Philippine National Broadband Network controversy

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The Philippine National Broadband Network controversy (or the NBN/ZTE deal, NBN/ZTE mess) is a political affair that centers upon allegations of corruption primarily involving former Commission on Elections (COMELEC) Chairman Benjamin Abalos, First Gentleman Mike Arroyo and Pres. Gloria Macapagal-Arroyo regarding the proposed government-managed National Broadband Network (NBN) for the Philippines and the awarding of its construction to the Chinese firm Zhong Xing Telecommunication Equipment Company Limited (ZTE), a telecommunications and networking equipment provider. The issue has captivated Filipino politics since it erupted in Philippine media around August 2007, largely through the articles of newspaper columnist Jarius Bondoc of the Philippine Star. It has also taken an interesting turn of events, including the resignation of Benjamin Abalos as COMELEC chairman, the alleged bribery of congressmen and provincial governors (dubbed as "Bribery in the Palace"), the unseating of Jose de Venecia, Jr. as House Speaker, and the alleged "kidnapping" of designated National Economic and Development Authority (NEDA) consultantturned-NBN/ZTE witness Rodolfo Noel "Jun" Lozada, Jr.
Contents
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1 History

1.1 Causes 1.2 Senate investigations 1.2.1 De Venecia's testimony 1.2.2 Neri's testimony 1.2.3 Lozada's kidnapping and testimony

1.3 Ombudsman cases 2 Reactions 3 References 4 External links

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History

Causes

On April 2007, Department of Transportation and Communications (DOTC) Secretary Leandro Mendoza and ZTE Corp. Vice President Yu Yong entered into a US$ 329.5 million contract for a national broadband network (NBN) that will improve government communications capabilities.[1] On the 21st of the same month, Mrs. Arroyo flew to China and witnessed the contract signing between the Department of Transportation and Communication and ZTE Corp. in Boao province [2], despite the fact that, at the time, the First Gentleman was still recovering from a critical condition, having recently undergone surgery for aortic aneurysm. 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. [1] On September 5, Senator Aquilino Pimentel called for a Senate investigation about the NBN project.[1] 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. [edit]

Senate investigations

[edit] 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, Inc. (AHI), the company that lost its bid to ZTE for the NBN project. [1]

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. [3] The younger de Venecia testified on September 18 that Mike Arroyo, President Gloria MacapagalArroyo's husband, personally told him to "back off" from pursuing the NBN project. [1] [edit] 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. [4] Neri and Abalos finally faced each other on the September 26 Senate hearing; Neri testified that Abalos told him "Sec, may 200 ka dito" 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.[1] 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.
[5]

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. [1]

[edit] 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.[6] 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.[7] On February 5, as the Senate arresting team waited on the Ninoy Aquino International Airport (NAIA) on Lozada's arrival,[8] Lozada was taken by unidentified people "out of town" and Lozada's kin appealed for help on his whereabouts. [9] 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. [10] 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. [11] 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.[12] 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 Baos, 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.[13] [edit]

Ombudsman cases

The Office of the Ombudsman 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.[14]

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Reactions

After the Lozada testimony, several sectors and prominent people such as Joey de Venecia and senator Panfilo Lacson called for president Arroyo's resignation, while Senate President Manuel Villar and senator Alan Peter Cayetano called for a leave of absence.[15][16] Vice President Noli de Castro on the other hand, asked President Arroyo and other government officials "should be charged" if they would be found directly involved in the alleged anomalies.[17] On February 12, the Makati Business Club and other about 80 groups called for Arroyo's resignation.[18] An estimated 10,000 people held a protest rally in front of Ninoy Aquino statue in Makati City to demand the resignation of Arroyo in February 15. [19] More than 4,000 including former President Corazon Aquino and Lozada attended the Sunday mass at the La Salle Green Hills' St. Benilde Auditorium. [20] [edit]

References
1. ^ a b c d e f g ZTE controversy timeline, GMA News 2. ^ JDV III implicates President Arroyo in NBN scandal, abs-cbnnews.com 3. ^ ABS-CBN Interactive, Supreme Court issues TRO on NBN deal 4. ^ Reuters, Arroyo suspends telecoms deal with Chinese firm 5. ^ ABS-CBN Interactive, ZTE asks SC to lift TRO 6. ^ Arrest order out for ZTE witnesses Neri, Lozada, GMA News

7. ^ "De Venecia ousted as House speaker", Philippine Daily Inquirer, 2008-02-05. Retrieved on 2008-02-05. 8. ^ Senate arresting team awaits Lozada's arrival at NAIA, GMA News 9. ^ Missing ZTE witness taken out of town; Lozada kin asks for help 10. ^ Lozada finally surfaces, links Abalos, Big Mike to ZTE mess 11. ^ High Court stops Senate from arresting ZTE witness Neri 12. ^ Lozada links First Gentleman, Abalos to NBN deal by Veronica Uy, Inquirer.net 13. ^ ZTE advanced $1M to Abalos--De Venecia III By Veronica Uy, Philippine Daily Inquirer. 14. ^ Ombudsman subpoenas Mike Arroyo, 4 others in ZTE mess - report, GMA News. 15. ^ newsinfo.inquirer.net, Senators want Arroyo resignation or leave of absence 16. ^ inquirer.net, De Venecia son joins Arroyo quit call 17. ^ gmanews.tv/story, Noli on ZTE: No one is above the law, not even Mrs Arroyo 18. ^ gmanews.tv, 80 groups unite, urge Arroyo to resign amid ZTE deal 'stink' 19. ^ Thousands gather in Makati to call for Arroyos ouster, GMA News 20. ^ Lozada: 'I was trying to save my soul', ABS-CBN News

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External links

De Venecia sons team claims overprice in NBN deal Experts report P8-B discrepancy, Inquirer.net

Categories: 2007 in the Philippines | 2008 in the Philippines | History of the Philippines | Politics of the Philippines | Political scandals

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