Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. on Thursday confirmed that the agency is expanding its investigation to include senators, local officials, and contractors mentioned in ongoing legislative inquiries into the flood control scandal.
“All personalities identified in Senate hearings will be investigated. No one will be spared,” Lumagui emphasized.
The commissioner also said the BIR has requested from the Commission on Elections (Comelec) the Statements of Contributions and Expenditures (SOCE) of all elected officials, including Senator Francis Escudero, to verify compliance with tax laws.
“We’re checking if campaign donations and remaining funds were properly declared and taxed,” he said.
Lumagui added that more than 200 individuals and companies — including those linked to contractors Pacifico “Curlee” and Sarah Discaya and their joint venture partners — are under audit for possible tax evasion and unreported income.
“This is a large-scale operation. Hundreds are being reviewed, and we’ve dedicated a full department to focus on these cases,” he said.
He explained that previous audits failed to detect anomalies because contractors submitted Department of Public Works and Highways (DPWH)-issued certificates of completion. “On paper, everything looked legitimate. It was only when the DPWH confirmed that some projects were ghost or incomplete that we identified clear tax violations,” Lumagui said.
The BIR also filed a P1.6-billion tax evasion case before the Department of Justice (DOJ) against former DPWH officials and private contractors allegedly involved in anomalous flood control projects in Bulacan.
In an interview, Lumagui said the case forms part of a broader investigation ordered by Malacañang to hold accountable those implicated in the flood control irregularities.
The second batch of complaints includes former DPWH Bulacan engineer Jaypee Mendoza and district engineer Henry Brice, along with contractors linked to projects flagged for possible ghost implementation.
“The total tax liabilities of the three individuals reached more than P1.6 billion, covering taxable years 2020 to 2024,” Lumagui said. “Our lifestyle checks revealed a clear mismatch between their declared income and the value of their properties, vehicles, and casino spending.”
Mendoza and Hernandez, who served as engineers under the DPWH Bulacan First District Engineering Office, have emerged as key figures in the Bocaue and Marilao flood control projects now under parallel investigation by the DOJ and the Senate Blue Ribbon Committee.
Testimonies and documents submitted to both inquiries indicate that Mendoza allegedly coordinated with private contractors in facilitating questionable transactions and project certifications.
“The BIR found that these officials and contractors purchased luxury cars and owned assets beyond their declared means, while records showed hundreds of millions of pesos were spent in casinos,” Lumagui said. “We verified that these casino transactions were real and included them in our tax assessment because they did not correspond to their declared income.”
He added that the respondents’ Statements of Assets, Liabilities, and Net Worth (SALNs) were instrumental in identifying undeclared assets and verifying possible ill-gotten wealth. “Their SALNs did not match our records. This discrepancy clearly indicates unreported income,” he said.
The BIR is coordinating with other government agencies and casino operators to trace possible money-laundering activities linked to gambling transactions. “We will coordinate with casinos for future investigations. This case will not end here — other companies and personalities mentioned in Senate hearings are also under review,” Lumagui said.
While Senate testimonies have hinted that some of the casino spending may have been used to launder kickbacks from flood control projects, Lumagui clarified that the BIR’s focus remains strictly on tax violations.
“Whatever the source or intention may be, the fact remains that there was unreported income. That alone is tax evasion,” he stressed.
The BIR commissioner reiterated that those charged will be compelled to pay their tax liabilities.
“The correct term is not ‘return’ but ‘pay.’ We will pursue all their assets to ensure that the P1.6 billion is settled. If they fail to pay, their properties — including vehicles — can be confiscated,” Lumagui said.