Two city-based lawyers are calling for an urgent probe of the Rehabilitation, Operate, Transfer (ROT) deal clinched during the administration of city mayor Dan Neri Lim with a private consortium giving rise to what is now known as Tagbilaran City Square. “If crime has been committed, an investigation through the city council is deemed urgent.”  This was how lawyers Victor de la Serna and Zotico Ochavillo appealed to City Vice-Mayor Jose Antonio Veloso and the members of the Sangguniang Panlungsod (SP) as they try to mount a revival of corruption charges surrounding the contract and operation of the Tagbilaran City Square.  “The new city administration seems to have shoved under the rug the anomalous contract. Anyone of the parties involved in the Rehabilitate-Operate-Transfer (ROT) Contract and their accomplices who are still in our city government offices, should not be let off the hook and be allowed to walk away without even being questioned or be punished for their wrongdoing,” the lawyers declared in their letter-complaint to the SP.

Dela Serna, in an interview with Station dyRD said he fears that the “paper trail” to “embezzled” yearly remittances from the City Square management should have been secured and be “sequestered” from the possession of key City Hall officials who were in cahoots with the former administration of City Mayor Dan Lim.  It may be recalled that Dela Serna, Ochavillo and now City Councilor Alexander Lim filed multiple complaints against the former city mayor and the private investors of the City Square led by Juan Apostol and Ko Beng Sum, citing violations of R.A. 3019 or the Anti-Graft and Corrupt Practices Act and R.A. 9184 or the Government Procurement Reform Act.  But since the cases have been filed in late 2008, the complaints have gone nowhere and gathering dust at the Regional Trial Court (RTC) and the Office of the Ombudsman-Visayas.  In their letter-complaint, Dela Serna and Ochavillo asked the SP to conduct a “parallel probe” and initiate filing of charges against those involved in the “fraudulent, anomalous and irregular” ROT contract and the misuse of annual rental revenues from the City Square.

 The lawyers proposed that the SP, through its Committee on Public Accountability and Investigation which is chaired by Councilor Lim, is in a better position to uncover the shady transactions involving the City Square and could cite in contempt those who refuse to testify or produce records, documents and papers pertaining the operations of the commercial complex.  Already frustrated at the inaction of the Ombudsman and the RTC, Dela Serna said the current city officials seem to be cowering despite the pressing need to pursue administrative and criminal charges against those responsible in the cover-up of unreported remittances from the private investors and the alleged under the table payoffs received by the former city mayor.  Dela Serna said, “We simply cannot allow this issue to go away and be forgotten. The former mayor and his cohorts should not be allowed to flee from accountability.”

 For his part, Councilor Lim said the SP, through his committee, can conduct an investigation once a complaint has been filed. “The letter-complaint of Atty. Dela Serna and Atty. Ochavillo was received by the SP last Friday. Hopefully, in the next regular session it will be submitted for referral to the committee level and only then can we summon for witnesses or resource persons, demand for the production of documents or records and commence the investigation,” Lim explained.  Asked whether he can identify possible resource persons or witnesses who may be called during the SP inquiry, Lim said they might summon Beng Ko and Apostol in the part of the private investor, Dela Serna and Ochavillo as the co-complainants, the city treasurer and city accountant. Former city mayor Jose Torralba who was reportedly approached by Beng Ko to confide the secret payoffs they made to former mayor Lim, could also be a possible resource person during the committee hearings, according to Councilor Lim.

 Just months before the May 2013 elections, Dela Serna alleged that Beng Ko (Ko Beng Sum) went to see him at his residence where the latter voluntarily admitted giving payoffs to the former mayor which amounted to millions if summed up. However, Beng Ko later denied these claims including his supposed meeting with Torralba and Dela Serna. On several occasions, Ko likewise refused to answer questions from media who sought his side through calls on his mobile phone. But Councilor Lim said that the businessman have assured City Mayor John Geesnell Yap that he will cooperate with the new city administration whenever an inquiry is made regarding the City Square contract and its operations. “If evidence from records of the city treasurer or city accountant can be presented to the city council, then that would make a huge difference on the movement of the case. Hopefully, this will also ignite interest from the RTC and the Ombudsman to pursue the matter,” said Dela Serna.

 The complainant-lawyers, who had a hard time obtaining even a copy of the ROT Contract which was kept out of public scrutiny during the previous administration, said the SP investigation could be the “game changer” that could actually take the cases filed against former mayor Lim up on “first base”. “The new city administration has a moral obligation to the public to expose the truth on the fraudulent, anomalous and irregular ROT Contract. The new mayor, through the Sanggunian, has the right to invoke a provision on the ROT where the City can revisit and review the contract after 5 years. A re-negotiation can be made and the City must ask for the recovery of financial damages or losses from what it could have earned if the deal was not grossly disadvantageous to the city right from the start,” Dela Serna explained.

 BACKGROUND

 It may be recalled that lawyers Dela Serna, Ochavillo and Lim (now city councilor) filed a class suit at the RTC questioning the ROT contract between the former mayor and the private investors on December 10, 2008. Separate administrative and criminal cases were likewise filed at the Ombudsman also naming the former mayor as respondent.

 In their complaint, the lawyers said the 25-year ROT contract is grossly disadvantageous to the city and presented as evidence different comparisons of other rental rates within close proximity of the former Agora Public Market. In the City Square contract, the city government gets only P30 per square meter rental for a period of 25 years while the private developers lease the stalls to renters at P600 per square meter, or 2,000% higher, plus a mandatory 10 months rental to be paid in advance. This considering that the building already had an existing structure that only needed improvements and finishing touches on the part of the consortium for the entire commercial complex to be completed and operational. With an estimated 7,000 sq. m. total rentable area from the first floor to the third floor, the private consortium is estimated to rake in a minimum income of over P80-million a year, excluding parking fees and other incidental revenues, according to the complainants.  The private consortium pays yearly rental of P5-million to the city government as minimum guarantee or 20% of the annual revenues, whichever is higher.

The cases have lingered at the RTC as five judges inhibited from hearing the case until the Regional Court Administrator raffled the complaint to RTC Judge Patcita Gamutan almost a year after the case was filed.  As Beng Ko’s alleged meetings with Dela Serna and Torralba became public knowledge, the former city administration refused to explain why the payments (rental) made in prior years were not reflected in the Statement of Receipts and Expenditures despite claims made by officials of the consortium that they have been religiously remitting their annual rental to the city government.  The same issue was in fact the subject of a scrutiny made by the Commission on Audit which was reflected in its 2011 Annual Audit Report of the city government.