AFTER SIX LONG years, the Court of Appeals finally cleared a mid-level official budget official for grave misconduct, gross neglect of duty, serious dishonesty and conduct prejudicial to the best interest of the service, in relation to the so-called Pharmally scandal.
Spared from jail time is Webster Laurenana, procurement management officer of the Department of Budget and Management (DBM), whom the Ombudsman claimed as equally liable alongside former DBM-Procurement Service Undersecretary Lloyd Christopher Lao, and four others.
The case stemmed from a P10-billion contract that was awarded to the Pharmally Pharmaceutical Corp., an undercapitalized company behind the medical supplies and COVID-19 vaccines which were used during the pandemic years.
PURELY MINISTERIAL
In a decision dated March 31, the appellate court’s 15th Division granted Laurenana’s plea for review as there was no substantial evidence to sustain the finding that he was liable for such administrative violations.
It noted that records showed Laurenana’s job is purely ministerial — issuing requests for quotation, or RFQs, but there was nothing to establish that he knew of Pharmally’s lack of authority to distribute RT-PCR test kits.
“The administrative case against him should therefore be dismissed,” said CA Associate Justice Marietta Brawner-Cualing.
LAO ACCOUNTABLE
In the same decision, the CA found no basis to overturn the Ombudsman’s findings holding former DBM-Procurement Service Undersecretary Lloyd Christopher Lao, former directors Warren Rex Liong and Christine Marie Suntay, inspection division chief Augusto Ylagan, and former Research Institute for Tropical Medicine employee Amado Tandoc.
“After a thorough review of the records and petitioners’ respective arguments, we find no sufficient basis to overturn the Ombudsman’s findings with respect to petitioners Lao, Liong, Ylagan, Suntay, and Tandoc III, et al,” the CA said.
As a final note in its decision, the court stated that “few betrayals are more grievous than the corruption of public office in a time of national suffering.”
SPURIOUS SUPPLIER
The court noted that in the ruling of the Ombudsman, “Pharmally could not credibly be considered a legally, technically, and financially capable” supplier or distributor under applicable procurement rules.
The CA also noted that in the Partial Committee Report of the Senate Blue Ribbon Committee, transactions undertaken by the government on April 23, 2020, and June 9, 2020, for the procurement of RT-PCR kits amounted to a total of P4.165 billion.
“Amid a health crisis that demanded from every public servant the utmost integrity, restraint, and fidelity to the common good, any use of official power for private advantage becomes especially reprehensible,” the CA said.
OMB’S RECOMMENDATION
The Ombudsman in 2023 recommended filing graft charges against three former officials of the Procurement Service-Department of Budget and Management (PS-DBM) over their involvement in a controversial COVID-19 test kits contract with Pharmally Pharmaceutical Corporation.
In August 2023, the Ombudsman recommended filing graft charges against three former officials of the Procurement Service-Department of Budget and Management (PS-DBM) over their involvement in a controversial COVID-19 test kits contract with Pharmally Pharmaceutical Corporation.
In a resolution dated Aug. 14, the Ombudsman’s office found Lao, Liong, and former procurement management officer Paul Jasper De Guzman had caused undue injury to the government worth P4.165 billion.
PHARMALLY ENABLERS
Lao is a close friend of former President Duterte, whom former Blue Ribbon Committee chair Sen. Richard Gordon labelled as the enabler and protector of the anomalous Pharmally deal.
It also recommended the filing of graft charges against Pharmally executives Twinkle Dargani, Mohit Dargani, Linconn Ong, Justine Garado, and Huang Tzu Yen. Then Ombudsman Samuel Martires approved the resolution on August 18, 2023.
The resolution mentioned three tranches of contracts entered into with Pharmally for RT-PCR test kits amounting to P600 million, P688 million and P2.877 billion.
LOPSIDED CONTRACTS
The Ombudsman noted that the former officials favored Pharmally over One Top Medical Systems Resources that had offered the same prices as Biosite Medical Instruments, Inc., one of the suppliers included in the Suppliers Directory for Bayanihan Act.
“They apparently acted with manifest partiality and in bad faith for unlawfully and willingly awarding the contracts to a newly incorporated corporation and without any business experience with the government,” the Ombudsman said.
The investigation of the Ombudsman stemmed from the complaint filed by former senator Richard Gordon and Senator Risa Hontiveros, who both conducted Senate inquiries on the contract.
POWERFUL ENOUGH
The Ombudsman noted that Lao signed the three notices of award and contract agreement all dated April 22, 2020 in favor of Pharmally. Lao and Liong also signed the Price Analysis Report prepared by De Guzman.
“There is no doubt that without the individual acts of the aforementioned respondents, the procurement of test kits would not have materialized,” the Ombudsman said.
Lawyer Ferdinand Topacio, who represented the Pharmally officials involved in the mess, said he was “greatly saddened by the indictment of certain private persons,” calling the 2021 Senate inquiries a kangaroo court.
“While we respect the resolution of the Ombudsman, we hope it is not true, as we have heard, that pressure was brought to bear by some politicians in an attempt to redeem themselves or to boost their political stock,” Topacio said.
JUDGEMENT CALL
Legislators who participated in the Pharmally investigation lauded the Ombudsman’s recommendation.
“It only goes to show that any form of corruption will be met with severe consequences. Our duty is to ensure that public funds are utilized for the benefit of the people, particularly during emergencies,” said Former Senate President Franklin Drilon, who actively took part in the previous Senate Blue Ribbon Committee investigation as Minority Leader.
Then Sen Panfilo Lacson (now Blue Ribbon chair) expressed surprise that one personality who was repeatedly and prominently mentioned in the supposed deals was not charged by the Ombudsman.
“That being said, I am willing to concede that maybe the evidence is not sufficient to establish probable cause against him,” said Lacson in reference to former President Rodrigo Duterte.
CONSPICUOUSLY MISSING
The former President was accused of acting as an “enabler” in the multibillion-peso Pharmally pandemic supply scandal as a Pharmally official had close ties to Duterte’s former economic adviser, Michael Yang.
Previous reports claimed that Yang acted as a financier/guarantor, and that the administration awarded large contracts to the small firm.
Duterte defended the procurement process as necessary during the pandemic, accusing senators of politicizing the issue. The former president even prevented Cabinet officials from attending Blue Ribbon hearings on the scandal.
He went as far as admitting having directed the transfer of funds to the DBM-PS for the purchase of medical supplies.