January 23rd, 12:30am January 22nd, 8:56pm TEBArticles

Inscribed on top of the cover of the dubious Joint Venture Agreement (JVA) between APO Production Unit Inc. (APO) and the United Graphic Expression Corp. (UGEC) for the production of machine-readable electronic passports is the chemical symbol for gold, “Au.”

Also, a straight line was inscribed in the middle of the deal the phrase “as good as gold.”

Under the JVA, UGEC owns 90 percent of the shares and APO only 10 percent, thus the same ratio for profit sharing.

“Without a company in existence for the JVA, there is also nothing for CoA to audit.

President Rody Duterte’s first Foreign Affairs Secretary Perfecto Yasay said the message imparted was that the deal was considered the “most precious asset” to the parties involved.

The contents of the golden deal were known only to former President Noynoy Aquino and his Presidential Communications Operations Office Secretary Sonny Coloma, plus some other favored individuals in the immediate yellow circle.

Yasay said the document was kept top secret and sacrosanct by both firms, “which is conclusive proof that the production and personalized printing of the passports awarded by DFA exclusively to APO was assigned to UGEC, led by businessman Iñigo Zobel, in violation of the law.”

The JVA is not a registered legal entity that has a personality separate and distinct from APO and UGEC as corporations.

Yasay said the JVA or UGEC cannot be held accountable for any breach of the contract awarded by the Department of Foreign Affairs (DFA) to APO. It is clearly the deceptive and unlawful means by which the prohibition not to subcontract in whole or in part the contract awarded to APO was circumvented.

He said the DFA was not even furnished a copy of the JVA and he only managed to acquire a copy of the deal later on when he was already out of the government.

“This is the mother of all irregularities resulting in the passport mess and therefore must be dealt as such,” he said.

For Yasay, however, it would be too late to cancel the deal since it will cause serious disruption in the production of passports.

Instead, he said UGEC should be made accountable through an amendment of the deal to protect the interest of the government.

Such an amendment would allow the Commission on Audit (CoA) to look into financial records of UGEC.

Yasay noted that since 5 October 2015 when the memorandum of agreement (MoA) between the DFA and APO for the passport production deal was signed, the JVA has not even registered as a corporation with the Securities and Exchange Commission.

“Without a company in existence for the JVA, there is also nothing for CoA to audit,” he said.

The DFA, then under Secretary Albert del Rosario, awarded the passport printing contract to APO despite the passports having been long produced at the security printing plant of the Bangko Sentral ng Pilipinas (BSP) in Quezon City which is technically equipped to print bank notes and documents that need security features.

The DFA awarded, through the MoA, the printing of electronic passports to APO despite a subsisting agreement between the BSP and Francois-Charles Oberthur Fiduciare of France.

APO did not have such facility and outsourced the printing to UGEC without the benefit of a public bidding.

As of now, the DFA cannot even hold UGEC accountable despite having direct control of the plant facilities in the Lima Technology Center in Batangas which produces the passports since it was not a party to the memorandum of agreement between the DFA and APO for the 10-year project.

Yasay, prior to stepping down from the DFA, said he attempted to return the printing contract to the BSP, but he was overpowered by members of Congress “who are also members of the Commission on Appointments.”

Subsequently, Yasay’s nomination as Foreign Affairs secretary was rejected by the powerful CA.

“The DFA awarded the production of a new e-Passport system to APO without bidding on condition that no part of the contract can be subcontracted or assigned to a private printer,” Yasay said.

Since the deal was only known to Noynoy and Coloma and the inner yellow circle, any investigation of the JVA logically should start from them.