DAP Ombudsman final complaint

Republic of the Philippines OFFICE OF THE OMBUDSMAN Quezon City Bayan Muna REP. CARLOS ISAGANI ZARATE, Bagong Alyansang Makabayan (BAYAN) Secretary General RENATO M. REYES, JR., Alliance Of Concerned Teachers (ACT) National Chairperson BENJAMIN VALBUENA, Confederation For Unity, Recognition and Advancement of Government Employees (COURAGE) President FERDINAND GAITE, Volunteers Against Crime and Corruption (VACC) President DANTE LA. JIMENEZ, MAE P. PANER, Kilusang Magbubukid ng Pilipinas (KMP) Secretary General ANTONIO FLORES, Gabriela Secretary General JOAN MAE SALVADOR, Kalipunan Ng Damayang Mahihirap (KADAMAY) National Chairperson, GLORIA ARELLANO, and Philippine Heart Center Employees AssoctionAlliance of Health Workers President BONIFACIO S. CARMONA, JR., Complainants, - versus -

Case No. _________

Former President BENIGNO SIMEON C. AQUINO III, and FLORENCIO ABAD, Former Secretary of the Department of Budget and Management (DBM), Respondents. x---------------------------------------------x

1

COMPLAINT AFFIDAVIT We, the Complainants, are Filipino citizens, taxpayers, and all of legal age, after having been sworn in accordance with law, hereby depose and state that: 1.

The Complainants are the following: i. Carlos Isagani Zarate is the representative from Bayan Muna Party-list for the 17th Congress, with office address at Room 210, Northwing Building, House of Representatives, Quezon City. ii. Renato M. Reyes, Jr. is the Secretary General of Bagong Alyansang Makabayan (BAYAN), with office address at No. 1 Maaralin St., Brgy.

Central, Quezon City. iii. Benjamin Valbuena is the National Chairperson of the Alliance of Concerned Teachers (ACT), with office address at 2nd Floor, Teachers’ Building, Mines corner Dipolog Streets, Vasra, Quezon City. iv. Ferdinand Gaite is the President of the Confederation For Unity, Recognition and Advancement of Government Employees (COURAGE), with office address at 118 Scout Rallos, Brgy. Sacred Heart, Quezon City. v. Dante LA. Jimenez is the Founding Chairman/President of the Volunteers Against Crime and Corruption (VACC), with office address at VACC Unit 610, 6th Floor, Corporate Center, 131 West Ave., Quezon City. vi. Mae P. Paner, of the Juana Change Movement, with residence at 1885A, Asuncion Street, Santiago Village, Makati City. vii. Antonio Flores is the Secretary General of the Kilusang Magbubukid ng Philipinas (KMP), with office address at 217- B, Alley 1, Road 7, Proj.

6, Quezon City.

2

viii. Joan Mae Salvador is the Secretary General of Gabriela, with office address at No. 35 Scout Delgado Street, Brgy. Laging Handa, Quezon City. ix. Gloria G. Arellano is the Natioal Chairperson of Kalipunan ng Damayang Mahihirap (KADAMAY), with address at 890 Labano Street, Napicor, Mangahan, Pasig City. x. Bonifacio S. Carmona, Jr. Is the President of the Philippine Heart Center Employees Association-Alliance of Health Workers, with address at B32, L4, Harmony Hills II Subd., Loma de Gato, Marilao, Bulacan.

2.

The Respondents are the following: i. Benigno Simeon S. Aquino III was the President of the Republic of the Philippines from June 30, 2010 until June 30, 2016. He held office at the Office of the President, Malacañan Palace Compound, J. P. Laurel St., San Miguel, Manila.

As private citizen, Respondent Aquino is publicly known to hold residence at No. 25 Times Street, West Triangle, Quezon City. ii. Florencio Abad was the Secretary of the Department of Budget and Management from June 30, 2010 until June 30, 2016. He held office at the Department of Budget and Management, General Solano St., San Miguel, Manila, which is his last known address and/or at Basco, Batanes.

3.

We charge Respondents Benigno Simeon C. Aquino III and Florencio B. Abad of committing and having committed crimes, offenses and administrative infractions including but not limited to the following: i. For the crime of illegal use of public funds or property or technical malversation defined under the Revised Penal Code,1 in relation to

1

Article 220. Illegal use of public funds or property. — Any public officer who shall apply any public fund or property under his administration to any public use other than that for which such fund or property were appropriated by law or ordinance shall suffer the penalty of prision correccional in its minimum period or 3

Section 80, Chapter 7, Book VI of Executive Order 292, which penalizes misuse of government funds or property,2 for their act of misappropriating public funds to programs, and projects, in conspiracy with one another, through the Disbursement Acceleration Program (DAP). ii. For the crime of usurpation of legislative powers defined under the Revised Penal Code3, for their implementation of the DAP, which resulted in the diversion of funds appropriated by the 2011, 2012, and 2013 General Appropriation Acts (GAA) to programs, activities, and projects (PAPs) they themselves identified and approved, from October 2011 to 2016, thereby supplanting the will of Congress with that of their own and repealing these GAAs and suspending their execution with respect to the items affected. iii. Section 3 (e)4 of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act for causing undue injury to complainants and the various

a fine ranging from one-half to the total value of the sum misapplied, if by reason of such misapplication, any damage or embarrassment shall have resulted to the public service. In either case the offender shall also suffer the penalty of temporary special disqualification.

If no damage or embarrassment to the public service has resulted, the penalty shall be a fine from 5 to 50 per cent of the sum misapplied.

2

Section 80. Misuse of Government Funds and Property.—Any public official or employee who shall apply any government fund or property under his administration or control to any use other than for which such fund or property is appropriated by laws, shall suffer the penalty imposed under the appropriate penal laws.

3

Art. 239. Usurpation of legislative powers. — The penalties of prision correccional in its minimum period, temporary special disqualification and a fine not exceeding 1,000 pesos, shall be imposed upon any public officer who shall encroach upon the powers of the legislative branch of the Government, either by making general rules or regulations beyond the scope of his authority, or by attempting to repeal a law or suspending the execution thereof.

4

Section 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: xxx (e) Causing any undue injury to any party, including the Government, xxx 4

sectors of the public they represent, including the government, in the discharge of their official administrative functions through evident bad faith or gross inexcusable negligence, as a result of the implementation of the DAP. iv. Grave Misconduct,5 Conduct Prejudicial to the Best Interest of the Service,6 and Gross Dishonesty,7 all emanating from the same facts and circumstances alleged herein from which the Respondents’ crimes and offenses arise.

4.

The ultimate facts constituting the elements of technical malversation, usurpation of legislative powers, graft and corruption, including administrative issuances which served as the bases for the DAP; how it served as a mechanism to declare forced savings and fund programs, activities, and projects (PAPs); and the role of Respondents Aquino and Abad are amply discussed in Araullo, et al. v. Aquino et al. (G.R. No. 209287, July 1, 2014 and February 3, 2015)8 (Araullo hereafter),which are hereby adopted and incorporated as part of this Complaint.

5

Rosas v. Montor, G.R. No. 204105, October 14, 2015: “Misconduct is defined as ‘a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by a public officer.’ It becomes grave misconduct when it ‘involves any of the additional elements of corruption, willful intent to violate the law or to disregard established rules, which must be established by substantial evidence.’ A person charged with grave misconduct may be held liable for simple misconduct if the misconduct does not involve any of the additional elements to qualify the misconduct as grave. The charge of gross misconduct is a serious charge that warrants the removal or dismissal of a public officer or employee from service together with the accessory penalties, such as cancellation of eligibility, forfeiture of retirement benefits, and perpetual disqualification from reemployment in government service.”

6

Abos v. Borromeo IV, A.M. No. P-15-3347, July 29, 2015: “Conduct prejudicial to the best interest of service, on the other hand, is defined by Largo v. Court of Appeals as any misconduct ‘which need not be related or connected to the public officers['] official functions [but tends to tarnish] the image and integrity of his/her public office.’”

7

Eduarte v. Ibay, A.M. No. P-12-3100, November 12, 2013: “We defined dishonesty as the disposition to lie, cheat, deceive or defraud; untrustworthiness; lack of integrity; lack of honesty, probity or integrity in principle; and lack of fairness and straightforwardness.”

8

Attached herein is the Certified True Copy of the Main Decision penned by Justice Bersamin dated July 1, 2014 as ANNEX “A”. Likewise attached herein is a copy of the Resolution dated February 3, 2015 disposing of the motions for reconsiderations filed in the case, as ANNEX “B”.

5

5.

In Governor Enrique T. Garcia, Jr., v. Office of the Ombudsman, et al.,9 the Supreme Court ruled that the Ombudsman gravely abused its discretion when it disregarded an Audit Observation Memorandum (AOM) in ruling that there was no probable cause for violation of Republic Act No. 3019. This AOM, as ruled by the Supreme Court in the aforecited case, contained factual and legal findings as to the presence of the elements of the crime and the probable guilt of the therein accused public official.

6.

The Ombudsman, the Supreme Court ruled, has the duty to determine probable cause by taking essential facts and evidence into consideration—including those already discovered by the COA. It should also avoid issuing rulings that amount to a patent violation of the Constitution, law, and existing jurisprudence.10 7.

An AOM of the COA is thus declared sufficient to be a basis for a finding of probable cause. In the same vein, a decision of the Supreme Court—which has the force and effect of a law—should likewise be considered sufficient to hold that the crimes in this charge have been committed and that Respondents are probably guilty thereof.

DAP’S CREATION AND IMPLEMENTATION 8.

The High Court in Araullo described DAP’s creation and implementation under the hands of Respondents Aquino and Abad as follows: How the Administration’s economic managers conceptualized and developed the DAP, and finally presented it to the President remains unknown because the relevant documents appear to be scarce.

The earliest available document relating to the genesis of the DAP was the memorandum of October 12, 2011 from Sec. Abad seeking the approval of the President to implement the proposed DAP. The memorandum, which contained a list of the funding sources for P72.11 billion and of the proposed priority projects to be funded, reads: MEMORANDUM FOR THE PRESIDENT

9

G.R. No. 197567, 19 November 2014.

10

Ibid.

6

xxxx SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS AND SOURCES OF FUNDS) DATE: OCTOBER 12, 2011 Mr. President, this is to formally confirm your approval of the Disbursement Acceleration Program totaling P72.11 billion. We are already working with all the agencies concerned for the immediate execution of the projects therein. xxx The memorandum of October 12, 2011 was followed by another memorandum for the President dated December 12, 2011 requesting omnibus authority to consolidate the savings and unutilized balances for fiscal year 2011. xxx Substantially identical requests for authority to pool savings and to fund proposed projects were contained in various other memoranda from Sec. Abad dated June 25, 2012, September 4, 2012, December 19, 2012, May 20, 2013, and September 25, 2013. The President apparently approved all the requests, withholding approval only of the proposed projects contained in the June 25, 2012 memorandum, as borne out by his marginal note therein to the effect that the proposed projects should still be “subject to further discussions.”

In order to implement the June 25, 2012 memorandum, Sec. Abad issued NBC No. 541 (Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012). xxx As can be seen, NBC No. 541 specified that the unobligated allotments of all agencies and departments as of June 30, 2012 that were charged against the continuing appropriations for fiscal year 2011 and the 2012 GAA (R.A. No. 10155) were subject to withdrawal through the issuance of negative SAROs, but such allotments could be either: (1) reissued for the original PAPs of the concerned 7

agencies from which they were withdrawn; or (2) realigned to cover additional funding for other existing PAPs of the concerned agencies; or (3) used to augment existing PAPs of any agency and to fund priority PAPs not considered in the 2012 budget but expected to be started or implemented in 2012. Financing the other priority PAPs was made subject to the approval of the President. Note here that NBC No. 541 used terminologies like “realignment” and “augmentation” in the application of the withdrawn unobligated allotments.

Taken together, all the issuances showed how the DAP was to be implemented and funded, that is — (1) by declaring “savings” coming from the various departments and agencies derived from pooling unobligated allotments and withdrawing unreleased appropriations; (2) releasing unprogrammed funds; and (3) applying the “savings” and unprogrammed funds to augment existing PAPs or to support other priority PAPs.11 9.

On behalf of Aquino and Abad, co-respondents in the Araullo case, the Office of the Solicitor General filed with the Supreme Court “Evidence Packets”12 bearing NBC No. 541 as well as other memoranda and communications13 issued under the DAP throughout the three years of its implementation. The same are attached to this complaint. The Evidence Packets included, among others, the sources of funds brought under the DAP and the uses of such funds per project or activity pursuant to DAP.14 10. The DAP releases, as found by the Supreme Court, are as follows: As of 2013, a total of P144.4 billion worth of PAPs were implemented through the DAP. Of this amount P82.5 billion were released in 2011 and P54.8 billion in 2012.15

11

Araullo. Emphases supplied, citations omitted.

12

Attached herein as ANNEX “C” series.

13

Attached herein as ANNEX “D” series.

14

Seventh Evidence Packet, Annex “C-6” herein.

15

Araullo. Citations omitted.

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11. During the hearing16 conducted by the Senate Committee on Finance on 24 July 2014, Respondent Abad admitted that Respondent Aquino and he declared under the DAP a total of P237.5 Billion in savings. Under oath, he detailed these forced savings from 2010 to 2013 as well as their sources: SEN. BINAY. Tapos you mentioned ho na may savings na 237 billion. Puwede ho ba kayong mag-enumerate kung saan galing itong 237 billion?

MR. ABAD. Well, ang pinakamalaking pinanggagalingan ng savings ay iyong savings sa personnel, iyong tinatawag ma [sic] Miscellaneous Personnel Benefit Fund. Nandito ho sa analysis na ginawa ng Department of Finance.

SEN. BINAY. Ito ho iyong pension and gratuity?

MR. ABAD. Hindi lamang iyon. Iyong pension kasi, isang bahagi lamang iyan. Ang MPBF, halimbawa, kasi ang ginawa ho naming patakaran, kung halimbawa mangailangan ang DepEd ng 40,000 teachers, ang ginagawa namin hinahawakan muna namin iyong pera kasi ang practice noon, pag binigay mo lahat iyong pera pero hindi pa sila nag-hire ng—halimbawa, ang pera, ang sweldo para mula Enero hanggang Disyembre pero Marso na hindi pa sila nagha-hire, minsan iyong pera nirerealign at ginagamit sa iba. Kaya amin po munang nililikom iyan at inilalagay sa Miscellaneous Personnel Benefit Fund.17 SEN. BINAY. Iyong retirement ho, kasama din ho dito, tama ho ba?

MR. ABAD. Iba ho iyong pension and guaranty fund. Iba hong special purpose fund ho iyon. Iba hong special purpose fund ho iyon, iba pa sa MPBF. SEN. BINAY. So, magkano ho ang nakuha dito?

16

Attached herein as ANNEX “E” is an excerpt of the transcript of the said hearing, which excerpt contain pages 1-6, 116-120.

17

The Aquino administration, beginning 2012, used the MPBF—a Special Purpose Fund under the administration of the DBM—to centralize funds for unfilled and newly created positions for all agencies with the DBM. Respondent Abad here described the centralization of funds for Teacher I items which are appropriated in Congress in the MPBF, to be released by DBM to the Department of Education only upon submission of the latter of proof that the teaching items will be actually filled.

9

MR. ABAD. Ito ho. Doon ho sa unreleased personal services, sa loob ho noong tatlong taon, umabot ho ng hundred— SEN. BINAY. Secretary, siguro can we do it on a yearly basis?

Actually, katulad noon di ba you said may 237 billion. Ito ho ba in a span of three years or baka ho puwede ninyong sabihin kunwari 2011, ilang savings ho iyong nakuha ninyo, 2012, 2013? xxx SEN. BINAY. So, sige ho. Noong 2011, magkano ho iyong savings na nakuha ninyo? Out of the 237 billion, magkano ho dito iyong savings and what is the source?

MR. ABAD. Halimbawa ho, iyong unreleased Personal Services, sa 2010, umabot ho siya ng 36.3 billion; sa 2011, umabot ho siya ng 35.97 billion; sa 2012, umabot ho siya ng 42.4 billion; at sa 2013, 31.2 billion.

SEN. BINAY. Ano ho ang total bale?

MR. ABAD. One hundred forty-five point nine seven two billion.

SEN. BINAY. So, kung idi-deduct ho natin sa 237 billion, saan pa ho hinugot iyong balanse.

MR. ABAD. Iyon naman iba galing sa MOOE iyong sa mga overhead or support to operations funds. Halimbawa, noong 2010 umabot iyan ng 17.75 billion; noong 2011, 11.8 billion; noong 2012, 12.6 billion; at noong 2013, 4.1 billion.

At iyong huling pinanggalingan ng savings ay iyong savings from Capital Outlays at noong 2010, 9.5 billion; noong 2011, 11.9 billion; noong 2012, 11.74 billion; at noong 2013, 12.12 billion. So, kung atin pong susumahin iyong PS, MOOE, Capital Outlay na savings, umabot ho siya ng 237.507894.18

18

ANNEX “E”, pages 117-120 10

12.

In sum, Abad admitted the sources of the DAP as: PS

MOOE

CO

TOTAL

2010

36.3

17.75

9.5

63.55

2011

35.97

11.8

11.9

59.67

2012

42.4

12.6

11.74

66.74

2013

31.2

4.1

12.12

47.42

TOTAL 145.972

46.25

45.26

237.482

13. Faced with several petitions assailing the constitutionality of the DAP, the Supreme Court in July 2014, after conducting oral arguments and requiring the submission of the parties’ respective memoranda, promulgated Maria Carolina Araullo, et al. v. Benigno Simeon Aquino III, through which it declared the DAP as unconstitutional. Condensed, the Court ruled that “[u]nreleased appropriations and withdrawn unobligated allotments under the DAP were not savings, and the use of such appropriations contravened Section 25(5), Article VI of the 1987 Constitution” on the following reasons: a.

“GAAs of 2011 and 2012 lacked valid provisions to authorize transfers of funds under the DAP; hence, transfers under the DAP were unconstitutional” b.

“There were no savings from which funds could be sourced for the DAP” c.

“No funds from savings could be transferred under the DAP to augment deficient items not provided in the GAA.” 14. The Court also ruled that “[c]ross-border augmentations from savings were prohibited by the Constitution” and that the so-called “savings” pooled under the DAP were allocated to “non-existent programs, activities, or projects” or PAPs that were not covered by any appropriations in the pertinent GAAs. 15.

The dispositive portion of Araullo reads: WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the following 11

acts and practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and related executive issuances UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987 Constitution and the doctrine of separation of powers, namely: (a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Acts; (b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the Executive; and (c) The funding of projects, activities and programs that were not covered by any appropriation in the General Appropriations Act. The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a certification by the National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditions provided in the relevant General Appropriations Acts.

16. Upon motions for reconsideration filed by both petitioners and respondents, the Court promulgated a Resolution dated 3 February 2015 which reiterated the unconstitutionality of the DAP and the legal bases therefor, only clarifying several matters on good faith: We do not doubt the existence of the presumptions of “good faith” or “regular performance of official duty”, yet these presumptions are disputable and may be contradicted and overcome by other evidence. Many civil actions are oriented towards overcoming any number of these presumptions, and a cause of action can certainly be geared towards such effect.

The very purpose of trial is to allow a party to present evidence to overcome the disputable presumptions involved.19

19

Hereinafter, Araullo on reconsideration (2015) 12

CRIMES AND OFFENSES COMMITTED BY RESPONDENTS What then are the elements constitutive of the foregoing charges outlined above and the supporting facts and circumstances in relation to the pertinent law and jurisprudence that point to Respondents Aquino and Abad’s liability and responsibility?

TECHNICAL MALVERSATION 17.

The elements of technical malversation are: a. The offender is a public officer. b. He or she applies any public fund or property to any public use other than that for which such fund or property were appropriated by law or ordinance. c. The public fund or property misapplied was under his or her administration.20

18. It should be noted that unlike malversation under Article 217 of the Revised Penal Code, technical malversation does not require that the offender be an accountable officer over the funds or property subject of the malversation. This follows from the plain text of Article 220 and the Court’s ruling in Rolando P. Dela Cuesta v. The Sandiganbayan and The People of the Philippines.21 19. Jurisprudence also states that neither criminal intent nor good faith is relevant in technical malversation: [C]riminal intent is not an element of technical malversation.

The law punishes the act of diverting public property earmarked by law or ordinance for a particular public purpose to another public purpose. The offense is mala prohibita, meaning that the prohibited act is not inherently immoral but becomes a criminal offense because positive law forbids its commission based on considerations of public policy, order, and convenience. It is the commission of an act as defined by the law, and not the character or effect thereof, that determines whether or not the provision has been violated. Hence, malice or criminal intent is completely irrelevant.22

20

Article 220, Revised Penal Code. Also, L.B. Reyes, The Revised Penal Code, Book II, 12th ed.

21

G.R. Nos. 164068-69, 19 November 2013

22

Arnold James M. Ysidoro v. People of the Philippines, G.R. No. 192330, 14 November 2012.

13

20. This is also implicit in the text of Article 220, which requires a diversion of funds or property from an appropriation to a different purpose, or in other words, from one public use to another. As the Court has held, the act of an accused in technical malversation, “no matter how noble or miniscule the amount diverted, constitutes the crime.”23 Nonetheless, as the diversion involves several billions of taxpayers’ money, there certainly was no nobility or good faith in such acts of the Respondents.

21. The first element of technical malversation is undisputed to be present in this case, for both Respondents Aquino and Abad.

22. A reading of Article 220 reveals that the second element has three components, namely, (i) the act of misapplication or diversion of funds is attributable to the respondents, (ii) the fact of diversion, and (iii) the fact that the funds diverted were already appropriated by law or ordinance.

23. That DAP is attributable to the Respondents is likewise both of public knowledge and undisputed, based on (1) admissions before the Supreme Court during the deliberations for Araullo and before the public as to their authorship of the DAP24 and (2) documents submitted to the Court, which were admitted as bases for the ruling that DAP amounted to an unconstitutional tinkering by the Executive with funds appropriated by law.

24. Common to the DAP issuances are telltale marks of Respondents Aquino’s and Abad’s conspiratorial authorship of DAP: a. statements such as “this is to formally confirm your approval of the Disbursement Acceleration Program”; b.

marginal notes in Aquino’s handwriting;

c.

Aquino’s initials next to several items in some of the memoranda; d. several boxes are marked “APPROVED,” also in Aquino’s handwriting; and

23

Ibid.

24

In numerous public statements including Aquino’s National Address on the Supreme Court’s decision on DAP, also available at http://www.gov.ph/2014/07/14/english-national-address-of-president-aquino-onthe-supreme-courts-decision-on-dap/, last accessed on July 6, 2016.

14

e.

Aquino and Abad’s signatures at the end of each memorandum.

25. The fact of criminal diversion has already been ruled upon by the Supreme Court, which described the DAP as a withdrawing and pooling mechanism for forced savings—that is, “(1) by declaring ‘savings’ coming from the various departments and agencies derived from pooling unobligated allotments and withdrawing unreleased appropriations; (2) releasing unprogrammed funds; and (3) applying the ‘savings’ and unprogrammed funds to augment existing PAPs or to support other priority PAPs.”25 26. In the first step, Respondents Aquino and Abad, through their issuances, removed the funds earmarked for several PAPs. In the third, they diverted the same to other items in the GAAs or to other PAPs not in the GAAs but which they declared as priority. These acts constitute criminal diversion, plain and simple, since time immemorial and even prior to the Araullo ruling.

27. In addition, the cross-border transfers and the funding of non-existent PAPs, which the Court found as unconstitutional acts under the DAP, both take for granted the fact of DAP-induced movement of appropriated funds from one public purpose to another.

28. The third component of the second element requires that the subject of the technical malversation be earmarked funds.26 29. An examination of the Evidence Packets as well as Respondent Abad’s admissions before the Senate as to the sources of the DAP will fully reveal that it targeted legislatively earmarked and appropriated public funds for withdrawal and diversion. For instance, the 12 October 2011 memorandum, the “genesis” of the DAP, lists the sources of the first applications of the DAP: A. Fund Sources for the Acceleration Program Fund Sources

FY 2011 Unreleased Personal

Amount Description (In million Php) 30,000 Unreleased Personnel Services (PS) appropriations which

25

Araullo.

26

De la Cuesta.

15

Action Requested Declare as savings and approve/

Services (PS) Appropriations

will lapse at the end of FY 2011 but may be pooled as savings and realigned for priority programs that require immediate funding Unreleased appropriations (slow moving projects and programs for discontinuance) Supported by the GFI Dividends

FY 2011 Unreleased Appropriations

482

FY 2010 Unprogrammed Fund

12,336

FY 2010 Carryover Appropriation

21,544

Unreleased appropriations (slow moving projects and programs for discontinuance) and savings from Zerobased Budgeting Initiative

FY 2011 Budget items for realignment

7,748

FY 2011 Agency Budget items that can be realigned within the agency to fund new fast disbursing projects DPWH-3.981 Billion DA – 2.497 Billion DOT – 1.000 Billion DepEd – 270 Million

TOTAL

authorize its use for the 2011 Disbursement Acceleration Program

Approve and authorize its use for the 2011 Disbursement Acceleration Program With prior approval from the President in November 2010 to declare as savings and with authority to use for priority projects For information

72.110

30. The Seventh Evidence Packet contains a comprehensive list of the sources of DAP funds, their proceeds, and the appropriation laws or General Appropriations Acts which appropriated them.

16

31. It is obvious from the above list, the Seventh Evidence Packet, and from similar lists contained in all the issuances that followed the October 12 memorandum, that Respondents Aquino and Abad diverted appropriations, that is, portions of the Treasury or public funds that have been set aside by the legislature for some public purpose.27 32. It should be noted that Personal Services (PS), Maintenance and Other Operating Expenses (MOOE), and Capital Outlay (CO) are allotment classes, meaning they are authorized to be released, via a general or special appropriations act, from the National Treasury to certain purposes specified by the legislature. The PS are “provisions for the payment of salaries, wages and other compensation (e.g., merit, salary increase, cost-of-living-allowances, honoraria and commutable allowances) of permanent, temporary, contractual, and casual employees of the government. The MOOE refers to “expenditures to support the operations of government agencies such as expenses for supplies and materials; transportation and travel; utilities (water, power, etc.) and the repairs, etc.” The CO refers to appropriations for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of the Government, including investments in the capital stock of GOCCs and their subsidiaries.”28 33. The last element of technical malversation requires that the public fund or property misapplied be under the administration of the offender.

34. Respondent Aquino as President entered office after vowing to faithfully and conscientiously fulfill his duties as Chief Executive, preserve and defend its Constitution, and execute the laws.29 35. During his term, Respondent Aquino was an accountable public officer for purposes of a prosecution under Title Seven of the Revised Penal Code.30 Being the Chief Executive, he was the single most accountable official responsible for the proper implementation of all the laws of the land—including the Constitution—and the single most accountable official during the budget execution stage, most

27

Section 2 (1), Chapter 1, Book VI of Executive Order 292

28

Glossary of Terms, usually published as part of the Budget of Expenditures and Sources of Financing, one of the volumes of the annual General Appropriations Acts. Also, Section 2 of EO 292.

29

Section 5, Article VII of the Constitution

30

Crimes Committed by Public Officers 17

importantly as regards the General Appropriations Act or the annual national budget. Furthermore, he is the principal of DBM Secretary Abad, the one expressly mandated by the Administrative Code to implement the national budget.

36. On the other hand, Respondent Abad’s authority and responsibility as the Secretary of Budget and Management were to exercise the mandate of his Department and to discharge its powers and functions.31 This mandate is spelled out in Chapter 1, Title XVII of the Administrative Code: SECTION 2. Mandate.—The Department shall be responsible for the formulation and implementation of the National Budget with the goal of attaining our national socio-economic plans and objectives.

The Department shall be responsible for the efficient and sound utilization of government funds and revenues to effectively achieve our country’s development objectives.

SECTION 3. Powers and Functions.—The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of organizational effectiveness and review and evaluation of legislative proposals having budgetary or organizational implications.32 37.

The Court stressed this mandate in Araullo: c.3. Budget Execution With the GAA now in full force and effect, the next step is the implementation of the budget. The Budget Execution Phase is primarily the function of the DBM, which is tasked to perform the following procedures, namely: (1) to issue the programs and guidelines for the release of funds; (2) to prepare an Allotment and Cash Release Program; (3) to release allotments; and (4) to issue disbursement authorities.

31

Section 6, Chapter 2, Book IV of Executive Order No. 292 or the Administrative Code of the Philippines.

32

Emphases supplied.

18

The implementation of the GAA is directed by the guidelines issued by the DBM. 38. Reading together their Constitutional and legal mandates, it can be gleaned that Respondents Aquino and Abad were, effectively, the two people, above of all officers having duties related to the budget, who have the duty and power of administration over public funds, most importantly, the annual national budgets. As Respondent Abad’s principal and the Chief Executive, Respondent Aquino was ultimately responsible in “the implementation of the National Budget” and “the efficient and sound utilization of government funds and revenues.”33 39. Considering the restrictions of the Constitution on transfer of appropriations and savings, as held by the Court in Araullo, Respondents Aquino and Abad had absolutely no room to construe their mandate under EO 292 as ground to supplant their judgment over that of Congress as to what PAPs will “attain our national socio-economic plans and objectives” and “effectively achieve our country’s development objectives.”

40. In other words, the Constitution forbids the Respondents, for the longest time, unless in restrictively exceptional cases which the Supreme Court has said do not apply to their acts, to withdraw funds away from the PAPs decided by Congress—such as the salaries and bonuses of government employees and the pension of retirees—and divert them to PAPs of their own choosing—such as roadworks for Respondent’s Aquino’s home province of Tarlac and additional pork barrel for legislators.34 41. Therefore, Respondents Aquino and Abad should be prosecuted for technical malversation, as all the elements thereof are present.

USURPATION OF LEGISLATIVE POWERS 42. The elements of the crime of usurpation of legislative powers are: a. The offender is a public officer.

33

Sections 2 and 3, Chapter 1, Title XVII of EO 292.

34

“PDAF (Various Other Local Projects)” and “Various Other Local Projects” are listed as DAP proceeds in most of the DAP tranches 19

b. He or she encroaches upon the legislative branch of the government: i. by making general rules or regulations beyond the scope of his or her authority, or ii. by attempting to repeal a law or suspending the execution thereof.35 43. As previously stated, the first element is present, against both Respondents Aquino and Abad.

44. The second element is likewise present, given that the Court has already ruled as to the fact of withdrawal of funds as “savings” without compliance with the legal and constitutional requisites. As categorically stated by the Court, “The withdrawal and transfer of unobligated allotments and the pooling of unreleased appropriations were invalid for being bereft of legal support.”36 45. As for the sourcing of DAP funds from “unprogrammed funds” or the standby appropriations provided in the GAAs for 2011, 2012, and 2013, the Court said that such use did not comply with the prerequisites for their release37 and was not for the purposes specified in these laws.38 46. Each act of withdrawal of funds effectively repealed the Constitution, and the 2010, 2011, 2012, and 2013 GAAs with respect to: a. the items affected, as their funding were illegally reduced; b. the definition of savings and augmentation provided by these GAAs; c. the period of availability of appropriations: i. two years for MOOE and CO under the 2011 GAA and

35

Reyes, Luis B., The Revised Penal Code, Book II, 13th ed., 1997, p. 406

36

Araullo

37

The Araullo 2014 Decision and 2015 Resolution. Chief of these requisites is that unprogrammed funds may only be released upon proof that the aggregate revenue collection has already exceeded the aggregate revenue target.

38

The Araullo 2014 Decision 20

d. e. f. g. h.

ii. one year for all allotment classes in the 2013 GAA; the provisions of the GAAs on the use of unprogrammed funds; the constitutional prohibition on transfer of appropriations; the constitutional prohibition on cross border transfers; the constitutional prohibition on funding non-existent PAPs; among others.

47. It must be clarified that while the Court declared that the President can adopt and implement the DAP as a program or an administrative system of prioritizing spending, and that in that sense, “the Executive did not usurp the power vested in Congress under Section 29(1), Article VI of the Constitution,”39 it drew the line between the DAP as a program and the unconstitutional acts Respondents Aquino and Abad committed thereunder, namely the acts mentioned in the dispositive portion of Araullo.

48. A program or an administrative system of prioritizing spending CANNOT BE a license to commit Technical Malversation, Usurpation of Legislative Powers, among other crimes or offenses, Grave Misconduct, Conduct Prejudicial to the Best Interest of the Service and Gross Dishonesty and to violate Section 3(e) of Republic Act No. 3019. Acts or omissions that constitute the elements of these and other crimes and offenses cannot be subsumed under and justified by a program or an administrative system of prioritizing spending.

49. It should also be stressed that the Court made no finding on the good faith of Respondents Aquino and Abad, or lack thereof, as clarified in the February 2015 Resolution in the Araullo case. Indeed, no such finding can be had by the Supreme Court during a certiorari case for constitutionality, as good faith is a non-issue in such a proceeding and a matter of fact to be declared as proven only after trial by a court of competent jurisdiction.

50. Hence, Respondents Aquino and Abad should be prosecuted for usurpation of legislative powers, as all the elements thereof are present.

39

Ibid.

21

DAMAGE OR UNDUE INJURY RESULTING TO THE PUBLIC SERVICE INCLUDING THE GOVERNMENT

51. As Respondent Abad admitted, the bulk or around 61.5% of the total “savings” declared under the DAP were funds for Personnel Services. This means that funds meant for new plantilla positions in government; salaries, benefits, and bonuses; retirement pension, and others were illegally diverted to the PAPs that he and Respondent Aquino identified and approved.

52. In the concrete sense, the DAP reduced the funds intended for the salaries and benefits of government personnel—for three years and to the tune of P145.972 Billion. The DAP slashed the funds that could have been spent to hire teachers, nurses, doctors, and other personnel who could have aided in the delivery of government service, and who could have eased the workload of those already in the civil service.

53. In addition, damage to the public service proceeds from the mere fact of violation of separation of powers and the unlawful diminution of funds for the PAPs declared by Congress as necessary for public service and national development.

54. There is therefore enough ground to find damage resulting to the public service, which will warrant the higher fine of 50% to 100% of the funds subjected to technical malversation.

VIOLATION OF SEC. 3(e) OF RA 3019 55. The following are the essential elements of violation of Sec. 3 (e) of RA 3019: 1. The accused must be a public officer discharging administrative, judicial or official functions; 2. He must have acted with manifest partiality, evident bad faith or inexcusable negligence; and 3. That his action caused any undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage or preference in the discharge of his functions.40

40

Consigna vs. PP, GR No. 175750-51, April 2, 2014 22

56. Again, the first element obtains in this case. It is settled that, for the period alleged herein, Respondents Aquino and Abad discharged official and administrative functions, being the main authors and implementors of the DAP. For one, they signed and implemented the DAP memoranda on their authority as President and budget secretary.

57. The second element likewise obtains herein. The acts of Respondents Aquino and Abad, as enumerated and exhaustively discussed in Araullo, expose their evident bad faith or inexcusable negligence.

58. It should be stressed that Aquino already knew beforehand that his acts of tinkering with the annual GAAs and fiscal dictatorship are contrary to the Constitution and a grave sin to the principles of separation of powers, transparency, and good governance. To quote from his own Explanatory Note in Senate Bill 312141 which Respondent Aquino filed in 2009: [A]s the “power of the sword” belongs to the President, “the power of the purse” resides in Congress.

In practice however, the President still wields considerable control over public spending through the exercise of budget impoundment. xxx x x x [T] presidential prerogative has been misused and abused, and has emasculated Congress’ authority to check the President’s discretionary power to spend public funds. In effect, the President seems to a have a vast and unbridled control over the national budget.

This bill seeks to increase congressional oversight and to limit executive influence over specific appropriations in the General Appropriations Act.

59. While his Explanatory Note mentions only impoundment, his bill as a whole sought to control rescission, reservation, and deferral of releases, all of which are similar to the unconstitutional acts committed through the DAP. 60. At the very least, Respondents Aquino and Abad, who had been top government officials for decades already at the time that

41

Attached herein as ANNEX “F”.

23

they authored and implemented the DAP, cannot feign ignorance of the illegality of their acts.

61. Finally, the acts of Respondents Aquino and Abad, have caused undue injury to the public service, as discussed above.

GOOD FAITH AND PRESUMPTION OF REGULARITY IN THE PERFORMANCE OF OFFICIAL FUNCTIONS 62. Being the authors and implementors of DAP, Respondents Aquino and Abad cannot raise the presumption of regularity in the performance of official functions in light of the conclusive and clear clarificatory confirmation or affirmation by the Supreme Court in Araullo that the implementation of DAP contravened the Constitution and the various GAAs. This presumption has thus been clearly rebutted by Araullo and there can no longer be any doubt as to the unlawfulness and illegality of Respondent’s acts.

63. Respondent Aquino could neither raise the defense of good faith. As discussed in the preceding section, Aquino’s full awareness of the unconstitutionality and illegality of the acts he and Respondent Abad were committing in a span of three years is evident from a bill that he filed when he was still a senator. On 4 March 2009, he filed Senate Bill No. 312142 entitled The Budget Impoundment Control Act, which sought to prohibit the rescission, reservation, or deferral of releases, all of which were implemented in some form or another under the DAP. 64. In Senate Bill No. 3121, he labeled these actions, which were prevalent under the watch of his economics teacher, then-President Gloria Macapagal Arroyo, as “misused and abused, and has emasculated Congress’ [sic] authority to check the President’s discretionary power to spend public funds. In effect, the President seems to have a vast and unbridled control over the national budget.”

65. Clearly, as early as 2009, Respondent Aquino knew of the illegality and unconstitutionality of this mechanism in the Philippine budget.

66. Respondents have yet to fully account for the diversion of the already appropriated public funds, and for this they must also be held criminally and administratively liable. Failure to Render Accounts is

42

Ibid.

24

itself a crime under the Revised Penal Code43 and the Government’s auditing codes. But more importantly, without prejudice to the IMMEDIATE initiation and filing of the criminal Informations for Technical Malversation, Usurpation of Legislative Powers and violation of Section 3(e) of RA 3019 and the decision on the Respondents’ administrative culpability for Grave Misconduct, Conduct Prejudicial to the Best Interest of the Service and Gross Dishonesty, the accounting may yet reveal the Respondents’ OTHER greater and harsher criminal and administrative liabilities. (Some say that the DAP was used to finance the destruction of others and the growth in the careers of some. All these point to the importance of accounting for the use of the DAP) 67. This complaint is not a debate about the Respondents’ statesmanship and brinkmanship in their administration of the peoples’ money as accountable and responsible officers. It is about the pure and simple criminal diversion of public funds that have already been appropriated, to projects or programs that did not pass Congress’ power over the purse, which in the process caused undue hardships and prejudice to the Filipino civil servants and the Filipino people as a whole. Let us unmask what the Respondents have done and show to them and other public officers who may wish to follow their crooked path – that no matter how dense, pompous and bombastic the words they employ to conceal their nefarious ends, they will – at the right time especially when the cloak of unbridled power fades and veil of immunity is shed – be caught, charged, prosecuted and convicted for the plain and simple criminal acts or omissions they do.

68. Complainants execute this complaint-affidavit to attest to the truth of the foregoing and to cause the institution of the corresponding criminal complaints against Respondents for technical malversation and usurpation of legislative powers, violation of the Anti-Graft and Corrupt Practices Act as well as grave misconduct, conduct prejudicial to the best interest of the service, and gross dishonesty.

43

Art. 218. Failure of accountable officer to render accounts. Any public officer, whether in the service or separated therefrom by resignation or any other cause, who is required by law or regulation to render account to the [Commission on Audit], or to a provincial auditor and who fails to do so for a period of two months after such accounts should be rendered, shall be punished by prision correccional in its minimum period, or by a fine ranging from 200 to 6,000 pesos, or both.

25

IN WITNESS WHEREOF, we have hereunto set our hands on this 8 day of July 2016 in Quezon City. th

REP. CARLOS ISAGANI ZARATE.

RENATO M. REYES JR.

BENJAMIN VALBUENA

FERDINAND GAITE

DANTE LA. JIMENEZ

MAE P. PANER

ANTONIO FLORES

JOAN MAE SALVADOR

GLORIA G. ARELLANO

BONIFACIO S. CARMONA, JR.

CERTIFICATION Subscribed and sworn to before me this 8th day of July 2016 in Quezon City. This is to certify that the affiants personally appeared before me and verified that they executed this affidavit-complaint, has read the same and that the contents thereof are true and correct of their own knowledge and information and based on the available records.

26