Anti-graft office dismisses case filed by former mayor against city officials over settlement with landfill operator

THE Office of the Ombudsman found no violation in the Cebu City Government’s decision to settle in 2020 the civil case filed by a private service provider that rendered service for the City’s garbage disposal in 2013 and 2014.

The anti-graft office dismissed the criminal complaint filed by former Cebu City mayor Tomas Osmeña in 2021 against the late mayor Edgardo Labella, then presiding officer and now Mayor Michael Rama and some members of the 15th Sangguniang Panlungsod for violation of Republic Act (RA) 3019, or the Anti-Graft and Corrupt Practices Act.

Members of the 15th City Council who were included in the complaint were former councilor and now Vice Mayor Raymond Alvin Garcia, Councilors Joel Garganera, Jerry Guardo, Donaldo Hontiveros, Renato Osmeña Jr., former councilors David Tumulak and Prisca Niña Mabatid and the late councilor Antonio Cuenco.

The case filed by Osmeña stemmed from the agreement the Cebu City Government entered into with Asian Energy Systems Corp. (AESC), the operator of a private landfill in the town of Consolacion, back when Rama was the mayor during his 2013-2016 term.

According to the ombudsman, Osmeña’s complaint was anchored on the settlement of the claim of AESC, procurement of the contract without public bidding, and procurement by direct contracting. The ombudsman’s decision was received by the City Legal Office on May 8, 2023.


Graft Investigator Janet Vejerano said in her nine-page resolution that she did not find any probable cause to indict all respondents, “in conspiracy with one another,” in connection with Cebu City’s compromise agreement with AESC. Her decision was approved by Ombudsman Samuel Martires last March 4.

“Respondents are public officers who, in discharge of their official functions, have not been proven to have acted with manifest partiality, evident bad faith, and/or gross inexcusable negligence that may have caused undue injury or have given unwarranted benefit to any party,” read a portion of Vejerano’s decision.

Vejerano said since there was no restraining order issued by the proper judicial tribunal, the City Council had no reason to refuse the recommended amicable settlement of the civil case.

The graft investigator further said Osmeña or other parties “feeling aggrieved by the outcome of the civil case had their legal remedies; filing of another complaint for violation of Section 3(e) of RA 3019 with this office is not the appropriate legal course of action.”

Rama’s previous indictment

According to Vejerano, the previous finding to indict Rama and former members of the City’s Bids and Awards Committee (BAC) for graft and corruption before the Sandiganbayan does not cover the civil aspect of the case.

In 2017, Osmeña also filed a case against Rama and former BAC members in relation to the procurement of waste disposal services amounting to P25 million in 2015 from AESC.


When Osmeña won the mayoral race in the 2016 elections, the City’s contract with AESC was still in force as Rama had issued a purchase order for solid waste disposal services for the period of May-August 2016.

Osmeña though discovered that the Commission on Audit found irregularities in the procurement by direct contracting, and records of the Department of Environment and Natural Resources-Environmental Management Bureau (DENR-EMB) also showed that AESC was not the only landfill operator in Central Visayas with an environmental compliance certificate (ECC).

Osmeña later ordered the payment of P31.9 million to AESC stopped. The amount covered the billing period of March-August 2016.

The former mayor’s move prompted AESC to file a case for breach of contract, sum of money and damages against Osmeña and the City Government before the Regional Trial Court (RTC) in Parañaque City.

In February 2020, the 15th Sangguniang Panlungsod passed Resolution 15-2020-2020, which authorized Labella to settle the civil case with AESC.

With the measure passed by the City Council, the RTC then granted the joint motion to approve the compromise agreement and the case was thus “terminated and/or disposed.”

However, in May 2021, Osmeña filed a petition for relief from judgment before the Parañaque City RTC. The petition was a request to the court to set aside its judgment that had already been entered.


In March 2022, the ombudsman directed the respondents to submit their counter-affidavits.

Rama denied that the purchase order for the contract covering March-August 2016 was based on direct contracting, and explained that the mode of procurement was negotiated procurement due to two failures of bidding.

“The BAC negotiated with Asian Energy, which was technically, legally and financially capable to undertake the project of waste disposal through tipping fee,” Rama said in his counter-affidavit.

Guardo, Hontiveros, Tumulak and Renato admitted their participation in the passage and approval of the resolution.

They explained that the compromise agreement endorsed by the City Legal Office to the City Council came with a request for a resolution authorizing Labella to enter into an amicable settlement with AESC.

The councilors, in their counter-affidavits, said the endorsement was referred to the committee on laws and committee on budget and finance which favorably recommended it, rationalizing that the “compromise agreement is the best course of action to avoid unnecessary expenditures.”

Garcia and Garganera echoed the defenses of the other councilors.

The counsel of Labella and Cuenco, meanwhile, informed the ombudsman of the passing of their clients. Cuenco died on June 27, 2020, while Labella died on Nov. 19, 2021.