SENATOR TEOFISTO GUINGONA III
SPONSORSHIP SPEECH COMMITTEE REPORT NO. 74/ SRN 518
(ALLEGED ANOMALY ON THE ACQUISITION BY THE PNP OF HELICOPTERS IN 2009 FROM MAPTRA)

Distinguished Ladies and Gentlemen,

When the Blue Ribbon Committee initially started its investigation on the PNP helicopters deal, we said that what we have is just the beginning of a story. After six hearings, the Committee is now ready to present to you the whole story on the PNP helicopters deal through Committee Report No. 74, filed pursuant to PS Resolution No. 518. Resolution Directing the Senate Committee on Accountability of Public Officers (Blue Ribbon) to Conduct an Inquiry, in Aid of Legislation, on the Alleged Anomalous and Irregular Acquisition by the PNP of Light Operational Helicopters in 2009 from MAPTRA, with the end in view of determining whether the said act constitute a violation of RA 3019, determine the parties responsible therefore and to provide remedial measures to further strengthen the said law and procurement process of the Philippine National Police.

The Blue Ribbon Committee finds Jose Miguel Arroyo and several members of the Philippine National Police liable for a violation of Sections (3) e and g and Section 4 of the Anti-Graft and Corrupt Practices Act.

Allow me to summarize our findings: First, a combination of testimonial and documentary evidence proves that former first gentleman Jose Miguel Arroyo (FG) is the real owner of the used helicopters sold to the PNP. The following points must be noted: 1. Archibald Po clearly testified that Mike Arroyo bought helicopters and used Po's previous company, Asian Spirit, to bring the helicopters into the Philippines. Mr. Po further testified that Mike Arroyo wanted to sell his helicopters and that when these were eventually sold to the PNP, Mr. Po himself turned over the money to the former first gentleman.

2. The testimony of the pilot Gaspar pointed to the Arroyos as the most frequent users of the choppers. He also confirmed that at one time. Gaspar also said that in one occasion, FG himself informed him that he would be using the chopper for that day.

3. The president of MAPTRA, the company used to sell the helicopters to the PNP, testified that despite problems in the procurement, he was assured that the transaction will be approved because Mike Arroyo was the owner of the helicopters.

4. Editha Solano-Juguan, Marketing, Billing, and Collection Manager of Lionair, Inc testified that she was the one who collected fees for operational and maintenance expenses from 2004 to 2011. She collected this from Rowena del Rosario, the bookkeeper of the company of the Arroyos. On certain occasions, she would see FG in the office. She also testified that FG witnessed the exchange of payments between her and Rowena del Rosario.

5. Even the Arroyo's own bookkeeper, Rowena del Rosario, never denied that she did, in fact, paid Lionair for maintenance and operational expenses from 2004 to 2011.

Second, these second-hand helicopters were bought by the PNP despite violations of multiple rules of procurement.

1. PNP awarded the contract to MAPTRA, Inc., an entity that was obviously not a legally, 2 technically, and financially capable supplier of helicopters.

2. PNP awarded the contract to MAPTRA despite 7 the fact that it was clear from MAPTRA's proposal that what it was selling were used helicopters (service center conditioned). PNP clearly disregarded that glaring fact and just insisted on signing a supply contract for NEW helicopters. PNP did not even ask MAPTRA for a new proposal which clearly indicates that it was able to procure NEW helicopters.

3. Ronaldo Puno is equally liable because he violated a resolution he himself signed which

requires the NAPOLCOM to monitor each stage of the procurement process undertaken by the PNP, through an Oversight Committee. Conrado Sumanga, Jr., a member of this Oversight Committee, clearly testified that they did not follow the resolution and was only present during the first hearing. The Oversight Committee never filed a report. Ronaldo Puno never asked for this report and he never issued a certification to the effect that "the contract has been entered into in faithful compliance with all applicable laws and regulations".

4. Jesus Versoza, former Chief of the PNP, approved and signed the Supply Contract without getting the certification from Ronaldo Puno and without even checking the true identity and financial, legal, and technical qualification of the supplier, MAPTRA.

5. The PNP received the helicopters despite the fact that these were used helicopters and that these were not in accordance with theNAPOLCOM specifications.

Third, the amount of $700,000 in cash, was turned over to FG as payment for the used helicopters. These are the facts of the case, upon which our finding of liability against Mike Arroyo and other members of the PNP, rests.

Mr. President, this representation, together with two other senators, endorsed a copy of this Report to the Ombudsman and to further prove the value of the

Senate Blue Ribbon Committee's investigation into this matter, the fact-finding committee of the Ombudsman has, in fact, affirmed our findings and as ruled that a violation of the Anti-Graft and Corrupt Practices Act was indeed committed. In light of this anomalous transaction, the Committee proposes the following legislative actions: First, amending the Anti-Graft and Corrupt Practices Act: a) Increasing the penalties imposed; b) increasing the prescription period of offenses; and c) providing a provision that the right of the State to recover properties unlawfully acquired should not be barred by the passage of time, are some of the proposed amendments of this Committee on the Anti-Graft and Corrupt Practices Act.

Second, amending the Government Procurement Reform Act: The following should be considered as offenses under the Government Procurement Reform Act: a) Approving a contract with a bidder that is not legally, technically, and financially capable of entering into a contract; b) Delivering and accepting goods, products, and services which are different from those approved by the appropriate bids and awards and/or negotiation committee and reflected in the resulting Supply Contract. Also, procurement laws should require entities to establish and make known the process and corresponding accountabilities in relation to stages other than bidding and/or negotiations.

In closing, please allow me to reiterate that "A nation of integrity is not made up of citizens who sit in a corner, fearful, helpless, or apathetic about the condition of the State." The Blue Ribbon Committee, in submitting this report, fulfills its mandate and puts forward its desire of a truly transparent and accountable state and people.