1987 Philippine Constitution

Section 13. The President, Vice-President, the Members of the Cabinet, and their
deputies or assistants shall not, unless otherwise provided in this Constitution, hold any other
office or employment during their tenure. They shall not, during said tenure, directly or
indirectly, practice any other profession, participate in any business, or be financially interested
in any contract with, or in any franchise, or special privilege granted by the Government or any
subdivision, agency, or instrumentality thereof, including government-owned or controlled
corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of
their office.

The spouse and relatives by consanguinity or affinity within the fourth civil degree of the
President shall not, during his tenure, be appointed as Members of the Constitutional
Commissions, or the Office of the Ombudsman, or as Secretaries, Undersecretaries, chairmen
or heads of bureaus or offices, including government-owned or controlled corporations and their
subsidiaries.

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Republic Act No. 9417

AN ACT TO STRENGTHEN THE OFFICE OF THE SOLICITOR GENERAL BY

EXPANDING AND STREAMLINING ITS BUREAUCRACY, UPGRADING EMPLOYEE
SKILLS AND AUGMENTING BENEFITS, AND APPROPRIATING FUNDS THEREFOR
AND FOR OTHER PURPOSES.

SEC. 3. Standards. - The Solicitor General shall have cabinet rank and the same
qualifications for appointment, rank, prerogatives, salaries, allowances, benefits and privileges
as the Presiding Justice of the Court of Appeals; an Assistant Solicitor General, those of an
Associate Justice of the Court of Appeals.

R.A. 6713
"Code of Conduct and Ethical Standards for Public Officials and Employees"

Section 3. Definition of Terms. - As used in this Act, the term:

(b) "Public Officials" includes elective and appointive officials and employees, permanent
or temporary, whether in the career or non-career service, including military and police
personnel, whether or not they receive compensation, regardless of amount.

(f) "Substantial stockholder" means any person who owns, directly or indirectly, shares
of stock sufficient to elect a director of a corporation. This term shall also apply to the parties
to a voting trust.
 (g) "Family of public officials or employees" means their spouses and unmarried children
under eighteen (18) years of age.

(i) "Conflict of interest" arises when a public official or employee is a member of a board,
an officer, or a substantial stockholder of a private corporation or owner or has a substantial
interest in a business, and the interest of such corporation or business, or his rights or duties
therein, may be opposed to or affected by the faithful performance of official duty.

(j) "Divestment" is the transfer of title or disposal of interest in property by voluntarily,

completely and actually depriving or dispossessing oneself of his right or title to it in favor of a
person or persons other than his spouse and relatives as defined in this Act.

Section 7. Prohibited Acts and Transactions. - In addition to acts and omissions of public
officials and employees now prescribed in the Constitution and existing laws, the following shall
constitute prohibited acts and transactions of any public official and employee and are hereby
declared to be unlawful:

(a) Financial and material interest. - Public officials and employees shall not,
directly or indirectly, have any financial or material interest in any transaction
requiring the approval of their office.

(b) Outside employment and other activities related thereto. - Public officials
and employees during their incumbency shall not:

(1) Own, control, manage or accept employment as officer,

employee, consultant, counsel, broker, agent, trustee or nominee in any
private enterprise regulated, supervised or licensed by their office unless
expressly allowed by law;

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Section 9. Divestment. - A public official or employee shall avoid conflicts of interest at

all times. When a conflict of interest arises, he shall resign from his position in any private
business enterprise within thirty (30) days from his assumption of office and/or divest himself
of his shareholdings or interest within sixty (60) days from such assumption.

The same rule shall apply where the public official or employee is a partner in a
partnership.

The requirement of divestment shall not apply to those who serve the Government in
an honorary capacity nor to laborers and casual or temporary workers.

xxxx

Section 11. Penalties. - (a) Any public official or employee, regardless of whether or not
he holds office or employment in a casual, temporary, holdover, permanent or regular capacity,
committing any violation of this Act shall be punished with a fine not exceeding the equivalent
of six (6) months' salary or suspension not exceeding one (1) year, or removal depending on the
gravity of the offense after due notice and hearing by the appropriate body or agency. If the
violation is punishable by a heavier penalty under another law, he shall be prosecuted under the
latter statute. Violations of Sections 7, 8 or 9 of this Act shall be punishable with imprisonment
not exceeding five (5) years, or a fine not exceeding five thousand pesos (P5,000), or both, and,
in the discretion of the court of competent jurisdiction, disqualification to hold public office.

(b) Any violation hereof proven in a proper administrative proceeding shall be sufficient
cause for removal or dismissal of a public official or employee, even if no criminal prosecution
is instituted against him.

RULES IMPLEMENTING THE CODE OF CONDUCT AND ETHICAL

STANDARDS FOR PUBLIC OFFICIALS AND EMPLOYEES
(REPUBLIC ACT NO. 6713

Rule IX
Conflict of Interest and Divestment

Section 1. (a) An official or employee shall avoid conflict of interest at all times.
(b) Conflict of Interest occurs:
(1) When the official or employee is:
a) a substantial stockholder; or
b) a member of the Board of Directors; or
c) an officer of the corporation; or
d) an owner or has substantial interest in a business; or
e) a partner in a partnership; and

(2) The interest of such corporation or business, or his rights or duties

therein, are opposed to or affected by the faithful performance of official
duty.

(c) A substantial stockholder is any person who owns, directly or indirectly,

shares of stock sufficient to elect a director of a corporation. This term shall also
apply to the parties to a voting trust.

(d) A voting trust means an agreement in writing between one or more

stockholders of a stock corporation for the purpose of conferring upon a trustee
or trustees the right to vote and the other rights pertaining the shares for certain
periods and subject to such other conditions provided for in the Corporation
Law.

Section 2. (a) When a conflict of interest arises, the official or employee involved shall
resign from his position in any private business enterprise within thirty (30) days from his
assumption of office and/or divest himself of his share-holdings interest within sixty (60) days
from such assumption. For those who are already in the service, and conflict of interest arises,
the officer or employee must resign from his position in the private business enterprise and/or
divest himself of his shareholdings or interest within the periods herein-above provided,
reckoned from the date when the conflict of interest had arisen. The same rule shall apply
where the public official or employee is a partner in a partnership.

(b) If the conditions in Section 1 (b) concur, divestment shall be mandatory for any
official or employee even if he has resigned from his position in any private business enterprise.

(c) Divestment shall be to a person or persons other than his spouse and relatives within
the fourth civil degree of consanguinity or affinity.

(d) The requirements for divestment shall not apply to those specifically authorized by
law and those who served the government in an honorary capacity nor to laborers and casual
or temporary workers.

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REPUBLIC ACT No. 3019

ANTI-GRAFT AND CORRUPT PRACTICES ACT

Section 3. Corrupt practices of public officers. In addition to acts or omissions of public

officers already penalized by existing law, the following shall constitute corrupt practices of any
public officer and are hereby declared to be unlawful:

xxxx

(h) Director or indirectly having financing or pecuniary interest in any

business, contract or transaction in connection with which he intervenes or takes
part in his official capacity, or in which he is prohibited by the Constitution or by
any law from having any interest.

xxxx

Section 9. Penalties for violations. (a) Any public officer or private person committing any
of the unlawful acts or omissions enumerated in Sections 3, 4, 5 and 6 of this Act shall be
punished with imprisonment for not less than one year nor more than ten years, perpetual
disqualification from public office, and confiscation or forfeiture in favor of the Government of
any prohibited interest and unexplained wealth manifestly out of proportion to his salary and
other lawful income.

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Venus v. Desierto, G.R. No. 130319,

[October 21, 1998], 358 PHIL 675-704

“It would be of some worth citing the case of Trieste, Sr. vs. Sandiganbayan,
145 SCRA 508, to clarify the application or the above-pertinent provision wherein
the Supreme Court said: "What is contemplated in Section 3(h) of the anti-graft
 law is the actual intervention in the transaction in which one has financial or
pecuniary interest in order that liability may attach (Opinion No. 306, Series 1961
and Opinion No. 94, Series 1972 of the Secretary of Justice).” ||| ()

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Go v. Sandiganbayan, G.R. No. 172602,

[April 13, 2007], 549 PHIL 782-816

In the said case, Diosdado Garcia, proprietor of D.T. Garcia Construction Supply, together
with Jaime Domingo, then municipal mayor of San Manuel, Isabela, was charged with Section
3 (h) of RA 3019 as it appeared that he was used by Domingo as a dummy to cover up his
business transaction with the municipality. Section 3 (h) of the anti-graft law reads:

SEC. 3. Corrupt practices of public officers. — . . .

(h) Directly or indirectly having financial or pecuniary interest in any

business, contract or transaction in connection with which he intervenes
or takes part in his official capacity, or in which he is prohibited by the
Constitution or by any law from having an interest.

The elements of this offense are: (1) that the accused is a public officer; (2) he has a
direct or indirect financial or pecuniary interest in any business, contract, or transaction; (3) he
either: (a) intervenes or takes part in his official capacity in connection with such interest, or (b)
is prohibited from having such interest by the Constitution or by law. 19

Despite the first element mentioned above, the Court affirmed the conviction of Garcia,
a private individual, as well as that of Domingo, who was then a municipal mayor, for violation
of Section 3 (h) of RA 3019. In so holding, the Court established that Domingo and Garcia acted
in conspiracy with one another in the commission of the offense. Domingo thus also serves to
debunk petitioner Go's theory that where an offense has as one of its elements that the accused
is a public officer, it necessarily excludes private persons from the scope of such offense.

The precept that could be drawn from Luciano, Singian and Domingo, and which is
applicable to the present case, is that private persons, when acting in conspiracy with public
officers, may be indicted and, if found guilty, held liable for the pertinent offenses under Section
3 of RA 3019, including (g) and (h) thereof. This is in consonance with the avowed policy of the
anti-graft law to repress certain acts of public officers and private persons alike constituting
graft or corrupt practices act or which may lead thereto.

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Teves v. Saniganbayan
G.R. No. 154182, December 17, 2004 (EB)
 The essential elements set out in the afore-quoted legislative definition of the crime of
violation of Section 3(h) of the Anti-Graft Law are as follows:

1. The accused is a public officer;

2. He has a direct or indirect financial or pecuniary interest in any business,

contract, or transaction;

3. He either
a. intervenes or takes part in his official capacity in connection with
such interest; or

b. is prohibited from having such interest by the Constitution or by any

law.

There are, therefore, two modes by which a public officer who has a direct or indirect
financial or pecuniary interest in any business, contract, or transaction may violate Section 3(h)
of the Anti-Graft Law. The first mode is if in connection with his pecuniary interest in any
business, contract or transaction, the public officer intervenes or takes part in his official
capacity. The second mode is when he is prohibited from having such interest by the
Constitution or any law.

xxxx

A careful reading of the information reveals that the afore-quoted last part thereof is
merely an allegation of the second element of the crime, which is, that he has a direct or indirect
"financial or pecuniary interest in any business, contract or transaction." Not by any stretch of
imagination can it be discerned or construed that the afore-quoted last part of the information
charges the petitioners with the second mode by which Section 3(h) of the Anti-Graft Law may
be violated. Hence, we agree with the petitioners that the charge was for unlawful intervention
in the issuance of the license to operate the Valencia Cockpit. There was no charge for
possession of pecuniary interest prohibited by law.

However, the evidence for the prosecution has established that petitioner Edgar Teves,
then mayor of Valencia, Negros Oriental,18 owned the cockpit in question. In his sworn
application for registration of cockpit filed on 26 September 198319 with the Philippine
Gamefowl Commission, Cubao, Quezon City, as well as in his renewal application dated 6
January 198920 he stated that he is the owner and manager of the said cockpit. Absent any
evidence that he divested himself of his ownership over the cockpit, his ownership thereof is
rightly to be presumed because a thing once proved to exist continues as long as is usual with
things of that nature.21 His affidavit22 dated 27 September 1990 declaring that effective
January 1990 he "turned over the management of the cockpit to Mrs. Teresita Z. Teves for the
reason that [he] could no longer devote a full time as manager of the said entity due to other
work pressure" is not sufficient proof that he divested himself of his ownership over the cockpit.
Only the management of the cockpit was transferred to Teresita Teves effective January 1990.
Being the owner of the cockpit, his interest over it was direct.
 Even if the ownership of petitioner Edgar Teves over the cockpit were transferred to his
wife, still he would have a direct interest thereon because, as correctly held by respondent
Sandiganbayan, they remained married to each other from 1983 up to 1992, and as such their
property relation can be presumed to be that of conjugal partnership of gains in the absence of
evidence to the contrary. Article 160 of the Civil Code provides that all property of the marriage
is presumed to belong to the conjugal partnership unless it be proved that it pertains exclusively
to the husband or to the wife. And Section 143 of the Civil Code declares all the property of the
conjugal partnership of gains to be owned in common by the husband and wife. Hence, his
interest in the Valencia Cockpit is direct and is, therefore, prohibited under Section 89(2) of the
LGC of 1991, which reads:

Section 89. Prohibited Business and Pecuniary Interest. – (a) It shall be unlawful for
any local government official or employee, directly or indirectly, to:

(2) Hold such interests in any cockpit or other games licensed by a local government
unit…. [Emphasis supplied].

The offense proved, therefore, is the second mode of violation of Section 3(h) of the
Anti-Graft Law, which is possession of a prohibited interest. But can the petitioners be convicted
thereof, considering that it was not charged in the information?

The answer is in the affirmative in view of the variance doctrine embodied in Section 4,
in relation to Section 5, Rule 120, Rules of Criminal Procedure, which both read:

Sec. 4. Judgment in case of variance between allegation and proof. –

When there is a variance between the offense charged in the complaint or
information and that proved, and the offense as charged is included in or
necessarily includes the offense proved, the accused shall be convicted of the
offense proved which is included in the offense charged, or of the offense
charged which is included in the offense proved.

Sec. 5. When an offense includes or is included in another. – An offense

charged necessarily includes the offense proved when some of the essential
elements or ingredients of the former, as alleged in the complaint or
information, constitutes the latter. And an offense charged is necessarily
included in the offense proved when the essential ingredients of the former
constitute or form part of those constituting the latter.

The elements of the offense charged in this case, which is unlawful intervention in the
issuance of a cockpit license in violation of Section 3(h) of the Anti-Graft Law, are

1. The accused is a public officer;

2. He has a direct or indirect financial or pecuniary interest in any business,

contract, or transaction, whether or not prohibited by law; and
 3. He intervenes or takes part in his official capacity in connection with such
interest.

On the other hand, the essential ingredients of the offense proved, which is possession
of prohibited interest in violation of Section 3(h) of the Anti-Graft Law, are as follows:

1. The accused is a public officer;

2. He has a direct or indirect financial or pecuniary interest in any business, contract or

transaction; and

3. He is prohibited from having such interest by the Constitution or any law.

It is clear that the essential ingredients of the offense proved constitute or form part of
those constituting the offense charged. Put differently, the first and second elements of the
offense charged, as alleged in the information, constitute the offense proved. Hence, the
offense proved is necessarily included in the offense charged, or the offense charged necessarily
includes the offense proved. The variance doctrine thus finds application to this case, thereby
warranting the conviction of petitioner Edgar Teves for the offense proved.