Presidential Commission on Good Government v. Desierto
REITERATIONFacts
The Antecedents: The Presidential Commission on Good Government (PCGG), through Atty. Orlando L. Salvador, filed a complaint with the Ombudsman against private respondents for violations of Section 3(e) and (g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). The complaint stemmed from loans granted by the Development Bank of the Philippines (DBP) to Sabena Mining Corporation (SABEMCOR), which the PCGG alleged were behest loans based on criteria set by Memorandum Order No. 61, specifically that they were under-collateralized and the borrower was undercapitalized. The loans in question involved US$15,000,000 and P263 Million granted between 1978 and 1982. Procedural History: The Ombudsman dismissed the complaint, finding that the loans were not insufficiently collateralized, there was insufficient evidence of undercapitalization, and the action had prescribed. The PCGG's motion for reconsideration was denied. This led to the filing of a petition for certiorari with the Supreme Court. The Petition: The PCGG alleged that the Ombudsman committed grave abuse of discretion in dismissing the complaint, particularly concerning the findings on prescription and the sufficiency of evidence to establish probable cause.
Issue(s)
Whether the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the complaint for violation of R.A. No. 3019, and whether the loans granted to SABEMCOR were under-collateralized and SABEMCOR was undercapitalized, thereby constituting behest loans. Whether the offenses charged had already prescribed. Whether DBP exercised sound business judgment in granting the loans, considering the role of private respondents and the Ombudsman's discretion.
Ruling
The Supreme Court dismissed the petition for certiorari and affirmed the Resolution dated February 22, 1999, and the Order dated May 26, 1999, of the Office of the Ombudsman. The Court found no grave abuse of discretion on the part of the Ombudsman.
Ratio Decidendi
On the alleged grave abuse of discretion, sufficiency of evidence, and behest loans: The Court reiterated that the Ombudsman is vested with wide latitude in determining whether probable cause exists. The Ombudsman's finding that the loans were not under-collateralized was supported by substantial evidence. Furthermore, the Court noted that even if SABEMCOR was undercapitalized, the Committee's own resolution required at least two criteria to classify a loan as behest. The Ombudsman also found insufficient evidence to prove undercapitalization. The Court emphasized that it would not interfere with the Ombudsman's findings unless tainted by grave abuse of discretion, which was not present here. On the issue of prescription: While the Ombudsman initially ruled that the action had prescribed based on the loan approval dates, the Court conceded that the prescriptive period for behest loan cases commences from the date of discovery by the fact-finding committee. However, this concession did not alter the outcome as the primary issue revolved around the Ombudsman's finding of lack of probable cause on the merits. On the exercise of sound business judgment by DBP, the role of private respondents, and respect for Ombudsman's discretion: The Court observed that the loans were intensively studied and evaluated by DBP before approval. There was no showing that the DBP Board of Directors failed to exercise sound business judgment or that the approval was contrary to acceptable banking practices. The Court also found no circumstances indicating a common criminal design or collusion between DBP officers and SABEMCOR to cause undue injury to the government. The Court noted the specific defenses raised by private respondents. The Court underscored that unless there are compelling reasons, it will respect the Ombudsman's exercise of discretion in determining probable cause.
Main Doctrine
The Court affirmed the Ombudsman's dismissal of the complaint for violation of R.A. No. 3019, finding no grave abuse of discretion as the Ombudsman's conclusion of lack of probable cause was supported by substantial evidence, particularly regarding the sufficiency of collateral and the insufficiency of evidence for undercapitalization. The Court also reiterated that the prescriptive period for behest loan cases commences from the date of discovery by the fact-finding committee.