Abad tags Corona in World Bank loan mess

Posted at 01/17/12 11:46 PM

MANILA, Philippines - Irregularities involving the use of a portion of a $21.9-million loan by the World Bank to the Supreme Court occurred during the term of Chief Justice Renato Corona, Budget Secretary Butch Abad said on Tuesday.

In an interview with Tony Velasquez on ANC Primetime, Abad said Annex 4 of the World Bank aide memoire detailed the alleged misuse of the Supreme Court loan.

"If you read the Annex 4 of the report, it was very clear there that the gross irregularities happened in 2010 and 2011," Abad said.

"I was surprised when the Chief Justice said that he has nothing to do with this particular project," he said, citing Corona's earlier statement that the $21.9 million project intended for judicial reforms started before he became chief justice.

"The loan was negotiated sometime in 2003. Then it was implemented. What was startling is the finding that the mid-2010 up to 2011 [period] when they observed escalating use of funds and accompanying this was irregular use of funds," Abad said.

"There were procurements that violated the agreement or simply ignored the agreement in the contract," he said. "That is something that the chief justice has to answer."

"This is very explicit in the World Bank memoire," he said.

The World Bank and Malacañang on Tuesday confirmed the financial institution's aide memoire that pointed out "ineligible expenditures" in the use of its loan to the Supreme Court for the Judicial Reform Support Project.

Out of town trips, lavish accommodations

Instead of being spent fully for reforms in the judiciary, a portion of the  loan was allegedly used for out of town trips of SC magistrates.

On March 18, 2011, Chief Justice Renato Corona and other Supreme Court officials went to the University of Cebu. The aide memoire said it appears that plane fares for some court officials were taken from the loan.

The World Bank is also questioning the travel allowance of 2 court officials, which reached P170,000 or $4,000 each for a 3-day trip to Sydney, Australia.

This is aside from lavish room accommodations and dinners shouldered by the Supreme Court. Corona was appointed chief justice of the Supreme Court in 2010.

The memo also questioned what it believes is the excessive power given by the Supreme Court to its spokesman and administrator Jose Midas Marquez in handling the loan package.

The bank said Marquez, while acting as court administrator, was also chief of the powerful Bids and Awards Committee.

"In four contracts to one firm, this senior court official was also requestor of services, approver of terms of reference, end user, authorizer of contract extensions, authorizer of payments," the memo said. The World Bank pointed out that this has led to questionable decisions on how the fund was managed.

The World Bank is demanding a refund from the Supreme Court for expenses that were not covered by the grant.

Corona has denied involvement in the alleged misuse of the World Bank loan.

He said the alleged misuse of the funds happened more than 10 years ago before he became chief justice.

"Ang iba naman dito ay maipapaliwanag ni Judge Geraldin Econg ng PMO [Program Management Office] na siyang namamahala nito sa mga pondong ito," he said.

Marquez echoed Corona's statement, saying the PMO is preparing the answer to the memo.

"Let's give the PMO an opportunity to address the issue. More than anyone, it should be the PMO of the Court which could explain," he said on Monday.

Regarding his multiple positions, Marquez said: "That's an internal matter. I've held more during Chief Justice [Reynato] Puno's watch."

Unusual report

Abad, meanwhile, described the memo as "unusual."

"It is not regular for an institution like the World Bank to come out with such a report. [The memo uses] very sharp and pointed language," he said.

"For example, lack of internal control or financial management... that you can no longer trust or believe in. Those are very strong findings that I'm sure is causing a lot of sleepless nights among those directly involved in the project," he said.

He added that seriousness of the allegations in the memo, as well as the response of some Supreme Court officials, caught him by surprise.

"I was surprised when higher officials of the judiciary were initially saying they had not read the report when fact of the matter, the report was directly furnished to one of the associate justices who directly reports to the head of the Project Management Office, who also reports directly to the Court Administrator," he said.

"I would find it rather strange for such delicate findings, very scathing assessment. I find it strange it did not get to the higher-ups in the judiciary," he added.

"I would be very concerned if I'm accused of wanton and gross abuse in the management of public funds," Abad said.

Fiscal autonomy

The Department of Budget and Management official said the problem is caused by the judiciary's insistence on fiscal autonomy and refusal to be placed under thorough financial checks and balances.

"They always raise the flag of fiscal autonomy," he said.

This happens whenever the executive tries to exercise its oversight functions and request financial reports from the judiciary, especially the use of funds that are provided by the former.

"We have always been insisting that it is to the best interest [of the Supreme Court] to be transparent and accountable for the use of public funds," Abad said.

He declined to dismiss the idea that the contents of the World Bank memo will be used against Corona in his impeachment trial.

He said Corona's impeachment case is "sui generis" or one of a kind.

"It is up to the impeachment court to rule on," Abad said. "I am certain that this aide memoire has caught the attention of prosecutors."

Copies of memo

Abad also confirmed getting a copy of the World Bank report.

"It was an aide memoire that was principally directed to Associate Justice Teresita de Castro of the Judicial Reform Project. There were 13 others who were issued copies. I was one of them," he said.

He explained that while the judiciary is the beneficiary of the loan, the executive department handled the negotiations for the project.

Abad said that while the judiciary has fiscal autonomy, the World Bank recognizes the oversight functions of the Department of Finance and the National Economic and Development Authority.

"We were naturally provided copies of the aide memoire," he added. - with ANC