Fake receipts saga at Coast Guard: CA reinstates intel officer Dalangin

MANILA, Philippines – The Court of Appeals (CA) has decided to reinstate an intelligence officer of the Philippine Coast Guard (PCG) who was dismissed over anomalous purchases.

At the same time, at least two other agencies continue to probe into who should be held accountable in the years-long anomalies at the PCG involving fake receipts.

Commander Allen Dalangin, formerly the PCG’s Deputy Chief of Staff for Intelligence, Security and Law Enforcement, was dismissed by the Office of the Ombudsman in July 2017 for his involvement in P68-million worth of purchases of office, hardware, construction, information technology and cellphone supplies.

Dalangin, along with 23 others, including former commandant, rear admiral William Melad, were dismissed for violating procurement rules when they split purchases to avoid bidding. The Commission on Audit (COA) also found that the purchases, done in 2014, were liquidated using fake receipts.

In a decision promulgated on Thursday, July 19, the CA 2nd Division reversed the Ombudsman and ordered the reinstatement of Dalangin. (The decision does not cover others affected by the 2017 Ombudsman dismissal.) 

“This Court finds no substantial evidence to support the findings that petitioner is administratively liable of the charges filed against him, and consequently, petitioners' exoneration is in order,” said the decision penned by Associate Justice Jane Aurora Lantion, with concurrences from Associate Justices Remedios Salazar-Fernando and Zenaida Galapate-Laguilles.

“Dalangin is hereby reinstated to his former government rank/position without loss of seniority rights, with full payment of back salaries and other accrued benefits from July 27, 2018 up to his actual reinstatement,” the justices ordered.

CA decision

The COA found that P387,372-worth of receipts from Dalangin’s P8-million cash advance are fake, as they were denied by the suppliers. 

Dalangin said that “he had no hand in securing the alleged invoices or receipts, as he merely signed the vouchers with supporting documents handed to him by his subordinates, who had certified that the contents of such documents were true.”

“However, not an iota of proof was adduced. As the complainant, the Ombudsman’s Field Investigation Bureau-Military and Law Enforcement Officers (FIB-MOLEO) failed to present evidence to prove that petitioner did not liquidate the cash advances he received, or that the petitioner’s acts of submitting receipts or invoices to substantiate the intelligence funds he had used showed that petitioner was predisposed to lie, cheat, deceive or defraud the government,” the CA said.

The CA added: “The Ombudsman failed to establish by substantial evidence, which would lead to a reasonable conclusion that petitioner’s acts were deliberate, attended by corruption or wilful intent to violate a particular law, and was done to procure benefit for himself or for another person.”

Fraud audit

The PCG’s fake receipts problem does not end with Dalangin.

Two government agencies, the Commission on Audit, and the Office of the Ombudsman, are still investigating the years-long problem.

For example, in 2017 alone, the COA flagged P818,531-worth of liquidation receipts which were disowned by suppliers. They were from the cash advances given to newly-promoted Rear Admiral Leopoldo Larroya.

The COA said that despite its recommendations the previous years to take legal actions, or at the very least, liquidate millions-worth of remaining cash advances, the PCG still released cash advances in 2017.

Nine PCG officials are currently under preventive suspension for alleged misuse of P27-million worth of cash advances, while the Office of the Ombudsman conducts its fact-finding investigation. The Ombudsman also has to resolve another issue of P125-million worth of anomalous rescue equipment deals.

This prolonged issue has prompted the COA to conduct a comprehensive fraud audit of the PCG involving “alleged anomalous transactions relative to the grant and liquidation of cash advances granted in calendar years 2011 to 2014.”

According to documents obtained by Rappler, PCG Commandant Admiral Elson Hermogino was furnished with initial audit highlights last June.

“The initial findings and observations contained therein are the initial results of the Special Audit Team (SAT) audit/investigation which, if not controverted, shall be deemed accepted by the concerned personnel involved in the transactions,” COA told Hermogino in a letter. 

In COA’s 2017 audit report of the PCG, state auditors said “no appropriate administrative and legal action was taken by the Management against persons found responsible/liable for the fake/irregular transactions." Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.