PHNO-HL: TOP ZTE OFFICIALS TO TESTIFY VS GMA / GMA, ABALOS FACE GRAFT RAPS OVER ZTE


TOP ZTE OFFICIALS TO TESTIFY VS GMA / GMA, ABALOS
FACE GRAFT RAPS OVER ZTE

MANILA, DECEMBER 31,
2011 (STAR) By Michael Punongbayan - Two executives of ZTE
Corp., the largest telecommunications equipment company in China, will be among
the witnesses of the Ombudsman against Pampanga Rep. Gloria Macapagal-Arroyo,
now facing graft charges before the Sandiganbayan for her alleged role in the
$329-million national broadband network (NBN) anomaly.
ZTE vice president Yu Yong and Fan Yang, one of the firm's directors, are
expected to testify against the former president, her husband Jose Miguel
Arroyo, former elections commissioner Benjamin Abalos, and former Department of
Transportation and Communications (DOTC) secretary Leandro Mendoza during trial.

Both Chinese executives were listed as main witnesses in the three separate
criminal complaints filed by the Office of the Ombudsman on Wednesday, along
with other key personalities who claimed to have knowledge of how the NBN-ZTE
deal was overpriced due to alleged commissions and kickbacks.
The STAR sources said Yu Yong and Fan Yang have already been asked to testify
before the Sandiganbayan on the graft cases filed by former Ombudsman Merceditas
Gutierrez against Abalos and former National Economic and Development Authority
(NEDA) director general Romulo Neri in May 2010, also in relation to the NBN
deal.
The Office of the Special Prosecutor (OSP) has sent to the ZTE officials the
letters signed by Justice Secretary Leila de Lima and translated into Chinese,
requesting their participation in the court hearings since they were the
executives who allegedly held meetings with the respondents discussing the
details of the contract.
Sources said there are several options to pursue, including the possibility
of having prosecutors, defense lawyers, and a Sandiganbayan clerk of court fly
to China to conduct a deposition, an out-of-court oral testimony of a witness
that is reduced to writing.
If such an arrangement cannot be made, government lawyers plan to first
secure the sworn statements or affidavits of Yu Yong and Fan Yang and have the
anti-graft court summon them through the Mutual Legal Assistance Treaty (MLAT).

Also listed as witnesses against the Arroyos, Abalos, and Mendoza are former
House speaker Jose de Venecia Jr. and his son Jose "Joey" de Venecia III,
NBN-ZTE deal whistleblower Rodolfo Lozada Jr., Dante Madriaga, and
representatives of DOTC and the Wack Wack Golf and Country Club.
The first graft case filed by the Ombudsman against Arroyo accuses her of
violating Section 3(i) of the Anti-Graft and Corrupt Practices Act for allegedly
having personal interest for personal gain in the contract "despite knowledge of
the irregularities and anomalies that attended its approval."
The second graft case against her and her husband, Abalos, and Mendoza is for
alleged violation of Section 3(g) of the same law which penalizes acts of
entering into any contract or transaction that is "manifestly and grossly
disadvantageous to the government."
The third case filed against Arroyo accuses her of violating Republic Act
6713 or the Code of Conduct and Ethical Standards for Government Officials and
Employees for playing golf and having lunch with ZTE executives in Shenzhen,
China while the NBN deal was still pending final approval.
Lawyer Gabriel Villareal, Abalos' legal counsel, said he could not comment
yet on the case filed against his client since he has not seen or read the
actual complaint.
OSP will handle trial
Unlike in the case of former Ombudsman Simeon Marcelo during the plunder
trial of former President Joseph Estrada, Ombudsman Conchita Carpio-Morales has
no plans of actually participating in Arroyo's trial.
Assistant Ombudsman Asryman Rafanan, the anti-graft agency's spokesman, said
Morales is not keen on joining the prosecutors who will handle the case at the
Sandiganbayan.
"The OSP will be handling the prosecution of the cases," he said, adding that
it will be up to the prosecution team to strategize and "explore the possibility
or the viability and the means with which to pursue or to secure the listed
witnesses," including the ZTE officials.
Rafanan said the Office of the Ombudsman will not pick the lawyers to handle
the Arroyo cases and will just follow the OSP's system of assigning cases to its
bureau.
When the cases were filed last Wednesday, representatives of the Office of
the Ombudsman did not go through the OSP and instead filed the complaints
directly with the Sandiganbayan.
"I think there is no express rule under the Office of the Ombudsman that all
information would have to pass through the OSP since the OSP is under the Office
of the Ombudsman," Rafanan explained.
When Ombudsman Morales held her first and only press conference after
assuming her post, Special Prosecutor Wendell Sulit, who has a rank equal to a
deputy ombudsman, was curiously absent from the presidential table even though
other officials were present.
Rafanan said the graft complaints against the Arroyos, Abalos, and Mendoza
would be raffled off to a division of the Sandiganbayan "and under the rules,
the court will have to determine probable cause for the issuance of warrant of
arrest."
"The office of the Ombudsman weighed the evidence and so far as meeting the
required quantum of evidence, it has sufficiently met the level of probable
cause and that the crimes were committed and that respondents probably committed
the crime and should be hailed to court," he said when asked how strong the
cases are.
Rafanan also dismissed claims that the Office of the Ombudsman erred in
finding reason to indict the respondents after previously being cleared of the
same accusations.
"It was discussed (in the resolution) that the Office of the Ombudsman had
the power to conduct another investigation over the case and that there is no
res judicata on that case even after the previous investigation conducted by the
previous ombudsman," he said.
Presidential Adviser for Political Affairs Ronald Llamas expects more
lawsuits to be filed against Arroyo.
Llamas said there are other cases that had not yet been filed at the Office
of the Ombudsman, like the fund anomaly at the Overseas Workers Welfare
Administration.
Meanwhile, lawyer Salvador Panelo accused the Office of the Ombudsman of
filing flawed graft complaints against Arroyo and Abalos.
Panelo said Abalos could not be charged for violating Section 3(g) of the
Anti-Graft and Corrupt Practices Act because he did not enter (into a contract
or transaction) on behalf of the government in the NBN deal.
"He was not a signatory to the contract," Panelo, a former spokesman for
Abalos, said, believing that the Office of the Ombudsman's case is weak.
Panelo said the NBN-ZTE deal that was cancelled "was not disadvantageous to
the government."
As to the graft cases filed against Arroyo, he said Section 3(g) of the
Anti-Graft and Corrupt Practices Act presupposes that there is no contract yet,
"there is no such animal precisely because it has been cancelled."
"Also, assuming there is a contract, there is absence of injury to the
government as ruled upon by a previous investigating panel," he stressed.
As to Section 3(i), Panelo asked, "how could the Ombudsman file a graft case
under such provision when the panel ruled that there is no proof that money,
assuming there is one which is impossible to prove, passed on to GMA?"
"That is precisely why it did not file a plunder case against GMA. There is a
contradiction in the stand of the panel," he said. With
Delon Porcalla
GMA, Abalos face graft raps over ZTE PhilStar –
Fri,
MANILA, Philippines - Graft cases have been filed with the
Sandiganbayan against Pampanga Rep. Gloria Macapagal-Arroyo, her husband Jose
Miguel Arroyo and two former officials in connection with the aborted
$329-million national broadband network (NBN) deal between her administration
and ZTE Corp. of China.
Facing charges with the Arroyos are former elections chairman Benjamin Abalos
(photo) and former transportation and communications secretary Leandro Mendoza.

But the Office of the Ombudsman, which filed the case, found no probable
cause to indict the four for plunder. Unlike plunder, violation of the
anti-graft law is a bailable offense.
Mrs. Arroyo is under hospital arrest, without bail, for electoral sabotage.
Party-list group Bayan Muna filed the plunder case against the Arroyos.
"That contract was abrogated so there's no damage done," Mr. Arroyo told The
STAR, referring to the NBN contract.
Ombudsman Conchita Carpio-Morales approved the recommendations of a special
panel of investigators indicting the former first couple and the two former
officials for violating Sections 3(g) and 3(i) of the Anti-Graft and Corrupt
Practices Act. She said the four should be held accountable for entering into a
contract that was "grossly disadvantageous" to the government. Based on the
report of the special panel, the cost of the cancelled NBN project should have
only been $130 million.
Carpio-Morales also filed a third criminal case for violation of Republic Act
6713 or the Code of Conduct and Ethical Standards for Public Officials and
Employees against the former president.
"GMA (Gloria Macapagal-Arroyo), despite knowledge of the irregularities,
authorized Mr. Mendoza to sign the contract in her behalf. By affixing his
signature in the contract, Mr. Mendoza was put on notice of those irregularities
that led to its signing, given that it was DOTC, of which he was then Secretary,
which approved the recommendations of the BAC (Bids and Awards Committee)," the
special panel of investigators said in its report.
"The signatories to the NBN-ZTE contract are criminally culpable. The moment
a public official signs a grossly disadvantageous contract, he incurs criminal
liability even if the contract has been cancelled," the report read.
Explaining the inclusion of the former first gentleman in the list of
respondents, investigators noted his "unusual interest in the transaction, as
gathered from his acts of playing golf and having lunch with ZTE officials in
Shenzhen, China, and initiating a reconciliatory meeting between (Jose) De
Venecia III and Mr. Abalos" who had different proposals in mind on how the NBN
project should be carried out. De Venecia, a son and namesake of a former
speaker, is a businessman engaged in telecoms development. "His (Mr. Arroyo)
active intervention, as reflected earlier, in the transaction makes him a
conspirator in the approval of the ZTE's proposal and the eventual signing of
the contract," according to the Ombudsman investigators.
The investigators also noted that a day before the signing of the contract on
April 20, 2007, "GMA was already fully aware of all the irregularities attendant
thereto" but still "fast-tracked the conclusion of the contract."
"That GMA gave her imprimatur to the irregular and grossly disadvantageous
contract should dissipate any doubt about her personal interest therein," their
resolution read.
In indicting the former president, the Ombudsman also cited her having played
golf and had lunch with ZTE Corp. officials in China.
"Indeed, it cannot be gainsaid that GMA's acceptance of the invitation for a
round of golf and lunch with ZTE officials in Shenzhen, China during the
pendency of the negotiations towards the consideration of the grant of the ZTE
proposal constitutes a violation of Section 7(d)," the special panel of
investigators said.
Photographs of Arroyo playing golf in China came out shortly after the
NBN-ZTE transaction was exposed in 2007. This further fueled speculations that
the Arroyos were directly involved in the transaction.
Presiding Sandiganbayan Justice Francisco Villaruz Jr. set the raffling of
the case on Monday next week after New Year's Day.
No proof of plunder
In the same resolution, the investigators said that based on testimonies of
three witnesses, there is not enough basis to indict the Arroyos and former
administration officials for plunder.
The complainants led by Bayan Muna Rep. Teddy Casiño and former Gabriela
representative Liza Maza had claimed that the Arroyos along with other
individuals including former National Economic and Development Authority (NEDA)
director general Romulo Neri received $35 million in commissions and kickbacks
from ZTE Corp. in exchange for the approval of the NBN deal. Aside from De
Venecia, the other witnesses were Dante Madriaga and Leo San Miguel, a
consultant to ZTE. The witnesses presented their testimonies before the Senate
then hearing the NBN controversy. But the testimonies of the three, according to
the Ombudsman, "cannot tend to prove that money changed hands."
"We can, of course, draw inference from them that, among other things, Mr.
Abalos was the one who lobbied and pushed for the ZTE proposal, and the one who
received the alleged kickback," the resolution read.
"GMA may appear to have used her position to fast-track the ZTE contract, but
there is no sufficient evidence to link her to the receipt of the alleged
payment of commissions (and or) kickbacks," it said.
Reacting to the filing of the cases, Mr. Arroyo said they cannot be held
liable because the NBN deal didn't push through. "Also why was she (Mrs. Arroyo)
charged, when she did not sign it (contract). There is no contract so there is
no corpus delicti," Mr. Arroyo said.
He said he and his wife would likely be surprised by the filing of the cases.
The former leader has been banned from using mobile phones and laptop computers
while under detention at the Veterans Memorial Medical Center. Mr. Arroyo said
they would have to consult with their lawyers in January to study their next
move.
Meanwhile, Malacañang welcomed yesterday the filing of criminal charges
against former president Macapagal-Arroyo in connection with the allegedly
overpriced NBN deal.
"The Filipino people have long been waiting for closure and this is the
process by which we as a people can get closure," deputy presidential
spokesperson Abigail Valte said in a press briefing.
Valte said it would be up to the Office of the Ombudsman to explain the cases
it decided to press against Arroyo.
Asked whether the arrest and detention of Arroyo on charges of electoral
sabotage could be considered as the administration's biggest achievement in the
fight against corruption, Valte said not necessarily because a lot of efforts
had been exerted to cleanse the government.
No hearing
Meanwhile, lawyers of Mrs. Arroyo yesterday arrived at the Pasay court for a
hearing on their petition for bail only to find out that Judge Jesus Mupas is on
leave until Jan. 6.
"We really do not begrudge the judge for going on leave but when one is
handling a case where the accused are detained, he should have given it a
priority," Arroyo's lead lawyer Jose Flamiano told The STAR.
But Flaminiano's team, through co-counsel Laurence Arroyo, had been informed

by the court last Monday that Mupas was already on leave and could no longer
tackle their motion for bail. He will report back to work on Jan. 9, 2012.
Flaminiano said given the urgency of their pleadings, Mupas should have cut
short his leave or gone to work on a half day just to hear the petitions.
"Something could have had Mupas arrive. Say, he could have set the hearing
for the first working day next year," said Flaminiano.
Flaminiano added that he suggested to clerk of court Joel Pelicano for
Mupas's substitute judge or the executive judge to preside over the hearing
yesterday "but both of them were not around also."
Flaminiano said he is appealing to Mupas to cut short his vacation so they
can tackle their motion for bail on Jan.2.
"We cannot really compel him but we hope he shortens his leave so we can
tackle the motion for bail," said Flaminiano.
Electoral sabotage is a nonbailable offense but an accused can seek bail
proceedings.
Mupas earlier turned down Arroyo's request for furlough from Dec. 24 to Jan.
2 for security reasons.
"Besides, this would avoid possible unnecessary security problems and
complaints of residents of La Vista who would be subjected to security
restrictions once Arroyo is allowed to stay at the exclusive subdivision for the
holidays," he explained. – With Aie Balagtas See, Aurea
Calica - By Michael Punongbayan (Philstar News Service, www.philstar.com)

FROM WIKIPEDIA
Philippine National Broadband Network controversy
From Wikipedia, the free encyclopedia
(Redirected from ZTE scandal)
The Philippine National Broadband Network controversy (also referred to as
the NBN/ZTE deal or NBN/ZTE mess) involved allegations of corruption in the
awarding of a US$329 million construction contract to Chinese telecommunications
firm ZTE for the proposed government-managed National Broadband Network (NBN).

The contract with ZTE was signed on April 20, 2007 in Hainan, China.
Following the emergence of irregularities, President Gloria Macapagal-Arroyo
cancelled the National Broadband Network project in October 2007. On July 14,
2008, the Supreme Court dismissed all three petitions questioning the
constitutionality of the national broadband deal, saying the petitions became
moot when the project was cancelled.
Background
President Arroyo In April 2007, Philippine Department of
Transportation and Communications (DOTC) Secretary Leandro Mendoza and ZTE Vice
President Yu Yong entered into a US$329.5 million contract for a National
Broadband Network (NBN) that would improve government communications
capabilities.
On August 29, Nueva Vizcaya Congressman Carlos Padilla hinted in a privilege
speech that Commission on Elections (COMELEC) Chairman Benjamin Abalos went to
China to broker a deal for the NBN project. The following day, Abalos denied
brokering for the NBN project, although he did admit going to China four times.

On September 5, Senator Aquilino Pimentel called for a Senate investigation
about the NBN project. As a result, three committees held joint hearings about
the issue: the Accountability of Public Officers & Investigations (aka the
Blue Ribbon Committee) headed by Alan Peter Cayetano, the National Defense and
Security committee headed by Rodolfo Biazon and the Trade and Commerce committee
headed by Mar Roxas.
Senate investigations
De Venecia's testimony
Jose "Joey" de Venecia III, son of House Speaker Jose de Venecia, Jr.,
testified on September 10 that he was with Abalos in China and that he heard
Abalos "demand money" from ZTE officials. The younger de Venecia was president
of Amsterdam Holdings, the company that lost its bid to ZTE for the NBN project.

On September 11, the Supreme Court of the Philippines promulgated a temporary
restraining order (TRO) on the $329-million national broadband network (NBN)
contract between the Philippine government and China's ZTE based on separate
certiorari suits filed by Iloilo Vice-Governor and former Representative Rolex
Suplico and Joey de Venecia III. Under political pressure from the opposition
group, the court gave ZTE fifteen days to comment on the injunction.
Suplico, a former opposition congressman, alleged that the agreement was
sealed without public bidding and violated the Telecoms Policy Act, which
required privatization of all telecommunications facilities. Congressman Padilla
sued DOTC and ZTE officials of violating the Anti-Graft and Corrupt Practices
Act, the Telecommunications Policy Act, the Build-Operate-Transfer (BOT) Act and
the Government Procurement Act at the Office of the Ombudsman.
AHI also petitioned the Court to direct the DOTC to provide copies of the
contract, since it should have won the same. The younger de Venecia testified on
September 18 that Mike Arroyo, President Gloria Macapagal-Arroyo's husband,
personally told him to "back off" from pursuing the NBN project.
Neri's testimony
On the September 20 Senate hearing, Cabinet officials attended the hearing
except for former National Economic and Development Authority (NEDA) Chairman
(now Commission on Higher Education Chairman) Romulo Neri, who was sick. On
September 22, 2007, president Arroyo suspended the broadband contract with ZTE
after the bribery scandal sparked major problems in her government.
Neri and Abalos finally faced each other on the September 26 Senate hearing;
Neri testified that Abalos told him "Sec, may 200 ka dito (You have 200M pesos
in this deal)" while playing golf at Wack Wack Golf Club; they had been
discussing the ZTE deal at that time. Abalos denied making the apparent bribe
attempt. Neri later invoked executive privilege in response to some Senators'
questions. He later shunned succeeding Senate hearings still citing executive
privilege
On September 27, 2007, ZTE petitioned the Supreme Court to lift the TRO
alleging, in its urgent omnibus motion, inter alia, that the injunction cost the
company millions.
Abalos announced his resignation as COMELEC chairman on October 1;
Resurreccion Borra succeeded him as COMELEC chairman. President Arroyo on her
October 2 trip to China, said to Chinese President Hu Jintao her "difficult
decision" to cancel ZTE Corp.'s contract for the NBN project.
On May 26, 2008, a Supreme Court decision (Neri vs. Senate) nullified the
citation of contempt against Neri, ruling that conversations between Neri and
President Arroyo are considered classified information.
Lozada's kidnapping and testimony
On January 30, 2008, the Senate produced warrants of arrest to Neri and
Rodolfo "Jun" Lozada, Jr., former chief executive officer of the government-run
Philippine Forest Corporation and a consultant of the NEDA. Neri then went into
hiding while Lozada skipped the Senate hearing and went to Hong Kong. Meanwhile,
House Speaker de Venecia lost a motion of confidence vote on February 5, which
unseated him as House Speaker; his partymate at Lakas-CMD, Prospero Nograles of
Davao City, succeeded him as speaker.
On February 5, as the Senate arresting team waited on the Ninoy Aquino
International Airport (NAIA) on Lozada's arrival, Lozada was taken by
unidentified people "out of town" and Lozada's kin appealed for help on his
whereabouts. On February 7, Lozada finally surfaced as police took him to La
Salle Green Hills, Mandaluyong City. Lozada linked Mike Arroyo and Abalos to the
ZTE scandal. On the same day, the Supreme Court stopped the Senate from
arresting Neri, ordering a status quo; Neri then resurfaced after the threat of
arrest was taken off.
The next day, on a Philippine Senate hearing, Lozada confirmed his NEDA boss
Romulo Neri's testimony that Commission on Elections (COMELEC) chairman Benjamin
Abalos and Arroyo's husband Mike Arroyo were behind the kickbacks in the deal.
Lozada's statement was made after he was "abducted" on the orders of Department
of Environment and Natural Resources (DENR) secretary Lito Atienza, Neri, former
Presidential Management Staff head Michael Defensor, Secretary for Special
Concerns Remedios Poblador and Deputy Executive Secretary Manuel Gaite.
On February 11, upon continuation of Senate hearings, the government denied
on kidnapping Lozada. Lozada claimed he was driven around Metro Manila and even
reached Los Baños, Laguna, before he was transported to the La Salle Green Hills
seminary. According to DENR Secretary Atienza, Lozada, who is his boss as the
Philippine Forest Corp. is under the DENR, asked for his help as "he feared for
his life" as he returned from Hong Kong. Joey de Venecia later claimed that ZTE
advanced USD 1 million to Abalos; senators pointed out that this qualifies as
"plunder" under Philippine criminal law since the advance was given when the
foreign exchange was at about PHP 50 to $1, thus equaling the PHP 50 million
floor for plunder.
Deputy Executive Secretary Manuel Gaite appeared on the February 26 hearing.
He had previously said that the P500,000 he gave to Lozada's brother was for
Lozada's expenses while staying at Hong Kong. Gaite said he "can't rationally
justify" the reason why he gave Lozada the hefty amount. He said that his action
"was moved by my conscience and my faith." Lozada earlier claimed that the
P500,000 was a bribe.
The Philippine Court of Appeals dismissed Jun Lozada's writ of amparo
petition for lack of evidence on his claim that there were threats to his life
and security. On September 23, 2008, Lozada asked the Supreme Court of the
Philippines to re-open and reconsider his case, thereby arguing for the
protection of his siblings, Violeta and Arturo.
Countersuit
Mike Defensor, on July 4, 2008 filed a 6-page perjury lawsuit Friday versus
Rodolfo Noel Lozada for "testifying under oath that he had paid Lozada P 50,000
to change his statement that he was not kidnapped at the Ninoy Aquino
International Airport (NAIA) when he arrived from Hong Kong at the height of the
Philippine National Broadband Network controversy (ZTE Zhong Xing
Telecommunication Equipment Company Limited scandal)."
Madriaga testimony
Also on the February 26 hearing, Dante Madriaga, a ZTE-employed engineer,
claimed that USD 41 million was sought as "advances". ZTE then withheld more
money, saying they needed to see President Arroyo's face at the signing of the
contract.
Ombudsman cases
The Ombudsman Ma. Merceditas N. Gutierrez subpoenaed First Gentleman Mike
Arroyo, Neri, the de Venecias and Abalos to hear their side of the story. The
case was filed by former vice president Teofisto Guingona, Jr., several lawyers,
Fr. Jose Dizon and party-list Representatives Joel Villanueva and Ana Theresia
Hontiveros-Baraquel, among others.
Judgment
President Arroyo decided to cancel the National Broadband Network project on
October 2, 2007 in a meeting with Chinese President Hu Jintao.[20] On July 14,
2008, the Supreme Court dismissed all three petitions questioning the
constitutionality of the national broadband deal, saying the petitions became
moot when President Arroyo decided to cancel the project.
Reactions
Following the testimony of Jun Lozada, several sectors and prominent people
such as Joey de Venecia and Senator Panfilo Lacson have called for President
Arroyo's resignation, while Senate President Manuel Villar and senator Alan
Peter Cayetano called for her to take a leave of absence. Vice President Noli de
Castro has said that President Arroyo and other government officials "should be
charged" if they would be found directly involved in the alleged anomalies.
The Catholic Bishops' Conference of the Philippines called an emergency
meeting on February 25, 2007 wherein they formed a collective stance which
refused to call for Arroyo's resignation, instead calling on her to be part of a
"moral reform process".
On February 29, 2008, a rally was held in the Makati City central business
district to protest corruption and call for the resignation of President Arroyo.
The rally's attendees, which included former Presidents Corazon Aquino and
Joseph Estrada, were estimated by police and rally organizers to be around 100
people.


Chief News Editor: Sol Jose Vanzi
© Copyright, 2011 by PHILIPPINE HEADLINE NEWS ONLINE
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