ITO ANG KATIBAYAN NA MAGNANAKAW AT HINDI BANAL ANG MGA AQUINOS AT KANILANG MGA KAPANALIG: An apparent favorite foreign law firm hired by the Aquino administration whose legal services were hired in at least three ongoing arbitration cases, is US-based White and Case, a law firm to represent the interest of the Philippines in the Belgian suit against the government, as well as a case in Singapore lodged against the Philippine government by the Philippine International Airport Terminal (Piatco) consortium in Singapore, and another one, through a suit lodged by Germany’s Fraport, a partner of Piatco in a arbitral court in New York. But it is not only foreign firms who charge astronomical fees, but also the local legal hires. DAP-type scam in foreign hires of arbitral lawyers Kickbacks taken from ‘excessive, exorbitant’ legal fees for foreign experts- The DAP worms are coming out of the Palace cans, one after another, adding more scndal to the already scandal- ridden Aquino presidency and administration, this time on alleged kickbacks being obtained by officials from excessive legal fees charged by foreign law firms and Philippine lawyers’ services hired by the Aquino government. Another Disbursement Acceleration Program (DAP)-type funding at which a regional trial court had been recently scandalized by its excessiveness and extravagance has risen in the Aquino administration horizon, through its hiring of both foreign and local legal firms, paying them extravagant and exorbitant fees for their arbitral services and violating constitutional provisions to boot. As things stand, there are at least four existing arbitation cases lodged at the International Chamber of Commerce (ICC) in Singapore and the United States, as well as a recent one lodged by the Philippine Government against China in a United Nations Law of the Sea (UNCLos) panel. Sometime in July, 2011, the Aquino administration moved to scrap the P11.8-billion Greater Maritime Access (GMA) roll-on, roll-off (RoRo) port project of the previous administration and agreed to pay the French contractor on a quantum meruit basis. Then Transportation Secretary Manuel “Mar” Roxas said the government will only pay French firm Eiffel Matiere the price of the steel pipes that had been delivered to the Philippine Ports Authority (PPA) by virtue of quantum meruit – a legal term which means “as much as he deserves” and is often used as a basis to continue a service without an agreement or contract. Eiffel Matiere was scheduled to deliver the remaining steel pipe piles, movable ramps, and uni-bridge systems that comprise most of the materials to build the modular ports but this was deferred when Roxas replaced resigned DoTC Secretary Jose “Ping” de Jesus, a newspaper reported. Upon his assumption to office, Roxas had the GMA RoRo ports project placed under review and eventually ordered the project cancelled, claiming that this was “overpriced.” The French firm was quoted as saying it will sue the Philippine govenrment on the cancellation of the contract. This would mean yet another arbitration suit against the Philippines. The hiring, along with the payments of the legal fees of the foreign law firms, as well as the fees of the Philippine lawyers, has in practice for sometime without any congressional allocation found in the yearly budgets, which is no different from what the Aquino admistration and its creators, implementors and proponents of DAP did when they diverted funds allocated by Congress to several projects, and pouring them into other projects that however, have no congressional imprimatur, which is in clear violation of the Constitution, laws and public policy, a court recently ruled. Moreover, the hiring of the foreign and local law firms were done without the benefit of any public bidding, and given to an implementing agency, again, another clear violation of the law and public policy. There was also no certification from the Commission on Audit as these DAP-like hiring of law firms, foreign and local, and even consultants, does not pass through the CoA and its audit. The way the DAP system worked under the Aquino administration, there is a usual notice of a special release order from the Department of Budget and Management which funds are then given to an implementing agency, which pays out whatever is needed in payment for projects. In an earlier arbitration case, the implementing agency was the Manila International Airport Authority (MIAA) which gave the funds to the local lawyers and presumably, the foreign lawyers hired by Malacañang. This was done without any public bidding. Under laws and public policies, the so-called implementing agencies are duty bound to hold biddings for projects. This was not done by MIAA. That the Aquino administration appears to be gung-ho on cancelling contracts and acceeding to arbitral proceedings when sued by the concerned foreign firm was explained by a reliable source from an attached agency of the executive department, who intimated to the Tribune that there is a lot of money to be made in kickbacks and commissions in government hires of foreign and local lawyers for the arbitration process, instead of settling issues through dialogs with foreign firms, and even foreign governments. The Aquino government hires international lawyers at exorbitant legal fees, aside from the superfluity of government also hiring Philippine legal experts, when there is the Philippine government lawyer, the Office of the Solictor-General to do the job of the local legal experts. The legal fees in one specific case that was recently decided by the Mandaluyong Regional Trial Court (RTC) Branch 213 bared in documents submitted by the Philippine government and included in its decision,. The court ruled against the government’s position, stating that the legal fees sought by the Philippine government awarded by the administration to the MIAA for payment of legal fees totaled some US $28 million—a hiring of lawyers and sums not undergoing any public bidding to bring on transparency, without any congressional allocation, and without a CoA certifcation—which the court said was violative of the Constitution and public policy. The major reason for the preponderance of arbitation cases stems from the penchant of President Aquino and his team, to unilaterally cancel contracts, signed and agreed upon by the foreign firms and the previous administation on Aquino’s unproved charges of corruption. It was during Aquino’s maiden State of the Nation Address (Sona) where he had announced that he ordered the immediate arbitrary cancellation of the P 18.7-billion Laguna Lake Rehabilitation Project (LLRP). The cancelled contract had the Belgian marine engineering firm Baagerwerken Decloedt en Zoon N.V. (BDZ) tasked to dredge Laguna de Bay as a means to improve water flow and flood control capacity, with the dredged material being treated and reused to create about 100 hectares of artificial wetlands at the lake’s northern end as a further pollution- and flood-control measure. BDZ is a reputable Belgian firm and its contract was iron-clad on the tasks to be done, which was contrary to the accusations of Aquino that while the lake would only be dredged while the dreged material would merely be dumped in another place. The LLRP project by BDZ, Aquino said in his Sona, was marked by corruption, despite the fact that a review made by the Environment department and the Department of Justice found no anomalies and even endorsed the project. With the arbirtrary cancellation of the project, the government was sued by the Belgian BDZ which filed a case before the International Center for the Settlement of Investment Disputes (ICSID) in Washington DC, seeking 70 million euros or some P4 billion in damages from the Philippine government. An apparent favorite foreign law firm hired by the Aquino administration whose legal services were hired in at least three ongoing arbitration cases, is US-based White and Case, a law firm to represent the interest of the Philippines in the Belgian suit against the government, as well as a case in Singapore lodged against the Philippine government by the Philippine International Airport Terminal (Piatco) consortium in Singapore, and another one, through a suit lodged by Germany’s Fraport, a partner of Piatco in a arbitral court in New York. But it is not only foreign firms who charge astronomical fees, but also the local legal hires. In a recent case heard and decided by RTC Mandaluyong Branch 213, it involved one filed by the Aquino government, represented by DoTC and the MIAA against Piatco over the issue of the “Recognition and Enforcement of the Arbitral Award of the International Chamber of Commerce (ICC). Thedecision showed that recognition and enforcement of the final award—which concerns the legal fees as payment to government’s lawyers—White and Case–sought by the DoTC is contrary to Philippine Law and public policy, “because the items comprising the subject of the award, i.e., the GRP’s (Government of the Philippines) arbitration costs and expenses were incurred in violation of the Constitution, relevant statutes and other rules promulgated pursuant to law governing government procurement.” There was no bidding done in the DoTC’s hiring of its international lawyers, White and Case, which appears to be a favorite legal firm utilized by the Philippine government. This is clearly against RA 9184, Section 10, which states that “All Procurement shall be done through Competitive Bidding…” which includes “consulting services.” It was bared in the decision that White and Case fees, along with the legal fees of then Philippine lawyers, led by retired Supreme Court Justice Feliciano and his then researcher, now Chief Justice Lourdes Sereno, were astronomical and extravagant—fees that are beyond what lawyers, both foreign and legal are paid. A source from the legal community who is has particuipated in arbitral proceedings, said a foreign law firm for a Philippine suit lodged against the government in an arbitration court charges merely US$ 2 million for the foreign legal firm’s legal services. The fees charged for the foreign law firms amounted to some US$ 20 million. And it was not just White and Case that was hired by the Philippine government. There were four foreign law firms hired for the same case. Both the Aquino government’s foreign firms and Philippine lawyers, were paid a combined US$ 28 million. As the court decision stated: “Left totatally unexplained by the Respondent Government is the procurement of legal services of four foreign law firms and legal experts in addition, aside from the Office of the Solicitor-General (OSG), the main responsibility of which deals with representation of the Philippine Government in litigation. “As tabulated by the Arbitral Tribunal in its Final Award on costs, the expenditure of ‘reasonable costs’ on the part of the OSG amounted to US$509,895.11, whereas the costs of the legal services of two Filipino experts have a total of US$ 574,230.15, which is much bigger. In addition, outside of the funds expended by the OSG, the Arbitral Tribunal recorded the costs of services attributed to the law firm of White and Case alone at US $19, 076,952.9 million. Two other foreign law firms, (Allen and Gledhill and Drew and Napier) incurred a total cost of US $508,984.39. In sum, the expenses of the OSG is at $509,825.11 as against the total cost of the non-governmental experts and foreign law firms of US$20, 160,150.44 (twenty million one hundred sixty and one hundred fifty dollars and 40 cents). The Tribune source working in an agency under the Executive Department said that the legal fees are deliberately inflated as there are kickbacks involved from such fees. “It is always the same foreign legal firms hired by the Aquino administration. Imagine three different foreign law firms being hired when only one foreign firm, if at all, is needed for these arbitration cases? “White and Case is always tapped by the government. And the fees are already very very high—in the tens of millions of dollars. There is no bidding at all and there is no congressional allocations found in the national budget and even the CoA is ignored,” the source said. “Why else would this be done by the administration if there are no kickbacks for certain officials involved in the hiring of these foreign and local lawyers? “In the case of the Belgian firm suing the Philippine government over a cancelled contract, it is again White and Case that has been hired. Why, if not for the hidden kickback?”, the source said. In the decision, the court also said: There was no justification at all for the GRP to hire and engage the services of foreign law firms to represent it in the arbirtration. After all, the OSG is more familiar with Philippine laws than the foreign lawyers engaged by the GRP (government of the Philippines) at excessive and unconscionable cost to the Republic. There can thus be no doubt that the GRP’s arbitration costs and expenses were not only irregular and uneccesary, these were also excessive, extravagant and unconsionable.” “the Court cannot condone such blatant and shameless violation of the Constitution and other mandatory or prohibitory statutes.” The court voided the payment of the legal fees won in the arbitration court by the Philippine government, with the court stating that since the arbitration costs and expenses were not lawfully incurred since the GRP’s unlawful act remains void, despite the Final Award rendered by the Arbirtral court.
Posted on: Tue, 09 Sep 2014 10:08:06 +0000
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