White Paper #3: How Financial Aid to Senior Citizens Become Milking Cows of Local Politicians

By Philippine Institute of Applied Politics

Abstract
This white paper is designed to provide accurate and authoritative information in regard to the political subject covered. Condensed from the book Tapestry of Philippine Politics, the following excerpts attempts to record all forms of machinations and maneuvers through which the administration of MAYOR TOMAS OSMENA formulates its major governance policy of providing financial assistance to senior citizens of Cebu City, disbursing public funds for the purpose, and tapping government monies for political/personal ends. A conspiracy involving top officials of the Department of Social Welfare and Services (DSWS) and directors in the Cebu City Senior Citizens Council (CCSC) who are known to be appointees of Mayor Osmena had defrauded the city government at least P14 million a year for four years or P56 million in-between 2008 and 2011 from appropriation providing P4,000 in annual financial assistance to senior citizens. The scam involved the use of 3,500 membership accounts, consisting of 440 senior citizens who had long since died, 1,427 senior citizens who are still alive but had moved to other provinces and cities of the Philippines, and 1,633 bogus senior citizens, according to documents uncovered in research and investigation by the Bureau of Local Government Finance (BLGF) and Commission on Audit (COA). They were able to collect the monies through Osmenas loyal ward (disbursing officers) at the Office of the City Treasury, CCSC, and barrio captains. The scam was uncovered based on the paper trail of 486 men and women whose sample signatures and penmanship matched (via computer software) with those signatures in the payrolls where the 3,500 accounts appeared.

Implications
Reflective of serious misconduct, abuse of authority and discretion, and serious irregularity toward defrauding the government, this will affect the re-election of Osmena, about which the US Department of State and the Political Section of the US Embassy in Manila should be aware.

Chronology
June 2007: Mayor informed the City Legislative Council that the Cebu City Senior Council (CCSC)1, composed of six members, will be formed to lay down the policies and procedures toward providing annual financial assistance to senior citizens of the city via legislation; July 2007: The Office of the City Mayor and the CCSC pegged the financial assistance at P4,000 per year to every retiree from both government and private sectors who are aged 60 and above, who are still living, and who may be qualified within reasonably adequate documentation2; June 2008: In its first year3 of implementation, up to 41,976 men and women aged 60 and above who are certified and documented to be alive were extended assistance at P4,000 each; The membership accounts of 3,500 men and women including 440 senior citizens who had long since died, 1,427 senior citizens who are still alive but had moved to other provinces and cities of the Philippines, and 1,633 bogus senior citizens were integrated into the rolls of beneficiaries in 15 barrios by the DSWS, through CATHY YSO, and the CCSC chaired by ROGER NUNEZ. June 2009: During the second year4, a little more than 44,627 senior citizens availed of the financial assistance at P4,000 each; June 2010: Before the mayoral term5 of OSMENA ended in June 2010, his administration managed to give away P4,000 in financial assistance to 46,841 senior citizens; June 2011: The new administration of Mayor Michael Rama6 formed the Office of Senior Citizens Affairs (OSCA) and processed and paid P4,000 per senior citizen among 48,892 who were qualified; January 2012: Mayor Rama declared a new policy7 increasing the financial assistance to P7,000 to be given in two installmentsthe first in June 2012 for P3,000 and another P4,000 in December; April 2012: Rama ordered a review on the documentation of senior citizens qualified under the administration of his predecessor to remove from the roll of recipients those who have died or who have moved to other provinces of the country; During the first installment cut-off on June 26, 2012, up to 51,003 recipients were qualified. Unfortunately, only 47,872 were able to show up, submit valid identification, and collect. Between June 27, 2012 and July 26, 2012 not a single one of the remaining qualified 3,131 senior citizens appeared to claim their share of financial assistance. The cash cover for such assistance had lapsed by July 15, 2012 and was no longer eligible for release.

Senior staff at OSCA raised suspicion of padding in the roster of recipients involving appointees of MAYOR OSMENA to the CCSC and attempts to defraud the government millions in financial assistance that had fallen into the hands of bogus senior citizens.

How Much Money Changed Hands

Between 2008 and 2011, up to 182,336 had been given P729.344 million8 in financial assistance. During the first June 26, 2012 cut-off up to P143.616 million were disbursed to 47,872 recipients. A conspiracy involving top officials of the Department of Social Welfare and Services (DSWS) and their cohorts in about 15 barrios had successfully defrauded the government up to P14 million a year or P56 million in-between June 2008 and December 2011. The scam which involved 440 senior citizens who had long since died, 1,427 senior citizens who are still alive but had moved to other provinces and cities of the Philippines, and 1,633 bogus senior citizens.

Investigation Findings
1.1 A discreet investigation zeroed in 3,500 recipients who had inadequate documentation but were extended financial assistance between 2008 and 2011. Altogether for 14,000 recipients, up to P56 million had fallen into the wrong hands. 1.2 The list of allegedly dubious9A recipients belonged to batches that were previously cleared for payment by the DSWS under the administration of OSMENA. The paper trail of anomalous transactions was traced to the endorsements of DSWS department head CATHY YSO and CCSC executive chairman ROGER NUNEZ. 1.3 The names of recipients in the padded9B list belonged to men and women from Duljo Fatima, Inayawan, Kalunasan, Kinasang-an, Mambaling, Pardo, Punta Princesa, Quiot, San Nicolas, Bulacao, Calamba, Suba, Sawang Calero, Tabunan and Tisatraditionally political turfs or bailiwicks of OSMENA. 1.4 The signatures and penmanship of 3,500 recipients10 who were able to escape detection and signed the payroll came from 486 men and women, as was established in a computer-ran signature matching process performed by the Bureau of Local Government Finance (BLGC). 1.5 Up to P28 million in amounts raised by 486 payment receipt facilitators 11 in 2009 and 2010 found their way into the account of suspected Tommy bagman Augustus Pe, who subsequently transferred them to his principals BPI and HSBC accounts. The money was later given to allies of Osmena who ran for positions in the October 2010 barrio elections (See White Paper No.4); 1.6 The conspiracy to defraud the government P56 million12 could not have been made possible without the cooperation of silent partners in the CCSC dominated by political appointees of OSMENA.
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1.7 Although Mayor Rama had six appointees in the CCSC, including its chairman, the scam occurred before their very noses, without one of them taking notice or raising suspicion at all. 1.8 The former mayors appointees in the CCSC even influenced the council into allowing release of the assistance by barrio disbursement officers, thereby making detection and discovery more difficult; 1.9 Inter-agency investigation involving the Commission on Audit (COA) and the BLGC is continuing over who were responsible and may take time to complete.

References
1 2

Referral letters and appropriation ordinances at the City Council, 2007-2010; Policy formulations and documentation records, CCSC, 2007-2010; 3 First-year implementation, DSWS referral letters and recommendations, 2008; 4 Second-year implementation, referral letters from Mayor Osmena to the DSWS, 2009; 5 Third-year implementation, DSWS referral letters and recommendations, 2010; 6 Fourth-year implementation, Rama administration, 2011; 7 Fifth-year implementation, new Rama administration policy, 2012; 8 Annual trial balances of the city government over four-year period, 2008-201; 9 Confidential technical audit report; Commission on Audit, 2012; 9A Ibid; 9B Ibid, COA; 10 Third Quarter Report, Bureau of Local Government Finance, 2012; 11 Regional Branch-to-Branch Deposit Tracking Service, Central Bank of the Philippines, 20092010; 12 Confidential reports to Finance Secretary (PURISIMA), Economic Intelligence Bureau, Cebu section, June-December 2010;

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