Ex-Cagayan governor acquitted of graft cases over mall construction

MANILA – Former Cagayan governor Edward Lara has been acquitted by the Sandiganbayan 6th Division of two graft cases stemming from his alleged use of the provincial government to float bonds for the construction of a mall in 2001.

In a decision promulgated last February 19, the court said the prosecution failed to prove beyond reasonable doubt that Lara violated Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act.

The court said that there was no basis for the claim of the prosecution that the provincial government of Cagayan suffered injury for paying P6.15 million financial advisory fees to Preferred Ventures Incorporated (PVI).

Likewise, the court said that the P213.795 million payment made to Asset Builders Corporation (ABC) for the construction of the Cagayan Town Center, now known as Paseo Reale Mall, was not in violation of the anti-graft law.

"Clearly, all payments made to ABC were in order. There were no unwarranted benefits or advantage extended to it," the court said in the decision penned by Associate Justice Karl Miranda, with the concurrence of Division Chairperson Sarah Jane Fernandez and Associate Justice Kevin Narce Vivero.

In the complaint filed by the Office of the Ombudsman, it said that there was no competitive public bidding for the project.

However, Lara argued that prevailing procurement laws at the time of engagement of PVI did not require public bidding prior to the engagement of a financial consultant. 

The court also noted that the Sangguniang Panlalawigan passed resolutions and ordinances in relation to the bond flotation of the province. 

The court emphasized that the Local Government Code gave local government units the authority to issue bonds to support priority projects and local development.

"The power of the LGUs to issue bonds to finance its projects, if done in accordance with the law, should not be hindered. While the court will not tolerate corruption, neither will it stifle an LGU’s aspirations for development if carried out properly," the court said.

The court said in the decision that no civil liability may be adjudged, and that the bonds posted by Lara be released and the hold departure order be lifted and set aside.

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