PCGG vs Desierto

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PCGG vs Desierto
G.R. No. 140231
July 9, 2007

Facts:

On October 8, 1992, then President Fidel V. Ramos issued Administrative Order No. 13 creating the Presidential Ad Hoc Fact-Finding Committee on Behest Loans (Committee) which was tasked to inventory all behest loans, determine the parties involved and recommend whatever appropriate actions to be pursued thereby.

On November 9, 1992, President Ramos issued Memorandum Order No. 61 expanding the functions of the Committee to include the inventory and review of all non-performing loans, whether behest or non-behest.

The Memorandum set the following criteria to show the earmarks of a "behest loan," to wit: "a) it is undercollaterized; b) the borrower corporation is undercapitalized; c) a direct or indirect endorsement by high government officials like presence of marginal notes; d) the stockholders, officers or agents of the borrower corporation are identified as cronies; e) a deviation of use of loan proceeds from the purpose intended; f) the use of corporate layering; g) the non-feasibility of the project for which financing is being sought; and, h) the extraordinary speed in which the loan release was made."

Among the accounts referred to the Committee's Technical Working Group (TWG) were the loan transactions between NOCOSII and PNB.

After it had examined and studied all the documents relative to the said loan transactions, the Committee classified the loans obtained by NOCOSII from PNB as behest because of NOCOSII's insufficient capital and inadequate collaterals. Specifically, the Committee's investigation revealed that in 1975, NOCOSII obtained loans by way of Stand-By Letters of Credit from the PNB; that NOCOSII was able to get 155% loan value from the offered collateral or an excess of 85% from the required percentage limit; that the plant site offered as one of the collaterals was a public land contrary to the General Banking Act; that by virtue of the marginal note of then President Marcos in the letter of Cajelo, NOCOSII was allowed to use the public land as plant site and to dispense with the mortgage requirement of PNB; that NOCOSII's paid-up capital at the time of the approval of the guaranty was only P2,500,000.00 or only about 6% of its obligation.

Based on the Sworn Statement of PCGG consultant Orlando Salvador, petitioner filed with the Office of the Ombudsman the criminal complaint against respondents. Petitioner alleges that respondents violated the following provisions of Section 3 (e) and (g) of R.A. No. 3019.

The respondents failed to submit any responsive pleading before the Ombudsman, prompting Graft Investigator Officer (GIO) I Melinda S. Diaz-Salcedo to resolve the case based on the available evidence. In a Resolution dated January 12, 1998 in OMB-0-95-0890, GIO Diaz-Salcedo recommended the dismissal of the case on the ground of insufficiency of evidence or lack of probable cause against the respondents and for prescription of the offense. Ombudsman Desierto approved the recommendation on May 21, 1999. Petitioner filed a Motion for Reconsideration but it was denied by GIO Diaz-Salcedo in the Order dated July 9, 1999, which was approved by Ombudsman Desierto on July 23, 1999.


Issue:

Whether respondents violated the following provisions of Sec 3 (e) and (g), specifically corrupt practices of public official, of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act?

Held:

On the issue of whether the Ombudsman committed grave abuse of discretion in finding that no probable cause exists against respondents, it must be stressed that the Ombudsman is empowered to determine whether there exists reasonable ground to believe that a crime has been committed and that the accused is probably guilty thereof and, thereafter, to file the corresponding information with the appropriate courts. Settled is the rule that the Supreme Court will not ordinarily interfere with the Ombudsman's exercise of his investigatory and prosecutory powers without good and compelling reasons to indicate otherwise. Said exercise of powers is based upon his constitutional mandate and the courts will not interfere in its exercise. The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman, but upon practicality as well. Otherwise, innumerable petitions seeking dismissal of investigatory proceedings conducted by the Ombudsman will grievously hamper the functions of the office and the courts, in much the same way that courts will be swamped if they had to review the exercise of discretion on the part of public prosecutors each time they decided to file an information or dismiss a complaint by a private complainant.

While there are certain instances when this Court may intervene in the prosecution of cases, such as, (1) when necessary to afford adequate protection to the constitutional rights of the accused; (2) when necessary for the orderly administration of justice or to avoid oppression or multiplicity of actions; (3) when there is a prejudicial question which is sub-judice; (4) when the acts of the officer are without or in excess of authority; (5) where the prosecution is under an invalid law, ordinance or regulation; (6) when double jeopardy is clearly apparent; (7) where the court has no jurisdiction over the offense; (8) where it is a case of persecution rather than prosecution; (9) where the charges are manifestly false and motivated by the lust for vengeance; and (10) when there is clearly no prima facie case against the accused and a motion to quash on that ground has been denied, none apply here.

After examination of the records and the evidence presented by petitioner, the Court finds no cogent reason to disturb the findings of the Ombudsman.

No grave abuse of discretion can be attributed to the Ombudsman. Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack of jurisdiction. The exercise of power must have been done in an arbitrary or despotic manner by reason of passion or personal hostility. It must be so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.

The herein assailed Orders being supported by substantial evidence, there is no basis for the Court to exercise its supervisory powers over the ruling of the Ombudsman. As long as substantial evidence supports the Ombudsman's ruling, that decision will not be overturned.

WHEREFORE, the petition is DISMISSED. Except as to prescription, the assailed Resolution dated May 21, 1999 and Order dated July 23, 1999 of the Ombudsman in OMB No. 0-95-0890 are AFFIRMED. No costs. SO ORDERED.