Justice department wants probe on alleged PCSO anomalies

ABS-CBN News

Posted at Jul 27 2019 04:07 PM | Updated as of Jul 28 2019 02:55 PM

MANILA -- (2nd UPDATE) Justice Secretary Menardo Guevarra on Sunday directed the National Bureau of Investigation (NBI) to look into alleged corruption at the Philippine Charity Sweepstakes Office (PCSO). 

This, following President Rodrigo Duterte's order to suspend operations of all PCSO gaming outlets across the country over alleged "massive corruption." 

Guevarra described the probe as "an opportunity where the PCSO and its licensees may come forward and show that there's no such corruption or fraud involved in their operations. "

On Friday night, Duterte ordered authorities to enforce his order to shut down all PCSO gambling operations such as the lotto, Peryahan ng Bayan, small town lottery (STL), and Keno.

The President gave authorities 24 hours starting Saturday to complete the job. 

"I have today ordered the closure, the stoppage of all gaming schemes sa... whatever nature, however done, that got the franchises to do from the PCSO. The ground is massive corruption involving all, pati the courts who repeatedly issued injunctions to paralyze government and to allow corruption to thrive," he said. 

The PCSO said it would comply but added it would appeal the President's order, citing its mandate and beneficiaries. The PCSO provides medical and calamity aid using proceeds from its gaming operations. 

The Justice chief earlier said he was "surprised" at the President's order, saying the suspension might be "temporary." 

However, Guevarra on Sunday clarified that the President has the authority to suspend, even terminate, PCSO-licensed gaming schemes.

He explained that the President can do such "upon prima facie proof that licensees are not faithfully complying with their legal obligation to remit the correct amount of the government's share in revenues, or that their operations are tainted by fraud, deceit, or corruption."

"It should be emphasized that a gaming license is not a contractual right but a mere privilege that may be revoked at any time by the state," Guevarra said.

Duterte's directive prompted authorities to shut down PCSO gambling operations around the country. 

Guevarra also clarified that the suspension of PCSO operations does not suspend the state gaming regulator's charter.

"The PCSO has other sources of revenue apart from its gaming operations and it will continue to perform its mandate, albeit with limited resources," he said.

In its 2018 audit report on the agency released just this month, the Commission on Audit noted a P4.607-billion deficit from PCSO profits from STL operations from 2017 to 2018. 

The report also said the PCSO should remit to government P8.426 billion in profits, a figure representing half of its P16.852 billion net earnings from 1994 to 2016.

The PCSO management, however, pointed out that it does not have annual net earnings but savings, which are deducted from its operating expenses and then allocated in the PCSO charity fund.

-- with a report from Mike Navallo, ABS-CBN News