Genuino v. Office of the Ombudsman

FIRST DIVISION

[G.R. Nos. 219653-54. September 14, 2021.]

EFRAIM C. GENUINO, petitioner, vs.OFFICE OF THE OMBUDSMAN, ANNA DOMINIQUE ML. COSETENG, SUSAN R. PAPA, JAIRULLA JAITUILLA, EMILIO AMAGO, JR., EDGARDO S. GALENO, AGUSTO M. BONILLA, DENNIS A. CORDERO, SUSANA ONG BERINO, NUNILON MORENO, DAVE SAN JUAN, AND PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), respondents.

[G.R. Nos. 219655-56. September 14, 2021.]

ESTER P. HERNANDEZ, petitioner, vs.OFFICE OF THE OMBUDSMAN, ANNA DOMINIQUE ML. COSETENG, SUSAN R. PAPA, JAIRULLA JAITUILLA, EMILIO AMAGO, JR., EDGARDO S. GALENO, AGUSTO M. BONILLA, DENNIS A. CORDERO, SUSANA ONG BERINO, NUNILON MORENO AND DAVE SAN JUAN, respondents.

[G.R. Nos. 219666-67. September 14, 2021.]

RENE C. FIGUEROA, petitioner, vs.OFFICE OF THE OMBUDSMAN AND PHILIPPINE AMUSEMENT AND GAMING CORPORATION, REPRESENTED BY EUGENE D. MANALASTAS, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedSeptember 14, 2021which reads as follows: DETACa

"G.R. Nos. 219653-54 — Efraim C. Genuino v. Office of the Ombudsman, Anna Dominique ML. Coseteng, Susan R. Papa, Jairulla Jaituilla, Emilio Amago, Jr., Edgardo S. Galeno, Agusto M. Bonilla, Dennis A. Cordero, Susana Ong Berino, Nunilon Moreno, Dave San Juan, and Philippine Amusement and Gaming Corporation (PAGCOR)

G.R. Nos. 219655-56 — Ester P. Hernandez v. Office of the Ombudsman, Anna Dominique ML. Coseteng, Susan R. Papa, Jairulla Jaituilla, Emilio Amago, Jr., Edgardo S. Galeno, Agusto M. Bonilla, Dennis A. Cordero, Susana Ong Berino, Nunilon Moreno and Dave San Juan

G.R. Nos. 219666-67 — Rene C. Figueroa v. Office of the Ombudsman and Philippine Amusement and Gaming Corporation, represented by Eugene D. Manalastas

The petitions utterly lack merit.

Preliminary Matters

To recall, the Ombudsman found probable cause to charge petitioners, Efraim C. Genuino, Ester P. Hernandez and Rene C. Figueroa, (petitioners, et al.) with (a) violation of Section 3 (e) of Republic Act No. 3019 (RA 3019) 1 regarding the consultancy contract with Jose Arne A. Navarra (Navarra) and Synercraft Control Technologies (Synercraft), (b) violation of Section 3 (e) of RA 3019 in relation to the P37,063,488.21 direct disbursement of Philippine Amusement and Gaming Corporation (PAGCOR) to Philippine Amateur Swimming Association, Inc. (PASA), and (c) violation of Section 3 (h) of RA 3019 for petitioner Efraim C. Genuino's (Genuino) supposed act of self-dealing. Accordingly, three (3) Informations were filed against them before the Sandiganbayan, docketed SB-16-CRM-0326, SB-16-CRM-0327 and SB-16-CRM-0328, respectively.

The Court takes judicial notice though that under Resolution 2 dated February 7, 2019, the Sandiganbayan Special Third Division, upon motion of the special prosecutor, dismissed SB-16-CRM-0326 on ground that the funds paid to Navarra and Synecraft were already included in the P37,063,488.21 disbursed to PASA in SB-16-CRM-0327. In other words, the subject offense in SB-16-CRM-0326 was already circumscribed in SB-16-CRM-0327. Consequently, filing both Informations for violation of Section 3 (e) of RA 3019 against the same individuals amounted to charging the accused twice for the same offense. 3

In view of this development, the Court will now focus on petitioners' purported violations in relation to the alleged illegal disbursement of P37,063,488.21 and Genuino's supposed act of self-dealing.

The Ombudsman did not act with Grave Abuse of Discretion

To reiterate, the Ombudsman found probable cause to charge petitioners, et al., with violations of Sections 3 (e) and (h) of RA 3019, thus:

Section 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

xxx xxx xxx

(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

xxx xxx xxx

(h) Directly or indirectly having financing or pecuniary interest in any business, contract or transaction in connection with which he intervenes or takes part in his official capacity, or in which he is prohibited by the Constitution or by any law from having any interest.

xxx xxx xxx

To be clear, the Ombudsman's finding of probable cause does not rule on the issue of guilt or innocence of the accused. It only determines, based on evidence presented, whether there is enough reason to believe that a crime has been committed and that the accused is probably guilty thereof. 4

Here, the Ombudsman hinged its finding of probable cause on the following circumstances:

One. Under Section 26 of Republic Act No. 6847 5 (RA 6847), the 5% allocation of PAGCOR's monthly income in favor of Philippine Sports Commission (PSC) should be directly remitted to the latter. The pertinent provision reads:

Section 26. Funding. — x x x

To finance the country's integrated sports development program, including the holding of the national games and all other sports competitions at all levels throughout the country as well as the country's participation at international sports competitions, such as, but not limited to, the Olympic, Asian, and Southeast Asian Games, and all other international competitions, sanctioned by the International Olympic Committee and the International Federations, thirty percent (30%) representing the charity fund and proceeds of six (6) sweepstakes of lottery draws per annum, taxes on horse races during special holidays, five percent (5%) of the gross income of the Philippine Amusement and Gaming Corporation, the proceeds from the sale of stamps as hereinafter provided, and three percent (3%) of all taxes collected on imported athletic equipment shall beautomatically remitted directly to the Commission and are hereby constituted as the National Sports Development Fund. x x x (Emphases added)

It is undisputed, however, that PAGCOR directly released P37,063,488.21 of public funds supposedly allotted for PSC in favor of PASA. Petitioners admit as much but argue that they were merely carrying out in good faith the directive given them by PSC. For as it was, former PSC Chairman William I. Ramirez authorized PAGCOR to directly remit PSC's shares to PASA through letter dated August 2, 2007.

Yet, the law does not appear to allow PAGCOR's direct release of public funds to PASA instead of PSC. Notably, PSC's 5% share in PAGCOR's income forms part of the NSDF which PSC is accountable for. But when PAGCOR released P37,063,488.21 directly to PASA, this huge amount may have slipped through PSC's accounting. How then could PSC liquidate its share if said share would not be reflected in its records? 6 In this regard, we agree with the Ombudsman that the direct release of the 5% share to any entity other than the PSC is probably improper, if not illegal.

Two. Genuino and his family effectively own and control TRACE Aquatic Center (TAC) to whom PASA eventually paid bulk of the disbursed amounts. Consider: 7

 

Name	Relationship with Genuino	Position in TRACE Computer College, Inc.	Position in PAGCOR	Period
Efraim C. Genuino	x	Board Member/	x	1986-2003/
	x	x	Chairman and Chief Executive Officer	February 2001-June 30, 2010
Aurora F. Genuino	Wife	President	x	2002-2007
Sheryl F. Genuino	Daughter	Board Member (vice Efraim C. Genuino)	x	2004
Erwin F. Genuino	Son	President	x	2008-2010

 

There were years when Genuino's position in PAGCOR and TRACE College overlapped. Too, petitioner Genuino and his family occupied top executive ranks in TRACE College. In fact, from 2007-2009, when the funds were disbursed to PASA and ultimately paid to TAC, Genuino's son was serving as President of TRACE College. It is not far from possibility, therefore, that Genuino had pecuniary interest in the disbursements to PASA and transactions with TAC.

True, the Minutes of the PAGCOR Board Meeting dated August 15, 2007 shows that petitioner Genuino voluntary inhibited 8 himself from deliberations on matters relating to PASA. But even prior to the aforesaid Board Meeting, PAGCOR already committed itself to allocate P124,507,172.00 to PASA through MOA dated March 15, 2007. We have yet to hear petitioner Genuino's defense on how this matter came to be under his watch as Chairman of PAGCOR. Without any sufficient explanation, therefore, we are inclined to agree with the Ombudsman that in all probability, the allocation and subsequent disbursement of funds in favor of PASA bore Genuino's imprimatur.

Three. Of the P37,063,488.21 disbursed funds to PASA, P910,000.00 was paid to Navarra and Synecraft which Navarra himself owned. 9 In all, P9,000,000.00 would have been paid to them in a period of five (5) years 10 were it not for PSC's subsequent rescission of authority supposedly granted by Ramirez to PAGCOR.

The Ombudsman found though that the consultancy contracts with Navarra and Synecraft were excessive and unnecessary considering that the TAC's facilities were far superior than what they had to offer. 11 This factual finding of the Ombudsman is binding on this Court and impels us to believe that, indeed, there was no need to enter into the consultancy contracts after all. Even if necessary, the excessiveness of the amounts to be paid to Navarra and Synecraft renders it probable that the transaction was not above board.

Finally. The direct disbursement of public funds in favor of PASA was consummated through its coordinated actions with PSC and PAGCOR, through their officers including herein petitioners. To reiterate, petitioners Genuino, Ester P. Hernandez, and Rene C. Figueroa were PAGCOR Chairman, Vice President of Accounting Department, and Executive Vice President and Head of Research and Development Department, respectively, when the funds were disbursed. Indubitably, these are top level executive positions which could have been used to influence, directly or indirectly, the execution of the Memorandum of Agreement 12 (MOA) dated March 15, 2007, the grant of financial assistance, and the disbursement of funds in favor of PASA.

In any event, Genuino himself signed the checks that eventually released the subject funds which ultimately landed in the pockets of TAC. Meanwhile, Figueroa and Hernandez issued recommendatory actions and marginal notes which formed the basis for the questionable release of funds to PASA.

All told, we agree with the Ombudsman that there is probable cause to believe that petitioners, together with other PAGCOR, PASA and PSC officers caused undue injury to the government when they directly disbursed public funds allotted for PSC in favor of PASA. Indeed, other national sports associations may have been deprived of badly needed funding for their athletes because of their concerted actions. All these, apart from the alleged pecuniary interest of Genuino in the transactions. As the disbursements ultimately made their way to TAC, a facility under the ownership and control of petitioner Genuino and his family, we are similarly led to the conclusion that the disbursements and transactions were probably not above board after all. Consequently, we are not inclined to rule that the Ombudsman acted in grave abuse of discretion when he found probable cause to charge petitioners with violations of Section 3 (e) and (h) of RA 3019.

Indeed, the Court does not generally interfere with the Ombudsman's findings of probable cause. This rule on non-interference is based on the respect for the investigatory and prosecutorial powers granted by the Constitution and Republic Act 6770, The Ombudsman Act of 1989, to the Office of the Ombudsman. 13

Despite this well-entrenched principle, however, an aggrieved party is not without recourse where the finding of the Ombudsman as to the existence of probable cause is tainted with grave abuse of discretion, amounting to lack or excess of jurisdiction. An act of a court or tribunal may constitute grave abuse of discretion when it is performed in a capricious or whimsical exercise of judgment amounting to lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of positive duty, or to a virtual refusal to perform a duty enjoined by law, as where the power is exercised in an arbitrary and despotic manner because of passion or personal hostility. 14 But as earlier discussed, there is no such grave abuse of discretion here.

ACCORDINGLY, the petitions are DISMISSED. The Joint Resolution dated September 22, 2014 and Joint Order dated January 28, 2015 of the Ombudsman in OMB-C-C-11-0351-F and OMB-C-C-11-0358-F are AFFIRMED with MODIFICATION.

The recommendation to file an Information for violation of Section 3 (e) of RA 3019 against petitioners, et al., with regard to the disbursements of public funds for the consultancy services in favor of Jose Arne A. Navarra and/or Synecraft Control Technologies is SET ASIDE.

These cases are CONSOLIDATED with G.R. Nos. 219666-67, entitled "Rene C. Figueroa vs. Office of the Ombudsman, et al.," also First Division cases, and G.R. Nos. 219666-67 are REFERRED to the Member-in-Charge of the lower-numbered cases, G.R. Nos. 219653-54 and G.R. Nos. 219655-56.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1. Entitled "Anti-Graft and Corrupt Practices Act," approved on August 17, 1960.

2. Penned by Presiding Justice Amparo M. Cabotaje-Tang and concurred in by Associate Justices Bernelito R. Fernandez and Sarah Jane T. Fernandez.

3.People v. Genuino, et al., Criminal Case Nos. SB-16-CRM-0326 to 0328, February 7, 2019.

4. See Arroyo v. Sandiganbayan, et al., G.R. No. 210488, January 27, 2020.

5. Entitled "Philippine Sports Commission Act," approved on January 24, 1990.

6. G.R. Nos. 219653-54, Vol. I, Rollo, pp. 44-45.

7.Id. at 934.

8.Id. at 683.

9.Id. at 50.

10.Id.

11.Id.

12. G.R Nos. 219666-67, rollo, p. 98.

13.Reyes v. Ombudsman, et al., 810 Phil. 106, 114 (2017), citing Dichaves v. Ombudsman, 802 Phil. 564 (2016).

14.Yatco v. Ombudsman, et al., G.R. No. 244775, July 6, 2020.