The Sandiganbayan has started its proceedings on the graft charge involving the alleged irregular transfer of P41.4 billion Covid-19 funds filed against former Department of Health (DOH) secretary Francisco T. Duque III and Procurement Service - Department of Budget and Management (PS-DBM) Undersecretary Lloyd Christopher A. Lao.

After a raffle on Friday, Aug. 30, the case was referred to the anti-graft court's first division which would determine probable cause to warrant the issuance of an arrest order.

Probable cause refers to a reasonable basis to believe that a crime has been committed for the issuance of an arrest order.

The Office of the Ombudsman (OMB) recommended bail of P90,000 each for Duque and Lao.

Duque and Lao were charged with violation of Section 3(e) of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act, for the alleged irregular transfer of P41.464 billion DOH funds to the PS-DBM from March to December 2020.

In the charge sheet filed by Graft Investigation and Prosecution Officer III Napoleon Regan D. Malimas last Aug. 27, state prosecutors blamed Duque for causing the fund transfers amounting to P41,463,867,117.52 to PS-DBM "despite the obligation of DOH to directly and expeditiously procure the Covid-19 medical supplies and equipment requested by the end-user offices to address the pandemic."

The funds were intended for the urgent and immediate purchase of detection kits, nucleic acid extraction machine, mechanical ventilator, personal protective equipment (PPE), surgical mask, cadaver bag, and various test kits.

Malimas alleged that the DOH's arrangement with the PS-DBM did not hasten the project implementation, as the PS-DBM did not have such medical items in its inventory.

In the case of Lao, the charge stated that he accepted the said transfers "notwithstanding non-compliance with the aforementioned procurement law, rules and issuances as well as the afore-cited accounting and auditing rules on transfer of funds from one agency to another."

Worse, the PS-DBM charged a four percent service fee amounting to P1,658,554,684.70, which was taken from DOH funds, the charge sheet alleged.. As a result, undue injury was caused to the DOH and the end-user offices and bureaus, it also alleged.

Duque and Lao became the subject of the OMB's investigation after Senator Risa Hontiveros and former Senator Richard Gordon filed a complaint last May 8.

The senators claimed that the bids and awards committee (BAC) of the DOH could have just undertaken the procurement of the much-needed supplies to address the Covid-19 pandemic without relying on the PS-DBM, so the P1.659 billion service fee charged by the PS-DBM was unnecessary.