The Supreme Court (SC) has ruled that violations of procurement laws do not automatically lead to graft conviction of government officials for corrupt practices under the Anti-Graft and Corrupt Practices Act.

In a decision written by Associate Justice Jose Midas P. Marquez, the SC reiterated that “the prosecution bears the burden to prove all the elements of the crime beyond reasonable doubt.”

The SC decision made public last Nov. 8 in G.R. Nos. 219598 and 220108 reversed the 2015 rulings of the Sandiganbayan and ordered the acquittal of Arnold D. Navales, Rey C. Chavez, Rosindo J. Almonte, Alfonso E. Laid, and William V. Guillen of violation of Section 3(e) of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act.

Those acquitted were officials of the Davao City Water District (DCWD) with most of them members of the firm’s Pre-Bidding and Awards Committee-B (PBAC-B).

Aside from Navales, Chavez, Almonte, Laid and Quillen, also charged before the Sandiganbayan were Wilfredo a. Carbonquillo, general manager, and Wilfred G. Yamson, assistant general manager.

In the March 26, 2015 Sandiganbayan decision, the anti-graft court sentenced Navales and his four co-accused to a prison term ranging from six to 10 years with perpetual disqualification to hold public office.

The cases against Carbonquillo and Yamson were ordered archived since they had remained at large.

Navales and his group challenged their conviction before the SC when their motions for reconsideration were denied by the Sandiganbayan.

Graft and corrupt practices of public officials and employees are detailed in Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act.

Under Section 3 (e) of RA 3019, public officials and employees are held liable for corrupt practices by “causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.”

A background of the case summarized by the SC’s Public Information Office (SC-PIO) stated that in 1997, the DCWD Board of Directors approved the recommendation of Carbonquillo to directly negotiate with Hydrock Wells, Inc. (Hydrock) for the drilling phase of the firm’s water supply project.

It said the PBAC-B waived the advertisement requirement for bidding and instead invited accredited well drillers to participate in the project. Only three responded, including Hydrock, the summary stated.

PBAC-B recommended that the board award to Hydrock the project through a negotiated contract, which was subsequently approved, it said.

In 2005, administrative and criminal complaints were filed against the DCWD officials. The complaints led to the conviction of Navales and his group. 

On the administrative complaints, the SC ruled that Navales and his group cannot be held liable for grave misconduct unless there is proof of bad faith. Instead, the SC found them guilty of simple neglect of duty or simple misconduct for not properly following procurement procedures.

The SC-PIO also said:

“The SC acquitted the petitioners (Navales and the four others), stating that failure to follow procurement laws is not enough to prove graft unless there is evidence of malicious intent.

“To convict someone under Section 3(e) of RA 3019, the person must be a public officer doing their job. The officer must have acted in bad faith, shown clear favoritism, or been grossly negligent. Their actions must have caused harm to someone or given unfair advantages or benefits to another person.

“To fall under Section 3(e) of RA 3019, a procurement violation must be done in bad faith, with manifest partiality or inexcusable negligence harming a party, including the government, or giving another undue preference, or giving any private party any unwarranted benefits.

“The Court found that petitioners, as members of the PBAC-B, merely recommended to the DCWD Board the award of contract. It was the DCWD Board which had the authority to approve and award the contract to Hydrock.

“While there might have been irregularities in the procurement process that violated procurement laws, there was no evidence showing petitioners were motivated by manifest partiality or bad faith.

“Instead, petitioners resorted to a negotiated contract believing it is allowed as an exceptional case given the urgency of the procurement and the lack of qualified bidders. 

“The Court also found that petitioners did not intentionally give Hydrock undue advantage as it was Carbonquillo who recommended giving the award to Hydrock, which petitioners disregarded and instead invited other accredited well drillers. However, it was Hydrock which submitted the lowest price quotations.”

The dispositive portion of the SC decision: 

“For these reasons, the Consolidated Petitions for review on certiorari are granted. The decision dated March 26, 2015 and resolution dated Aug. 7, 2015 of the Sandiganbayan (Special Third Division) in Criminal Case No. SB-CRM-0067, are reversed. Petitioners Arnold D. Navales, Rey C. Chavez, Rosindo J. Almonte, Alfonso E. Laid and William V. Guillen are acquitted for failure of the prosecution to prove their guilt beyond reasonable doubt. Let entry of judgment be issued immediately. So ordered.”