SC clears Marcos cronies, others of graft over P100-M ‘behest loan’

The Supreme Court (SC) cleared former cronies of the late dictator Ferdinand Marcos and several others of graft over an alleged P100-million behest loan granted to a sugar milling company by the Philippine National Bank in 1968.

In a March 20 decision, the Second Division denied a petition for certiorari filed by the Presidential Commission on Good Government (PCGG) challenging the Office of the Ombudsman's 2006 dismissal of a criminal complaint against former PNB directors, including ex-senator Juan Ponce Enrile, and the Tolong Sugar Milling Company, Inc. (TSMCI).

The case revolved around a $27.793-million PNB loan (more than P108.9 million based on the exchange rate at the time) to the sugar milling company, despite the TSMCI being "under-capitalized" and the loan being "under-collateralized," according to the PCGG.

The commission named former PNB directors Enrile, Roberto Benedicto, Antonio Diaz, Ismael Reynoso, Simeon Miranda, Renato Tayag, Juan Trivinio, Cesar Virata, Jose Macario Laurel IV, and Jose Leido Jr. as respondents.

Also impleaded were former PNB Dumaguete branch managers Rafael Perez and Felicisimo Gonzales, as well as former TSMCI officers Ramon Escaño, Evelina Teves, Herminio Teves, Lorenzo Teves, Catalino Noel, and Lamberto Macias.

The Ombudsman had dismissed the complaint for lack of probable cause, prompting the PCGG to bring the case to the High Court with an accusation that the Ombudsman committed grave abuse of discretion.

However, the High Court ruled that the PCGG's allegations were "insufficient" to support charges for violation of Section 3(e) and (g) of Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act.

While the commission "exerted great effort" to explain how the loan bears the characteristics of a behest loan, the Court said "they utterly failed to demonstrate or even allege that the respondents acted with manifest partiality, evident bad faith, or inexcusable negligence, causing undue injury or unwarranted benefit to any party."

There was also "no allegation" that the respondents "conspired and colluded with each other to defraud the government," the Court said.

The justices also ruled that the Ombudsman's dismissal of the complaint was not tainted by grave abuse of discretion, even assuming that the PCGG's allegations were sufficient to support the charges, because the PNB Dumaguete branch had supposedly appraised the properties offered by the sugar milling firm at P111 million in October 1967, "negating" the PCGG's claim that the value of the company's collateral was "substantially insufficient to cover the amount of the loan."

The Court thus held that the PCGG failed to show that the Ombudsman gravely abused its discretion by dismissing the complaint against the respondents. It said the PCGG questioned how the Ombudsman assessed the evidence in its investigation, which "could not be the proper subject of a petition for certiorari."

"Simply stated, no grave abuse of discretion may be attributed to the Ombudsman merely because of its alleged misappreciation of facts and evidence," the Court said.

"Instead, the instant petition is bereft of any statement or allegation purportedly showing that the Ombudsman exercised its power in an arbitrary or despotic manner by reason of passion or hostility. Consequently, the instant petition must be dismissed."

The decision was penned by Associate Justice Jose Reyes, Jr., with concurrences from Associate Justices Mariano del Castillo, Estela Perlas-Bernabe, Alfredo Benjamin Caguioa, and Amy Lazaro-Javier. — Nicole-Anne C. Lagrimas/DVM, GMA News