Abad acted in bad faith

SC justices find DBM chief aware DAP was illegal

SUPREME Court justices said Budget Secretary Florencio Abad was aware that the Disbursement Accleration Program was unconstitutional, and that the transgressions in the performance of his duties “negate the presumption of good faith.”

In his separate opinion, Senior Associate Justice Antonio Carpio also said it was President Benigno Aquino III who violated the constitutional doctrine of separation of powers of the three equal branches of government, and said the Court could not allow the “castration of a vital part of the checks-and-balances enshrined in the Constitution.”

Different faces of impeachment. Members of the
activist group Gabriela hold up various images of
President Benigno Aquino III who they want
impeached for the Disbursement Acceleration
Program that was declared illegal by the Supreme
The Palace on Thursday remained unapologetic, saying that the Executive branch had enough built-in mechanism to determine the accountability of public officials responsible for the DAP, including Abad.

Communications Secretary Herminio Coloma said the Palace will also cooperate with the Ombudsman’s plan to initiate a probe.

“If you say we need to apologize, that means we committed a wrongdoing. We did not commit any wrongdoing,” he said.

But Carpio, the most senior Supreme Court magistrate cited the admission of Abad before the Court that the DAP was approved by the President.

“The President under the DAP... usurps the power of the purse of Congress,” Carpio said.

Carpio said the President disregarded the General Appropriations Acts by declaring unobligated allotments from implementing agencies as savings in the middle of fiscal year and realigning them to other projects.

“The power to impound unobligated appropriations in the GAA, coupled with the power to realign such funds to any project, whether existing or not in the GAA, is not only a usurpation of the power of the purse of Congress and a violation of the constitutional separation of powers, but also a substantial re-writing of the 1987 Constitution,” he said.

Carpio noted that what was more puzzling is that “majority in the Senate and in the House of Representatives support the DAP and NBC 541 when these Executive acts actually castrate the power of the purse of Congress.”

“This Court cannot allow a castration of a vital part of the checks-and-balances enshrined in the Constitution, even if the branch adversely affected suicidally consents to it,” Carpio said, explaining why he voted to declare DAP as unconstitutional.

In his opinion, Associate Justice Arturo Brion said Abad was aware that the DAP was unconstitutional.

“Aside from the many admissions outlined elsewhere in the opinion, there are indicators showing that the DBM secretary might have established the DAP knowingly aware that it is tainted with unconstitutionality,” Brion said.

The Court, voting 13-0, ruled Tuesday that acts undertaken by the Executive Department through the DAP were unconstitutional.

Brion noted that Abad admitted during oral arguments that he understood the legal and practical implications of the DAP.

“As a lawyer and with at least 12 years of experience behind him as a congressman who was even the chairman of the House appropriations committee, it is inconceivable that he did not know the illegality or unconstitutionality that tainted his brainchild,” Brion said.

“Armed with all these knowledge, it is not hard to believe that he can run circles around the budget and its processes, and did, in fact, purposely use this knowledge for the administration’s objective of gathering the very funds collected under the DAP,” he added.

Brion also said that Carpio specified examples why Abad could not have been acting in good faith while Associate Justice Lucas Bersamin showed that Abad knew of the constitutional provisions that the DAP was violating.

Brion said Carpio maintained that Abad could not have been acting in good faith because the DBM implemented the DAP even if it was a respondent in cases where the Supreme Court repeatedly ruled on savings and the power to realign funds.

The DBM also allegedly failed to present evidence that the Bureau of Treasury had certified that revenue collections for fiscal years 2011, 2012 and 2013 exceeded original revenue targets, which is a requirement for the use of unprogrammed funds.

During the oral arguments, Abad also admitted that DAP funds were made available to the Commission on Audit and the House of Representatives despite his awareness that cross-border transfer of funds is prohibited under the Constitution.

Brion said the DBM released P143.7 million on Nov. 11, 2011 for the IT infrastructure program and hiring of additional litigation experts for COA and P250 million for the completion of the construction of the legislative library and archives building of the House.

Palace official may still be held culpable for the implementation of the voided DAP, the Supreme Court said in its decision.

Associate Justice Marvic Leonen, an appointee of President Aquino, took a milder view of liabilities, and said the government was driven by good intentions.

“DAP is a management program that appears to have had been impelled with good motives. It generally sought to bring government to the people in the most efficient and effective manner,” he said, in his 29-page opinion.

But Leonen also believed that the Court was not the proper venue for determining possible liabilities.

“Whether the constitutional violation is in good faith or in bad faith, or whether any administrative or criminal liability is forthcoming, is the subject of other proceedings in other forums,” he said.

In a 92-page decision released Thursday night, the Court ruled that while recipients cannot be held liable for benefitting from programs, activities and projects under the DAP in good faith, the Executive branch cannot be instantly cleared of culpability.

The high court found the applicability in this case of the doctrine of operative fact, which recognizes the validity of the assailed law or action prior to the determination of its unconstitutionality as an operative fact that produced consequences that cannot always be erased, ignored or disregarded.

“We find the doctrine of operative fact applicable to the adoption and implementation of the DAP,” the Court said.

“The doctrine of operative fact can apply only to the programs, activities and projects that can no longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities,” the decision said.

But the Court did not directly order an investigation and prosecution of the officials behind the DAP – including President Benigno Aquino III and Budget Secretary Florencio Abad – in the dispositive or conclusion of the ruling. This issue was only mentioned in passing in the ruling.

In the decision, written by Associate Justice Lucas Bersamin, the Court declared that the acts and practices under the DAP violated the constitutional doctrine of separation of powers and the provision

prohibiting inter-branch transfer of appropriations.

It specifically struck down the withdrawal of unobligated allotments from implementing agencies and their use as sayings prior to end of fiscal year, cross-border transfers of savings of the executive to augment funds of agencies outside the department and funding of projects and programs not covered by the General Appropriations Act (GAA).

It also voided the use of unprogrammed funds despite the absence of a certification by the national treasurer that the revenue collections exceeded the revenue targets for non-compliance with condititions in the GAA.

The Count has the same finding on National Budget Circular No. 541 and related executive issuances.

According to the tribunal, there is nothing under the General Appropriations Act of 2011 and 2012 to authorize transfers of funds under the DAP.

The high court added that a careful review of the documents submitted to them showed that the “savings pooled under the DAP were allocated to programs and projects that were not covered by any appropriations in the pertinent GAAs.”

“Although the OSG (Office of the Solicitor General) rightly contends that the Executive was authorized to spend in line with its mandate to faithfully execute the laws (which included the GAA), such authority did not translate to unfettered discretion that allowed the President to substitute its will for that of Congress. He was still required to remain faithfully to the provisions of the GAAs (General Appropriation Acts), given that this power to spend pursuant to GAAs was but a delegation to him from Congress. Verily, however, the power to spend the public wealth resided in Congress, not in the Executive. Moreover, leaving the spending power of the Executive unrestricted would threaten to undo the principle of the separation of powers,” it said.

The high court agreed with petitioners that the Executive department forced the generation of savings in order to have a larger fund available for discretionary spending. They said the government “by withdrawing unobligated allotments in the middle of the fiscal year, in effect deprived funding for programs and projects with existing appropriations under the GAAs.”

The anti-DAP groups said there was no law that authorized the withdrawal and transfer of unobligated allotments and the pooling of unreleased ppropriations; and that the unbridled withdrawal of unobligated allotments and the retention of appropriated funds were akin to the impoundment of appropriations that could be allowed only in case of “unmanageable national government budget deficit” under the GAAs, thus violating the provisions of the GAAs of 2011, 2012 and 2013 prohibiting the retention or deduction of allotments.

“The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated allotments and the pooling of unreleased appropriations were invalid for being bereft of legal support,” the high court said.

However, while the acts under DAP were illegal, the high tribunal cited “equity and fair play” and the “undeniably positive results (of the DAP) that enhanced the economic welfare of the country.”

“To count the positive results may be impossible, but the visible ones, like public infrastructure, could easily include roads, bridges, homes for the homeless, hospitals, classrooms and the like. Not to apply the doctrine of operative fact to the DAP could literally cause the physical undoing of such worthy results by destruction, and would result in most undesirable wastefulness,” it said.

The Court said that consequences resulting from the DAP and its related issuances could no longer be undone.

Because of this, it applied the doctrine of operative fact, which nullifies the Executive act but sustains its effects. The Court thus exempted the DAP from the general rule that a void or unconstitutional law or act produces no effect.

The Court ruling partially granted the nine petitions filed against the DAP last year by former Manila Councilor Greco Belgica, former Iloilo Rep. Augusto Syjuco, lawyers Jose Malvar Villegas Jr. and Manuelito Luna; Philippine Constitution Association (Philconsa); Integrated Bar of the Philippines (IBP); the Bayan Muna, Kabataan and Gabriela party-list groups; Confederation for Unity, Recognition and Advancement of Government Employees (Courage); and the Volunteers Against Crime and Corruption.

While some among the petitioners were preparing an impeachment complaint, an expert on constitutional law, Fr. Joaquin Bernas of the Ateneo Law School said it would be very difficult to oust the President over the DAP.

Bernas said impeachment was practically impossible because Aquino controlled both the House of Representative and the Senate.

He added that even the charge of culpable or an intentional violation of the Constitution might not be enough to convict Aquino.

“It seems to me it’s more of ignorance of the Constitution, and ignorance is not a ground for impeachment,” Bernas said.

But Bernas, said petitioners could go after Abad since he has no immunity from suit.

Also on Thursday, San Beda Graduate School of Law dean Fr. Ranhilio Aquino Jr. said the Court’s ruling on operative fact did not shield those who committed wrongdoing using DAP funds.

Aquino noted that the author of the Court decision declaring DAP unconstitutional cited Brion’s opinion, which said the doctrine of operative fact would protect only those who can prove they erred in good faith.

“That clearly places the burden of proof of the “authors, proponents and implementers” to prove good faith on their part,” Fr. Aquino said.

“Whether constitutional or not, funneling DAP funds to fictitious NGOs is criminal,” he added. “So the doctrine of the operative fact is no shield for those who may have committed wrongdoing using DAP funds.”

Of the P140.8 billion DAP funds, at least P12.357 billion went to lawmakers.

Some of the funds that went to the lawmakers were channeled to bogus non-government organizations of alleged pork barrel fund scam mastermind Janet Napoles.

There were also allegations that the DAP was used to reward the congressmen and senators who voted to impeach and convict former Chief Justice Renato Corona.

But Senator Juan Edgardo Angara said the President and his Cabinet were not liable because the Court’s ruling was prospective—meaning that such actions would no longer be allowed.

Senate President Pro Tempore Ralph Recto said the government should abide by the Supreme Court decision so that all expenditures must comply with the doctrines set forth by the ruling.

Prospectively, he said the proposed 2015 national budget, specifically its provisions, should comply with the Court’s ruling on DAP.

“To the credit of this administration, it is no longer doing any and all acts the Supreme Court has struck down as unconstitutional,” he said.

“These practices have long been abandoned. These violations are not in progress but have long been unilaterally terminated by the government,” he added. – With Joyce Pangco Pañares and Macon Ramos-Araneta



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