SC affirms graft conviction of Lozada siblings in ‘Lupang Hinirang’ program of PFC in 2007

Published May 27, 2022, 1:00 PM

by Rey Panaligan 

Supreme Court

The Supreme Court (SC) has affirmed the 2016 Sandiganbayan decision that convicted Rodolfo Noel I. Lozada Jr., former president and chief executive officer of the government-owned Philippine Forest Corporation (PFC), in connection with the notice of award to his brother, Jose Orlando, of the 6.5 hectares of public land under the agency’s “Lupang Hinirang” program in 2007.

Also affirmed was the conviction of Jose Orlando, who was then a contractual consultant and confidential assistant at the Office of the PFC President from Oct. 1, 2005 to Feb. 7, 2008.

But the SC modified the jail term imposed on the Lozada siblings for violation of Section 3(e) of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act, to “the indeterminate penalty of imprisonment of six (6) years and one (1) month, as minimum, to ten (10) years and one (1) day, as maximum” instead of the “six (6) years as minimum to ten (10) years and one (1) day, as maximum” ordered by the Sandiganbayan.

With the resolution which was made public last March 23, the SC denied the appeal of the Lozada siblings.

On Dec. 29, 2011, two criminal charges were filed by the Office of the Ombudsman (OMB) against Rodolfo Noel and one graft case against Jose Orlando.

In the graft case for violation of Section 3(e) of RA 3019, the OMB said that Rodolfo Noel, as PFC president, “willfully, unlawfully, and feloniously, through evident bad faith and/or manifest partiality, award the leasehold right over 6.599 hectares of public land under the Lupang Hinirang Program of the Philippine Forest Corporation, to his brother (Jose Orlando) despite knowledge that the latter did not undergo the prescribed application process, when as President and CEO of the Philippine Forest Corporation, it was his duty to award leasehold rights and to ensure that all applicants should go through the regular application process, and accused Jose Orlando for accepting such award notwithstanding knowledge of the absence of such required application process, thereby giving unwarranted benefit, preference and advantage to accused Jose Orlando over other qualified beneficiaries of the program, to the prejudice of public interest.”

In Rodolfo Noel’s second graft case, he was accused by the OMB of allegedly having pecuniary interest in another award of a leasehold right. But the Sandiganbayan acquitted him of the second charge.

The issue on the notice and award of public land under the “Lupang Hinirang” program of PFC was taken up during the 2008 Senate investigation into the alleged anomalous $329-million deal with Zhong Xing Telecommunications Equipment International Investment Limited (ZTE) of China for the Philippines’ National Broadband Network (NBN) project in 2007.

Rodolfo Noel appeared before the Senate investigation as the star witness against the government’s transaction during the time of then President Gloria Macapagal Arroyo.

Arroyo filed a demurrer to evidence in the graft case filed against her. The demurrer was granted by the anti-graft court. The grant was tantamount to the acquittal of Arroyo of the charges.

In 2021, the SC affirmed the 2016 Sandiganbayan acquittal of former Arroyo of the graft charges on the ZTE transaction.

In 2007, the PFC board passed two resolutions on the development plan of the 2,900 hectares of the idle lands within the resettlement area of Laiban Dam Project in Rizal that was ceded by the Metropolitan Waterworks and Sewerage System.

The PFC was authorized to lease the lands, through auction process, at a floor price of PS00 per hectare per year, and one-time payment of Pl,000 for the parcellary and monumenting cost for every hectare applied for. The areas will be awarded through the issuance of Lupang Hinirang Certificates, supported by the Economic Productivity out of Idle Land (EPIL).

One of the resolutions authorized PFC to set aside 200 hectares for its own area for agro-forestry projects and Jatropha plantations. These 200 hectares may be awarded to PFC’s officials, staff and personnel through the same auction process.

The OMB said that while not an officer, staff or employee of PFC, Jose Orlando was allowed to apply and included in the list of bidders for the “Lupang Hinirang” program. On Dec. 18, 2007, Jose Orlando was issued a notice of award signed by his brother Rodolfo Noel as PFC president.

In convicting the Lozada siblings, the Sandiganbayan said that the PFC resolution was very clear that the allocation and award to its officials, staff and personnel of any tenurial rights under “Lupand Hinirang” project can only be done if “the same auction process” is observed.

“Unfortunately, both accused (Lozada siblings) were not able to establish that the “auction process’ was ever complied with. Moreover, it is worth stressing that even if allocation and award to the officials, staff and employees of tenurial rights do not require the ‘auction process.’ still accused Jose Orlando should not have been issued an Order of Payment and a Notice of Award,” the anti-graft court said.

“As consultant, he could therefore, not be considered to be within the purview of ‘PFC official, staff and employees.’ In allowing his brother, accused Jose Orlando, to apply for tenurial rights under the ‘Lupang Hinirang’ project… accused Rodolfo Noel acted with manifest partiality and evident bad faith,” the court also said.

“On the other hand, on the issue of conspiracy between the Lozada brothers, the presence of which would make both guilty of the crime charged, this Court believes that the brothers conspired so that the lease of idle public land accused Jose Orlando applied for would be awarded to him,” it added.

The Lozada brothers appealed the Sandiganbayan’s decision before the SC. Rodolfo Noel told the SC he did not give unwarranted benefit in favor of his brother, Jose Orlando, in allowing him to apply for a grant of leasehold right as the same was authorized by Resolution No. 15 approved by the Board of PFC.

He said his brother complied with the prescribed process for the inclusion in the list of bidders by submitting an application form to the “Lupang Hinirang” committee and placing his bid.

Contrary to the ruling of the Sandiganbayan, Resolution No. 15 did not specifically require the existence of employer-employee relationship nor need a regular status of employment to qualify for application for a leasehold right, he said.

“As a confidential assistant in the office of the PFC president, Jose Orlando is considered a staff or personnel. The finding of conspiracy has no basis absent proof of shared criminal purpose or design,” he added.

In resolving the petition, the SC said:

“Here, the prosecution failed to show that the government, or any party suffered undue injury by reason of the issuance of a notice of award to Jose Orlando. Nonetheless, Rodolfo Noel’s issuance of a notice of award of leasehold rights in Jose Orlando’s favor, despite non-compliance with the application and auction requirements, smacks of unwarranted and unjustified preference.

“In establishing preference, it is not necessary to show that Orlando was preferred or chosen over a specific individual. The fact that Jose Orlando was granted a notice of award, even if he did not go through the required procedure, is sufficient to establish that there was preference in his favor.

“We are not persuaded by Rodolfo Noel’s insistence that he did not give unwarranted benefit to Jose Orlando since no lease agreement and tenurial instrument were executed in his favor and that, if at all, the issuance of a notice of award in Jose Orlando’s favor merely gave him a ‘preferential right’ which was merely an inchoate right.

“While the issuance of the EPIL transfers the leasehold rights in favor of an applicant or awardee, it is merely a formality, or confirmation of the vested right previously acquired by the applicant or awardee, through the issuance of a notice of award in his favor. No less than Rodolfo himself stated in his testimony that the grant of a notice of award is followed by the execution and issuance of the EPIL and the ‘Lupang Hinirang’ Certificate which will consummate the award of the leasehold rights.

“The Court likewise agrees with the Sandiganbayan that petitioners conspired with each other, so that the lease of idle public land would be awarded to Jose Orlando.

“As president of the PFC, Rodolfo Noel was authorized to sign all documents, agreements, and contracts relating to the award of leasehold rights. Thus, without Rodolfo Noel’s approval, Jose Orlando would not have been included in the list of bidders and issued a notice of award.

“On the other hand, the issuance of the notice of award would not have been consummated without Jose Orlando’s consent and acceptance, as evidenced by his signature in the conforme portion of the notice. Thus, taking together the actions of Rodolfo Noel and Jose Orlando, the element of conspiracy is established.”