NEA’s Conceptual Hook

The conceptual “hook” that NEA used to inveigle public opinion so that many residents of Baguio and Benguet simply acquiesced to the virtual abolition of the regular BENECO Board was “massive corruption.”

Of course, any talk about fighting corruption will always get strong public support. Unfortunately, corruption is something very easy to allege but very hard to prove.

For example, if you have read all the Decisions or Resolutions that arose out of the many audit reports of NEA in the last two years, you’ll be surprised that there is no mention about anomalous car plans. But that is one of the favorite “marites” topics in coffee circles among misinformed member consumers.

When I explained the full story behind that car plan in a recent post (https://m.facebook.com/story.php?story_fbid=699766955227747&id=100055833461513&mibextid=Nif5oz) it was the first time for many member consumers to realize that all the “corruption” talk against the Magnificent Seven directors Esteban Somngi, Jeffred Acop, Mike Wayway Maspil, Peter Busaing, Jonathan Obar, Josephine Tuling and Robert Valentin were all nothing but a red herring.

Then there’s all that speculation about alleged lavish per diems, perks and privileges supposedly being enjoyed by these regular BENECO directors. Again, I explained that in another post (https://m.facebook.com/story.php?story_fbid=700032891867820&id=100055833461513&mibextid=Nif5oz) that was another eye-opener for many people.

If all you’ve been reading are those cowardly-written blind items in some local newspapers (ex. That provocative but totally irresponsible “True or False” editorial section feature of Baguio Midland Courier) it’s easy to jump on the bandwagon of the blood-thirsty lynchmob looking for any excuse to engorge themselves with this buffet of unresearched story leads.

Baguio Chronicle doesn’t do any better with their selective angle treatment of the BENECO story, devoting practically unlimited column-inches on NEA pronouncements and yet interviewing none of the Magnificent Seven. NOT EVEN ONE. Factchecking advocates? Give me a break.

Happily, the Annual General Membership Assembly (AGMA) is coming up next month—unless postponed or cancelled by NEA for any reason.

During that meeting, the Members can cut through all this daunting layers of communicational redtape and seek DIRECT ANSWERS from the assembly secretariat in open floor debates.

It is to be expected that open debate will not be allowed, but this is something the Members must insist on. By its very name, the ANNUAL assembly is held but once a year, so sweeping these important concerns under the rug will bury these issues for good. There will be no more occasions to revisit them.

What are these concerns?

Number one: was “corruption” eliminated after the termination of the Magnificent Seven?

If the gravamen of the offense(s) for which the M7 were removed is that their time in office was marked by profligate waste of BENECO funds and resources, then it should be SO EASY to do the math.

According to NEA, the regular board should have been holding only TWO board meetings a month, getting paid only P10,000 per meeting per director. That means it would have cost BENECO no more than P560,000 to keep the M7 at work since January 2023 until the end of April.

Over the SAME PERIOD (just the last four months), how much has it cost the BENECO Members to underwrite the total expenses of all the trips by the NEA contingent of the project supervisor, auditors, support staff (and their families and guests who might have tagged along) including hotel accommodations, transportation or gasoline, “special” contingency allowances, representation, golfing green fees and other informal perks—all of which were charged to BENECO?

There is an important legal point of distinction here. Whereas ALL the expenditures incurred by the regular board are provided for in the annual Cash Operating Budget (COB) of BENECO which NEA had approved—a fact that NEA does not deny—the spendings of BENECO just to kowtow with all the whims of NEA in the last four months are all spontaneous and unplanned.

The operative consideration for any item of expense to be included in the COB is it must be a regular, recurring and liquidatable anticipated expense.

That’s why you can be 100% sure that all the expenses so far shouldered by BENECO during this “Step-in Rights” era are NOT included in the COB—precisely because these expenses were NOT anticipated. Providing a cushy salary for positions NOT included in the Table of Organization (or “plantilla”) of the cooperative, for one, would be an anomalous act of payroll-padding. Worse, if money was actually disbursed to pay an expense that has no legal basis, it is textbook TECHNICAL MALVERSATION.

As I’ve pointed out already, whether the Magnificent Seven are “corrupt” people or not is speculative, presumptive and a matter of evidence–still sorely lacking to this day. On the other hand, what NEA is doing in broad daylight calls for little or no imagination. You can see what you are actually seeing.

So if spending OUTSIDE of the provisions in the COB is somehow permissible when it involves NEA, why can spending IN ACCORDANCE WITH THE COB be ground for administrative liability when it involves the Magnificent Seven?

What is good for the goose must be sauce for the gander. Unless, of course, martial law was declared sometime right after New Year and we didn’t get the memo.

Number two: When did NEA acquire the power to annul—if not by edict then by non-cognition—the determination, recognizance (and even certification) of another administrative agency of COORDINATE jurisdiction?

I will not insist here that the Cooperative Development Authority (CDA) has already pronounced BENECO a “new being” having morphed in some manner into a “true cooperative” because even I don’t believe that myself.

But it remains ON RECORD that BENECO, as far as CDA is concerned, is now a STOCK COOPERATIVE.

But NO, says NEA. There has been no organizational change because if there was, NEA could not possibly even touch that “new organization” with a ten-foot pole. As it is, NEA has such complete, total and absolute control over BENECO today–including its emasculated ‘activist’ MCO’s–that everytime NEA says “Jump!” the only response BENECO can faintly say is “how high?”

Note that NEA and CDA are both administrative bodies—just like the LTO, LTFRB, HLURB, NLRC, PRC, LRA and hundreds of other specialty bodies who have both quasi-legislative (rulemaking) powers and quasi-judicial (hearing and adjudication) powers.

In the exercise of the latter, both NEA and CDA act like pseudo-courts with the equivalent rank of a Regional Trial Court (RTC). That’s why you can only question the decisions of NEA and CDA before the Court of Appeals (CA) and no lower.

In the judiciary, this is a sacrosanct rule. You will NEVER find any RTC branch willing to review the decision of ANOTHER RTC branch. The Rules and countless Supreme Court decisions don’t allow it—because all RTC’s are CO-EQUAL and exercise COORDINATE levels of jurisdiction, no one is superior enough to counter check another—and all RTC judges are notoriously jealous about protecting this turf.

It should be the same for administrative tribunals. Yet, NEA ran roughshod all over CDA on this matter of BENECO’s “conversion” but the latter can’t seem to find those two roundish objects, usually located somewhere in the groin area, to raise even a whimper.

The BENECO Members are entitled to know straight from the “horse’s mouth,” so to speak: is BENECO now a stock cooperative under the CDA, or still the statutory cooperative under PD 269 and still but only SUPERVISED (not controlled) by NEA?

Number three: One of the compulsory elements of the agenda in an AGMA is the rendition of the Treasurer’s Report, or the presentation of the Financial Statement.

At long last, the Members can finally get the definitive word on how much exactly does BENECO owe its supply contractor Team Energy. We only know roughly that the monthly bill hovers around a third of P240M—if we base it on their own claim that BENECO ran up that bill when it didn’t pay on time from March till May in 2021 .

Applying the law’s criteria for an “ailing cooperative” then that indebtedness will not be less than P240M—equivalent to the lower threshold of a 90-day “arrears” but it can be more, because the law considers an EC “ailing” for having ANY arrears in excess of 90 days.

I heard figures as high as P2.7 BILLION—and that, to me, is worrisome. Why? Because that figure is only P1.3 BILLION short of BENECO’s total assets. To reach P2.7 BILLION, BENECO should have not been paying for 34 months, or THREE YEARS!

That is impossible.

Not only that, but at the present interest rate of about 3.7% p.a. that P2.7 BILLION would be ballooning at almost P8.3M a month. Anytime you have an overhead that is almost 10 percent of your aggregate monthly billing, you are in trouble. The only way to bail BENECO out of a hole that deep is to PASS ON the cost of the bailout needed to the end consumers.

Of course, there’s another and SIMPLER way: just “default” on those arrears, offering no resistance to its conversion into equity, creating another pathway to “privatization.”

Remember, the second modality for “privatizing” BENECO is by a management investment contract (MIC). Once collectibles are converted into controlling equity investment, all that remains to be done is just to turn over the management of BENECO to the investor. There won’t even be an auction. On paper it works.

Again, if this makes it through a carefully controlled AGMA, it would not require any further consultation. Payment of a debt by “dacion” (in kind having equivalent value) is a valid option of settling a monetary obligation—with the consent of the debtor, or through one acting as its sole authorized AGENT.

There goes Section 21-C again.

(NEXT: Who can ask these questions at the AGMA and how?)*