Republic of the Philippines Ombudsman Bldg.

, Agham Road, GovernmentCenter Diliman, Quezon City

OFFICE OF THE OMBUDSMAN

FIELD INVESTIGATION OFFICE,

Complainant,

-versus-

OMB-C-C-11-0758-L

For: Violation of Sec. 3 (e) of R.A. 3019 (The Anti-Graft and Corrupt Practices Act)

RONALDO V. PUNO, ET AL.,

Respondents. x----------------------------------------------------x

REPLY
TO THE PROSECUTIONS VERIFIED MANIFESTATION AND COMPLIANCE

RespondentATTY. JOSE MIGUEL T. ARROYO, by counsel, unto this Honorable office, and by way ofReply to the Verified Manifestation and Compliancefiled by the Field Investigation Office, respectfully states, that:

1.

Complainant avers that the issues raised in respondent

Arroyos (FG, for brevity) Motion for Reconsideration were already squarely ruled upon in the Investigating Panels Joint Resolution, dated May 30, 2012 and did not make a comment, nor interpose any opposition to respondent Arroyos Motion for Reconsideration, even if it contains the documentary evidence found to be absent in the Panels Joint Resolution.

2.

Respondent former First Gentleman, Atty. Jose Miguel Arroyo

(FG) begs leave for an opportunity to stress the salient points of his defense for the second and closer look of this Honorable Office.

3.

Respondent

maintains

that

he

was

maliciously

implicated in the above-entitled criminal caseon the basis SOLELY of speculative conclusions that he is the owner of the helicopters and thathe had a PRESUMED hand in the herein-assailed transaction brevity). between Manila Aerospace Products Trading (MAPTRA, for brevity) and the Philippine National Police (PNP, for

4.

By way of summation, respondent FG cannot be the owner,

trustor, or beneficiary of the helicopters sold to the PNP. As early as March 2001, respondent FG already sold and transferred his shares of stocks inLourdes T. Arroyo, Inc. (LTA, Inc. for brevity) in favor of Mr. Benito R. Araneta and his divestment of interest was evidenced bythe following documentary evidence attached to respondent FGs Counter Affidavit, to wit: a. Deed of Assignment of Shares of Stock, dated 15 March 200;

b. Certification of Divestment of Interest issued by Regino Q. Ferraren, Jr., LTAs Corporate Secretary;

c. Certificate Authorizing Registration issued by the Bureau of Internal Revenue (BIR) upon payment of the Capital Gains and Documentary Stamp Taxes for the transfer of 998,980 shares;

d. General Information Sheetsfor years 2004 and 2009;

e. Stock Journal of the LTA, Inc.

f. Cancelled Stock Certificates of respondent FG.

These documents prove that at the time, material to this case, respondent FG was neither a director, nor an officer, nor a stockholder of LTA, Inc.As such, he could not be a trustor or beneficiary, as discussed hereunder.
5.

Respondent FG reiterates that the helicopters evidence including sworn statements

were never owned by him or even LTA, Inc..Various documentary attached to respondents Counter-Affidavit and Rejoinder show that the helicopters sold to the PNP were imported by Mr. Po and registered in the name of Mr. Pos Asian Spirit and LIONAIR, to wit:

a.

CAAP records show that Capt. Antonio G. Buendia,

President of Asian Spirit, wrote the former Air Transportation Office(now Civil Aeronautics Authority of the Philippines) and the Philippine Aerospace Development Corporation asking for clearance to import the helicopters;

b.

The Applications for Import Permit from Clark Development

Corporation signed by Mr. Joaquin Ernesto L. Po do not only show the importation made by Mr. Po's company but the ownership of the helicopters;

c.

The Aircraft Invoices issued by RHC on 30 December 2003,

which are attached in the Complaint, and which clearly indicate that the helicopters were sold to LIONAIR with Mr. Po as the dealer contact;

d.

The Applications for Export Certificate of Airworthiness

and the Export Certificates for the two (2) R44 Raven 1 Robinson helicoptersissued and authenticated by the Federal Aviation Administration of the United States of America show that the purchaser of the two (2) helicopters with Serial Nos. 1372 and 1374 was LIONAIR;

e. The Registration Certificates of the helicopters issued by Philippine authorities indicate Mr. Pos companies, Asian Spirit and LIONAIR, as registered owner;

f. Mr. Austria and Mr. Sia declared under oath in the Application for registration that the owners of the helicopters are Mr. Pos Asian Spirit and LIONAIR;

g. The

Aircraft Lease Agreement between Asian Spirit

(Lessor) represented by Mr. Po and LIONAIR (Lessee) represented by Mr. Sia as its corporate secretary;

h. Deeds of Absolute Sale for S.N. 1372 and S.N. 1374 dated March 23, 2004 and March 30, 2004 between LIONAIR (Vendor) and Asian Spirit (Vendee) were filed and registered in the CAAP, where Mr. Renato Sia signed as Corporate Secretary for LIONAIR.

These official documents issued here and abroad, readily show Mr. Pos Lionair or Asian Spirit as the true and legal owner(s) up to of the the sale helicopters, to from the importation MAPTRA, which

subsequently sold the helicopters to the PNP.

6.

Despite

the

above

indubitable

pieces

of

evidence, the Investigating Panel maintains its position that respondent FG is the true owner of the helicopters, which were registered in Mr. Pos companies under an Implied Trust. Granting without admitting and only for the sake of argument that this theory espoused by thePanel is correct, it is respectfully submitted that respondent FG should still be exonerated for lack of probable cause.

7.

First, even if we consider the view advanced by

this Office to the effect that an implied trust existed over the helicopters, it is very clear that respondent FG could
5

not be the trustor or beneficiary of the implied trust because the money used to pay the price of the helicopters, when acquired from Robinson Helicopter Corporation, was not the money of respondent FG but that of LTA, Inc., which is a corporation, a juridical entity, with a distinct legal personality of its own. Hence, even assuming, as found by this Honorable Office, that there is an implied trust over the helicopters, the trustor or beneficiary could not be respondent FG but LTA, Incorporated.

8.

Second,

even

assuming

again,

without

admitting, and just for the sake of argument,thatit is respondent FG himself who owns the helicopters, there would still be no basis to include him in the instant criminal indictment,because he had no part in the transaction between MAPTRA and the PNP. It must be noted that it was MAPTRA, an entirelyindependent and separate entity,which entered into a supply agreement with the PNP. It was not Lionair, as the owner or alleged trustee of respondent FG, which sold the helicopters to the PNP but Mr. de Veras MAPTRA.The position of the investigating panel that if respondent FG did not sell his helicopters to MAPTRA, the transaction with the PNP could not have transpired, is untenable, to say the least. It is just like saying, that if a Filipino was accidentally ran over by a car in

Saudi Arabia, this incident could not have happened, had the Filipino did not go to Saudi Arabia.Suffice it to state, that if

a person buys from a supplier an item at a reasonable price, then, sells it to the government at an overprice, it does not make sense to blame the supplier (the original owner). Moreover, it needs emphasis that MAPTRA was not an agent of Lionairin the sale of the two (2) helicopters to the PNP, but a complete stranger.The
finding that MAPTRA turned over to Lionair the amount of P36,800,000.00 as full payment of the purchase price of the two helicopters only shows that MAPTRA did not act as agent of Lionair. Otherwise, the sale should have been in thename of the principal and the entire proceeds of the saleshould have been remitted to the principal.

9.

In fact, the Bureau ofInternal Revenue (BIR) on 5 July

2012 filed tax evasion complaints before the Department of Justice against MAPTRA and Mr. De Vera for violating several provisions of the National Internal Revenue Code since based on the supply contract, supplemental supply contract, disbursement vouchers and official receipts secured by the BIR from the Commission on Audit (COA)PNP, wherein investigators showed that MAPTRA received from the PNP, net of taxes for the herein-assailed sale of the helicopters. Despite having earned said income, however, MAPTRA failed to declare income payments received from PNP in its Income Tax Returns and to pay the corresponding taxes thereon.

10.

Again,

this

Honorable

Office

in

its

finding

of

factsacknowledged that it was Mr. De Vera of MAPTRA who approached Mr. Po and Sia looking for helicopters, to wit:

18. On 18 March 2009, respondent De Vera of Manila Aerospace Products Trading (MAPTRA Sole Propritorship) approached Archibald Po and Renato M. Sia about a possible buyer of Robinson Helicopters and inquired if there were units immediately available, to which Mssrs, Po and Sia responded that the units immediately available were four (4) R44 Raven 1 Helicopters owned by respondent FG. Respondent de Vera was given the proposal. 19. On March 25, 2009, respondent de Vera went back to Lionair and asked for a second proposal for three (3) preowned helicopters instead of four (4). De Vera then told Sia and Po that the three (3) helicopters would be included in his bid to the PNP. On the same day, Po called up respondent FG and informed him that MAPTRA was requesting for three (3) helicopters which MAPTRA would include in its bid with the PNP. Respondent FG told Po to proceed.

11. Thus, even if respondent FG was indeed the owner of the helicopters, FG did not sell the helicopters to the PNP but to MAPTRA.It was MAPTRA whichacquired the pre-owned helicopters from LIONAIRby virtue of an independent and separate sale transaction. Thereafter, MAPTRA sold the helicopters or to the PNP, in pursuant sale to of a the Negotiated Supply Contract. Thus, if there is any overprice irregularity the helicopters to the PNP, ONLY MAPTRA (being the
8

new owner/seller) and the PNP(the new buyer) were involved in the assailed sale.

12. Respondent FG had no participation, even indirectly, theapproval MAPTRA;the conditions in the of negotiation Contract of the with of the the Sale terms PNP; with and the

determination including

price;the

alleged

misrepresentation by MAPTRA that the helicopters were brand new; and the acceptance of the second-hand units by the PNP. Nobody from the PNP ever said that FG talked to them, or influenced them, or persuaded them,to buy the helicopters from MAPTRA. There is therefore nothing to support a conclusion of conspiracy.To repeat, respondent FG was a complete stranger to MAPTRA (the buyer of Lionair), which was the new owner and Seller of the helicopters, SUBSEQUENTLY SOLD to the PNP. Mr. de Vera even categorically denied having met or even knowing respondent FG. At the Senate investigation, Mr. de Vera admitted that he does not know respondent FG. He testified involving respondent FG:

SEN. EJERCITO ESTRADA. Okay. Let me ask- before I get back to you- Mr. de Vera, kilala mo ba si First Gentleman?

MR. DE VERA. Not personally, Your Honor.1

(bold supplied for emphasis)

13. Even the statements of Mr. de Vera quoting Mr. Po to have mentioned respondent FG in their conversations were repeatedly denied by Mr. Po , himself. made:
SENATOR RECTO:In that way, ano. Okay. Sinabi mo rin sa pahayag mo kanina, base sa conversations ninyo ni Mr. Po, sinabi mo on Page 5, May instruction na ako galing kay sinasabi mo sabi sayo ni Mr. Po, May

At

the

August

Senate

Blue

Ribbon

Committee hearing, the following exchanges were

instruction na ako galing kay FG, yan daw ang ibebenta mo at ide-deliver sa PNP. Yun and sabi sa akin ni FG na gusto nya maitulak ang tatlong helicopters nya. Meron
kayong pahayag na sinasabi sa inyo ni Archie Po itong bagay na ito.

MR. DE VERA: Yes, Your Honor. SENATOR RECTO: Totoo ba to, Archie? MR. PO: Hindi po, eh

TSN, Senate Blue Ribbon Committee Hearing, BRHGonzales XV-I, August 2, 2011, 11:42 a.m., 1, page 126.

10

SENATOR RECTO: So nagko-kontra ngayon kayo dito sa sinumpaang salaysay. Wala kang sinasabing ganoon? MR. PO:Wala po. SENATOR RECTO: wala kang sinasabi na ganoon sa kanya? MR. PO: Wala po.2
14. Mr. Po was consistent in denying the alleged conversation. In

all his sworn statements submitted to this Honorable Office, he denied the alleged conversation with Mr. de Vera. This Honorable Office could

not be selective in evaluating the statements of Mr. Po. It could not consider some factual allegations incredible yet, accept the others as truthful. For purposes of criminal prosecution, statements that are false in one part could not be truthful in another part.

PRAYER
WHEREFORE, in view of the foregoing, it is most respectfully prayed that the Resolution, dated 30 May 2012, be reconsidered, reversed and set aside and that the charge against respondent Jose Miguel Arroyo for violation of Section 3(e) of R.A. 3019, be dismissed FOR UTTER LACK OF PROBABLE CAUSE. Such other relief,just and equitable in the premises, are likewise prayed for.
2

TSN, Senate Blue Ribbon Committee Hearing, MelNovero VII-2, August 2, 2011, 12:52 p.m., 4, page 196.

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Quezon City; 03 December2012.

HERRERA BATACAN & ASSOCIATES LAW FIRM (Counsel for Accused Atty. Jose Miguel T. Arroyo) Suite 301 Crispina Building, 1589 Quezon Avenue, Quezon City By: ATTY. EDNA HERRERA-BATACAN ROLL No. 30649 May 13, 1980 PTR No. 6121498; 01/12/2012 IBP No. 826755; 01/12/2012 MCLE No. I 002710; 09/26/2007 MCLE No. II 001873; 09/26/2007 MCLE No. III 001052; 04/07/2010 -AND-

ATTY. MARK ANTHONY BAYQUEN ROLL No. 54076 April 25, 2007 IBP No. 869224/11-18-11/PPLM PTR No. 47593/01-09-12/Makati MCLE Compliance No. III-0013287 COPY FURNISHED: HON. SANDIGANBAYAN -2nd Division (Pursuant to SB Res. No. 12-CRM-0164) Centennial Building Commonwealth Avenue Corner Batasan Road, Quezon City FIELD INVESTIGATION OFFICE Office of the Ombudsman Agham Road, Quezon City

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