People v. Lala

A conviction under Section 3(e) of R.A. No. 3019 cannot be sustained absent proof that the accused acted with corrupt intent, even where procurement laws were violated. Findings of violations of procurement laws, rules, and regulations, on their own, do not automatically lead to conviction under the anti-graft law; the essential elements of Section 3(e), including corrupt intent, must be established beyond reasonable doubt.

The case involves officials of the Department of Public Works and Highways (DPWH) Region 7 and a private contractor, GAMPIK Construction and Development, Inc., charged with violation of Section 3(e) of R.A. No. 3019 in connection with the procurement of decorative lampposts and street lighting facilities for the 12th ASEAN Summit, which was scheduled to be held in Cebu in January 2007. Administrative Order No. 139, issued by President Arroyo on January 27, 2006, designated the DFA as lead agency and tasked the DPWH with implementing infrastructure projects for the summit. The procurement was conducted through negotiated procurement under R.A. No. 9184 (Government Procurement Reform Act), with the projects funded from the Motor Vehicles Users Charge. The Ombudsman-Visayas conducted the fact-finding investigation and preliminary investigation that led to the filing of Informations before the Sandiganbayan.

In January 2007, the 12th ASEAN Summit was set to be held in Cebu, Philippines. In preparation, President Arroyo issued Administrative Order No. 139 on January 27, 2006, designating the DFA as lead agency and assigning the DPWH to implement several infrastructure projects. On June 23, 2006, the DFA submitted an Aide Memoire to DPWH Acting Secretary Ebdane with a list of proposed projects and a recommendation for alternative procurement, given the target completion date of October 20, 2006. Among the approved projects were the supply and installation of decorative lampposts and street lighting facilities along ceremonial routes in Mandaue City and Lapu-Lapu City, categorized as road safety projects funded from the Motor Vehicles Users Charge.

DPWH Region 7 prepared the Program of Works and Estimates (POWE) and Approved Budget for the Contract (ABC), and proceeded with negotiated procurement. Three bidders were drawn from the DPWH's registry of contractors for each contract. For Contract ID No. 06HO0008, the three contractors were GAMPIK, Cebu Technochem Industries, Inc., and Square Cube Construction. For Contract ID No. 06HO0048, the three selected contractors were GAMPIK, Cebu Technochem Industries, Inc., and Fambik Construction and Equipment Co., Inc. For both contracts, GAMPIK was determined to be the lowest bidder, and Notices of Award were issued accordingly. The BAC-DPWH Region 7 conducted the Dropping and Opening of Bids for Contract ID No. 06HO0008 on August 14, 2006, and for Contract ID No. 06HO0048 on November 28, 2006.

Notably, a Memorandum of Understanding dated November 22, 2006 was executed between DPWH Region 7 and GAMPIK, authorizing the latter to immediately proceed with the project under Contract ID No. 06HO0048 — six days before the actual bidding on November 28, 2006. Two contracts were subsequently entered into: Contract ID No. 06HO0008, executed on September 12, 2006, for 300 sets of decorative park lamp assembly at PHP 83,250.00 per set or a total of PHP 24,975,000.00; and Contract ID No. 06HO0048, executed on March 8, 2007, for PHP 35,634,401.25, consisting of four lamppost installation projects in Lapu-Lapu City. In December 2006, GAMPIK was paid PHP 21,228,750.00 as 85% payment for work accomplished under Contract ID No. 06HO0008. No payment was released for Contract ID No. 06HO0048.

On January 9, 2007, the Ombudsman-Visayas received a letter from representatives of people's organizations in Cebu requesting an investigation into the alleged overpricing of the lampposts. On February 7, 2007, a certain Crisologo Saavedra submitted a contract proposal showing he supplied decorative street lights in Cebu City for PHP 25,124.53 per set. PACPO of the OMB-Visayas conducted a fact-finding investigation and rendered a Final Evaluation Report on March 23, 2007, finding the lampposts highly overpriced. Two Informations were filed before the Sandiganbayan: SB-08-CRM-0270 for Contract ID No. 06HO0008 and SB-12-CRM-0006 for Contract ID No. 06HO0048, both charging violation of Section 3(e) of R.A. No. 3019.

The Sandiganbayan acquitted all accused in SB-08-CRM-0270 but convicted Lala, Fernandez, Hermoso, and Surla in SB-12-CRM-0006, finding that the premature execution of the MOU constituted manifest partiality or gross inexcusable negligence in predetermining GAMPIK as the winning bidder. The Sandiganbayan found that GAMPIK was already predetermined as the winning bidder as early as November 22, 2006, six days before the actual bidding, and that the subsequent bidding was a mere formality. The Sandiganbayan also found Surla in conspiracy with the public officers when he signed the MOU on behalf of GAMPIK. The accused-appellants moved for reconsideration, arguing that the MOU date was a typographical error, that there was no predetermination, that the Information did not charge the execution of the MOU, and that the presumption of regularity applied. The Sandiganbayan denied the motions on December 23, 2020.

• Right to Fair and Impartial Preliminary Investigation: Accused-appellant Surla argued that his constitutional right to a fair and impartial preliminary investigation was violated when the same person acted as both complainant and chairperson of the committee that resolved the preliminary investigation.
• Right to be Informed of the Charge: Surla contended that he was deprived of his constitutional right to be informed of the charge against him, given the variance between the facts alleged in the Information and the basis of his conviction.
• Absence of Conspiracy and Manifest Partiality: Surla argued that the Sandiganbayan committed serious and reversible error in finding him guilty of conspiracy, considering that no unwarranted benefit was granted to GAMPIK and that the element of manifest partiality was not proven beyond reasonable doubt.
• Absence of Essential Elements: Lala, Fernandez, and Hermoso argued that the Sandiganbayan gravely erred in finding them guilty beyond reasonable doubt of violation of Section 3(e) of R.A. No. 3019 despite the absence of its essential elements.
• Conspiracy: Lala, Fernandez, and Hermoso disputed the Sandiganbayan's finding that conspiracy existed among the accused.
• Variance Between Information and Conviction: Lala, Fernandez, and Hermoso argued that they were being convicted of a charge not found or included in the Information, in violation of their right to be informed of the nature and cause of the accusation against them.

• Dismissal of Appeal: The People of the Philippines, through the Office of the Special Prosecutor of the OMB, prayed for the dismissal of the appeal, contending that the Sandiganbayan correctly convicted the accused-appellants.

• Elements of Section 3(e), R.A. No. 3019: Whether all the elements of Section 3(e) of R.A. No. 3019 were satisfactorily proven beyond reasonable doubt.
• Right to Fair and Impartial Investigation: Whether the right of accused-appellants to a fair and impartial investigation was violated.
• Right to be Informed: Whether the right of accused-appellants to be informed of the nature and cause of the charge against them was violated.

• Elements of Section 3(e), R.A. No. 3019: No. The prosecution failed to establish the second and third elements — manifest partiality, evident bad faith, or gross inexcusable negligence, and the causing of undue injury or giving of unwarranted benefits — because corrupt intent, which is at the heart of R.A. No. 3019, was not proven beyond reasonable doubt.
• Right to Fair and Impartial Investigation: No. The issue was raised for the first time on appeal and is thus barred; in any event, PACPO merely collated and evaluated evidence submitted to it, and did not serve as both prosecutor and judge, so due process was not violated.
• Right to be Informed: No. The Information sufficiently alleged the ultimate facts constituting the offense — that the accused caused the award through negotiated procurement despite the absence of legal requirements for a valid procurement process — and need not state the finer details of how the crime was committed.

• Elements of Section 3(e), R.A. No. 3019: Section 3(e) of R.A. No. 3019 requires three elements: (1) the accused is a public officer discharging administrative, judicial, or official functions; (2) the accused acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and (3) the action caused undue injury to any party, including the Government, or gave any private party unwarranted benefits, advantage, or preference. While the first element was satisfied, the second and third were not. The Sandiganbayan relied on Abubakar vs. People to find that the premature execution of the MOU constituted manifest partiality and gross inexcusable negligence. However, Abubakar is distinguishable: there, seven contractors were allowed to deploy equipment before bidding with no indication they were qualified, whereas here GAMPIK was qualified and was in fact the lowest bidder. More critically, the Court applied Martel vs. People, which clarified that violations of procurement laws, on their own, do not automatically lead to conviction under R.A. No. 3019; corrupt intent must be evident. Here, GAMPIK was qualified, the project was not overpriced, GAMPIK completed the project, and GAMPIK was never paid. These undisputed facts negated corrupt intent, and the execution of the MOU was driven by immense pressure to complete the lamppost projects before the ASEAN Summit. Accordingly, the Sandiganbayan erred in convicting the accused-appellants.

• Right to Fair and Impartial Investigation: The issue was raised for the first time on appeal, which is generally barred as it would be anathema to fairness and due process. At any rate, the Court found the ruling in Diaz vs. Sandiganbayan more applicable than Cojuangco vs. PCGG. In Diaz, the Court held that the preliminary investigation was valid because the investigating officer merely evaluated evidence produced by the complainant and was not the accuser and investigator rolled into one. Similarly, PACPO merely collated and evaluated evidence submitted to it; there was no showing that PACPO served as both prosecutor and judge simultaneously. Thus, the accused-appellants' right to due process was not violated.

• Right to be Informed: An Information need only allege the ultimate facts constituting the offense, not the finer details of why and how the crime was committed. The Information in SB-12-CRM-0006 sufficiently alleged that the accused, with deliberate intent, manifest partiality, or evident bad faith and/or gross inexcusable negligence, caused the award through negotiated procurement despite the absence of legal requirements for a valid procurement process, including the absence of competitive bidding, thereby giving unwarranted benefits to GAMPIK. The details of how there was no competitive bidding — such as the predetermination of the winning bidder through the MOU — need not be stated in the Information, as these are matters of evidence threshed out at trial. Nevertheless, the acquittal was still in order because the prosecution failed to prove all elements beyond reasonable doubt.

• Elements of Section 3(e), R.A. No. 3019 — The offense has three elements: (1) the accused is a public officer discharging administrative, judicial, or official functions; (2) the accused acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and (3) the action caused undue injury to any party, including the Government, or gave any private party unwarranted benefits, advantage, or preference. The second element has three modes of commission: "manifest partiality" (a clear, notorious, or plain inclination or predilection to favor one side or person), "evident bad faith" (a palpably and patently fraudulent and dishonest purpose to do moral obliquity or conscious wrongdoing for some perverse motive or ill will), and "gross inexcusable negligence" (negligence characterized by the want of even slight care, willfully and intentionally with conscious indifference to consequences). The third element may be satisfied either by causing undue injury or by giving unwarranted benefits, advantage, or preference.

• Corrupt Intent as Essential to R.A. No. 3019 Convictions — At the heart of the acts punishable under R.A. No. 3019 is corruption. Findings of violations of procurement laws, rules, and regulations, on their own, do not automatically lead to conviction under the anti-graft law. It must be established beyond reasonable doubt that the essential elements of Section 3(e) are present, including that the accused was driven by corrupt intent. A conviction cannot be sustained if the acts of the accused were not driven by any corrupt intent. This principle was clarified in Martel vs. People, an en banc decision.

• Sufficiency of Information — Ultimate Facts Doctrine — An Information need only state the ultimate facts constituting the offense; it need not state the finer details of why and how the crime was committed. Details that do not go into the core of the crime need not be included in the Information but may be presented during trial. The rule requiring evidence to establish elements to a moral certainty applies only for purposes of conviction, not for determining the sufficiency of an Information to warrant trial.

• Validity of Preliminary Investigation Where Investigator is Not the Complainant — A preliminary investigation is not invalid merely because the investigating body also filed the Information, provided the investigator did not also gather the evidence as complainant. Where the investigating body merely collated and evaluated evidence submitted by others, there is no probability of partiality requiring inhibition, and due process is not violated.

• "In criminal cases involving Section 3(e) of Republic Act No. (R.A.) 3019, or the Anti-Graft and Corrupt Practices Act, in relation to alleged irregularities in procurement committed by public officers, findings of violations of procurement laws, rules, and regulations, on their own, do not automatically lead to the conviction of the public officer under the said special penal law." — This passage, quoted from Martel vs. People, articulates the controlling principle that procurement irregularities alone are insufficient for conviction under R.A. No. 3019; corrupt intent must be proven beyond reasonable doubt.

• "At the heart of the acts punishable under R.A. 3019 is corruption." — This defines the animating spirit of the anti-graft law and serves as the analytical lens through which the Court evaluated whether the accused-appellants' actions warranted conviction.

• "Graft entails the acquisition of gain in dishonest ways." — This formulation, attributed to Senator Tolentino during the law's deliberations, defines the core concept of graft that underlies Section 3(e) and distinguishes punishable corruption from mere procedural lapses.

• "An information need only state the ultimate facts constituting the offense. It need not state the finer details of why and how the crime was committed." — This articulates the ultimate facts doctrine governing the sufficiency of Informations, clarifying that evidentiary details may be developed at trial without violating the accused's right to be informed.

• Martel vs. People, G.R. Nos. 224720-23, Feb. 2, 2021 — Controlling precedent. The Court relied on this en banc decision to clarify that corrupt intent must be established beyond reasonable doubt in Section 3(e) cases, and that procurement violations alone do not automatically warrant conviction. This was the decisive authority for the acquittal.
• Abubakar vs. People, 834 Phil. 435 (2018) — Distinguished. The Sandiganbayan relied on this case to find manifest partiality and gross inexcusable negligence from the premature execution of the MOU. The Supreme Court found it inapplicable because the factual context was starkly different: in Abubakar, seven contractors were allowed to deploy equipment before bidding with no indication of qualification, whereas here GAMPIK was qualified and was the lowest bidder.
• Fuentes vs. People, 808 Phil. 586 (2017) — Followed. Cited for the definition of the three modes of commission under Section 3(e) — manifest partiality, evident bad faith, and gross inexcusable negligence — as defined in Coloma, Jr. vs. Sandiganbayan.
• Diaz vs. Sandiganbayan, 292 Phil. 678 (1993) — Followed. Applied to hold that the preliminary investigation was valid because PACPO merely collated and evaluated evidence submitted to it and was not the accuser and investigator rolled into one, distinguishing it from Cojuangco vs. PCGG.
• Cojuangco vs. PCGG, 268 Phil. 235 (1990) — Distinguished. The Court explained that the doctrine invalidating a preliminary investigation where the same body gathered evidence and conducted the investigation does not apply where the investigating body merely evaluated evidence produced by a separate complainant.
• People vs. Sandiganbayan (Fourth Division), 769 Phil. 378 (2015) — Followed. Cited for the principle that an Information need only allege ultimate facts constituting the offense, and that details not going into the core of the crime need not be included but may be presented at trial.
• Villarba vs. Court of Appeals, 874 Phil. 84 (2020) — Followed. Cited for the principle that the right to be informed is rooted in due process and the presumption of innocence, and that factual allegations in an Information must be meticulously scrutinized but the Information is adequate if it sufficiently alleges ultimate facts.
• People vs. Coritana, G.R. No. 209584, Mar. 3, 2021 — Followed. Cited for the principle that an Information need only state the ultimate facts constituting the offense and need not state the finer details of why and how the crime was committed.

• Section 3(e), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — Prohibits public officers from causing undue injury to any party, including the Government, or giving any private party unwarranted benefits, advantage, or preference in the discharge of official functions through manifest partiality, evident bad faith, or gross inexcusable negligence. The Court applied this provision by analyzing each element and finding that the second and third elements were not proven beyond reasonable doubt.
• Republic Act No. 9184 (Government Procurement Reform Act) — Governs the procurement process for government projects. The Informations alleged that the accused-appellants conducted the procurement despite the absence of legal requirements for a valid procurement process under this law, including the absence of competitive bidding. The Court noted procurement irregularities but held they did not automatically warrant conviction under R.A. No. 3019 absent corrupt intent.
• COA Circular No. 85-55A — Establishes a ten percent (10%) allowable price variance for government procurements. The Informations alleged that the contract price exceeded the allowable variance under this circular, but the Court found that the project was not overpriced.

Caguioa (Chairperson), Dimaampao, and Singh, JJ., concurred. Inting, J., filed a concurring opinion (not reproduced in the provided text).