Not only is Public Estates Authority Tollway Corporation (PEATC) officer-in-charge Dioscoro Esteban facing multiple charges before the Ombudsman over the battle for control of the Manila-Cavite Expressway (Cavitex), but he is also in hot water for hiring a private lawyer.

The Office of the Government Corporate Counsel (OGCC) indicated its disapproval of Esteban’s move for several reasons, including a breach of the rules governing government-owned and controlled corporations (GOCCs) and the waste of public funds.

Former government corporate counsel Rogelio Quevedo, now a PCGG commissioner since 29 February this year, wrote to Esteban directing him to coordinate with Assistant Government Corporate Counsel Ma. Dolores Rigonan regarding the re-assumption by the OGCC of the PEATC’s legal affairs and cases.

The OGCC was perplexed to receive PEATC’s 29 January 2024 termination letter that didn't give any legal justifications, Quevedo said, referring to Esteban’s notice terminating the services of state lawyers in favor of a private law firm.

“In the best interest of the government, PEATC shall also ensure the provision of the information and documents necessary for the OGCC to comprehensively and faithfully handle its cases and other legal concerns,” Quevedo said.

Under the law, the OGCC is the principal and statutory law office of GOCCs and their subsidiaries, government financial institutions, corporate offspring, instrumentalities with corporate powers, and acquired asset corporations.

Quevedo cited Republic Act 6000, Executive Order 292 and EO 596 as the basis for the representation by the OGCC of state-run companies.

He also cited a Supreme Court ruling that explicitly designated the OGCC as the principal law office of GOCCs and their subsidiaries.

The SC ruling restated OGCC’s control and supervision over all legal departments and divisions and empowered it to promulgate rules and regulations to effectively implement the objectives of the office.

Quevedo explained that the legal mandate of the OGCC, as stated under EO 292, was created by the President’s transitory legislative powers under the aegis of the Constitution.

Public money must not be used

He said public funds shall not be utilized to pay for private legal counsel or law firms to represent government agencies in court or to render legal services.

If legal services cannot be avoided or are justified under extraordinary or exceptional circumstances, the written conformity and acquiescence of the OGCC, and the written concurrence of the Commission on Audit, shall first be secured before the hiring of a private lawyer or law firm, he said.

None of those steps were taken by Esteban in petitioning for a writ of mandamus with the Court of Appeals.

“The purpose of requiring the written conformity of the OGCC before the engagement of private lawyers or legal consultants is to confirm the necessity of such by the government agency or GOCC concerned,” Quevedo pointed out.

He said the purpose for requiring the CoA’s written concurrence is to ensure the reasonableness of the legal fees.

Consequently, Quevedo said the use of public funds for retainer fees of private law practitioners hired without the prior written conformity and acquiescence of the OGCC, as well as the written concurrence of the CoA, shall be disallowed in audit and shall be a personal liability of the officials concerned.

Special nature

The relationship between GOCCs like the PEATC as the client and the OGCC as counsel “cannot be treated as an ordinary attorney-client relationship that is mainly fiduciary in nature that could simply be terminated upon the mutual agreement of the parties.”

Rather, the legal relationship is one created by the law that “imposed upon the OGCC the duty and responsibility to represent the GOCCs in all proceedings before any courts, quasi-judicial and administrative bodies to uphold the best interest of the government.”

Quevedo said the special legal relationship between OGCC and PEATC cannot be summarily terminated “at the sole will of PEATC.”

A mere letter of termination, without the concurrence and authority of the Office of the President in the exercise of its administrative powers, is not sufficient, the OGCC head said.