SC asked to declare unconstitutional P125M ‘confidential funds’ released to OVP in 2022

The Supreme Court (SC) was asked on Tuesday, Nov. 7, to declare unconstitutional the P125 million “confidential funds” transferred last November from the Office of the President (OP) to the Office of the Vice President (OVP).

In a petition, the SC was also asked to order the OVP, which spent the “confidential funds” in just 11 days last December, to return the P125 million to the government’s treasury.

The petitioners were Christian S. Monsod, Ibarra M. Gutierrez III, Maria Cielo D. Magno, Imelda M. Nicolas, Katrina C. Monsod, Ray Paolo J. Santiago, Honorio A. Poblador III, Augusto C. Lagman, Vicente C. Romano III, Rex C. Drilon II, and Miguel V. Jugo.

Named respondents were the Vice President Sara Z. Duterte for OVP, Executive Secretary Lucas P. Bersamin, and Secretary Amenah F. Pangandaman of the Department of Budget and Management (DBM).

In a summary, the petitioners told the SC that on Dec. 30, 21, the General Appropriations Act (GAA) under Republic Act No. 11639 was passed for 2022 fiscal year.

They said that on Aug. 22, 2022, Vice President Duterte requested for P403.46 million for various purposes from Secretary Pangandaman. Out of the requested amount, the OVP sought P250 million as “confidential funds” although such funds were not included in the 2021 and 2022 budgets, they said.

Thereafter, they said, the DBM released P221.42 million to OVP “to cover financial assistance/subsidy and confidential fund per officer of the President approval dated Nov. 28, 2022.”

They said that of the P221.42 million released, P125 million was for “the non-existent” confidential funds and P96.42 million for financial assistance/subsidy.

The petitioners told the SC that the Commission on Audit (COA) then released its 2022 Audit Report of the OVP, “confirming that the office fully utilized the P125 million Confidential Fund that was transferred in December 2022, in just 11 days, even though the OVP had neither an item nor an allotment for a Confidential Expense in the 2022 GAA.”

They said that “under the 2022 GAA, while there is a heading on ‘Confidential, Intelligence, and Extraordinary Expenses’ and a particular item with an appropriation for ‘Extraordinary and Miscellaneous Expenses,’ there is no item, much more an appropriation, for ‘Confidential’ or ‘Intelligence’ Expenses.”

Thus, they said, “it’s clear that Congress did not intend to create any item for Confidential Expenses and the release of funds by the DBM to the OVP is a clear usurpation of the exclusive power of Congress to determine how the budget should be spent.”

They also said that the 2022 GAA provides that the contingent fund “shall cover the funding requirements of new or urgent activities or projects of national government agencies, GOCCs (government owned or controlled corporations) , and LGUs (local government units) that need to be implemented or paid during the year.

They pointed out that “the creation of a Confidential Fund by executive fiat was not for the above-mentioned reason, and the purpose of a Contingent Fund is to precisely cover the funding requirements of new or urgent projects that need to be implemented during the year.”

The petitioners also alleged:

“The transfer of the funds from the Contingent Fund to the OVP as Confidential Funds was not savings and the use of such appropriations is improper.
“The Constitution absolutely prohibits transfer of appropriation— with the only exception of the augmentation of savings— which exclusively belongs to a certain class of people, the President being one of the very few exceptions.

“The rationale for such is in order to keep the Executive and other budget implementors within the limits of their prerogatives during budget execution, and to prevent them from unduly transgressing Congress’ power of the purse.

“The funds transferred from the Office of the President to the Vice President were from the Contingency Fund and not actual savings. There were also no actual deficiencies incurred in the current year to augment; it was a fund inexistent and unappropriated. It is a particular item of expenditure.

“Transparency is a constitutional mandate; and any exception must be strictly construed. The transfer to an item created by executive fiat, which is the Confidential Fund, is nothing more but to circumvent the proper accounting scrutiny required for the use of public funds. The utilization of a confidential fund under the guise of confidential expenses is to shortchange accountability when the very same expenses are already itemized in respondent OVP’s budget under the GAA of 2022.”