Fact-Finding Committee v. Desierto
REITERATIONFacts
The Antecedents: The Presidential Ad Hoc Fact-Finding Committee on Behest Loans (Committee), created by Administrative Order No. 13, investigated allegations of loans granted by government financial institutions at the behest of previous government officials. The Committee identified loan transactions between Comptronics Philippines, Inc. (CPI), later Integrated Circuits Philippines (ICPI), and the Development Bank of the Philippines (DBP) as bearing the characteristics of a behest loan under Memorandum Order No. 61. These characteristics included being under-collateralized, the borrower corporation being undercapitalized, direct or indirect endorsement by high government officials, deviation of loan proceeds, use of corporate layering, non-feasibility of the project, and extraordinary speed in loan release. Procedural History: Atty. Orlando L. Salvador, representing the Committee, filed a sworn complaint with the Office of the Ombudsman for violation of Section 3(e) and (g) of Republic Act (R.A.) No. 3019, the Anti-Graft and Corrupt Practices Act, against members of the DBP Board of Governors and officers of ICPI. The complaint alleged undue haste in the approval of an industrial loan and an interim loan, under-collateralization, and under-capitalization of ICPI. The Ombudsman dismissed the complaint, finding that the cause of action had prescribed, that Administrative Order No. 13 and Memorandum Order No. 61 could not be applied retroactively as they would constitute ex post facto laws, and that there was no probable cause to indict the respondents. A motion for reconsideration was denied. The Petition: The Presidential Ad Hoc Fact-Finding Committee on Behest Loans, through the Presidential Commission on Good Government, filed a Petition for Certiorari seeking to nullify the Ombudsman's resolution and order.
Issue(s)
Whether the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that the offenses had prescribed. Whether Administrative Order No. 13 and Memorandum Order No. 61 are ex post facto laws and cannot be applied retroactively. Whether there is probable cause to indict the private respondents for violation of Section 3(e) and (g) of R.A. No. 3019.
Ruling
The petition is DENIED. The assailed Memorandum and Order of the Ombudsman in OMB-0-95-0443 are AFFIRMED.
Ratio Decidendi
On the issue of prescription: The Court ruled that the Ombudsman committed grave abuse of discretion in finding that the offenses had prescribed. Citing previous rulings in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto and Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Ombudsman Desierto, the Court held that for offenses involving the acquisition of behest loans committed prior to the EDSA Revolution, the prescriptive period should be computed from the discovery of the commission of the offense, not from the date of commission. This is because it was difficult for the State to discover such violations at the time they were made due to connivance between public officials and beneficiaries. Since the Committee was created on October 8, 1992, and the complaint was filed on February 17, 1995, less than three years had passed, meaning the offenses had not prescribed. On the issue of ex post facto laws: The Court disagreed with the Ombudsman's declaration that Administrative Order No. 13 and Memorandum Order No. 61 could not be applied retroactively because they would violate the constitutional prohibition against ex post facto laws. The Court defined an ex post facto law and clarified that penal laws are those that define crimes and establish penalties. Administrative Order No. 13 merely created a committee and defined its functions, while Memorandum Order No. 61 provided criteria for determining behest loans. Neither order imposed penalties. Therefore, they are not penal laws and cannot be characterized as ex post facto laws. Furthermore, the Court noted that the Ombudsman acted in excess of jurisdiction by delving into the constitutionality of these administrative issuances, as established in Estarija v. Ranada. On the issue of probable cause: The Court found no probable cause to indict the private respondents for violation of Section 3(e) and (g) of R.A. No. 3019. For a violation of Section 3(e), it must be shown that the accused, a public officer, acted with manifest partiality, evident bad faith, or gross inexcusable negligence, causing undue injury or unwarranted benefits. For a violation of Section 3(g), there must be a showing that a contract was entered into on behalf of the government that was manifestly and grossly disadvantageous. The Court found that the DBP officers studied and evaluated ICPI's loan request and were convinced of its viability. Petitioners failed to demonstrate that DBP did not exercise sound business judgment or that the loan conditions favored ICPI. The presumption of good faith in the performance of duties by public officers was not overcome, and there was no showing of dishonest purpose, moral obliquity, or conscious doing of a wrong. The Court also found that ICPI was not under-capitalized, as its paid-up capital increased significantly, and the loan was sufficiently collateralized, with the aggregate value of securities exceeding the loan amount. The approval process was also not characterized by undue haste, with a processing period of over four months for the industrial loan. The Court noted that the petitioner did not specify the precise role or participation of each private respondent in the alleged violation. No concrete acts of ICPI's directors and officers were alleged or proven to have unduly influenced DBP officials, nor was there evidence of collusion or common criminal design to cause undue injury to the government. The Ombudsman cannot be faulted for not proceeding with the prosecution without sufficient evidence to secure a conviction.
Main Doctrine
The Ombudsman committed grave abuse of discretion in dismissing the complaint for violation of R.A. No. 3019 on the grounds of prescription and the non-retroactivity of administrative issuances, as well as in finding no probable cause, when the evidence indicated that the loan transaction exhibited characteristics of a behest loan and the prescriptive period should be counted from the discovery of the offense. Administrative issuances creating fact-finding committees and defining behest loans are not penal in nature and thus do not violate the prohibition against ex post facto laws.