The ‘original sin’ in Pharmally deal

Like a fish caught by the mouth, former Health Secretary Francisco Duque III revealed what many had already guessed, but dared not say: that then-President Rodrigo Duterte had ordered the transfer of P47.6 billion from the coffers of the Department of Health (DOH) to the Procurement Service of the Department of Budget and Management (PS-DBM), supposedly to procure COVID-19 supplies at the height of the pandemic.

As bombshells go, it wasn’t exactly earth-shattering, but one that gave clarity to lingering questions on the political firestorm that rocked the country two years ago. That fateful order—a presidential directive as it now appears—was the “original sin” believed to have set the stage for the anomalous deal of plunderous proportions.

The presidential order allowed a little-known company called Pharmally Pharmaceutical Corp., with a paid-up capital of P625,000, to corner pandemic contracts worth billions of pesos as facilitated by PS-DBM. All told, Pharmally would secure, between March 2020 and July 2021, deals that totaled P11 billion to supply DOH with personal protective equipment sets, face masks, face shields, COVID-19 test kits, and other medical items.

Categorical statement

Duque made his disclosure during the June 3 oversight hearing of the House appropriations committee. Said Duque: “Publicly, the order to transfer funds from [DOH to PS-DBM] was made by the President in our weekly meetings or Talk to the People [program].”

It was the first categorical statement from any official, past or present, that linked the former president to the transfer of health funds to PS-DBM, headed then by former budget undersecretary Lloyd Christopher Lao.

But it wasn’t the first time such a claim was made.

On Feb. 1, 2022, the draft committee report released by then Sen. Richard Gordon who chaired the Senate blue ribbon panel, had stated that Duterte “admittedly ordered the transfer of P42 billion of DOH funds to PS-DBM for the purchase of supplies for use against COVID-19.”

The claim, however, had no solid footing, since it was predicated on Duterte’s admission on Aug. 31, 2021, that he ordered Duque to skirt established bidding processes. “I was the one who said, ‘I am sure there is a law which would exempt you from bidding’,” the former president had said. Duterte had never otherwise confessed to his role in the transfer of funds, until his health secretary let the cat out of the bag two years later.

Hasty clarification

On June 4, however, Duque hastily tried to take back his revelation by issuing a clarification that he had been “regrettably taken out of context” in media reports.

Yet there was no denial in his words, only empty justifications. In fact, Duque’s concluding sentence only reaffirmed what he had told the House panel earlier—that Duterte “gave his approval to course the procurement of said items through the PS-DBM.”

Duque’s ambivalence is not surprising, torn as he must be between the obligation to defend his former boss, and the instinct to protect his own hide.

Recall that on May 8 this year, the Office of the Ombudsman named Duque and Lao as respondents in a graft complaint in connection with what the Ombudsman described as the “illegal transfer” of some P41.46 billion in funds from the DOH to PS-DBM from March to December 2020, presumably the same amount linked to Duterte’s order. The Ombudsman’s resolution said Duque and Lao “acted with evident bad faith or gross, inexcusable negligence,” with their wrongdoing “highlighted by the fact that the illegal fund transfers occurred amid a national health emergency where respondents were expected to be more prudent and diligent in handling people’s money.”

Though not quite a smoking gun, Duque’s disclosure swung the culpability in his former boss’ direction, under the principle of command responsibility.

Forgetfulness as excuse

When asked about Duque’s admission, all the former president could say was he couldn’t remember. “Maybe what I said is, ‘go ahead’,” one newspaper report quoted him as saying. “I could not recall, for the life of me. Maybe what you are saying is true.”

Such excuse is nothing new for Duterte, so it is now up to the Ombudsman to compel him to recall his exact role in the still unraveling Pharmally scandal. Was he complicit or only negligent since the grossly disadvantageous contracts were consummated under his nose?

Then again, would Ombudsman Samuel Martires, a Duterte appointee, find the gumption to indict the former president for the same offenses his office had ruled against Duque and Lao?

The bigger question: Would the Marcos administration run after Duterte and make him accountable, as earlier governments had done by filing plunder cases against former presidents Joseph Estrada and Gloria Macapagal Arroyo? Or, like scores of other untouchables, would the former president be spared the wages of sin in the interest of politics?