No joke: Secret fund misuse real

Confidential funds were used to buy tables, chairs, and printers. Medicines and food items were used as rewards for information. Checks amounting to hundreds of millions were withdrawn in cash and stuffed in gym bags. Fake names were used as recipients.

These were among the many red flags in Vice President Sara Duterte’s confidential fund utilization, as stated in the testimony of a state auditor presented as a prosecution witness during last week’s impeachment trial.

The Vice President’s reply to these irregularities will be known when her defense team presents its case at the trial, after the prosecution finishes presenting all four articles of impeachment against her in the next two months.

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Yet, the many telling details about how the Vice President’s P612.5 million confidential funds were spent and liquidated bolster long-standing concerns about the potential for misuse and corruption of confidential and intelligence funds (CIF).

The lack of oversight and safeguards in using secret funds, coupled with public officials seemingly having no compunction or accountability when taking liberties with taxpayer money, only calls into question the continuing practice of allocating confidential funds beyond public scrutiny.

Prima facie evidence

It was the testimony of Roderick Wamil, former auditor at the Commission on Audit’s (COA) Intelligence and Confidential Funds Audit Office, that focused on the irregularities in the confidential fund utilization. He said the VP’s office submitted mere acknowledgment receipts, instead of official receipts and sales invoices, for liquidating the expenses.

“So, based on the acknowledgment receipts they submitted, rewards were paid in cash, medicines, and various goods. However, none of those reward payments had any supporting document attached showing the success of the information-gathering or surveillance activity conducted on the basis of the information provided by the informer,” Wamil said. He said failure to liquidate the funds constitutes prima facie evidence that the funds were for the VP’s personal and private use.

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Private prosecution lawyer Lorna Kapunan presented obviously fictitious names as recipients of the confidential funds—Andy Lim, Alejandro Pikit, Mico Harina, Nova Santos, and Patty Ting. These were in addition to Mary Grace Piattos, now a household name, who was found to have no birth or identification records.

One loophole in the much-touted Joint Circular No. 2015-01, which provides guidelines in the use of CIF, is its silence on the use of aliases in the liquidation documents. Wamil said under the joint circular, aliases are neither prohibited nor allowed. This is a gray area that can be exploited to flout accounting rules, as shown in the VP’s case.

COA’s postaudit mandate

The joint circular specifies expenses where confidential funds can be used, but the agency has wide latitude and total secrecy in spending the money. COA’s postaudit mandate does not help identify red flags before the funds are used. Only after the funds were utilized could the COA come in and issue an audit observation memo asking the agency to comply with proper liquidation requirements or a disallowance if the agency fails to do so.

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This brings us to the fundamental issue of why civilian agencies, such as the Office of the Vice President (OVP), should receive confidential funds when national security is not part of their mandate. Unlike intelligence funds, which are clearly for information gathering by uniformed, military, and intelligence agencies that directly impact national security, confidential funds are for surveillance activities by civilian agencies intended to support their mandate.

But as indicated in the VP’s case, the confidential funds were used for expenses that are well within the OVP’s regular budget. Bank officials likewise found it “unusual” that the VP’s confidential funds were all withdrawn in cold cash.

Lack of accountability

It is about time confidential funds for civilian agencies are abolished, as they provide another cash cow for corruption. And one disincentive to giving civilian agencies massive secret funds is the lack of accountability, shamelessly pushed in the impeachment trial by Duterte’s ally, Sen. Imee Marcos.

In her manifestation, Marcos tried to force Wamil into saying that Duterte was not the accountable officer for the confidential funds since she was not the payee of the checks. Fortunately, Wamil was not intimidated and asserted the Vice President’s accountability: “That is not entirely correct, Your Honor, because under the Joint Circular, it shall be the responsibility of the head of the agency first to approve the cash advance; second, to oversee the agency-wide utilization; and third, to ensure compliance with the Joint Circular.”

Indeed, under what regime is the head of the agency not accountable for the use of public funds, hundreds of millions at that? What a joke.

/cb