DEPARTMENT of National Defense (DND) officials denied that they sought favors from a former employee of a firm that bagged a contract for the Armed Forces of the Philippines (AFP).
DND Executive Fernando Manalo said there is no truth to the claim of Rhodora Alvarez that they asked for a 15-percent cut from the winning bidder out of the project’s total amount.
Alvarez was the local representative of Rice Aircraft Services Inc. (Rasi) and Eagle Copters Ltd., the joint venture that bagged a P1.2-billion contract to supply the AFP with 21 refurbished UH-1D helicopters. Alvarez allegedly asked her employers an amount equivalent to 15 percent of the total project cost and saying the money was for officials of the DND.
Alvarez, however, was fired by Rasi after she allegedly failed to explain and liquidate the money, which ran in millions, according to Manalo, DND undersecretary for finance, munitions, installation and materiel.
Alvarez alleged that the DND favored Rasi over other bidders for the project. She also claimed the helicopters delivered to the Philippines were not working.
The Philippine Air Force, being the helicopters’ end-user, denied the claim and said they also subjected the choppers to flight tests.
The DND, through Arsenio Andolong, director of its public affairs service, said Alvarez’s claims were “false and misleading” and asked her to substantiate them.
“We thus question Ms. Alvarez’s motive for smearing the reputation of the department and its officials. We challenge her to go beyond her rhetoric and back her statements with concrete proof,” Andolong said.
Andolong said any bidding involving projects of the DND is being conducted with utmost transparency wherein third-party representatives are even present in order to ensure that the process is not tainted.
“We reiterate that the procurement processes in the DND are aboveboard, transparent and conducted in accordance with existing rules and regulations under law. In line with this, it is the practice of the DND to invite third-party observers, such as the Coalition Against Corruption [CAC], the Samahang Magdalo, and members of the media to witness the procedures conducted by DND’s Bid and Awards Committee [BAC],” he said.
“The UH-1 Acquisition Project is no exception,” Andolong added.
Late this week, Alvarez reiterated her claims against the DND over the project in a radio interview.
However, DND Spokesman Peter Paul Galvez said, “the secretary of national defense [Voltaire T. Gazmin] categorically states that he has strict instructions to all DND officials to avoid acts of impropriety in all their dealings.”
He added Gazmin “has never issued instructions to seek favors from any entity nor manipulate transactions that would violate the public trust and result in a disadvantage to the government.”
The DND official lamented the department is being dragged by
Alvarez into her “quarrel” with Rasi, purposely because she could not force her former employer to give in to her demand.
Rasi President Robert Rice Jr. had informed defense department officials that the company will file criminal charges against Alvarez for her actions and “malicious” claims that partly prompted the DND to cancel its acceptance of the remaining 14 choppers, which are already in the country. The DND had already accepted and paid for seven helicopters.
Gazmin had moved to cancel the acceptance of the remaining choppers after Alvarez hurled accusations, claiming among others, that the contract was tainted by anomaly, or that Rasi had been favored by members of the DND’s BAC and had its members asked commissions from the winning bidder.
Galvez said the DND “laments that the project was a ‘casualty’” in Alvarez’s tussle with her former employer, from which she was allegedly “extorting” money or that she was even using the whole chopper contract to force Rasi to give in to her demand.
Rice said he has written to
Manalo, wherein he clarified Alvarez’s standing with the company and, at the same time, enumerated the alleged violations she committed and which led to her termination.
In his letter dated March 3, 2015, Rice claimed they took Alvarez as the company’s representative in Manila in October 2013, wherein she was also tasked to create a local company that would pay for expenses relating to the payroll of the local employees of Rasi, who would assemble the choppers, equipment, performance bond, purchases, food and lodging of employees and other expenses.
In between June and October 2014, Rice claimed they sent Alvarez a huge amount of money in order to cover for such expenses. Last December she requested an additional amount from the company, Rice said in the letter.
Rice added they did not expect the request, considering that Alvarez had been given with a huge amount, and as such, they asked her to submit documents enumerating where the money went.
The local representative allegedly submitted “insufficient data” prompting Rasi to tap the services of a local auditing firm, which found half of the amount given to her unaccounted.
The firm also found out that the local representative had “outstanding bills with vendors” that were supposed to have been paid, Rice said.
He claimed that when they approached Alvarez with the unaccounted amount, she became
“aggressive and began to extort Rasi for money, threatening to cancel the contract.”
She also demanded that “Rasi pay her 15 percent of the contract right away.” If the money is not sent to her, Rice claimed that Alvarez would have the production or assembly or the helicopters stopped. But Rasi dismissed her demands until she could account for the money, according to Rice. “Then she began to employ tactics,” Rice said.
Alvarez allegedly sent home the crew that were assemblying the helicopters and told them not to report for work until further notice. She also revoked the performance bond covering the project wherein she had assigned herself as the signatory of the bond. “This has stopped the payment on multiple accepted aircraft,” Rice claimed.
Rice also said Alvarez had an affair with an Air Force officer, who is a member of the evaluating team, which Rasi deemed “inappropriate and ground for termination.”
All of these transactions happened while Alvarez is an employee of the government, working with the Bureau of Internal Revenue.
Months later, or in April this year, Alvarez came out in the media claiming that the helicopter deal was tainted with corruption.