Drilon says backer of Lao, Pharmally missing link for 'deliberate' plunder in DOH fund mess

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Metro Manila (CNN Philippines, August 30) — Senate Minority Leader Franklin Drilon described the controversy involving overpriced COVID-19 medical supplies from a company without sufficient credentials as a "deliberate plan to plunder" public coffers, with a mysterious backer who is yet to be revealed.

Speaking to CNN Philippines' The Source on Monday, Drilon lamented the involvement of former Budget Undersecretary Lloyd Christopher Lao, who awarded an ₱8.68 billion deal to Pharmally Pharmaceuticals Corp. to procure personal protective equipment and testing kits that were later found to be overpriced.

"I was saying, this did not happen by accident," Drilon said. "There was a deliberate plan to plunder the coffers to the tune of what we're talking about. All the indications are there."

"What we are looking for now is the missing link," he added, "and the identification of who the backer is of Usec. Lao and Pharmally to be able to get into this kind of monumental graft we are talking about."

During the Senate hearing last Friday about the Department of Health's alleged misuse of COVID-19 response funds, senators raised concerned about Lao's failure to cross-check the credentials of Pharmally, which was only six-months old and had a capital of only below ₱600,000 when it bagged the multi-billion contract.

Senators pointed out that the Procurement Service of the Department of Budget and Management (PS-DBM) bought face masks at ₱13 and ₱27 each while the Philippine Red Cross purchased them at only ₱5.

READ: Senators seek Ombudsman probe into PS-DBM's ₱8.6-B deal with firm 

"In the criminal law, (Lao's) participation would be that of a principal by direct and indispensable cooperation," Drilon noted, when asked about Lao's culpability.

"Which means that, this crime would not have happened without his direct participation because he was the one who made the awards," he said.

Drilon also slammed Health Secretary Francisco Duque's directive to transfer some ₱42 billion of its pandemic response funds to the DBM without a signed memorandum of agreement.

Where are the medical supplies?

Drilon said the PS-DBM is authorized to have an inventory of procured supplies. But the Senate still has to find out where the overpriced medical items ended up since local governments and hospitals declined to receive them when they were offered a hefty retail price for the supplies.

"These are not one box or two boxes," Drilon stressed. "These are millions of PPEs, these are millions of face masks, these are millions of face shields."

"It is reasonable to find out what happened to these because among the information that we gathered is the public hospitals or the LGUs which were supposed to receive these refused to pay for it because it was overpriced, higher than the suggested retail price of the DBM itself," he also said.

Republic Act 7080 states that any public officer who connived with family members, relatives, business associates, subordinates or other persons to accumulate "ill-gotten wealth through a combination or series of overt or criminal acts...in the aggregate amount or total value of at least [₱50 million] shall be guilty of the crime of plunder and shall be punished by reclusion perpetua to death."