Cash gifts & car plans – COA report shows what Corona’s wife did as a GMA appointee

My exclusive

By Raïssa Robles

Cristina Corona, wife of Renato the Philippine Supreme Court Chief Justice, claims that a Department of Justice investigation of her is actually connected to her husband’s impeachment trial.

According to her, “the Chief Justice is clearly the target, not me,” she said in a statement.

She has denounced as “bare-faced lies” and “purely black propaganda” all allegations of fund misuse and abuse hurled against her by Frank Daytec Jr., a sacked operations manager of John Hay Management Corporation which she used to head.

The case of Cristina Corona is common in Philippine politics. Whenever a political squabble erupts, all the alleged dirt comes out in the open.

Here’s what ordinary citizens need to know: even if the charges are politically motivated — ARE THEY TRUE? In this regard, there’s a Commission on Audit Report (COA) that the public will find interesting.

First though, some background.

It’s true – as her hubby had said – that she had been working for John Hay since the 1990s. What her hubby did not say in his December 16, 2011 speech on the steps of the Supreme Court was that Mrs Corona was personally appointed to the John Hay board of directors by the newly-installed President Gloria Macapagal-Arroyo on May 19, 2001 – or roughly a week after Estrada loyalists had stormed Malacanang Palace and nearly unseated Arroyo.

Why do I bring up this point? Because with everything going on around her and the political instability of her government then, Mrs Arroyo took the time out to make such an appointment. I can only conclude that this was important enough to be on her to-do list that May.

The following year, Mrs Corona’s hubby was rewarded with a plum post – a seat in the 15-member Supreme Court. While the salary was not that good, the psychic income was tremendous.

I don’t recall anyone raising at that time any question over the possible conflict of interest involved in a top judge, appointed by the President,  having a wife occupy a position also by virtue of presidential appointment. Perhaps at that time the public mood was one of relief that Estrada had been unseated.

In 2005, however, things dramatically changed when the nation learned that very possibly Mrs Arroyo had cheated in the 2004 elections in order to win by a million votes. The forces that installed Arroyo broke into factions.

From that time, challenges to her staying on in power came thick and fast. She barred her cabinet officials and even military officials from appearing in congressional investigations by issuing Executive Order 464 – which the Supreme Court ruled as constitutional twice on April 20, 2006 and August 15, 2006. Corona went along.

She tried to amend the Constitution through a “people’s initiative so she could extend her term of office. The SC rejected this on October 25, 2006. Corona dissented.

In February 2006, she foiled a planned military withdrawal from her government by declaring “a state of national emergency.” The SC ruled in May 2006 that her declaration was constitutional but the warrantless arrests of rallyists were not; and any seizure of a privately-owned public utility or business would also not be constitutional. Corona agreed.

Despite the fact that the Supreme Court was increasingly dealing with questions that directly involved Mrs Arroyo’s actions as President, Mrs Corona – presumably with her husband Associate Justice Corona’s consent – allowed herself to be appointed chairperson of the John Hay board on April 12, 2007 and to a concurrent post as John Hay president on July 28, 2007.

I don’t know what the Code of Judicial Conduct says on such appointments. The SC only passed its own rules of ethics for associate justices much later on.

And strangely, there seems to be nothing in our laws that forbids a close relative of an SC justice from being appointed by the President to a high level position. Justice Corona, in his speech, sort of implied that his case was similar to that of the Abad family where the father Florencio is the Budget Secretary, the daughter is the Presidential Management Staff, the son is with the Department of Finance and the mother is a prominent congresswoman. (No, she does not chair the Appropriations nor Ways and Means Committee.)

Not quite. It’s possible a case of lack of check and balance can be lodged in the Abad family’s case but not conflict of interest.

In the Corona couple’s case, it can easily be argued the family became beholden to the President for the wife’s appointment. And incidentally, did Associate Justice Corona ever make a public disclosure of that possible conflict of interest situation then?

Not that I can recall.

Now let’s go back to Mrs Corona and how COA had rapped her actions and that of the John Hay Board.

The COA under President Arroyo released an eight-page “Comments and Observations” on John Hay on its website. It dealt with John Hay’s financial dealings for 2007 – the year Mrs Corona was appointed its Chair and president.

You can download the report by going to the COA website and clicking on “Cluster IV – Industrial & Area Development and Regulatory”.

COA branded as illegal the action of the “Board of Directors (which) granted a cash gift of P30,000, net of tax, each to themselves.”

Here’s the portion from the COA finding which you can download from the COA website:

6. The JHMC Board of Directors granted a cash gift of P30,000, net of tax, each to themselves at the end of the year totaling P210,000 without legal basis.

Verification of disbursement vouchers disclosed that a Year-End Benefit (YEB) of P30,000, net of P3,333.33 tax, or a total of P210,000, was granted to each member of the Board of Directors of JHMC at the end of the year without legal basis. This same benefit was granted to the members of the Board of Directors in 2006, which was also a subject of an Audit Observation Memorandum for want of legal basis.

Department of Budget and Management (DBM) Circular Letter No. 2002-02 states in part the following:

“2.0 To clarify and address issues/requests concerning the same, the following compensation policies are hereby reiterated:

2.1 PERA, ADCOM, YEB and retirement benefits are personnel benefits granted in addition to salaries. As fringe benefits, these shall be paid only when the basic salary is also paid.

2.2Members of the Board of Directors of agencies are not salaried officials of the government. As non-salaried officials they are not entitled to PERA, ADCOM, YEB and retirement benefits unless expressly provided by law.”

As clearly stated by the above DBM Circular, the members of the Board of Directors, they being not salaried officials of the government, are not entitled to YEB.

We recommended that the YEB received by the members of the Board of Directors should be refunded. Henceforth, JHMC should refrain from granting benefits and allowances to the Board of Directors without legal basis.

Management commented that they will be filing an appeal for this.

COA also stated that the Board approved a car plan for themselves “without approval from the President of the Philippines”. At that time of approval Mrs Corona was only a Board member, not the head. However, it seemed she participated in the car plan.

Here’s a portion rom the COA website:

2. A Car Plan was granted to the Members of the John Hay Management Corporation Board of Directors and Vice President without approval from the President of the Philippines.

Car Plan – 2007

The John Hay Management Corporation (JHMC) purchased 11 motor vehicles for a total of P10,353,356 for the Car Plan of the members of the Board of Directors (BOD) and the Vice President in February to June 2007. The purchase of vehicles and the grant of the Car Plan were not approved by the President of the Philippines. Administrative Order No. 103 which directed the continued adoption of austerity measures in the government suspended the granting of additional benefits to governing boards such as car plans and also the purchase of any type of motor vehicles, except ambulances and those required by the military and police.

Verification of documents supporting the grant of the car plan revealed that the John Hay Poro Point Development Corporation (JPDC) Motor Vehicle Purchase Plan approved by President Fidel V. Ramos in 1997 was used as legal basis for the JHMC Car Plan. Internally Generated Funds was used since no amount was allocated for the purchase of motor vehicles in the 2007 JHMC Budget.

Finally, COA noted that under Mrs Corona’s watch, John Hay had set up an office in Manila and “as a result, unnecessary expenses totaling P690,183 were incurred.”

COA suggested that the office be closed down to save tax money.

Here’s the COA report on this as posted on its website during the Arroyo administration:

7. A John Hay Management Corporation Office was set up in Manila despite the fact that all business operations of the Corporation are conducted in the principal office and place of business, which is in Baguio City. As a result, unnecessary expenses totaling P690,183 were incurred.

An extension Office in Manila was set up by the JHMC in September 2007. Although Article I, Section 2 of the By-Laws of the JHMC provides that the Corporation may have as such other branch offices as its Board of Directors may designate, no business operations of JHMC are conducted in Manila in order to justify the setting up of a Manila Office. All operations are conducted in the principal office and place of business, which is in Baguio City.

In connection with the setting up and maintenance of the JHMC Manila Office, the Corporation had incurred various expenses such as office rental, personal services, office equipment, furniture and fixtures, traveling, gasoline, representation and utility expenses totaling P690,183 from September to December 2007.

Verification of receipts submitted to liquidate cash advances drawn by the President or Treasurer for the representation, supplies, gasoline, and miscellaneous expenses for the Manila Office disclosed the following which are either irregular or unnecessary: (1) Costs of snacks were allowed to be reimbursed. (2) Costs of meals which obviously were not for representation were also allowed to be reimbursed. (3) Costs of meals incurred during meetings were not supported with attendance sheets, notices of meetings and agenda. (4) Gasoline expenses incurred for the two JHMC vehicles being used by the Officers and employees in Manila were not supported with drivers’ trip tickets. (5)The President and Treasurer, who are the signatories of the check, both hold office in Manila. (6)Checks, disbursement vouchers and other documents have to be brought down to Manila for their signatures and/or approval thus, resulting in the incurrence of additional expenses for gasoline and traveling.

Granting that no Manila Office was set up, JHMC employees shall have to prepare the board materials in Baguio City and some employees have to travel to Manila to assist during Board of Directors’ meetings which are held in the BCDA conference room. The estimated expenses to be incurred by the Corporation relative to this set up, shall only be P40,000 or roughly P50,000 a month. JHMC could have only incurred an estimated amount of P160,000 instead of the expenses incurred in the Manila Office of P690,183 from September to December or a savings of P530,183.

Management should consider giving up the Manila Office set up to avoid the incurrence of unnecessary expenses since no business operations of JHMC are conducted in Manila. The President, who is also the Officer-In charge of the Office of the Chair, and the Chief Operating Officer, should also consider going to Baguio City on a regular basis. Apart from strengthening relationship with JHMC employees and clients through regular meetings and consultations and prompt approval/signing of various documents, the President can personally oversee the business operations of JHMC.

After the 2007 COA report, all reports pertaining to John Hay simply vanished from the COA website.

Perhaps Mrs Corona could be asked what she did to COA’s recommendations for 2007 and succeeding years.

Those would have little to do with her husband’s impeachment trial. By the way, whistle-blower Daytec has nothing to do with the 2007 COA report because he came in 2008.

Granted, the amount involved in Mrs Corona’s case – only P170,000 –  is tiny compared to the sums claimed in the alleged plunder cases of former President Gloria Macapagal-Arroyo. Or even former President Joseph Estrada.

The mayor did submit a liquidation report but the anti-graft court Sandiganbayan said he had breached Commission on Audit Circular No. 97-002, which requires all expenses to be liquidated within 30 days.

The mayor’s crime? “Failure to Render Accounts” under Article 218 of the Revised Penal Code.