The Modus operandi applied in PDAF SCAM..

The PDAF scam involved the funding of "ghost projects" that were funded using the PDAF funds of participating lawmakers. These projects were in turn "implemented" through Napoles' companies, with the projects producing no tangible output. According to testimony provided by Benhur Luy's brother, Arthur, funds would be processed through fake foundations and non-governmental organizations (NGOs) established under the wing of the JLN Group of Companies, the holding company of Janet Lim-Napoles, with Napoles' employees—even a nanny—named as incorporators or directors. Each foundation or NGO served as an official recipient of a particular legislator's PDAF funds, and each organization had a number of bank accounts where PDAF funds would be deposited for the implementation of these projects. Napoles, who specialized in trading agricultural products, frequently used the procurement of agricultural inputs in the propagation of the scam. Either her employees would write to legislators requesting for funds for the implementation of a particular project (e.g. farm inputs), or a legislator would indicate to the DBM a particular recipient agency for his or her PDAF funds that would be pre-selected by Napoles. Once received, this is forwarded to the DBM, which would then issue a Special Allotment Release Order (SARO) indicating the amount deducted from the legislator's PDAF allocation, and later a Notice of Cash Allocation (NCA) given to the recipient agency. The NCA would then be deposited in one of the foundation's accounts, and the funds withdrawn in favor of the JLN Group of Companies. The funds would then be split between Napoles, the lawmaker, the official of the DA responsible for facilitating the transfer of funds and, for good measure, the local mayor or governor. The JLN Group of Companies offered a commission of 10-15% against funds released to local government units and recipient agencies of PDAF funds, while a legislator would receive a commission of between 40-50% against the total value of his/her PDAF. Letters sent by Napoles' employees to participating legislators would also include a letter from a local government unit requesting for funding, bearing the forged signature of the local mayor or governor. All documents involving local government units were prepared by Napoles' staff, and Benhur Luy would forge the signature of the local mayor or governor. Local government officials who were used by Napoles were often unaware that they were participating in the scam. In other instances, however, Napoles would use emissaries to establish contact with local mayors in exchange for commissions that would come from the implementation of these projects. Every recipient agency participating in the scam had employees or officials that maintained contact with Napoles, allowing for the smooth processing of transactions and the expedient release of PDAF funds to her organizations. Most importantly, Napoles was in regular contact with the DBM through Undersecretary for Operations Mario L. Relampagos,[18] who had three employees (identified as Leah, Malou and Lalaine) responsible for the processing of SAROs destined for Napoles' organizations. (From Wikipedia, the free encyclopedia, http://en.wikipedia.org/wiki/Priority_Development_Assistance_Fund_scam )

What is "Priority Development Assistance Fund scam"?

The Priority Development Assistance Fund scam, also called the PDAF scam or the pork barrel scam, is a political scandal involving the alleged misuse by several members of the Congress of the Philippines of their Priority Development Assistance Fund (PDAF, popularly called "pork barrel"), a lump-sum discretionary fund granted to each member of Congress for spending on priority development projects of the Philippine government, mostly on the local level. The scam was first exposed in the Philippine Daily Inquirer on July 12, 2013, with the six-part exposé of the Inquirer on the scam pointing to businesswoman Janet Lim-Napoles as the scam's mastermind after Benhur K. Luy, her second cousin and former personal assistant, was rescued by agents of the National Bureau of Investigation on March 22, 2013, four months after he was detained by Napoles at her unit at the Pacific Plaza Towers in Fort Bonifacio. Initially centering on Napoles' involvement in the 2004 Fertilizer Fund scam, the government investigation on Luy's testimony has since expanded to cover Napoles' involvement in a wider scam involving the misuse of PDAF funds from 2003 to 2013. It is estimated that the Philippine government was defrauded of some ₱10 billion in the course of the scam, having been diverted to Napoles, participating members of Congress and other government officials. Aside from the PDAF and the fertilizer fund maintained by the Department of Agriculture, around ₱900 million in royalties earned from the Malampaya gas field were also lost to the scam. The scam has provoked public outrage, with calls being made on the Internet for popular protests to demand the abolition of the PDAF, and the order for Napoles' arrest sparking serious discussion online. (From Wikipedia, the free encyclopedia,http://en.wikipedia.org/wiki/Priority_Development_Assistance_Fund_scam)

What is Priority Development Assistance Fund?

The Priority Development Assistance Fund (PDAF) is a discretionary fund in the Philippines available to members of Congress. Originally established as the Countrywide Development Fund (CDF) in 1990, it is designed to allow legislators to fund small-scale infrastructure or community projects which fell outside the scope of the national infrastructure program, which was often restricted to large infrastructure items. The PDAF is commonly called the "pork barrel", and has been the subject of much public criticism following exposés on abuses perpetuated by members of Congress on use of the fund in 1996 and 2013. (From Wikipedia, the free encyclopedia, http://en.wikipedia.org/wiki/Priority_Development_Assistance_Fund)

What is the system of Pork Barrel?

Pork barrel is the appropriation of government spending for localized projects secured solely or primarily to bring money to a representative's district. The usage originated in American English. In election campaigns, the term is used in derogatory fashion to attack opponents. Scholars, however, use it as a technical term regarding legislative control of local appropriations. In the Philippines, the term "pork barrel" is used to mean funds allocated to the members of the Philippine House of Representatives and the Philippine Senate to spend as they see fit without going through the normal budgetary process or through the Executive Branch. It can be used for both "hard" projects, such as buildings and roads, and "soft" projects, such as scholarships and medical expenses. Beginning in 2006, the amount was ₱70.0 M for each Representative and ₱200.0 M for each Senator. This pork barrel system was stopped by President Ferdinand Marcos during his dictatorship but was reintroduced by President Corazon Aquino in 1986. The program has had different names over the years, including the Countryside Development Fund, Congressional Initiative Fund, and currently the Priority Development Assistance Fund.[citation needed] During the presidency of Gloria Macapagal Arroyo, the PDAF became the biggest source of corruption among the legislators. Kickbacks were common and became syndicated--using pre-identified project implementers including government agencies, contractors and bogus non-profit corporations as well as the government's Commission on Audit. In August 2013, outrage over the ₱10 B Priority Development Assistance Fund scam, involving Janet Lim-Napoles and numerous Senators and Representatives, led to widespread calls for abolition of the PDAF system. This also included the pork barrel funds of President Aquino that amounted to several billions of pesos.[citation needed] The Million People March which occurred on August 26, 2013, National Heroes' Day in the Philippines, called for the end of "pork barrel" and was joined by simultaneous protests nationwide and by the Filipino diaspora around the world.[ (From Wikipedia, the free encyclopedia,http://en.wikipedia.org/wiki/Pork_barrel)