Friday, June 27, 2008 Ex-MWSS chief charged with graft
THE former administrator of the Metropolitan Waterworks and Sewerage System (MWSS) was charged with graft for allegedly purchasing debenture or security bonds that resulted in losses to the state-owned water firm amounting to more than P31.6 million and projected losses of P11.4 million.
In a complaint-affidavit, MWSS administrator Diosdado Jose Allado asked the Department of Justice (DOJ) to investigate and charge his predecessor, Lorenzo Jamora, with violation of Sections 3 (e) and (g) of Republic Act (RA) 3019, also known as the Anti-Graft and Corrupt Practices Act.
Section 3 (e) of RA 3019 provides that any public official who shall be found guilty of "causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence" will be penalized.
On the other hand, Section 3 (g) penalizes public officials who shall "enter, on behalf of the Government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby."
According to Allado, Jamora unlawfully made use of restricted funds intended for the payment of the utility firm's loan from the Japan Bank of International Cooperation (JBIC) without authorization of the MWSS Board of Trustees to pay for the bonds he purchased from the Home Guaranty Corp. (HGC) and National Power Corporation (Napocor) in separate occasions last year, in the total amount of P791.39 million.
He said the MWSS board did not authorize the use of the restricted cash for the purchase of HGC debenture bonds or Napocor bonds or for any other purpose other than what the funds are restricted for.
"Respondent Jamora caused undue injury to the MWSS in the discharge of his functions as administrator of the MWSS through manifest partiality and evident bad faith in violation of the anti-graft law," said Allado in his complaint.
"It's like you being given tuition by your mother but you spent in on horse-racing," he later told reporters in an interview.
Allado said Jamora terminated the agency's time deposits to pay bonds, which are classified as restricted cash of the MWSS since they are intended for the payment of MWSS loans to JBIC.
He said after the MWSS board discovered the use of the restricted cash, it immediately passed a resolution "disavowing" the use of its restricted funds having been made without approval from the MWSS board and confirmation from the Department of Finance.
The board also gave Allado the go-signal to conduct an investigation and to file appropriate charges against Jamora.
Aside from the lack of the required approval of the MWSS board, Allado said the purchase of the bonds was grossly disadvantageous to the MWSS and to the government in general.
It noted that HGC bonds were purchased in the secondary market at a premium price, thus resulting in an immediate loss of MWSS' restricted funds in the amount of P19.45 million.
Allado said Jamora allowed the purchase of the HGC debenture bonds from Damar Financing Corporation on April 13, 2007 at a price higher than their face value.
He said the bonds' face value were P259.50 million which will mature on September 6, 2008 and P54.57 million with a maturity date of February 19, 2009.
But, Allado said his predecessor purchased the bonds in the amount of P274.98 million and P58.55 million, respectively, resulting in an immediate loss of MWSS' restricted funds in the amount of P19.45 million.
On the other hand, the transaction for the purchase of Napocor bonds with a face value of P213.79 million at a premium buying price of P225 million, according to Allado, is also grossly disadvantageous to the MWSS as it resulted in the reduction of MWSS restricted cash in the amount of P12.186 million.
Allado explained that the transaction for the purchase of HGC and Napocor bonds is grossly disadvantageous to the MWSS because the net interest to be gained from the purchase of the HGC bonds is P14.41 million while the net interest would be P20.73 million if the amount is deposited in Development Bank of the Philippines securities which gives 5.25 percent interest for long-term investment.
Similarly, the complainant said the purchase of the Napocor bonds is disadvantageous to the MWSS because the net interest to be gained from the purchase of the said bonds is P80.83 million while the net interest if the funds were deposited in government securities is P85.94 million or a difference of P5.11 million.
"In summation, the immediate loss to the MWSS is the reduction in its restricted cash in the amount of P31.64 million and the projected loss is P11.43 million," Allado said.
Allado noted that Napocor bonds are not tradable and are held to maturity instruments, thus it cannot be converted into cash to pay for MWSS obligations. (ECV/Sunnex)
