Presidential Ad Hoc Fact-Finding Committee v. Desierto
REITERATIONFacts
The Antecedents: The Presidential Ad Hoc Fact-Finding Committee on Behest Loans (Petitioner) investigated a loan guarantee agreement between Coco-Complex Philippines, Inc. (CCPI) and the National Investment Development Corporation (NIDC) for a loan from Fried Krupp of Germany. NIDC approved a guarantee for DM7.4M. CCPI later had an outstanding obligation of ₱205,889,545.76 as of March 31, 1992. Petitioner filed a sworn statement before the Ombudsman against officers and board members of NIDC/PNB and CCPI for violation of Section 3(e) and (g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act), alleging the loan was processed with haste, was under-collateralized, and CCPI was undercapitalized. NIDC later restructured CCPI's loan, increased it, and allowed conversion of advances into equity, and guaranteed a credit line with PNB. Procedural History: The Ombudsman initially dismissed the complaint on the ground of prescription, but this was reversed by the Supreme Court, which ordered the Ombudsman to conduct a preliminary investigation. Petitioner filed a Manifestation and Request for Issuance of Subpoena Duces Tecum to obtain records from PNB, but the Ombudsman failed to act on it. Subsequently, the Ombudsman dismissed the complaint for failure to furnish the names of the NIDC officials responsible. Petitioner filed a Motion for Reconsideration with a Motion for Leave to Admit Amended Complaint, identifying respondents more precisely and reiterating allegations of under-collateralization and undercapitalization. The Ombudsman denied the motion, considering it a mere scrap of paper. The Petition: Petitioner filed a Petition for Certiorari, assailing the Ombudsman's Resolution and Order for grave abuse of discretion, particularly for holding the evidence insufficient and for failing to act on the request for subpoena duces tecum.
Issue(s)
Whether the Ombudsman committed grave abuse of discretion in dismissing the amended complaint for insufficiency of evidence. Whether the Ombudsman gravely abused his discretion in failing to act on the petitioner's request for a subpoena duces tecum. Whether the questioned transactions bore the characteristics of a behest loan. Whether the elements of violations under Section 3(e) and (g) of RA 3019 were sufficiently alleged in the amended complaint.
Ruling
The Supreme Court granted the petition, reversed and set aside the Ombudsman's Resolution and Order, and ordered the Ombudsman to conduct a preliminary investigation with utmost dispatch, issue the required subpoena for specific board resolutions and other relevant documents, and promptly evaluate the arguments of all parties.
Ratio Decidendi
On the Ombudsman's Grave Abuse of Discretion in Dismissing the Complaint: The Court found that the Ombudsman gravely abused his discretion in dismissing the amended complaint for being insufficient. The Ombudsman summarily dismissed the petitioner's voluminous exhibits without discussing whether the transactions bore the characteristics of a behest loan or whether the respondents were probably guilty. The probable cause standard requires more than a bare suspicion but less than evidence that would justify a conviction, implying a probability of guilt. The Ombudsman's failure to explain the basis for his action, especially when probable cause was not clearly absent, constituted grave abuse of discretion. The Court emphasized that the Ombudsman must determine that the complainant failed to establish probable cause, and this determination requires a thorough examination of the evidence and the elements of the offense. On the Ombudsman's Failure to Act on the Subpoena Duces Tecum: The Court held that the Ombudsman's failure to act on the petitioner's motion for a subpoena duces tecum was a critical error. The Ombudsman's justification that the Presidential Commission on Good Government (PCGG) should have issued the subpoena was found flimsy, as the Ombudsman himself is empowered to issue subpoenas under RA 6770. By not acting on the motion and then dismissing the complaint for failure to produce the documents, the Ombudsman acted against his mandate to act promptly on complaints and enforce liabilities where evidence warrants. The Court noted that the Ombudsman should have at least informed the petitioner of his stance on the subpoena, giving the petitioner an opportunity to act accordingly. On the Characteristics of Behest Loans: The Court found prima facie proof that the questioned transactions bore the characteristics of behest loans. Specifically, the borrower corporation (CCPI) was undercapitalized, as its paid-up capital was significantly less than the loan guarantee amount, and it failed to comply with the stipulated capital increases. Furthermore, the loan accommodation was under-collateralized, as the value of the collateral was less than the loan amount, even with a liberal valuation. The NIDC's own memorandum indicated the insufficiency of collateral and recommended additional security, which was not provided. Lastly, the loan accommodation was approved with extraordinary haste, with the board approving the loan on the same day a report highlighting insufficient collateral and capital was submitted, contrary to acceptable lending practices. On the Sufficiency of Allegations for Violations of RA 3019: The Court found that the elements of violations under Section 3(e) and (g) of RA 3019 were sufficiently alleged in the amended complaint. For Section 3(e), the elements include the accused being public officers, committing prohibited acts in their official capacity, causing undue injury or giving unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence. For Section 3(g), the elements are being a public officer, entering into a contract manifestly and grossly disadvantageous to the government. The amended complaint alleged that PNB/NIDC officers, in conspiracy with CCPI officers, granted a loan with characteristics of a behest loan, causing injury to the government and being manifestly disadvantageous, with the NIDC directors' assent attended by gross inexcusable negligence, if not evident bad faith or manifest partiality. The Court also noted that the complaint against unnamed NIDC officers was valid under Section 7, Rule 110 of the Rules of Court, and that the named respondents did not deny their positions or assent to the transactions.
Main Doctrine
The Ombudsman gravely abused his discretion in dismissing a complaint for failure to provide copies of board resolutions when the petitioner had filed a motion for subpoena duces tecum which was not acted upon, and when other evidence prima facie supported the allegations of behest loans, undercapitalization, and under-collateralization. The failure to name all respondents is permissible under the Rules of Court when their true names are unknown.