Ex-PCSO manager digs hole for her and Arroyo at Senate hearing

MANILA Philippines (July 8, 2011) - A candid former Philippine Charity Sweepstakes Office (PCSO) manager who is apparently trained to keep secrets but is not good at lying implicated ex-president Gloria Macapagal Arroyo even deeper in the PCSO mess now under investigation by the Senate.

At the resumption of the hearing of the Senate Blue Ribbon Committee yesterday, Rosario Uriarte, former PCSO General Manager and Deputy Chairman and Arroyo's trusted aide at the charity office, testified without a legal counsel, relying only on occasional whispered advice from former PCSO Chairman Manolo 'Manoling' Morato who sat beside her.

Uriarte said the former president approved a total of P325 million in intelligence funds, converted from the agency’s public relations budget, in a span of three years.

This confirms the records from the Commission on Audit (COA) that show that Uriarte requested intelligence funds from Arroyo amounting to P75 million in 2008, P90 million in 2009 and a total of P160 million in 2010.

The huge amount is on top of the annual P60 million confidential fund regularly included in the annual corporate budget of the PCSO.

Uriarte explained that of the P160 million in 2010,  P138 million had already been  spent before a new PCSO management took over. They were spent for the roll-out of nationwide Small Town Lottery (STL) operations, which was designed to halt the proliferation of the illegal numbers game, jueteng.

The senators found the unusually high intelligence fund in 2010 suspicious because this was an election year but Uriarte would not admit to any election related expense out of the intelligence fund.

Uriarte said former President Arroyo approved her request on Jan. 4, 2010 to divert 20 percent of the agency’s public relations budget or a minimum of P150 million to intelligence funds/confidential funds. An additional P10 million was released close to the May elections.

Uriarte admitted that she handed the request letters directly to Arroyo and that the former president approved these during those meetings.

Intelligence fund is not subject to audit and the legitimacy of its objects of expenditure is inherently difficult to establish by virtue of their confidential nature.

But Uriarte fumbled when explaining how the intelligence funds had been spent. She said the funds went to intelligence assets, surveillance on illegal numbers game operations, the rollout of the small town lottery (STL) project of the PCSO, payment of blood money for overseas Filipino workers on death row and for typhoon relief operations.

This explanation did not convince any of the senators in the panel.

Asked if they knew about the projects enumerated by Uriarte, the former members of the PCSO board led by its chairman Sergio Valencia said that they were not aware of this.

“The letters were discussed in the board meetings. We confirmed the approvals of the President. This has been the practice,” Valencia said.

Uriarte said she would inform the PCSO board of any planned disbursement of intelligence funds in executive sessions so there were no records of these meetings.

Uriarte explained that she sought approval of the president for additional intelligence fund each time because the PCSO is under the Office of the President.

She also admitted that Arroyo knew about the use of the intelligence funds because they would discuss it during their meetings. Even as she personally witnessed Arroyo sign the confidential documents related to the intelligence funds, Uriarte said she turned over all the documents to former president.

She claimed that the request for a huge amount in intelligence funds in 2010 was meant to support the rollout of the STL project of the PCSO. Uriarte justified the promotion of the STL, saying the PCSO was able to generate P7.9 billion in revenues when it was still in the experimental stage.

Uriarte also said that intelligence funds had also been used to provide blood money for OFWs on death row in at least 4 cases, costing P5 million each for a total of P20 million. Uriarte said that the blood money was given in cash directly to former foreign affairs undersecretary for migrant workers affairs Esteban Conejos.

Conejos shall be ordered to appear in the next Senate hearing to confirm or deny this.

Senator Enrile told Uriarte, "Alam mo, habang nagsasalita ka, lalo kang nababaon. Naaawa ako sayo. You know, I tell you, and you better consult your lawyer, if you are charged for the disbursement of this fund, you cannot give this kind of answers to a judge. You will go to jail."

Uriarte may be held liable for plunder, Enrile warned. “You better be careful, this is a series of transactions, it comes under the real definition of plunder and the way you are answering it, you are putting yourself inside jail,” he said.

"You need to get yourself a lawyer. You are lying. You have to face the law," Drilon followed up.

Drilon also said Uriarte implicated Arroyo in the anomaly because of her answers.

“You implicated the former president by saying that the former president knew all of this, approved of all of this. I hope you realize what you are saying. You are implicating the former president by your statements that she was part of this crime,” Drilon told Uriarte.

He said that it would be up to the former president, who is now congresswoman of Pampanga, to give her side on the issue.

Drilon noted that Uriarte’s statements were “very, very damaging” and that the Ombudsman should take a look at her testimonies and “see what liabilities the former president has on the basis of that testimony under oath of Uriarte.”

“Certainly there is basis for the ombudsman to conduct a thorough investigation.”

Both Enrile and Drilon told reporters after the hearing that they're convinced Uriarte was lying and used the intelligence funds for purposes other than what they were intended for.

While Arroyo who is now a congresswoman cannot be forced to appear before the senate panel because of inter-parliamentary courtesy, Senate Blue Ribbon committee chairman Teofisto Guingona III said she has a lot of explaining to do to the public.

“This is very serious and this amounts to plunder and if it’s not properly explained, this can also go to the courts and there she has to explain,” Guingona said.

Sen. Francis Escudero said Uriarte and Arroyo could face malversation raps for the misuse of PCSO’s intelligence funds.

“Under oath at the Senate, she readily admitted to using the intelligence fund to offset other requests for funding like blood money and relief operations and under oath, she also said that former President Arroyo was knowledgeable and approved all of these transactions,” Escudero said.

“No matter how noble the intentions were, these still do not justify the misappropriation of the funds intended for what they claimed to be for intelligence operations,” he added.

He explained that under the law, any public officer who misuses or misappropriates public funds is guilty of malversation and could face life imprisonment under the Revised Penal Code.

After the hearing, Uriarte told reporters she stands by her answers and that she's confident she'd be able to explain herself more in the next hearing.

The camp of former president Arroyo, mum as ever on accusations of corruption leveled against her, has not issued any statement as of posting time.

The Senate panel shall have the chance grill Uriarte further on the PCSO's intelligence funds in a closed-door session on Wednesday when the hearing resumes.