G.R. No. 135715 ; April 13, 2011
PRESIDENTIAL AD HOC FACT-FINDING COMMITTEE ON BEHEST LOANS, represented by MAGDANGAL B. ELMA, PCGG CHAIRMAN AND ORLANDO C. SALVADOR AS CONSULTANT OF THE TECHNICAL WORKING GROUP OF THE AD-HOC COMMITTEE, Petitioners, vs. HONORABLE ANIANO A. DESIERTO AS OMBUDSMAN, PANFILO O. DOMINGO, CONRADO S. REYES, ENRIQUE M. HERBOZA, MOHAMMAD ALI DIMAPORO, ABDULLAH DIMAPORO AND AMER DIANALAN, Respondents.

FACTS

The case involves a petition challenging the Ombudsman’s dismissal of a complaint concerning alleged behest loans. Respondents Mohammad Ali Dimaporo, Abdullah Dimaporo, and Amer Dianalan were stockholders/officers of Mindanao Coconut Oil Mills (MINCOCO). Respondents Panfilo O. Domingo, Conrado S. Reyes, Enrique M. Herboza, and Ricardo Sunga were officers of the National Investment and Development Corporation (NIDC). In 1976, MINCOCO, which was undercapitalized (paid capital of P7M) and under-collateralized (assets worth P7M), obtained Guarantee Loan Accommodations from NIDC totaling approximately P51,047,600. In 1983, a memorandum bearing President Ferdinand Marcos’s marginal note disallowed the foreclosure of MINCOCO’s properties by government banks, which was construed as releasing MINCOCO from its liabilities.
In 1992, President Fidel Ramos created the Presidential Ad Hoc Fact-Finding Committee on Behest Loans to recover ill-gotten wealth. The Committee, using criteria from Memorandum Order No. 61, found MINCOCO’s loans to be behest due to under-collateralization, undercapitalization, the presence of a marginal note from President Marcos, identification of officers as cronies, and the extraordinary speed of loan approval. Consequently, the Committee filed a complaint with the Ombudsman in 1997 against the respondents for violation of Sections 3(e) and (g) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act).
By Resolution dated July 9, 1998, the Ombudsman dismissed the complaint on two grounds: (1) insufficiency of evidence, finding the allegations of undercapitalization and cronyism unproven and the marginal note pertaining only to the release of liabilities, not the loan approval; and (2) prescription, ruling that the offenses, committed in 1976 under the old RA 3019, prescribed in ten years (by 1986), and the 1997 complaint was filed too late.

ISSUE

Whether the Ombudsman committed grave abuse of discretion in dismissing the complaint on the grounds of prescription and insufficiency of evidence.

RULING

The Supreme Court DISMISSED the petition, finding NO GRAVE ABUSE OF DISCRETION on the part of the Ombudsman.
1. On Prescription: The Court held that the prescriptive period for the criminal offenses charged had indeed lapsed. The alleged acts (approval of the guarantee loans) occurred in 1976. Under the old RA 3019 (prior to its 1982 amendment), the prescriptive period was ten years. The period commenced in 1976 and expired in 1986. The complaint filed in 1997 was well beyond this period. The Court rejected the petitioner’s arguments:
* The imprescriptibility under Section 15, Article XI of the 1987 Constitution applies only to civil actions for recovery of ill-gotten wealth, not to criminal prosecutions under RA 3019.
* The “discovery rule” (starting the prescriptive period from discovery in 1992) does not apply. Prescription began to run from the day of the commission of the violation (1976), as the acts of approving the loans were not concealed or unknown to the government agencies involved (NIDC, government banks).
2. On Insufficiency of Evidence: The Court upheld the Ombudsman’s finding of insufficient evidence to establish probable cause for violations of RA 3019. The Ombudsman’s determination during preliminary investigation is generally beyond judicial review unless shown to be tainted with grave abuse. The Court found none, agreeing with the Ombudsman’s analysis that:
Being undercapitalized, by itself, does not constitute a crime.
No evidence was presented to prove that respondent Mohammad Ali Dimaporo was a “crony.”
* President Marcos’s 1983 marginal note related to the disallowance of foreclosure, not to the 1976 approval of the loans, and thus did not constitute an “endorsement” for the loan grant.
* The alleged deviations (e.g., takeover by UNICOM) were procedural violations, not criminal acts under RA 3019.
3. On Procedural Matter: The petition, filed as a petition for review on certiorari under Rule 45, was treated as a petition for certiorari under Rule 65 due to its allegations of grave abuse of discretion by the Ombudsman.
The Court concluded that the Ombudsman did not act capriciously or whimsically. His findings on prescription and insufficiency of evidence were based on the law and the evidence on record. Therefore, his dismissal of the complaint was not attended by grave abuse of discretion.