Pharmally saga: The audacity of crooks




The Manila Times


IF the reporters of today who have covered legislative inquiries on official corruption were to exchange notes with similarly grounded reporters of the past generations on what specific official corruption story featured all the elements of impunity and total disregard for rules, the consensus top-notcher would be the Pharmally scam. Read the Government Procurement Act and its detailed safeguards against government bids going rogue. Then go to the news archives to get a refresher on the almost-forgotten details of the scam, from its origin story (the unexplainable transfer of P42 billion from the Department of Health (DoH) to the PS-DBM ) to former senator Dick Gordon’s final — and unheeded — plea to his former colleagues to sign the blue ribbon committee report on the scam. If you are a Filipino with just a modicum sense of country, you will lose all faith in state institutions after reading the details of the scam, specifically after realizing that the supposed established guardrails against corruption are no match to the vileness of determined crooks. The Pharmally scam is essentially a saga on the audacity of crooks. For sheer brazenness, nothing can beat the recklessness of the Pharmally grifters. Even if the plan is to steal government money, crooks usually tiptoe around rules and do an elaborate dance of deception. No, that was not Pharmally. The Pharmally scam was not even an elaborate and tangled web of corruption and deceit, where the major actors pretended to play by the rules while robbing the state coffers blind. Like going through the motions of a bidding process no matter how rigged. The Pharmally scam is more akin to a mafioso operation, operating on the concept of “what are rules and safeguards for if not to be assaulted and broken.” For sheer impunity and audacity and mockery of the rules, nothing can top the impunity and audacity of the Pharmally actors. For a backgrounder-cum-reminder on what Pharmally was, and get a sense of the crime committed, let us start with the P42 billion fund that was released to the PS-DBM by the Department of Health (DoH), of which an P11 billion plus portion was allocated to Pharmally’s Covidrelated purchases in 2020 and 2021. Historically, the DoH has always been tight on funds. In fact, the UN agencies monitoring the health expenditures of nations across all continents have a single, consistent verdict on Philippine public health spending. The verdict: spending has always fallen short of the UN spending benchmarks and grossly inadequate. Little money is allocated to the DoH year in and year out, despite its critical frontline function. Let us also remember that all agencies of government want to keep every peso of their yearly budgets and agency heads like the health secretary are very protective of their budgets. So when then Health secretary Francisco Duque moved P42 billion from his meager budget to the PS-DBM for supposed Covid procurement with an indecent rush and haste, you instantly realized that a grand plot to brazenly steal government money — in the time of Covid at that — was underway. As they say in the horse races, “The red flag is up.” Indeed, the Commission on Audit (CoA) raised red flags on the P42 billion fund transfer made by Duque’s DoH. Red flags from CoA led to the Senate inquiry into the fund transfer. Which also led to the dogged pursuit by the Senate blue ribbon committee then led by Senator Gordon, of where the P42 billion went. At this point, the grandest and biggest official scam ever plotted began to unravel. The blue ribbon committee found that Pharmally, which snagged an P11 billion supply contract from the PS-DBM, was so reckless it posted many false information in its corporate GIS, or general information sheet. The stated addresses of the listed incorporators were mostly fictitious, which was unearthed by Senate personnel that served the summons on these incorporators. These grounds alone are enough to disqualify a corporate entity from entering into contracts with the government. But there is more — and worse. The hastily incorporated Pharmally was capitalized at less than P1 million, which was not even enough to qualify as a medicine supplier for major LGUs. Or, not even enough to qualify for public works projects put up for bidding by the regional offices of the DPWH. Yet, it snagged a no-bid contract of P11 billion, which led the blue ribbon committee to suspect that it was incorporated in haste for that P11 billion supply contract. Meaning, every detail of the scam was pre-arranged, the rules and the guardrails against corruption be damned. Based on the Senate testimonies of PSDBM personnel, the items covered by the Pharmally imports were pre-cleared even before landing in Manila from China. This propped up Dick Gordon’s suspicion that everything, every step of the scam was, pre-planned. The Tagalog term for this is more succinct: “lutong makaw.” That most of the Pharmally imports were grossly overpriced, a violation serious enough to send government suppliers on long prison terms, was totally expected. For example, Dick Gordon, as chairman of the Philippine National Red Cross, was familiar with the prices of the face masks acquired by the PNRC. Gordon made a comparison with the Pharmally face mask prices and confirmed the scandalous overpricing. How about the Covid purchases that were past their shelf life and expired? So unprecedented was the brazenness of the Pharmally deal that a P2 billion supply contract awarded to a construction company registered in China — yes, a construction company supplied P2 billion of the P42 billion Covid supplies — almost went unnoticed. So with the other suppliers who most likely had “arrangements” similar to that of Pharmally. A few days back, the Office of the Ombudsman suspended a total of 32 former and current officials of the DoH and PS-DBM for their involvement in the scam. Among those suspended were two personalities whose names dotted the blue ribbon committee report on the Pharmally scam — Warren Rex Liong, ironically now occupying the No. 2 post at the Office of the Ombudsman, and Llyod Christopher Lao, former head of the PS-DBM. No action yet on Michael Yang, the suspected “facilitator” of the Pharmally deal. Sen. Risa Hontiveros, after the suspension order on the 32, asked an interesting question: Who was the mastermind?