97 contracts for 12 Napoles NGOs over P900-M Malampaya fund

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The Department of Agrarian Reform (DAR) chopped down the P900 million into 97 contracts to allow a former undersecretary to sign the memorandum of agreements (MOA) between the agency and 12 non-government organizations (NGOs) linked to Janet Lim-Napoles, the Commission on Audit found.

State auditors revealed in their special audit on the Malampaya funds released to DAR that the contracts with the 12 NGOs linked to Napoles were split into 97 memorandums.

“[The 97 MOAs], one for each local government unit [did not]exceed P10 million even when the projects to be implemented by each NGO are practically the same,” the report read.

The report covered Malampaya funds appropriated to DAR for financial and rehabilitation assistance for communities which suffered the onslaught of Typhoons Ondoy and Pepeng.


DAR entered into 97 MOAs with the 12 NGOs “on the same date and for the same projects,” or as many as nine memoranda for three NGO.

No justification was found for the splitting of the contracts, the report added.

Auditors said that “splitting in any form is prohibited” under the Government Procurement Reform Act.

The audit team speculated that the reason for the splitting was because P10 million “is the upper limit” of the amount which former undersecretary Narciso Nieto can sign.

In their review, auditors stated that Nieto signed the MOAs and vouchers, while the checks were also signed by him or by Teresita Panlilio, former officer-in-charge undersecretary.

Any amount higher than P10 million requires the signature of the secretary of the department.

“As clearly illustrated, the contracts were apparently divided or broken down into small amounts to enable payments during project implementation in amounts that were within the signing and countersigning authorities,” the report stressed.

COA said that the NGOs received disbursement vouchers or checks on four dates in 2009: November 26 and December 3, 22 and 23.

Each check ranged between P5 million to P10 million, with one NGO, Tanglaw Para sa Magsasaka Foundation, Inc., receiving P52.5 million in one day.

Auditors said that payments made between November 26 and December 3 were made even before the notice for cash allocations was released on December 21.

“This means that DAR used funds from other sources,” the report stated.

During the filing of charges at the Office of the Ombudsman, Justice Secretary Leila de Lima told reporters that Napoles already knew about the fresh stream of money that would be channeled to DAR even before its earmark.

The 12 NGOs were then made to manufacture bogus MOAs for supposed livelihood projects, which by chance were made relevant after the two tropical storms ravaged the country.

In total, Napoles-linked NGOs received P900 million, the biggest recipients of which are Gintong Pangkabuyan Foundation Inc. and Karangyaan para sa Magbubukid Foundation Inc. each at P82.5 million.

The National Bureau of Investigation, the filing body before the Ombudsman, said that DAR officials “exclusively selected” these 12 NGOs for 97 projects.

At present, Nieto and Panlilio are facing plunder and graft charges before the anti-graft agency over the alleged rain of public treasury. JOHN CONSTANTINE G. CORDON

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