Press Release
January 26, 2016

Opening Statement of Senator Koko Pimentel for the
Senate Blue Ribbon Subcommittee Hearing

Today, we will continue hearing Proposed Senate Resolution No. 826 on the alleged P1.6 Billion Overpricing of the 11-Storey New Makati City Hall II Parking Building, the reported overpricing of the 22-Storey Makati City Hall Building, and related anomalies purportedly committed by former and current local government officials of Makati City, together with Proposed Senate Resolution No. 1114, which is about the alleged irregular transactions entered into by the Home Development Mutual Fund/PAG-IBIG Fund and the Boy Scouts of the Philippines under the leadership of Vice President Jejomar Binay.

This Subcommittee has conducted 24 hearings and to reiterate, we have tackled the following subject matters:

1) Alleged overpricing of the following infrastructure projects:

a) Makati City Hall II Parking Building;

b) Makati City Hall Building;

c) University of Makati Nursing Building;

d) Makati Science High School Building;

e) As well as the supplies for Ospital ng Makati;

2) Alleged irregularities in the following transactions:

a) Home Development Mutual Fund/PAG-IBIG Fund as to the granting of developmental loans to favored contractors and its award of service contracts to favored bidders;

b) Boy Scouts of the Philippines-Alphaland Joint Venture Agreement;

c) University of Makati - STI Joint Venture Agreement;

3) And other related irregular transactions or corruption issues, such as:

a) The award of government land to an unqualified private corporation, Meriras Realty and Development Corporation property in COMEMBO, Makati;

b) The so-called "Hacienda Binay" in Rosario, Batangas;

c) Makati City Senior Citizens' Benefits;

d) Makati City Sister cities;

e) Makati Friendship Suites; and

f) Makati Homeville.

It is worthy to note that various government agencies have acted in accordance with the discoveries that we have made herein.

On January 2015, after being prompted by our investigations, the Boy Scouts of the Philippines (BSP) was finally paid its long overdue rent by Alphaland for the use of its share pursuant to the Joint Venture Agreement between the BSP and Alphaland, in the amount of P7,709,920 covering 2014 rentals.

The Bureau of Internal Revenue (BIR) has filed on January 22, 2015, a P73.34-million tax evasion complaint against Mr. Antonio Tiu, the person who claimed ownership of the Rosario, Batangas Property, referred to in the course of the hearings as "Hacienda Binay".

The Department of Agrarian Reform (DAR) has investigated possible violations of Republic Act No. 6657, otherwise known as the "Comprehensive Agrarian Reform Law" in the Rosario, Batangas Property. DAR Secretary Virgilio de los Reyes has committed to pursue the investigation of this property and to report to this Subcommittee the results of his investigation on the alleged premature conversion or illegal conversion of agricultural land into any non-agricultural use. We are awaiting the report from DAR.

On May 7, 2015, the Anti-Money Laundering Council, pursuant to Section 10 of Republic Act No. 9160, otherwise known as the "Anti-Money Laundering Act of 2001", sought, through an Ex Parte Petition from the Court of Appeals (CA), an order freezing certain bank accounts of, investments made by, and insurance policies issued to Vice President Binay, Mayor Junjun Binay, Gerardo Limlingan, Eduviges Baloloy, Ernesto S. Mercado, Greenergy Holdings, Inc., Sunchamp Real Estate Development Corporation, Earthright Holdings, Inc., Antonio L. Tiu, Millenium Food Chains Corporation, Elenita S. Binay, Lily Hernandez Crystal, Carmelita Palo Galvan, Francisco Balaguer Baloloy, Bernadette Cezar Portollano, Mitzi Ouano Sedillo, Marguerite Lichnock, Mellisa Gay Castañeda Limlingan, Victor S. Limlingan, Patricia Grace Limlingan Padua, Gerard Martin Castañeda Limlingan, James Lee Tiu, Pei Feng Lee, Ann Lorraine Buencamino Tiu, Frederick Dueñas Baloloy, Jennifer V. Baloloy, Mario Alejo Oreta, Jose Orillaza, Daniel C. Subido, Man Bun Chong, Erlinda S. Chong, April Joy Pascual Mercado, and OMNI Security Investigation and General Services. The CA (First Division) granted the Petition and issued a Freeze Order on all the accounts of the foregoing, as stated in the First Division's Order dated May 11, 2015.

The Philippine Stock Exchange (PSE), on May 13, 2015, imposed a suspension on the trading of shares of Greenergy Holdings, Inc. as a result of the May 11, 2015 Freeze Order. It must be noted that this Subcommittee was given the assurance by the PSE that all publicly listed companies that are under the PSE's jurisdiction shall be constantly monitored to ensure that the information and data that are given to the investing public are accurate, fair, objective, and complete.

On October 12, 2015, the Office of the Ombudsman has found probable cause to file graft charges against Vice President Binay, Mayor Binay, and 22 others for Malversation, Falsification, violations of Section 3(e) of the Anti-Graft and Corrupt Practices Act, and violation of the Government Procurement Reform Act, in connection with several alleged irregularities in the procurement and award of the contracts for the design/architectural services and the construction of the Makati City Hall II Parking Building. Earlier, on October 9, 2015, Ombudsman Conchita Carpio-Morales ordered the dismissal of suspended Makati Mayor Jejomar Erwin "Junjun" Binay, Jr. and recommended that he [Binay, Jr.] be perpetually disqualified from holding any public office.

In the course of our proceedings, we have likewise requested the Government Procurement Policy Board (GPPB), through its Executive Director, Atty. Dennis S. Santiago, for recommendations to improve transparency and accountability in government procurement procedures. To date, however, we have yet to receive any recommendation from the GPPB. Thus, I would like to remind the GPPB to seriously take up our challenge to thoroughly review our government procurement system, which, as the hearings have shown, is full of loopholes, vulnerable to manipulation, and susceptible to massive corruption. The procurement laws are your Bible, you encounter these everyday, don't tell us you see nothing wrong with them.

The Commission on Audit (COA) was also tapped to provide this Subcommittee with "ideas or concrete proposals, in aid of legislation, arising from this investigation or past investigations concerning infrastructure works of the government". We hope COA would share their wisdom gained from past investigations.

The Securities and Exchange Commission (SEC), through Chairperson Teresita J. Herbosa, was also requested to submit a final report to this Subcommittee on the transactions of the involved corporations that were mentioned in the course of our proceedings.

In the Partial Report on the alleged overpricing of the Makati City Hall II Parking Building which was issued by this Subcommittee last May 26, 2015, we, after careful scrutiny of the evidence on hand, concluded that -

"The Makati City Hall II Parking Building is clearly overpriced and the amount of the overprice is from a low of P1,124,137,306.70 to a high of P1,389,069,379.14."

The Subcommittee stated in said Partial Report that its investigation on the alleged overprice in the construction of Makati City Hall II Parking Building has revealed the commission of the crime of Plunder, committed through what we called a "grand conspiracy".

Our public committee hearings on the two resolutions will end today. This representation would like to assure everyone that legislative ideas based on the evidence that we have gathered and our findings on the two resolutions shall be forthcoming. To remind everyone, this Subcommittee's proceedings were undertaken in aid of legislation.

Let it be known that the legislative recommendations which we stated in our May 26, 2015 Partial Report shall be studied and pursued in Congress. These are:

1. For the Senate to review the grant to Subcommittees of the Blue Ribbon Committee the power to cite and punish for contempt;

2. The enactment of a law providing for a presumption of overpricing in a government infrastructure project;

3. The enactment of a law requiring the use of "acceptable industry standards" approved by the COA and the DPWH, similar to the Langdon and Seah (formerly, Davis Langdon and Seah) Construction Cost Handbook, as the basis for agency estimates and as standard reference material for all government infrastructure projects;

4. The enactment of a law enhancing the transparency of government procurement processes by the mandatory video recording of all government procurement procedures and/or activities;

5. The enactment of a law that would require the inspection by COA of government construction or infrastructure projects to be undertaken together with an independent special inspection company (Independent Third Party);

6. Enactment of a law which would require the periodic rotation of the chairperson and members of the Bids and Awards Committee of local government units (LGU) in order to prevent the same evil of too much familiarization and camaraderie with those transacting with the LGU;

7. Enactment of a law which will allow "the opposition and dissenters" access to official records as a matter of right, like the Freedom of Information (FOI) law;

8. "One Project, One Ordinance", that is, the enactment of a law requiring local government units to pass one specific ordinance authorizing and governing the construction of each big-ticket infrastructure project, complete with costs estimates and planned sources of budget allocation, as well as descriptions, plans, and drawings which give an idea as to the final look and outcome of the project;

9. Enactment of an "Anti-Dummy of Public Officials Law" and make acting as a dummy of a public official, for corrupt purposes, a specific crime with stiff penalties;

10. Amend Republic Act No. 6770, otherwise known as the "Ombudsman Act of 1989" to strengthen the Ombudsman's powers in cases of forfeiture of unlawfully acquired properties of public officials or employees; and

11. Amend Republic Act No. 6541, as amended by Presidential Decree No. 1096, otherwise known as the "National Building Code," to impose stiff penalties of imprisonment and fine for any violation of this law.

Hence resource persons should submit the evidence they want to submit. But nothing prevents submission direct to the Subcommittee outside of hearing.

These are just some of the ideas which came out from the investigation of the Makati City Hall II Parking Building and the Hacienda in Rosario, Batangas. I'm sure there will be other "lessons learned" or valuable ideas for legislation to result from the hearings of the other subject matters mentioned earlier.

With that said, we now proceed to the hearing proper.

May I call on Director Rudy Quimbo to acknowledge our resource persons and witnesses for today's hearing, which, as I have mentioned, will be the last hearing of this Subcommittee.

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