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De la Paz assumes blame for fund release

Euro general scam cover-up mimics Bolante’s — Santiago

By Angie M. Rosales

11/16/2008

Retired Philippine National Police (PNP) director for comptrollership Eliseo de la Paz and former Agriculture Undersecretary Jocelyn “Joc-joc” Bolante used the same script in taking the rap for high-level corruption, Sen. Miriam Defensor Santiago indicated in yesterday’s Senate probe into the so-called euro generals scandal.

Appearing finally before Senate probers inquiring into the scandal in which De la Paz and his wife were found by Russian authorities to be transporting 105,000 euros or P6.9 million in cash in violation of laws in that country, the retired police official assumed sole responsibility in effecting the release of the said amount. De la Paz claimed that all transactions related to the release of huge stash were made only verbally.

Defensor said the claim of De la Paz has a very close parallelism with the Bolante case in which Bolante said he was solely responsible for the release of P728 million fund for fertilizer subsidy that ended up being distributed to close political allies of President Arroyo prior to the 2004 presidential elections.

Embattled ranking police officers also maintained the money was to be used as “emergency fund” for the country’s delegation to the 77th Interpol General Assembly being held in Russia when De la Paz was apprehended.

Two other ranking PNP officers supported the claim of De la Paz, even practically attesting that the buck stopped at De la Paz, saying the former official took

upon himself the accountability for his action.

De la Paz, who was in government service for 36 years, did not bat an eyelash in admitting guilt when foreign relations committee chair Santiago cited the findings of a PNP fact-finding body that found him culpable for violating laws when he ordered the release of the amount through verbal instructions.

Santiago reminded De la Paz that for his “heroic act” in taking the fall for his superiors, he could be facing not less than 20 years behind bars.

De la Paz, however, remained unperturbed and even offered the information that the original amount he requested amounted to P10 million but he received only P6.3 million only as “contingency fund” for the RP delegation to the Interpol.

He later on added that the amount was also a standby fund in the event that the delegation will make purchases of intelligence equipment prototypes usually on display or on exhibits during such events.

“Do you agree that your superior official, such as the PNP chief (Jesus Verzosa) and the DILG (Department of Interior and Local Government) Sec. (Ronaldo) Puno should be absolved, and instead, all blame and guilt should be pinned on you? Do you agree with this situation? Because in effect that is the consequence of this statement in the PNP report” Santiago asked.

“The release of the P10 million for the travel expenses for the supposedly contingency fund is based on my instructions,” he said.

“That’s very heroic. You are assuming all guilt. But I have to tell you as a lawyer and a formal trial judge that you are facing a regular sentence of 20 years or more than that. Are you ready to do that? Go to jail 20 years, leave your wife your child, your vision impaired child, just so other people can be free? Because I refuse to believe that you are the sole perpetrator of the crime or offenses stated in these two reports. I believe you are part of a bigger conspiracy and that…you are willing to assume responsibility for others. That seems for me to be the most humanitarian view of the situation,” Santiago said.

This made Santiago to state that people in government who are likely to be accused in a criminal prosecution by the Ombudsman are obviously covering up for people higher up than themselves. “That’s why I keep repeating to General Dela Paz that he has to be prepared to go to jail, if he continues to operate in a misplaced sense of esprit de corps or out of a misguided sense of honor,” she said.

“He should not try to cover up for his superiors not only because it is a distorted sense of being a gentleman in a PMA sense but also because it will serve as a bad precedent in the campaign against corruption,” Santiago added.

The superior officials can always bribe or threaten a middle-level official to take the rap for them, and in that way we will never be able to clean our country of corruption. I really just feel sorry for Gen. De la Paz and I wish that he would change his mind because he could do the country a genuine service if he tells the truth.

The former PNP officer stood pat on his testimony, saying that the it was only his call to request for the release of the P6.9 million, the certification of which, incidentally, was made only when he was already under detention by Russian authorities.

Santiago made clear her position that she is not buying De la Paz’ testimony, telling him that even at this point, she’s also theorizes the possibility of the “PNP keeping secret funds for travel expenses or for deposit in secret bank accounts abroad or for bribing other public officials or for corruptive propaganda.”

“That is why, I could smell 10 feet away something is rotting,” Santiago said, adding that she is not discounting the possibility of the money being public in nature although the supposed paper trail tend to show otherwise.

At the initial stage of the proceedings, Santiago told her colleagues in the Senate that certification of the receipt for the funds by De la Paz and the certification made by the foreign exchange dealer Felisa Sakaluran for the conversion of the money from peso to euro was notarized on the same day, by the same lawyer.

“I’m saying that this is not government funds because the certification by Sakaluran was dated Oct. 3 and the certification (on the actual release of funds was) made by (PNP budget chief Senior Supt. Tomas) Rentoy (III) was on Oct. 10, meaning bago pa nailabas ang pera sa PNP ay napalitan na (into Euro) (meaning before the money was taken out of the PNP, these were already converted into euros).

“Suffice it to say that the first transaction with the money changer was before the money was actually released,” she said.

“I gave the money to De la Paz on Oct. 3 (but subsequently) issued the certificate of release when they were already being held in Moscow. I certify that it came from me, it was for the for the consumption of the Russian authorities to show that it came from government funds,” Rentoy said.

Santiago said the events were indicative that the PNP fact-finding report is a cover-up report. “It is intended to place guilt on Dela Paz and draw attention away from his superiors who may have issued the orders themselves, or at the very least participated in the scam,” she said.

De la Paz insisted though that the money were taken from the PNP’s intelligence funds, both to cover for the travel expenses of the group and as well as for contingency purposes.

Commission on Audit (CoA) chairman Reynaldo Villar when sought for his legal opinion said that De la Paz’s testimony that the intelligence funds might be used for other purposes is not allowed under the law.

“So in effect, the CoA chief is calling the PNP a liar,” she said.

Opposition Sen. Panfilo Lacson supported the contention of Santiago. Being a former PNP chief, Lacson pointed out an apparent violation in the release of cash advances as PNP regulation requires the fiscal or finance officer and not the budget officer or the comptroller to release the funds.

Police Supt. Samuel Rodriguez, the disbursing officer for the directorate for intelligence and his immediate superior, Chief Supt. Orlando Pestaño, who is director for finance services, corroborated De la Paz’ testimony on the former officer requesting the P10 million.

Rodriguez told Senate probers that he immediately alerted his superior on the apparent violation of auditing laws when he received instructions to release the funds by Rentoy, with De la Paz being the requesting party who is also the approving authority. Pestaño reports directly to De la Paz.

“I made a notification addressed to my immediate officer police superintendent Pestaño that there will be a violation of some auditing laws so I made it a point to notify him through memo and I submitted it to him and then I also made a memo and I submitted to police superintendent Rentoy informing police director De la Paz that there is a violation with regard to the release of cash to be sourced from the intelligence and confidential funds,” said Rodriguez.

Rodriguez admitted to Senate probers that it’s very unusual for the director of comptrollership to be requesting for P10 million coming from the intelligence funds of the PNP.

Pestaño, when notified of the “technical and legal” problem said he brought up the matter to De la Paz, said he presumed regularity when the former official assured him at that time that he would take care of the needed approval of higher authorities.

“Being my immediate officer, I authorized the release,” Pestaño said.

“Don’t you agree, that it’s a farce? The requesting party is also the approving party…and now, you could be held liable?” commented Sen. Richard Gordon.

“I’m just following the chain of command your honor,” said Rodriguez.

“What prevented you from going to the chief PNP (Verzosa)?” Lacson asked Pestaño, to which the latter merely said that it never occurred to him, with the assurance given to him and the existence of the memorandum executed by Rodriguez, also for their own protection, in case they would be put into question.

The CoA chief noted to Senate probers the possibility of some PNP officials escaping liability, as there is no existing laws on the issue of breach in so-called “chain of commands,” in this case.

“Where you out go shopping for intelligence equipment? You had the money disbursed on possibilities?” asked Sen. Rodolfo Biazon, taking off from the initial statement made to Santiago by De la Paz.

“I take full responsibility on this your honor. I’m not a scapegoat,” De la Paz said.

De la Paz also invoked his right against self-incrimination when confronted on the issue of why he did not declare the cash on hand while in the foreign land.

Initially claiming ignorance on a Bangko Sentral ng Pilipinas (BSP) regulation that requires traveling individuals to declare more than $10,000 in their possession before Sen. Loren Legarda, De la Paz later on admitted being aware of it, but not on whether he needed to make a similar declaration before Russian authorities.

Legarda said she found unbelievable De la Paz’s claim of ignorance on a standard travel regulation, citing his stature in the police force.

De la Paz reiterated his earlier claim that 45,000 of the 105,000 Euros belonged to businessman Tyrone Ng Arejola, whom he claimed to be a family friend and asked him to buy for him an expensive watch, the value of which was described by Sen. Manuel “Mar” Roxas II as something already worth a modest house and lot.

Arejola was also managed by Roxas to confess that he have had some business dealings with the PNP, providing among others equipment for civilian disturbance unit.

Santiago found several inconsistencies in both the testimony of De la Paz and his colleagues, leaving them with no credibility at all in the story that they have created for themselves.

“For example, the most telling point there is that, according to the certification of the money changer, money started to be exchanged from pesos to euros before the actual release of the money as testified to by the PNP budget officer. This alone is indicative that the PNP fact-finding report is a cover-up report. It is intended to place guilt on Dela Paz and draw attention away from his superiors who may have issued the orders themselves, or at the very least participated in the scam,” she said in an interview with reporters.

“I have already explained that the money which the PNP report calls ‘government funds’ may not be legal government funds at all but maybe the result of another scam within the PNP which I call the PNP Recruit Scam. They are given money from January to December to recruit young trainees for the police but they will appoint these trainees until after six months to one year and will not return the money either. They will keep it for themselves in the PNP. So I have estimated that from 2005 up to, let’s say, 2010, that would amount to P700 million pesos. Just one fund alone. What about other undiscovered funds that they keep at their own disposal and exercise full discretion over.

“The saying in Latin when you are evaluating evidence as a trial judge is falsus in unum, falsus in pluribum. If you tell a lie at one point, the judge is justified in presuming that you are lying in all other points. For me, their declarations are all self-interested, that is to say it is all meant to protect certain people even at the cost of their own liabilities,” she said.