Ombudsman indicts Olongapo mayor, other officials over SM Prime deal

Adrian Ayalin, ABS-CBN News

Posted at Jul 12 2018 10:19 PM

MANILA - The Office of the Ombudsman has found probable cause to charge Olongapo City Mayor Rolen Paulino of violation of the Anti-Graft and Corrupt Practices Act for the lease of public land awarded to SM Prime Holdings Inc. (SMPHI) in 2014.

Also included in the resolution approved by Ombudsman Conchita Carpio Morales on June 25 are Vice Mayor Aquilino Cortez Jr.; Councilors Elena Dabu, Benjamin Gregorio Cajudo II, Eduardo Guerrero, Noel Atienza, Alruela Bundang-Ortiz, Edna Elane, Emerito Linus Bacay, Randy Sionzon, and Egmidio Gonzales Jr; other city government officials Tony-Kar Balde III, Cristiflor Buduhan, Anna Marin, Florentino Sison, Mamerto Malabute, and Joy Fernandez Cahilig.

The indictment order of the Ombudsman came after a complaint was lodged against the respondents by Rodalyn Guinto Hanif.

On January 7, 2014, SMPHI submitted an unsolicited proposal to the city government for the long-term lease of the Olongapo City Civic Center, or the KBG Complex, where it will build a mall, hotel tower, call center buildings, parking slots, and a multimodal transport terminal.

It was alleged that the lease would lead to the displacement of the City Museum, Public Library, City Disaster Risk Reduction and Management Office and Convention Center and they only be given space in the SMPHI mall.

The resolution of the Ombudsman said the Swiss challenge method of bidding, as proposed by SMPHI is a legal mode of awarding contracts. 

Swiss challenge is a process when a public authority which has received an unsolicited bid for a project publishes details of the bid and invites third parties to match or exceed it. 

“The records sufficiently established, however, that respondents Paulino, Cortez, SP members and SBAC members failed to ensure compliance with the proper procedure required by law in the award to SMPHI of the long-term lease over the KBG Complex, thereby giving unwarranted benefit, advantage or preference to SMPHI,” the Ombudsman said. 

The Ombudsman noted that Republic Act 7718 or the Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector requires the lapse of 60 working days from the date of the last publication of the invitation to submit bids in a newspaper of general circulation. 

It was noted that the last invitation was published on October 20, 2014 but after only 10 days, SMPHI was awarded of the lease deal on October 30, 2014.

Paulino issued the notice of award on October 31, 2014 and the Sangguniang Panglungsod confirmed the award through a resolution on November 12, 2014.

“They acted with manifest partiality, evident bad faith or gross negligence by failing to follow the prescribed period under the law with the clear intent to deny other prospective project proponents of making a better offer or proposal and as a result, their act gave unwarranted advantage, preference or benefit to SMPHI,” the Ombudsman said.

The Ombudsman, however, dismissed the other allegations of graft for the supposed influence used by Paulino over barangay officials and the SP members, as well as the violation of the Act to Prohibit the Cutting, Destroying or Injuring of Planted or Growing Trees, Flowering Plants and Shrubs or Plants of Scenic Value Along Public Roads, in Plazas, Parks, School Premises or in Any Other Public Pleasure Ground.

The Ombudsman also dismissed charges in relation to the Government Procurement Act and Presidential Decree 1096 or the National Building Code.