Military probes fund conversion involving oil products

By Rene Acosta, Business Mirror

Posted at Apr 07 2011 09:57 AM | Updated as of Apr 07 2011 05:57 PM

Gen. Eduardo Oban, Armed Forces chief of staff, has ordered an investigation into the alleged conversion of funds for the supply of petroleum, oil and lubricants to the military reportedly involving hundreds of millions of pesos.

The move was prompted by the discovery of the unusually high consumption or delivery of gasoline and other oil products to the Armed Forces, through the Office of the Deputy Chief of Staff for Logistics (J-4), by oil company Petron.

The J-4 is the same office that military whistle blower retired Lt. Col. George Rabusa said was used by alleged corrupt senior officers in converting hundreds of millions of pesos of military funds.

Its forerunner, the defunct Office of the Deputy Chief of Staff for Comptrollership, Rabusa said was exploited by former officials as it was used in identifying and clearing out funds that did not end in military coffers but went to the pockets of senior officers.

Sources said Oban ordered the various investigating arms of the Armed Forces, including the provost marshal general and the inspector general, to investigate the J-4 and its staff over the irregularly high delivery, consumption and distribution of gasoline and other oil products.

The office is currently headed by Commo. Teddy Pan and its budget officer is a certain Lt. Col. Padigdig.

A report said from January up to March 15,  a period of  less than three months, the J-4 reportedly recorded a total distribution and consumption of gas for the whole Armed Forces in the amount of more than P400 million, which is in excess of the allowed amount of less than P150 million.

The fuel consumption covered the last three months of former chief of staff Ricardo David, who served his term from July last year up to March 7, prompting some observers to theorize that a conversion could have been committed for his pabaon.

Days before his retirement, David consistently told military reporters that he will not repeat the allegations against his predecessors and will only receive what is legally due to him—his retirement money.

David was appointed immigration commissioner by President Aquino one week after he retired from the military service.

Some, however, believe that David did not know that the conversion took place during his watch, considering that it took place amid the searing heat of Congress investigation into the corruption in the military and with the repeated pronouncements of defense and military officials against anomalous acts and practices.

Aside from the questionable volume of oil deliveries, Oban wanted the provost marshal general and the inspector general to look into the possibility of collusion between J-4 and Petron officials on the deliveries.

The investigation will involve looking into the possibility that the petroleum products have been converted into cash by the J-4, and this could be ascertained, partly by looking into the deliveries for specific units, tag cards and other documents.

Even with the unusually high volume of deliveries, the military reported that it encountered tight oil supply during the month of January.

When he was appointed as chief of staff last month, Oban immediately looked into the military’s logistics and procurement systems as reform is his leadership’s cornerstone.

He wanted the reforms, not only at the logistics and procurement offices but even with the whole Armed Forces, to be immediately felt by foot soldiers.

“When I assumed office, I said that the first order of the day is no to corruption, no to conversion. These should be stopped. From hereon, we will aggressively pursue reforms. We will give more teeth and muscle to our institutional mechanisms, particularly the internal audit, provost marshal, and inspector general to really check on all the units and on reforms that we wanted to instituted,” he told reporters in one of his interviews.