4 SSS officials cleared of profiteering charge

[ERRATUM: In the June 4 issue of the Philippine Daily Inquirer, an article on Page A15, “4 SSS officials cleared of profiteering charge,” carried the wrong photo of Ernesto D. Francisco Jr., the SSS equities product development head who had been cleared of wrongdoing. The photo published was that of lawyer Ernesto B. Francisco Jr., who is not employed or connected with the SSS. The Inquirer regrets the error and apologizes to Atty. Ernesto B. Francisco Jr.]

Several months after being accused of profiteering at the expense of their stakeholders, four key officials of the Social Security System (SSS) were cleared by the leadership of the state-administered pension fund, saying accusations against them lacked proof.

Cleared of the accusations leveled by former SSS Commissioner Jose Gabriel La Viña were the fund’s executive vice president for investments Rizaldy Capulong, equities investment division chief Reginald Candelaria, equities product development head Ernesto Francisco Jr. and chief actuary George Ongkeko Jr.

In a resolution dated March 7 — but made public only last weekend — the Social Security Commission, the agency’s policymaking body, said the administrative complaints against the investment officials should be “dismissed for lack of evidence.”

“It is worthy to stress that every public official is entitled to the presumption of good faith in the discharge of their duties,” the commission said in its resolution.

“Thus, absent any showing of bad faith of malice, bare allegations cannot prevail over the presumption of regularity in the performance of official functions,” it added.

“In this case, mere conjectures, surmises and suppositions of supposed loss of corporate opportunities cannot overcome the presumption of regularity in the performance of official functions.”

Dishonesty, misconduct

A week after he filed an official complaint with the pension fund’s board last October, La Viña, the social media manager of the 2016 election campaign of President Duterte, accused the officials of “serious dishonesty and grave misconduct.”

La Viña—who was later removed by President Duterte from his SSS post but recently appointed undersecretary at the Department of Tourism when Wanda Teo was still the tourism secretary—alleged that Candelaria and Francisco had vetted each other’s personal stock trades among themselves.

The trades were then approved by Capulong, as required by the institution’s rules.

La Viña said, however, that all three officials were in a conflict of interest situation because they transacted with stockbrokers whom they had also cleared to trade on behalf of SSS.

Initial public offering

In particular, La Viña said the officials personally profited from the initial public offering of companies like Metro Retail Stores Group Inc., Golden Haven Memorial Park Inc., Shakey’s Pizza Asia Ventures Inc., Wilcon Depot Inc. and Eagle Cement Corp., all the while failing to invest SSS funds in these same ventures.

The officials reasoned, however, that these companies had failed to meet the pension fund’s strongest investment criteria, and that their personal trades had been disclosed to and had approval from their superiors.

Ongkeko was remiss in his role of providing a complete set of records of the trades of the investment officers, La Viña said.

The SSS leadership said, however, that “it is well settled” in administrative proceedings that “the burden of proof that respondents committed the acts complained rests with the complainant.”

“Basic is the rule that mere allegation cannot be given credence unless proven by substantial evidence,” the Social Security Commission said.

Relieved

The four officials were temporarily relieved of their duties pending the results of the investigation of their investments in shares of stock.

The SSS manages almost P500 billion in assets, accumulated through the mandatory monthly contributions of its 35 million members who are employees in the private sector.

Up to 30 percent of the SSS reserve fund can be invested in the equities market, subject to strict criteria set by the fund’s investment oversight committee that La Viña had chaired.

Candelaria and Ongkeko resigned at the height of the controversy. Ongkeko is now a consultant with the Department of Finance overseeing reforms in the military pension system.