G.R. No. 138142 September 19, 2007
The Presidential Ad Hoc Fact-Finding Committee on Behest Loans and Presidential Commission on Good Government, petitioners, vs. Ombudsman Aniano A. Desierto, Alicia Ll. Reyes, Leonides S. Virata, Rodolfo D. Manalo, Verden C. Dangilan, Ismael A. Mathay, Jr., Jose Y. Campos, Francisco de Guzman and Erwin G. Vorster, respondents.

FACTS

Petitioners filed a complaint with the Office of the Ombudsman against private respondents, former officers of the Development Bank of the Philippines (DBP) and Pagdanan Timber Products, Inc. (PTPI), for violation of the Anti-Graft and Corrupt Practices Act (RA 3019). The complaint alleged that a 1974 loan from DBP to PTPI was a behest loan, characterized by undue haste in approval, insufficient capitalization of the borrower, and undercollateralization, purportedly granted at the behest of former President Ferdinand Marcos. The Ombudsman dismissed the complaint, ruling that the offenses had prescribed and that there was no probable cause. The Ombudsman computed the ten-year prescriptive period from the 1974 transaction, thus barring the 1998 complaint. Petitioners filed this certiorari petition, arguing grave abuse of discretion.

ISSUE

Whether the Ombudsman committed grave abuse of discretion in dismissing the complaint on the grounds of prescription and lack of probable cause.

RULING

Yes, the Ombudsman committed grave abuse of discretion regarding prescription but not on the finding of lack of probable cause. On prescription, the Court ruled that for violations of special laws like RA 3019, the prescriptive period commences from the discovery of the offense, not merely from its commission, pursuant to Act No. 3326 . The behest nature of the loan, by its definition, involves concealment; thus, the period should run from its discovery by the PCGG-led Fact-Finding Committee in 1992. The complaint filed in 1998 was therefore timely. However, the Court upheld the Ombudsman’s finding of no probable cause for graft. The determination of probable cause is an executive function, and absent a clear showing of arbitrariness, the Court will not interfere. The Ombudsman found no substantial evidence of manifest partiality, bad faith, or gross negligence by the DBP officers, nor evidence that the loan was granted due to pressure from Marcos. Furthermore, respondents Jose Y. Campos and Francisco de Guzman were covered by a valid immunity agreement with the PCGG. Since the Ombudsman had already thoroughly evaluated the merits, the case was not remanded. The petition was partially granted, nullifying the Ombudsman’s ruling on prescription but affirming the dismissal for lack of probable cause.