Nabcor, ZREC funded NGOs without vetting

MANILA, Philippines – Were they complicit in the pork barrel scam or were they just fooled?

Former heads of subsidiary agencies of the Agriculture Department told senators on Thursday, September 5, that they were conned into allowing the transfer of lawmakers’ development funds to fake non-governmental organizations (NGOs).

The senators didn't buy it. At a hearing of the Senate blue ribbon committee, they got the former heads of the National Agribusiness Corp (Nabcor) and ZNAC Rubber Estate Corp. (ZREC) to admit that they failed to check the backgrounds of the NGOs that got millions of pesos in taxpayers’ money.

Former Nabcor president Alan Javellana and former ZREC head Salvador Salacup testified during the second day of the probe into the pork barrel scam. They headed their agencies during 2007 to 2009, the period covered by the special audit of the Priority Development Assistance Fund (PDAF).

Nabcor and ZREC, corporations attached to the Department of Agriculture, were chosen for the special audit because they were among the government entities that got the most PDAF releases.

Dalawa lang iyan: kasama ka o naloko ka? (It’s either you are complicit or you were fooled),” Sen Bam Aquino told the two officials.

In response, Salacup said, “Yes, naloko po.” (Yes, we were fooled.)

Javellana also said, “Yes, naloko rin kami.” (Yes, us too.)

Sen Teofisto “TG” Guingona III quipped, “Naloko na!” (It’s a mess!)

PAPER VALIDATION. Former ZREC head Salvador Salacup says his agency just did documentary validation of the NGOs, coupled with a check on liquidation reports prepared by a CPA. Senators say this was not enough. Photo by Rappler/Franz Lopez

PAPER VALIDATION. Former ZREC head Salvador Salacup says his agency just did documentary validation of the NGOs, coupled with a check on liquidation reports prepared by a CPA. Senators say this was not enough.

Photo by Rappler/Franz Lopez

No background checks, no interviews

The senators rejected the statements of Nabcor and ZREC that they just relied on documents from the NGOs and lawmakers’ endorsement “in good faith.”

Salacup and Javellana said they did not accredit but merely “validated” the NGOs on the basis of required documents from the Securities and Exchange Commission, Bureau of Internal Revenue, and mayor’s permit, financial statements, and periodic liquidation of funds by a certified public accountant that the NGOs themselves chose.

They admitted they did not check the offices of the NGOs or conduct face-to-face interviews.

Senator Francis Escudero pointed out that government procurement laws and COA circulars require more documents, like the performance security or bond for negotiated procurement.

“In clear violation of existing laws and regulations, you simply awarded [the funds to the NGOs]. Based on the endorsement of the legislators, hook, line and sinker, pasok na, go na iyon?”(That was it?)

The officials said they released the funds based on liquidation through official receipts, but Escudero cited the COA finding that many receipts turned out to be fake.

Pressed by senators, Javellana said, “We could have done better in validating all these things, doing due diligence on all these documents.”

Salacup agreed, “Yes, more intense validation should have been done.”

Aquino said there was no excuse for the oversight because the subsidiary agencies even got 3% of the amount given to NGOs.

'CAN'T RECALL.' Former NABCOR president Alan Javellana says he cannot recall the names of legislators who signed the endorsement letters carried by Benhur Luy. Photo by Rappler/Franz Lopez

'CAN'T RECALL.' Former NABCOR president Alan Javellana says he cannot recall the names of legislators who signed the endorsement letters carried by Benhur Luy.

Photo by Rappler/Franz Lopez

Officials confirm some names

The pork barrel scam is an intricate web of alleged corruption involving lawmakers who allowed their PDAF to be siphoned off to bogus projects of fake NGOs in exchange for hefty kickbacks.

The special COA report on the PDAF, although limited to the last 3 years of the Arroyo administration, already showed at least P6.2 billion was released to 82 dubious NGOs. Ten of these groups were linked to Napoles.

The former officials of Nabcor and ZREC confirmed the COA findings that Senators Juan Ponce Enrile, Ramon “Bong” Revilla Jr, and Jinggoy Estrada and other congressmen channeled their pork barrel to the Napoles-linked funds through the two agencies.

A Rappler report in July showed that dubious NGOs also got PDAF releases from Senators Gringo Honasan and Edgardo Angara through Nabcor.

Why brief Janet Napoles?

While Salacup said he does not know Napoles, Javellana said he met with her twice in Discovery Suites, her office building in Ortigas.

Asked about the circumstances of their meeting, Javellana said a former employee introduced him to Napoles and he met her thinking she was a prospective investor in Nabcor.

“I was invited by Napoles to go to Discovery Suites. We did not talk about PDAF. I briefed her about Nabcor, our project…. The second meeting was a followup on what we discussed.”

This prompted Escudero to say: “Who is Janet Napoles for you to brief her about Nabcor? Her name does not appear in any of the NGOs’ [documents]. She’s not part of the NGOs dealing with your office. Why go out of your way to brief her about Nabcor twice?”

Javellana replied: “We were looking for investors. I met with many other prospective investors.”

Javellana also admitted meeting Benhur Luy, Napoles’ cousin and former aide, but denied knowing he was related to Napoles. He said Luy frequented his office, bringing endorsement letters from lawmakers.

But when asked who were the legislators who signed the letters, he said he could not recall.

Guingona said: “The details, having coffee with Napoles, that you didn’t eat anything during the meeting, you recall. But the lawmakers, you don’t. That’s selective memory.”

‘Highly suspicious demeanor’

The committee chairman ordered Javellana to return to the next hearing day, and identify the lawmakers who submitted endorsement letters to Nabcor in favor of Napoles-linked NGOs.

In an press briefing after the hearing, Guingona said Javellana was obviously nervous and his demeanor was “highly suspicious.”

“We hope in the next hearing, Mr Javellana’s memory will be 100%.”

The senator said whistleblowers the committee intends to invite will be able to establish if the agency heads were complicit in the scam.

Guingona said one of the recommendations of the committee will be to hold a “massive information campaign” on the procurement law following Salacup’s statement that he did not know about the circulars on requirements for the NGOs.

The next hearing is on Thursday, September 12. – Rappler.com