From start to finish, the Pharmally mess has been a witch’s brew of corruption, now coming to a boil with the release of a Senate Blue Ribbon report that ascribes blame to the highest elected official in the land.
The key question from the start was, how did an under-capitalized startup with no track record whatsoever manage to corner more than P11 billion in government contracts for pandemic supplies―such as face masks and face shields―at prices well above what was available in the market at the time?
The personalities involved suggest the answer.
A friend of the President, Michael Yang, a Chinese businessman from Davao who was later made presidential economic adviser despite his nationality, provided funding for a company that was capitalized at only P625,000, and made some key introductions as well.
Another key figure, Lloyd Christopher Lao, was a volunteer election lawyer for the President’s campaign in 2016. In appointing him to head the Procurement Service of the Department of Budget and Management (DBM-PS) in 2017, the President said he was repaying a debt.
Through a series of Senate hearings, we now know that it was Lao who authorized billions of pesos of purchases from Pharmally, without the benefit of competitive bidding―or even due diligence to ensure the government was not at a disadvantage.
Making all this possible was the transfer of P42 billion from the Department of Health, headed by the indestructible Secretary Francisco Duque III, to the DBM-PS, presumably to speed up the purchase of face masks, face shields and personal protective equipment.
The President and his allies sought to justify the contracts as emergency purchases allowable under the Bayanihan law on the national response to the COVID-19 pandemic, but a series of Senate hearings revealed just how disadvantaged the government was by these deals, and how key Pharmally executives spent their obscene profits on luxury cars―instead of plowing the funds back into the company, if it were a legitimate business.
Now, in a 113-page partial report, the Senate Blue Ribbon committee found that President Duterte betrayed the public trust with his actions related to the Pharmally contracts.
The committee recommended plunder, graft and other criminal and administrative charges against Duque, former government officials, and Pharmally executives.
Although the President is immune from suit while he is in office, charges may be brought against him after his term ends later this year, the panel said.
“At some point after his term of office, charges must be considered against President Rodrigo Duterte for what has transpired in this great anomaly,” the report said.
“After all, he was the one who appointed all the people who approved these transactions and aggressively protected and defended them when they were caught in this horrible crime against our people. In the course of doing so, the President attempted to diminish the Senate and COA (Commission on Audit), institutions that safeguard our democracy and integrity,” it added.
The Blue Ribbon committee also recommended the deportation of Yang for his role in the Pharmally deals. The draft report alleged that Yang violated the tax laws, which justifies the filing of criminal charges against him, his declaration as an undesirable alien, and immediate deportation.
The President and his allies will no doubt dismiss the Blue Ribbon report as being politically motivated, particularly as it comes during an election year.
But when the hurly-burly’s done and the battle’s lost and won, there will be a price to pay for the Pharmally mess. It remains to be seen, however, who will ultimately lose his head in this tragedy of corruption.