The Supreme Court affirmed the Sandiganbayan’s conviction of Dr. Roger R. Posadas and Dr. Rolando P. Dayco for violating Section 3(e) of the Anti-Graft and Corrupt Practices Act and Section 7(b) of the Code of Conduct and Ethical Standards for Public Officials and Employees. The ruling underscores the importance of public officials avoiding conflicts of interest and upholding ethical standards in government service. It serves as a reminder that public office is a public trust and that those who violate that trust will be held accountable.

University Officials Entangled: When Does Public Service Become Self-Service?

In the case of Dr. Roger R. Posadas and Dr. Rolando P. Dayco vs. Sandiganbayan and People of the Philippines, the Supreme Court addressed critical questions about ethical conduct, abuse of authority, and conflict of interest within the University of the Philippines (UP) Diliman. At the heart of the controversy was Dr. Posadas’s appointment as Project Director and Consultant of the Technology Management Center (TMC) Project while serving as UP Diliman Chancellor. Dr. Dayco, as Officer-In-Charge (OIC) during Dr. Posadas’s absence, facilitated these appointments, leading to charges of violating the Anti-Graft and Corrupt Practices Act and the Code of Conduct and Ethical Standards for Public Officials and Employees. The central legal question revolved around whether these appointments constituted an abuse of power and a violation of ethical standards, warranting criminal liability.

The case originated from the establishment of the TMC at UP Diliman, aimed at developing graduate courses in technology management. Dr. Posadas, a key figure in technology management, initially declined the position of TMC Director. However, during his term as Chancellor, he sought funding for the TMC Project from the Canadian International Development Agency (CIDA). A Memorandum of Agreement (MOA) was then executed between Dr. Posadas, representing UP-Diliman, and the Philippine Institute for Development Studies (PIDS), with CIDA providing the funding. This agreement set the stage for the events that would later lead to legal scrutiny.

While Dr. Posadas was on official travel to China, Dr. Dayco, as OIC, appointed Dr. Posadas as the Project Director and Consultant for the TMC Project, with compensation for both roles. This action raised concerns about conflict of interest and the propriety of receiving dual compensation. The Commission on Audit (COA) initially raised questions about the legality of these fees, leading to a suspension of payments. Although the UP Chief Legal Officer provided justifications, an administrative complaint was filed, ultimately leading to the Ombudsman recommending charges against both Dr. Posadas and Dr. Dayco.

The Sandiganbayan found both petitioners guilty, stating they acted with evident bad faith, knowing the limitations of Dr. Dayco’s power as OIC. The court emphasized that their actions caused undue injury to the government, as Dr. Posadas received salaries and consultancy fees. The Sandiganbayan rejected the argument that the funding source being from CIDA absolved them, asserting that once UP received the funds, they became impressed with public attributes and were subject to auditing rules.

The Supreme Court, in affirming the Sandiganbayan’s decision, meticulously dissected the legal issues. A critical point of contention was whether the motion for reconsideration filed by the petitioners was correctly denied for not being set for hearing. The Court cited the 2002 Revised Internal Rules of the Sandiganbayan, which mandates that motions for reconsideration be scheduled for hearings, thus validating the Sandiganbayan’s decision to deny the motion.

The Court further analyzed the elements of Section 3(e) of R.A. No. 3019, which include the accused being a public officer, acting with manifest partiality, evident bad faith, or inexcusable negligence, and causing undue injury to the government. The Supreme Court agreed with the Sandiganbayan that the actions of Dr. Posadas and Dr. Dayco demonstrated evident bad faith, leading to undue injury to the government. The Court emphasized that bad faith implies a dishonest purpose or some moral obliquity and conscious doing of a wrong, which was evident in the coordinated actions of the petitioners.

Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud.

Regarding the authority of an Officer-In-Charge (OIC), the Supreme Court cited Section 204 of the Government Accounting and Auditing Manual, which delineates the limited powers of an OIC, stating that an OIC’s powers are confined to administrative functions and ensuring the continuation of usual activities, but do not extend to the power to appoint employees. The Court found that Dr. Dayco, as OIC, exceeded his authority by appointing Dr. Posadas as TMC Project Director, thereby violating established rules and regulations. Moreover, the appointment was made retroactive, further violating civil service rules against retroactivity of appointments.

The Court also addressed the issue of dual compensation, highlighting the prohibition against government officials holding multiple positions unless allowed by law. Section 7, Article IX-B of the 1987 Constitution explicitly states that no appointive official shall hold any other office or employment in the Government, reinforcing the principle against dual roles. The appointment of Dr. Posadas, therefore, fell within this prohibition, as he was simultaneously serving as Chancellor and TMC Project Director without any legal justification.

Unless otherwise allowed by law or by the primary functions of his position, no appointive official shall hold any other office or employment in the Government, or any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries.

The argument that the TMC Project was funded by foreign sources did not absolve the petitioners, as the Court clarified that once the funds were received by UP, they became trust funds subject to government auditing rules. The Court stated these funds were in the nature of “trust fund” as defined by Presidential Decree No. 1445 as “fund that officially comes in the possession of an agency of the government or of a public officer as trustee, agent or administrator, or that is received for the fulfillment of some obligation.” The disbursement of funds to Dr. Posadas, therefore, constituted an actual injury to the government, satisfying the elements of Section 3(e) of R.A. No. 3019.

With respect to Section 7(b) of R.A. No. 6713, the Code of Conduct and Ethical Standards for Public Officials and Employees, the charge involved the private practice of profession, with Dr. Posadas being appointed as Consultant of the TMC Project. The Court referenced Article 250 of the University Code, which requires permission from the University President or Chancellor before practicing any profession that may be affected by the functions of their office. Since Dr. Posadas and Dr. Dayco entered into the consultancy contract without prior permission from the University President, they violated Section 7(b) of R.A. No. 6713.

The Supreme Court thus concluded that the Sandiganbayan did not commit grave abuse of discretion in convicting the petitioners for violating Section 7(b) of R.A. No. 6713. The Court highlighted that the contract for consultancy services should have been authorized by the University President, given that the Chancellor himself was being engaged. The Court also affirmed the finding of conspiracy, emphasizing that the actions of Dr. Dayco and Dr. Posadas indicated a concerted effort to facilitate the improper appointments.

FAQs

What was the key issue in this case?	The key issue was whether Dr. Posadas and Dr. Dayco violated the Anti-Graft and Corrupt Practices Act and the Code of Conduct and Ethical Standards for Public Officials and Employees through improper appointments and dual compensation.
Who were the parties involved?	The parties involved were Dr. Roger R. Posadas and Dr. Rolando P. Dayco as petitioners, and the Sandiganbayan and the People of the Philippines as respondents. Dr. Posadas was the Chancellor of UP Diliman, and Dr. Dayco was the Vice-Chancellor and OIC during the relevant period.
What laws were allegedly violated?	The laws allegedly violated were Section 3(e) of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act, and Section 7(b) of Republic Act No. 6713, the Code of Conduct and Ethical Standards for Public Officials and Employees.
What was the role of the Technology Management Center (TMC) Project?	The TMC Project was aimed at developing graduate courses in technology management at UP Diliman, funded by the Canadian International Development Agency (CIDA). It became the center of the controversy due to the allegedly improper appointments and compensation.
Why was Dr. Dayco’s role as Officer-In-Charge (OIC) significant?	Dr. Dayco’s role as OIC was significant because he was the one who appointed Dr. Posadas as Project Director and Consultant of the TMC Project while Dr. Posadas was out of the country. This raised questions about the extent of an OIC’s authority.
What was the Commission on Audit’s (COA) involvement?	The COA initially raised concerns about the legality of the payments to Dr. Posadas, leading to a suspension of payments. Although the suspension was later lifted, the issue remained a point of contention in the case.
What did the Supreme Court decide?	The Supreme Court affirmed the Sandiganbayan’s decision, finding Dr. Posadas and Dr. Dayco guilty of violating Section 3(e) of R.A. No. 3019 and Section 7(b) of R.A. No. 6713.
What were the penalties imposed?	The penalties imposed included imprisonment, perpetual disqualification from public office, and an order to indemnify the government.

The Supreme Court’s decision in this case serves as a stern warning against conflicts of interest and ethical lapses in public service. By upholding the Sandiganbayan’s conviction, the Court reaffirmed the importance of accountability and adherence to ethical standards among public officials. The ruling underscores that public office is a public trust, and any breach of that trust will be met with legal consequences.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: DR. ROGER R. POSADAS AND DR. ROLANDO P. DAYCO v. SANDIGANBAYAN, G.R. Nos. 168951 & 169000, July 17, 2013