Not one of 91 RSBSgraft cases resolved - Malaya 10.07.2006

Ex-AFP chief says he is ‘high-profile’ scapegoat

BY VICTOR REYES

NINETY-ONE cases of graft have been filed against officials and employees of the AFP Retirement and Separation Benefits System, which is set to be abolished by yearend to avoid further losses, but not a single case has been resolved.

The filing of cases, the military said, is an indication that it is serious in ridding the investment fund of corruption.

"Based on document that we have now, 91 cases are filed and pending before the Sandiganbayan," said Lt. Col. Bartolome Bacarro, chief of the AFP public information office.

Bacarro gave reporters a list of some of the pending cases, which identified former RSBS president Jose Ramiscal as among respondents.

"This would just show that indeed there have been efforts to really determine the culpability and identify persons who are parties, who have had hands in these anomalies," he said.

Bacarro could not say how much money was involved in the cases.

"I don’t have it right now," he said.

Bacarro said Defense Secretary Avelino Cruz and AFP chief Gen. Hermogenes Esperon are "bent on going after those who have committed infractions in the operation of RSBS."

Told some of the cases have been pending before the anti-graft court for several years already, Bacarro said: "I am not privy to the merits of the case. It’s beyond us. We have submitted it already to the Sandiganbayan."

Asked if the number of cases filed is an indication of rampant corruption in the RSBS, Bacarro said: "I cannot say that. That is the internal dealing of the RSBS which I’m not privy to."

On whether the military will take efforts to speed up the resolution of these cases, Bacarro said: "There will be some efforts to expedite (the cases). This is entirely in the hands of the Sandiganbayan."

Jose Nano, RSBS executive vice president, denied that the RSBS is bankrupt.

Cruz, in announcing the RSBS’ abolition last Monday, described the investment fund as a "hopeless case" and as "bankrupt."

Nano, who assumed the post just five days ago, said the RSBS posted a P14 million profit last year.

In the past two years, RSBS recorded profits of around P120 million.

The RSBS has assets of P11.6 billion. It collects at least P700 million a year from contributions from the 120,000 active members of the military. Soldiers make monthly contributions of 5 percent of their base pay.

Of the P700 million collection, around P400 million goes to the retirement pay of retirees while the remaining P300 million goes to the operational expenses and salaries of RSBS officials and employees.

Nano said the RSBS has settled over the past five years the P5 billion borrowed from various banks by previous RSBS leaderships. The loans were used to acquire real estate properties. Since 2000, the RSBS had been under the leadership of Cesar Jaime. Jaime has tendered his resignation effective Oct. 15.

‘DON’T BLAME US ALL’

Nano met with the RSBS rank and file to inform them how they would be compensated by government upon the agency’s abolition. The employees will receive benefits due them under the law.

During the meeting, Gina Lee, head of the RSBS account management department, bewailed insinuations that all officers and employees of RSBS are corrupt as she expressed fear this would impact negatively on them when they apply for new jobs.

Lee said the rank and file should not be blamed for the corruption in the institution.

Lorna Lanoza, RSBS vice president for corporate planning, expressed frustration over how the RSBS is being blamed on them.

She said when they appeared as resource persons in Senate investigations during the Estrada administration, they made public the problems at the RSBS and proposed its rehabilitation.

Lanoza said they also brought up the problems before the Feliciano Commission that investigated the Oakwood mutiny. The Senate blue ribbon committee and the commission recommended the abolition of RSBS.

Former AFP chief Gen. (ret.) Lisandro Abadia, who is under investigation by the Ombudsman for the approval of an alleged anomalous P277 million loan, justified the decision of RSBS board of trustees to go into the real estate business in the early 90s.

CORPORATE DECISION

Abadia said the RSBS posted P1.5 billion in profit from 1991 to 1994 "because of the boom in the real estate."

He said the board of trustees, which he chaired as AFP chief during the Aquino administration, later decided to resort to borrowings to buy more lands.

When the financial crisis struck, the RSBS began incurring losses.

"I can’t blame the board of trustees at that time. It was a corporate decision," he said. "But something went wrong somehow."

"I am the high-profile scapegoat," he added.

Ramiscal, a retired general, and three others were accused of an alleged overpriced purchase of 148 parcels of land for P167.6 million.

In 2004, then AFP chief Gen. Narciso Abaya ordered the shutting down of five RSBS subsidiaries – RSBS Enterprise, Globan Fruits and Development Corp., Goodfit Manufacturing Corp., CEMX Inc., and RSBS Land – to avoid further losses.

Abadia supported a statement of Sen. Rodolfo Biazon, a former AFP chief, that the abolition of the RSBS might be illegal.

"RSBS was created by law. Senator Biazon is right, a law should abolish it…The decision (to abolish RSBS) came out so suddenly," he said.

The RSBS was created in 1973 by a presidential decree issued by President Ferdinand Marcos, who provided seed money of P200 million, with the vision of establishing a self-sufficient fund that would meet the retirement and pension needs of the soldiers.

Senators called for an investigation and audit of perks received by military officials who took turns in running the RSBS.

"Operating expense includes huge allowances. We will look into how much these allowances are. I understand, there are news reports about fantastic allowances of these officials," said Sen. Franklin Drilon, chairman of the Senate finance committee.

PRUDENCE

He said the RSBS contributions are "trust funds."

"Therefore, they (RSBS officials) must exercise the prudence of a good father of a family in handling these trust funds. That duty includes the duty to exercise prudence in the allowances
that they get," he said.

"Kung dambula ang mga allowances nila, may karapatang magalit ang pangkaraniwang sundalo," he added.

Cruz, during a hearing of his department’s proposed budget, said operating allowances eat up the budget of the RSBS to the tune of P300 million to P400 million a year.
He said the pension fund employs 200 personnel.

"Kinakain ng operating expenses yung assets namin. Hindi kumikita yung kumpanya. There will come a time na babagsak na yung assets below the contributions. Kaya kailangan ho isara na talaga ngayon, i-liquidate na yung assets," Cruz told senators.

He said from the "ashes" of RSBS, a new and efficient pension fund would be created. This would be run by professional managers and could yield 8 to 9 percent interest on soldiers’ money. The current interest is 6 percent.

RSBS AUDIT

Cruz said the RSBS is conducting its own "comprehensive audit" of the pension fund’s assets based on a grant from the World Bank through the Department of Finance.

He said the audit will include all the operations of RSBS up to June of this year.
The audit was in line with a recommendation of the Senate blue ribbon committee, which investigated the RSBS years back.

"This is not yet finished because I want it to be up to June 2006. So hopefully, in the next several weeks, we will have this completed study, that we will also submit to this committee," he said.

Cruz said RSBS has "little cash" and a net asset of P11.6 billion.
Drilon said liquidating the assets could take time.

"You will never know when you’ll able to realize cash out of these fixed assets if you’re going to convert it into cash," he said.

Cruz said the little cash is enough to cover the pension’s funds obligations to its contributors.
Drilon nevertheless said the fact that RSBS’ operating expenses are very high indicates that some RSBS officials are getting hefty allowances.

"They should jail all those who are responsible for this. It is totally unfair to our soldiers whose pensions are prejudiced by this crime committed by the management of RSBS," he said.

He added: "I feel strongly about that. These are ordinary soldiers. Ito po ay mga pangkaraniwang sundalo na nagbigay ng pondo sa RSBS at winaldas ng mga opisyales. Ito po ay hindi tama. Ito po ay kasalanan hindi lamang sa mga sundalo, pati na sa mga pamilya ng sundalo."

MILKING COW

Minority leader Aquilino Pimentel said some high ranking military officials have turned the RSBS into a "milking cow" through their "anomalous" transactions.

He said a Senate probe on the RSBS from 1998 to 2000 revealed that the pension fund was grossly mismanaged.

Pimentel said among the anomalies uncovered by the committee was the overpricing of real estate properties purchased by the RSBS, which he said contributed to the dissipation of its resources.

The Senate blue ribbon committee also recommended the prosecution of a number of RSBS officials and other individuals involved in the irregularities.

"The investigation by the blue ribbon committee showed that the RSBS became a milking cow of unscrupulous people who ran it," he said.

"It is time that it be disbanded. But care should be made that in disbanding it, the culprits, some of whom are now charged in court upon the prodding of the blue ribbon committee, do not go scot-free and its beneficiaries, especially the ordinary soldiers, should be properly compensated for the money they put into the RSBS," he said.

Cruz said RSBS has properties in Silang, Cavite; a 169-hectare lot in Morong, Bataan; four hectares in the Mall of Asia in Pasay; 180 hectares in Batangas; and, a building in Binondo, Manila.

5,000 RETIREES YEARLY

Biazon said AFP and Malacañang officials should assuage fears of soldiers that they would lose their contributions.

He said 5,000 AFP soldiers retire every year with P100,000 in benefits from RSBS.

He recalled that when he retired, he received P85,000.

Biazon also said soldiers are wary that AFP officials who were implicated in the alleged mismanagement of the pension fund would go scot-free after its abolition.

"Papano na ang mga may kasalanan doon (sa) pagkawala ng malaking pera sa RSBS? There are still pending cases before the Sandiganbayan of the previous members of the fund," he said.

Biazon also said the total worth of RSBS was estimated at P18 billion four years ago but this is now down to P11 billion.

Biazon said RSBS funds should have grown to P32 billion by now if only it was managed properly.

Rep. Gilbert Remulla (NP, Cavite) said the RSBS fund mess could spark military adventurism.
"Delikado iyan. This problem will definitely contribute to an already restive military," he said.

Rep. Roilo Golez (Ind., Parañaque), also a member of the opposition and former chair of the House committee on national defense, said the AFP and the defense department should make good in explaining how the RSBS went bankrupt.

Golez lamented that the RSBS funds, which he said came from soldier’s "blood and sweat," went missing.

OPPORTUNISTS

In a joint statement, majority congressmen said "political opportunists" might take advantage of the situation.

Representatives Antonio Cerilles (NPC, Zamboanga del Sur) and Rep. Monico Puentevella (Lakas, Bacolod City) dispelled talks that the issue could cause restiveness in the military.
Cerilles said some quarters "may try to harp on the RSBS fund mess knowing that soldiers are sensitive on this issue."

"We urge our soldiers not to listen to these nasty and baseless rumors. We remain confident on the professionalism of our soldiers as the bulk of our AFP did not join past coup attempts," he said. – With Dennis Gadil, Wendell Vigilia and Jocelyn Montemayor