Press Release
August 18, 2011

TRANSCRIPT OF PRESS CONFERENCE OF SEN. DRILON
After budget hearing

Drilon: The chair of CoA, Grace Pulido-Tan, is so exasperated with the manner in which the intelligence funds are being audited, that to use her phrase 'CoA is inutile pagdating sa audit ng intelligence funds' because intelligence funds can pass in audit simply by certifications being issued. This is what we call the closed envelope system wherein you place your accounting of intel fund in a closed envelope, seal it, send it to the chair of CoA and you have accounted for hundreds of millions of intel funds. This practice started in 1998 and what CoA is doing now is to review these regulations on the audit of intel funds to provide more safeguards. Surprisingly, she said that the requirements on the intel fund liquidation during Martial Law years were more stringent than today that is why he is prepared to give up the authority of CoA to audit intel funds under the present state of things. We agreed and we suggested to her that there should be a distinction between the intel funds of security and law enforcement-related agencies and intel funds granted to purely civilian agencies not involved in national security or law enforcement. On the first sector, meaning those agencies involved in national security and law enforcement, we should have more leeway because indeed by its very nature, it is difficult to have very stringent regulations on the liquidation of intel funds. On the other hand, when they are not involved in security and law enforcement services, we should be very strict about the liquidation of intel funds and that is borne out by the fact that for example in PCSO, can you imagine that there were no liquidations of what was allocated as intel funds in 2004 and 2007? What is significant in these 2 years is that these were election years. There is absolutely no record on file and the abuse of intel funds used by the PCSO in the past administration is clearly seen by the manner in which the officials then liquidated these intel funds which by the way was way beyond their corporate budget and they were able to convert items in the operating funds into intel funds with the authorization of then President Gloria Macapagal-Arroyo. I would repeat, there was no liquidation of intel funds in 2004 and 2007. We do not even know how much was appropriated for those years because that has to be checked with PCSO. This is now the tack of the CoA insofar as intel funds are concerned and the Senate oversight committee on intel funds will be closely coordinating with CoA. There will be closer coordination and consultation between the select oversight committee on intel funds in the Senate and CoA so that we can prevent these abuses committed in the past on this allocation. For 2012, the NEP would indicate P1,329,034,000 in intel funds.

Q: Kasama na yung sa Presidente?

Kasama na yung sa President pero hindi kasama dito yung sa GOCCs like Pagcor and PCSO.

Q: OP, PNP and AFP may intel funds?

OP, DENR, DoF, DILG and PNP, DoJ, DND, DoTC, AMLC, NICA, PDEA, Office of the Ombudsman.

Q: Kailangan pa ba ng batas para hindi na maulit yung ginagawa nila sa intel funds?

Hindi kailangan ng batas. May kapangyarihan ang CoA para maglabas ng reglamento tungkol sa pag-liquidate ng intel funds.

Q: Nabanggit kanina yung tungkol sa CCT na hindi napupunta sa tamang benepisyaryo. Ano ang plano ng komite?

Firstly, this happened in the past. The standards have been changed, as for example they were saying that there were deficiencies in the selection process because in the selection of provinces, there were provinces selected which are not the poorest of the poor provinces. That standard has been changed. Today, you look at the poorest of the poor regardless from which province they are located. In any case, they admitted that the discrepancy, as a percentage, is not that significant.

Q: Sabi nyo no need for new law...

My view is that CoA has full authority to set the regulation on the liquidation of intel funds.

Q: CoA can restrict the closed envelope system only to AFP?

Yes they can restrict the closed envelope system. They can require more detail in the liquidation report. They can require documentation. That is precisely why we are saying that there should be different set of standards for the agencies which are involved in national security and law enforcement and in the non security and law enforcement agencies.

Q: Through EO or AO?

Issuance of CoA lang yan.

Q: Sa Pagcor may intel fund din na nagamit sa 2004 at 2007?

Pagcor was not around so we have no opportunity to ask that and CoA did not bring the records of Pagcor they could not give us that information but they promised to provide us.

Q: on AMLC

AMLC's Vicente Aquino highlighted and emphasized the need to amend the law so that we would be able to criminalize terrorist financing as a distinct crime. Right now, the Philippines is classified in the group of countries whose laws and institutions are vulnerable to money launderers. Therefore there are efforts to amend the law before the year is over in order that such deficiencies can be corrected and the country will become fully compliant with the OECD and set rules in international monetary system.

Q: Hindi covered yung terrorist financing?

What they are saying is terrorist financing should be a crime in itself rather than simply a predicate crime to money laundering.

Q: Gusto ni Presidente na ma-amend ang anti-terror law.

Amendments to Anti-Money Laundering and Human Security Act are part of the priority list.

Q: Ano ang particular provision na gusto amyendahan sa Human Security Act?

Hindi ko maalala.

Q: Kay Iggy Arroyo, pwede ba siyang i-compel ng Senate to attend the hearing?

I cannot speak for the Senate but I am not in favor of issuing any subpoena to a member of the House of Reps. We invited Cong. Iggy Arroyo to the Senate to shed light on the statements he made in relation to the matter being investigated by the Blue Ribbon committee. He in effect volunteered himself as a resource person and therefore we have invited him as a resource person because he appears to have certain knowledge of certain events relevant to the investigation. But since he is a member of HOR, should he choose not to honor the invitation, we will honor the tradition of not compelling him to attend our hearings as we would do ordinarily where the witness is not a member of the legislature. We respect that tradition insofar as the compulsory process is concerned. If he declines this invitation, we will proceed to look into his allegations without his presence.

Since we are on this topic, it is in my view that the lease agreement entered into by Iggy Arroyo and Lionair is a contrived lease agreement. It was invented to cover-up and the lease agreement was not really intended to govern the relationship between the lessor, Lionair, and the lessee, allegedly LTA Inc. Why am I saying this? First, under the terms of the lease agreement, the lease of the helicopters is for a period of 2 months ending May 15, 2004. For the 2-month period, there is a minimum number of hours for use and that is 60 hours at $400/hour. The lease agreement indicates that the minimum payment for the use of helicopters for 2 months is P9.8 million. In other words, whether LTA, as a lessee, will use the helicopters or not, it is supposed to pay P9.8 million. I challenge Iggy Arroyo to produce the cheque to show payment of P9.8 million to Lionair o anumang ebidensya na nagpapatunay na binayaran nya ang Lionair ng P9.8 million. There was no payment, which means that this lease agreement was never effective and was only resorted to to shore up the allegation, futile as it is, that Lionair is the owner. Number 2, the signature of Mr. Rene Sia is doubtful because it appears only in the last page. The other pages of the lease agreement were never signed. Number 3, the registration numbers of the helicopters were only made available after the date of the lease contract. So how could they have divined the registration numbers? In fact, 2 of the 5 helicopters came after the date of the lease agreement.

Q: May cedula pa.

Yung cedula ni Rene Sia is dated April 2, 2004. The supposed lease agreement was signed March 2004. All of these indicate that this lease agreement was a contrived lease agreement and in fact the circumstances surrounding it make it a spurious document. I repeat, ilabas nyo yung cheke na P9.8 million na pinambayad sa Lionair para magpatunay na talagang nirentahan ang helicopters. Again, the circumstances surrounding the use of the helicopters would show beyond reasonable doubt that the helicopters were owned by Mike Arroyo. Maintenance and hangar fees up to I think May 2011 were paid out of LTA Bldg. There is testimony already on that payment by the staff of Mike Arroyo, whose staff was a member of the Pag Ibig board. The pilot came from the PNP. An ordinary citizen owning a helicopter could not direct the PNP pilot to be the pilot. The flight log will show that these helicopters took off and landed in Malacanang. Sino po ba ang Pilipino na pwedeng mag land at mag take off sa Malacanang kundi ang Unang Ginoo at ang kanyang pamilya.

All of these would really show beyond reasonable doubt that it is Mike Arroyo who is the owner. Unfortunately, in their desperation to invent the evidence, to rebut this very strong circumstantial evidence that the helicopters were purchased by Mike Arroyo, they come up with a spurious, contrived lease agreement which unfortunately will not fly.

Q: Can this qualify as falsification even if these are private documents?

I cannot answer that at this point. Apart from the statement of the lawyer, Atty. Fornier, I do not know where they submitted this lease agreement. We have copies of the lease agreement but I am not so certain if this was submitted to the city prosecutor's office in Pasay.

Q: If the documents are falsified to mislead the investigators?

That's why I cannot answer you because hindi ko alam kung saan dinala yung affidavit na ito. We only know it because of the press statement of the lawyer.

Q: Diba that's intended to be submitted sa Senate investigation?

I do not know yet.

Q: Once they submit it will they be liable?

Once they submit it we will review their criminal liability.

Q: Sinabmit na po sir, annex ng document, yung case laban kay Po.

Then Po should file the appropriate criminal charges against Mike Arroyo, not falsification, this is a contrived document, because Iggy Arroyo asserts that he signed it.

Q: Hindi ba pwedeng mag counter ng perjury si Archi Po, kung notarized ni Lope Velasco yon or any of the lawyers?

He can because under oath, Atty Mike Arroyo is saying that Mr. Po is the owner of the helicopters and here is the proof: a lease agreement wherein you lease these helicopters to LTA.

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