Public Bidding and Travel Permits: When Mayors Fall Under Anti-Graft Law

The Supreme Court, in Cabrera v. People (G.R. Nos. 191611-14, July 29, 2019), affirmed the conviction of a husband-and-wife pair of municipal mayors for violating Section 3(e) of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019). The case arose from two sets of acts: the purchase of medicines without competitive public bidding from a corporation owned by relatives, and the reimbursement of travel expenses for trips made without proper written authorization. The ruling clarifies the strict requirements for exceptions to public bidding and the mandatory nature of travel permissions for local chief executives.

The Facts of the Case

Librado Cabrera served as Mayor of Taal, Batangas from January to June 1998, after which his wife, Fe Cabrera, assumed the post until July 1999. During their respective terms, the municipality purchased medicines directly from Diamond Laboratories, Inc. (DLI), a corporation whose stockholders and officers were relatives of Librado. The purchases, totaling over P1.5 million, were made without public bidding.

The Cabreras were also charged for reimbursing themselves for travel expenses to Manila—P27,651.83 for Librado and P170,987.66 for Fe—without securing the required written permission from the governor before departure. They later obtained the governor's approval, but only in December 2000, well after the travels and reimbursements had been completed.

The Issue Before the Court

The central question was whether the Cabreras' failure to conduct public bidding for the medicine purchases and their reimbursement of travel expenses without proper authorization constituted a violation of Section 3(e) of R.A. No. 3019.

The Ruling: Conviction Affirmed

The Supreme Court denied the petition and affirmed the Sandiganbayan's conviction. The Court held that both acts satisfied the elements of Section 3(e): the accused were public officers, they acted with manifest partiality or evident bad faith, and their actions caused undue injury to the government or gave unwarranted benefits to a private party.

On the Medicine Purchases: Exceptions to Public Bidding Are Strict

The Court emphasized that procurement by local government units must generally be through competitive public bidding, as mandated by Section 356 of the Local Government Code (R.A. No. 7160). While Section 366 provides exceptions—including emergency purchases and direct purchase from manufacturers—these exceptions are strictly construed.

The Cabreras claimed their purchases qualified as emergency purchases and as direct purchases from a duly licensed manufacturer. The Court rejected both defenses. Under the Implementing Rules and Regulations of the Local Government Code, an emergency purchase requires a regular requisition containing specific details, including a certification that the price paid was the lowest at the time of procurement and certifications from the local budget officer, accountant, and treasurer. None of these requirements were met.

Similarly, for direct purchases from manufacturers, the Court noted that the Cabreras presented no proof that DLI was a duly licensed manufacturer, nor did they conduct the required canvass of prices among known manufacturers to secure the lowest price. The Court stressed that a party invoking an exception to a general rule bears the burden of proving compliance with its requisites.

The Court found that awarding the procurement contract to relatives without public bidding demonstrated manifest partiality. The choice of DLI as the grantee of the medicines, in the absence of public bidding, showed that the Cabreras gave unwarranted benefit, advantage, or preference in favor of DLI. The Court observed that the awarding of a procurement contract to relatives without the benefit of competitive public bidding was a clear demonstration of favoritism and bias.

On the Travel Reimbursements: Written Permission Must Precede Travel

The Court also upheld the conviction for the travel reimbursements. Section 96(b) of the Local Government Code requires mayors to secure the permission of the governor for any travel outside the province. Applying the rule of statutory construction that words used in a statute carry the same meaning throughout, the Court held that the "permission" in Section 96(b) must be written and secured before departure, consistent with Section 96(a).

The governor's belated approval in December 2000 did not cure the defect. At the time the Cabreras approved their own disbursement vouchers, no written permission existed. The Court noted that the Cabreras, as claimants, were also the ones approving the vouchers—a clear circumvention of the disbursement procedures under the IRR of the Local Government Code. The unauthorized reimbursements caused undue injury to the municipality, which was deprived of public funds for unjustified expenses.

Practical Takeaways

• Public bidding is the default rule. Local government procurement must go through competitive public bidding. Exceptions under Section 366 of the Local Government Code are strictly construed, and the burden is on the public officer to prove compliance with all requirements.
• Documentation is critical for emergency purchases. An emergency purchase requires a complete requisition with certifications on price reasonableness and fund availability. Failure to comply converts an ostensibly valid exception into a criminal act.
• Travel permissions must be in writing and obtained before departure. Verbal approval or belated written permission does not satisfy Section 96 of the Local Government Code. This applies to mayors traveling outside their province.
• Public officers cannot approve their own questionable claims. Approving disbursement vouchers for personal reimbursements without the required supporting documents constitutes evident bad faith and gross inexcusable negligence.
• Subsequent ratification does not cure prior violations. An approval obtained after the fact, especially one secured only when an audit or investigation looms, will not negate liability for an already consummated offense.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.