The Supreme Court (SC) has acquitted then Davao del Norte 2nd District Rep. Antonio R. Floirendo Jr. as it reversed the 2020 Sandiganbayan’s decision that convicted the former legislator of graft.
The graft complaint against Floirendo Jr. was filed with the Office of the Ombudsman in 2017 by then House Speaker Pantaleon D. Alvarez.
In a criminal charge sheet filed with the Sandiganbayan, the OMB accused Floirendo Jr. of “willfully, unlawfully and criminally have direct and/or indirect financial interest in the 21 May 2003 Joint Venture Agreement (JVA) between the Bureau of Corrections (BuCor) and Tagum Agricultural Development Company, Inc. (TADECO), in which company he then owned 75,000 shares of stocks worth P7.5 million and which company's (TADECO) majority stocks were in turn owned by and under the control of accused's family through Anflo Management and Investment Corporation, despite being prohibited by Article VI, Section 14 of the 1987 Constitution from having such financial interest.”
The charge arose from the 1969 JVA between TADECO and BuCor on the development of 3,000 hectares within the Davao Prison and Penal Farm in Davao del Norte into a banana plantation.
In 1979, the JVA was amended. The agreement was signed by then TADECO’s chairperson Antonio O. Floirendo Sr. and then BuCor officer-in-charge Ramon J. Liwag and approved by then Justice Secretary Simeon Datumanong.
In 2003, the agreement was renewed for another 25 years.
At the time of the renewal of the agreement in 2003, Floirendo Jr. was Davao del Norte’s 2nd district congressman.
During the trial at the Sandiganbayan, Floirendo Jr. was the only witness in his defense. Among other things, Floirendo Jr. told the court that he is not an incorporator of TADECO which was incorporated in 1950 before his birth; he owns about 0.89 per cent of TADECO's total outstanding shares which he acquired between 1977 to 1996; he had no involvement in the negotiation and execution of the 2003 JVA; he was neither TADECO's director nor officer; and that the House of Representatives had no participation in the review or approval of the 2003 JVA.
On Aug. 26, 2020, the Sandiganbayan found Floirendo Jr. guilty beyond reasonable doubt of the crime of violation of Section 3(h) of Republic Act No. 3019 for “having a direct or indirect financial interest in the 2003 JVA, such interest being prohibited under Article VI, Section 14 of the 1987 Constitution.”
He was sentenced to a prison term ranging from six years and one month as minimum to eight years as maximum with perpetual disqualification from holding public office.
The anti-graft court ruled that “while members of the House of Representatives are not prohibited from having a direct or indirect financial interest per se, they are, however, prohibited from having a direct or indirect financial interest in any contract with the Government during the representative's term of office.”
It pointed out that Floirendo Jr. should have divested his shareholdings in TADECO and in Anflo Management and Investment Corporation (ANFLOCOR), a corporation owned by the Floirendos, which was engaged in investing and managing the operations of the Anflo Group of Companies, which included TADECO.
When his motion for reconsideration was denied, Floirendo Jr. elevated the case to the SC.
At the center of the legal dispute is Article VI, Section 14 of the Constitution which provides: “… neither shall he, directly or indirectly, be interested financially in any contract with, or in any franchise or special privilege granted by the Government, or any subdivision, agency, or instrumentality tllereoj, including any government-owned or controlled corporation, or its subsidiary, during his term of office; and he shall not intervene in any matter before any office of the Government for his pecuniary benefit or where he may be called upon to act on account of his office.”
In a resolution (under GR No 255250) issued by its second division and made public last March 23, the SC said:
“This Court cannot accept the Sandiganbayan's view that the mere holding of an interest in a corporation to whom a contract was granted by the Government is enough to put a member of Congress within the purview of the constitutional prohibition.
“The Constitution must not have envisioned such a myopic view, for members of Congress would be at the mercy of the Anti-Graft Law for their nominal shareholdings in just about any corporation in whose favor the Government has actually granted and will in the future grant contracts to, even without doing any act in relation to, nor benefitting from, the same.
“In convicting Floirendo Jr., the Sandiganbayan banked on the 2003 JVA's provisions on production and profit sharing. It hastily concluded that because TADECO and BuCor entered into the 2003 JVA with the objective of obtaining profits therefrom, then automatically, Floirendo Jr. was financially interested in the 2003 JVA by simply owning 75,000 shares in TADECO and 537,950 shares in ANFLOCOR.
“In other words, the Sandiganbayan considered mere ownership of shares of stocks on the part of Floirendo Jr. to conclude that he has a financial interest in the 2003 JVA.
“For sheer lack of evidence to prove that Floirendo Jr. was financially interested in the 2003 JVA, the Sandiganbayan casually declared that Floirendo Jr. never denied his financial interest in the 2003 JVA. This is unfounded.
“To be sure, the prosecution only proved that: (1) Floirendo Jr. acquired shareholdings of 75,000 in T ADECO from 1977 to 1996 through gifts from Floirendo Jr.'s father; (2) he was already a shareholder of TADECO when he assumed office as representative of the 2nd District of Davao del Norte during the 12th Congress; (3) he was a member of the Board of Directors of ANFLOCOR from 2002 to 2005; (4) he was the Vice-President of ANFLOCOR from 2002 to 2003;
“(5) he was a shareholder ANFLOCOR from 2002 to 2005; (6) from 2002 to 2005, he owned 537,950 shares of ANFLOCOR; (7) his father subscribed to the authorized capital stock of ANFLOCOR on his behalf; (8) ANFLOCOR owns 56% of TADECO; his father, mother, uncle, sisters, and brother were shareholders of ANFLOCOR since 2012; (10) ANFLOCOR is a family corporation owned by the Floirendos; (11) TADECO and ANFLOCOR are stock corporations operating for profit; and (12) when TADECO earns profit from a transaction with the BuCor, its stockholders will ultimately earn through dividends.
“Yet, in no instance did the prosecution present evidence that Floirendo Jr. obtained a monetary gain or benefit when the 2003 JVA was entered into with the government. In fact, Floirendo Jr. has consistently testified that he had no involvement in the negotiation of the 2003 JVA.
“In the present case, the prosecution merely relied on the existence of Floirendo, Jr. 's shares in TADECO and ANFLOCOR as basis for Floirendo Jr.'s pecuniary interest.
“If this Court were to give its imprimatur to the Sandiganbayan's conviction, then it would open the floodgates to abusive prosecutions through speculations and surmises.
“The mere fact that TADECO and ANFLOCOR were stock corporations capable of distributing any future profit from the 2003 JVA to its stockholders, Floirendo Jr., does not automatically prove that he obtained a monetary gain or benefit from the 2003 JVA.
“Without proof of such monetary gain or benefit, this Court cannot say with certainty that he was financially interested in said contract granted by the government, which will catalyze the prohibitive effects of Article VI, Section 14 of the Constitution.
“More importantly, the records do not show that Floirendo Jr. used his influence to push for the 2003 JVA. There is also no proof that he used his membership in Congress as a leverage to have the contract executed.
“Borrowing the language of the Constitution, Floirendo Jr. did not intervene in any matter before any office of the Government for his pecuniary benefit or where he may be called to act on account of his office. It was not shown that he was a member of the House Committee that approved the contract with TADECO. It was likewise not shown that he performed acts that influenced the grant of the contract to TADECO.
“FOR THESE REASONS, the instant Appeal is GRANTED. The Decision dated August 26, 2020 and Resolution dated January 22, 2021 of the Sandiganbayan in SB-18-CRM-0101 are REVERSED and SET ASIDE. Accused-appellant Antonio R. Floirendo Jr.· is ACQUITTED of violation of Section 3(h) of Republic Act No. 3019. Let entry of final judgment be issued immediately. SO ORDERED.”