Ex-GSIS head Garcia denounces Ombudsman over graft case

Former president and general manager Winston Garcia of the Government Service Insurance System (GSIS) on Tuesday criticized the Office of the Ombudsman for supposedly sitting on a graft complaint against him for 10 years before eventually filing a case at the Sandiganbayan last week.

“This case has been languishing in the Office of the Ombudsman for more than 10 years and was only decided this year, less than a year before the May 2016 elections,” Garcia said in an emailed statement sent by his lawyer Star Elamparo.

Last Friday, the Office of the Ombudsman, through its Office of the Special Prosecutor (OSP) filed graft charges against Garcia and 10 other high-ranking former officials of the pension fund for government employees. The charges alleged that the respondents in 2004 awarded a multimillion-peso contract to UnionBank of the Philippines (UBP) for the GSIS electronic membership card (E-Card) project.

“It will be noted, however, that in their haste to file this case, certain procedural and jurisdictional lapses were committed which can be valid grounds for an immediate dismissal. We are confident we will be vindicated before an impartial tribunal such as the Sandiganbayan,” Garcia said.

Garcia has filed his certificate of candidacy for the gubernatorial seat of Cebu in 2016. He is running under the Garcia clan’s One Cebu party.

Garcia said the sole basis of the Ombudsman for the filing of the case was the “reckless findings” of a 2005 Commission on Audit (COA) report.

In the report, the commission said the contract was awarded despite irregularities that included undue preference to UnionBank of the Philippines which at that time had fewer branches and ATM stations nationwide than the state-owned Land Bank of the Philippines – then the GSIS depository bank.

E-Card still on

With the transfer of GSIS funds from LandBank to UnionBank, the commission estimated that the government stands to lose P1.27 billion in seven years.

The GSIS e-card project was aimed at providing easier and paperless transactions for GSIS members in their application for loans and benefits.

In his statement, Garcia noted there was nothing irregular in awarding the E-Card project to UnionBank. He pointed out that “the project continues to be implemented by the GSIS up to the present without any objection from the COA.” 

“How can the E-Card project be disadvantageous to the government when until now the GSIS is still using it? They tried to replace it but nobody is capable of providing such a system,” Garcia said.

“In fact, the E-Card project continues to be the most successful program of the GSIS, generating billions of savings and earnings when it replaced the costly check system of disbursement of loans, claims and pensions,” he added.

Garcia claimed that the GSIS saved around P200 million a year and was able to lower the maintaining average daily deposit by P6 billion a year when it started implementing the E-Card project.

While government agencies and corporations are never required to hold public biddings in their choice of banks for deposit and disbursement, the GSIS nonetheless conducted a selection process, Garcia said.

LandBank refused

The pension fund invited all BSP-approved banks dealing with GSIS, and other private banks that were willing to act as a GSIS depositary bank.

Garcia said only three banks accepted the invitation: UnionBank, Bank of the Philippine Islands (BPI) and Development Bank of the Philippines (DBP).

“LandBank refused to participate despite the invitation,” Garcia said.

The GSIS technical committee chose UnionBank for many valid grounds, including a lower maintaining balance of P1 billion. He noted that BPI and DBP required a maintaining balance of P2 billion.

UnionBank also did not require any maintaining balance for E-Card holders, Garcia said.

He claimed that the UnionBank E-Card is more expansive in terms of use and accessibility as it can be used in ATM facilities not only in the county but also abroad. The card from BPI and DBP can only be used in local ATMs running on the Plus and Visa networks.

“This feature allows our pensioners living abroad to access their pensions,” Garcia said.

He noted that UnionBank is not only an approved government depository bank but is also partially owned by the SSS, the state-run pension fund for private sector employees. – VS, GMA News