During the Senate recess, an orchestrated media attack was launched against the Senate, in connection with Committee Report No. 30. The report makes the unprecedented recommendation that the Ombudsman and the Department of Justice should prosecute former President Fidel Ramos and five of his cabinet members for technical malversation of public funds, involving some P7 billion.The historic report was filed by no less than six Senate committees, led by the Blue Ribbon committee. But in the best tradition of psychological warfare, certain sectors of the media tried to discredit the senators involved, while pretending to discuss legal and policy issues raised by the report.
It is an indication of the poverty in legal argumentation of the Ramos partisans -- in media and elsewhere -- that they find it necessary to attack the Senate as an institution, and the senators in their individual capacities, without contributing to an intelligent elucidation of the issue. The issue is not the accomplishment of the Senate for this session, or the individual failings of the senators. To attempt to drag down the debate to the level of digging for dirt is mere muckraking, and a pathetic attempt to dodge the issue. For the issue is not political; the issue is plainly and evidently legal.
Under our constitutional system, the power to appropriate public funds belongs to Congress, and to Congress alone. The command of the Constitution is categorical: “No money shall be paid out of the Treasury, except in pursuance of an appropriation made by law.” (Article VI Sec. 29 para. [1]).
The only participation allowed to the President is, that he shall submit the proposed budget to the Congress, as a basis for the general appropriations act. Thus, the Constitution provides: “The President shall submit to the Congress without thirty days from the opening of every regular session, as the basis of the general appropriations bill, a budget of expenditures and sources of financing, including receipts from existing and proposed revenue measures.” (Art. VII Sec. 22, emphasis added.)
Because the power of appropriation belongs to the Congress, and the President’s proposed budget is only a basis for congressional action, Congress enjoys the freedom to decide whether to adopt, amend, or even disregard the proposed budget. The only limitation is that Congress cannot increase the budget. Thus, the Constitution provides: “The Congress may not increase the appropriations recommended by the President for the operation of the Government as specified in the budget. The form, content, and manner of preparation of the budget shall be prescribed by law.” (Article VI Sec. 25 para. [1], emphasis added.)
The moment that Congress approves the budget and the President signs it into law, the budget can no longer be amended. However, the Constitution allows what it calls a “transfer of appropriations,” or what media calls “fund juggling.” Thus, the Constitution provides: “No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law from their respective offices from savings in other items of their respective appropriations.” (Article VI Sec. 25 para. [5]).
This is the constitutional provision that is squarely at issue under Senate Committee Report No. 30. The question put before us is: Did a sitting president violate the Constitution by making an unauthorized transfer of appropriations, in the amount of P7 billion of public funds? Put in another way, was the transfer of appropriations legal or illegal? This is the only issue. All else is extraneous, irrelevant, and a disservice to the Filipino public.
Therefore, let us analyze Article VI Sec. 25 para (5), which I shall here refer to as Paragraph 5.
Committee Report No. 30, in recommending the criminal persecution of a former president, raises two legal issues, as follows:
1. What is the basis and extent of presidential immunity from suit?
2. To what extent can the President juggle funds, and for what purposes?BASIS AND EXTENT OF PRESIDENTIAL IMMUNITY
The Constitution does not provide for presidential immunity from suit. What the Constitution provides is congressional immunity, which has specific textual roots in the speech and debate clause, providing: “No Member shall be questioned nor be held liable in any other place for any speech or debate in the Congress or in any committee thereof.” (Article 6 Sec. 11) Thus, unlike congressional immunity, presidential immunity is not expressly prescribed by the Constitution.
Since there is no express basis in the Constitution, what is the basis for presidential immunity? This basis is found in decisions of the Supreme Court, which in our country have the force of law. And since the matrix of our legal culture is the United States, we have to go to American jurisprudence to understand why presidential immunity is necessary, despite the conspicuous silence of the Constitution.
In the case of Nixon v. Fitzgerald, 457 US 731 (1982), the US Supreme Court explained that absolute presidential immunity is “a functionally mandated incident of the President’s unique office, rooted in the constitutional tradition of separation of powers and supported by our history.” The Court raised the following arguments in favor of presidential immunity:
1. The visibility and influence of the Office of the President, which makes its occupant an easy and tempting target for lawsuits;
2. The importance of insulating presidential judgment and energy from the distractions and pressures that potential liability for damages would create; and
3. The availability of alternative checks on presidential action, such as media scrutiny, congressional oversight, and the threat of impeachment.
In the 1997 case of Clinton v. Jones, the US Supreme Court ruled that President Clinton, who is an incumbent, was liable to a suit for damages, based on actions taken before his term began.
It is significant for our purposes that President Clinton did not invoke absolute immunity; he merely invoked relative immunity, for the duration of his incumbency. Thus, President Clinton, himself a lawyer, implicitly admitted that his immunity ends, when his term of office ends.
And yet in our country, there are a few who seem to operate on the befuddled notion that presidential immunity extends to the entire lifetime of a former president! This, of course, is an absolutely silly proposition, without any basis in law or policy. In the words of Justice White of the US Supreme Court, writing in the Nixon case, this is a notion that “places the President above the law and is a reversion to the notion that the King can do no wrong.”
The Clinton ruling sets down prevailing American law on presidential immunity, as follows. The purpose of presidential immunity is to avoid rendering the President “unduly cautious in the discharge of his official duties.” When the act is official, the President is entitled to absolute immunity from liability for damages. When the act is unofficial, there is no immunity.
How is the line drawn between official and unofficial act? The US Supreme Court applied what it called “a functional approach.” An official’s absolute immunity extends only to acts in performance of particular functions of his office. For example, a judge’s absolute immunity does not extend to actions performed in a purely administrative capacity.
For his official acts, the President may be disciplined principally by impeachment, not by private lawsuits for damages. But for his purely private acts, he is subject to the laws.
Can an incumbent president be criminally prosecuted? Yes, says Prof. Laurence Tribe of Harvard University. In his book, American Constitutional Law, 2nd edition, he states: “In general, there is no executive immunity from criminal prosecution.”
If a sitting President can be criminally prosecuted, with even more reason, a person who is no longer sitting as President should face criminal prosecution on prima facie evidence of wrongdoing. The mindless argument that this rule would paralyze a sitting President into inaction is sophistic. This is the rule that applies to all public officials. None of them have been paralyzed into inaction. Why then should a President claim an exemption? If the fear is that the rule might be abused, then the remedy is to prevent abuse. But the mere possibility of some hypothetical abuse is not a valid argument against the rule itself.
In the Philippines, the law on presidential immunity is found in Supreme Court decisions. Thus, in the case of In re Bermudez, 145 SCRA 160 (1986), the court ruled: “Incumbent presidents are immune from suit or from being brought to court during the period of their incumbency and tenure.” (Emphasis added.)
This was followed by the case of Soliven v. Makasiar, 167 SCRA 393 (1988) which ruled:
The rationale for the grant to the President of the privilege of immunity from suit is to assure the exercise of Presidential duties and functions free from any hindrance or distraction, considering that being the Chief Executive of the government is a job that, aside from requiring all the officeholder’s time, also demands undivided attention.
However, also according to our Supreme Court, the doctrine of presidential immunity has at least two limitations:
1. The first limitation is, that immunity applies only to an incumbent president, as laid down in Bermudez;
2. The second limitation is, that immunity applies only to legal acts, as laid down in the case of United States v. Reyes, 219 SCRA 192 (1993). In that case, the Supreme Court held:The doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the officers and agents of the government is removed the moment they are sued in their individual capacity. This situation usually arises where the public official acts without authority or in excess of the powers vested in him. It is a well-settled principle of law that a public official may be liable in his personal private capacity for whatever damage he may have caused by his act done with malice and in bad faith, or beyond the scope of his authority or jurisdiction.
Therefore, under existing law consisting of Supreme Court decisions, Committee Report No. 30 is legally correct in recommending criminal prosecution of a former president, because:
1. The criminal suspect is no longer an incumbent president; and
2. He will be sued in his individual capacity, because he allegedly acted in excess of the powers vested in him as a public official.EXTENT AND PURPOSES OF FUND JUGGLING
The gravamen of Committee Report No. 30 is the constitutional prohibition against fund juggling, as follows:
No law shall be passed authorizing any transfer of appropriations; however, the President . . . (etc.) may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.
This provision is couched in the negative: “No law shall be passed . . . .” The negative form is a form of emphasis. What is emphasized is the prohibition; with the result that prohibition is the general rule, while fund juggling is merely an exception. Therefore, in case of doubt, the doubt must be resolved in favor of the prohibition, and against fund juggling.
The Constitution imposes certain requirements for fund juggling, or transfer of appropriations. The threshold requirement is that there should be a law passed by Congress. This requirement was emphasized by the Supreme Court in the case of Gonzales v. Macaraig, 191 SCRA 470 (1990), which held: “The power to augment from savings lies dormant until authorized by law.” Admittedly, there is such a law -- the Budget Reform Decree of 1977 ( as amended by RA No. 6670).
Under the Constitution, there are two key requirements: augmentation, and savings. What do these terms mean? They are defined in every annual budget.
The first requirement is augmentation, meaning that the transfer should serve to augment an item. The 1999 budget, Section 54 (b) defines “augmentation,” as follows:
“Augmentation” implies the existence in this Act of an item, project, activity, or purpose with an appropriation which, upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In no case, therefore, shall a non-existent item, project, activity, purpose, or object of expenditure be funded by augmentation from savings or by the use of appropriations authorized otherwise in this Act.
The law provides that before there can be augmentation, there should first be an item with an appropriation. The question therefore is: Did the 1997 budget contain an item for the National Centennial Celebrations with an appropriation of some P7 billion, or at least close to it? The answer is no. Therefore, the first requirement was not met.
Mr. Ramos has admitted that he issued a memorandum dated 27 February 1997, directing the executive departments to support the grandiose Centennial Project from their 1997 budgets. This Ramos memorandum is the smoking gun. It clearly violates the legal provision that: “In no case shall a non-existent item be funded by augmentation.” The Centennial Project does not appear as a funded item in the 1997 budget. Therefore, it is a non-existent item and as such, it cannot be augmented without violating the law.
If Mr. Ramos had wanted to spend P7 billion for a propaganda campaign for the centennial, the legal procedure was for him to include it in the 1997 budget, which he himself drew up and submitted to Congress. That would have been the transparent thing to do. But he opted to be surreptitious, and thus incurred criminal liability. This is the necessary consequence, bcause both penal law and administrative law abhor deviousness.
The second requirement is that the augmentation must come from savings. The 1999 budget, Section 54 (a) defines “savings” as follows:
“Savings” refer to portions or balances of any programmed appropriation in this Act free of any obligation or encumbrance still available after the completion of the work, activity, or purpose for which the appropriation is authorized, or arising from unpaid compensation and related acts pertaining to vacant positions and leaves of absence without pay.
There were no savings in the 1997 budget. The proof is that in fiscal year 1998, almost all agencies of government under the Ramos administration registered “amounts payable” ranging from tens to hundreds of millions of pesos. This means that the agencies incurred obligations which they failed to pay in 1998 for lack of funds. Therefore, in 1997-98 there were no savings, and the second requirement was likewise not met.
If there were no savings, where did the Ramos cabinet get the money for the centennial? Of course, from regular budget items, but without the official knowledge or authorization of Congress. Mr. Ramos engineered this sleight of hand by issuing Administrative Order No. 371 dated 17 December 1997. He directed all government agencies to “reduce total expenditures . . . by at least 25 percent of authorized regular appropriations.” Thus, he was able to generate so-called “mandatory reserves” for the Centennial Project. Obviously, since there were no savings, he resorted to a technical term: “mandatory reserves.”
A corollary requirement is that even if there are savings, the law provides that: “priority shall be given to the augmentation of the amounts set aside for compensation, bonus, retirement gratuity, terminal leave, old-age pension of veterans and other personnel benefits authorized by law.”
Assuming arguendo that the mandatory reserves could be considered as savings, it should first have been used for government personnel benefits, including GSIS employer contributions. How many agencies under the Ramos administration failed to pay mandatory bonuses and other emoluments to their employees, because the money was diverted to the Centennial Project?
What folly! For one thing, the record shows that the DECS failed to give in full the amelioration allowance of teachers, because the chief executive wanted the money used for propaganda. That was truly criminal.
In summary, Mr. Ramos being the admitted source, he is criminally liable for fund juggling, which was illegal for failure to meet the requirements of law, as follows:
1. Mr. Ramos augmented a non-existent item.
2. He augmented it, although there were no savings. Assuming that mandatory reserves could be considered as savings, then he was obliged by law to give priority to the augmentation of personnel benefits, not the non-personal services allegedly rendered by the Centennial Project.Under the Constitution, the President has no power to juggle funds, except only after complying with the strict requirements of law. It is instructive that in 1977 during martial law, a presidential decree sought to give the President power to approve fund transfers, without any requirements. The Supreme Court struck down that provision, in the case of Demetria v. Alba, 148 SCRA 208 (1987). The Demetria decision was written by then Justice, now Senate President, Marcelo Fernan.
In Demetria, the Court insisted that the law should follow the constitutional requirements that: there should be savings; and there should merely be augmentation. The Court said that “savings” and “augmentation” are standards set by law, and the President has a duty to comply with these standards. The Court also said that even if Congress passes a law giving to the President the power to transfer funds, the law cannot give the President the power of indiscriminate transfer.
The twofold requirements of augmentation and savings were reiterated by the Court in the case of Philconsa v. Enriquez, 235 SCRA 506 (1994). The Court held that before the Senate President and Speaker of the House can approve a realignment, they have to check the following requirements:
1. The funds to be realigned or transferred are actually savings in the items of expenditures from which the same are to be taken; and
2. The transfer or realignment is for the purpose of augmenting the items of expenditure to which said transfer or realignment is to be made.If Congress, which possesses the power of appropriation, is required to observe the constitutional standards of augmentation and savings, then there is no reason why the President should be allowed to ignore these standards. To argue otherwise is to argue that what Congress cannot do, the President can do -- an argument that has no legal basis.
In conclusion, it is worthwhile to paraphrase an opinion in the Gonzales case. The traditional power of Congress over the public purse is negated, if functions or offices it has not included in the General Appropriations Act are inserted through the grant of carte blanche authority to shift savings from one department or agency to another. It is infinitely the more evil, if the funds shifted around total the stupendous sum of P7 billion. The unauthorized and wanton spending of P7 billion, in the middle of the unspeakable poverty of a Third World country, can only be described as sick. In the words of American constitutional law, it served no compelling state interest.
What the Senate critics seek to sustain -- without realizing that they do so -- is no longer augmentation within the purview of the Constitution. It is already fund juggling, against the express command of the body in whom fiscal power is vested.
I humbly submit that Committee Report No. 30 -- for all that it is historic and unprecedented -- is legally correct. In fact, it is so meticulous that it is legally impeccable. If I may, I commend the committee chairpersons -- primarily Sen. Aquilino Pimentel, Jr. and Sen. Anna Dominique Coseteng -- for their due diligence and unusual courage in filing the report. I intend to vote in its favor, and I urge all our colleagues to do the same. A unanimous vote would serve to emphasize the institutional adherence of the Senate to the rule of law, and particularly to the Constitution and its Equal Protection Clause.
We are well cognizant that there are a few who might feel impelled by party discipline to vote against the report, even only to emphasize party loyalty. This is accepted behaviour, because no less than the Constitution itself provides for a party system. However, it bears emphasis that at this stage, we are not being asked to cast a vote on guilt or innocence. In fact, we have no such authority. That power belongs to other branches of government, whom the law mandates to discharge this function, only after full appreciation of the evidence. We are not tasked to appreciate that evidence.
What we are individually tasked to do is to pronounce firstly, that we place full trust and confidence in the work of no less than six Senate committees, headed by our preeminent and historically prestigious committee, the Committee on Accountability of Public Officers and Investigation. And we are tasked to pronounce, secondly, that procedures set out in the Constitution are paramount, command the utmost fidelity, and the worldview of our republican democracy admits of no exception in favor of any individual.
Accordingly, I move that this speech should be referred to the Ombudsman, the Secretary of Justice, and the chairperson of the presidential commission on the Centennial Project, for their consideration.
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The Isulong Team: Isulong SEOPh, Isulong Seoph by Benj, Pinoy Isulong by Seoph Martinez and Useless Isulong