Palace orders suspension of 3 water utility officials

Malacañang on Friday ordered the suspension of three Local Water Utilities Administration (LWUA) board of trustees for misappropriation of at least P480 million in public funds to acquire a troubled thrift bank. In a statement, Executive Secretary Paquito Ochoa Jr. said Bonifacio Mario Peña, Susana Dumlao Vargas, and Renato Velasco were placed under preventive suspension for at least 90 days for their alleged anomalous acquisition of Laguna-based Express Savings Bank Inc. (EXSBI). Ochoa said their suspension may continue until it is "lifted or the administrative adjudication of [the] case is terminated." Finance Secretary Cesar Purisima last month filed an administrative complaint against LWUA board of trustees before the Office of President. Separately, Purisima also filed a criminal complaint against the officials before the Department of Justice. At the time, Purisima said LWUA chairman and former Surigao del Sur Rep. Prospero Pichay and other board of trustees should be stopped "from exerting undue influence by intimidating subordinates and tampering with documentary evidence" while the Justice Department holds its preliminary investigation. The respondents named in the complaint were Pichay, Peña, Vargas, Velasco, and Daniel Landingin. The two-page suspension order pointed out there may be a "possible prejudice" should they continue their stay in office. "It warrants the imposition of a preventive suspension," it said. Ochoa said Purisima sought the preventive suspension of Peña, Vargas, and Velasco for "alleged grave misconduct arising from their direct and willful participation in facilitating the highly irregular and anomalous takeover and acquisition of shares of stocks of [the bank]." In their defense, Vargas, Velasco, and Peña contended that the possession by LWUA of the majority of shares of stock of EXSBI were never taken up in any of their board meeting from the time they assumed office. The suspension order thus said that "at the very least, the inaction of respondents... constitutes neglect in the performance of duty, if not grave misconduct. As members of the board of trustees, it was incumbent upon them to know matters affecting LWUA." 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 has meanwhile suffered deficiencies since 2005. The bank posted a capital deficiency of more than P51 million by the end of 2009. About 87 percent of the bank was originally controlled by the family of Valenzuela Mayor Sherwin Gatchalian. — Jesse Edep/LBG, GMA News