Senate endorses raps vs Dep’t of Energy’s Cusi, others over P40-B Malampaya deal

PRESIDENT DUTERTE and Energy Secretary Alfonso Cusi in an animated discussion

PASAY CITY – The Senate has adopted a resolution seeking charges against Department of Energy (DOE) Secretary Alfonso Cusi and other officials over the approval of the sale of a majority stake in the Malampaya gas field for $565 million or more than P40 billion.

The Senate action came following a privilege speech by Sen. Sherwin Gatchalian after he released a report of the Senate energy committee on its hearings on the allegedly questionable Chevron Philippines-UC Malampaya transaction which involves President Rodrigo Duterte’s campaign contributor Dennis Uy.
The DOE led by Cusi and Udenna Corporation’s Uy claimed that the transaction was “above board.”

Senate Majority Leader Juan Miguel Zubiri and Senators Ronald “Bato” dela Rosa, Ramon “Bong” Revilla Jr. and Francis Tolentino abstained during the vote on the resolution but the measure was still approved by majority of senators.

Sen. Gatchalian said that for railroading the approval of the sale of participating interest of Chevron in Malampaya gas field, key DOE officials led by Secretary Cusi are criminally and administratively liable for graft, gross neglect of duty, and grave misconduct and should immediately resign from their posts.

“I call on Secretary Cusi and his erring subordinates to immediately resign. With all that has happened, the Filipino people can no longer trust you to faithfully safeguard our country’s precious energy resources,” Gatchalian stressed.

In a privilege speech delivered on February 2, Gatchalian exposed the numerous times that the DOE officials violated laws just so they could give a seal of approval to the sale of the 45% participating interest in the Malampaya gas project of Chevron Malampaya LLC Philippines, now known as UC 38 LLC, to UC Malampaya – an indirect subsidiary of Udenna Corporation.

At the onset of the Senate inquiry into the $565 million or more than P40 billion Chevron-UC Malampaya deal, DOE officials prescribed prior government approval as dictated by Presidential Decree No. 87 and Department Circular 2007-04-0003 on such transaction only to retract late last year after financial evaluation of UC Malampaya yielded the findings that it has a negative $137.2 million working capital or negative P6.9 billion.

As such, the Senate Energy Committee Chairperson said Cusi and his subordinates are liable for the following: gross neglect of duty and grave misconduct in evaluating and approving this transaction; Anti-Graft and Corrupt Practices Act for knowingly approving the transfer of the 45% participating interest in SC 38 to UC Malampaya – an entity that is clearly not qualified, and in so doing providing an unwarranted benefit, advantage, or preference to UC Malampaya through manifest partiality, evident bad faith, or gross inexcusable negligence in evaluating and approving the deal.

If found guilty, they could face dismissal from public service, imprisonment of six years and one month to 15 years and perpetual disqualification from public office, Gatchalian said.

In the light of this incident, Gatchalian said amendments to strengthen PD 87 are in order and to also ensure that future service contractors and DOE officials will not repeat the same mistakes.

“The law is the law. Anyone who violates it must be punished to its full extent. I call on the proper authorities to promptly file administrative and criminal cases against Secretary Alfonso Cusi, who approved the deal, and other DOE officials who evaluated the Chevron-UC Malampaya deal and recommended its approval,” Gatchalian emphasized.

Malampaya powers more than four and a half million homes and businesses in Mega Manila alone. Six out of every ten light bulbs in Meralco’s franchise area are powered by Malampaya gas. It contributes almost 20 percent of the entire country’s power generation mix.

In a statement, Gatchalian alleged that the DOE officials went against laws in order to give their approval to the sale of the 45 percent participating interest in the Malampaya gas project of Chevron Malampaya LLC Philippines, now known as UC 38 LLC, to UC Malampaya, an indirect subsidiary of Udenna Corporation.

The senator said the DOE officials prescribed prior government approval as dictated by Presidential Decree No. 87 and Department Circular 2007-04-0003 on such a transaction only to retract late last year after financial evaluation of UC Malampaya found that it has “negative $137.2 million” working capital.

“It is immediately apparent that the Udenna subsidiary is financially unqualified because it has negative working capital,” he added.

“However, instead of disapproving the transaction as it should have, DOE bent over backwards to find a way to approve the transfer to UC Malampaya—an entity it already knew was financially unqualified based on the agency’s own standards,” Gatchalian said in his speech.

Cusi earlier branded as harassment and political propaganda the graft charges earlier filed against him and several others over the sale of shares in the Malampaya gas field.

“I have no doubt the truth will vindicate me and the innocent people dragged into this purported action clearly filed for the singular purpose of political propaganda,” Cusi said.