G.R. No. 206327 - International Exchange Bank vs. Rudy S. Labos and Associates, Inc., Spouses Rodolfo S. Labos and Consuelo R. Labos, and Rockwell Land Corporation

The controversy involves the utilization of the Countrywide Development Fund (CDF) allocated to Constantino H. Navarro, Jr., then Surigao Del Norte First District Representative, for the years 1997 to 1998.
The Commission on Audit (COA) conducted a special review upon Assignment Order No. 00-002 dated January 17, 2000.
The COA found that P13,832,569.00 of Navarro’s CDF was used to purchase assorted goods, such as medicines, drug testing kits, nebulizing machines, sporting materials, rice paddy plows (araro), blackboard erasers, chalks, and notebooks.
These purchases were done through direct contracting without public bidding, violating Section 3 of Executive Order (E.O.) No. 302.
Overpricing was detected, ranging from 13.6% to 506% above prevailing market prices, amounting to P2,863,689.36.

After COA’s Notices of Disallowance issued on January 23, 2001, the Office of the Ombudsman filed criminal charges before the Sandiganbayan.
Accused included Navarro, Quirino M. Libunao (Regional Director of DILG-Caraga), Carlos T. Derecho, Romeo S. Jardenico, Benito R. Catindig, Iluminada C. Tuble (San Marino Laboratories President), Marlene B. Corpus (Mt. Bethel Pharmaceutical owner), Edwin L. Dizon (E.G. Trading owner), Gerardo A. Rosario and Mario Tokong (Revelstone Sales International).
The charges stemmed from direct contracting and overpricing involving different suppliers without public bidding for purchase of medicines and farming tools.

Libunao, as Regional Director of the DILG-Caraga Region, allegedly approved and supervised the transactions, certifying them as necessary and lawful.
He signed related documents including Requisition and Issue Vouchers (RIVs), Purchase Orders (POs), Disbursement Vouchers (DVs), and checks payable to suppliers (San Marino Laboratories and Revelstone Sales International).
He was charged with violating Section 3(e) of RA 3019 (Anti-Graft and Corrupt Practices Act) for giving unwarranted benefits through gross negligence, involving two specific cases:

Criminal Case No. 27803: Purchase of 45 boxes of assorted medicines worth P2,000,000 from San Marino without bidding, with overpricing of P1,237,740.75.
Criminal Case No. 27805: Purchase of 1,200 sets of araro tools worth P900,000 from Revelstone without bidding, with alleged overpricing of P108,000.00.

Prosecution witnesses included COA auditors, a pharmacist, a police laboratory official, and a businessman.
The Sandiganbayan found Libunao guilty beyond reasonable doubt of violating Section 3(e) of RA 3019 in both cases, imposing imprisonment and perpetual disqualification from public office.
Other accused suppliers were acquitted for failure to prove criminal design.
Libunao’s Motion for Reconsideration was denied by the Sandiganbayan on September 12, 2014.

Libunao filed a Consolidated Petition for Review on Certiorari under Rule 45.
Key arguments included alleged violation of his constitutional right to due process due to conviction under a different section of RA 3019 than charged, absence of conspiracy or contract entry, and failure of prosecution to prove elements of the offense beyond reasonable doubt.

Whether Libunao’s right to due process and to be informed of the nature and cause of accusation was violated when he was convicted under Section 3(e) of RA 3019 despite being charged under Section 3(g).
Whether Libunao committed violation of Section 3(e) of RA 3019 by giving unwarranted benefits and causing undue injury to the government through gross inexcusable negligence.
Whether the prosecution proved beyond reasonable doubt all the essential elements of violation of Section 3(e).
Whether public bidding was required and whether its absence constituted unlawful acts under E.O. No. 302.
Whether Libunao’s defense reliance on subordinates absolves him of liability.