Case Digest: Neri vs. Senate Committee on Accountability of Public Officers G.R. No.

180643, March 25, 2008

(Topic: Executive Privilege – Constitutional Law 1)

Petitioner: Romulo L. Neri

Respondents: Senate Committee on Accountability of Public Officers and

Investigations, Senate Committee on Trade and Commerce, and Senate Committee
on National Defense and Security

Facts:

Petitioner Romulo Neri, then Director General of the National Economic and
Development Authority (NEDA), was invited by the respondent Senate Committees to
attend their joint investigation on the alleged anomalies in the National Broadband
Network (NBN) Project. This project was contracted by the Philippine Government
with the Chinese firm Zhong Xing Telecommunications Equipment (ZTE), which
involved the amount of US$329,481,290. When he testified before the Senate
Committees, he disclosed that then Commission on Elections Chairman Benjamin
Abalos, brokering for ZTE, offered him P200 million in exchange for his approval of
the NBN Project. He further narrated that he informed President Gloria
Macapagal-Arroyo about the bribery attempt and that she instructed him not to accept
the bribe. However, when probed further on what they discussed about the NBN
Project, petitioner refused to answer, invoking “executive privilege.” In particular, he
refused to answer the questions on 1.) whether or not the President followed up the
NBN Project, 2.) whether or not she directed him to prioritize it, and 3.) whether or not
she directed him to approve it.

Later on, respondent Committees issued a Subpoena Ad Testificandum to petitioner,

requiring him to appear and testify on 20 November 2007. However, Executive
Secretary Eduardo Ermita sent a letter dated 15 November to the Committees
requesting them to dispense with Neri’s testimony on the ground of executive privilege.
Ermita invoked the privilege on the ground that “the information sought to be
disclosed might impair our diplomatic as well as economic relations with the People’s
Republic of China,” and given the confidential nature in which these information were
conveyed to the President, Neri “cannot provide the Committee any further details of
these conversations, without disclosing the very thing the privilege is designed to
protect.” Thus, on 20 November, Neri did not appear before the respondent
Committees.

On 22 November, respondents issued a Show Cause Letter to Neri requiring him to

show cause why he should not be cited for contempt for his failure to attend the
scheduled hearing on 20 November. On 29 November, Neri replied to the Show
Cause Letter and explained that he did not intend to snub the Senate hearing, and
requested that if there be new matters that were not yet taken up during his first
appearance, he be informed in advance so he can prepare himself. He added that his
non-appearance was upon the order of the President, and that his conversation with
her dealt with delicate and sensitive national security and diplomatic matters relating
to the impact of the bribery scandal involving high government officials and the
possible loss of confidence of foreign investors and lenders in the Philippines.
Respondents found the explanation unsatisfactory, and later on issued an Order citing
Neri in contempt and consequently ordering his arrest and detention at the Office of
the Senate Sergeant-At-Arms until he appears and gives his testimony.
Neri filed the petition asking the Court to nullify both the Show Cause Letter and the
Contempt Order for having been issued with grave abuse of discretion amounting to
lack or excess of jurisdiction, and stressed that his refusal to answer the three
questions was anchored on a valid claim to executive privilege in accordance with the
ruling in the landmark case of Senate vs. Ermita (G.R. No. 169777, 20 April 2006).
For its part, the Senate Committees argued that they did not exceed their authority in
issuing the assailed orders because there is no valid justification for Neri’s claim to
executive privilege. In addition, they claimed that the refusal of petitioner to answer
the three questions violates the people’s right to public information, and that the
executive is using the concept of executive privilege as a means to conceal the
criminal act of bribery in the highest levels of government.

Issue:

Whether or not the three questions that petitioner Neri refused to answer were
covered by executive privilege, making the arrest order issued by the respondent
Senate Committees void.

Discussion:

Citing the case of United States vs. Nixon (418 U.S. 683), the Court laid out the three
elements needed to be complied with in order for the claim to executive privilege to be
valid. These are: 1.) the protected communication must relate to a quintessential and
non-delegable presidential power; 2.) it must be authored, solicited, and received by a
close advisor of the President or the President himself. The judicial test is that an
advisor must be in “operational proximity” with the President; and, 3.) it may be
overcome by a showing of adequate need, such that the information sought “likely
contains important evidence,” and by the unavailability of the information elsewhere
by an appropriate investigating authority.

In the present case, Executive Secretary Ermita claimed executive privilege on the
argument that the communications elicited by the three questions “fall under
conversation and correspondence between the President and public officials”
necessary in “her executive and policy decision-making process,” and that “the
information sought to be disclosed might impair our diplomatic as well as economic
relations with the People’s Republic of China.” It is clear then that the basis of the
claim is a matter related to the quintessential and non-delegable presidential power of
diplomacy or foreign relations.

As to the second element, the communications were received by a close advisor of

the President. Under the “operational proximity” test, petitioner Neri can be
considered a close advisor, being a member of the President’s Cabinet.

And as to the third element, there is no adequate showing of a compelling need that
would justify the limitation of the privilege and of the unavailability of the information
elsewhere by an appropriate investigating authority. Presidential communications are
presumptive privilege and that the presumption can be overcome only by mere
showing of public need by the branch seeking access to such conversations. In the
present case, respondent Committees failed to show a compelling or critical need for
the answers to the three questions in the enactment of any law under Sec. 21, Art. VI.
Instead, the questions veer more towards the exercise of the legislative oversight
function under Sec. 22, Art. VI. As ruled in Senate vs. Ermita, “the oversight function
of Congress may be facilitated by compulsory process only to the extent that it is
performed in pursuit of legislation.”
Neri’s refusal to answer based on the claim of executive privilege does not violate the
people’s right to information on matters of public concern simply because Sec. 7, Art.
III of the Constitution itself provides that this right is “subject to such limitations as may
be provided by law.”

Held:

The divided Supreme Court (voting 9-6) was convinced that the three questions are
covered by presidential communications privilege, and that this privilege has been
validly claimed by the executive department, enough to shield petitioner Neri from any
arrest order the Senate may issue against him for not answering such questions.

The petition was granted. The subject Order dated January 30, 2008, citing petitioner
in contempt of the Senate Committee and directing his arrest and detention was
nullified.
PHILCONSA vs. HON. SALVADOR ENRIQUEZ, G.R. No. 113105 August 19, 1994
Facts:
House Bill No. 10900, the General Appropriation Bill of 1994 (GAB
of 1994), was passed and approved by both houses of Congress on December 17,
1993. As passed, it imposed conditions and limitations on certain items of
appropriations in the proposed budget previously submitted by the President. It also
authorized members of Congress to propose and identify projects in the “pork barrels”
allotted to them and to realign their respective operating budgets.
Pursuant to the procedure on the passage and enactment of bills as prescribed by the
Constitution, Congress presented the said bill to the President for consideration and
approval.
On December 30, 1993, the President signed the bill into law, and declared the same
to have become Republic Act NO. 7663, entitled “AN ACT APPROPRIATING FUNDS
FOR THE OPERATION OF THE GOVERNMENT OF THE PHILIPPINES FROM
JANUARY ONE TO DECEMBER THIRTY ONE, NINETEEN HUNDRED AND
NINETY-FOUR, AND FOR OTHER PURPOSES” (GAA of 1994). On the same day,
the President delivered his Presidential Veto Message, specifying the provisions of
the bill he vetoed and on which he imposed certain conditions, as follows:
1. Provision on Debt Ceiling, on the ground that “this debt reduction scheme
cannot be validly done through the 1994 GAA.” And that “appropriations for payment
of public debt, whether foreign or domestic, are automatically appropriated pursuant
to the Foreign Borrowing Act and Section 31 of P.D. No. 1177 as reiterated under
Section 26, Chapter 4, Book VI of E.O. No. 292, the Administrative Code of 1987.
2. Special provisions which authorize the use of income and the creation,
operation and maintenance of revolving funds in the appropriation for State
Universities and Colleges (SUC’s),
3. Provision on 70% (administrative)/30% (contract) ratio for road
maintenance.
4. Special provision on the purchase by the AFP of medicines in compliance
with the Generics Drugs Law (R.A. No. 6675).
5. The President vetoed the underlined proviso in the appropriation for the
modernization of the AFP of the Special Provision No. 2 on the “Use of Fund,” which
requires the prior approval of the Congress for the release of the corresponding
modernization funds, as well as the entire Special Provision No. 3 on the “Specific
Prohibition” which states that the said Modernization Fund “shall not be used for
payment of six (6) additional S-211 Trainer planes, 18 SF-260 Trainer planes and 150
armored personnel carriers”
6. New provision authorizing the Chief of Staff to use savings in the AFP to
augment pension and gratuity funds.
7. Conditions on the appropriation for the Supreme Court, Ombudsman, COA,
and CHR, the Congress.
Issue:
whether or not the conditions imposed by the President in the items
of the GAA of 1994: (a) for the Supreme Court, (b) Commission on Audit (COA), (c)
Ombudsman, (d) Commission on Human Rights, (CHR), (e) Citizen Armed Forces
Geographical Units (CAFGU’S) and (f) State Universities and Colleges (SUC’s) are
constitutional; whether or not the veto of the special provision in the appropriation for
debt service and the automatic appropriation of funds therefore is constitutional

Held:
The veto power, while exercisable by the President, is actually a
part of the legislative process. There is, therefore, sound basis to indulge in the
presumption of validity of a veto. The burden shifts on those questioning the validity
thereof to show that its use is a violation of the Constitution.
The vetoed provision on the debt servicing is clearly an attempt to repeal Section 31
of P.D. No. 1177 (Foreign Borrowing Act) and E.O. No. 292, and to reverse the debt
payment policy. As held by the court in Gonzales, the repeal of these laws should be
done in a separate law, not in the appropriations law.
In the veto of the provision relating to SUCs, there was no undue discrimination when
the President vetoed said special provisions while allowing similar provisions in other
government agencies. If some government agencies were allowed to use their
income and maintain a revolving fund for that purpose, it is because these agencies
have been enjoying such privilege before by virtue of the special laws authorizing
such practices as exceptions to the “one-fund policy” (e.g., R.A. No. 4618 for the
National Stud Farm, P.D. No. 902-A for the Securities and Exchange Commission;
E.O. No. 359 for the Department of Budget and Management’s Procurement Service).
The veto of the second paragraph of Special Provision No. 2 of the item for the DPWH
is unconstitutional. The Special Provision in question is not an inappropriate provision
which can be the subject of a veto. It is not alien to the appropriation for road
maintenance, and on the other hand, it specifies how the said item shall be expended
— 70% by administrative and 30% by contract.
The Special Provision which requires that all purchases of medicines by the AFP
should strictly comply with the formulary embodied in the National Drug Policy of the
Department of Health is an “appropriate” provision. Being directly related to and
inseparable from the appropriation item on purchases of medicines by the AFP, the
special provision cannot be vetoed by the President without also vetoing the said
item.
The requirement in Special Provision No. 2 on the “use of Fund” for the AFP
modernization program that the President must submit all purchases of military
equipment to Congress for its approval, is an exercise of the “congressional or
legislative veto.” However the case at bench is not the proper occasion to resolve the
issues of the validity of the legislative veto as provided in Special Provisions Nos. 2
and 3 because the issues at hand can be disposed of on other grounds. Therefore,
being “inappropriate” provisions, Special Provisions Nos. 2 and 3 were properly
vetoed.
Furthermore, Special Provision No. 3, prohibiting the use of the Modernization fund
for payment of the trainer planes and armored personnel carriers, which have been
contracted for by the AFP, is violative of the Constitutional prohibition on the passage
of laws that impair the obligation of contracts (Art. III, Sec. 10), more so, contracts
entered into by the Government itself. The veto of said special provision is therefore
valid.
The Special Provision, which allows the Chief of Staff to use savings to augment the
pension fund for the AFP being managed by the AFP Retirement and Separation
Benefits System is violative of Sections 25(5) and 29(1) of the Article VI of the
Constitution.
Regarding the deactivation of CAFGUS, we do not find anything in the language used
in the challenged Special Provision that would imply that Congress intended to deny
to the President the right to defer or reduce the spending, much less to deactivate
11,000 CAFGU members all at once in 1994. But even if such is the intention, the
appropriation law is not the proper vehicle for such purpose. Such intention must be
embodied and manifested in another law considering that it abrades the powers of the
Commander-in-Chief and there are existing laws on the creation of the CAFGU’s to
be amended.
On the conditions imposed by the President on certain provisions relating to
appropriations to the Supreme Court, constitutional commissions, the NHA and the
DPWH, there is less basis to complain when the President said that the expenditures
shall be subject to guidelines he will issue. Until the guidelines are issued, it cannot be
determined whether they are proper or inappropriate. Under the Faithful Execution
Clause, the President has the power to take “necessary and proper steps” to carry
into execution the law. These steps are the ones to be embodied in the guidelines.