Ombudsman indicts Kalinga mayor, coop chief


BAGUIO CITY — The Office of the Ombudsman has finally indicted Balbalan, Kalinga Mayor Kenneth Dale Mangaoang and his brother-in-law Benguet Electric Cooperative (Beneco) general manager Gerardo Verzosa for graft in the P5 million barangay electrification “questioned” by the Commission on Audit two years ago.

Ombudsman Conchita Carpio Morales has recommended to the Sandiganbayan the filing of violations of section 3 (e) of Republic Act 3019 against Mayor Mangaoang and Verzosa, though dismissing the same complaints against their supposed alleged cohorts Faustino Damian Jr. ad Randy Carolino for lack of probable cause.

Morales gave credence to evidence presented by three member-consumers of the cooperative for allegedly entering an anomalous contract “with obvious personal vested interests to the disadvantage of Beneco users, taxpayers and citizens.”

Bartolome Sacla Jr., Reynaldo Suello and Mary Grace Bandoy claimed the electrification project of Beneco in Balbalan, which is even outside the power cooperative’s franchise, was anomalous and disadvantageous to the public. “Mayor (Mangaoang) and Engr. (Verzosa) abused their respective positions and relations… to realize the said anomalous contract.”

Verzosa who said he has not received the indictment papers of the Ombudsman dated April 1, 2015 but apparently it is yet to be handed out by November 30, this year maintained that he did not benefit from the project. “The help I extended to my late brother-in-law resulted to savings on the part of Balbalan LGU compared to the project costings submitted by the (Kalinga Electric Cooperation) to the Balbalan LGU.”

Mangaoang has died of a lingering illness last month.

Verzosa further argued that the materials were delivered directly to the project site in Balbalan, “hence it cannot be claimed that Beneco owned materials were used and delivered to Balbalan LGU.” He further claimed that the Ombudsman appeared to have neglected the valid points raised in his counter affidavit.

The power cooperative manager vowed he will fight it out in the Sandigan to defend his position.

COA observation

The COA sensed disorder in the “deal” between Balbalan through then Mayor Mangaoang and Beneco through Verzosa, when Balbalan bought materials from Beneco, the electric cooperative distributing power more than 400 kilometers from the town managed by Mayor Mangaoang’s brother-in-law,Verzosa.

The COA also found out that Mangaoang lacked authority to enter a MOA with Kaelco because the town’s council did not allow it, while no loan agreement was also entered between Balbalan and Kaelco.

Balbalan also accordingly failed to submit to the COA pertinent documents within government auditing rules hence, “depriving the auditor form conducting timely review and recommending corrective measures…” (as contained in COA Circular 2009-001).

COA further found out that an advance payment of nearly P300,000 for the installation of the main line was made by Balbalan which is prohibited in the Local Government Code.  Total payments of P1,534,781.30, the COA found out, were paid in the name of Faustino Damian Jr. and not receipted by Beneco “casting doubts on whether the amount entered the coffers of the company (i.e. Beneco).  The auditor also questioned the legal personality of Damian Jr. to represent Beneco “considering the absence of a Board Resolution authorizing Damian to represent the cooperative and the Memorandum of Agreement is unsigned by Beneco”.

COA said Balbalan town, “could have saved on installation cost had it assigned the installation lines to the Kaelco considering that such is within their capability to perform and the benefits derived from the project would redound to the cooperative.”

The COA though after reviewing documents pertaining to the transactions found that Beneco “seemed to have acted as middleman, thus, there was a possibility that the goods were acquired at a higher cost to the disadvantage of the LGU.” It added, “had the procurement been made directly to electrical supply companies, discounts could have been availed of, especially that purchases were made in large volumes or quantity. Both Beneco and Kaelco, could not have qualified had proper eligibility checks been conducted and the track records of bidders been considered,the COA said.

The audit report further found out “there was no evidence of the conduct of pre-procurement conference, while Balbalan town failed to post and advertise about its bidding schedule both in its website and the PhilGEPS for 7 days. “The invitation posted in the newspaper of general nationwide circulation does not contain important information regarding the project such as the Approved Budget for the Contract and the Source of Fund and a brief description of the scope of work of the project.”

The COA further noted that shopping was recommended as a mode of procurement after the first failed bidding, “despite the fact that the cost of materials to be procured is in excess of the allowable threshold for a 3rd class municipality which is P100,000 and the alternative mode allowed by law in cases of two failed bidding is negotiated procurement.” Further adding, Balbalan resorted to splitting the government contract, which is prohibited under the government procurement law.

Balbalan’s Bidding and Awards Committee (BAC) failed to invite their representative and two observers from an NGO to witness all stages of the procurement, the COA also said.

The National Electrification Administration (NEA) earlier received a complaint by Baguio City councilor Fred Bagbagen about the “deal” after the COA report.

NEA with its new charter, has taken over the overseeing powers of all electric firms and cooperatives in the country apparently dismissed the complaint. #


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