Lina in P650-M plunder charge

Customs Commissioner Alberto Lina, former Customs Commissioner Guillermo Parayno Jr. and former Customs Deputy Commissioner Primo Aguas are facing plunder and graft charges before the Office of the Ombudsman in connection with an “unceremoniously cancelled” P650-million contract for a modern integrated customs processing system at the Bureau of Customs (BOC).

The cancelation is feared to delay the Philippines’ integration into the single Asean (Association of Southeast Asian Nations) Market.

Parayno, as then-finance undersecretary, was also the subject of graft charges in 2011, along with Finance Secretary Cesar Purisima and then-Customs Commissioner Angelito Alvarez over the use of E-Konek Pilipinas—an Internet server providing electronic lodgment of import and export entries for the bureau—“without any legal contract with the bureau and no public bidding.”

It started operating in 1994. “E-Konek rakes in hundreds of millions in revenues annually through its illegal operations in BOC offices nationwide.

To date, E-Konek maintains 26 big clients that questionably and directly transact daily in BOC,” the charge sheet against the three in 2011 read.

Lina owns 96.48 percent of E-Konek, while Alvarez and Parayno are former officials of Lina’s companies.

Lina and Aguas also face charges for violating provisions of the new government procurement law prohibiting delays in the implementation of a government project.

The integrated customs processing system, along with a national single window, is seen as the long-sought-after solution to rampant smuggling in the Philippines.

It established a central database system that tracks in real time all customs procedures nationwide. It aims to be a fully electronic, paperless and human contact-free system of recording and monitoring customs transactions.

The national single window consolidates relevant services from all government agencies involved in customs procedures using international standards.

The bidding for the project opened in October last year.

In November 2014 five prospective bidders—including E-Konek Pilipinas, headed by Parayno, and the winning bidder, Omniprime Marketing Inc-Intrasoft Joint Venture (OMI-Intrasoft JV)—submitted eligibility documents for the integrated system.

The corporation behind the now-antiquated systems used by the BOC—the foreign computer-systems company Unisys—subcontracted the implementation of the E2M to partners Webb Fontaine—and E-Konek Pilipinas when it developed the existing computer system at the bureau.

By December 2014, with the exception of the OMI-Intrasoft JV—all of the prospective bidders had been disqualified for one reason or another by the Department of Budget and Management’s (DBM) Bids and Awards Committee (BAC) and the technical working group (TWG). Subsequently, the joint venture was invited to formally bid for the project, and in February this year, it submitted its technical and financial proposals for the project.

‘Conflict of interest’

In a 30-page complaint-affidavit, Annabelle Margaroli, representative of of OMI-Intrasoft JV, said the cancelation of the contract by Lina almost immediately after his appointment as Customs commissioner was “a grave instance of criminal conflict of interest, manifest illegal partiality and malevolent bad faith.”

She also said it benefited E-Konek Pilipinas, Parayno and, ultimately, Lina himself and his family as he (Lina) has a 96.48-percent stake in the company, which also bid, but was disqualified. She was assisted in the filing by lawyer Harry Roque of the Roque and Butuyan Law Offices.

Aguas, Margaroli said, although not part of the BAC, tried to influence the committee and TWG by requiring them to reevaluate the results of the eligibility, hoping to accommodate his favored bidders, and asking them to relax the procurement law, while negatively criticizing the JV of OMI-Intrasoft during the BAC meetings that he attended.

To further delay the award of the project, he also required the JV’s project team members to undergo a series of interviews, in violation of the new law governing government procurement procedures.

And while the interview process was ongoing, he made public announcements that, in the event the bidding process failed, there would be a rebidding, or an updated version of the current system would be adopted.

This undue impositions by Aguas delayed the selection of the highest rated bid (HRB) for more than two months, Margaroli said.

Last April 13, OMI-Intrasoft JV was finally declared the winner of the seven-month-long public bid. Ten days later, on April 23, the contract was finalized and scheduled for signing by the end of the same month.

But on April 24, Lina suddenly replaced Commissioner John Sevilla. It took Lina only two weeks after that to cancel the contract that had undergone two biddings. On May 6, he issued a notice to the DBM canceling the contract on the ground that he needed to review all the projects in the pipeline entered into by the Sevilla. He also said the project was no longer needed.

“E-Konek Pilipinas, as an existing service provider of the BOC, stands to continue reaping benefits from the perpetuation of the current inefficient and dysfunctional system that had been intended for elimination,” Maragoli said.

Parayno, being the president of E-Konek Pilipinas, “is an inevitable beneficiary of the criminal acts” of Lina and Aguas, “and an indispensable party/conspirator who is now calling the shots at the BOC,” Maragoli said.

Criminal acts

Roque said the Ombudsman should investigate Lina, Parayno and Aguas for plunder. He also said they conspired in a series of overt criminal acts to delay and eventually cancel the OMI-Intrasoft JV contract, so that E-Konek Pilipinas may continue its lucrative, but highly inefficient and corruption-prone business with the BOC, valued at between P100 million and P500 million or more annually.

Roque also pointed to two additional overt acts committed by Lina which accentuated his liability for plunder:

1) The clearance he gave to the release of broadcasting equipment belonging to GMA Network handled by two of his corporations—2100 CB and U-Freight—using allegedly fake import permits.

2) Lina’s refusal to act on charges that U-Freight and another company he owns, the Nague Malic Magnawa & Associates Customs Brokers—were linked to 771 missing shipments of airplane parts for the airline company Zest Air worth at least P1.5 billion.

The two cases, Roque said, “further underline the financial benefits Respondent Lina and Respondent Parayno stand to lose if the new systems won by OMI-Intrasoft JV in competitive bidding and which Respondent Lina canceled is actually implemented and the series of acts of plunder Respondents have committed.”

Asean members have agreed on a common window system to fasttrack cargo clearance as they move toward regional integration. The system complies with international open communication standards while ensuring that each country can exchange data securely and reliably with any trading partner that uses international open standards.

Its hallmarks are a simpler and faster processing time, and a more transparent way of doing business. Said to be already 10 years in the making, the national single window is a key component of the country’s goal to join the Asean Market by the end of this year.