Blue Ribbon report: ‘Barkada’ at Customs was inept or corrupt, or both. That’s how P6.4-B drugs could be smuggled

October 11, 2017 - 1:50 AM
Dprdon senate BOC hearing
Senator Richard Gordon and Senator Antonio Trillanes IV grill Mark Taguba during the 4th Blue Ribbon committee hearing on P6.4-billion shabu shipment from China at the Senate hearing of Aug. 22, 2017. File Photo by Geremy Pintolo, Phil.Star

MANILA – What happens when you allow a “barkada” or a cabal of people with the same background, but not the requisite qualifications, to run an agency with a huge mandate and an even bigger luggage as one of the “most corrupt” in government? A total breakdown in the system, which has made it possible for PhP6.4 billion worth of shabu (crystal meth) to be smuggled into the country through the Bureau of Customs’ Green Lane.

The Senate blue ribbon committee released Tuesday night a draft report on its investigation into corruption at the Bureau of Customs and the P6.4 billion shabu smuggling, recommending an overhaul of the agency and the filing of charges against its former chief, Nicanor Faeldon and several others.

Nicanor Faeldon
Former Customs Commissioner Nicanor Faeldon. Photographed by EDD GUMBAN, Philstar

The former Marine officer had put in a “cabal” of former military men who had no knowledge and expertise in customs administration, some f whom were corruptible, and this made it possible not just to facilitate release of undervalued shipments but the entry, without inspection of a containerized shipment of drugs, said the report drafted by the committee chairman, Sen. Richard Gordon.

While praising Faeldon for manning up in one hearing and saying he was responsible for “every gram of shabu that entered the country through Customs,” the blue ribbon said Faeldon had set his agency up for disaster by establishing a Command Center that “resulted in situations that ironically eased the entry of drugs and of illicit goods rather than prevent it.”

The report added that the “overcentralization of powers and functions facilitated the entry of illegal drugs as well as of other smuggled contraband. It described Faeldon’s act of creating ComCen as “unlawful and illegal.”

Gordon Faeldon
Senator Richard Gordon and Faeldon. Photographed by EDD GUMBAN, Philstar

Basis for charges
The committee said it thus found basis to charge Faeldon with violation of RA 10863, or the Customs and Tariff Modernization Act (CMTA), specifically his usurpation of powers of the secretary of finance and his over-centralization of institutional controls in a so-called “Command Center,” that would have prevented the shabu smuggling from happening.

“One major contributor to this disarray in the bureaucracy was his penchant for putting in a cabal of like-minded people, coming from the same background, PMAers or Magdalo members. He created an echo chamber, where they listened only to themselves. Sadly for the country, we found that such an arrangement only led to gross incompetence, resulted in corrupt-ible officers, managers. One hard lesson learned: do not put one barkada in one place, performing the same assignment,” said the report.

The committee also recommended charges against key Customs officers whom Faledon had recruited when he was designated commissioner:

• Director Neil Anthony Estrella, director for Customs intelligence, for violation of RA 10863 and the antigraft and corrupt practices act.

Estrella’s biggest fault, in the committee’s eyes, was his failure to coordinate with the Philippine Drug Enforcement Agency (PDEA) as mandated by law, before carrying out a “controlled delivery” at a Valenzuela warehouse, which could have allowed authorities to catch the main culprits. The failure to work with PDEA in timely fashion also compromised the prosecution of the case.

Faeldon Estrella
Faeldon and Estrella facing each other during one of the Senate hearings. Photo by Boy Santos, Philstar

“With all the fatal procedural flaws in what was then the country’s biggest drug haul, the committee cannot but surmise that the veteran Estrella is grossly negligent and incompetent, or corrupt, or both, He has been so grossly negligent and cavalier in conducting the raid that the ineptitude portrayed here was so consistent and so pervading, raising the suspicion that all these mistakes were committed deliberately in order to shield the main principalks from liability.”

• Deputy Commissioner Gerardo Gambala, for misfeasance and nonfeasance, for his failure to implement appropriate safeguards at the ComCen, making the shabu smuggling possible. It “is an indication of gross incompetence tantamount to misfeasance, due to his lack of knowledge of customs law and administration.”

• Intelligence officer Joel Pinawin, for malfeasance, misfeasance, nonfeasance. The committee deemed him in “equal fault” with Estrella in handling the “controlled delivery.”

• Milo Maestrecampo, director, import assessment service, for malfeasance, misfeasance, nonfeasance.
“He did not exercise due diligence in not immediately acting on the Value Verification requested by Atty. Larribert Hilario of the Risk Management Office. Because of his inaction, a shipping container found to have been loaded with drugs passed through customs without inspection.”

Procedural flaws
The blue ribbon also found that the Harmonized Systems codes used by Taguba and licensed customs broker Teejay Marcellana for their shipment, allowing it to be tagged for the green lane, came from Maestrecampo.

Other key players in the shabu smuggling were also recommended for charging, but not Davao Vice Mayor Paolo Duterte and Atty. Maneses Carpio, the President’s relatives who appeared in one hearing after Sen. Antonio Trillanes tagged them as part of the “Davao Group” that controls the influence-peddling at Customs. Instead, the blue ribbon simply recommended a lifestyle check on them and several others.

Paolo Duterte Manase Carpio
Presidential son-in-law Manases Carpio (right) and Davao Vice Mayor Paolo Duterte.

Meanwhile, besides the Customs officials, the blue ribbon also recommended the filing of charges against key players in the transaction:

• Chen Ju long aka Richard Chen and Richard Tan, a goods and cargo consolidator who owned Hong Fei Logistics, that handled the shipment of printing equipment that subsequently turned out to have disguised the shabu. Establishing his intent to commit a crime is not indispensable, said the committee, as the crime he has allegedly committed is mala prohibita, referring to violation of RA 9165, Comprehensive Dangerous Drugs Act.

• Li Guang Feng, aka Manny Li, was a mere facilitator, a “victim of circumstance,” said the blue ribbon, and it expressed hope that the law enforcement agencies would consider several positive acts of his throughout the episode. As example, Li refused to change the packing list of the shipment when told to do so by those who had set up the drug importation; and didn’t leave country when told to.

• Dong Yi Sheng aka Kenneth Dong, for importatation of dangerous drugs and/or controlled precursors and essential chemicals. Dong is also liable for violation of the National Internal Revenue Code (NIRC).

• Mark Ruben Taguba II, the whistleblower who provided the senators listings of those benefiting from the “TARA” system. He was described by the panel as the “quintessential corruptor” and recommended for prosecution for violations of the Customs Act, corruption of public officials and violation of RA 9165 in re: importation of dangerous drugs.

The committee tagged Taguba “a central figure in this disgustingly corrupt chain.”

• Eirene Tatad of EMT EMT Trading, the “disposable consignee” lured by Taguba to set up EMT so it could “receive” the shipment

• Davao councilor Small Abellera, for direct bribery.

• Teejay Marcellana, licensed customs broker

There was no way to excise the evil that plagues Customs except through an overhaul, the blue ribbon said. “It is strongly recommended and urged in the strongest terms that the BOC be totally overhauled.”

Pre-shipment inspection, performance reviews
The panel likewise recommended a study of “the feasibility of conducting Pre-shipment Inspection Reports from the port of origin which shall be furnished to the port of destination prior to its embarkation, including the BOC’s daily monitoring of total containers and collections per day in relation to its annual target.”

The committee further recommended the filing of charges against the officers of the BOC Command Center and other specified personalities.

Additionally, it said, “the ‘TARA’ system must be utterly dismantled and never allowed to come into existence again.”

The committee report also called for “periodic review” of the performance of licensed brokers and “summary processes for license suspension or revocation.”

Among other points, the report called for “a continuous relationship with China on the problem of proliferation of drugs … if indeed drugs are coming from China,” and underscored seeking “greater cooperation from them.”

Lifestyle checks
The Committee decided to request the National Bureau of Investigation to include “certain members of the First Family”, namely Davao City Vice Mayor Paolo Duterte and Atty. Manases Carpio, “in the lifestyle checks being conducted. There are many examples that we are aware when rumors of abuse of close relationships abound, regardless of the administration in power. In this administration, a similar pattern has emerged, with certain members of the First Family being linked to this sordid affair.”

This video clip below shows the reaction of Davao City Mayor Sara Duterte-Carpio, saying it is premature to be discussing a draft report:

Asked to be haled to court were the following individuals for their involvement in the smuggle of the 604 kgs of shabu, “especially looking into lifestyle checks of the persons mentioned”:

15 respondents for lifestyle checks
The 15 respondents subject to lifestyle checks as detailed in the Committee Report.

Furthermore, the report called for “regulatory compliance checks and test” on the following:
1. HongFei Logistics Philippines
2. Golden Strike Logistics, Inc.
3. EMT Trading
4. Integricy Trading
5. RO and SS Tradings [sic]

No to complacency
“Now is not the time to be passive and indifferent,” the report said in closing. “We cannot afford to be complacent today. We must condemn, as we must always condemn, in the strongest terms, those responsible for the scourge of drugs – especially … exported from China and imported into the Philippines.”