LEYECO II GM must return illegal fund payout, consumer advocate urges

Press Release
By NASECORE
March 2, 2007

PARAÑAQUE CITY, Philippines  –  Consumer watchdog National Association of Electricity Consumers for Reforms Inc. (NASECORE) is urging the National Electrification Administration (NEA) to direct Leyeco II Electric Cooperative, Inc., General Manager Atty. Jerry Gwen L. Conde to return the total amount of PhP2,797,190.50 that was fraudulently disbursed as productivity incentive bonus for 2005 for the coop’s officers and regular employees after NEA has denied the coop’s request for the approval of its Board Resolution “Approving the appropriation of the amount of P2,797,190.50 to cover the cost of the 14th month pay (productivity incentive bonus) for the year 2005 of its officers and regular employees”.

“We commend NEA for favorably acting on our letter request to deny LEYECO II’s incentive bonus for the year 2005 as the coop failed to meet items (3) and (5) of the five (5) criteria under the Revised Guidelines on Benefits, Allowances and Other Incentives to EC Officers and Employees which are as follows: (3) has sufficient funds in excess of due and necessary expenditures to cover the amount required by this bonus; and (5) has posted a 5% cumulative net margin for a ten-month period ending 31 October of the current-year,” NASECORE President Pete Ilagan said.

LEYECO II’s Financial and Statistical Report shows that it suffered net loss of PhP5.678-million in 2005, PhP9.47-million in 2004, PhP3.07-million in 2003, PhP24.06-million in 2002, and PhP4.9-million in 2001.

“If Leyeco II had been incurring losses since 2001, how could the general manager ever think of giving out a 14th month pay? This is simply anomalous that shows outright gross disregard of member-consumers’ interests”, Ilagan said.

On September 20, 2006 NASECORE also wrote the Leyeco II Board calling its attention about this questionable 14th month pay.  As a result of this letter, the Leyeco II Board of Directors created a special committee to investigate the matter and found out that Atty. Gerry Gwen Conde, the coop’s general manager, among others, acted in “grave abuse of discretion amounting to lack or excess of authority resulting to illegal disbursement of the cooperative funds in the amount of P2,797,190.50.”  In his affidavit, LEYECO II secretary and treasurer Alan C. Surpia said that he signed the check for disbursements of the said benefits after being assured by Atty. Conde that the proposed PhP2.7 million worth of incentive bonus was already approved by NEA.

Based on this and the Committee report, the Leyeco II Board passed a Resolution “Terminating the General Manager, Atty. Jerry Gwen L. Conde, of Leyte II Electric Cooperative, Inc.” for his “deliberate defiance, disrespect, grave abuse of authority, and arrogance...which are detrimental and inimical in the operations of Electric Cooperatives.”

In support of this Leyeco II Board resolution, NASECORE, likewise, asked NEA to forfeit all benefits and entitlements due to Atty. Conde  as a warning to all general managers of electric cooperatives under its supervision to exercise due prudence in managing the funds of the coops which come from the rate payments of its member-consumers.