Case filed vs DOTC chief : NBN deal

[explorer]

Case filed vs DOTC chief over broadband deal

By Volt Contreras
Inquirer
Last updated 03:16am (Mla time) 08/29/2007

MANILA, Philippines -- Saying the public was misled about the National Broadband Network (NBN) project, an opposition congressman Tuesday lodged a criminal complaint against Transportation Secretary Leandro Mendoza and several others who sealed the $329-million deal with a Chinese firm without public bidding.

Nueva Vizcaya Rep. Carlos Padilla (NP) accused Mendoza and two assistant secretaries of the Department of Transportation and Communications of “giving undue advantage” to ZTE Corp., China’s third largest telecommunications firm, which bagged the NBN project aimed at linking government agencies nationwide through a common electronic backbone.

Padilla said the DOTC officials “discriminated against and deliberately refused to act on the proposal” presented by Amsterdam Holdings Inc. (AHI), a company partially owned by Jose de Venecia III, a son and namesake of the House Speaker.

“The project cost of over $329 million that will be shouldered by Philippine taxpayers in the ZTE contract is iniquitous compared with the $240-million project cost proposed by AHI,” Padilla said in a complaint filed Tuesday with the Office of the Ombudsman.

Covered by the election period during which no government contract should be signed, Mendoza and Yu Yong, ZTE vice president, inked the deal on April 21 in ceremonies witnessed by President Gloria Macapagal-Arroyo.

On the same day, Trade Secretary Peter Favila signed with Chinese authorities a $460-million deal to build a satellite-based backbone for the Cyber Education Project (CEP) on behalf of the Department of Education.

Both agreements were sealed in Boao, China.

Senate probe

For his part, Sen. Edgardo Angara said the Senate would investigate the “indecent haste” in allocating P26.4 billion for the CEP.

“Before embarking on a P26.4 billion worth of project, I think we should first ask why no First World country has adopted this. No studies have been made regarding the effectiveness of TV-based instruction in basic education,” Angara said in a statement.
Aside from citing Mendoza, Padilla’s complaint named Assistant Secretaries Lorenzo Formoso and Elmer Soneja as respondents.

Soneja was included in the criminal complaint in his capacity as chair of the DOTC bids and awards committee for information and communications technology (BAC-ICT).

The respondents included four top ZTE executives led by its chair, Hou Weigui, vice president Yu, Manila office chief representative George Zhu Ying, and executive director Fan Yan.

Padilla also alerted anti-graft investigators about several “John Does” or “public officers and private individuals who conspired with the respondents to defraud the government by entering into an illegal contract with ZTE Corp.”

All aspects suspicious

The lawmaker asked the Ombudsman to prosecute Mendoza and the others for violation of the anti-graft law and the Government Procurement Reform Act.

“The officials I have charged are liable for misleading the public and executing this anomalous contract and should be punished accordingly,” Padilla said in a statement.

“There was no bidding done for this project, and under the law all telecommunications projects of the national government have to be bid out.”

“All aspects of this contract are suspicious because they actually tried to hide it from the public. Even the Department of Justice ended up looking silly when it came out with an opinion that the contract was legal even though it had not even received a copy from the DOTC,” Padilla said.

The DOTC would rather have the country incurring a $329-million loan from China for the NBN, “even though Malacañang and DOTC records would show that there were several private companies volunteering to undertake the project at no cost to our government,” he said.

Timeline

The congressman gave the following narration in support of the charges:

• In September 2006, ZTE submitted an “unsolicited proposal” to the Commission on Information and Communications Technology (CICT). The proposal called for a government-to-government loan to fund the construction of the NBN.

When completed, the project is to be turned over to the DOTC for its operation and maintenance, according to the ZTE proposal.

• Around the same period, AHI “also expressed intention to undertake the development of the NBN without any fund appropriation and guarantee from the national government.” It proposed a system it then dubbed as the “Orion Network.”

• On Oct. 17, 2006, then Secretary Romulo Neri of the National Economic and Development Authority (NEDA) wrote AHI a letter conveying his support for the Orion Network. Padilla attached a copy of Neri’s letter to the complaint.

• About a month later, a meeting between President Macapagal-Arroyo and the NEDA Cabinet cluster “discussed the necessity for a privately funded government broadband network.”

The officials in that meeting also “expressed their unanimous view that the government connectivity and (info-tech) infrastructure should be developed at no cost, and with savings, to the national government.”

[explorer]

AHI’s unsolicited proposal

• On Dec. 5, 2006, AHI formally submitted to the DOTC its own unsolicited proposal for the NBN. The submitted materials included a feasibility study and identified AHI’s partner in the project as Huawei, said to be the largest telecom equipment supplier in China and the second largest in the world.

• By Jan. 2 this year, the AHI proposal had reached the CICT for initial review and endorsement.

• On Jan. 4, the company also submitted to the DOTC a draft memorandum of agreement spelling out the respective obligations of the AHI and the government.

• On Jan. 8, AHI made a formal presentation of the Orion Network to the DOTC at the Edsa Shangri-La Hotel in Mandaluyong City. Exactly a month later, AHI’s Richard Pratte e-mailed the DOTC to answer the latter’s additional questions.

ZTE proposal

• On Feb. 26, Soneja asked AHI and ZTE to submit the “final version” of their respective proposals.

On the same day, ZTE submitted the “same proposal” it previously furnished the CICT but subject to revisions to integrate the Department of Education’s Cyber Education Project. AHI, meanwhile, “deemed its earlier submissions as final.”

• On Feb. 28, a technical working group (TWG) completed its evaluation of the two rival proposals, factoring in the CyberEd project.

• On March 6, the DOTC’s bids and awards committee adopted the TWG’s recommendations and forwarded these to the NEDA.

• On March 18, AHI wrote to the DOTC “requesting compliance with the rules on unsolicited proposals under Republic Act No. 6957 (Build-Operate-Transfer Law) and its implementing rules and regulations.

Incomplete

• On March 26, the DOTC, through respondent Soneja, informed AHI that its proposal was “found incomplete” and that “the period to evaluate the proposal has not yet commenced.”

At this point, Padilla remarked in the complaint, “Soneja made this representation despite the fact that AHI’s proposal was already previously evaluated by the CICT and TWG as of Feb. 28.”

“It would seem at this point that Soneja knew more about the approval of the ZTE-NBN deal with the government that he found excuses to reject the AHI’s proposal.”

• On April 3, AHI wrote the DOTC “taking exception to the finding that its proposal was incomplete” and noting that the agency “never informed (the company) of any deficiency or additional requirement.”

• Seven days later, Soneja wrote AHI reiterating DOTC’s findings that its proposal was incomplete and that its deficiencies have actually been relayed to the firm in previous meetings and consultations.

US ambassador

• On April 20, US Ambassador Kristie Kenney wrote Neri “expressing the US government’s interest in the NBN” and asking the Philippine government to “take time to carefully review and consider the multiple expressions of interest that have been submitted, including those involving American companies.”

“Kenney also manifested that in all government projects, there should be competition and transparency,” the congressman said in his complaint.

Shocking

On the same day, however, Mendoza and Formoso were already in Hainan, China, to sign the NBN contract as “awarded” to ZTE.

“What is more shocking is that the signed contract with ZTE was supposedly lost by commercial attaché Emmanuel Ang the night after it was signed. Respondent Mendoza now refuses to disclose the other details of that agreement, which is plainly disadvantageous to the government,” Padilla said.

[explorer]

Broadband deal not needed -- UP study
‘Gov’t has no core competence for project’

By Tony Bergonia
Inquirer
Last updated 02:18am (Mla time) 08/06/2007

MANILA, Philippines -- The strongest argument against an $800-million plan to build two government-owned information technology (IT) backbones to create a Cyber Corridor is that there is no need for them, according to two professors at the University of the Philippines School of Economics (UPSE).

One of the projects is the $329-million national broadband network (NBN), while the other is the $460-million plan to build a satellite-based IT backbone for the Cyber Education Program (CEP).

Economics professors Raul V. Fabella, dean of the UPSE, and Emmanuel S. de Dios listed many reasons the government should not pursue the two projects at the risk of betraying the public interest. The biggest reason cited in the study: The government does not need to own one broadband backbone, much less two.

“The only backbone that the government needs today is a moral one,” Fabella and De Dios said in a paper titled “Lacking a backbone: The controversy over the National Broadband Network and Cyber-education projects,” which was released on Aug. 2.

The paper said one reason the two projects were likely to end up being just a waste of funds was that it was not in the government’s “core competence” to own, maintain and use an IT infrastructure separate from two that already exist -- one owned by Philippine Long Distance Telephone Co. (PLDT) and another owned jointly by PLDT’s competitors.

“From the 1990s … until recently, the government seems to have adhered to the concept of ‘core competence,’” the paper said.

It was a strategy that saw canteens, air transportation and power generation being run by private firms, instead of government agencies.

It was a strategy, the paper said, which resulted from lessons the government learned when it threw away hundreds of billions of pesos by generating and distributing electricity through National Power Corp.

“This strategy has clearly yielded more success,” said the paper.

“But the loan-powered versions of the NBN and the CEP require the government to abandon this painfully won strategy and resurrect the zombie of a government-run communications system,” it said.

Details of the $329-million NBN project that went to Chinese firm ZTE remain hazy, although the Department of Justice has ruled that the contract for it is legal.

Transportation Secretary Leandro Mendoza and Yu Yong, ZTE vice president, signed the contract on April 21, in ceremonies witnessed by President Gloria Macapagal-Arroyo shortly before the Philippine copy of the contract was stolen.

On the same day, Trade Secretary Peter Favila signed with Chinese authorities a $460-million deal to build a satellite-based backbone for the CEP on behalf of the Department of Education.

Both agreements were sealed in Boao, China.

More harm than good

While there was no question of the benefits of a broadband connection for the public schools and government offices, the government’s two biggest IT projects are likely to do more harm than good to public funds, and to the people, the paper said.

“It is essential to note that original government plans at no point envisioned a separate backbone to be financed, owned and operated by, and dedicated to the needs of the government,” it said.

“It was completely unexpected, therefore, … when this apparent resolve and consistency crumbled and the government reversed its direction.”

Not only did the government reverse itself, but the cost of the projects also ballooned from P5.1 billion to P19 billion for the NBN and from P5.2 billion to P24.6 billion for the CEP, according to the paper.

“The government has now incredibly ended up batting not just for one, but for two publicly owned government broadband backbones!” it said. “How has this happened?”

Defenders of the NBN said the project was like a gift being handed on a silver platter by the Chinese government to the Philippines so they couldn’t understand what all the fuss was about.

China’s motives

But the paper said a closer look at Chinese generosity would unmask the real motives for China’s eagerness to lend $329 million to the Philippines for the NBN.

“China’s newly discovered generosity is … neither strange nor totally unexpected,” it said. “That country is, after all, sitting on some $1.33 trillion of foreign exchange reserves.”

Generosity is easy to come by if one’s vault was starting to burst open with cash.

China, the paper said, was using loans “as a tool to simultaneously unload” its excess cash and to achieve another goal -- entice indebted countries to import Chinese products to keep Chinese workers employed.

The excess cash won’t have to sleep anymore in Chinese government vaults but, in the case of the NBN contract, earn three percent annual interest as a result of the sovereign guarantee that assures payment whether or not the Philippine government benefits from the project.

ZTE also has IT projects in Liberia, Algeria, Ghana and Lesotho. The projects were all funded by loans from the Chinese government.

“But though one may justifiably raise eyebrows at the Chinese … it should really cause no surprise that they should be conscious of their country’s interests and seek to promote these avidly,” said Fabella’s and De Dios’ paper.

Trap of donor nations

“Instead, what should be surprising is if the Philippines and its leaders were sufficiently unaware of, or oblivious to, their country’s own interests to be caught in the trap of donor countries,” it said.

The paper said that while it was clear that hundreds of billions of pesos would pour into the NBN and CEP, their benefits in terms of pesos and centavos were not very clear. It said the government also appeared not to know exactly what it wanted to do with broadband technology, except to connect to the Internet as many government offices and public schools as possible.

No feasibility study

This, the paper said, was obvious from the start -- there was no feasibility study made on the NBN project, in particular, because no lender wanted to finance it.

“To begin with, if the government seriously believed the NBN backbone was a vital project, then it ought first to have completed the preliminary work … of identifying the magnitude and urgency of the need, the technology and equipment required to fill it, and a ballpark figure for its cost,” the paper said.

“Since it did not set its own minimum conditions beforehand … the government effectively allowed bidders and loan pushers to write their own terms,” it said.

The paper did not identify who these bidders and loan pushers were, but the NBN project came about after telecommunications firm Amsterdam Holdings Inc. (AHI) sent an unsolicited proposal to build a broadband network with the government as its main, but not exclusive, client.

Shortly after AHI sent the proposal, US firm Arescom and ZTE came in with their own.

The AHI proposal apparently was driven by Ms Arroyo’s 2006 State of the Nation Address in which she identified the Cyber Corridor as one of her priority projects.

But to do this, the President needed full support from Congress, a goal that was then, and probably is now, not difficult to meet because the House of Representatives was under Ms Arroyo’s ally, Speaker Jose de Venecia Jr., whose son Jose III owns AHI.

Fabella and De Dios said the absence of a feasibility study led to confusion on the part of officials who were pushing for the NBN and the CEP, and those who had been vacillating.

“No common basis can … be laid for a comparison of options, since deliverable features will always vary with costs,” they said.

“This situation is as absurd as calling for a bid to supply government with ‘fruits in general,’” they added.

Turnaround artists

With government not knowing exactly what it wanted, “the technical upper hand is abdicated … to project proponents such as turnaround artists in unsolicited bids and ODA [official development assistance] merchants.”

The paper said the Philippine government should have learned its lessons from past, and ongoing, foreign-funded projects like the Light Rail Transit 1, Metro Rail Transit 2, MRT 3, the NorthRail and Terminal 3 of the Ninoy Aquino International Airport (NAIA).

It said the absence of choices, as required by lenders and uncontested by debtors, “was why the rail gauges of the LRT 1, MRT 2 and MRT 3 are all different, and why the nonfunctional NAIA 3 is irrationally still in the heart of the metropolis.”

“The situation is pathetic in one sense since it vividly illustrates the adage about beggars not being choosers,” said the paper.

It said the fundamental IT problem that the government had to address was to find the “last-mile connectivity” to link government and public school computers -- from as far north as Batanes to as far south as Tawi-Tawi -- to the Internet.

But it said that simply building a backbone to serve as an invisible technological highway would not serve the purpose.

[explorer]

No links to final users

“In short, even as information highways might connect various islands, provinces, cities and indeed the world, there are few, or no links, connecting them to final users,” said the paper.

“It is as if expressways had been built but not the municipal or barangay roads that would connect people to such high speed lanes,” it said. “A related problem is, of course, few people own the ‘vehicles’ (read computers and peripherals) needed to travel such roads.”

What needs to be done, the paper said, is just for signals carried by fiber optics or wireless technology to reach the farthest of government computers.

“There is no need to reinvent the wheel,” it said.

If the government wants to save on costs, the paper added, it simply could use its leverage as a “bulk buyer” to obtain lower rates from private telecommunications firms.

“For this, one does not need an NBN,” the paper said.

Proponents of the NBN had said during Cabinet meetings the project would save the government as much as 50 percent in telecommunications spending.

It was to be the NBN’s single biggest selling point, but nowhere in letters or transcripts of meetings discussing the project was it made clear how much in savings were to be realized from the project. Not one of its proponents had certain answers.

Why then pursue the project?

The paper said one reason could be “poor ethos” taking its toll.

“Just as a slave can get used to his chains and actually fear freedom, it is said that poor countries cannot afford to be rich,” said the paper. “That is, poor countries are too engrossed in the ‘poor ethos’ and find it difficult to escape from it.”

“Their short-term horizons prevent them from discerning the large future payoffs of postponing consumption. Thus, they tend to splurge today … poor nations are poor because they cannot handle affluence,” the paper said.

Irrational shopping binge

“If a credit line prompts an irrational shopping binge, that is a sure sign of the poor ethos in action. That person is destined for bankruptcy,” Fabella and De Dios said.

Another reason that could be driving the Arroyo administration into pursuing these two costly projects, according to the paper, was its newfound confidence in fiscal reforms and the increase in revenue that these brought.

“But more revenues make sense only if additional resources are spent judiciously and effectively,” said the paper.

“Unfortunately, many in the political establishment have taken these promising numbers as a license for them to take what they believe is their well-deserved share,” it said.

[explorer]

No go for broadband deal--Palace adviser
Apostol: Where's copy of contract?

By Michael Lim Ubac, Riza T. Olchondra, Jeannette Andrade
Inquirer, Last updated 00:24am (Mla time) 08/07/2007

THE CONTROVERSY over the $329-million national broadband network (NBN)
contract that went to ZTE Corp. of China was reduced Monday to a paper chase.

President Gloria Macapagal-Arroyo's legal adviser, Sergio Apostol, said the project could not be implemented because the contract was nonexistent.

"How can we implement? There are no papers. Show me the contract," Apostol said when asked about the status of the ZTE contract.

The Philippine government's copy of the contract was stolen shortly after Transportation Secretary Leandro Mendoza and Yu Yong, ZTE vice president, signed it on April 21 in the presence of Arroyo.

Also stolen was the Philippine copy of the $460-million contract to build a satellite-based backbone for the Department of Education's Cyber Education Program (CEP).

Both the NBN and CEP contracts were signed in Boao, China, on the same day. The projects were to be financed by a concessional loan from China.

Two professors at the University of the Philippines' School of Economics said there was no need for the NBN and CEP deals.

Economics professors Raul V. Fabella and Emmanuel S. de Dios said the two projects were likely to end up being a waste of funds partly because it was not in the government's "core competence" to own, maintain and use an information technology infrastructure separate from two existing ones owned by private telecommunication firms.

Moral backbone

They said government should address "last-mile connectivity" to government agencies and public school computers instead of building another network.

"The only backbone that the government needs today is a moral one," Fabella and De Dios said in a paper titled "Lacking a backbone: The controversy over the National Broadband Network and Cyber-education projects."

Apostol said before Malacañang would answer the criticisms heaped on the project, there should be proof that the contract ever existed.

Details of the NBN project remain hazy at this time although the Department of Justice has ruled that the contract is legal.

In broad strokes, the NBN will exclusively cater to the telecommunication needs of the national government and local government agencies. It is also aimed at reducing the telecommunications spending of the government.

Budget Secretary Rolando Andaya Jr. said the NBN project, to be funded through a loan by China's Eximbank, carried a sovereign guarantee, which means that the government will have to pay for every yuan spent for the project.

Andaya, however, said the ZTE deal was not covered by the Government Procurement Act, which requires a transparent bidding process.

"There are exceptions under that law, and if it's a government-to-government (contract), then there's no need for it to go through that," he said.

Contract didn't reach Palace

But Apostol pointed out that legally speaking, the contract was nonexistent because there were no documents to speak of.

"Somebody has stolen it--(all) two copies. So there's no contract. We don't know what kind of contract it is," the President's legal adviser said.

He noted that the ZTE contract did not pass through his office for scrutiny.

"It did not pass through Malacañang because it was lost. How can it pass through me when the documents were gone? I haven't seen the contract," he said.

Never impartial

Apostol described Fabella and De Dios as "never impartial." He said the UP professors "have not even seen the contract, (yet) they made conclusions already."

The Department of Transportation and Communication (DOTC) disagreed with Fabella and De Dios' claim that the country does not need another broadband network.

"This is one of the few cases in which outsourcing does not make sense," said Lorenzo Formoso, assistant secretary for telecommunications.

"Using existing telco services is costing us almost P4 billion a year. If we make last-mile connections by buying more airtime from them, we will have to budget this again. In contrast, if government has its own network, the savings will actually pay for the loan," Formoso said.

Savings

DOTC data show that government can save P2.51 billion from the NBN project set to be undertaken by ZTE. At present, the cost of all telecommunications for government is P3.5 billion.

With the loan-backed contract, government is set to pay P990 million in annual amortization, giving the government P2.51 billion in savings that can be used for other purposes, according to the DOTC.

But the savings would exclude those for mobile communications because the NBN does not have a mobile component.

The DOTC said the offer of Amsterdam Holdings Inc. (AHI), the company that submitted an unsolicited to build a broadband network, and that of another bidder, US-based Arescom, would be more expensive than that of ZTE's.

This is because AHI is offering a $240-million satellite-based network with 87 stations but the government must buy its own Voice over Internet Protocol or VoIP service.

Arescom has offered a bid-price of $135 million but can only provide 21 base stations. "So, in reality, they are more expensive," Formoso said.

House probe

In the House of Representatives, the chair of the committee on information and communication technology wants to grill executives of the National Economic and Development Authority, DOTC and Commission on Information and Communications Technology on the NBN deal.

Catanduanes Rep. Joseph Santiago said representatives of ZTE, AHI and Arescom, along with Fabella and De Dios, would also be invited to the public hearing.

The Alliance of Concerned Teachers (ACT) asked the government to sober up on its "Cyber Education" program, calling it a white elephant that has nothing to do with cutting-edge technology.

ACT chair Antonio Tinio said the money to fund the project could be better spent on building classrooms, subsidizing the education of children who cannot afford to go to school, hiring more teachers, and producing quality teachers.

Simply broadcasting

"The project is very expensive with little or no proven benefits to the students. It is simply broadcasting a 20-minute lecture to selected schools via satellite. If that is the only thing the Department of Education (DepEd) wants to do, it might as well tape the lectures, place them in compact disks and distribute them to the schools for viewing,"
Tinio said.

The project aims to set up television production and satellite broadcasting facilities at DepEd's central office and satellite-based facilities in 26,618 schools nationwide, each of which will be provided with a multimedia classroom equipped with four television sets, two desktop computers and a printer.

Fifteen- to 20-minute lectures conducted by education experts in all subjects for all grade or year levels will be aired live via satellite to all schools on 12 television channels.

Tinio said the project would not provide students with computer-based learning as the name connotes

[niky]

No big surprise that people are starting to question it. The whole deal stank from the beginning... and noted economists were starting to draw parallels between the deal and Marcos Era economics...

Simply put, the government should not be in business. This is the problem we see in places like Venezuela... or, wait... we've seen this in the Philippines... when the government, under Marcos, nationalized certain businesses... they degraded... with privatization, things have finally started picking up for them.

It would be more in the government's interest to invest in local telecommunications firms to boost connectivity, rather than to "reinvent the wheel" (as opined above) and create its own network. This would also allow it to leverage lower prices and rates out of these firms, who are constrained by the lack of lines and the need to deal with PLDT.

[explorer]

from: http://opinion.inquirer.net/inquirer...ticle_id=90097

No excuse

Inquirer EDITORIAL
Last updated 02:04am (Mla time) 09/23/2007

MANILA, Philippines -- Haste makes waste -- and lays waste to the cause of good government. It was with apparent haste that reporters were summoned yesterday to hear Trade Secretary Peter Favila and acting Justice Secretary Agnes Devanadera announce the latest instructions from the President: Both the ZTE deal and the Cyber Education Project have been suspended.

This is like the President saying, at 4:40 in the afternoon, she’s issued a decree ordering the sun to set later in the day. Of course, there will be a sunset, but only a fool would attribute it to the President. But the Palace obviously thinks there are plenty of fools. For only foolish minds would confuse the President’s instructions with anything substantial. What has put the ZTE deal on hold took place prior to the President’s issuing her instructions. The deal was put on hold, and remains on hold, because of a TRO issued by the Supreme Court.

Therefore it really doesn’t matter at all, what the President’s instructions are—even with regard to the Cyber Education Project, which we already predicted will be the next focus of congressional and public inquiry. So the obvious thing here is, this is a public relations move, but it does not affect basic government policy.

And we say haste lays waste to good government, because pressed on what government intended to do next, and why the administration suddenly reversed itself on two huge projects, the two secretaries were at a loss for words. Favila simply stated the President told them what to say. Devanadera, obviously less politically suave, then told the media that the ZTE deal was legally defensible; Favila then told the media that the President’s decision was triggered by “bad publicity”—see how it’s basically a PR move?

The question then becomes, will the President’s weekend attempt to take credit for an act of the Supreme Court be enough to defuse tensions? Will it be enough, for example, to maintain the brittle peace within her ruling coalition? Could it stop a potentially explosive Senate hearing on Wednesday, where former Socioeconomic Planning Secretary Romulo Neri is due to testify under oath?

Newsbreak has put forward this version of events. The Comelec chair, its report says, approached then Neda chief Neri for “help” with the ZTE deal. Neri replied he’d take a look. Abalos, the report says, took this to mean Neri wasn’t interested, so he quickly said, “There’s 200 for you here.” Neri asked what he meant. Abalos allegedly replied, “200 million.” End of conversation.

Neri, the report says, then went to the President and told her about the offer. When Neri told her that he refused it, the President supposedly told him to forget the money but to approve the deal. Two days later, Neri was removed from the National Economic and Development Authority.

This is a version of events that requires investigation. With both Abalos and Neri scheduled to appear before the Senate, now, more than ever, the hearings should proceed.

The administration pulled out all the stops to try to deflect attention and reduce the focus on the NBN controversy, using fair means and foul. Everything and everyone—from presidential daughter Evangeline “Luli” Arroyo’s display of cattiness, to the AFP chief of staff’s blowhard statements of a destabilization plot and how martial law is a necessary tool in government’s legal arsenal, to this, the latest clumsy move by the President— have been tried.

The Senate then must ponder if it wants to be an accomplice to this effort to sweep things under the rug, or if it will pull the rug out from under the feet of some extremely nervous officials. The President said the ZTE contract would be suspended—“no ifs, ands or buts.” What there should be no ifs, ands or buts about is that the public interest requires a continuation of the Senate hearings.

The hearings themselves, after all, not only subject executive officials to much-needed public scrutiny, they also put the senators under the microscope. This can only be healthy for the body politic. This is what public accountability is all about. May we remind the President of one of her favorite expressions: “Let the chips fall where they may.”

Even at the very desk of the President of the Philippines, if necessary.

[explorer]

http://opinion.inquirer.net/inquirer...ticle_id=90274

Probe deeper

Inquirer EDITORIAL
Last updated 01:47am (Mla time) 09/24/2007

MANILA, Philippines -- The decision to “suspend” what Trade Secretary Peter Favila rather defensively called the “much-talked-about and much-maligned broadband project” (as well as the other controversial Chinese-funded initiative, the Cyber Education Project) is an obvious attempt to pull the rug from under the Senate committees investigating the allegedly anomalous deal.

In making the announcement on Saturday, Favila was accompanied by Acting Justice Secretary Agnes Devanadera, who suggested, most tellingly, that perhaps the Senate investigation was no longer necessary. “What more can they [the senators] ask when everything has been answered and explained? It’s my personal opinion that everything has been covered.”

We’re glad she hedged her answer by qualifying it as her personal opinion, because if it were her department’s official opinion, we would have reason to ask the government’s chief lawyer to resign her brief.

By no stretch of the imagination could the seven-hour hearing at the Senate session hall last Thursday be considered to have “covered” everything. (Unless, of course, “cover” means “cover up.”) Many questions are begging to be asked. What kind of lawyer has Devanadera become, if she suggests that these questions have not only been asked, they have been definitively answered?

The suspension of the ZTE arrangement (or “contract in the process of becoming,” as Sen. Juan Ponce Enrile described the controversial document regarding the proposed National Broadband Network last Thursday) will lead to its cancellation; but is the suspension (a cancellation, so to speak, in the process of becoming) enough reason to conclude the Senate investigation?

Not for all the tea in China. If anything, the decision to suspend the arrangement should embolden the senators, on both sides of the aisle, to get to the bottom of the controversy.

We all already know this, but for the benefit of Solicitor General Devanadera, let us list down a few of the questions that must be asked, and that must be answered to the satisfaction of the Senate and the people, in the next hearing.

First, and most important: Why is Commission on Elections Chairman Benjamin Abalos brokering for ZTE? Even the most elastic testimony last Thursday, that of Transportation Secretary Leandro Mendoza, cannot disguise the unusual interest Abalos has shown in ZTE’s proposal. Assistant Secretary Lorenzo Formoso would have us believe that he and businessman Jose “Joey” de Venecia III discussed NBN business under Abalos’ benign and disinterested gaze; perhaps he is merely protecting himself, but the mere fact that the discussion took place right in Abalos’ office in the Comelec, and in Abalos’ presence, is on its face already questionable. Considering what others involved in the project, however peripherally, have said about Abalos’ interest, Formoso’s characterization of Abalos’ role in those fateful meetings becomes highly suspect. If Abalos went out of his way to discuss the NBN project with Finance Secretary Margarito Teves, the Senate must determine the scope and extent of the Comelec chairman’s interest in the ZTE deal.

Second, glaring discrepancies exist between Mendoza’s testimony and the young De Venecia’s. Who, in fact, is telling the truth? Even a simple matter like who introduced whom must be resolved: Did Speaker Jose de Venecia in fact introduce his son to Mendoza for the first time early this year, as Mendoza claims? Did Mendoza in fact organize a “reconciliatory” meeting between “the old man” (Abalos) and the De Venecia scion? Did a waiter at the Wack-Wack club house in fact witness the alleged “Back off!” incident, where Jose Miguel Arroyo allegedly tried to intimidate the young De Venecia? (This is Sen. Jinggoy Estrada’s call, and we hope, for the sake of the waiter and his family, that he had thought it through before making the announcement during the first hearing.)

Third, what did President Macapagal-Arroyo know, and when did she know it? Even without Abalos’ impeachable involvement, the ZTE “contract” remains suspect. How, for instance, was the NBN decision converted, quite seamlessly, from build-operate-transfer initiative to government-project-funded-by-concessional-loan? That conversion requires the imprimatur of the President, nothing less. Perhaps Secretary Romulo Neri can―finally, finally―enlighten us.

“Everything has been covered”? Not by a long shot.

[jpdm]

--Pag ganito mga nababasa mo, sa kabila ng nagkakandakuba ka na sa pagbabayad ng tax dahil sa panawagan ng pamahaan na tulungan ang bayan, yan ang isusukli ng gobyerno sa bayan--parang gusto kong ma-juramentado...

--Grabe na talaga sobrang kapal ng mga opisyales sa gobyerno!!!

--lalo na itong mga sangkot sa NBN talagang wala ng takot sa Diyos!!!

[artpogi]

To some extent, I've been following this news.

IMO if we will look at all the players in this deal, mukhang mas credible talaga si Joey De Venecia. He already said that even if the ZTE deal will be suspended or will be put for re-bid they (AHI?) are not interested anymore. So what do they have to lose?

Character assasination of the players has begun, starting with Speakers' son.

IMO the important player on this one is Romulo Neri. From the looks of it, Neri was "forced" out of NEDA because of his "opposition" to the NBN deal. Neri divulged that "major" players attempted to bribe him, according to him he refused the bribe but was ordered by "Malacanang" to approve the deal and then Neri was shipped to CHED.

I'm waiting for what Neri has to say once he starts his testimony at the Senate.

My opinion is, this deal stinks all the way to Malacanang, aside from Abalos, there are bigger (read high placed) politcos involved in this deal. The money in this deal is too big to be passed-up by higher politicos.

The way I expect this to end is Mendoza (DOTC chief) will be sacrificed. Abalos will be advised to shut-up, the Senate will be given the run-around and the scam will die a natural death. And once the public/media has laid-off the backs of the scammers, the ZTE deal will push thru.

Sorry Philippines but that's just the way it is.

[Galactus]

Hopefully, Sec. Neri does testify, at sana ipitin nya yung dapat ipitin. I knew there was something fishy about his transfer from NEDA to CHED.

What they expect Neri to disclose
GOTCHA By Jarius Bondoc
Monday, September 24, 2007


Last Thursday Romy Neri was supposed to testify at the Senate on the hated ZTE deal. On the eve he noticed strange men casing his house in Quezon City. As a Cabinet member Romy promptly reported the security threat. Executive Sec. Ed Ermita dispatched a team from the Presidential Security Group. Romy failed to attend the Senate hearing due to bum stomach. The surveillants turned out to be police intelligence agents.

Why cops were spying on him, Romy doesn’t understand. News reports, meanwhile, quoted Armed Forces chief Gen. Hermogenes Esperon as associating the ZTE scam exposé to a plot to rock the Arroyo tenure. The military analysis echoes the old Marcos martial law trick of blaming legitimate dissent on communists and rightists. Did the surveillants suspect Romy of being among the imagined conspirators? Why do some officials seem so scared of what he might reveal about the $330-million government broadband deal with ZTE Corp. of China?

I have talked to Romy exactly ten times by phone and face-to-face ever since I started a series in Mar. on the ZTE scam. Each conversation was tense. On two occasions Romy swore me to secrecy. At least twice too he said his life was in my hands. In the last three talks, including Tuesday after I first testified about my exposés, I asked him when he would bare all. He repeated that there’s a time and place for everything. I told him of at least four pious groups that are praying for his safety. He assured me he would tell only the truth if made to take the oath. I said I anticipate the heavy sacrifice he would face if he does so; he sympathized with me for undergoing harassment, threats and false accusations. In our last talk, I told him I am honored he considers me a friend since 1987, when he became head of the Congress Planning and Budget Office.

I often review my notes of our first talk on the morning of Apr. 20, the day I wrote about the rush to sign the ZTE contract in Boao, China. From insider info, I had stated that the National Economic Development Authority, which he headed then, had approved the ZTE deal in a huff. He called to clarify that what NEDA had cleared was the concept for a national broadband network, not the company. Sorry, I said, but I drew my conclusion from the endorsement of Secretaries Leandro Mendoza and Ramon Sales specifying both Amsterdam Holdings Inc. and ZTE — just that it’s with the latter that Mendoza was signing a contract. I confided the tip that the NEDA didn’t like what it was doing.

Romy then rattled off many things he knew about the events leading to the scheduled signing of Apr. 21. I later learned that he had told at least three of our common friends the same things.

Some of the items have since been reported in broadcast and print. There was a supposed invitation from Comelec chief Benjamin Abalos to golf at the Wack Wack Country Club, during which Romy was offered P200 million to support ZTE. As the story goes, Romy turned down and told President Arroyo about the indecent proposal. Whereupon, she instructed him to not accept the bribe but ensure the NEDA approvals just the same. Romy has neither confirmed nor denied the reports.

Only God and Romy know if under oath he would confirm or deny the other items. I pray that he expound on them. He had told me on that morning of Apr. 20 and several other times that not only a Comelec official but an influential businessman too was inordinately lobbying for ZTE Corp. The businessman allegedly was responsible for the sudden rise of the ZTE tag price to $330 million days before the signing, when its original offer in Dec. to Feb. was $262 million. What was the $68-million difference for, I asked in subsequent talks. Romy said the businessman was assigned to raise campaign funds for an administration party during the last election.

I would understand if Romy balks in identifying the businessman. In a previous cocktail party at the residence of Speaker Jose de Venecia Jr., he said, that man had cornered and threatened him for opposing a fishy pier project. That man reportedly also worked on Romy’s consequent transfer from NEDA to the Commission on Higher Education.

Romy in our talks implicated most of the persons Joey de Venecia has exposed under oath as thieving from the broadband purchase. But I get the impression that Romy knows much more than the heroic whistleblower who initially was bidding for the telecom project.

About ZTE executives, Romy also said he has never seen any group as aggressive as them in pushing for a contract. They were waiting outside the NEDA conference room while the Cabinet was deliberating about them.

More importantly, Romy said a very powerful official arm-twisted him to turn the broadband project from a safe build-operate-transfer plan to a risky outright supply purchase. It was for that reason, he told me on Apr. 20, that he almost resigned from the Cabinet the day before.

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http://philstar.com/index.php?Opinio...id=20070923128