Gregorio?

“MS. PAZ. (Witness approached likewise Ms. Gregorio and tapped her shoulder)

“THE CHAIRMAN. ‘Yan si Julie Gregorio. Sin0 pa’ng nakakita mong nando’n na
andito ngayon? Tumayo nga lang ‘yung mga Feshan officials.
(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of
the Chairman).
Sin0 pa?

“MS. PAZ. Sila lang PO kasi ‘yung talagang nakita ko. Hindi ko PO - - may mga
kasama pa PO kasi silang iba.

“THE CHAIRMAN. 00.

“MS. PAZ. Per0 PO sila PO kasi ‘yung mga hinihingan ko ng mga identification cards
para PO i-confer dun sa signatures appearing on the Secretary’s Certificate.

“THE CHAIRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng
identification cards.

“MS. PAZ. At saka PO si Marlyn Araos.

“THE CHAIRMAN. At saka si Marlyn Araos..

“MS. PAZ. Opo.

”THE CHAIRMAN. ., .nagbigay sila ng card

 59

“MS. PAZ. Opo.

“THE CHAIRMAN. Okay. Pakibalik langpo kayo dun sandali.

Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring
(signatory) puwede lang do’n, di ba si Marlyn Araos lang?

“MS. PAZ. Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. Si Marlyn Araos ang pangalan nya.

“MS. PAZ. Opo.

“THE CHAIRMAN. So, s’ya lang ang nakakapirma?

“MS. PAZ. S’ya PO Yung authorized based on the Secretary’s Certificate provided PO
sa bank.

“THE CHAIRMAN. Ang mga accounts na it0 umaabot ng humigit kumulang sa P I 5 0

million ang lumabas-pumasok dito. ‘Yan ang computation namin.. .

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. ...mga gano’n kalaki.

“MS. PAZ. Yes, Your Honor, ‘yun PO ‘yung ipinrisinta (present) sa amin.

“THE CHAIRMAN. At itong account na it0 ay sarado na.

“MS.PAZ. Yes, Your Honor.

“THE CHAIRMAN. Kalian sinarhan itong account na ito?

“MS. PAZ. Sometime in July 2006, Your Honor.

“THE CHAIRMAN. Sometime 2006 itong account na it0 isinara, wala ng pera, zero
account., .

“MS. PAZ. Yes, Your Honor.”

Admission of Marilyn Araos regarding the circumstances of the

account as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15:

“THE CHAIRMAN. Ms. Marilyn Araos, pa’no ka nagkaron ng ganyang halagang 153
million pinapasok ‘yung pera sa ‘yo?

“MS. ARAOS. Your Honor hindi ko PO alam na gano’n kalaking amount ang pumasok
sa ...

“THE CHAIRMAN. Basta pumipirma ka lang.

“MS. ARAOS. Yes. Your Honor.

xxx
 60

“MS. ARAOS. Sorry PO. Ang sabi n’ya PO kasi sa akin nung nasa Land Bank PO kami -
actually silang dalawa PO ni Ms. Llarena ang unang nakita ko sa Bangko pagpasok.

“THE CHAIRMAN. So, si Gregorio at saka si Llarena.

“MS. ARAOS. Yes, opo.

“THE CHAIRMAN. Pagkatapos?

“MS. ARAOS. And then nung

“THE CHAIRMAN. Ba’t ka nagpunta doh? Sino’ng nagsabing pumunta ka ro’n?

“MS. ARAOS. As per instruction din PO ni Mr. Paule.

“THE CHAIRMAN. Mr. Paule toldyou to go to the bank.

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. All right. And then what happened? Nakita mo si Llarena, nakita mo
si Gregorio, then what happened?

“MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko, so sabi sa ‘kin ni
Ms. Gregorio-nagtanong PO ako kung ano’ng ginagawa ko dit0 kasi hindi ko po talaga
alam, as per instruction’lang ni Mr. Paule, magmi-meet kayo ro’n ni Ms. Llarena and Ms.
Gregorio. So, nung nando’n na PO ako sa bangko pagpasok ko, nakita ko PO silang
dalawa nagu-usap together with Ms. Raquel, ‘yung bank manager PO. So nung
pagpasok ko PO, Your Honor, nakita ko silang dalawa, ‘yun nga PO nagtanong ako kay
Ms. Gregorio kung ano’ng ginagawa ko rito. So, ang sabi n’ya, “Mag open tayo ng
account.”

“THE CHAIRMAN. Sino, si Ms. Gregorio?

“MS. ARAOS. Yes, Your Honor

“THE CHAIRMAN. 00.

“MS. ARAOS. And then ang sabi n’ya sa ‘kin, ‘Ikaw ang magiging signatoty.”

2. MONEYLAUNDERING

She is a principal since she cooperated in the commission of the

offense by another act without which it would not have been accomplished

as estdblished by:

0 Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
 61

1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla

“Julie” Misola-Gregorio dated January 20, 2009;

“GREGORIO. x x x In the early part of March 2004, I received a call from Ms. Aytona
through my office coordinator Mae Espiritu, that I have to be present at the Land Bank
Quezon City Extension office on March 8, 2004 to open an account in accordance with
what had been previously agreed upon. When Mr. Antolin, my vice president and I
arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We
were made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by
Feshan Philippines, Incorporated to be the sole signatory in said account and a
Memorandum of Agreement the pertinent portions of shich are quoted below:

“The Second Party shall supply and deliver the subject fertilizer on credit at PI50
per bottle as per proposal dated February 4, 2004 and hereto attached as Annex “A”

“Number three. That the First Party shall issue the check payments to the
Second Party for whatever deliveries to be made by the latter;.

“Number four. That by reason of this Joint Venture Agreement, the Second Party
shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be
secured by the First Party, which amount shall be paid upon collection of the covering
purchase orders;

“Number five. That the Second Party shall furnish to the First Party all the
necessary documents needed to implement the completion of the whole projects like
business permits, sales invoices, official receipts, and so forth;

“Number six. That the First Party shall protect the interest of the Second Party in
all projects to be undertaken during the effectivity of this agreement;
“Number seven. The Second Party shall not be, however, allowed to intervene in
all transactions and activities to be undertaken by the first party except otherwise, if her
presence is needed.

“THE SENATE PRESIDENT. Who is the First Party

“MS. GREGORIO. The First Party is Araos Trading.

“THE SENATE PRESIDENT. Araos Trading, Okay.

“MS. GREGORIO. Opo.

“In compliance with said MOA, Ms. Aytona, through her duly authorized representative,
received from our office bank sales invoices, delivery receipt and official receipts on
March 12-16, 2004 and April 2004.“

Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVll-I January 20, 2009, 12:58 p.m., pp.1-5:

“THE CHAIRMAN. .. .nandito ba ’yung bank manager?

 62

Okay.

“MS. GREGORIO. Nand‘yan.

“THE CHAIRMAN. Sinong nakita n’yo - - natatandaan n’yo ba nung pinirmahan ‘yan,
‘yang MOA na?

“MS. PAZ. No, sir, Your Honor, hindi ko PO nakita na.. .

“THE CHAIRMAN. Kayo ha ‘yung unang hank manager nung panahon na ‘yan?

“MS. PAZ. Yes, Your Honor. Hindi ko po nakita ’yung pinirmahan nilang MOA.
Basta PO ang pinresent (present) nila sa ‘kin is the Secretary’s Certificate signed by
the corporate secretary and attested by president PO of the...

“THE CHAIRMAN. When you say “si1a”sino ‘yong mga ‘yon?

“MS. PAZ. Si Marilyn Araos PO.

“THE CHAIRMAN. lturo mo sa ‘kin si Marilyn Araos.

“MS. PAZ. ‘Yung nasa ...

“THE CHAIRMAN. Tumayo ka nga.

“MS. PAZ. Nasa may right side PO ni Ms. Llarena

“THE CHAIRMAN. Tapikin mo. Puntahan mo’t tapikin mo para sigurado tayo.

“MS. PAZ. (At this juncture, witness approached and touched the shoulder of Ms
Araos).

”THE CHAIRMAN. S’ya si Marilyn Araos. S’yang kasama. Sin0 pa ang kasama?

“MS. PAZ. Si Maritess Aytona

“THE CHAIRMAN. Puntahan mo si Maritess Aytona na kasama s’ya dun sa hangko.

“MS. PAZ. (Witness approached and tapped the shoulder of Ms. Aytona).

“THE CHAIRMAN. S’ya ‘yan si Maritess Aytona, kasama dun nung pinrisinta ‘yung
Secretary’s Certificate.

“MS. PAZ. Ang pagkakatanda ko P O . . .(Off-mike)

“THE CHAIRMAN. Mike please. Hiramin mo muna kay Mr. Jocjoc

“MS. PAZ. Ang pagkakatanda ko PO, Your Honor, meron din PO silang kasama na
mga officials ng Feshan.

“THE CHAIRMAN. Sin0 PO yon?

“MS. PAZ. Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio.

“THE CHAIRMAN. Julie Gregorio.

“MS. PAZ. Opo, nandun PO sya.

“THE CHAIRMAN. Pakituro mo kung sin0 dit0 si Julie Gregorio?

“MS. PAZ. (Witness approached likewise Ms. Gregorio and tapped her shoulder).
 63

“THE CHAIRMAN. ’Yan si Julie Gregorio. Sin0 pa’ng nakakita mong nandoh na
andito ngayon? Tumayo nga lang ’yung mga Feshan officials.

(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive of
the Chairman).

Sin0 pa?
“MS. PAZ. Sila lang po kasi ‘yung talagang nakita ko. Hindi ko PO - - may mga
kasama pa po kasi silang iba.

“THE CHAIRMAN. 00.

“MS. PAZ. Per0 po sila po kasi ‘yung mga hinihingan ko ng mga identification cards
para PO i-confer dun sa signatures appearing on the Secretary’s Certificate.

“THE CHAIRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo ng
identification cards.

“MS. PAZ. At saka PO si Marlyn Araos.

“THE CHAIRMAN. At saka si Marlyn Araos

“MS. PAZ. Opo.

“THE CHAIRMAN. .. .nagbigay sila ng card,

“MS. PAZ. Opo.

“THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandal;.

Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring
(signatory) puwede lang do’n, di ba si Marlyn Araos lang?

“MS. PAZ. Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. Si Marlyn Araos ang pangalan n’ya

“MS. PAZ. Opo.

“THE CHAIRMAN. So, s’ya lang ang nakakapirma?

“MS. PAZ. S’ya po ‘yung authorized based on the Secretary‘s Certificate provided po
sa bank.

“THE CHAIRMAN. Ang mga accounts na it0 umaabot ng humigit kumulang sa PI50
million ang lumabas-pumasok dito. ‘Yan ang computation namin.. .

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. .. .mga gano’n kalaki.

“MS. PAZ. Yes, Your Honor, ‘yun PO ‘yyung ipinrisinta (present) sa amin

. “THE CHAIRMAN. At itong account na it0 ay sarado na.

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. Kalian sinarhan [tong account na ito?

“MS. PAZ. Sometime in July 2006, Your Honor:

 64

“THE CHAIRMAN. Sometime 2006 itong account na it0 isinara, wala ng pera, zero
account.. .

“MS. PAZ. Yes, Your Honor.”

b Being a beneficiary of the account up .-1 and about W6Million

(see ANNEX L)

3. FALSETESTIMONY/PERJURY IN SOLEMN AFFIRMATION

The Revised Penal Code defines false testimony/perjury in solemn

affirmation as follows:

ARTICLE 183. False testimony in other cases and perjury in

solemn affirmation. -The penalty of arrest0 mayor in its maximum period
to prision correccional in its minimum period shall be imposed upon any
person who, knowingly making untruthful statements and not being
included in the provisions of the next preceding articles, shall testify under
oath, or make an affidavit, upon any material matter before a competent
person authorized to administer an oath in cases in which the law so
requires.
“Any person who, in case of a solemn affirmation made in lieu of an
oath, shall commit any of the falsehoods mentioned in this and the three
preceding articles of this section, shall suffer the respective penalties
provided therein.”

The elements of perjury are:

1, The accused made a statement under oath or executed an affidavit

upon a material matter;
2.The statement or affidavit was made before a competent officer
authorized to receive and administer oath;
3. In that statement or affidavit, the accused made a wilful and
deliberate assertion of a falsehood; and
4. The sworn statement or affidavit containing the falsity is required by
law or made for a legal purpose

Taking into consideration the testimonies of Ms. Marites Aytona, Mr.

Jose B. Barredo, Jr., Ms. Leonicia Marco-Llarena and Ms. Julie M.

 65

Gregorio, the fact has been established that all of these witnesses have

committed false testimony/perjury in solemn affirmation.

Pointed out were the allegations in Ms. Leonicia Marco-Llarena’s

affidavit which were in contradiction or inconsistent with that of Ms.

Gregorio’s affidavit.”

According to Ms Llarena, she personally did not make any direct

dealings with Feshan Philippines nor with Ms. Gregorio. Ms Llarena said

she never went to the office of Feshan Philippines.”

Ms. Llarena further said the first time she saw Ms. Gregorio was

when the latter, together with Ms. Aytona and Mr. Antolin, came to visit her

office.83

On the other hand, Ms. Gregorio in her sworn affidavit alleged that

Ms. Llarena, which Gregorio referred to as Ms. Necy, had expressed to her

her desire to buy fertilizers from Feshan Philippines. According to Ms.

Gregorio, she and Ms. Necy in fact were able to arrive at certain terms and

conditions.

4. DISOBEDIENCE
TO SUMMONS ISSUED BY THE NATIONAL ASSEMBLY

Article 150. Disobedience to summons issued by the National Assembly,

its committees or subcommittees, by the Constitutional Commissions, its
committees, subcommittees or divisions. -The penalty of arresfo mayor or a ,
81
TSN, JADela Cruz, 11-1, December 22, 2008, 10:40 a.m.
82
TSN, Ctsotto, VI-I, December 22, 2008, 11:20 a.m.
83TSN,CGCastro, Vlll-I, December 22, 2008, 11:40 a.m.
 66

fine ranging from two hundred to one thousand pesos, or both such fine and
imprisonment, shall be imposed upon any person who, having been duly
summoned to attend as a witness before the National Assembly (Congress), its
special or standing committees or subcommittees, the Constitutional
Commissions and its committees, subcommittees, or divisions, or before any
commission or committee chairman or member authorized to summon witnesses,
refuses, without legal excuse, to obey such summons, or being present before
any such legislative or constitutional body or official, refuses to be sworn or
placed under affirmation or to answer any legal inquiry or to produce any books,
papers, documents, or records in his possession, when required by them to do
so in the exercise of their functions. The same penalty shall be imposed upon
any person who shall restrain another from attending as a witness, or who shall
induce disobedience to a summons or refusal to be sworn by any such body or
official. ( A s amended by Com. Act No. 52.)

Ms. LLarena disobeyed the subpoena for the December 10,

2008 hearing. (ANNEX Q)

D. Ms. DEON~LLA
“JULIE”MISOLA-GREGORIO

1. PLUNDER

She is a principal since she personally took part in the execution of

the act as established by:

* Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla
“Julie” Misola-Gregorio dated January 20, 2009:

“MS. GREGORIO. _ _ _ (7) The second party shall not be, however, allowed to
intervene in all transactions and activities to be undertaken by the first pady except
otherwise, if her presence is needed.

“THE SENATE PRESIDENT. Who is the first party?

“MS. GREGORIO. The first party is Araos Trading.

“THE SENATE PRESIDENT. Araos Trading, okay,

“MS. GREGORIO. Opo.

In compliance with said MOA, Ms. Aytona, through her duly authorized
representative, received from our office blank sales invoices, delivery receipts and
official receipts on March 12-16, 2004 and April 2004.

“Soon, Ms. Aytona, through the order slips dulq signed either by Marilyn Araos,
Cecile Clemente and Bing Salvador started picking up from my warehouse the
 67

corresponding fertilizer from March 15, 2004 to May 29, 2004 through their
corresponding trucking services.

"In the meantime, the Land Bank checks representing the payment were delivered
to our office either by the employee of Ms. Llarena or Ms. Aytona except the
P500,OOO.OO cash which was delivered to me personally by Marilyn Araos, a
representative of Ms. Aytona on April 7, 2004.

"On December 23, 2008, one day after I testified, I was conscientiously moved
to spill the beans so I requested Land Bank at Quezon City Extension Office,
Elliptical Road, Diliman, Quezon City, to furnish me copies of the bank statement
of the account opened on Mach 9, 2004 by Feshan through Ms. Araos. Luckily, on
January 15, 2009, said bank furnished me 41 pages of the Bank Statement. It was
my first time to have access on that account and I found out that the amount of P152,
776,208.00 was deposited from March 9, 2004 to January 31, 2006.

"The foregoing constitutes the true and actual participation that transpired between
Feshan and Ms. Aytona/Ms. Llarena/Ms. Araos regarding this transaction and for this
purpose I hereby state categorically the following:

(a) Feshan, nor any of its officers or employees, were never knowingly involved in
any scheme or device to defraud the government. While it acknowledges its
grievous error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the
company name, commercial documents, and its fertilizer license, as well
as allowing the use of its corporate papers in opening a bank account for the
benefit of persons not connected with Feshan, its actions were guided solely
by its desire to dispose of its fertilizer stocks and to minimize the losses it was
then suffering from the fertilizer line of its business.

(b) Feshan was never a party to any overpricing of the fertilizer in question. The
MOA and Order Slips are hard evidence to support this. It was sold at
P150.00/bottle because of the voluminous orders and there would be no
more promotional or marketing expenses to be incurred.

(c) Feshan never received any payment beyond what was specified in the MOA and
delivery receipts which showed a total of P13, 513,800.00.

(d) Feshan nor any of its officers/employees never received any monies from Land
Bank of the Philippines Current Account No. 1032-IC-0331-101604 opened
on March 9, 2004, nor benefited from the same in any way, form or manner.

(e) While the names of the alleged recipients of the fertilizers were specified in the
order slips, there was no way for Feshan or its officers to confirm the
truthfulness or accuracy of the same, nor was there any need to do the same
since Feshan had executed a MOA undertaking..."
(Annex R)

e Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7'h
hearing: RPAlger XVII-1 January 20, 2009, 1 2 5 8 p.m., pp.1-5:

"THE CHAIRMAN. Mike please. Hiramin mo muna kay Mr. Jocjoc

"MS. PAZ. Ang pagkakatanda ko PO, Your Honor, meron din PO silang
kasama na mga officials ng Feshan.

"THE CHAIRMAN. Sin0 PO 'yon?

 68

“MS.’ PAZ. Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio

“THE CHAIRMAN. Julie Gregorio.

“MS. PAZ. Opo, nandun PO s’ya

“THE CHAIRMAN. Pakituro mo kung sin0 dit0 si Julie Gregorio?

“MS. PAZ. (Witness approached likewise Ms. Gregorio and tapped her
shoulder).

“THE CHAIRMAN. ‘Yan si Julie Gregorio. Sin0 pa’ng nakakita mong nando’n
na andito ngayon? Tumayo nga lang ‘yung mga Feshan officials.

(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the
directive of the Chairman).

“Sin0 pa?

“MS. PAZ. Sila lang PO kasi ’yung talagang nakita ko. Hindi ko PO - - may mga
kasama pa PO kasi silang iba.

“THE CHAIRMAN. 00.

”MS. PAZ. Per0 PO sila PO kasi ‘yung mga hinihingan ko ng mga identification
cards para PO i-confer dun sa signatures appearing on the Secretary’s
Cerfificate.

“THE CHAIRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan
mo ng identification cards.”

Admission of Marilyn Araos regarding the circumstances of the

account as found in the Transcript of Stenographic Notes of the 7Ih
hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15:

“THE CHAIRMAN. Ms. Marlyn Araos, pa’no ka nagkaro’n ng ganyang halagang

PI53 million pinapasok yung pera sa’yo?

“MS. ARAOS. Your Honor, hindi ko PO alam na gano’n kalaking amount ang
pumasok sa.. .

“THE CHAIRMAN. Basta pumipirma ka lang.

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. Pirma ka lang ng pirma,

xxx

“THE CHAIRMAN. Uh-huh.

”MS. ARAOS. So, sabi ko PO, I refused, Your Honor, s’yempre, hindi ko PO
kasi - - naman ako ‘yung may-ari nung Feshan Philippines, how come na ako
PO ang magiging sole signatory nila.

“THE CHAIRMAN. Uh.

 69

“MS. ARAOS. So - - and then PO yon. Na-threat PO ako kasi, Your Honor,
kasi.. .

“THE CHAIRMAN. Ano’ng tinreten (threaten)? Ano’ng ibig sabihin na na-threat

ka?

“MS. ARAOS. Na-threat PO kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung
hindi ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko.
“THE CHAIRMAN. So, nagtatrabaho ka hay Paule?

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. May sweldo ka kay Paule?

“MS. ARAOS. Commission lang PO.

‘‘THE CHAIRMAN. Commission saan? Commission ng ano?

“MS. ARAOS. Commission PO dun sa account na binigay n’ya sa ‘kin.

“THE CHAIRMAN. ‘Yung account na tinutukoy natin?

”MS. ARAOS. No, hindi PO.

“THE CHAIRMAN. Ano?

“MS. ARAOS. Binigyan n’ya PO ako ng assignment sa Region 111 and IV.

“THE CHAIRMAN. Ah, ikaw ang taga-Region 111 and IV ...

“MS. ARAOS. Yes.

“THE CHAIRMAN. . . .taga-kuha ng mga proponent?

“MS.ARAOS. Sa LGU, Your Honor.

“THE CHAIRMAN. Sa LGU.

“MS.ARAOS. Opo.

“THE CHAIRMAN. So, may commission ka do’n. Magkano ang commission mo

do’n?

“MS. ARAOS. One percent lang PO, Your Honor.

“THE CHAIRMAN. One percent. Kung ano’ng mapirmahan ng proponent-LGU

‘yon ang makukuha mo, one percent?

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. Okay, Nung pumirma ka, pa’no mo ngayon, wini-withdraw

‘yung pera? Sino’ng nagsasabi sa yong mag-withdraw ng pera?

“MS. ARAOS. Hindipo kasi ako nagwi-withdraw, Your Honor, eh.

“THE CHAIRMAN. 0 papano?

”MS. ARAOS. Wala PO akong winithdraw (withdraw).

“THE CHAIRMAN. 0, eh, ikaw ang nakapirma doon, eh.

 70

“MS. ARAOS. Yes, Your Honor, per0 ang tao PO kasi ni Ms. Gregorio ang
nagwi-withdraw. Hindi ko PO talaga alam, Your Honor, kung sino’ng nagwi-
withdraw. Kasi nung nasa bangko PO ako, Your Honor, hindi ko PO nahawakan
ang checkbook. Pinapipirma lang PO nila ako ng four blank checks ni Ms. Gregorio
ang then nung that time PO nung pumirma na ko - - may trabaho PO kasi ako no’n
kaya ang sabi ko, “Ma’am, baka puwede mauna na ‘ko,” kasi sabi ko, “Meron pa
PO akong aasikasuhin sa labas.” So, nung pinirmahan ko PO ‘yung tseke sa kanila.
Hindi ko na po alam kung sin0 ang humawak.
“THE CHAIRMAN. Napakatapang mo naman na pipirma ka ng blank check na
hindi mo account.

“MS. ARAOS. Eh, ‘yun nga PO, Your Honor, sabi ko PO nung una ako po’y na-
threaten dahil that time, Your Honor, kasi wala PO akong trabaho...

“THE CHAIRMAN. Magkano ang nakuha mo sa totality nung one percent?

“MS. ARAOS. Sa LGU PO kasi ’yung hinawakan ko, Your Honor, sa Region 111
PO, tatlong municipalities.

“THE CHAIRMAN. Magkano ‘yon?

“MS. ARAOS. Hindi ko PO matandaan kung magkanong exact amount.

“THE CHAIRMAN. Subukan mo.

“MS. ARAOS. More or less PO, ‘yung dun sa Region Ill and IV nasa 15 M PO.

“THE CHAIRMAN. Fifteen million. So, one percent ang nakuha mo do’n?

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. Checking account.

“MS. ARAOS. Opo.

“THE CHAIRMAN. So, ang pinirmahan mo checking - - binigyan ka ka’gad ng

checkbook ni Raquel?

“MS. ARAOS. Ah, hindi PO, Your Honor, pinapirmahan pa n’ya pa ‘ko ng
signature card at saka deposit slip. And then I asked the manager PO kung ano pang
kailangan. So, ang sabi n’ya sa ‘kin, “Wala na, wala na tayong...

“THE CHAIRMAN. So, hindi nakatapos ang bangko sa araw na ‘yon sapagkat
nagpirma ka lang ng signature check at saka ‘yung record mo.. .

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. So, pagkatapos no’n nakita mong pumirma s’ya ng apat na
blank checks?

“MS. PAZ. Hindipo, YourHonor. Kasipo ang lastpo ‘yung inabot ko lang PO
sa kanyang checkbook, ni-receive n’ya PO ‘yon dun sa acknowledgement receipt.”

2. MONEYLAUNDERING
 71

She is a principal since she personally took part in the execution of

the act as established by:

Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘hhearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla
“Julie” Misola-Gregorio dated January 20, 2009;

“MS. GREGORIO. . . . (7) The second party shall not be, however, allowed to intetvene
in all transactions and activities to be undertaken by the first party except otherwise, if
her presence is needed.

“THE SENATE PRESIDENT. Who is the first party?

“MS. GREGORIO. The first party is Araos Trading.

“THE SENATE PRESIDENT. Araos Trading, okay.

“MS. GREGORIO. Opo.

In compliance with said MOA, Ms. Aytona, through her duly authorized representative,
received from our office blank sales invoices, delivery receipts and official receipts on
March 12-16, 2004 and April 2004.

, . “Soon, Ms. Aytona, through the order slips duly signed either by Marilyn Araos, Cecile
Clemente and Bing Salvador started picking up from my warehouse the corresponding
fertilizer from March 15, 2004 to May 29, 2004 through their corresponding trucking
services.

“In the meantime, the Land Bank checks representing the payment were delivered to
our office either by the employee of Ms. Llarena or Ms. Aytona except the P500,OOO.OO
cash which was delivered to me personally by Marilyn Araos, a representative of Ms.
Aytona on April 7, 2004.

“On December 23, 2008, one day after I testified, 1 was conscientiously moved to
spill the beans so I requested Land Bank at Quezon City Extension Office, Elliptical
Road, Diliman, Quezon City, to furnish me copies of the bank statement of the
account opened on Mach 9, 2004 by Feshan through Ms. Araos. Luckily, on January
15, 2009, said bank furnished me 41 pages of the Bank Statement. It was my first time
to have access on that account and I found out that the amount of P152,776,208.00 was
deposited from March 9, 2004 to January 31, 2006.

“The foregoing constitutes the true and actual participation that transpired between
Feshan and Ms. Aytona/Ms. Llarena/Ms. Araos regarding this transaction and for this
purpose I hereby state categorically the following:

(a) Feshan, nor any of its officers or employees, were never knowingly involved in
any scheme or device to defraud the government. While it acknowledges its
grievous error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the company
name, commercial documents, and its fertilizer license, ,as well as allowing the
use of its corporate papers in opening a bank account for the benefit of persons
not connected with Feshan, its actions were guided solely by its desire to
dispose of its fertilizer stocks and to minimize the losses it was then suffering
from the fertilizer line of its business.
 72

Feshan was never a party to any overpricing of the fertilizer in question. The
MOA and Order Slips are hard evidence to support this. It was sold ai
Pl50.00/bottle because of the voluminous orders and there would be no more
promotional or marketing expenses to be incurred.

Feshan never received any payment beyond what was specified in the MOA and
delivery receipts which showed a total of P13,513,800.00.

Feshan nor any of its officerdemployees never received any monies from Land
Bank of the Philippines Current Account No. 1032-IC-0331-101604 opened on
March 9, 2004, nor benefited from the same in any way, form or manner.

While the names of the alleged recipients of the fertilizers were specified in the
order slips, there was no way for Feshan or its officers to confirm the
truthfulness or accuracy of the same, nor was there any need to do the same
since Feshan had executed a MOA undertaking...”

Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5:

“THE CHAIRMAN: Pakituro mo kung sin0 dit0 si Julie Gregorio?

(Ms. Paz likewise approached Ms. Gregorio and tapped her shoulder.)

“THE CHAIRMAN: ‘Yan si Julie Gregorio. Sin0 pa’ng nakikita mong nando’n na
nandito ngayon? Tumayo nga lang ‘yung mga Feshan officials.

(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive
of the Chairman).
“Sin0 pa?

“MS. PAZ. Sila lang PO kasi yung talagang nakita ko. Hindi ko PO - may mga
kasama pa PO kasi silang iba.

“THE CHAIRMAN. 00.

“MS. PAZ. Per0 PO sila PO kasi ‘yung mga hiningan ko ng mga identification cards
para PO i-compare dun sa signatures appearing on the Secretary’s Certificate.

“THE CHAIRMAN . So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo
ng identification cards.

“MS. PAZ. At saka PO si Marilyn Araos.”

Sinumpaang Salaysay of Marilyn Araos submitted on January26,

2009

3. TAXEVASION
 73

The National Internal Revenue of 1997 defines tax evasion as follows:

SECTION 254. Attempt fo Evade or Defeat Tax. - Any person who

willfully attempts in any manner to evade or defeat any tax imposed under
this Code or the payment thereof shall, in addition to other penalties
provided by law, upon conviction thereof, be punished by a fine of not less
than Thirty thousand pesos (P30,OOO) but not more than One hundred
thousand pesos (P100,OOO) and suffer imprisonment of not less than two
(2) years but not more than four (4) years: Provided, That the conviction or
acquittal obtained under this Section shall not be a bar to the filing of a
civil suit for the collection of taxes.

Taking into consideration the testimony of Ms. Julie M. Gregorio,

President of FESHAN, the fact has been established that she did not pay

the 'proper taxes for the fertilizer transactions. Instead, she availed herself

of tax amnesty and paid only about half a million pesos

In her testimony, Ms. Julie Gregorio said that her company, FESHAN,

was able to sell a total of FIFTY MILLION PESOS worth of fertilizers to Ms.

(Ms. Gregorio pointed to Ms. Llarena as the one

Leonicia Mar~o-Llarena.'~

who paid for the f e r t i l i ~ e r . ) ~ ~

Ms. Gregorio said the payment was made in checks amounted to

TWELVE MILLION PESOS and the remaining THIRTY EIGHT MILLION

PESOS was paid in cash.86

But according to the COA report, about ONE HUNDRED FIVE

MILLION PESOS of fertilizers were bought from FESHAN.87

84TSN,LDGalapon, IX-I, December 22,2008, 1150 a.m.

"TSN, LDGalapon, IX-I, December 22, 2008, 11:50 a.m.
86TSN,LDGalapon IX-I, December 22,2008, 11:50 a.m.; TSN, L.Sapida, X - I , December 22,2008, 12:OO
noon
87
TSN, LDGalapon, IX-I, December22, 2008, I t 5 0 a.m.
 74

It was pointed out to Ms. Gregorio that the report of the COA found

that out of the 728 Million Pesos, FESHAN got a total transaction of ONE

HUNDRED FIVE MILLION PESOS worth of fertilizers.88

However, Ms. Gregorio said the total transaction FESHAN had was

only FIFTY MILLION PESOS more or less.89

Ms. Gregorio denied any knowledge as to who received or to where

the remaining FIFTY FIVE MILLION PESOS went.”

Ms. Gregorio claimed that she paid the proper taxes.”

In answer to a query she admitted that FESHAN’s actual sale was

only FIFTY MILLION PESOS worth of fertilizers. However, FESHAN

received a total amount of ONE HUNDRED FIVE MILLION PESOS from

the DA. In other words, there was an excess of FIFTY FIVE MILLION

PESOS.”

Ms. Gregorio explained that the ONE HUNDRED FIVE MILLION

PESOS was entered in FESHAN’s book of accounts as

Ms. Gregorio further explained she was advised to enter the ONE

HUNDRED FIVE MILLION PESOS in their book of accounts and applied

for tax a m n e ~ t y . ’ ~

88
TSN, Guinhawa, XI-I, December 22, 2008 12:lO p.m.
89
TSN, Guinhawa, XI-I, December 22,2008, 12:lO p.m.
”TSN, Guinhawa, XI-I, December 22, 2008, 12:lO p.m.
91
TSN, L.Sapida, X-I, December22, 2008, 12:OO nn
”TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m.
93 TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m.

g4TSN,MTCajandab, 1-2, December22, 2008, 1:20 p.m.

 75

Ms. Gregorio disclosed that it was Ms. Aytona who told her to hire an

accountant. It was this accountant who advised Gregorio to enter in their

book of accounts the ONE HUNDRED FIVE MILLION PESOS instead of

the FIFTY MILLION PESOS only.95

Ms. Gregorio further revealed that Ms. Aytona and the accountant

were the ones who made the c o m p ~ t a t i o n . ~ ~

Ms. Gregorio affirmed that the real or actual sale of FESHAN was

only FIFTY MILLION PESOS though the actual amount received was ONE

H U N D R E D FIVE MtLLlON PESOS.”

Ms. Gregorio said that her corporation did not pay the income tax

covering the said transaction. She disclosed that they availed of the tax

amnesty since the 105 million pesos was not the actual sales they had.g8

In spite of all these, however, note must be made that Ms Gregorio

recanted later her statement and said that in reality she sold the fertilizer

only for @I
50 per bottle/liter.

Ms. Gregorio also revealed that a bank account was opened in the

name of FESHAN at the Land Bank of the Philippines, Elliptical Road

Branch, Quezon City on March 2004. However, Ms. Gregorio had no

access or control over the said account because the signatory thereto was

95TSN,MTCajandab, 1-2, December 22, 2008, 1:20 p.m.

96
TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m.
97
TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m
98
TSN, MTCajandab, 1-2, December22, 2008, 1:20 p.m.
 76

Ms. Marilyn Araos, a former employee of Ms. Marites Aytona. It was in this

account which the 105 million pesos was deposited.”

Gregorio’s acts, with the assistance of Aytona, in manipulating or

cooking the books paved the way for their applying- successfully- for a tax

amnesty and availing themselves of the benefits of such. That she paid

only P500,OOO.OO when in fact more was due government because of what

appeared in her books(P105 plus million) makes the case for violation of

the NIRC- paying less than what was due.

4. Disobedience to Summons issued by t h e National

Ass e m bl y

She failed to appear at the hearings of December 10 and 17,

2008 despite due notice and receipt of subpoena.

It must be noted, in all fairness however, that Ms. Gregorio was a

cooperative witness: she told the Committee the facts regarding the

overprice of the fertilizers upon which we were able to dig deeper; and, she

signed a waiver to all records in the LANDBANK FESHAN account. Without

that waiver, the Committee would never have been able to determine the

real amount that was laundered through it, and would not have been able

to find out who the payees/ beneficiaries were. Her recantation revealed

the lies, the fiction, the falsities, and other fairy tales foisted

”TSN, JADela Cruz, 11-2, December 22, 2008, 1:30 p.m

 77

Committee. Her recantation broke the ramparts of false narratives pcit up

against the truth. Credit thus is given her for her assistance in preseri.ling lo

us a clearer picture of the activities of the cabal. Whether it was pangs of

conscience, a sudden sense of civic-spiritedness, or an epiphany on ilie

way to Damascus that made her change her mind and retract is something

we need not divine now. Suffice it to say that her help has been

tremendous. The prosecution arm of the governmerit is urged to take

cognizance of this fact.

E.MR. REDENTOR
ANTOLIN

1. PLUNDER

He is a principal since he personally took part in the execution of the

act as established by:

Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla
“Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the early part of March 2004, l received a call from Ms. Aytona
through my office coordinator Mae Espiritu, that l have to be present at the Land Bank
Quezon City Extension office on March 8, 2004 to open an account in accordance with
what had been previously agreed upon. When Mr. Antolin, my vice president and l
arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were
made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan
Philippines, lncorporated to be the sole signatory in said account and a Memorandum of
Agreement the pertinent portions of which are quoted below:

“The Second Party shall supply and deliver the subject fertilizer on credit at P I 5 0
per bottle as per proposal dated Februaty 4, 2004 and hereto attached as Annex “A”

“Number three. That the First Party shall issue the check payments to the
Second Party for whatever deliveries to be made by the latter;
 78

“Number four. That by reason of this Joint Venture Agreement, the Second Party
shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be
secured by the First Party, which amount shall be paid upon collection of the covering
purchase orders;

“Number five. That the Second Party shall furnish to the First Pariy all the
necessary documents needed to implement the completion of the whole projects like
business permits, sales invoices, official receipts, and so forth;

”Number six. That the First Party shall protect the interest of the Second Party in
all projects to be undertaken during the effectivity of this agreement;
“Number seven. The Second Party shall not be, however, allowed to intetvene in
a// transactions and activities to be undertaken by the first party except otbewise, If her
presence is needed.

“THE SENATE PRESIDENT. Who is the First Party?

“MS. GREGORIO. The First Party is Araos Trading

“THE SENATE PRESIDENT. Araos Trading, Okay.

“MS. GREGORIO. Opo.

“In compliance with said MOA, Ms. Aytona, through her duly authorized representative,
received from our office bank sales invoices, delivery receipt and official receipts on
March 12-16, 2004 and April 2004.”’00

“x x x That on or about March 8, 2008, my office coordinator, Anna Marie Espiritu

reminded me about the call made by Ms. Aytona about the Memorandum of Agreement
which must be signed at the Land Bank in Quezon City with a message also that she
had already signed that Memorandum of Agreement and that she would appreciate if l
can also affix my conformity thereto x x x

;4ccordingly, on March 8, 2004, l went to the bank together with my Vice President Mr.
Redentor Antolin;
“When we arrived thereat, Ms. Llarena and Ms. Araos were already there and we were
made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan
Phils., Inc. to be the sole signatory in said account and a Memorandum of Agreement x x
xllof

Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5:

“(Ms. Paz likewise approached Ms. Gregorio and tapped her shoulder.)

100
TSN, January 20, 2009, 1:48 p.m., pp. 1-6
‘01 Supplemental Sworn Statement of Deonilla “Julie”Misola-Gregorio
 79

“THE CHAIRMAN: ‘Yan si Julie Gregorio. Sin0 pa’ng nakikita mong nando’n na
nandito ngayon? Tumayo nga lang Lung mga Feshan officials.

“(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive
of the Chairman).

“Sin0 pa?

“MS. PAZ. Sila lang PO kasi ’yung talagang nakita ko. Hindi ko PO - may mga
kasama pa PO kasi silang iba.

“THE CHAIRMAN. 00.

“MS. PAZ. Pero PO sila PO kasi ‘yung mga hiningan ko ng mga identification cards
para PO i-compare dun sa signatures appearing on the Secretary’s certificate.

“THE CHAlRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo
ng identification cards.

“MS.PAZ. At saka PO si Marilyn Araos. ”

Admission of Marilyn Araos regarding the circumstances of the

account as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15:

“THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandali.

Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring
(signatoty) puwede lang doh, di ba si Marlyn Araos lang?

“MS. PAZ. Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. Si Marlyn Araos ang pangalan n’ya.

“MS. PAZ. Opo.

“THE CHAIRMAN. So, s’ya lang ang nakakapirma?

“MS. PAZ. S’ya PO ‘yung authorized based on the Secretary’s Certificate provided PO
sa bank.

“THE CHAIRMAN. Ang mga accounts na it0 umaabot ng humigit kumulang sa PI50
million ang lumabas-pumasok dito. ’Yan ang computation namin.. .

“MS.PAZ. Yes, Your Honor.

“THE CHAIRMAN. ...mga gano’n kalaki.

“MS. PAZ. Yes, Your Honor, Yun PO ‘yung ipinrisinta (present) sa amin

“THE CHAIRMAN. At itong accounf na if0 ay sarado na.

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. Kalian sinarhan itong account na ito?

“MS. PAZ. Sometime in July 2006, Your Honor.

 80

“THE CHAIRMAN. Sometime 2006 itong account na ito isinara, wala ng pera, zero
account.. .

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. Ms. Marlyn Araos, pa‘no ka nagkaro’n ng ganyang halagang PI53
million pinapasok ‘yung pera sa’yo? You’re under oath.
Na-oath nab a ‘to kanina? 0 sige.

“MS. ARAOS. Your Honor, hindi ko PO alam na gano’n kalaking amount ang
pumasok sa.. .

“THE CHAIRMAN. Basta pumipirma ka lang.

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. Pirma ka lang ng pirma.

xxx

“THE CHAIRMAN. Uh-huh.

“MS. ARAOS. So, sabi ko PO, I refused, Your Honor, s’yempre, hindi ko PO kasi -
‘ - naman ako ‘yiing may-ari nung Feshan Philippines, how come na ako PO any
magiging sole signatory nila.

“THE CHAIRMAN. Uh.

”MS. ARAOS. So - - and then PO ‘yon. Na-threat PO ako kasi, Your Honor, kasi

“THE CHAIRMAN. Ano’ng tinreten (threaten)? Ano’ng ibig sabihin na na-threat ka?

“MS. ARAOS. Na-threat PO kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung hindi
ko pipirmahan ang bangko PO, tatanggalin ako sa frabaho ko.”

LAUNDERING
2. MONEY

He is a principal since he personally took part in the execution of the

act as established by:

Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla
“Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the early part of March 2004, I received a call from Ms. Aytona
through my office coordinator Mae Espiritu, that I have io be present at the Land Bank
I
Quezon City Extension office on March 8, 2004 to open an account in accordance with
what had been previously agreed upon. When Mr. Antolin, my vice president and I /

Jf
arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were
 81

made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan
Philippines, Incorporated to be the sole signatory in said account and a Memorandum of
Agreement the pertinent portions of which are quoted below:

“The Second Party shall supply and deliver the subject fertilizer on credit at PI50
per bottle as per proposal dated February 4, 2004 and hereto attached as Annex Y ”:.

“Number three. That the First Party shall issue the check payments to the
Second Party for whatever deliveries to be made by the latter;

“Number four. That by reason of this Joint Venture Agreement, the Second Party
shall be paid an overriding fee equivalent to 2% of the gross purchase orders that will be
secured by the First Party, which amount shall be paid upon collection of the covering
purchase orders;
“Number five. That the Second Party shall furnish to the First Party all the
necessary documents needed to implement the completion of the whole projects like
business permits, sales invoices, official receipts, and so forth;

“Number six. That the First Party shall protect the interest of the Second Party in
all projects to be undertaken during the effectivity of this agreement;

“Number seven. The Second Party shall not be, however, allowed to intervene in
all transactions and activities to be undertaken by the first parfy except otherwise, if her
presence is needed.

“THE SENATE PRESIDENT. Who is the First Party?

“MS. GREGORIO. The First Party is Araos Trading

“THE SENATE PRESIDENT. Araos Trading, Okay.

“MS. GREGORIO. Opo.

“In compliance with said MOA, Ms. Aytona, through her duly aufhorized representative,
received from our office bank sales invoices, delivery receipt and official receipts on
March 12-16, 2004 and April 2004.”’02

‘k x x That on or about March 8, 2008, my office coordinator, Anna Marie Espiritu

reminded me about the call made by Ms. Aytona about the Memorandum of Agreement
which must be signed at the Land Bank in Quezon City with a message also that she
had already signed that Memorandum of Agreement and that she would appreciate if I
can also affix my conformity thereto x x x

“Accordingly, on March 8, 2004, I went to the bank together with my Vice President Mr.
Redentor Antolin;

“When we arrived thereat, Ms. Llarena and Ms. Araos were already there and we were
made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan
Phils.. lnc. to be the sole sianatorv in said account and a Memorandum of Agreement x x j

102
TSN, January 20, 2009, 1:48 p.m., pp. 1-6
103
Supplemental Sworn Statement of Deonilla “Julie” Misola-Gregorio
 82

Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7th
hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5:

“(Ms. Paz likewise approached Ms. Gregorio and tapped her shoulder.)

“THE CHAIRMAN: ‘Yan si Julie Gregorio. Sin0 pahg nakikita mong nando’n na
nandito ngayon? Tumayo nga lang ‘yung rnga Feshan officials.

“(At this juncture, Mr. Antolin and Ms. Gregorio stood up to comply with the directive
of the Chairman).

“Sin0pa?

“MS. PAZ. Sila lang PO kasi ‘yung talagang nakita ko. Hindi ko PO - may mga
kasama pa PO kasi silang iba.

“THE CHAIRMAN. 00.

“MS.PAZ. Per0 PO sila PO kasi ‘yung mga hiningan ko ng mga identification cards
para PO i-compare dun sa signatures appearing on the Secretary’s Certificate.

“THE CHAIRMAN. So, si Julie Gregorio at saka si Reden Antolin ang hiningan mo
ng identification cards.

“MS. PAZ. At saka PO si Marilyn Araos.”

Being a beneficiary of the account up to and about P=456,000.

“THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandal;.

Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring
(signatory) puwede lang do’n, di ba si Marlyn Araos lang?

“MS. PAZ. Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. Si Marlyn Araos ang pangalan n’ya,

“MS. PAZ. Opo

“THE CHAIRMAN. So, s’ya lang ang nakakapirma?

“MS. PAZ. S’ya PO ‘yung authorized based on the Secretary’s Certificate provided PO
sa bank.

“THE CHAIRMAN. Ang mga accounts na ito umaabot ng humigit kumulang sa PI50
million ang lumabas-pumasok dito. ‘Yan ang computation namin.. .

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. . ..mga gano’n kalaki.

“MS. PAZ. Yes, Your Honor, Yun PO ‘yung ipinrisinta (present) sa amin.

“THE CHAIRMAN. At itong account na it0 ay sarado na.

 83

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. Kalian sinarhan itong account na ;to?

“MS. PAZ. Sometime in July 2006, Your Honor.

“THE CHAIRMAN. Sometime 2006 itong account na it0 isinara, wala ng pera, zero
account ...

“MS. PAZ. Yes, Your Honor.

“THE CHAIRMAN. Ms. Marlyn Araos, pa’no ka nagkaro’n ng ganyang halagang PI53
million pinapasok ‘yung pera sa’yo? You’re under oath.
Na-oath na ba ‘to kanina? 0 sige.

“MS. ARAOS. Your Honor, hindi ko PO alam na gano’n kalaking amount ang
pumasok sa. ..

“THE CHAIRMAN. Basta pumipirma ka lang.

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. Pirma ka lang ng pirma,

xxx

“THE CHAIRMAN. Uh-huh.

“MS. ARAOS. So, sabi ko PO, I refused, Your Honor, s’yempre, hindi ko PO kasi -
- naman ako ’yung may-ari nung Feshan Philippines, how come na ako PO ang
magiging sole signatory nila.

“THE CHAIRMAN. Uh,

MS. ARAOS. So - - and then PO ‘yon. Na-threat PO ako kasi, Your Honor, kasi

THE CHAIRMAN. Ano’ng tinreten (threaten)? Ano’ng ibig sabihin na na-threat ka?

MS. ARAOS. Na-threat po kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung hindi
ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko.”‘04

F. MS. MARILYN ARAOS

I.PLUNDER

She is a principal since she personally took part in the execution of

the act as established by:

Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,

lo+
Transcript of Stenographic Notes of the 7thhearing: RPAlger XVII-1 January 20, 2009 1258 pp. 5-15
 84

1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla

"Julie" Misola-Gregorio dated January 20, 2009;

"GREGORIO. x x x In the early part of March 2004, l received a call from Ms. Aytona
through my office coordinator Mae Espiritu, that l have to be present at the Land Bank
Quezon City Extension office on March 8, 2004 to open an account in accordance with
what had been previously agreed upon. When Mr. Anfolin, my vice president and I
arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were
made to sign a Secretary's Certificate whereby Ms. Araos was authorized by Feshan
Philippines, lncorporated to be the sole signatory in said account x x x " ' ~ ~

(a) Feshan, nor any of its officers or employees, were never knowingly involved in
nay scheme or device to defraud the government. While it acknowledges its
grievous error in allowing Ms. Aytona/Ms. LlarenaIMs. Araos to use the company
name, commercial documents, and its fertilizer license, as well as allowing the
use of its corporate papers in opening a bank account for the benefit of persons
not connected with Feshan, its actions were guided solely by its desire to
dispose of its fertilizer stocks and to minimize the losses it was then suffering
from the fertilizer line of its business."'06

Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, 'Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7'h
hearing: RPAlger XVII-1 January 20, 2009, 1258 p.m., pp.1-5:

"THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandal;.

Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring
(signatory) puwede lang doh, di ha si Marlyn Araos lang?

"MS. PAZ. Yes, Your Honor, si Marilyn Araos PO.

"THE CHAIRMAN. Si Marlyn Araos ang pangalan n'ya

"MS. PAZ. Opo.

"THE CHAIRMAN. So, s'ya lang ang nakakapirma?

"MS. PAZ. S'ya PO Yung authorized based on the Secretary's Certificate provided
POsa bank.

"THE CHAIRMAN. Ang mga accounts na it0 umaabot ng humigit kumulang sa

PI50 million ang lumabas-pumasok dito. 'Yan ang computation namin.. ."

. Admission of Marilyn Araos regarding the circumstances of the

account as found in the Transcript of Stenographic Notes of the 7'h
hearing: RPAlger XVII-1 January 20, 2009 1258 pp. 5-15:

105
TSN, Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7
'06TSN, MELNovero IV-2 January 20, 2009, 1:48 p.m., pp. 1-6
 85

“MS. ARAOS. Aminado po ako doh, a l o po ‘yong pumipirma

“THE CHAIRMAN. 00.Sino’ng nagsabi sa ‘yong pumirma ka doh?

“MS. ARAOS. According PO ‘to kay Ms. Gregorio.

xxx

“THE CHAIRMAN, ...at ...

“MS. ARAOS. Ni Mr. Paule rin PO.

xxx

“THE CHAIRMAN. ...dun sa account na yon?

xxx

“MS. ARAOS. Yes, Your Honor.

xxx

“MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita
ko silang dalawa, ‘yun nga PO nagfanong ako kay Ms. Gregorio kung ano’ng
ginagawa ko rito. So, ang sabi niya, “Mag-open tayo ng account.”

Admission of Ms. Araos in her participation in the commission of

the crime under instructions from Mr. Jaime Paule as found in the
Transcript of Stenographic Notes Lpamorca XI-I January 26, 2009
12:29 p.m., pp. 3-8:

”MS. ARAOS. x x x inutusan ako ni Tito Jim na magpakita kina Tita Julie or Julie
Gregorio at kay Tita Necy Llarena. Tinatanong ko kung saan kami magkikifa at
sinabihan ako ni Tito Jim na pumunta ako sa Land Bank of the Philippines, Elliptical
Circle Branch x x x Duon katatagpuin sila Tita Julie Gregorio at Tita Necy Llarena.

“Nang dumating ako doon x x x sinabihan ako ni Tita Julie Gregorio na magbubukas
siya ng account sa pangalan ng Feshan at gagawin daw akong sole signatory. x x x
sinabihan ako ni Tifa Julie na /yon daw ang pinagkasunduan nilang dalawa ni Tito
Jim or Jimmy Paule.

xxx

Sinabihan din ako ni Tito Jim ng umagang iyon pagkatapos kong pumirma ng
signature card na iyon, yung account na iyon na binuksan ko sa Land Bank Nlipfical,
ay papasukan din ng collection ko sa mga LGUs na naka-assign sa akin sa Region
111 and IV.”

Ms. Araos gave us a more lucid picture of the whole operation by her

candid responses to questions propounded to her. She likewise subniilted

a critical photograph, as an attachment to her affidavit, which showed the

attendance of almost all the main characters in this saga: Mr.Jaime Pa~ile,
 86

Ms. Leonicia Marco-Llarena, Ms. Julie Gregorio, Mr. Redentor Antolin, and

herself, in a party hosted by Ms. Llarena and which belied Mr.Paule’s claim

that he did not know any of the other persons subject of this investigation.

The prosecution arm of government is urged to take notice of these

matters.

2. MONEYLAUNDERING

She is a principal since she personally took part in the execution of

the act as established by:

Julie Gregorio’s Testimon as found in the Transcript of

‘
Stenographic Notes of the 7 hearing. tl
. ’
Guinhawa 111-2 January 20,
2009, 1:38 pm pp, 5-7 and MELNovero IV-2 January 20, 2009,
1.48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla
“Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the early part of March 2004, I received a call from Ms.
Aytona through my office coordinator Mae Espiritu, that l have to be present at the
Land Bank Quezon City Extension office on March 8, 2004 to open an account in
accordance with what had been previously agreed upon. When Mr. Antolin, my vice
president and I arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were
already there. We were made to sign a Secretary’s Certificate whereby Ms. Araos
was authorized by Feshan Philippines, Incorporated to be the sole signatory in said
account and a Memorandum of Agreement x x x x ” ‘ ~ ’

(a) “Feshan, nor any of its officers or employees, were never knowingly involved in
nay scheme or device to defraud the government. While it acknowledges its
grievous error in allowing Ms. AytonaIMs. Llarena/Ms. Araos to use the company
name, commercial documents, and its fertilizer license, as well as allowing the
use of its corporate papers in opening a bank account for the benefit of persons
not connected with Feshan, its actions were guided solely by its desire to
dispose of its fertilizer stocks and to minimize the losses it was then suffering
from the fertilizer line of its business.”f08

lo7TSN,Guinhawa 111-2 January 2 0 , 2009, 1:38 pm pp. 5-7

108
TSN, MELNovero IV-2 January 20, 2009, 1:48 p.m., pp, 1-6
 87

Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7’h
hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5:

“THE CHAIRMAN. Okay. Pakibalik lang PO kayo dun sandali.

Pagbigay PO sa inyo ng card nagbukas kayo ng account at sin0 ang signatoring
(signatory) puwede lang doh, di ba si Marlyn Araos lang?

“MS. PAZ. Yes, Your Honor, si Marilyn Araos PO.

“THE CHAIRMAN. Si Marlyn Araos ang pangalan n’ya,

“MS. PAZ. Opo

“THE CHAIRMAN. So, s’ya lang ang nakakapirma?

“MS. PAZ. S’ya PO ‘yung authorized based on the Secretary’s Certificate provided
POsa bank.

“THE CHAIRMAN. Ang mga accounts na if0 umaabot ng humigit kumulang sa

PI50 million ang lumabas-pumasok difo. ‘Yan ang computation namin. ..”

Admission of Marilyn Araos regarding the circumstances of the

account as found in the Transcript of Stenographic Notes of the 7*h
hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15:

“MS. ARAOS. Aminado PO ako do’n, ako PO ‘yung pumipirma

THE CHAIRMAN. 00.Sino’ng nagsabi sa ‘yong pumirma ka doh?

MS. ARAOS. According PO ‘to kay Ms. Gregorio

xxx

THE CHAIRMAN. ...at ...

MS. ARAOS. Ni Mr. Paule rin PO.

xxx

THE CHAIRMAN. _..dunsa account na ‘yon?

xxx

MS. ARAOS. Yes, Your Honor.

xxx

MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita
ko silang dalawa, ‘yun nga PO nagtanong ako kay Ms. Gregorio kung ano’ng
ginagawa ko rito. So, ang sabi niya, “Mag-open fayo ng account.”
 88

G.Ms. MARITESS
AYTONA

1. PLUNDER

She is a principal she personally took part in the execution of the act

as established by:

Julie Gregorio's Testimony as found in the Transcript of

Stenographic Notes of the 7thhearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
1:48 p.m., 'pp. 1-6; and Supplemental Sworn Statement of Deonilla
"Julie" Misola-Gregorio dated January 20, 2009:

TSN, Guinhawa 111-2 Januaw 20, 2009, 1:38 pm p p . 5-7

"GREGORIO. x x x Ms. Aytona approached me in the early part of Februaty, 2004

with the information that she had already verified our eligibility to sell fertilizer and
asked me if l would be willing to sell the fertilizer on credit. Soon, she scheduled an
appointment with me and discussed further some details of the transaction. She
mentioned to me that her business partner, Ms. Llarena would issue checks to cover
the cost of the fertilizer I would be selling. She accompanied me to the office of Ms.
Llarena at Dane Publishing House in Quezon City for me to personally assess and
evaluate her financial capability. Convinced that she could indeed be able to pay a//
the sitting stocks l had at that time, the transaction was consummated. Any
businessman for that matter would grab the tempting offer and would even consider
it as good luck.

In the early part of March 2004, l received a call from Ms. Aytona through my office
coordinator Mae Espiritu, that l have to be present at the Land Bank Quezon City
Extension office on March 8, 2004 to open an account in accordance with what had
been previously agreed upon. When Mr. Antolin, my vice president and I arrived at
the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were made
to sign a Secretary's Certificate whereby Ms. Araos was authorized by Feshan
Philippines, lncorporated to be the sole signatory in said account and a
Memorandum of Agreement x x x x"'*'

"MS.GREGORIO. Opo.
In compliance with said MOA, Ms. Aytona, through her duly authorized representative,
received from our office blank sales invoices, delivery receipts and official receipts on
March 12-16, 2004 and April 2004.

Soon, Ms. Aytona, through the order slips duly signed either by Marilyn Araos, Cecile
Clemente and Bing Salvador started picking up from my warehouse the corresponding
fertilizer from March 15, 2004 to May 29, 2004 through their corresponding trucking
setvices.

In the meantime, the Land Bank checks representing the payment were delivered to
our office either by the employee of Ms. Llarena or Ms. Aytona except the P500,OOO.OO

109
TSN, Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7
 89

cash which was delivered to me personally by Marilyn Araos, a representative of Ms.

Aytona on April 7, 2004.

“On December 23, 2008, one day after I testified, l was conscientiously moved to
spill the beans so l requested Land Bank at Quezon City Extension Office, Elliptical
Road, Diliman, Quezon City, to furnish me copies of the bank statement of the
account opened on Mach 9, 2004 by Feshan through Ms. Araos. Luckily, on January
15, 2009, said bank furnished me 41 pages of the Bank Statement. It was my first [/me
to have access on that account and l found out that the amount of P152,776,208.00 was
deposited from March 9, 2004 to January 31, 2006.

“The foregoing constitutes the true and actual participation that transpired between
Feshan and Ms. Aytona/Ms. Llarena/Ms. Araos regarding this transaction and for this
purpose l hereby state categorically the following:

Feshan, nor any of its officers or employees, were never knowingly involved in
nay scheme or device to defraud the government. While it acknowledges its
grievous error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the company
name, commercial documents, and its fertilizer license, as well as allowing the
use of its corporate papers in opening a bank account for the benefit of persons
not connected with Feshan, its actions were guided solely by its desire to
dispose of its fertilizer stocks and to minimize the losses it was then suffering
from the fertilizer line of its business.

Feshan was never a parfy to any overpricing of the fertilizer in question. The
MOA and Order Slips are hard evidence to support this. It was sold at
Pl50.00/bottle because of the voluminous orders and there would be no more
promotional or marketing expenses to be incurred.

Feshan never received any payment beyond what was specified in the MOA and
delivery receipts which showed a total of P13,513,800.00.

Feshan nor any of its officers/employees never received any monies from Land
Bank of the Philippines Current Account No. 1032-IC-0331-101604 opened on
March 9, 2004, nor benefited from the same in any way, form or manner.

While the names of the alleged recipients of the fertilizers were specified in the
order slips, there was no way for Feshan or its officers to confirm the
truthfulness or accuracy of the same, nor was there any need to do the same
since Feshan had executed a MOA undertaking.. .’’‘o

0 Existence and circumstances relating to the bank account

confirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009, 12:58 p.m., pp.1-5:

“MS. PAZ. Yes, Your Honor. x x x ang pinresent (present) nila sa ‘kin is
the Secretary’s Certificate signed by the corporate secretary and attested by
president PO of the...

“THE CHAIRMAN. When you say “sila”sino yong mga ‘yon?

“MS. PAZ. Si Marilyn Araos PO.

xxxx

110
TSN, MELNovero IV-2 January 20,2009, 1:48 p.m., pp. 1-6
 90

“MS. PAZ. Si Maritess Aytona.

xxxx

”MS. PAZ. Ang pagkakatanda ko PO, Your Honor, meron din PO silang kasama
na mga officials ng Feshan.

“THE CHAIRMAN. Sin0 PO ’yon?

“MS. PAZ. Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio

xxxx

“MS. PAZ. Per0 PO sila PO kasi ‘yung mga hinihingan ko ng mga identification cards
para PO i-confer dun sa signatures appearing on the Secretary’s Certificate.”

2. MONEY LAUNDERING

She is a principal since she personally took part in the execution of

the act as established by:

Julie Gregorio’s Testimony as found in the Transcript of

Stenographic Notes of the 7‘h hearing: Guinhawa 111-2 January 20,
2009, 1:38 pm pp. 5-7 and MELNovero IV-2 January 20, 2009,
1:48 p.m., pp. 1-6; and Supplemental Sworn Statement of Deonilla
”Julie” Misola-Gregorio dated January 20, 2009:

“GREGORIO. x x x In the ear/y part of March 2004, I received a call from Ms. Aytona
through my office coordinator Mae Espiritu, fhat I have to be present at the Land Bank
Quezon City Extension office on March 8, 2004 to open an account in accordance with
what had been previously agreed upon. When Mr. Antolin, my vice president and l
arrived at the said bank, Ms. Llarena and Ms. Malyn Araos were already there. We were
made to sign a Secretary’s Certificate whereby Ms. Araos was authorized by Feshan
Philippines, lncorporated to be the sole signatory in said account x x x””‘

“Feshan, nor any of its officers or employees, were never knowingly involved in nay
scheme or device to defraud the government. While it acknowledges its grievous
error in allowing Ms. Aytona/Ms. Llarena/Ms. Araos to use the company name,
commercial documents, and its fertilizer license, as well as allowing the use of its
corporate papers in opening a bank account for the benefit of persons not connected
with Feshan, its actions were guided solely by its desire to dispose of its fertilizer
stocks and to minimize the losses it was then suffering from the fertilizer line of its
business.”“2

111
TSN, Guinhawa 111-2 January 20, 2009, 1:38 pm pp. 5-7
112
T S N , MELNovero IV-2 January 20, 2009, 1:48 p.m., pp. 1-6
 91

Existence and circumstances relating to the bank account

ccmfirmed by the Land Bank Elliptical Road Manager, Ms. Raquel
Paz as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009, 1.258 p.m., pp.1-5:

“MS. PAZ. Yes, Your Honor. x x x ang pinresent (present) nila sa kin is the
Secretary’s Certificate signed by the corporate secretary and attesfed by president
PO of the.. .

THE CHAIRMAN, When you say “Si1a”sino yong mga yon?

MS. PAZ. Si Marilyn Araos PO.

xxxx

MS. PAZ. Si Maritess Aytona

xxxx
MS. PAZ. Ang pagkakatanda ko PO, Your Honor, meron din PO silang kasama na
mga officials ng Feshan.

THE CHAIRMAN. Sinopo yon?

MS. PAZ. Ang pagkakaalam ko PO nandun si Ma’am Julie Gregorio.

xxxx
MS. PAZ. Per0 PO sila PO kasi yung mga hinihingan ko ng mga identification cards
para PO i-confer dun sa signatures appearing on the Secretary’s Certificate.”

3. TAXEVASION

She provided invaluable assistance to Gregorio in cooking the

corporate books in order for the latter to take advantage of a tax amnesty,

aside from lowering the income figures.

Ms. Gregorio disclosed that it was Ms. Aytona who told her to hire an

accountant. It was this accountant who advised Gregorio to enter in their

book of accounts the ONE HUNDRED FIVE MILLION PESOS instead of

the FIFTY MILLION PESOS only.113

‘I3 TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m

 92

Ms. Gregorio further revealed that Ms. Aytona and the accountant
were the ones who made the omp put at ion.''^

Ms. Gregorio affirmed that the real or actual sale of FESHAN was

only FIFTY MILLION PESOS though the actual amount received was ONE

HUNDRED FIVE MILLION PESOS.115

4. FALSE
TESTIMONY/PERJURY IN SOLEMN AFFIRMATION

While she claimed to be a mere footsoldier, the other participants of

the operation, e.g., Ms. Julie Gregorio, Ms. Leonicia Marco-Llarena, and

Ms. Marilyn Araos claimed instead that far from being a mere footsoldier,
Ms. Aytona was a principal player and had a far greater role in

implementing the scheme.

It was also pointed out that the allegations in Ms. Marites Aytona's

were in contradiction or inconsistent with those stated in Mr. Jose Barredo's

affidavit.'16

In contradiction to Mr. Barredo's claim, Ms. Aytona said she did not

recruit Boy Barredo. Instead, it was Mr. Barredo who called her up about

the project and signified his intention to join a foundation or to be an agent

7
TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m.
TSN, MTCajandab, 1-2, December 22, 2008, 1:20 p.m
Il6TSN, JADela Cruz, 11-1, December 22, 2008, 10:40 a.m
 93

of a supplier of fertilizer. It was she who recommended Mr. Barredo to the

foundation under Mr. Jimmy P a ~ 1 e . l ’ ~

Ms. Aytona stressed she did not receive any instruction from Mr.

Barredo although sometimes the two of them went to DA regional offices

for the accreditation of the foundation.’”

Mr. Barredo, on the other hand, denied approaching Ms. Aytona. He

said it was Ms. Aytona who gave him written instructions regarding the

fertilizer project and it was she who had his calling cards made.’lg

5. DISOBEDIENCE
TO SUMMONS ISSUED BY THE NATIONAL
ASSEMBLY

Ms. Aytona failed to appear at the hearings of December 10,

and 17, 2008 despite due notice and receipt of summons.

H. MR.JAIMEPAULE

1. PLUNDER
‘
He is a principal since he personally took part in the execution of the

act as established by:

117
TSN, JADela Cruz, 11-1, December 22, 2008, 10:40 a.m.
118
TSN, MPMendoza, 111-1, December 22, 2008, 1050 a.m
119
TSN, MPMendoza, 111-1, December 22, 2008,10:50 a.m.
 94

Admission of Marilyn Araos regarding the circumstances of the

account as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009 12:58 pp. 5-15:

”MS. ARAOS. Aminado PO ako doh, ako PO ‘yung pumipirma.

“THE CHAIRMAN. 00.Sino‘ng nagsabi sa ‘yong pumirma ka doh?

”MS. ARAOS. According PO 40 kay Ms. Gregorio.

xxx

“THE CHAIRMAN. ...at.. ,

“MS. ARAOS. Ni Mr. Paule rin PO.

xxx

“THE CHAIRMAN. ...dun sa account na yon?

xxx

“MS. ARAOS. Yes, Your Honor.

xxx

“THE CHAIRMAN. Ba‘f ka nagpunfa doh? Sino’ng nagsabing pumunta ka ro’n?

“MS. ARAOS. As per instruction din PO ni Mr. Paule.

“THE CHAIRMAN. Mr. Paule told you to go to the bank.

“MS. ARAOS. Yes, Your Honor.

xxx

“MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita
ko silang dalawa, ‘yun nga PO nagtanong ako kay Ms. Gregorio kung ano’ng
ginagawa ko rito. So, ang sabi niya, “Mag-open tayo ng account.”

xxx

‘‘MS. ARAOS. Na-threat PO kasi ako ni Mr. Paule na ang sabi n’ya sa ‘kin kung
hind; ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko.

“THE CHAIRMAN. So, nagtatrabaho ka kay Paule?

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. May sweldo ka kay Paule?

“MS. ARAOS. Commission lang PO.”

Mr. Paule started seeking the assistance of Mr. Natalio Castillo

Jr., and other possible investors, to secure financing for the
project.”’ Mr Castillo, wanting to verify Mr. Paule’s credibiliy

‘”TSN, RLTUMAMPOS, X-2, January 20,2009, 2:48PM, p. 6

 95

even asked him how sure Mr. Paule was that he had control of
the project. Mr. Paule then showed Mr. Castillo a copy of a
SARO for P728M (see Annex P) and an NCA representing
about 40% of the SARO’s value.12’ Mr. Paule even said that,
“kausap ko si Jocioc Bolante”.

LAUNDERING
2. MONEY

He is a principal since he personally took part in the execution of the

act as established by:

Admission of Marilyn Araos regarding the circumstances of the

account as found in the Transcript of Stenographic Notes of the 7‘h
hearing: RPAlger XVII-1 January 20, 2009 1258 pp. 5-15:

“MS. ARAOS. Aminado PO ako do’n, ako po ‘yung pumipirma.

“THE CHAIRMAN. 00.Sino’ng nagsabi sa ‘yong pumirma ka doh?

“MS. ARAOS. According PO ‘to kay Ms. Gregorio.

xxx

“THE CHAIRMAN. ...at ...

“MS. ARAOS. Ni MI: Paule rin po

xxx

”THE CHAIRMAN. ...dun sa account na ‘yon?

xxx

“MS.ARAOS. Yes, Your Honor.

xxx

“THE CHAIRMAN. Ba’t ka nagpunta doh? Sino’ng nagsabing pumunta ka ro’n?

“MS. ARAOS. As per instruction din PO ni Mr. Paule.

“THE CHAIRMAN. Mr. Paule told you to go to the bank.

“MS. ARAOS. Yes, Your Honor.

”’TSN, SNTUPAZ, XI-2, January 20, 2009,2:58PM, p. 2

TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 8
 96

xxx
“MS. ARAOS. And then nung nando’n na PO ako sa loob nung bangko x x x x nakita
ko silang dalawa, ‘yun nga PO nagtanong ako kay Ms. Gregorio kung ano’ng
ginagawa ko rito. So, ang sabi niya, “Mag-open tayo ng account.”

xxx

“MS.ARAOS. Na-threat PO kasi ako ni MK Paule na ang sabi n’ya sa ‘kin kung
hindi ko pipirmahan ang bangko PO, tatanggalin ako sa trabaho ko.

“THE CHAIRMAN. So, nagtatrabaho ka kay Paule?

“MS. ARAOS. Yes, Your Honor.

“THE CHAIRMAN. May sweldo ka kay Paule?

“MS. ARAOS. Commission langpo.”

3. FALSE
TESTIMONY/PERJURY IN SOLEMN AFFIRMATION

Mr. Paule may be liable as he denied that he knew anything about

the scheme when in fact, he talked to Mr. Castillo and invited the latter to

be its financier. He denied knowing Ms Araos,Iz4 he denied that Araos

was his employee or that she was not introduced to him during the 50th

birthday party of Ms LlarenalZ5when, in fact, the contrary was true.

Mr. Paule had repeatedly denied, in his affidavit and testimony,

before the Committee that he knew any one of the persons involved in the

scam. But the photograph taken during M s Llarena’s 50th birthday and the

testimony of four witnesses, at least, belie his assertion. His presence was

lZ3 TSN, RLTUMAMPOS, X-2, January 20,2009,2:48PM, p. 6

124
TSN,mhSantos,ll-1, January 26, 2009, 10:59AM,p.6

125
TSN, Caturia, Ill-I, January 26, 2009,11:09AM, p. 4-5
 97

there for all to see. I-le was seated together with Antolin, Gregorio, and

Araos. (see Annex K)

Paule testified that the first time he came across and got to know Ms

Aytona was in 2008 at the DPWH, Region IV-A office when he attended a

bidding,lZ6when in fact they had met and got to know each other in 1999

yet."'

I . UNDERSECRETARY
BELINDA
GONZALES

I.PLUNDER

She is a principal since she cooperated in the commission of the

offense by another act without which it would not have been accomplished

as established by:

The findings of Committee Report No. 54:

"In the Committee of the Whole public hearing of January 31, 2006,
Undersecretary Belinda Gonzales specifically mentioned that it was the Office of
Undersecretary Jocelyn Bolante who ordered the release of funds to the
recipients stated in the list. 'I got instructions from Usec Bolante that this-f 100
Mil/ion-will be transferred to the different regional offices.

"Secretary Luis Lorenzo end Undersecretary Belinda Gonzales sewed as co-

signatories of Bolante in transferring the money from the Department of
Agriculture to the regional field units (RFUs) and to local governments. Assistant
Secretary Jose Felix Montes served as the program's spokesperson. "

126
TSN, RLTUMAMPOS, X-!, January 20, 2009, 11:4XAM, p.2-4

127
Karagdagang Sinumpaang Salaysay, Ms Aytona, December 22,2008
 98

0 The findings of Task Force Abono:

“6.10 It may be stressed that the DA officials who directed the disbursement and
realignment of the P723 million fertilizer fund were Jocelyn “Joc-JOC”1. Bolante,
lbarra T. C. Poliquit and Belinda Gonzales. These public officials appeared to
have full control of the distribution of the fertilizer funds as they even disregarded
fhe original lisf of proponenfs listed in Annex “A” of the SARO. They, together
with those who participated with them, should be held liable for violation of
Section 3(e) of Republic Act 3019 and Article 220 of the Revised Penal Code.”

2. TECHNICAL
MALVERSATION

She is a principal by direct participation since she personally took part

in the execution of the act as established by:

0 The findings of Committee Report No. 54:

7n the Committee of the Whole public hearing of January 31, 2006,

Undersecretary Belinda Gonzales specifically mentioned that it was the Office of
Undersecretary Jocelyn Bolante who ordered the release of funds to the
recipients stated in the list. ‘I got instructions from Usec Bolanie that this-P 100
Million-will be transferred to the different regional offices.

“Secretary Luis Lorenzo and Undersecretary Belinda Gonzales served as co-

signatories of Bolanfe in transferring the money from the Department of
’

Agriculture to the regional field units (RFUs) and to local governments. Assistant
Secretary Jose Felix Montes served as the program’s spokesperson. ”

The findings of Task Force Abono:

“6.10 It may be stressed that the DA officials who directed the disbursement and
realignment of the P723 million fertilizer fund were Jocelyn “Joc-JOC”1. Bolante,
lbarra T. C. foliquif and Belinda Gonzales. These public officials appeared to
have full control of the distribution of the fertilizer funds as they even disregarded
the original list of proponents listed in Annex “A” of the SARO. They, together
wiih those who participated with ihem, should be held liable for violation of
Section 3(e) of Republic Act 3019 and Article 220 of the Revised Penal Code.”

Testimony of former Usec. BolantelZ8:

“THE CHAIRMAN. Opo. Ulitin ko lang PO, mabilis lang. Samakatuwid ’yong pong
sinasabi natin - nabasa ninyo na PO ‘yan? Ano PO ang sinasabi diayn sa SARO?
“For the purpose of farm inputs, “hindi PO ba?

TSN, SNTUPAZ XIV-1 November 28, 2008 2:29 P.M. pp. 5-8
 99

“BOLANTE. Nakalagay PO dito, “for the purchase of farm inputs” as indicated in

Annex ‘X”.
“THE CHAIRMAN. Farm inputs. Opo. Ngayon PO meron pong advice ang SARO
naman dito, “Please be advised that the amount of P728 million only was
released to your agency. Details as follows:

SARO Number, funding source, athorized ...” - ang purpose “to cover the
purchase of farm inputs” as indicated in Annex ‘X“. Opo?
“BOLANTE. That is what is written in this document that you have given.
“THE CHAIRMAN. Opo. Samakatuwid ‘yong 728 million pinabili para sa farm
inputs per0 maraming bumili ng bulldozer, may gamarnit ng kalsada, may
gumamit ng - hindi bulldozer, tractor at lahat, hindi ha? May mga shredders,
tama PO ba ‘yon? Alam ninyo PO ba ang ;big sabihin ng technical malversation?
Alam PO ba ninyo ang ibig sabihin ng technical malverstation? Papaliwanag ko
lang PO. Technical malversation PO under our Revised Penal Code is, “an
offender is a public officer“ kayo PO ay public officer. “He applies public funds or
property under his administration to some public use” ginagamit para sa publiko,
“public use for which public funds or property were applied is different from the
purpose for which they were originally appropriated by law or ordinance.” Ang
original intention PO nito is para sa tinatawag nating hindi PO implements per0
inputs, hindi PO ba?

“BOLANTE. Ang sa pagkakaintindi ko PO farm inputs - since the source of the

fund ay nanggaling PO sa rice and corn at saka sa HVCC, it can actually be used
for farm implements likewise.
“THE CHAIRMAN. That is according to you?

‘BOLANTE. Right. That is my honest understanding PO.

“THE CHAIRMAN. Parang ‘yang ang research ninyo? Siguro ipatanong ninyo sa
inyong abogado dahil ‘yong farm inputs malinaw sinabi ninyo kanina pesticide,
insecticide, medaling buhatin, pampataba ng lupa. ‘Yong farm implements PO
malaki ang diperensya noon, bumibili kayo ng traktora, bumibili kayo ng ibang
bagay at dalawang dokumenfo ‘yong kinuha ninyo na in-authorize kayo for farm
inputs. lsang SARO galing sa DBM at saka notice of cash allocation na pang-
inputs.
“BOLANTE. Your Honor, you also mentioned about the farm-to-market road as
explained by the Honorable Senator Migz Zubiri. Actually, they made a formal
request for the reallocation of the fund from farm inputs to the farm-to-market
road and it was duly approved by the DBM. Hence, it was implemented. So, what
we did was to transfer the fund to the DPWH which was the implementing
agency.
“THE CHAIRMAN. 0, baligtad na ngayon. DBM na ngayon ang nagiimplemenf?
“BOLANTE. No, what I mean is that
“THE CHAIRMAN. Nagbago. Binago na ninyo ‘yong Revised Administrative
Code.
“BOLANTE. No. what l mean is to -- for the change what I could recall was for
the change of the use of that 5 million allocated to Senator Migz Zubiri, there
was a formal request made as a matter of procedure to the DBM and the DBM
upon the endorsement of the DA approved the request of then Congressman
Migz Zubiri, And so on the basis of the approval, we transferred the fund to
DPWH which implemented the farm-to-market road.

“THE CHAIRMAN. May I ask COA, pwede ba ‘yon? Kapag may allotment
pwede, alam ko, pwede i-realign, hindi ba?
 100

“MS. JIMENEZ. Your Honor, the case of the funds supposed to be under the
proponents of Senator Zubiri.. .

“THE CHAIRMAN. Hindi PO. I am not asking about Senator Zubiri. I am

taking it..

“THE CHAIRMAN. ...I am faking it as a general statement here na ‘yung SARO

and the NCA say for farm inputs. ‘Yung case ni Senator Zubiri if he got the
permission.. .

“MS. JIMENEZ. Yes.

“THE CHAIRMAN. ...that means pinayagan. Per0 ‘yung iba maraming binili,
implements, puwede ho ba ‘yon?

“MS. JIMENEZ. Your Honor, dit0 sa case ng 728, ang alam ho iang naming
na nabili nila na implements are the shredder, shredder lang PO.

“THE CHAIRMAN. Hindi ho, merong mga pumps ang alam ko, eh. May mga
pumps, may mga tractors. Di ba dit0 sa Paraiiaque merong - - sa ibang lugar,
diba?

“MS. JIMENEZ. Shredder PO ‘yon

“THE CHAIRMAN. Are shredders inputs?

“MS. JIMENEZ. Dit0 nga PO di namin s’ya kinlasify (classify) as input. Kasi
dun sa definition ng.. .

“THE CHAIRMAN. Assuming that you’re correct na shredders lang, are

shredders inputs or implements?

“MS. JIMENEZ. lmplements

“THE CHAIRMAN. Implements. So, is there a violation of the law there?”

Testimony of COA Director Flerida JimenezlZ9:

“MS. JIMENEZ. Tama PO ‘yan, Your Honor. Na-account PO namin ‘yong 728
million per0 hindi PO ang ibig sabihin ay tama ‘yong pinagkagastusan ng 728.

“SEN. ESCUDERO. Do you confirm, Ma’am, that based on your COA report,
there are some items that are overpriced by 700 to 1,000 to 1,250 percent, that
the foliar fertilizer was diluted in some respects, in fact, up to 42 percent, that the
farmer-beneficiaries listed as supposed to be recipients of the fund, at least, to
the tune of 56 percent did not comply with certain circulars as to being qualified
to receive such a fund from government?

“MS. JIMENEZ. Tama PO ‘yon lahat, Your Honor.

“SEN. ESCUDERO. So, accounfed man, illegal, bawal, at puwede nating

sabihing labag sa batas ang ginawang pagre-release.

“MS. JIMENEZ. May mga nakita PO kaming diperensiya, Your Honor, sa audit
namin. ”

129
TSN,Caturla, 11-1, November25, 2008, 10:31 am, pg. 6
 101

J. JOSELITO
FLORDELIZA

1. MONEYLAUNDERING

He may be liable for money laundering as he allowed the use of his

Foundation and the Foundation’s account as conduits for to illegally-

obtained monies from go~ernment’~’:

“THE CHAIRMAN. Can you please name the foundation? Please press the
microphone.

“MR. FLORDELIZA. National Organization for Agricultural Enhancement and

Productivity Incorporated.

“THE CHAIRMAN. Are you awa‘re that this is the foundation that Ms. Aytona is
alleging to have represented as a proponent? You are aware?

“MR. FLORDELIZA. Yes, Your Honor.

“THE CHAIRMAN. And you are coming here on your own free will, right? Please
press the microphone.

“MR. FLORDELIZA. Yes, Your Honor.

“THE CHAIRMAN. Now, in the course of being utilized by Ms. Aytona as the
proponent, how did it happen? Did she come to you?

“MR. FLORDELIZA. She was introduced to me by Mr. Castillo.

“THE CHAIRMAN. Mr. Castillo introduced Ms. Aytona to you? Pinakilala kayo?

“MR. FLORDELIZA. Yes, Your Honor.

“THE CHAIRMAN. Nung pinakilala kayo, anong sinabi nila?

“MR. FLORDELIZA. There is no specifics, Your Honor.

“THE CHAIRMAN. 0 tapos, anong nangyari?

“MR. FLORDELIZA. At that time, I told them na kasi during that time, Your
Honor, I’ve already a permanent employment.

“THE CHAIRMAN. Yes

130
TSN, RLTumampos,X-2, January 20,2009,2:48pm,pp. 2-4
 102

“MR. FLORDELIZA. So, I told them that I could no longer personally monitor or
handle those projects. But they told me that you do not need to because we will
handle all the documentation and all we need is your foundation and your-the
signature is required.

“THE CHAIRMAN. And would you have been paid for that?

“MR. FLORDELIZA. Yes, Your Honor.

“THE CHAIRMAN. And how much was the fee offered to you?

“MR. FLORDELIZA. I was proposed a fee of 3 percent for the project.

“THE CHAIRMAN. Three percent for evety order made?

“MR. FLORDELIZA. For whatever amount is ....

“THE CHAIRMAN. And were you paid for that?

“MR. FLORDELIZA. Yes, Your Honor, I think so.

“THE CHAIRMAN. You were paid.

“MR. FLORDELIZA. Yes, sir.

“THE CHAIRMAN. How much were you paid, if you will recall?

“MR. FLORDELIZA. I could not remember the exact amount, Your Honor, but I
believe I signed something like six or seven MOAS.”

The crime of plunder may absorb the other crimes found to have been

committed here. But that is not for us to decide. The prosecution service

and the courts will have to decide that as the case, we hope, progresses.

However, there is a need to show the whole panoply of malfeasance,

misfeasance or nonfeasance committed if only to show the people the

many wrongdoings perpetrated upon them.

As a last word on the witnesseslresource persons: the comportment and

demeanour of the witnesseslresource persons in this investigation not only

was frustrating, it was downright insulting.

 103

Here was Bolante, not submitting to any of the subpoenas then issued,

flying to the US, and appearing only because he was deported back to the

Philippines. On his way out of the airport, he rides a wheelchair, clutching

his chest. He is brought by an ambulance to the hospital, where he has

himself confined. He appears before the Senate acting gaunt, meekly

asking permission to eat and take medicines while the hearing is ongoing-

and only to tell lies.

Most of the other witnesses would not appear immediately after service

of a subpoena, some had to be threatened with an arrest and detention

before appearing. Mr. Paule shows up only after the threat of detention at

the Pasay City Jail was issued. Some would wait until a testimony of

another is heard before they made themselves available. Most would

submit their affidavits on the very hearing day itself, forcing the Committee

to analyze the statements on the fly. They fall sick, they have themselves

confined in hospitals, they hide until they are found. We found this practice

to be not only in bad taste, but in bad faith as well. The excuses made for

their non-appearance are myriad, and the deviousness displayed appalling.

They wrestled with the Committee hoping that the Blue Ribbon would tire,

would forget about them, would surrender. They discounted the zeal and

passion the Committee had in unearthing the facts, forgetting that while

they could run, they couldn't hide. Your Committee on Public Accountability

and Investigations commits that we will strive, we will seek, we will find, and

we'will not yield.

 104

None, save for Mr. Castillo, came on his own to do his duty as a goocl

citizen to help uncover the truth, and to aid the Senate in its legishtive

work. Mr Castillo hardly hesitated when informed that he mighi: be asked to

testify before the Committee; he readily performed his civic duty, without

the presence or assistance of counsel. He felt he didn't need one, for he

believed that the unvarnished truth with him was more than enough io

accompany and protect him. Many crimes, many wrongdoings could be

solved in this country if only many of our citizens act commendably and

perform their responsibility by volunteering to tell ,the truth in nmny

proceedings and investigations.

II. We recommend the passage of the following proposed measures:

A.AMLA AMENDMENTS

To protect its asset recovery program and to curb and

discourage all forms of money laundering.

Republic Act No. 9160 as amended by Republic Act No. 9194 otherwise known
as The Anti-Money Laundering Act of 2001, allows the Anti-Money Laundering
Council (AMLC) to file before the Court of Appeals an ex parfe application before
the Court of Appeals to freeze any monetary instrument or property that is in any
way related to any unlawful activity13' as defined by the Anti-Money Laundering

131 Section 3

(i)'Unlawful activity' refers to any act or omission or series or combination thereof involving or having direct
relation t o the following:

(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal
Code, as amended;
(2) Sections 4, 5, 6, 8, 9, 10, 12, 13, 14, 15, and 16 of Republic Act No. 9165, otherwise Iknown as the
Comprehensive Dangerous Drugs Act of 2002;
 105

Law. The Court of Appeals may issue a freeze order upon the finding of
probable cause.

The freeze order issued by the Court of Appeals shall only be for a period of
twenty (20) days unless extended by the Court. In relation to this, on 15
December 2005, the Supreme Court issued Supreme Court Administrative
Memorandum No. 05-11-04-SC otherwise known as Rules of Procedure in
Cases of Civil Forfeiture, Asset Preservation, and Freezing of Monetary
Instrument, Property, or Proceeds Representing, Involving, Or Relating to an
Unlawful Activity or Money Laundering Offense Under RA 9160 as Amended.

The Supreme Court Memorandum provides that there can be a non-extendible

six (6) month extension of the freeze order. Section 53 (b) of the Rule provides:

Extension. - On motion of the petitioner filed before the expiration of

twenty days from issuance of a freeze order, the court may for good
cause extend its effectivity for a period not exceedingsix months.

Thus, there are instances when due to negligence, lack of interest or by inability
to come up with a solid case due to sheer volume of evidence, the AMLC, Office
of the Ombudsman or the Office of the Solicitor General fails to file an
attachment case under Rule 57 of the Rules of Court and/or file a case under RA
1379 otherwise known as An Act Declaring Forfeiture in Favor o f the State any

(3) Section 3 paragraphs 6 , C, E, G H and I of Republic Act No. 3019, as amended; otherwise known
as the Anti-Graft and Corrupt Practices Act;
(4) Plunder under Republic Act No. 7080, as amended;
(5) Robbery and extortion under Articles 294, 295. 296, 299, 300, 301 and 302 o f the Revised Penal
Code, as amended;
( 6 ) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. 1602;
(7) Piracy on the high seas under the Revised Penal Code, as amended and Presidential Decree No.
532;
(8) Qualified theft under Article 310 of the Revised Penal Code, as amended;
(9) Swindling under Article 315 of the Revised Penal Code, as amended;
(10) Smuggling under Republic Act Nos. 455 and 1937;
(11)Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of
2000;
(12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as
defined under the Revised Penal Code, as amended; including those perpetrated by terrorists
against non-combatant persons and similar targets;
(13) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the
Securities Regulation Code o f 2000;
(14) Felonies or offenses of a similar nature that are punishable under the penal laws of other
countries.
 106

Property found to Have Been Unlawfully Acquired by any Public Officer or

Employee and Providing for the Proceedings Therefor praying at the same time
for a preliminary attachment. When any of these three agencies fail to file any of
the two actions, the freeze order will automatically lapse giving the owners of the
accounts a free hand to dispose of the money or property as they wish.

Once the alleged offenders take hold of the accounts or property suspected to be
related to money laundering, then the Republic of the Philippines is immediately
deprived of the possibility to recover unlawfully acquired assets and is prejudiced
by the loss of property.

Therefore, in the best interest of the Republic, it is very much needed to amend
Section 10 of AMLA to be able to protect its asset recovery program and to curb
and discourage all forms of money laundering. The proposed amendment seeks
to extend the extension period of the freeze order from an additional six (6)
months as provided by the Supreme Court Memorandum to two (2) years.
However, the two (2) year freezing should be applied for, every six (6) months in
order to show that there is no grave abuse of discretion on the part of AMLC.
Once the Republic has duly applied for attachment and forfeiture under RA 1379
in cases where the public officer is the alleged offender, then there will no longer
be any need for the freeze order.

Amendment: Extend the extension period of the freeze order

from an additional six months to two years. The two year

freeze should be applied for every six months to show that

there is no grave abuse of discretion on the part of AMLC.

B. PROCUREMENT ACT AMENDMENT

 107

In the case of the fertilizer fund scam, a number of

foundations, people’s organizations, NGOs and associations

have become agents of money laundering transactions.

Amendment: Include private institutions, NGOs, people’s

organizations and other private entities that receive

government monies in the coverage of the Procurement Act.

C. AMLA RULES REVISION

The Rules of the AMLA provide for absolute secrecy in its

investigations, thwarting sometimes investigations of

Congress into misfeasance, malfeasance, and non-feasance

of public officers.

Amendment: Revise the Rules, as written by the

Congressional Oversight Committee on the Anti-Money

Laundering Law, to reinstate the provision allowing

Congress some powers of inquiry relevant to its

investigations.13*

D. AMENDMENT TO THE BANK SECRECY ACT

RA 1405 has often been a stumbling block in finding the

prosecution of offenders. Since public officers and

132
Letter Of 21 January 2009 already sent to Senator Edgardo J Angara, Chairperson for the Senate
 108

employees have chosen their profession and they are bound

by the Constitution to be accountable to the people, serve

them with utmost responsibility, integrity, loyalty and

efficiency, act with patriotism and justice, and lead modest

lives, it is but proper that the right to secrecy of their bank

deposits be relaxed a bit.

Amendment: Amending the Bank Secrecy Act to include in

the exception public officers charged before the Courts for

violations of Sections 3(b) and (c), under Corrupt Practices

of Public Officers.

E.AMENDMENT TO THE RULES OF PROCEDURE

GOVERNING INQUIRIES IN AID OF LEGISLATION RE

DIRECT CONTEMPT

In the recent past, the power to immediately cite persons in

contempt has been frustrated due to the absence of a

provision of Direct Contempt in the Senate Rules of

Procedure Governing Inquiries in Aid of Legislation

Amendment: Include the provision on Direct Contempt,

Indirect Contempt and Arrest in the Rules of Procedure

Governing Inquiries in Aid of Legislation.

 109

F. SUGGESTED STANDARD PROVISION TO BE ADDED TO

THEGAAEVERYYEAR

Amendment: Include a provision in the GAA that will

penalize officials and employees for failure to submit

quarterly financial and narrative accomplishment reports.

111. We urge the Ombudsman to decide on the cases which have been

pending with them for nearly 1,300 days. The Ombudsman has mofu

proprio powers to conduct an investigation into wrongdoings of

government officers. Had it exercised its powers more aggressively, the

resolution of the Fertilizer scam and other issues related to it could have

been yesterday's news. Alas, such is not the case here. And so now is

the time for the law enforcement agencies and the prosecution arms of

government to perform what it was originally tasked to do.

IV. We recommend that an amendment to the Constitution be made

making the Ombudsman an elective rather than an appointive position.

We can ensure its independence from the Executive, more than what we

have now, by making the position subject to elections. We need an

Ombudsman beholden only to the people. The mode of election, and or

nomination of candidates for this position, e.g., candidates who may he

vetted first by the Supreme Court before they are allowed lo run, need

not be decided right now. But this issue has to be discussed and there is
 110

no better time than today. Needles to say, any changes to our exkting
'
Charter must be made only after the 2010 elections.

CONCLUSION

'
Insofar as this aspect of the Bolante case and his ilk are concerned

our task has ended. We thank the Magsaysay and Arroyo Committees for

starting the work that led to this current effort towards uncovering more

personalities, and more acts - no less egregious, no less criminal. We are

confident that our efforts have revealed many pieces of this fertilizer puzzle.

But while this report is complete and this closure final insofar as this

(Bolante) aspect of the case is concerned, we do not discount that there

might still be out there things that remain for us to ascertain, e.g., former

DA Sec. Luis P. Lorenzo Jr. has not testified yet. Has he stayed abroad to

hide or has he resided overseas because he could not stomach what was

happening in his department?

Agencies of the Executive Department, such as the DBM, including

then Secretary Emilia Boncodin were so grossly remiss in their duties. That

g728M was released without their knowledge is difficult to believe. At the

very least, it could have exercised enough supervision over such a

gargantuan amount to ensure that it was not wasted or stolen.

 111

The Executive Department should have supervised its agents and

subordinates well, rewarding those who do good work and punishing those

who do badly, rather than, for example, allowing the appointment of

Poliquit in December 2005 to a cushy position as GSlS Vice President

even as the controversy remained unresolved. It should first have ensured

that the investigation was concluded before such promotion was made.

And for promoting Belinda Gonzales to the post of DA Undersecretary,

without a very thorough vetting process that could have bared the s c a m

the Executive here committed twice the sin of omission.

As early as the 13'' Congress, the Senate had found that the

President herself "must be held accountable in the mismanagement of the

fertilizer fund and take it upon herself to institute measures to correct the

flaws in her a d m i n i ~ t r a t i 0 n . I ~ ~

The President is the Chief Administrative Officer of the Government.

While the Constitution is not explicit about this position, by reason of her

being the Chief Executive and the head of government, she exercises and

wields all administrative powers inherent in her position.

133
Committee Report No. 54, 13IhCongress, p. 36
 112

A corollary rule to the control powers of the President is the "Doctrine

of Qualified Political Agency." As the President cannot be expected to

exercise all her control powers at all times and in person, she will have to

delegate some of them to her Cabinet members. The Doctrine of Qualified

Political Agency provides that all executive and administrative

organizations are adjuncts of the Executive Department. The heads of the

various executive departments are assistants and agents of the Chief

Executive, Except in cases where the Chief Executive is required by the

Constitution or law to act in person or the exigencies of the situation

demand that she acts personally, the multifarious executive and

administrative functions of the Chief Executive are performed by and

through the executive departments. Thus, the acts of the Secretaries of

such departments, performed and promulgated in the regular course of

business, unless disapproved or reprobated by the Chief Executive, are

presumptively the acts of the Chief Executive.'34

Thus, while the Committee found no evidence directly linking the

President to the fertlizer scam, the acts of the former Undersecretary of the

DA, Mr. Jocelyn lsada Bolante and his cohorts, now Undersecretary

Belinda Gonzales and now GSIS Vice President lbarra Poliquit, are

deemed acts of the President since they acted within the scope of their

authorities given to them by then Secretary Luis Lorenzo, Jr. Since there

134
Agpalo, Ruben E., Administrative Law, Law on Public Officers and Election Law, p.28, Rex Bookstore,
2005 citing Juat v. Land Tenure Administration, 1 SCRA 361 (1961) and Carpio v. Executive Secretary,
206 SCRA 290 (1992)
 113

was no reprobation or disapproval coming from President Gloria

Macapagal-Arroyo regarding their actions, it can easily be inferred that the

President acquiesced to such acts. Does anyone really believe that

Bolante, et. al., would have been able to malverse such a gargantuan

amount and continue to evade all sorts of liability without the acquiesence

of Malacanang?

The President's knowledge as to the fertilizer fund scam controversy

had, in fact, been alluded to by former DBM Secretary Emilia Boncodin in

her testimony during the 13'h Congress: "When asked if the fertilizer fund

request made by Usec. Bolante for the Department of Agriculture was upon

the instruction of the President, Secretary Boncodin replied with, 'I would

imagine so. !>,I35

lnspite of that knowledge, there was no close monitoring of how the

money was spent, and, more importantly, whether the funds were spent

wisely and well. The omission was so appalling that the people involved

were allowed to get away with it. Despite storm clouds appearing in the

horizon, promotions and new appointments were instead made. The

gathering storm should have been a warning that something was amiss.

The exposure that first appeared in the media should have been impetus

!7
Committee Report No. 54, 1 March 2006, 13th Congress of the Senate, p. 13
 114

enough to act, to investigate, to correct, to punish. None was done even

after the Senate during the 13'h Congress issued its findings in CR 54.

The AMLC was slow, the Bureau of Internal Revenue was absent, the

DBM allowed it, the President and the DA Secretary did not move.

What we have heard instead from the administration is deafening

silence. No investigation, no condemnation, not a whisper, not a whimper,

nary a sound - not even a slap on the wrist. This lack of supervision, this
negligence in monitoring, this lack of accountability, this omission was so

gross; it was tantamount to bad faith, even criminal neglect.

This is not the first corrupt operation that has been committed and, if

the leaders in the Executive Department are not careful and more

circumspect, more deliberate, and more judicious in the release of funds,

this will not be the last. This lack of monitoring by officials in the

administration resulted in such wastage of vast amount of funds- akin to a

faucet leak which every one notices but which no one bothers to report for

repairs- with the water continually running until the water runs out.

This dearth of monitoring efforts led to a maldistribution of resources:

favored (or priority) ones getting more than others. While many government
 115

agencies have to wrestle with others to get their fair share of inadequate

resources, here the favorites get the lion's share without even having to go

through the bureaucratic maze all in the name of greed and re-election.

Worse, the absence of close supervision facilitated the malversation of

public funds and allowed the conspirators to divert funds that had been

allocated for, and should have otherwise gone to the benefit of, the

farmers-constituents of the different LGUs and congressional districts.

Upon the release of a huge amount of money, bells and whistles should

have gone off in the DBM, warning them, telling them to monitor closely the

manner by which the funds were to be distributed. They should have

required regular reporting of how the money was spent, even before the

COA came in. It was just but responsible. This way, no releases should

have been allowed without first accounting for the past expense. The DBM,

in this case, has underserved the people.

Particularly egregious are the acts of Jocelyn Bolante. He claimed to

have exerted efforts to stamp out corruption at the DA by drafting a memo

to Sec. Lorenzo to report allegations of corruption. However, no copy of

any such memo was ever presented to us, and Sec. Lorenzo, in a phone

call, even denies having ever received such a memo. At the same time,

even assuming the truth of Bolante's claim, he should not have stopped at

just drafting a memo for Sec. Lorenzo, after he was informed of the

existence of a syndicate in the DA, if he was true to his duty. He should

have filed and pursued a case with the Ombudsman or investigated until all
 116

people in the group were exposed and punished. The allegations of bribery,

told to him, were so serious and so grave, that he should have acted with

great dispatch. By his inaction, he failed to live up to the precepts of the

Code of Conduct and Ethical standards for Public Officials and Employees,

that “they shall enter public service with utmost devotion and dedication to

duty. (Section 4(b), RA 6713) Worse, our hearings have established that

Bolante, far from crusading against corruption, was instead himself

engaged in a systematic scheme of corruption. By his acts he failed to live

up, nay he violated his Rotary creed: what he said was not the TRUTH,

what he did was not FAIR to the Filipino, what he did was not BENEFICIAL

to all. He must have been able to rise up the Rotary International hierarchy

by masquerading himself as a person who believed in its tenets, but in

reality was violating them. He has brought shame to himself, to his family,

and to his organization. He has done disservice to the nation, and has

wronged his country.

We dread to see again the unleashing of packs of wolves feasting

upon already-scarce resources of government. In all probability, there were

other wolf packs involved in the disposition of the remaining P535M in

fertilizer funds that have yet to be traced. The practice of allowing the

appearance/insertion of “lump sums” in budget, especially in re-enacted

ones; the non-transparency of these items’ usage especially as they refer

to projects already completed during the year previous, will give a free rein

to these sharks, sensing blood, turning into a feeding frenzy- especially /

 117

during times of elections and natural disasters. How many times have we

seen this? How many times do we still have to suffer for this?

The Ombudsman failed to do its duty when no resolution was made

on this case even after more than a thousand days. We denounce its

inaction in the strongest possible terms. Instead of being part of the

solution to corruption and justiying the existence of its office, it has instead

become part of the problem, worsened the climate of corruption, and given

cause for its abolition. By its blatant inaction and callous behaviour, it would

seem as if it has been coopted by the corrupt. It seems that instead of

apprehending the caravans of thieves, the Ombudsman has turned a blind

eye and has allowed them to go on their merry way.

The gross inaction by the Ombudsman is one that must not be

allowed or tolerated by the people and by the leaders of this country.

Certainly, and at the very least, the Senate will not tolerate the

Ombudsman’s criminal negligence. The Senate’s primary constitutional

function is to pass laws; surely we can concentrate on that. We cannot

punish corrupt officials, we cannot send them to jail. However, when the

people’s cry for justice and resolution to these problems remain unheeded,

unanswered, and unaddressed by the Ombudsman, we will cast shame on

the shameful, step up to the plate, and act.

 118

To be sure, there are already serious and mounting calls for her

resignation, and we support them. This Committee and this Senate are

done repeatedly reminding her to act and discharge ier duty. The Senate

will not .hesitate to exercise its power of the purse as well as other

legislative and constitutional powers to enact wholesale reforms in the

Office of the Ombudsman and remove its occupants, if not effect its de

facto abolition. The Ombudsman must be held accountable for allowing

people to get away with crime.

Our people are losing their patience. One time on a street of

Tagaytay, a farmer, selling her produce, approached the Committee

Chairman to tell him “sir napapanood namin kayo, ipakulong nyo yang

Bolante na yan. Hirap na hirap na kami dito, at yang mga taong yan ay

nagpapasasa lang pala sa kaban ng bayan,” and that the Senate dispense

with the formalities and just send the scoundrels straight to jail. Who can

fault her? Our farmers and other needy sectors are being used by the

corrupt as cover for their crimes.

Our farmers are already on the streets. We must not stand idle. As if

stealing from government wasn’t bad enough, the nefarious acts of these

corrupt people ended up victimizing the farmers: the real, direct and true

victims of this scam.

 119

Again and again we read or hear of reports of graft here and

corruption there - the recent World Bank report on collusion in the bidding
process has again put our country’s integrity in question. The Philippines

has also been rated the most corrupt Asian economy by the Political and

Economic Risk Consultancy (PERC). If we do not put a stop to corruption,

we will be doomed to perpetual notoriety - a reputation most unfair to our

people, millions of whom will be forced to find their future in foreign shores.

The anger of the people is palpable in the streets and in the fields. A

social volcano is smouldering and unless we do something soon, it is

bound to explode. It is hoped that we do not come to that - we still are a

country of laws and not of men. But we must heed the voice of our people if

we are to remain a Republic of the people.

Although it is our devout wish that there be less investigations by the

Senate, there remains a duty to look at, and pursue the truth about serious

allegations of many irregularities in government: the collusion among

contractors and government officials in World Bank-financed infrastructure

projects, the bribery allegations surrounding our drug enforcement

agencies, the ZTE broadband scandal, and procurement anomalies in the

Armed Forces of the Philippines, to name a few. We must get the rascals

out of government.
 120

We must stop the “coarsening of our political culture” that is facilitated

by those who choose to be “silent witnesses to evil deeds.” ‘We will not

accept scandalous behavior in government and in society. We will,

instead, raise the standard of duty and accountabilty in our country.

The Blue Ribbon Committee will not hesitate to exercise political will

in investigating and exposing malfeasance, misfeasance and nonfeasance.

Those who are summoned must be forewarned that no one should trifle

with the Senate and the Blue Ribbon Committee lest they be cited for

contempt and get their just deserts. Fiatjusfifia ruat coelum.

Moreover, because of continued Ombudsman inaction, the

Committee has been forced to break ground and file cases (and when

justified, will continue to file cases) against corrupt government officials, as

it has done against Bolante. The Committee Chairman is rather surprised

that the case the Committee filed with the DOJ against the fertilizer fund

conspirators has yet to proceed. If the information we have is correct, they

are awaiting our Committee Report. Why they have to wait, why they

cannot investigate on their own utilizing our leads or the information we

have discovered, escapes us.

 121

Why have there been so many brazen shootings and murders within

the DA over the years? We, therefore, find it a moral imperative to call on

the appropriate agencies to resolve and to report on the slayings of Marlyn

Esperat and Teofilo Mojica and the shooting of Estelita Jardino. Ms.

Esperat filed a case against officials of the DA regarding the P544M

allegedly scammed out of government. It is reported that because of this,

she was murdered in front of her children in cold blood. Mr. Mojica, was

shot in the head, as were his wife, child, and niece in the early morning of

last September 13. His murder has been connected with another anomaly

in the DA, involving the misuse of P168M for fertilizers. They would have

died in vain if we do not investigate, in aid of legislation, these tragedies,

and what led to the murders.

The public, for a long time, has demanded closure to this issue. We

have done our part. Now, let the prosecution arm of government do theirs.

Lest this be misconstrued as passing the buck, we do this only because the

Constitution and our laws, through the principle of separation of powers,

have assigned the subsequent function of prosecution to other agencies of

government.

In conclusion, the totality of what we have seen, heard, read

and ferreted out in the Committee's inquiry provides us not just details of

specific wrongs and mistakes committed by certain persons in the fertilizer

 122

fund mess. They also point to the bigger picture of corruption and greed

that is so prevalent in national life not only today, but which has been

intensifying over decades.

The bigger picture shows us the distressing spectacle of veritable

wolfpacks preying with impunity on government projects, having access to

colossal sums of public money, using power and influence without

compunction, and perverting public office into an opportunity for abuse and

gain. A host of individuals endeavour to gain at all costs: through lying,

cheating, killing, and stealing. Many more are voting for the wrong people

and for the wrong reasons.

These irregularities uncovered at the DA have been painful and costly

to the nation. But they do not stop there. Indeed, at the very same time that

we were conducting our Blue Ribbon inquiry, other Congressional

committees were similarly engaged by scandals and irregularities in other

agencies and sectors of public life.

Since the object of our inquiry is to come up with legislation that can

effectively combat the menace of graft and corruption in our country, we

feel the need to say something here about the formidable challenge we

face.
 123

Let us not pretend that when the international media tags the

Philippines as one of the most corrupt countries in the world, it's only the

grafters among us who are under indictment. The label shames us all.

Nor is our problem only the way that others see us. Our people are

coming dangerously close to believing that nothing can be done about

corruption and greed in our country, that everyone's on the take, that it

permeates all branches of government, and that working for a larger

common good is impossible - and that Senate inquiries like ours will come

to nothing.

We can no longer be silent and callous witnesses to rampant acts of

corruption and remain blase and unaffected by the many storms of

scandals that continually pummel our body politic. We can no longer

tolerate the practice of the art of equivocation and pretense that breeds

only suspicion and lies. Constant conflicts continue to sap our moral

stamina and instigate our cynicism. A significant number believe the worst:

that we have a flawed socio-political culture where judges and justices toe

the administration line, where military officials will always say yes to those

in power to ensure future employment in government. Independence of

thought, belief, and judgment has become a rarity. Everyone is cowed by

power, money, pelf, and influence.

 124

The Senate must not allow this public cynicism to have the last word.

But if we are to combat this culture of corruption and dispel this cynicism,

we have to develop what one writer has called "a concept of enough." We

have to say that this menace must be stopped for the sake of our own

survival as a nation.

Change cannot be done overnight, or from a single inquiry, or a piece

of legislation. But we believe that every step we take in the fight for integrity

in government is a step forward to better governance. We believe that

when we succeed in one resolute action to stop graft, we could set off or

and inspire others to do the same. And sooner or later the time will come

when all these efforts will gather together to become an irresistible force

that will shatter the wall of graft and corruption in our country.

To this work and this goal, we in the Blue Ribbon Committee are

committed!

Respectfully submitted:

B
an Investigations (Blue Ribbon)
 125

Members:
/-

-
GR
7 OR10 B. HONASAN II REVILLA JR.

PA

MIRIAM DEFENSOR SANTIAGO

\MAR R O X ~ S ANTONIO “SONNY” F. TRILLANES IV

<
LOREN B. LEGARDA MANUEL “LITO” M. LAPID

FRANCIS “CHIZ” G. ESCUDERO FRANCIS N. PANGILINAN

COMPANERA PIA S. CAYETANO

JOKER P. ARROYO ALAN PETER TOMPANERO” s. CAYETANO /

 126

Ex-OfficioMembers:

JUAN MIGUEL F. ZUBlRl

Majority Floor Leader

AQUlLlNO Q. PIMENTEL JR.

Minority Floor Leader

HON. JUAN PONCE ENRILE

President
Senate of the Philippines
Pasay City
 127

ACKNOWLEDGEMENT

The Chairman would like to thank the Senators who attended and

participated in the hearings. Appreciation is likewise expressed here to his

colleagues for allowing the Chair to conduct the hearing in a manner that

allowed the individual Senators to ask their questions and pursue their

points to its logical conclusions sans strict time limitations. Appreciation is

also expressed here to the staff of the Senators who paid good attention to

the proceedings, taking copious notes and guiding their principals well so

that questions were not repeated and the manner of questioning not

repetitive. We treated the witnesses fairly, we conducted the hearings in a

very deliberate, determined, and conscientious manner. The process

worked.

Our thanks to the Blue Ribbon staff for their tireless dedication and

hard work. Their industry and competence, their enthusiasm and

perseverance, their integrity and uprightness make us proud. There is still

hope in our civil service after all.

 / I

Separate concurring and dissenting'opinian:

Pursuant to section 22' of the Rules of Procedure, I respectfully submit the following
concurring and dissenting opinion;

I
The instant proceeding is the sequel of an earlier inquiry on the same subject matter
during the 13" Congress, Commi!iee Report No. 54thereofwas prepared by Senator Ramon B.
Magsaysay, Jr. chair of the lead Committee on Agriculture and Food, and myself as chair ofthe
Blue Ribbon Committee. It was approved unanimously by the Senate.

A cursory reading, because of time conswaints, of this current 124 page Committee
Report indicates that the findingsthereon appear not inconsistent with the earlier Committee
Report No. 54.

There is no cogent reason not to extend my concurrence.

I1
The C o e i t t e e Report recommends' amendments to the Anti-Money Laundering Law
'

and the inter-related Bank Secrecy Law.as well aa the Procurement Law. The AMLA and the
Procurement Law are fresh laws, enacted by the 12thCongress. The AMLA particularly was the
subject 'ofintense, long-dpvn out, non-partisan debate and deliberation because bf its potential
adverse effects on ow banking system and as a handy tool for harassment.

We have to move .with caution on this one. The problem is not with the law itself but in
its enforcement.

I am constrhed to submit a qualified dissent on the remedid~legislation.

m
Sen.Gordon deserves to be commended for the str~ght-forwakdmanner he handled and
closed this inquiry,

Rispectfully submitted,
24 February 2009

JOmB P. ARROYO