Thursday, November 25, 2010

CODE-NGO: No law broken in PEACe Bonds deal

The Caucus of Development NGO Networks (CODE-NGO) today told members of the House of Representatives that rules were not bent to favor CODE-NGO in the sale of the Poverty Eradication and Alleviation Certificate (PEACe) Bonds.

CODE-NGO executive Sixto Donato Macasaet said in the House of Representatives Committee on Good Government and Public Accountability inquiry on the PEACe Bonds that the controversial transaction “followed all legally mandated and required government procedures.”

Macasaet added that the Arroyo government did not favor CODE-NGO, and even rejected their proposal for a negotiated sale of the bonds – even as negotiated bond sales are legal and have clear and generally accepted rules. The zero-coupon bonds were instead auctioned by The Bureau of Treasury to Government Securities Eligible Dealers (GSED). CODE-NGO and its agent RCBC Capital had to outbid 14 prominent banks to purchase the PEACe Bonds.

The sale of the bonds to CODE-NGO and RCBC raised P10.17 billion for the Arroyo government in 2001. The bonds were then resold by RCBC, for CODE-NGO, to private investors, thus generating the P1.4 billion trading gain that has been used as an endowment fund for poverty alleviation programs.

CODE- NGO also belied allegations that Social Welfare Secretary Corazon (Dinky) Juliano Soliman was involved in the Peace Bonds transaction. Soliman resigned as chair of CODE-NGO in January 2001 when former President Gloria Arroyo appointed her as DSWD secretary, and was hence no longer connected to CODE-NGO when the bonds were issued in October 2001.

Macasaet clarified that Atty. Hector Soliman, spouse of Sec. Dinky Soliman, also had no participation in the PEACe Bonds transaction. He only assisted the founding of the Peace Equity Access for Community Empowerment Foundation (PEF), which managed the endowment funds donated to it by CODE-NGO for poverty alleviation projects. PEF was registered with the SEC on Nov. 27, 2001.

PEF Board Members sought Atty. Soliman’s help in its founding year as “he is known as a lawyer working for the poor, and with NGOs.” Atty. Hector Soliman resigned as PEF corporate secretary on March 1, 2002.

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