An Analysis of Non-Implementation of Franchise as Crime in Leandro Leviste Solar Energy Case
An Analysis of Non-Implementation of Franchise as Crime in Leandro Leviste Solar Energy Case
Amiel Gerald A. Roldan™
October 14, 2026
Non-implementation of a legislative franchise is not, in the abstract, a standalone common-law crime, but under Philippine statutory frameworks it can trigger criminal liability when framed as willful neglect of obligations under the Public Service Act (PSA) or related regulatory regimes, especially where public interest in essential services is implicated.
The Leviste–Solar Para sa Bayan (SPBC / SPSB) controversy illustrates the tension between franchise as a privilege conditioned on performance, the limits of penalizing pure omission, regulatory interdependence, corporate-veil piercing, and concurrent civil/administrative accountability.
Factual and Statutory Matrix
Republic Act No. 11357 (31 July 2019) granted Solar Para sa Bayan Corporation a non-exclusive 25-year legislative franchise to construct, install, establish, operate, and maintain distributed energy resources (DERs) and microgrids using renewable (or hybrid) technology in designated remote, unviable, unserved, or underserved areas across specified provinces and localities. The franchise is explicitly conditioned on public interest and commercial purposes; the Department of Energy (DOE) is charged with identifying qualifying areas; the grantee must secure certificates of public convenience and necessity and other permits from the Energy Regulatory Commission (ERC), DOE, or relevant agencies; and continuous operation is required. Critically, Section 11 provides that the franchise “shall be deemed *ipso facto* revoked in the event that the grantee fails to operate continuously for two (2) years.” Transfer or assignment of the franchise or controlling interest without prior congressional approval likewise triggers ipso facto revocation upon failure to report.
SPBC, founded and controlled by then-businessman (later Batangas 1st District Representative) Leandro Antonio L. Leviste, never secured the necessary permits or launched meaningful operations. By Leviste’s own public admissions and corporate filings, operations across its limited sites ceased around 2022; the company became effectively defunct, with liabilities exceeding assets. Parallel Solar Philippines group entities (under Solar Philippines Power Project Holdings Inc., majority-owned by Leviste) obtained and later saw terminated numerous renewable-energy service contracts, generating DOE claims of approximately ₱24 billion in penalties and obligations (of which only a negligible fraction has been collected) and Commission on Audit flags of over ₱10 billion in unpaid commitments linked primarily to the group. These terminations left unrealized gigawatt-hours of potential capacity. Concurrent Ombudsman probes into plunder and graft (non-bailable) target Leviste and, in related allegations, his mother Senator Loren Legarda, centering on the franchise’s grant, non-performance, and alleged related-party or divestment structures.
In May 2026 the DOE filed a criminal complaint with the Department of Justice alleging willful neglect and intentional failure to fulfill franchise obligations under the PSA (Commonwealth Act No. 146, as amended by Republic Act No. 11659). An information was filed in Makati RTC Branch 235 charging Leviste and two corporate officers with violation of Section 25. The court issued an arrest warrant (bail ₱72,000); Leviste, abroad since August 2026 accompanying his mother on medical leave, has been characterized by the NBI as a fugitive. Defense counsel (Antonio La Viña) counters that SPBC is not a public utility covered by the PSA, that the DOE’s failure to issue implementing rules and identify specific areas rendered performance impossible (triggering automatic revocation), and that the complaint is a “complaint looking for a crime” lacking specific penalizable acts beyond a general clause.
Can Non-Implementation Constitute a Crime?
Philippine franchise law treats a legislative franchise as a special privilege granted by Congress under the Constitution’s franchise power, subject to conditions and the public-interest residual. Non-performance does not automatically criminalize the grantee; ordinary commercial non-performance yields civil remedies, franchise cancellation, or administrative sanctions. Criminalization requires a specific penal statute that attaches liability to the omission.
Section 25 of the PSA (as amended) penalizes any person who “knowingly and willfully neglect[s], fail[s], or omit[s] to do or perform” any act required by the Act, or who causes a public-service corporation to do so. For juridical persons the imprisonment penalty (originally modest, later raised under RA 11659 to a range that can reach 6 years and 1 day to 12 years, plus fine up to ₱2 million) falls on responsible officers, directors, or managerial employees. The DOE and DOJ theory is that the franchise obligations—continuous operation in the public interest, securing permits, delivering power to underserved areas—constitute acts required under the regulatory umbrella of the PSA once the franchise is granted, and that seven years of total inactivity plus diversion of entrepreneurial energy to parallel profit-oriented entities under Leviste’s control evidences willful neglect amounting to a “badge of fraud” justifying veil-piercing and personal liability.
Countervailing doctrinal and factual considerations are substantial:
- Coverage: The PSA historically regulated “public services”/public utilities (distribution and transmission of electricity among others). Microgrids and DERs in remote areas occupy a hybrid space; RA 11357 itself requires certificates of public convenience where applicable but does not automatically convert every franchisee into a PSA-regulated public utility. Defense arguments that the franchise falls outside the PSA’s penal reach therefore have formal plausibility.
- Impossibility and regulatory dependence: RA 11357 expressly tasks the DOE with determining the geographic scope. Absence of IRR and area identification can be framed as rendering performance legally or practically impossible, invoking the maxim that the law does not require the impossible and the franchise’s own ipso facto revocation clause. Once revoked by operation of law, subsequent “non-implementation” loses its object.
- Mens rea: “Knowingly and willfully” demands more than passive non-performance; it requires conscious disregard or deliberate omission. Public statements admitting cessation, combined with parallel commercial activity, can be argued either as evidence of willfulness or as good-faith acknowledgment of regulatory blockage.
- Nullum crimen sine lege and specificity: Penal statutes are strictly construed. A general neglect clause cannot be stretched to cover every franchise condition without identifying the precise statutory duty violated. Courts have historically required clearer statutory anchors for pure omissions.
Thus non-implementation can be prosecuted as a crime when the franchise is treated as creating PSA-type duties and the omission is willful, but the theory is contested, fact-intensive, and vulnerable to motions to quash or demurrer on coverage, impossibility, and nullum crimen grounds. It is closer to regulatory enforcement via the criminal process than to classic malum in se criminality.
Immediate Repercussions and Weight of the Alleged Crime
Immediate repercussions (as of mid-October 2026):
- Arrest warrant outstanding; Leviste treated as a fugitive while abroad. Co-accused officers have posted bail.
- Parallel Ombudsman proceedings on plunder/graft (far graver, non-bailable, with potential perpetual disqualification from public office) remain active; these rest on broader allegations of anomalous contracts, unpaid obligations exceeding ₱10 billion, and possible conflict-of-interest or facilitation issues surrounding the original franchise grant.
- Civil recovery actions by DOE/OSG for the ₱24 billion claim continuum; collection remains minimal.
- Political and institutional fallout: questions of conflict of interest for a sitting representative, scrutiny of the original legislative process, and pressure on energy regulators to demonstrate even-handedness against non-performing contractors.
- Practical operational consequences: the franchise is treated as lapsed or revoked; residual sites and liabilities remain orphaned; public confidence in microgrid franchising as a vehicle for last-mile electrification is damaged.
Weight of the PSA charge itself: moderate. The statutory maximum (up to 12 years imprisonment and fine) is not negligible, yet bail is set at only ₱72,000, signaling that the court does not view the offense as among the most serious. Conviction would turn on proof of willfulness and PSA coverage; acquittal or dismissal on technical grounds is a realistic possibility. The far heavier weight attaches to the Ombudsman plunder/graft track (potential reclusion perpetua range under the Anti-Plunder Law and related statutes, plus civil forfeiture) and to the pure economic and developmental cost: forgone renewable capacity, higher system costs, and delayed rural electrification. The PSA case functions more as a prosecutorial entry point and symbolic accountability mechanism than as the primary vehicle of severe penal consequence.
Broader Academic and Policy Implications
The episode exposes structural features of Philippine franchise practice: the ease with which political access can secure special legislation, the subsequent difficulty of enforcing performance conditions once the privilege is granted, the *ipso facto* clauses that create automatic but often unlitigated revocation, and the residual resort to general regulatory penal provisions when specialized energy statutes prove inadequate. It also highlights the limits of criminal law as a tool for enforcing developmental franchises—omissions are harder to prosecute than affirmative frauds, regulatory agencies share causal responsibility for non-performance when they fail to issue necessary rules, and corporate layering plus political office complicate personal accountability.
In comparative perspective, pure non-performance of infrastructure franchises more commonly yields administrative cancellation, forfeiture of bonds, or civil damages rather than imprisonment; criminalization tends to require additional elements of deception, misappropriation, or public-fund abuse. The Leviste matter therefore sits at the boundary between regulatory failure and potential criminal liability, testing whether Philippine courts will treat sustained, willful non-implementation of a public-interest energy franchise as sufficiently culpable under the PSA’s neglect provisions, or whether the combination of automatic revocation, regulatory non-feasance, and lack of specific mens rea proof will collapse the charge. The concurrent high-stakes Ombudsman cases, however, ensure that the larger accountability questions—public trust, conflict of interest, and the integrity of the renewable-energy contracting system—will not rest solely on the narrower PSA theory.
While the Ombudsman plunder and graft complaints against Rep. Leandro Leviste, Sen. Loren Legarda, and former Energy Secretary Alfonso Cusi form a far more serious track than the Public Service Act case.
They remain at the preliminary investigation stage (as of the latest available reports through early October 2026), with no formal information yet filed in the Sandiganbayan. The respondents have been ordered to submit counter-affidavits; Legarda’s camp has publicly disputed the allegations and sought reconsideration, arguing insufficient evidence and absence of any government funds taken.
Core Allegations and Legal Bases
Ombudsman Jesus Crispin Remulla announced on 31 July 2026 that investigators had recommended, and he had signed the charge sheet for, a preliminary investigation into:
- Plunder under Republic Act No. 7080 (the Plunder Law). This is a non-bailable offense when the aggregate amount involved reaches or exceeds ₱50 million. The Ombudsman ties the threshold to more than ₱10.44 billion in unpaid financial obligations arising from terminated solar contracts linked to Leviste’s companies.
- Multiple violations of the Anti-Graft and Corrupt Practices Act (RA 3019), specifically:
- Section 3(e) (causing undue injury to the government or giving unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence);
- Section 3(h) (direct or indirect financial interest in any business, contract, or transaction in which the public officer intervenes or takes part in an official capacity — conflict of interest);
- Section 3(i) (becoming interested, for personal gain, in any transaction requiring approval of a board or office of which the officer is a member).
- Related violations of the Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713).
The theory of the case, as articulated by the Ombudsman, is that Legarda (then Senate Finance Committee chair), Leviste, and Cusi “conspired to secure exclusive government rights over the country’s solar energy resources through legislative and regulatory actions.” This allegedly produced a “virtual monopoly” of solar service contracts awarded to corporations within Leviste’s network (primarily under the Solar Philippines umbrella and the Solar Para sa Bayan franchise). Many projects were never developed (“ghost electricity”); some contracts were transferred to paper entities that never operated; and the terminated contracts left the government with over ₱10.44 billion in unpaid obligations (work/training commitments, development assistance fees, contractual penalties). Remulla has described the resulting public damage as potentially “hundreds of billions” when lost capacity and systemic costs are considered, and has characterized the respondents as “big fish.”
Supporting factual threads include:
- The 2019 grant of RA 11357 (the SPBC franchise) and subsequent DOE renewable-energy service contracts.
- Failure to deliver committed capacity under the Philippine Energy Plan.
- Later divestments/sales of related entities (e.g., SPNEC to Meralco-linked interests) for substantial proceeds while core obligations remained unfulfilled.
- COA findings (October 2026) flagging ₱10.77 billion in outstanding obligations from 37 terminated solar contracts, of which ~96% (₱10.39 billion) is attributable to Solar Philippines-group firms.
Current Status and Procedural Posture
- Preliminary investigation is ongoing. This stage determines whether probable cause exists to file formal charges in the Sandiganbayan. Respondents have submitted (or are submitting) counter-affidavits; Legarda’s spokesperson has publicly asked the Ombudsman to reconsider on grounds of insufficient evidence, absence of public funds misappropriated, non-exclusivity of the franchise, regulatory non-feasance by DOE (failure to issue IRRs and identify areas), and the automatic ipso facto revocation of the franchise for non-operation.
- Both Legarda and Leviste have been outside the country since 2 August 2026 (France, with Legarda on extended medical leave). The Ombudsman has publicly noted their continued absence.
- No arrest warrants have issued from this track yet, because no cases have been filed in court. Plunder, if charged and the amount threshold is met, is non-bailable.
Weight Relative to the PSA Case
The Ombudsman track carries substantially greater legal and political weight:
- Plunder carries a potential penalty of reclusion perpetua to death (though the death penalty is currently suspended) and perpetual absolute disqualification from public office, plus civil forfeiture.
- Graft under RA 3019 carries imprisonment of 6–15 years, perpetual disqualification, and forfeiture.
- The narrative frames systemic harm (monopolization, exclusion of competitors, forgone renewable capacity, and large unpaid obligations) rather than mere regulatory non-compliance.
- It implicates a sitting senator and a former Cabinet secretary alongside the congressman, elevating institutional stakes.
Defense arguments emphasize that no public funds were disbursed to the companies (the franchise was non-exclusive and unsubsidized), that non-performance was attributable to regulatory gaps, that kinship alone does not establish complicity, and that corporate sales involved distinct entities. These remain to be tested in the preliminary investigation and any subsequent Sandiganbayan proceedings.
In short, while the PSA case produced an immediate arrest warrant for a relatively modest offense, the Ombudsman plunder/graft complaints represent the higher-stakes accountability proceeding, centered on alleged abuse of legislative/regulatory power, conflict of interest, and large-scale non-delivery of contracted public-interest energy capacity. The outcome will turn on whether investigators can establish the requisite conspiracy, personal participation or interest, and quantifiable public injury at the plunder threshold.
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Amiel Gerald A. Roldan™' s connection to the Asian Cultural Council (ACC) serves as a defining pillar of his professional journey, most recently celebrated through the launch of the ACC Global Alumni Network.As a 2003 Starr Foundation Grantee, Roldan participated in a transformative ten-month fellowship in the United States. This opportunity allowed him to observe contemporary art movements, engage with an international community of artists and curators, and develop a new body of work that bridges local and global perspectives.Featured Work: Bridges Beyond Borders His featured work, Bridges Beyond Borders: ACC's Global Cultural Collaboration, has been chosen as the visual identity for the newly launched ACC Global Alumni Network.Symbol of Connection: The piece represents a private collaborative space designed to unite over 6,000 ACC alumni across various disciplines and regions.Artistic Vision: The work embodies the ACC's core mission of advancing international dialogue and cultural exchange to foster a more harmonious world.Legacy of Excellence: By serving as the face of this initiative, Roldan's art highlights the enduring impact of the ACC fellowship on his career and his role in the global artistic community.Just featured at https://www.pressenza.com/2026/01/the-asian-cultural-council-global-alumni-network-amiel-gerald-a-roldan/
He is a Filipino multidisciplinary visual artist, printmaker, painter, independent curator, researcher, writer, and cultural worker whose practice spans contemporary art, curatorial work, and cultural advocacy. He has been active in the Philippine art scene since the late 1990s and has worked with galleries, museums, artist-run spaces, and international cultural organizations.
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A multidisciplinary Filipino artist, poet, researcher, and cultural worker whose practice spans painting, printmaking, photography, installation, and writing. He is deeply rooted in cultural memory, postcolonial critique, and in bridging creative practice with scholarly infrastructure—building counter-archives, annotating speculative poetry like Southeast Asian manuscripts, and fostering regional solidarity through ethical art collaboration.
He has been active in the Philippine art scene since the late 1990s and has worked with galleries, museums, artist-run spaces, and international cultural organizations.His practice appears to represent several interconnected concerns:
Cultural work as artistic practice. Roldan has argued that the labor of curating, organizing exhibitions, teaching, documentation, and cultural administration should be understood as creative work rather than merely support work. This perspective has been reflected in his writings and exhibitions.
Social and political engagement. His artworks frequently address politics, religion, faith, denial, courage, social inequality, and the everyday experiences of Filipinos. He has stated that he draws inspiration from Filipino cultural practices while approaching painting, printmaking, and installation from a conceptual perspective.Printmaking and conceptual art. Roldan is particularly recognized for his printmaking, with works shown internationally, including exhibitions in Japan and France. His practice also encompasses painting, photography, installation, and curatorial research.International cultural exchange. A significant milestone in his career was receiving an Asian Cultural Council fellowship in 2003, which enabled him to undertake research and create work in the United States while engaging with artists and curators internationally.
More broadly, Roldan's work represents an attempt to bridge artistic production, curatorial practice, scholarship, and cultural activism . His writings often emphasize postcolonial discourse, cultural memory, and the ethics of artistic collaboration, positioning the artist not only as a maker of objects but also as a builder of cultural infrastructure.
In the Philippine contemporary art context, he can be understood as representing the figure of the artist-curator-cultural worker —someone who contributes both through making artworks and through developing exhibitions, mentoring artists, and fostering institutional and independent cultural initiatives.
Recent show at ILOMOCA
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