Bureaucratic corruption in the Cordillera

Northern Dispatch

It is commonplace knowledge that corruption is rampant at all levels of government. The Commission on Audit’s (COA) Special Audit Office’s (SAO) Report 2012-03 details the anomalies involved with the Priority Development Assistance Fund (PDAF) and various infrastructure, including local projects (VILP) from calendar years 2007 to 2009.

What is commonly known as PDAF is divided into two kinds of projects – hard or infrastructure usually coursed through the Department of Public Works and Highways, and soft projects such as training programs and the fertilizers and agricultural products. Examples of these were the P728-million fertilizer fund scam in 2004 and the types of projects of the bogus non-government organizations (NGOs) of Janet Lim-Napoles.

As early as 2003, former senator Panfilo Lacson, in a privilege speech in the Senate, exposed the corruption attendant to PDAF. There is standard operating procedure (SOP) every step of the way for infrastructure projects — set percentages skimmed off from the total project cost for the legislator, the contractor, the DPWH district engineer, such that finally only 50% of total project cost gets implemented. It is no wonder that so many infrastructure projects are substandard. Remember how the concreting of Halsema Highway a few years back was so unacceptable that the contractors were called to task by the World Bank, and they had to redo the project.

The COA SAO Report 2012-03 does not delve into the hard projects of the legislators in the Cordillera. Suffice it to say that the people know that there are kickbacks to the legislators from their roads and other infrastructure projects. There are contractors identified with certain politicians who are awarded the infrastructure projects for a slice of the pie, some bigger, some smaller. That is why there is a flurry of road building before elections, notwithstanding a supposed ban on projects at this time, ie. incumbents collecting their SOPs to use as campaign funds.

It is in relation to their soft projects that the Cordillera legislators are not spared in the audit Report.


*Wacnang was still congressman during the first part of 2007, but was replaced by Agyao after the elections in 2007. Agyao also was assigned as caretaker of the Mountain Province when Dominguez died while still in office.


* Annex B of the Report shows that these projects still have outstanding unliquidated cash advances.
The PDAF projects of the Cordillera legislators mentioned in the COA Report were channeled through the Technological Resource Center (TRC), National Livelihood Development Corporation (NLDC) and National Agribusiness Corporation (NABCOR) as the implementing agencies (IA). Clearly, these government-owned and controlled corporations (GOCCs) were all part of the pork barrel scam, and the concerned officials should therefore also be held accountable.

The Report concluded the implementing agencies used the funds without due regard to existing rules and regulations. Substantial amounts were transferred to NGOS, without any appropriation law or ordinance authorizing such transfer, and were used for projects not eligible under the program. Worse, the reported projects were supported with questionable and/or spurious documents.

From Table 2, it is clear why Dangwa was among those charged with plunder at the Ombudsman. He dispensed a total of P44.74 million for agricultural projects, most of these funneled through three of the fake NGOs of Napoles. These are the Social Development Program for Farmers Foundation Inc. (SDPFFI), Countrywide Agricultural and Rural Economic Development Foundation Inc. (CARED), and People’s Development Program for Farmers Foundation Inc. (POPDFI). In addition, he joined other Cordillera lawmakers in partnering with two other dubious NGOs, the Masaganang mga Bukirin Foundation, Inc. (MBFI) and Ito Na Movement Foundation (ITONAMI), which look like they may be part of another syndicate into PDAF scams needing further research.

Dangwa gave two projects to SDPFFI, of which the whistleblower Benhur Luy was president. When the audit team went to its address, they were entertained in the garage. There were no staff, equipment nor documents, and the unit was owned by another person. The P15.520-million project was coursed through NABCOR as the implementing agency was for the procurement of liquid fertilizers and agricultural packages for individual beneficiaries. The second project amounting to P8.730 million was coursed through NLDC, and was supposedly for training and the procurement of livelihood kits. These projects were questionable on the following grounds: 1) the suppliers had questionable documents, had no permits, could not be found or did not confirm transactions; 2) the former mayor of Sablan, Bony Tacio, denied that there were items delivered to his municipality; 3) the audit team concluded that the trainings supposed to be conducted by Ditchon Trading was questionable as Ditchon is based in Laguna, far from the training site in Benguet; and 4) Dangwa did not reply to the team’s request for confirmation.

Dangwa gave a project worth P7.2 million to POPDFI, another Napoles’s fake NGO, through TRC as the implementing agency. POPDFI could not be located at the address it gave, and the unit was up for rent. SARO 07-09157 was for the procurement of agricultural production kits for farmer-beneficiaries in the municipalities of Itogon, Kibungan, La Trinidad, Mankayan, Sablan, Tublay, Atok, Bakun and Bokod in Benguet. Of the 283 selected beneficiaries, only 180 were in the list of registered voters, with the identities of the remaining not even established. The supplier, TNU Trading, was using three different ATPs using the same series of numbers and its license to operate as distributor of fertilizers had expired as of February 4, 2007.

The mayor of Kibungan, Benito D. Siadto, and the mayor of Sablan Bony Tacio, categorically denied receiving any kits from a similar agricultural project coursed through the Masaganang Ani para sa Magsasaka Foundation, Inc.

Dangwa coursed another project through TRC to CARED, another Napoles fake NGO. The address was a shanty occupied by the mother of one of the incorporators. The agricultural project was similar to the above, covering training by Ditchon Trading and procurement of agricultural packages and livelihood kits from TNU Trading. The two suppliers mentioned are also the ones in the projects above with dubious legitimacy. Dangwa did not reply to the team’s request for confirmation and the project remains completely unliquidated up to the present.

Three Cordillera legislators, Dangwa, Agyao and Wacnang coursed their PDAF through NLDC and TRC to the Masaganang mga Bukirin Foundation, Inc. (MBFI), an NGO registered with the Securities and Exchange Commission and with a business permit from Quezon City covering the CYs 2007-2010. Its address was a high-end residential unit without NGO signage, whose caretaker did not know anything about the aforementioned NGO.

The projects were for the procurement of computer systems and livelihood kits for distribution to selected individual recipients. Supposed procurements were not supported with receipts or any proof of payments. Dangwa’s project targeted 33 recipients in Benguet, none of whom was a registered voter. The two projects of Wacnang have not been liquidated up to the present. Elias Bulut’s two projects with TRC and one with NLDC had questionable suppliers and recipients. The beneficiaries did not have complete addresses and could therefore not be contacted for confirmation. Dangwa, Bulut and Wacnang never replied to the audit team’s request for confirmation.

ITONAMI was the NGO to which Congressman Manuel Agyao of Kalinga channeled P11.447 million PDAF funds through the implementing agencies NABCOR and NLDC. Samuel Dangwa also channeled P0.970 M to ITONAMI through NLDC. Annex C of the Report reveals that while ITONAMI was registered with the Securities and Exchange Commission, it did not have any permit to operate, nor was it ever a tenant of the address they gave.

Agyao’s project through NABCOR and ITONAMI was for the procurement of 4WD tractors. While Northern Asia Sales Corporation confirmed the delivery of 4WD tractors, the status of these tractors could not be established. The City Agricultural Officer of Tabuk claimed that he was not aware of any 4WD tractors turned over to the City government of Tabuk during the previous and present administration.

Both the Agyao and Dangwa projects with NLDC and ITONAMI were for training and various livelihood kits to be distributed to individual farmer beneficiaries. Said transactions were questionable on the following grounds: 1) the supposed suppliers did not have business permits or could not be located; 2) the mayors where beneficiaries were supposed to come from did not confirm their residency; 3) and some of the beneficiaries who were contacted denied that they ever received livelihood kits. While Agyao confirmed the authenticity of his signatures in all documents submitted by ITONAMI, Dangwa never replied to the team’s request for confirmation, and the dubious NGO did not confirm its transactions nor submit the documents requested by the Audit team.

Congressman Agyao of Kalinga coursed five projects worth P21.146 million through the NLDC to the Commoners Foundation, Inc. (CFI), an NGO registered with the SEC based in Lucena City. The projects covered the procurement of farm tools, planting materials, various livelihood kits and books from 36 suppliers and intended for 5,453 individual recipients. Many of the purported suppliers were questionable, having no business permits or could not be located. Many of the supposed beneficiaries denied receiving livelihood kits or otherwise could not be located. 11 of the respondents who were contacted denied attending the training, there were some that claimed that they attended a training conducted at the Pastoral Center, Bulanao whereas the training was purportedly conducted for five days at Emilia’s Kitchenette. Agyao confirmed the authenticity of his signatures submitted in the documents of the NGO.

Mauricio Domogan, then congressman and presently mayor of Baguio City gave a PDAF project amounting to P4.7 million to Share a Joy Foundation, Inc. through the TRC, covered by SARO No. ROCS 07-04138. The SAO report has this to say: “This NGO is not registered with SEC and has no permit to operate from the City Government of Baguio. It was reportedly operating at Camp John Hay Development Corporation, Loakan Road, Baguio City. It did not confirm its transactions and did not submit additional documents requested by the team. Hence the very existence of the NGO is questionable.”

The project, with funds released in 2007, was intended for the implementation of various livelihood projects. The release, however, remained unliquidated as of audit date despite request by the team. Domogan confirmed the authenticity of his signatures in all projects submitted by the NGO.

Recently, the Commission on Audit announced that it would issue notices of dis-allowance, or ask that the monies from those PDAF projects found to be ghost or anomalous be returned to the coffers of government. Concerned citizens and taxpayers should also call for accountability and prosecution, and file the cases for plunder or malversation of public funds against these corrupt lawmakers.


In relation to the P900-million Malampaya funds scam, the Cordillera also figured prominently in the listing of municipalities which purportedly received allocations of P10 million each designated to rehabilitate agrarian communities damaged by typhoons Ondoy and Pepeng in 2009. It will be recalled that the Cordillera region was among the hardest hit by the two super typhoons which came one after the other in 2009.

Then President Gloria Macapagal Arroyo authorized the Department of Budget and Management (DBM) to release portions of the Malampaya funds through the Department of Agrarian Reform to support the rehabilitation of agrarian communities damaged by the two storms. Table 3 above shows that 22 out of 97 mayors who were named in the releases of the Malampaya funds are from the Cordillera region, with seven municipalities in Abra, three in Apayao, six in Benguet, four in Ifugao, and two in Kalinga. All of them supposedly received P10 million each, said funds released during the last week of December in 2009.

In an affidavit, Merlina Su?as, a former employee at Napoles’ JLN Corp. and now one of eight whistle-blowers in the pork barrel scam, claimed that the signatures of the 97 mayors were forged, that the funds did not reach the local governments and instead “all went to the pocket” of Napoles through the bogus institutions which they had set up through which the funds were funneled (PDI, Aug 13, 2013).

Agrarian Reform Secretary Virgilio de los Reyes said that his agency started its investigationn into the Malampaya fund as early as November last year after a team from the Commission on Audit (COA) found that at least two mayors did not receive agricultural packages from the fund intended for their towns. He identified the mayors as Ramon Tinawi of Hingyon town in Ifugao and Allen Jesse Mangaoang of Balbalan, Kalinga. He said the two former mayors, in a letter to the COA, denied knowledge of the project and claimed that their signatures were forged in the documents pertaining to it (PDI, Aug 13, 2013).

Recently, Mayor Benito Siadto of Kibungan, Benguet spoke to media and said that he had nothing to do with the scam and that his signature was forged. It is incumbent upon the other Cordillera mayors named in the list to now speak up to clear their names if they really were not part of the Malampaya Fund scam.

The latest development in the pork barrel issue is the President’s pork barrel or the huge amounts of funds that are under his discretion, and the Disbursement Acceleration Program funds or DAP. Records show that P1.5 billion from DAP was allocated for the Cordillera People’s Liberation Army. Why was such a huge amount given to the CPLA and how was this spent? This needs more research, and will be tackled on another day. (Northern Dispatch)

Share This Post