Priority Development Assistance Fund Scam

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Janet Lim-Napoles is a Filipino entrepreneur. She is the owner of JLN Group of Companies. Established in 2009, the company provides services and products that address the unique requirements of different industries all over the Philippines. It also serves as a prime and holding corporation for a number of subsidiaries.


PHP 10 billion pork barrel scam

Napoles has been alleged of having engineered a PHP 10 billion scam over the past decade by using the pork barrel funds of 5 senators and 23 Congressmen for ghost projects. She was even tagged as the alleged mother of the PHP 10 billion pork barrel scam.

Napoles' firm was allegedly tapped for government-funded projects that were later found questionable. The “so-called projects” include the PHP 728 million fund for a fertilizer project for poor farmers. It was alleged that the fund was diverted to benefit politicians and the former President. The Fertilizer fund scam is a political scandal that involved the officials of the Department of Agriculture (DA) and local and national government officials during the Gloria Macapagal-Arroyo administration. Agricultural funds which amount to PHP 728 million and PHP 1.1 billion released in 3 February 2004 and 11 February 2004 respectively were allegedly misused and utilized to finance Arroyo's campaign before the May 2004 Presidential Elections. Napoles was even summoned to a Senate blue ribbon committee hearing in 2008 to talk about the scam. However, no charges were officially filed against her.

Merlina Pablo Sunas, an employee of Napoles whom she had appointed as president of a bogus non-government organization called People's Organization for Progress and Development Foundation Inc. (POPDFI), currently stands as a witness against Napoles.

In an interview with the Inquirer, Luy claimed that JLN offered 40 to 60 percent of the amount of PDAF to commissioners in exchange for the right to determine the implementing agency and fund beneficiary.

Sunas told NBI that a “concealed deal” happened between Benhur Luy, Napoles' personal assistant and the whistleblower of the pork barrel scam, and government officials. The latter discovered that the amount of the Priority Development Assistance Fund (PDAF) given to her by a certain senator was small because Luy had hidden transactions. Sunas added that their foundations were founded to receive government funds that were remitted to her many bank accounts. The money will eventually be split between her and the lawmaker whose PDAF allotment was used or the official of the state agency involved.

Luy added that several properties supposedly acquired by Napoles in the course of her illegal activities. These include:

  • Houses and lots located at high-end subdivisions like Forbes Park in Makati, Ayala Alabang Village, the whole 25th floor of Discovery Center in Pasig City
  • Units in Serendra and Pacific Plaza Towers (18-B and South Garden Unit) and AFPVOI Village (lots only)
  • Expensive vehicles like Range Rover (PN TIN 11), white Porsche Cayenne (CYN 98), white Toyota Alphard, BMW, Tahoe, Chevrolet, two Ford E-150, Starex Gold, Toyota Prado, Savanna GMC, Lincoln Navigator, Hummer, Land Rover, Honda Civic and Mercedez Benz


Sunas alleged that NGOs benefited from the PHP 900 million Malampaya Fund but “no deliveries of supplies were ever made and that fake liquidation papers were submitted by the implementing agencies.”

It was alleged by Luy, Sunas, and other whistleblowers that the JLN forged signatures of fictitious individuals to organize POPDFI and other Non-government organizations (NGOs). Said NGOs include Kaupdanan Para sa Magsasaka Foundation, Social Foundation, Pangkabuhayan Foundation and Masaganang Ani Foundation.

Napoles' lawyer Jean-Paul Acut said Napoles was not involved in the fertilizer fund scam and has nothing to do with the alleged forging of signatures even the formation of the NGOs. He added that the issue was blown out of proportions by individuals in an attempt to extort money from her client.

Napoles and her brother, Reynaldo Lim, were earlier charged by the NBI for detaining Luy. The Department of Justice (DOJ) dismissed the complaint for lack of probable cause.

DOJ Secretary Leila de Lima refused to give more details given the gravity of the allegations. The investigation will be kept under wraps until the NBI completes its evidence gathering and evaluation. She said that lawmakers may be included in the investigations but refused to identify who would be investigated.

In an affidavit prepared by the MOST law firm, Napoles said that she and her company had never transacted business with the government or any of its agencies. She added that her name or the JLN Corp. was not mentioned in the resolution issued by the Sandiganbayan clearing the suspects in the fertilizer scam which proves that she and her business are not involved in the said scam.

In 2001, the Office of Ombudsman charged Napoles, her husband, retired Army Major Jaime Napoles, and 16 other personnel of the Navy Marine Corps and civilians with graft and malversation in connection with the acquisition of substandard Kevlar helmets amounting to PHP 3.8 million.

Involvement of government officials

5 Senators and 23 Congressmen who were allegedly involved in the scam were named. Senator Bong Revilla topped the list of Senators as he allegedly gave the syndicate access to his pork barrel to dummy NGOs in 22 instances. Senator Juan Ponce Enrile followed with 21 occassions; Jinggoy Estrada with 18; Ferdinand Marcos, Jr. with four and Gringo Honasan, once with a small amount.

23 Congressmen linked to the scam were also identified by The Inquirer. Topping the list is Rizalina Seachon-Lanete of Masbate's third district as she allowed her pork to be used 13 times. Conrado Estrella III of Pangasinan's 6th district and Rodolfo Plaza of Agusan del Sur followed with 9 occasions; and Samuel Dangwa of Benguet with 8.


Daughter's lavish lifestyle

The younger Napoles, Jeane, is currently on the news because of her lavish lifestyle as seen on her Instagram pictures. She allegedly flaunts expensive gifts, cars, jewelries, shoes, and bags from her parents via Instagram.

Janet confirmed the photos are authentic and real and offered an explanation. She said that the Porsche was a gift to their daughter when she graduated magna cum laude while the other Porsche is for her birthday. She added that the jewelry and expensive watches were gifts for Jeane's birthday.

Janet said that they have the right to go shopping as they are earning money from their ventures and insisted that their wealth is the result of their legitimate businesses. She added that they co-own a PHP 7 million hotel near Disneyland in Los Angeles, California.

Bureau of Internal Revenue (BIR) Chief Kim Henares said that the bureau is currently looking into the family's properties. She added that there is nothing wrong in flaunting one's wealth as long as the person pays the right taxes. Janet said that they have paid the right taxes and is ready to reveal all of their wealth if needed.


#MillionPeopleMarch

About 400,000 white-clad anti-pork barrel protesters filled Luneta Park to express anger over the pork barrel system and demand the total abolition of the said system, including the presidential pork, as well as the investigation and prosecution of officials and persons involved in the pork barrel scam.

The Million People March, which drew Filipinos different fields and affiliations into a single venue, is considered to be the biggest rally since President Benigno Simeon Aquino III assumed office in 2010. High-profile personalities also attended the protest. Among them were Manila Archbishop Luis Antonio Cardinal Tagle, former Chief Justice Renato Corona, Juana Change, Jim Paredes, Noel Trinidad, Willie Revillame, Gloria Diaz, and Robin Padilla.

The former Chief Justice was heckled and booed while some called him names as people are still reminded that he was impeached as he was accused of committing betrayal of public trust and violation of the Philippine Constitution.

Protesters even prepared an effigy which depicted Aquino as the “Pork Barrel King” for allegedly having allocated PHP 1.3 trillion in discretionary funds for 2014.

University of the Philippines (UP) Political Science Department teaching associate Rob Go said that protesters were able to send a clear message to Malacañang that the public would not tolerate corruption and that they are willing to do their part to ensure good governance and accountability.

Economist and former National Economic and Development Authority (NEDA) secretary general Solita Monsod said in an interview that the scam is just the tip of the iceberg of a wide and massive malversation of public funds. She said that the people should not just be angry at Janet Napoles but to the involved lawmakers and government agencies of the country as well.

Professor Prospero de Vera of the UP National College of Public Administration and Governance (NCPAG) said that he worries that as the people become agitated and obsessed with the discretion given to the legislators, they may be missing the bigger picture.

On the other hand, former Socioeconomic Planning Secretary Cayetano Paderanga said that although he condemns the misuse of funds, pork should not be abolished all together but reform it with transparency and accountability enforced. Paderanga added that even if extra funds would be allocated for local programs and concerns, the officials handling it must be accountable.

The group of whistleblowers of the said controversy is overwhelmed by the outpouring of support to their cause and that the large turnout of the protest march has given them strength.


Government's response

The Malacañang Palace vowed to fully investigate the scam over the past decade which involved the pork barrel funds of senators and congressmen which were spent on ghost projects. The DOJ, through the National Bureau of Investigation (NBI), is tasked to fully investigate the case.

The President, who expressed disgust over the alleged corruption, said that this kind of anomaly would no longer be repeated by ensuring penalties for those who would be found guilty.


Aquino to abolish pork barrel

On 23 August 2013, President Aquino announced to scrap the Priority Development Assistance Fund (PDAF). He said that though there is nothing wrong with the system, it has been abused by “a few greedy individuals.”

Aquino promised to reform the pork barrel fund. He said that funds can no longer be disbursed to NGOs and government corporations linked in the alleged pork barrel scam. He added that state firms like the ZNAC Rubber Estate Corporation and the National Agribusiness Corporation will be abolished.

Under the new system, legislators could still identify projects but they would need approval and would be closely scrutinized. Consumable soft programs like fertilizers and medicines and temporary infrastructure projects in the form of dredging, desilting, regravelling or asphalt overlay will be prohibited. Guidelines to safeguard public funds like the publication of bids and awarding of projects were also issued.


Janet Napoles surrenders to President Aquino

Out of fear for her life and hours after Malacañang set a PHP 10 million bounty for any information leading to her arrest, Janet Lim-Napoles surrendered to President Aquino on 28 August 2013.

Aquino turned over Napoles, who went hiding for two weeks, to Interior Secretary Mar Roxas and Philippine National Police (PNP) Director-General Alan Purisima for processing and booking.

Napoles, who sent surrender feelers to the President, and her husband were fetched at an undisclosed but secured location before they were brought to Malacañang to talk to the president. Before meeting the President, her medical situation was checked to assure her safety.

Reynaldo Lim, Napoles' brother who is also wanted for serious illegal detention charges, will soon surrender as well.

Janet Napoles is currently detained at Fort Sto. Domingo in Sta. Rosa, Laguna.


Abolishment of 5 agencies involved in pork barrel scam

The Malacañang Palace is moving to abolish government agencies that fake NGOs used to access pork barrel funds. The 5 agencies which are under investigation are: the Philippine Forest Corporation, the agro-forestry arm of the Department of Environment and Natural Resources (DENR); National Agribusiness Corp. (Nabcor) and Zamboanga del Norte College Rubber Estates Corp. (ZREC) of the Department of Agriculture (DA); Technology Resources Center (TRC) of the Department of Science and Technology (DOST); and, National Livelihood Development Corp. (NLDC) of Land Bank of the Philippines.

The fake NGOs were Focus on Development Goals Foundation Inc. (FDGFI), Interactive Training Opportunity on Needs Alleviation Movements Inc., Kapuso’t Kapamilya Foundation Inc. (KKFI), Livedures Foundation Inc., Maharlikang Lipi Foundation Inc., Philippine Environment and Ecological Development Corp., Pangkabuhayan Foundation Inc. (PFI), Kabuhayan at Kalusugan Alay sa Masa Inc. and Workphil Foundation Inc. (WFI).


Charges and investigation

On September 16, Napoles along with 38 others, including Senators Juan Ponce Enrile, Jinggoy Estrada, and Bong Revilla are charged on varying degrees of corruption. Janet and husband Jimmy Napoles were charged by the Bureau of Internal Revenue (BIR) for tax evasion ten days after. Their total liability are PHP 44.68 million and PHP 16.43 million respectively. Their daughter Janet, was charged the same by the BIR on October 10. She failed to pay taxes amounting to PHP 32 million.

In a Senate hearing on September 26, principal whistleblower Benhur Luy and other whistleblowers revealed Napoles' operations and properties.

On October 21, the Senate issued a subpoena for Napoles to testify before the blue ribbon committee on November 7.

On October 24, she was brought to Southern Luzon Hospital, Sta. Rosa, Laguna due to pain, nausea, and vomiting. The following day, concerns over her mental health arose as her lawyer said that Napoles talks to her self at night which was probably caused by solitary confinement.

On October 25, Benhur Luy handed a ledger over to the Senate Blue Ribbon Committee. It revealed that Napoles played favorites when dealing with PDAF kickbacks.

Lorna Patajo-Kapunan resigned as Napoles' lawyer on October 30.

Napoles met with Presidential spokesperson Edwin Lacierda on November 1 to negotiate the terms of her surrender to President Aquino. Two days before her scheduled testimony, she sent a letter to Senate President Franklin Drilon and Senate Blue Ribbon Committee Chairman Teofisto Guingona and asked to postpone the hearing as she has no lawyer to “guard her rights.”

On November 7, she finally faced the Senate and delivered her testimony. As she was without her private legal counsel, she was provided the assistance of lawyers from the Public Attorney's Office (PAO). She invoked her right against self-incrimination and denied allegations made by whistleblowers who were also present in the proceedings.


Napolist

On 26 May 2014, Napoles named 20 former and incumbent senators, and 100 representatives who supposedly received largesse from the pork barrel scam. The list is included in the expanded affidavit submitted by de Lima to the Senate Blue Ribbon Committee.

Senators named in the list were Rodolfo Biazon, Robert Barbers, Juan Ponce Enrile, Jinggoy Estrada, Loi Estrada, Gringo Honasan, Robert Jaworski, Lito Lapid, Loren Legarda, Ramon Magsaysay, Ferdinand Marcos Jr., Tessie Oreta Aquino, Aquilino Pimentel, Koko Pimentel, Ramon Revilla Jr., Vicente Sotto, Cynthia Villar, Manny Villar, Alan Peter Cayetano, and Francis Escudero. Also included in the list were three cabinet secretaries of PNoy: Department of Budget and Management (DBM) Secretary Florencio Abad, Department of Agriculture (DA) Secretary Proceso Alcala, and Technical Education and Skills Development Authority (TESDA) chief Joel Villanueva.

67 members of he House of Representatives were also named: Jesus Judin Romualdo, Banzai Nieva, Maite Defensor, Mikey Arroyo, Isidro Ungab, Reynaldo Umali, Salacnib Baterina, Conrad Estrella, Raymond Estrella, Victor Ortega, Neil Benedict Montejo, Arthur Pinggoy, Samuel Dangwa, Florencio Flores, Erwin Chiongbian, Erico Fabian, Florencio Miraflores, Napoleon Beration, Ricky Sandoval, Max Rodriguez, Rufus Rodriguez, Rizalina Seachon Lanete, JV Ejercito, Edgar Valdez, Scott Davies Lanete, Rafael Nantes, Sunny Rose Madamba, Ruffy Biazon, Gerard Gullas, Carlos Padilla, Rodolfo Plaza, Arnulfo Fuentebella, Raul del Mar, Rommel Amatong, Marc Douglas Cagas, Digaden Dilangalen, Iggy Arroyo, Rodolfo Valencia, Eduardo Zialcita, Nannette Castelo Daza, Constantino Jaraula, Clavel Martines, Manuel Ortega, Peter Falcon, Isidro Real, Corazon Malanyaon, Narciso Monfort, Uliran Joaquin, Juaquin Chipeco, Abdullah Dimaporo, Ernesto Pablo, Marcelino Libanan, Rolex Sulplico, Benasing Macambon Jr., Jesnar Falcon, Nasser Pangandaman, Hussien Pangandaman, Boy Umali, Bagatsing, Malapitan, Ecleo, Olano, Jesli Lapuz, Oca Rodriguez, Alvarado, Tulagan, and Nograles.

Pork agents were also included in the list. They were Celia Cuasay, Matt, Buth, and a person called as “Cong Gonzales.” Napoles also named additional pork agents including Mat Ranillo III and Ruby Tuason.


Accused in scam posted bail

On 20 June 2014, twenty of the 54 accused in the graft cases related in the scam posted bail in the Sandiganbayan to avoid arrest.

Former Technology Resource Center (TRC) Director General Dennis Cunanan paid in cash the full bail of PHP 210,000 for seven counts of graft. Three other TRC personnel also paid in full for their bail.

Four other accused asked for reduced bail and pleaded that they were mere government employees and the court agreed. Chita Jalandoni of the National Livelihood Development Corp. (NLDC) was lowered to PHP 90,000 from PHP 210,000 for seven counts of graft. Budget Undersecretary Mario Relampagos and three DBM employees were given a 50 percent discount so each paid PHP 240,000 for 16 counts of graft.

Napoles' two grown-up children and five of her employees posted surety bonds. Jo Christine Napoles and James Christopher Napoles posted a surety bond of PHP 450,000. Each is facing 15 counts of graft. Napoles' employees Nitz Cabilao posted a surety bond of PHP 450,000; Fernando Ramirez, PHP 450,000; Jesus Castillo, PHP 30,000; Dorilyn Fabian, PHP 60,000, and Renato Ornopia, PHP 90,000.

Two of the accused were out of the country when the Sandiganbayan issued an order to stop them from traveling on Monday. Immigration Commissioner Siegfrid Mison identified them as Antonio Ortiz and Renato Ornopia. Ortiz is the former director general of TRC and Ornopia used to work at the JLN Corporation and president of one of her bogus foundations. De Lima said that they will invoke the Mutual Legal Assistance Treaty with the country the two are hiding.


Senators detained

Senator Bong Revilla Jr. was the first of three senators to be detained on plunder and graft raps in connection with the scam. The Philippine National Police (PNP) brought Revilla to Unit One of the PNP Custodial Center from the PNP multipurpose hall. He arrived at Camp Crame on 20 June 2014 a few hours after he surrendered to the Sandiganbayan in connection with the plunder and graft cases filed against him.

He underwent booking procedure at Camp Crame's multipurpose hall. He also underwent physical and medical examination. An initial medical check of Revilla indicated that he was normal except for slightly high blood pressure. His BP was 140 over 90.

After undergoing booking procedures, he was given some free time with his family. Visiting hours ran from 9 a.m. to 3 p.m. Revilla has repeatedly denied benefitting from the alleged scam.

On the other hand, Senator Jinggoy Estrada will be jailed a the cell adjacent to that of Revilla. The commitment order was issued after Estrada submitted himself at the PNP Monday afternoon. He waited for the release of the commitment order at the PNP Multipurpose Hall then boarded a police car to be transferred to the Custodial Center. He then took physical and medical examinations, fingerprinting, and had his mugshot taken.

His wife Precy, children, and his lawyers were briefed about the visiting policies before they were allowed to enter the high-security detention facility. His father, Manila Mayor Joseph Estrada and mother Dr. Loi Ejercito left before the Senator had been moved to the Custodial Center.

Earlier Monday, he surrendered to his father, who turned him over to the PNP CIDG chief Police Director Benjamin Magalong at Camp Crame. He is facing plunder and graft charges along with Revilla.



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