B-121817, MAY 17, 1956

B-121817: May 17, 1956

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TO THE SECRETARY OF THE ARMY: WE HAVE BEFORE US FOR SETTLEMENT EIGHT UNCERTIFIED VOUCHERS IN FAVOR OF THE REPUBLIC OF THE PHILIPPINES COVERING THE COSTS OF LANDS ACQUIRED AND EXPENSES INCURRED INCIDENT TO CONDEMNATION OR EXPROPRIATION PROCEEDINGS CARRIED OUT UNDER ARTICLE XXII OF THE AGREEMENT BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE UNITED STATES OF AMERICA CONCERNING MILITARY BASES ENTERED INTO ON MARCH 14. WHENEVER IT IS NECESSARY TO ACQUIRE BY CONDEMNATION OR EXPROPRIATION PROCEEDINGS REAL PROPERTY BELONGING TO ANY PRIVATE PERSONS. THE PHILIPPINES WILL INSTITUTE AND PROSECUTE SUCH CONDEMNATION OR EXPROPRIATION PROCEEDINGS IN ACCORDANCE WITH THE LAWS OF THE PHILIPPINES. INCLUDING THE VALUE OF THE PROPERTY AS DETERMINED BY THE COURT. * * *" THE VOUCHERS REFERRED TO WERE NOT CERTIFIED FOR PAYMENT BECAUSE OF QUESTIONS AS TO THE REASONABLENESS OF THE CHARGES FOR THE LANDS INVOLVED.

B-121817, MAY 17, 1956

TO THE SECRETARY OF THE ARMY:

WE HAVE BEFORE US FOR SETTLEMENT EIGHT UNCERTIFIED VOUCHERS IN FAVOR OF THE REPUBLIC OF THE PHILIPPINES COVERING THE COSTS OF LANDS ACQUIRED AND EXPENSES INCURRED INCIDENT TO CONDEMNATION OR EXPROPRIATION PROCEEDINGS CARRIED OUT UNDER ARTICLE XXII OF THE AGREEMENT BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE UNITED STATES OF AMERICA CONCERNING MILITARY BASES ENTERED INTO ON MARCH 14, 1947.

ARTICLE XXII PROVIDES IN PERTINENT PART:

"CONDEMNATION OR EXPROPRIATION 1. WHENEVER IT IS NECESSARY TO ACQUIRE BY CONDEMNATION OR EXPROPRIATION PROCEEDINGS REAL PROPERTY BELONGING TO ANY PRIVATE PERSONS, ASSOCIATIONS OR CORPORATIONS LOCATED IN BASES NAMED IN ANNEX A AND ANNEX B IN ORDER TO CARRY OUT THE PURPOSES OF THIS AGREEMENT, THE PHILIPPINES WILL INSTITUTE AND PROSECUTE SUCH CONDEMNATION OR EXPROPRIATION PROCEEDINGS IN ACCORDANCE WITH THE LAWS OF THE PHILIPPINES. THE UNITED STATES AGREES TO REIMBURSE THE PHILIPPINES FOR ALL THE REASONABLE EXPENSES, DAMAGES AND COSTS THEREBY INCURRED, INCLUDING THE VALUE OF THE PROPERTY AS DETERMINED BY THE COURT. * * *"

THE VOUCHERS REFERRED TO WERE NOT CERTIFIED FOR PAYMENT BECAUSE OF QUESTIONS AS TO THE REASONABLENESS OF THE CHARGES FOR THE LANDS INVOLVED-- - ACQUIRED BY THE PHILIPPINE GOVERNMENT FOR THE UNITED STATES IN CONNECTION WITH THE CLARK FIELD-FORT STOTSENBURG EXPANSION PROJECT--- THE CHARGES BEING BASED UPON JUDICIAL DETERMINATIONS OF VALUE. ALSO QUESTIONED WERE CERTAIN CHARGES OF ADMINISTRATIVE EXPENSE, WHICH WERE DISALLOWED UPON THE VOUCHERS.

THE RECORD IN OUR OFFICE SHOWS THAT THE PHILIPPINE GOVERNMENT INITIATED AN INVESTIGATION IN REGARD TO CERTAIN ALLEGED IRREGULARITIES CONCERNING THE DETERMINATIONS OF THE COURT REGARDING PROPERTY VALUES IN THE PROJECT REFERRED TO BUT IT FAILS TO DISCLOSE WHETHER SUCH DETERMINATIONS WERE EVER SET ASIDE OR OTHERWISE INVALIDATED. IF THE DETERMINATIONS OF PROPERTY VALUES MADE BY THE COURT HAVE BEEN FINALIZED SO FAR AS THE REPUBLIC OF THE PHILIPPINES IS CONCERNED IT IS OUR VIEW THAT UNDER ARTICLE XXII THERE IS NO ALTERNATIVE BUT TO PAY THE AMOUNTS SO DETERMINED.

WE WOULD APPRECIATE AN EXPRESSION OF YOUR VIEWS REGARDING THE INTENT OF ARTICLE XXII OF THE AGREEMENT AND INFORMATION WHETHER THE COURT DETERMINATIONS NOW ARE VALID AND SUBSISTING. IF YOU CONCUR WITH OUR VIEW OF ARTICLE XXII AND FIND THAT THE DETERMINATIONS OF THE COURT ARE NOT TO BE FURTHER CHALLENGED, WE PERCEIVE NO REASON WHY PAYMENT OF THE VOUCHERS SO FAR AS THEY RELATE TO PROPERTY VALUES SHOULD NOT BE ADMINISTRATIVELY APPROVED.

THE QUESTION OF THE REASONABLENESS OF THE ADMINISTRATIVE EXPENSES INCURRED BY THE PHILIPPINE GOVERNMENT INCIDENT TO THE LAND ACQUISITION MAY BE OPEN TO SETTLEMENT BY NEGOTIATION BETWEEN THE DEPARTMENT OF THE ARMY AND APPROPRIATE PHILIPPINE AUTHORITIES; HOWEVER, IN THE INTERIM THERE WOULD APPEAR TO BE NO OBJECTION TO APPROVING THE AMOUNTS APPARENTLY PASSED IN AN ADMINISTRATIVE AUDIT OF THE EIGHT VOUCHERS BY THE CHIEF, REAL ESTATE OFFICE (PHILIPPINES).

WE ARE ENCLOSING THE UNCERTIFIED VOUCHERS REFERRED TO AND COPIES OF SUCH RELATED PAPERS AS MAY BE USEFUL IN CONSIDERATION OF THE CASE. IT IS REQUESTED THAT THEY BE RETURNED WITH YOUR REPLY.