Estrada vs. Office of the Ombudsman

The Office of the Ombudsman's finding of probable cause during preliminary investigation is entitled to great respect and will not be disturbed absent grave abuse of discretion amounting to lack or excess of jurisdiction, even if based on hearsay evidence, provided there is substantial basis for crediting such evidence; moreover, the presence or absence of the elements of the crime charged is evidentiary in nature and is a matter of defense that may be passed upon only after a full-blown trial on the merits.

Senator Jinggoy Estrada, as a member of the Philippine Senate from 2004 to 2012, exercised discretionary authority over his Priority Development Assistance Fund (PDAF) allocations. Janet Lim Napoles operated JLN Corporation and controlled various non-governmental organizations (NGOs) allegedly utilized as conduits for diverting public funds. John Raymund de Asis served as Napoles' employee (driver/messenger/janitor) and was designated as President/Incorporator of Kaupdanan Para sa Mangunguma Foundation, Inc. (KPMFI), one of the JLN-controlled NGOs. The alleged scheme involved Estrada endorsing Napoles' NGOs to implementing agencies (IAs) to receive PDAF funds for ghost livelihood projects, with Estrada allegedly receiving commissions or kickbacks through his authorized representatives Pauline Labayen and Ruby Tuason.

• The PDAF Modus Operandi: Whistleblowers Benhur Luy, Marina Sula, and Merlina Suñas (JLN employees) revealed that Napoles and legislators negotiated project lists, costs, and commissions ranging from 40-60% of the total project cost. Napoles prepared "Listings" of projects which legislators endorsed to the Department of Budget and Management (DBM) for the release of Special Allotment Release Orders (SAROs). Upon SARO release, legislators endorsed JLN-controlled NGOs (specifically Masaganang Ani Para sa Magsasaka Foundation, Inc. [MAMFI] and Social Development Program for Farmers Foundation, Inc. [SDPFFI]) to Implementing Agencies (IAs) including the National Agribusiness Corporation (NABCOR), National Livelihood Development Corporation (NLDC), and Technology Resource Center (TRC). Checks were deposited to NGO accounts and withdrawn for Napoles' control, with ghost projects manufactured through fictitious beneficiary lists, falsified inspection reports, and spurious liquidation documents.
• Estrada's Alleged Participation: Estrada allegedly received P183,793,750.00 in kickbacks from 2004 to 2012, delivered through his Deputy Chief-of-Staff Pauline Labayen and Ruby Tuason. He allegedly utilized his position to pressure IAs to honor his NGO choices and expedite fund releases. The Commission on Audit (COA) Special Audit Office Report No. 2012-2013 documented irregularities in Estrada's PDAF releases totaling P262,575,000.00 to MAMFI and SDPFFI, noting that projects were "ghost" or inexistent, NGOs lacked accreditation, and beneficiaries were fictitious or could not be located.
• De Asis' Alleged Role: Designated as President/Incorporator of KPMFI (a JLN-controlled NGO), De Asis allegedly assisted in facilitating the transfer of checks from IAs, depositing them to bank accounts, and remitting funds to Napoles' residence.
• Ombudsman Proceedings: Estrada submitted counter-affidavits denying receipt of money and knowledge of Napoles' connection to NGOs, claiming his endorsement letters were merely recommendatory. De Asis failed to submit his counter-affidavit to the NBI Complaint, while Napoles failed to submit counter-affidavits to both complaints.
• Findings Below: The Ombudsman found probable cause for plunder (combination or series of overt acts under Section 1(d)(2) and (6) of RA 7080) and eleven counts of violation of Section 3(e) of RA 3019 (manifest partiality, evident bad faith, undue injury to government, and unwarranted benefits to private parties).

• Estrada — Lack of Evidence: Denied receiving kickbacks or amassing ill-gotten wealth; claimed no knowledge of Napoles' control over NGOs; alleged that endorsement letters were merely recommendatory and not mandatory; asserted that the complaints constituted political persecution and violated equal protection.
• Estrada — Inadmissibility of Evidence: Argued that whistleblower testimonies were inadmissible hearsay and covered by the res inter alios acta rule; contended that Luy's business ledgers were falsified and unreliable; asserted that the COA Report was merely recommendatory and not binding; claimed that admissions by co-respondents could not prejudice him.
• De Asis — Lack of Conspiracy: Maintained that he merely acted as a driver, messenger, and janitor in good faith; denied knowledge of the illegal purpose of the transactions; argued that no evidence showed knowing participation in the crime of plunder.
• Napoles — Defective Complaints: Asserted that the complaints were insufficient in form and substance for failure to state with particularity the time, place, and manner of the commission of the crimes; argued that the evidence failed to establish her specific participation in the alleged scheme.

• Ombudsman — Standard of Probable Cause: Countered that probable cause requires only a reasonable ground for belief of guilt, not absolute certainty or proof beyond reasonable doubt; emphasized that preliminary investigation is merely inquisitorial and does not finally adjudicate rights.
• Ombudsman — Sufficiency of Evidence: Maintained that whistleblower testimonies, corroborated by Tuason's affidavit and documentary evidence (PDAF documents, business ledgers, COA Report), provided substantial basis for finding probable cause; argued that technical rules of evidence (hearsay, res inter alios acta) do not apply in preliminary investigation; contended that Estrada's endorsement letters, executed under his authority as Senator, directly implicated him and were not merely recommendatory.
• Ombudsman — Conspiracy: Asserted that De Asis' designation as NGO President and his participation in processing checks and remitting funds established probable cause of conspiracy; argued that Napoles' role as mastermind was evidenced by the modus operandi and financial records showing her control over the diverted funds.

• Standard of Review: Whether the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in finding probable cause to indict petitioners for plunder and violation of Section 3(e) of RA 3019.
• Applicability of Technical Rules: Whether technical rules of evidence, specifically the hearsay rule and the res inter alios acta rule, should be applied in preliminary investigation proceedings.
• Sufficiency of Evidence: Whether the evidence presented (whistleblower testimonies, business ledgers, COA Report, endorsement letters) was sufficient to establish probable cause against each petitioner.

• Standard of Review: The Ombudsman did not commit grave abuse of discretion. Grave abuse implies a capricious, whimsical, or arbitrary exercise of judgment so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty enjoined by law; mere disagreement with the findings is insufficient to warrant judicial interference. The Court maintains a consistent policy of non-interference with the Ombudsman's executive determination of probable cause absent such arbitrary conduct.
• Nature of Probable Cause and Evidence Rules: Probable cause implies mere probability of guilt, not absolute certainty; it requires only evidence showing that more likely than not a crime was committed by the suspect. Preliminary investigation is not the occasion for the full and exhaustive display of the prosecution's evidence; technical rules of evidence do not apply, and probable cause may be established with hearsay evidence as long as there is substantial basis for crediting the hearsay. The presence or absence of the elements of the crime is evidentiary in nature and is a matter of defense that may be passed upon only after a full-blown trial on the merits.
• Against Estrada: The evidence—whistleblower testimonies, Tuason's corroborating affidavit, Luy's business ledger showing P183,793,750.00 in kickbacks, the COA Report, and Estrada's own endorsement letters—sufficiently established a combination or series of overt acts (receiving kickbacks under Section 1(d)(2) and taking undue advantage of position under Section 1(d)(6) of RA 7080) constituting plunder, and manifest partiality/evident bad faith under Section 3(e) of RA 3019. The Sandiganbayan's subsequent issuance of a warrant of arrest judicially confirmed the sufficiency of evidence, rendering questions on the preliminary investigation moot.
• Against De Asis: Evidence showed he was designated President of a JLN-controlled NGO and participated in processing checks, depositing them to bank accounts, and remitting funds to Napoles, establishing probable cause of conspiracy in plunder and violation of RA 3019. His defenses (lack of criminal intent, mere employment status) are evidentiary matters properly ventilated during trial, not preliminary investigation.
• Against Napoles: Evidence established her as the mastermind facilitating the scheme through JLN-controlled NGOs; the complaints were sufficient in form under Section 6, Rule 110 of the Rules of Criminal Procedure, adequately informing her of the accusations through the detailed modus operandi described therein.

• Non-Interference with Ombudsman's Finding of Probable Cause: The Supreme Court will not interfere with the Ombudsman's determination of the existence of probable cause in the absence of grave abuse of discretion amounting to lack or excess of jurisdiction, defined as a capricious, whimsical, or arbitrary exercise of judgment so patent and gross as to amount to evasion of a positive duty or virtual refusal to perform duty enjoined by law.
• Executive vs. Judicial Determination of Probable Cause: Executive determination (during preliminary investigation) is a function of the public prosecutor/Ombudsman requiring only that evidence engender a well-founded belief that a crime was committed and the respondent probably guilty; judicial determination (for warrant of arrest) is made by judges. Courts do not review the correctness of executive probable cause findings absent grave abuse.
• Relaxed Evidence Rules in Preliminary Investigation: Technical rules of evidence, including the hearsay rule and res inter alios acta, do not apply in preliminary investigations. Probable cause may be established with hearsay evidence provided there is substantial basis for crediting such evidence, as preliminary investigation does not finally adjudicate rights and obligations.
• Elements of Plunder: Under Section 2 of RA 7080, the elements are: (a) the offender is a public officer acting alone or in connivance with others; (b) amassing, accumulating, or acquiring ill-gotten wealth through a combination or series of overt/criminal acts under Section 1(d); and (c) aggregate amount of at least P50,000,000.00.
• Elements of Violation of Section 3(e) of RA 3019: The elements are: (a) the accused is a public officer discharging administrative, judicial, or official functions (or private individual in conspiracy); (b) acting with manifest partiality, evident bad faith, or inexcusable negligence; and (c) causing undue injury to any party including the government, or giving unwarranted benefits to a private party.

• "Probable cause need not be based on clear and convincing evidence of guilt, neither on evidence establishing guilt beyond reasonable doubt and definitely, not on evidence establishing absolute certainty of guilt. As well put in Brinegar v. United States, while probable cause demands more than 'bare suspicion,' it requires 'less than evidence which would justify . . . conviction.'" — Estrada v. Office of the Ombudsman, cited in the decision.
• "Probable cause merely implies probability of guilt and should be determined in a summary manner. Preliminary investigation is not a part of trial and it is only in a trial where an accused can demand the full exercise of his rights, such as the right to confront and cross-examine his accusers to establish his innocence."
• "The technical rules on evidence are not binding on the fiscal who has jurisdiction and control over the conduct of a preliminary investigation."
• "Probable cause can be established with hearsay evidence, as long as there is substantial basis for crediting the hearsay."
• "Preliminary investigation is not the occasion for the full and exhaustive display of the prosecution's evidence; and the presence or absence of the elements of the crime charged is evidentiary in nature and is a matter of defense that may be passed upon only after a full-blown trial on the merits."

• Reyes v. Office of the Ombudsman, G.R. No. 208243, 5 June 2017: Controlling precedent upholding the Ombudsman's finding of probable cause in PDAF cases involving Senator Enrile; established that technical rules of evidence do not apply in preliminary investigation and that the combination of whistleblower testimonies, COA Report, and FIO verifications constitutes sufficient evidence to engender a well-founded belief of guilt.
• Cambe v. Office of the Ombudsman, G.R. Nos. 212014-15, 6 December 2016: Controlling precedent regarding Senator Revilla's PDAF case; held that endorsement letters directly implicate legislators as they exercise post-enactment authority; applied relaxed evidence rules to reject similar arguments raised by De Asis regarding lack of criminal intent.
• Estrada v. Office of the Ombudsman, 751 Phil. 821 (2015): Distinguished as prior case involving the same petitioner but a different resolution; cited for the definition of probable cause and the principle that hearsay evidence may establish probable cause in preliminary investigations.
• Clave v. Office of the Ombudsman, G.R. No. 206425, 5 December 2016: Cited for the standard that the Ombudsman only needs to find enough relevant evidence to support its belief that the accused most likely committed the crime charged.
• Belgica v. Ochoa, G.R. No. 208566, 19 November 2013: Cited for the observation that the defining feature of Congressional Pork Barrel is the authority of legislators to participate in post-enactment phases of project implementation, and that direct endorsement of NGOs without public bidding violates procurement laws.
• Sec. De Lima v. Reyes, 776 Phil. 623 (2016): Cited for the principle that once the trial court finds probable cause and issues a warrant of arrest, questions regarding the conduct of preliminary investigation become moot.

• Article XI, Section 12, 1987 Constitution: Grants the Ombudsman power to act on complaints against public officials and employees as protector of the people.
• Section 15, RA 6770 (Ombudsman Act of 1989): Grants the Ombudsman authority to investigate and prosecute offenses involving public officials and employees.
• Section 2, RA 7080 (Plunder Law): Defines the crime of plunder and prescribes penalties therefor.
• Section 1(d)(2) and (6), RA 7080: Define ill-gotten wealth as including kickbacks from government contracts (d)(2) and taking undue advantage of official position to unjustly enrich oneself (d)(6).
• Section 3(e), RA 3019 (Anti-Graft and Corrupt Practices Act): Penalizes causing undue injury to the government or giving unwarranted benefits to private parties through manifest partiality or evident bad faith.
• Section 1 and 3, Rule 112, Revised Rules of Criminal Procedure: Define probable cause for purposes of preliminary investigation.
• Section 6, Rule 110, Revised Rules of Criminal Procedure: States the requirements for sufficiency of complaint or information.
• Section 28 and 30, Rule 130, Rules of Evidence: State the res inter alios acta rule and the admission by conspirator exception, respectively.

Leonardo-De Castro, Del Castillo, Perlas-Bernabe, Tijam (with separate concurring opinion), Leonen (with separate concurring opinion), Reyes, Jr. (joined the concurring and dissenting opinion of J. Peralta).

• Justice Velasco, Jr.: Would have granted the petitions; argued that the evidence should be individually assessed and found inadmissible as hearsay and covered by the res inter alios acta rule; contended that whistleblower statements were incompetent evidence; asserted that Luy's business ledgers were falsified and inherently unreliable; maintained that Estrada's endorsement letters were merely recommendatory and insufficient to establish probable cause for plunder.
• Justice Peralta: Concurring and dissenting; agreed with the dismissal but disagreed with the treatment of certain evidence and the application of specific legal principles.
• Justice Bersamin: Joined the dissenting opinion of Justice Velasco.