Ombudsman probes alleged DICT ‘ghost internet’ scheme

The Office of the Ombudsman has launched a fact-finding investigation into an alleged “ghost internet” scheme involving government information technology projects, with the probe set to center on contracts under the Department of Information and Communications Technology (DICT).

Assistant Ombudsman Mico Clavano said during a press conference on Friday, Sept. 18, that investigators uncovered a potential loophole in the procurement and inspection of government IT systems that could allow contractors to deliver cheaper, outdated, or even fake software while billing the government for the required technology.

“We have uncovered a scheme that we are calling Ghost Internet,” Clavano said.

He explained that government agencies spend billions of pesos on IT systems with specific technical requirements covering both hardware and software.

Under the alleged scheme, hardware such as machines and routers may be delivered and pass inspection, while the software that is supposed to operate on the equipment may not undergo the same level of verification.

“But once the hardware, the machines, the routers, are delivered and pass its inspection, everyone assumes the software that’s supposed to run on it is there as well. Nobody actually checks,” Clavano said.

According to Clavano, this creates a potential loophole that could allow a contractor to install cheaper, outdated, or fake software while still charging the government the full contract price for the required system.

Because the software may not be verified after the hardware passes inspection, possible irregularities could remain undetected until the system encounters problems or is subjected to a deeper investigation, he added.

The Ombudsman said its fact-finding investigation will center on the DICT and examine whether contracted sites and systems were actually installed and remain operational.

Investigators will also determine whether the government was billed for connectivity or other services that were never delivered and whether the prices charged for hardware, software, and services were reasonable or potentially inflated.

The probe will further look into the officials and individuals who approved or certified the projects and authorized the release of payments for systems or services that may not have been delivered.

The Ombudsman has not yet identified specific contractors or projects allegedly involved in the scheme, and currently in the fact-finding stage.

Clavano said the investigation has entered the fact-finding stage and that the Ombudsman will provide further information as the inquiry progresses.

“So that has entered into fact-finding, and we will update the public regarding the investigation on that matter as soon as possible,” he said.