Feb 22, 2021 @ 12:10
Ex-Cagayan guv Lara acquitted of graft over P220M Town Center project
The Sandiganbayan has acquitted former Cagayan Governor Edgar Lara of graft charges in connection with alleged irregularities in the construction of the Cagayan Town Center and the payment of financial advisory fees related to fundraising efforts.
In a recent 67-page decision, the court’s 6th Division cited the “failure of the Prosecution to prove his guilt beyond reasonable doubt,” and ruled that Lara will also not be held civilly liable.
It ordered the release of his bail bonds and the lifting of the hold departure order (HDO) against him.
Ombudsman prosecutors accused Lara of engaging the financial consultancy services of Preferred Ventures, Inc. (PVI) for P6.15 million in November 2001, without public bidding, authority from the Sangguniang Panlalawigan (SP), appropriation, and certificate of availability of funds.
Prosecutors also accused Lara of awarding a P213.8-million contract to Asset Builders Corporation (ABC) for the planning, design, development and construction of the Cagayan Town Center (CTC) in September 2003 also without public bidding and authorization from the SP.
ABC was also allegedly paid more than the contract price and the payments were sourced from the floated provincial bonds that arose from the fundraising project undertaken by PVI.
The Sandiganbayan, however, said the bond flotation was backed up by six resolutions and ordinances passed by the SP between November 2001 and March 2005.
Although some were belated, the board members still ratified the agreements entered into by Lara, even though they were “free to accept or reject” them, the decision penned by Associate Justice Karl Miranda pointed out.
It also noted that the prevailing procurement laws at the time of the execution of the agreement with PVI did not require public bidding. Back then, local government units (LGUs) were “merely encouraged” to adop the public bidding requirement for consulting services.
This meant that the provincial government “had the discretion to select a financial consultant in connection with its intended flotation of bonds, even without a public bidding,” read the decision.
The court added that Lara “did not exhibit evident bad faith,” as he only considered it prudent to engage the services of a financial consultant since this was the provincial government’s first-ever bond float.
It noted that he secured not only the authorization of the SP, but also the opinions of the Department of Justice (DOJ), the Department of the Interior and Local Government (DILG), and the Bangko Sentral ng Pilipinas (BSP).
The court said there was no unwarranted benefits given to PVI. On the contrary, it stressed that PVI was “rightfully entitled” to payment because it helped the province raise funds for the construction of the CTC, which now generates additional income.
“It was imperative for the province of Cagayan to pay PVI the agreed amount for the services it rendered… Such payment does not constitute unwarranted benefits, advantage or preference being given to PVI,” read the decision.
As for the construction of the CTC itself, the Sandiganbayan said the agreements were ratified and given appropriations by the SP in resolutions and ordinances between October 2003 and June 2005.
Prosecutors claimed the public bidding conducted was illegal and invalid because it did not include a detailed engineering design that would have served as basis for a comparison of the bids and the cost estimates.
But, the court said the detailed design was part of ABC’s scope of work and the province was “rightfully entitled” to resort to a “design-and-build” mode of constructing the CTC since this was not prohibited by procurement rules at the time.
Although the province ended up paying P222.06 million to ABC, or an adjustment of P9.04 million from the contract price, the Sandiganbayan found this justified because of the 271-day delay in the issuance of the notice to proceed and the “price escalation” of the construction materials.
“While the Court will not tolerate corruption, neither will it stifle an LGU’s aspirations for development if carried out properly. To do so would create a chilling effect making LGUs wary of exercising a lawful power and impede local development,” the court said.