The most accurate legal response on the government contracts of Solicitor General Jose Calida’s security agency was the first, by new Justice Secretary Menardo Guevarra. He opined that these are legal, assuming public bidding rules were followed.
Guevarra’s predecessor entered into two of the contracts. The solicitor general is autonomous, but attached solely for budget purposes to the Department of Justice.
This is a learning moment on framing conflict of interest laws. Different rules apply to different officials, such as legislators, judges and the Cabinet.
The key is to identify which applies.
There are two policy goals that compete: Broadening conflict prohibitions beyond what is in the law imposes financial burdens on, and could deter, those who wish to serve in government.
In Calida’s case, the tricky nuance is that the solicitor general has Cabinet rank, but is not legally a member of — and not subject to the strict prohibitions on — the Cabinet.
Calida confirmed the facts to Pinky Webb on CNN Philippines’ “The Source” last May 31.
Vigilant Investigative and Security Agency Inc. (Visai) was formed in 2001. Calida, his wife and children own it. It won government contracts even before Calida took office in 2016. Calida stated he resigned as its chair and president before assuming office, and disclosed his ownership.
Visai now has government contracts worth P261 million. Calida could not recall if this total substantially increased in 2016, but reminded that an agency’s profit is far lower than the gross contract amount, after paying for guards’ salaries, guns and equipment.
President Duterte weighed in: “Bakit, wala na ba tayong katuwirang magnegosyo? (Why, don’t we have rights to have businesses?)” He said Calida was “good” and there was no problem “as long as you do not participate.”
The logical legal starting point is the Constitution’s Article VII, Section 13, prohibiting “the Members of the Cabinet” from being “financially interested in any contract with” any government body.
The tricky part begins with Executive Order No. 473 (1976): “The Solicitor General shall be a member of the Cabinet.” The 1992 Supreme Court decision Gonzales vs Chavez explained: “President Ferdinand E. Marcos leaned heavily on his Solicitor General” and gave him “tremendously enhanced power.”
But this changed after Marcos.
The 2013 Funa vs Agra decision, quoting the 1991 Elma decision, reiterated: “Public officials given the rank equivalent to a Secretary, Undersecretary, or Assistant Secretary are not covered by the prohibition [in Art. VII, Sec. 13], nor is the Solicitor General affected thereby.” Republic Act No. 9417, today, gives the solicitor general Cabinet rank, but does not make him part of the Cabinet.
Thus, Art. VII, Sec. 13 does not apply.
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