Saturday, 15 September 2007

Mendoza mum on ZTE deal

By Jess Diaz And Paolo Romero
Original article at The Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070914183

Transportation Secretary Leandro Mendoza remains tightlipped on the controversial $330-million national broadband network deal that he signed in the presence of President Arroyo in Boao, China in April.

On Thursday night, during the House appropriations committee hearing on his agency’s proposed P22.5-billion budget for next year, Mendoza refused to answer questions about the project, citing legal restrictions.

As Mendoza kept his silence, a son and namesake of Speaker Jose de Venecia Jr. vowed to identify to senators next week a “mystery man” who was with Commission on Elections (Comelec) Chairman Benjamin Abalos when the latter allegedly tried to bribe him with $10 million so he would withdraw from the competition for the broadband project.

Jose de Venecia III is a majority stockholder and co-founder of Amsterdam Holdings Inc. whose broadband proposal was rejected by the government in favor of China’s ZTE Corp.

“The Supreme Court has issued a temporary restraining order enjoining us from implementing this project. We are bound by the sub judice rule,” Mendoza told the appropriations committee chaired by Albay Rep. Edcel Lagman.

Mendoza would not even say if there was indeed a contract awarded to ZTE Corp. or if he signed it on April 21.

“My lawyer has told me that any question about the contract, I should not answer,” Mendoza said.

He said much as he wanted to talk about the supposed ZTE contract to “separate truth from fiction, fact from lies,” he is prevented from doing so by the sub judice rule.

But opposition Rep. Rufus Rodriguez of Cagayan de Oro said the rule does not cover the information the lawmakers wanted to extract from Mendoza.

“Those are not covered. What is covered is discussion of the merits of the cases pending in the Supreme Court,” he said.

He said he just wanted to know if there was indeed a contract with ZTE or if it was Mendoza who signed it as Malacañang announced in April or if Mendoza could furnish a copy of the supposed contract to the appropriations committee.

Rodriguez’s incessant pleas fell on deaf ears. He waited in vain for Lagman, who is also a lawyer, to force Mendoza to answer questions.

Apparently in an effort to placate the Cagayan de Oro congressman, Lagman reminded him of the testimony of Budget Secretary Rolando Andaya Jr. that there is no allocation in the P1.227-trillion proposed national budget for the payment of any China loan for the NBN project.

“I will be the first to be vigilant about this. I do not want our debt servicing funds, which already take up a large part of the annual budget, to increase. In fact, I have been advocating the repudiation of some loans,” he said.

Rodriguez was inconsolable. He reminded Lagman that under Marcos-era decrees, Malacañang is empowered to enter into loan agreements and to automatically appropriate loan payment funds without consent from Congress.

“Before we know it, this whole thing will be a fait accompli,” he said.

He said with Mendoza’s refusal to answer even simple questions about the alleged ZTE contract, “this administration, consistent with its policy of not being transparent, is keeping the people and their representatives in the dark on this unnecessary, gargantuan and grossly overpriced project.”

About two hours before Mendoza faced the appropriations committee, Trade Secretary Peter Favila told Rodriguez and other members of the Lagman panel that he was the wrong person to ask about the ZTE deal and pointed to Mendoza as the one who could best explain the issue.

Last Wednesday, Malacañang prevented Favila from appearing in the House Question Hour to shed light on the ZTE contract.

‘Mystery man’’

After vowing to reveal the identity of the “mystery man” in the bribery controversy, the younger De Venecia urged President Arroyo to abandon the project and use the funds intended for it for other more urgent projects like housing and water system.

“I was asked to attend the Senate investigation on Tuesday and I don’t know what to expect there but I’m sure the senators will ask me who this ‘mystery man’ is and I’ll tell them,” De Venecia III told The STAR in a telephone interview.

He said Abalos brought the “influential person” with him apparently to make him accept the $10 million bribe offer.

Abalos is facing investigation in the House of Representatives and the Office of the Ombudsman for allegedly lobbying for the ZTE in exchange for cash and other perks, including sexual favors.

It was alleged that the ZTE deal was overpriced by some $200 million and the difference was meant for bribes. Under the agreement, the government will borrow at least $330 million to fund the ZTE-led broadband project.

“I will just tell the truth before the Senate and hope that something positive comes out of this because I truly believe that this contract is dirty and corrupted,” De Venecia said.

“Our proposal is our investment to the Philippines and zero loan for the government. What’s hard to stomach is the overpricing and kickbacks which the Filipino people will pay for because of the loan,” he said.

He said he believes the President might have been misled by her Cabinet officials in pushing for the ZTE deal. “She will always be my President,” he said.

Senate to fight EO 464

Senate President Manuel Villar Jr. said the Senate would stand its ground against the enforcement of Executive Order 464 which bars Cabinet officials from attending legislative hearings without the president’s approval.

“We stand solidly by the decision of the Supreme Court that it is unconstitutional. We shall defend and fight for the right of the Senate to investigate and summon officials for accountability. This mandate was bestowed on us by the Constitution and there is nothing personal here. We must carry out our sworn duty,” Villar said.

“Under my leadership, the Senate shall be independent and cannot be dictated on,” he stressed.

“Agreements involving a huge amount such as this should have been made public, discussed and scrutinized with the participation of all concerned sectors in the interest of transparency,” he said.

He also chided administration officials for claiming that the broadband documents were stolen in China.

“This deal involves P16 billion and the documents disappear in thin air? Are we not being outrageous?” he asked.

Pro-administration Sen. Miriam Defensor-Santiago said yesterday she is in favor of an investigation of the broadband controversy despite Mrs. Arroyo’s statement that the country should honor its commitment.

“The President theorized that this is already a done deal because she said that we have to honor our contract. My understanding is that there is now a valid and effective contract,” Santiago said.

“If that is the case, this is a monetary matter. It may be that there will be a need for the monetary board to approve it,” she added.

“It appears that they all want the same contract, and that the public is being made to witness a spat along the lines of marital disagreement between movie stars and alleged billionaire playboys. It is not interesting or even amusing,” she said.

“We must be a government that honors contracts and agreements that go through the required processes despite media attacks,” Mrs. Arroyo said on Thursday.

Bugging denied

Abalos meanwhile laughed off allegations of De Venecia that he bugged the AHI official’s phone conversations with ZTE executives.

“All I can say is that it is ridiculous, period. I don’t know what to say anymore… It’s too much. Now he is saying that I am a bugger? That is incredible,” Abalos said.

“Right now, I understand, they (Abalos’ lawyers) are looking to file several counts of libel versus (Joey) de Venecia. I am leaving it to them already,” Abalos said.

“Nevermind my personal case. I have to deal first with the barangay and Sanggunian Kabataan elections. I don’t want to be drawn into something that is unproductive,” Abalos said. The poll chief is set to retire on February 2008.

Meanwhile, ZTE announced yesterday that the volume of GSM products it produced and marketed grew by 300 percent in the first half of the year compared to the same period in 2006.

In a statement, ZTE pointed out that “this remarkable record can be attributed to the company’s continuous efforts to develop new technology innovation and forge strategic partnerships with key telecommunications providers worldwide.”

Early this year, ZTE partnered with Global eNetworks in the United Kingdom. This marked the company’s entry into the European telecoms scene, the statement said.

“Thanks to ZTE’s Softswitch technology, our company will offer a high quality portfolio of telecoms facilities to a wide range of third-party quality resellers,” the firm said quoting Robert Rees, Director of Global eNetworks.

“These facilities will embrace a variety of services that include voice, SMS, content, IP Centrex, advertising and audio-visual conferencing, all of which will be handled by ZTE’s revolutionary technology,” Rees said.

US envoy renews appeal

US Ambassador Kristie Kenney reiterated yesterday her call for transparency in government contracts amid the broadband controversy.

“What we always encourage is transparency when you are looking at business dealings, so that dealings are conducted in an open and transparent manner and they benefit all,” Kenney said when sought for comments on the issue.

Kenney was at the Women’s National Electoral Assembly at the Philippine International Convention Center where President Arroyo was guest of honor.

She declined to speculate on the impact of her letter to former Socio-Economic Planning Secretary Romulo Neri last April 20 expressing the US government’s interest in the NBN project. “My conversations and letters are something that are private,” she said.

In that letter, Kenney asked 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.” A US company, Arescom Inc., submitted a $130 million proposal for the NBN but its proposal was rejected. Kenney did not mention Arescom in her letter. With Aurea Calica and James Mananghaya

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