OMBUDSMAN Conchita Carpio-Morales has approved the dismissal of a graft complaint filed against former Puerto Princesa Mayor Edward S. Hagedorn, several councilors and two private respondents for leasing out two public markets and a slaughterhouse in 2013.
Morales signed the order on Dec. 15, 2016, but the 19-page resolution was released only this week after current Puerto Princesa Mayor Clarito Bayron was dismissed from the service for another graft case.
The resolution, written by graft investigator Zarnette E. Sanceda, was dated June 30, 2016 and approved by Sanceda’s superior Joaquin E. Salazar on July 1, 2016.
Bayani H. Jacinto, officer-in-charge of the Office of the Assistant Ombudsman, signed it on Aug. 3, 2016, and Deputy Ombudsman for Luzon Gerard A. Mosquera approved it two days later.
Aside from Hagedorn, the Ombudsman also dismissed the case against city administrator Agustin M. Rocamora, councilors Miguel Cuaderno IV, Henry Gadiano, Modesto Rodriguez II, Vicky T. de Guman. Fernnie Max C. Asuncion, Eleutherius L. Edralino, Mark David M. Hagedorn, Rafaelita S. Oliveros and Patrick Alex M. Hagedorn for lack of probable cause.
Teresa A. Gabayan of the Mga Magtitinda ng Puerto Princesa Inc. filed the graft complaint, claiming then-mayor Hagedorn conspired with the city councilors, Rocamora, acting city legal officer Shirley R. Daganta, and private respondents Cesar Areza and Alexander M. Cruz of ARCDCI to approve the lease contract for the public markets and a slaughterhouse.
Gabayan said the contract “was grossly disadvantageous to the Puerto Princesa city government and the people.” Her charge that Rocamora was a conspirator was dismissed by the Ombudsman for lack of cause of action, while the complaint against Areza and Cruz were dismissed for lack of jurisdiction.
Docketed OMB-L-C-13-0176, Gabayan claimed Hagedorn received an unsolicited proposal for the lease of city properties, including the bus and jeepney terminal, from ARCDCI in 2012, and later asked the Sangguniang Panglungsod to consider a possible lease for the rundown public facilities.
The SP approved Resolution No. 593-2012 to say it has no objection to such a study, and Hagedorn asked the councilors on December 19, 2012 to pass legislation authorizing the lease.
Gabayan wrote to oppose the privatization of the public markets and slaughterhouse on December 26, 2012, claiming the move would raise rents for vendors and ultimately jack up prices of the commodities they sell.
The following day, the SP passed Resolution No. 763-2012 to authorize Hagedorn to negotiate with ARCDCI, and on January 13, 2013, the mayor requested authority to enter a lease contract with the company.
On February 19, 2013, SP conducted a public hearing on the matter and six days later, Daganta issued Legal Opinion No. 05-2013 at the instance of the SP. The city legal officer said Puerto Princesa “may legally lease government economic enterprises and cannot be bound by bidding procedures, since under Republic Act No. 7160, which is the governing law on the matter, lease is not a form of procurement.”
Nine days later, SP passed Ordinance No. 554 to authorize Hagedorn to sign the lease contract with ARCDCI, which both parties signed – the company represented by Areza and Cruz — on March 19, 2013.
On April 18, 2013, Rocamora issued Administrative Order No. 067 and designated the members of the transition team for the lease contract of the city’s facilities, while Hagedorn approved Ordinance 554 four days later.
Gabayan claimed the contract was anomalous since Hagedorn had no authority to sign a contract, as Ordinance 554 was approved after the mayor had already cut a deal with ARCDCI.
Worse, she claimed there was no bidding for the contract covered by Republic Act No. 6975, as amended by RA 7718, which mandated bidding. She insisted Hagedorn and the other respondents conspired to defraud the people of Puerto Princesa in violation of Section 3, paragraph “e” and “g” of RA 3019, or the Anti-Graft and Corrupt Practices Law.
Instead of earning about P31.7 million a month from the lease, based on what Gabayan claimed was the rate of commercial space at P400 per square meter, Puerto Princesa got only between P291,666.67 and P904,941.45 monthly, for a net loss of at least P30,781,058.60 a month.
Cruz of ARCDCI belied this claim, saying since 2012, the net income from the operations of the public markets was only P6.75 million, while the slaughter was in the red by P831,099.52.
After analyzing the evidence and the submissions of the parties, the Ombudsman said it is not authorized to invalidate contracts and declare Ordinance 554 null and void, and presumes the same to be valid.
Neither did the Ombudsman rule on if RA 7718 should apply to the case.
“Nonetheless, assuming the contracts should have been opened for bidding, respondents’ failure to do so would still not amount to the crimes charged. The lack of public bidding, in itself, is not sufficient to support the indictment of respondents for violation of Sec. 3 (e) of RA 3019,” the resolution stressed.
The Ombudsman said “it finds the evidence on record insufficient to establish the elements of evident bad faith, manifest partiality and gross inexcusable neglect on their part as an element of Sec. 3 (e) of RA 3019.”
Worse, the complainant failed to establish a conspiracy between public and private respondents, the Ombudsman said.
“There is conspiracy when two or more persons come to an agreement concerning the commission of a crime and decide to commit it. Conspiracy is not presumed. While it need not be established by direct evidence, the evidence therefor must be reasonably strong to show a community of criminal design.
“Conspiracy must be established by positive and conclusive evidence and cannot be based on mere conjecture,” the resolution argued.
The complainant also failed to establish that Legal Opinion No. 05-2013 was written to serve the interest of ARCDCI and violate the law, the Ombudsman pointed out.
Moreover, the resolution noted, the claims of unwarranted benefits to the contractor and economic disadvantage to the government were not proven.