MANILA, Philippines: The Office of the Ombudsman recommended filing of criminal charges against former Health secretary Francisco Duque and Budget Undersecretary Lloyd Christopher Lao over the alleged illegal transfer of P41 billion to buy equipment and other items needed during the Covid-19 pandemic.
In a 49-page decision signed on May 6, 2024, a copy of which was obtained by The Manila Times on Friday night, the Ombudsman’s special panel of prosecutors also found Duque and Lao from the Procurement Service of the Department of Budget and Management (PS-DBM) “guilty of grave misconduct and conduct prejudicial to the best interest of service” and recommended their dismissal from government service, forfeiture of all retirement benefits and disqualification from reemployment.
The case stemmed from a complaint filed by former senator Richard Gordon and Sen. Risa Hontiveros against Duque, Lao and several other officials of the Department of Health (DoH) following the investigation of the Senate Blue Ribbon Committee on the illegal fund transfer of the DoH to the PS-DBM to buy personal protective equipment, reverse-transcription polymerase chain reaction (RT-PCR) test kits, alcohol, among others.
It was alleged that the transfers were approved and disbursement vouchers issued to the PS-DBM by DoH without the memorandum of agreements and certificates of previous liquidation.
The complaint also said that the DoH had “unjustifiably” outsourced procurement of Covid-19 related supplies to the PS-DBM despite the department’s authority and organizational structure in place to procure its own.
The Ombudsman found that not all fund transfers involved the procurement of CSEs, as it included other items such as cadaver bags, mechanical ventilators and nucleic acid extraction machines that do not fall under CSEs.
It also said that Duque admitted during the Senate hearing that the reason why the money was moved to the PS-DBM was for it to purchase or procure the medical supplies and equipment on behalf of the DoH, with the PS-DBM being its the procuring entity.
“It must also be stressed that despite GPPB’s (Government Procurement Policy Board) declaration of some Covid-19-related items as CSE, [the] PS-DBM apparently failed to meet the requirements for said items to be considered as CSE that can be acquired from PS-DBM, in accordance with certain regulations,” the Ombudsman said.
The Ombudsman also said that the DoH has no legal obligation or compelling reason to transfer funds and outsource its procurement to the PS-DBM, noting a circular issued by the GPPB after the enactment of the Bayanihan to Heal as One Act which “prescribes for procuring entities to directly negotiate or procure from a legally, technically, and financially capable supplier of goods.”
“On the contrary, it is clear from the aforementioned issuances that in times of emergencies such as the Covid-19 pandemic where urgent procurement is necessary, the contemplated set-up for procuring entities is to negotiate directly with the suppliers,” the Ombudsman said.
The Ombudsman said that both Duque and Lao acted in “bad faith” or “gross inexcusable negligence” in the discharge of their duties when they affected the fund transfer despite the department having the obligation to procure directly and not through the PS-DBM,
It also said that Duque and Lao conspired for the illegal transfer of funds.
Meanwhile, the Ombudsman ordered that the cases against Undersecretaries Maria Carolina Taino, Myrna Cabotaje, Roger Tong-An, and Leopoldo Vega, as well as several directors, be dismissed for lack of probable cause.
The Manila Times has reached out to Duque for his comment.
