system error: geez, what brought you here?!

From: Cenon Alfonso
To: williamolalia@usthospital.com.ph
Cc: hersheyhomol@yahoo.com; abaynsc@aol.com; marissasevilleno@usthospital.com.ph; mateobagsic@usthospital.com.ph; edgardoorlina@usthospital.com.ph; rolandocabatu@usthospital.com.ph; noemimenchavez@usthospital.com.ph
Sent: Wed, 19 Sep 2007 11:21 am
Subject: The Truth about the USTHI Saga

Dear Reader,

We are sending this email to you so that you can help us spread the truth to all Thomasians, particularly to all those who have a heart in the future of the UST Hospital. Please send this to all whom you know have been part and partners of the USTHI. Please forward this the USTMAAA, Cardinal Rosales and even to the Holy See.

We shall extensively quote the very document that contains the declaration and orders of the Master of the Order which he verbally delivered before us during the joint Board meeting last 17 September 2007 in the Rector's Hall.

We will confine ourselves to the three contentious issues, namely, the separation and incorporation of the Hospital (USTHI), the 3 Billion Hospital Redevelopment Project and Loan, and the Professional Fees. Because, we were made privy to other
surrounding circumstances that may have some significant bearing to the decisons and events of the recent past, we have the duty likewise to make these known to the public.

The Separation and incorporation of the Hospital
(USTHI).

The UST BOT "failed to secure the permission of the Master of the Order and that of the Holy See" and therefore (the Master) ".... I consider all these transactions to have been unlawful as they lacked my approval and that of the Holy See. (Cann 1291; 1292 Sec. 1; 638 Sec. 3; LCO 609 Sec. I & II). Both the legal counsels of the University, Atty. Divina, and that of the Hospital, Atty. Rody P. Padlan, who assisted in the process of incorporation of USTHI, will attest to the legality of the incorporation of
USTHI according to the Philippines laws. Be that as it may, it appears that the UST BOT was not aware of the Canon Laws concerned before and during the process of incorporation. Following the same Canon, all other corporations that have assumed a separate juridical entity from UST like the Benavides Foundation, Inc., the St. Thomas Charity Foundation, Inc., the UST Review Center, and the corporation that runs the Isabel Building are likewise "unlawful". Is this ignorance of the Canon Law? Obviously, this is not ignorance of Philippine civil laws. Who then is liable? Certainly, it is not USTHI. Or, is it a
case wherein such antiquated provisions of Canon Law that have been relegated to obscurity because they were never practiced by anyone here in the Philippines (not in the recent decades) nor anywhere else in the world but was conveniently used by the some dominican priests who have an axe to grind against the UST BOT? Be that as it may, the accountabilty and responsibilty falls upon the UST BOT, certainly not upon USTHI.

The public must know that despite this deficiency, upon learning about it, both the UST BOT and the USTHI worked together in order to amend the necessary documents of incorporation in accord with the recommendations of the Commission sent by the Master under the Chairmanship of Fr. Mark Edney, O.P. Such amendaments in fact was used by the Master, his Vicar and legal counsel through UST BOT last September 17, 2007 to dissolve USTHI.

Despite the lack of canonical approval of the Master and of the Holy See, it is an undeniable fact that the juridical separation of the Hospital from the University,was the important key of the turnaround of the Hospital from its certain collapse and closure. If it were not done, the Hospital would have been either closed down or have been managed by another group that would have closed down its charity division. IF IT WAS NOT PREVENTED, WAS IT NOT A CLEAR CASE OF LOSS OF CHURCH PATRIMONY? That was the situation at that time - 2003-2004. We seem to have a very short term memory!

It must also be recalled that the implementor of the current dissolution of USTHI - the Acting Rector - in order to return the Hospital to its former state of the was one of the BOT members who voted for the juridical separation of USTHI. Unwittingly or otherwise, he was not too long ago in the same desparate situation in frantic search for an urgent solution that can save the Hospital from its unabated down spiralling collapse. Unanimously, they were all convinced, after carefully studying all available options from September 2003 to May 2004 (that's 9 full months and at least half a dozen Board meetings of the
UST BOT and the UST Corporation) that they unanimously made the right decision. And said right decision bore good fruit in such a short time - 2004 - 2007. Don't we judge the tree by its fruit? Are we now turning a blind eye to these results and cling to some obscure Canon Law? Are we not like the "sadducees and pharisees" of the law which Jesus referred to as
"brood of vipers?' How about the tens of thousands of poor patients that have been served during the last 4 years who would not have eceived appropriate care without the turnaround of USTH? Is this not the Hospital's mission? How about the great improvement in the medical and allied health sciences training in the Hospital compared to its state during prior years?

Is this not the mission of the University? The juridical separation, the granting of its own personality and governance has preserved and improved and in fact greatly enhanced the University of Santo Tomas and its Hospital. It is a fact. Only the blind and those who choose to be such deny that. Given good faith among the members of the then UST BOT, and the legal means (civil) by which the process of separation was done, and most of all, given the excellent results that flowed from it,
IS THERE NO POSSIBLE REMEDY THAT CAN CURE THE UNINTENDED TRANSGRESSION OF THE CANON LAW? If there is, was it ever excercised? Can it not be done?

Reverting back to its former state is definitely not the solution. It is like as one friar said "going back to the middle ages".

The 3 Billion Redevelopment Project and Loan.

The context of the development project is not a stand-alone feat and definitely not spur-of-the-moment. This is Phase 2 of the UST BOT-approved 5-year strategic plan. After a very successful Recovery Phase (Phase 1) in 2004-2005, came Phase 2 - the Development Phase. Since USTH is in the catching-up process, Phase 2 is defined as infra, equipment, manpower and systems development towards unification of servics and standardization of care. But this process did not start here. The manpower development came very early. The number of medical staff ballooned to more than 100%. Systems development and accreditation were obtained as scheduled. Equipment updating came in very rapidly to 90% even before fiscal year 2007. Public reputation, both in the charity and business aspects significantly improved parallel to the improvement of the morale of the internal public. Success in small projects and investments propelled advancement to bigger risks and bigger investments. From the mere refurbishing of corners and services, to acquisition of major equipment costing nearly Php100M. After confidence building, the first of the 4 phases of the Development Phase was started and completed almost 2 months ahead of schedule. This is the Benavides Cancer Institute - a first of its kind in this country. The return as well as the patronage are overwhelmingly. They even better the best case scenario of the projections studies. This risk involved in BCI is over Php 600M total while the actual cash amount is Php 147M. By its current performance, it can reach its target a
year ahead of projections. Do we need another proof?

Now, what is the risk of the Php 3B investment? Is this unreasonable? For someone who is not familiar with Hospital management and affairs, yes. For someone who has not even made a single large investment elsewhere, yes. For someone who was not in anyway part of the confidence-building process that we have undergone for over 3 years, yes, For someone who does not fully comprehend and understand all the meticulous studies, feasibilities, projections and sentivity assessments that have been done, yes. For someone who does not like to listen but assumes on understanding everything about the project by simply reading the documents without the dynamics of it, yes.

For someone who will not be able to look beyond those numbers and projections and assumptions, yes. For someone who does not possess the vision, yes. For someone who is NOT willing to take the risk, yes. For someone who is not convince of success, yes. For someone who does not trust the people in-charge, yes.

The USTHI Board and the Hospital Administration painstakingly endeavored for 1 year and 9 months in taking care of all the details of the development project. Yes, again, like the deficiency in the separation and incorporation of USTHI, this project
and loan lacked the approval of the Master and of the Holy See. While all transactions are legally valid (according to civil law), it failed to satisfy the requirements of Canon Law. Are we to stop at the middle of the transactions? The order to "hold in
abeyance" from the Master came last September 2006 when all of the preparations and transactions were well on their way. Despite such tight situation, the UST BOT and the USTHI held back all processes by slowing the pace and simply allowed it to passively proceed for over 6 months. But the transaction time table came ahead of the Rome Commission's time table. The divergence became inevitable. By March of 2007, all involved parties are exerting pressures to USTHI to comply and proceed as previously agreed upon or else face legal and financial sanctions. Under "interpretative permission" USTHI signed the OLSA with the lending banks. THE ASSESSMENT OF ALL PARTIES INVOLVED IS THAT THE RISK OF FAILURE TO REPAY THE LOAN IS LOW. This is the result of the due diligence of the banks, the financial adviser and arranger and Punongbayan and Araullo (Grant Thorton Consulting). The projections numbers clearly speak for themselves. ALL TRANSACTIONS WERE DONE ABOVE BOARD. There are no hidden costs. No one or no group will be personally inured beyond what is agreed upon as part of the services rendered. The Hospital created all internal check and balance systems and responsible offices for proper accounting and disbursements. Risk management workshop conducted to leave no stone unturned. What else did we overlooked? What is the basis of the allegation that "there is unlikelihood that USTHI would be able to meet the repayment terms set out in the OLSA? All proofs are on the contrary? Where is the proof of that allegation? We waited for over 2 months. No one came out with anything at all. Even a scratch paper computation could have been a point of discussion!

Professional fees.

Yes, the USTHI BOT debated lengthily (and it shows that this was treated quite farily well) on the fees of all professional transactions. All contracts are above-board. Again, the issue is the same. There was no permission from the Master to enter into contracts with such professional groups with such fees. "I remind you that in some cases such contracts and agreements exceeded the monetary level that could be legitmately authorized by yourselves and consequently required my permission as Master of the Order and as Grand Chancellor of the University." That limit is clearly stated in the Canon law as $100,000.00 or Php 5M. Does it mean that henceforth all transactions exceeding Php 5M shall require Rome's approval? If this is so, all major equipments of the Hospital seem to have been acquired "unlawfully". Who will say that such fees are high and low? What is the industry rate? Is there an indusry rate? If there is none and the project depends on the financing scheme, are we to stop there or negotiate? That is exactly what the USTHI BOT did. It followed all industry rates. If there is no such rate, then negotiations. These were all meticulously done with the best interest of the hospital and they were all done transparently, professionally and consistenly. At the end of the day, despite such fees, what is important is that the project remains viable and risks remain low. Are we expecting to be served well always at pro bono rate or semi-pro bono rate? Such rate is only true among the Hospital Administration!

THE DOMINICAN LEADERSHIP, BEING THE FINAL DECISION MAKERS, CAN DO AND UNDO ANYTHING AND EVERYTHING WITH
THE UNIVERSITY AND THE HOSPITAL, AT WILL. There is no denying. We, as laymen, make a choice to assist them or not in their times of need. We believe that we have responded to their desperate calling in 2003. And we believe that the response we delivered, whether appreciated or not, was with great obvious success that bore some fruit that we can be proud of, not only before man but before God. We also believe that continuing along this line of development is the best chance for the University and the Hospital to preserve the partimony of the Church. We believe that if it will be reversed, the risk of losing the patrimony of the Church becomes intolerably high. There is nothing in our consciences that holds back our convictions.
All transactions have been completed above-board, professionally and devoid of all personal gain and interests. They may not be totally devoid of some errors, but rest assured that we have delivered our best in order to minimize or eliminate them. As we humbly leave our responsibilities to the next administrators after having been requested to by the Master of the Order, we make this appeal to the Master not to revert back the organization to where it came from but rather continue the projects as planned that are most vital for the Hospital's survival in the next 10 years. We likewise appeal that a canonical remedy
called "sanatio" be made rather than a complete reversal which may wipe out the remaining advantage that have been painstakingly won over during the last 3 years. WE FIRMLY BELIEVE THAT DESPITE THEIR "OBJECTIVE DISOBEDIENCE" FRS. NANTES, ARCEO AND PONCE, DID WHAT THEY DID BECAUSE OF WHICH THEY HAVE BEEN REMOVED FROM THEIR OFFICES, FOR THE SAKE OF THOSE LEAST OF GOD'S BRETHREN AND NOT TO OFFEND THEIR MASTER. Lastly, we make this appeal, as we pick up our personal carreers back to life (after having left them for 4 years) in order to help your institution, please keep our personal dignity intact by shielding us from unscrupulous allegations and accusations of your own brethren and their cohorts.

Despite this manner of parting, we still thank you for having given us the chance to respond to God's calling.

Cenon R. Alfonso, MD and William L. Olalia, MD

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