A civil society group on Tuesday slapped charges of plunder, graft and violations of ethical standards against Transportation Undersecretary Jose Perpetuo Lotilla over the non-remittance of P317 million in taxes to the Bureau of Internal Revenue (BIR) by information technology (IT) provider Stradcom Corp.
In a 12-page complaint filed before the Office of the Ombudsman, the Anti-Trapo Movement of the Philippines said Lotilla issued a memorandum in January 2013 that is now being used by the Land Transportation Office’s (LTO) IT provider to evade payment of its tax dues.
Docketed as case No. IC-OC-13-1751 dated August 27, 2013, the complaint cited an earlier memorandum issued by Executive Secretary Paquito Ochoa dated December 21, 2012, which directed Transportation Secretary Joseph Emilio Abaya to “release the amount of P1 billion from the escrow account under the Escrow Agreement among the LTO, Stradcom and Land Bank of the Philippines.”
Abaya then ordered Assistant Secretary Virginia Torres, chief of LTO, to “effect the payment of the following obligations of Stradcom,” among them, the P317 million to the BIR.
“This simply means that the P317 million due and owing to the BIR as and for taxes payable by Stradcom should be immediately remitted to the BIR,” Anti-Trapo wrote.
But the group claimed that Lotilla issued a memorandum on January 18, 2013 that “effectively countermanded” the memorandum of Abaya.
“Respondent Lotilla thereby effectively thwarted the direct remittance of the P317 million,” the group said.
They added that the full P1 billion was credited to Stradcom and that the company has insisted “that the entire amount” remitted to it pursuant to Lotilla’s memorandum “can be used entirely by it to the exclusion of others.”
The group said that “to date, Stradcom refuses to remit to the BIR the P317 million,” stating Lotilla’s memorandum as defense.
“Stradcom reasons out that the Memorandum dated January 18, 2013 of respondent Lotilla is very clear as to its intent: ‘Credit it to Stradcom Account No. 0572-1038-03,’” Anti-Trapo further alleged.
The group cited an August 7, 2013 story ran by The Manila Times, quoting BIR Commissioner Kim Henares who deplored the refusal of Stradcom to settle its tax obligations.
By issuing the January 18, 2013 memo, the complainant said Lotilla “has done a great disservice to the Filipino people, prejudiced the government and caused the misappropriation and malversation of public funds.” He also caused the “illegal or fraudulent conveyance or disposition of assets,” and “granted benefit in favor of Stradcom.”
“Respondent Lotilla, by his acts as detailed in this complaint, has failed to discharge the professionalism expected of him as a public officer. He is a disgrace to the corps of professional public officers in the DOTC treading the straight path under the Government of President Benigno Simeon C. Aquino III,” the group said.
Led by Leon Peralta, the group accused the government official of accommodating the business interest of corporations, particularly Stradcom and the joint venture of J. Knieriem B.V. Goes and Power Plates Development Concepts, Inc.
“Rumors abound in the DOTC, and in business circles, allegedly to the effect that the reason why many of the multi-billion projects being bidded out by the DOTC bids and awards committee, chaired by Lotilla, are mired in controversy, and are being delayed, is that the latter is involved in extra-legal negotiations with the bidders,” the complaint, a copy of which was obtained by the Times, read.
The latest “rumor,” the group pointed out, “is that [P50 million] allegedly changed hands just to qualify an otherwise unqualified bidder for a multi-billion peso project of the DOTC.”
Lotilla is also “allegedly raising funds for a presidential candidate in the May 2016 elections.”
The group asked the Ombudsman to preventively remove Lotilla to preclude any influence or pressure on the witnesses against him or tampering of evidence.
“If respondent Lotilla is allowed to continue on as DOTC Undersecretary for Legal Affairs, he will continue to be in a vantage position to extend more favors to Stradcom and other persons doing business with the DOTC and its attached agencies,” it added.
They also asked the agency to sustain probable cause against the undersecretary and to file a criminal case against Lotilla before the Sandiganbayan.
On July 31, Internal Revenue Commissioner Kim Henares issued a warrant of distraint/levy against Stradcom, explaining that under the National Internal Revenue Code, the agency can seize personal property and bank accounts of delinquent taxpayers.
On July 29, or two days before the garnishment of Stradcom’s money, the Times broke the story about the “missing” P317-million tax dues of Stradcom.
The DOTC approved the release of P1 billion to Stradcom in January, of which P317 million would have gone to the BIR. The money came from the P4.2 billion Stradcom account that was put in escrow.
It was learned that Ochoa, Abaya, Torres, Lotilla and Land Bank of the Philippines President Gilda Pico worked for the release of the P1 billion to be withdrawn from the Land Bank.
Days later, the Times’ Chairman Emeritus Dr. Dante Ang in his article questioned the propriety of Abaya’s memo that was later used as basis to release the funds in escrow.
Abaya had claimed that the funds were released because the DOTC “was made aware of only one case, an intra-corporate dispute involving Sumbilla and Quiambao in a Pangasinan court which was dismissed by the court and was then pending appeal before the CA.”
“Furthermore, the case was an intra-corporate dispute with Stradcom on part of government. The case was clearly an internal dispute. Furthermore, there was no restraining order or injunction preventing payment. There was a need to release funds for the service provider is essential for the provision of public services. DOTC certainly did not want public service to suffer because of an intra-corporate dispute that had absolutely no bearing on government’s contractual obligation to pay.”
In his article, Ang said that Abaya wrote in his Nov. 21, 2012 memorandum to President Benigno Aquino 3rd that “while the escrow account was previously under litigation and a restraining order issued by the court, the case has since been dismissed. The case is now pending with the Court of Appeals but is not the subject of any restraining order. Therefore, no judicial intervention or notice is necessary for the release of these monies.”
But contrary to the assertion of Abaya that “the case has since been dismissed,” an interpleader suit is still pending at the Quezon City special commercial court and litigation is still ongoing.
Following a bitter intra-corporate dispute between the Quiambao and Sumbilla groups in 2011, Torres filed an interpleader before the Quezon City Regional Trial Court to determine the rightful directors and officers of Stradcom.
In its August 23, 2011 resolution, the Supreme Court upheld the filing of the interpleader suit while noting the “underlying corporate dispute” in Stradcom. The high court then ordered the re-raffling of the case to a special commercial court in Quezon City RTC for resolution of the pending intra-corporate dispute.
The tribunal dismissed Quiambao’s motion for reconsideration with finality on January 24, 2012.