Morales floats another conflict of interest angle in Calida contracts

MANILA, Philippines – Entering into contracts with government agencies that the Office of the Solicitor General could end up representing in the future presents potential conflict of interest situations, Ombudsman Conchita Carpio-Morales said.

Calida’s security firm Vigilant Investigative and Security Agency Incorporated (Vigilant) bagged at least 14 government contracts worth P261.39 million after he was appointed Solicitor General in July 2016. (READ: Calida unsure if security firm won as many gov't contracts before 2016)

"Ibig sabihin kliyente mo ang NEDA [National Economic and Development Authority] dahil ikaw ay may security agency na nakipagkontrata sa [kanya] and at the same time kliyente mo rin ang NEDA dahil ikaw ang magrerepresenta sa kanya sa husgado [bilang solicitor general] so iyan ang mga tinitingnan ng investigators," Morales said in an interview with ABS-CBN News aired Tuesday, June 12

(This means that NEDA is your client when you have a security agency that it contracted with and at the same time, it is also your client because you will represent it in court [as Solicitor General], so that's what investigators are looking at.)

NEDA is among the 14 government contracts that Vigilant bagged after Calida was appointed in July 2016. 

The Office of the Ombudsman is investigating Calida’s contracts after Sereno supporter Jocelyn Acosta filed a complaint against the Solicitor General alleging conflict of interest.

Is this a new angle? Yes. Calida had previously defended Vigilant’s contracts by saying there is only a conflict of interest if the OSG regulates or grants franchises to security firms, which it does not. It is the Philippine National Police (PNP) which regulates security firms.

This is the first time that a public official – the Ombudsman no less – is citing a concrete legal theory for a possible case of conflict of interest.

Morales did not mention which law this legal theory falls under.

As it stands, at least 3 laws – the Constitution, the Code of Conduct for Public Officials, and the anti-graft law – have their own definitions of conflict of interest.

Calida said he did not violate the anti-graft law because the law prohibits conflict of interest as defined by the Constitution. The Constitution prohibits members of the Cabinet and Congress from having financial interests in transactions with the government. Calida said he is not a member of the Cabinet, though he has a Cabinet rank.

Calida also said he did not violate the Code of Conduct because the rules give an option to either resign or divest. Calida said his resignation from Vigilant’s board satisfied the rules.

However, Rule IX of the Implementing Rules and Regulations (IRR) of the Code of Conduct says that if certain conditions are met, “divestment shall be mandatory for any official or employee even if he has resigned from his position in any private business enterprise.”

The conditions are: the official is a substantial stockholder or a member of the  board or an owner or a partner.

Calida also defended the propriety of Vigilant’s contracts with the Department of Justice (DOJ) by saying the OSG is an autonomous body, though it is attached to the DOJ for budgetary purposes.

Divestment. In a separate interview with CNN Philippines, Morales did not address the question of whether or not Calida needs to divest from Vigilant, where he is still the owner of 60% of the shares. The rest are evenly divided among his wife and 3 children.

“I think the sacramental phrase there is 'when the conflict of interest arises' that has to do with the faithful performance of the duties of the pubic official. It would seem that Calida is saying there is no public interest involved that’s why he did not divest, but then he says, if and when public interest arises, that will be the time he will divest,” Morales said. (READ: Guevarra changes tune, will now review Calida firm's DOJ contracts)

The retiring Ombudsman added: “As I said, the case is pending fact-finding investigation. I don’t like to preempt the result of the fact-finding investigation.”

Neither Calida nor his spokespersons responded to Rappler’s request for comment.

Calida had earlier said he does not see the need to divest because there is no actual case of conflict of interest yet. –

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 or tweet @lianbuan.