Local water chief, 3 others suspended | Sun.Star.

MANILA (Updated) — The Office of the Ombudsman on Friday ordered the suspension of Prospero Pichay, Local Water Utilities Administration (LWUA) Board of Trustees chair, over alleged misuse of the agency’s funds in 2008.

Pichay was ordered suspended for six months without pay while the accusation of grave misconduct and violation of Republic Act 6713, or the Code of Conduct and Ethical Standards for Public Officers and Employees against him is being resolved.

The Ombudsman said Pichay’s suspension is necessary to keep him from “manipulating evidence” in a plunder case he is facing.

It said letting Pichay stay as LWUA board chairman would let him intimidate witnesses or destroy records “that might be vital to the case against him.”

Noting that evidence of Pichay’s guilt was strong, and that he will be removed from service if found guilty, the Ombudsman said it was “very likely” that he would tamper with that evidence.

The order signed by Overall Deputy Ombudsman Orlando Casimiro is immediately executory.

Pichay, a former member of the House of Representatives, is in trouble over alleged unlawful investment of P480 million in LWUA funds in the Express Savings Bank Inc. (EXSBI), a private thrift bank based in Laguna.

The Ombudsman said the creation or purchase of a “specialized banking institution” like the EXSBI should have been approved by President Benigno Aquino III.

LWUA acting administrator Daniel Landingin, deputy administrator Wilfredo Feleo, and lawyer Arnaldo Espinas were spared from the preventive suspension order.

Former Ombudsman Merceditas Gutierrez earlier denied a petition from LWUA employees to have Pichay placed on preventive suspension. The move was seen as an effort to shield Pichay, an ally of former president Gloria Macapagal-Arroyo, from the case.

Also on Friday, Executive Secretary Paquito Ochoa Jr. announced the 90-day preventive suspension order against LWUA trustees Bonifacio Mario Peña, Susana Dumlao Vargas and Renato Velasco over a separate complaint filed April 6 with the Office of the President by Finance Secretary Cesar Purisima.

The complaint is in relation to the LWUA’s misappropriation of at least P480 million in LWUA funds to acquire the EXSBI.

Ochoa said Purisima sought the preventive suspension of the three LWUA officials for alleged “grave misconduct arising from their direct and willful participation in facilitating the highly irregular and anomalous takeover” of the EXSBI.

In their defense, Vargas, Velasco, and Peña contended that LWUA’s majority stake in EXSBI was never taken up in any of their board meetings from the time they assumed office.

However, the suspension order pointed out that “at the very least, the inaction of respondents…constitutes neglect in the performance of duty, if not grave misconduct.”

Former Akbayan Representative Risa Hontiveros welcomed Casimiro’s decision on Pichay, saying it is the victory of the “forces of reforms” inside LWUA.

“Together with the rank-and-file workers of LWUA, we welcome this positive development. The wind of change has finally arrived at the institution. Nabunot na rin si Pichay sa kanyang pagkakatanim sa pwestong kanyang inabuso,” Hontiveros said in a statement.

Hontiveros added the suspension of Pichay who is an established ally of Arroyo contributes in the initiative to rid the government of “landmines and booby traps” left behind the previous administration.

“We all know that before Arroyo stepped down as president, she placed people in very strategic government offices to protect her from prosecution while maintaining substantial power and influence even under the new administration,” Hontiveros said.

LWUA is a government-owned-and-controlled corporation as a specialized lending institution for the promotion, development and financing of local water utilities, and as depository of the reserves for capital improvement of local water utilities.

EXSBI, on the other hand, is a Laguna-based thrift bank with an authorized capital stock of P100-million divided into one million common shares.

The bank has allegedly been suffering deficiencies since 2005 that by end of 2009, it has posted a capital deficiency of more than P51-million. The bank is originally 86.7 percent controlled by the family group of Valenzuela Mayor Sherwin Gatchalian.

The complainant said that without obtaining the requisite approvals from the Department of Finance, the Office of the President, and the Monetary Board, LWUA pushed through with the acquisition of the 485,337 shares of stock constituting approximately 60 percent of the outstanding capital stock of EXSBI worth P80-million. (Jill Beltran/Jonathan de Santos/Sunnex)