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Sunday, February 24, 2008
Arroyo admits corruption warning before signing ZTE deal
MANILA -- President Gloria Macapagal-Arroyo admitted Saturday of being warned about irregularities in the multimillion-dollar broadband project on the eve of signing the deal with ZTE Corp. in China last year.
It was the first time Arroyo has revealed she was aware as early as April 2007 of possible corruption linked to the US$330 million contract with China's ZTE Corp.
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"Someone told me about it the night before the signing of the supply contract. That was one of many signings. But how can you cancel a deal the night before, when you are dealing with a foreign country?" Arroyo said in an interview on dzRH.
She did not say who told her about the alleged irregularities or specify what they were.
Arroyo explained that the time someone reported to her about the irregularities in the national broadband network (NBN) project she immediately corrected it by having the project canceled.
"The first chance I had, I spoke to the President of China and told him we had to cancel the contract. At first he was surprised but he understood and we remain friends," she said.
Arroyo said she does not want corruption. "If the people are outraged over corruption, so am I," she said.
The President canceled the NBN project in September last year five months after the deal was signed in China last April.
Arroyo ordered the project canceled after Joey, the son of former House Speaker Jose de Venecia, testified in the Senate that her husband and the then-elections chief had threatened him to make him abandon his bid for the national broadband project. Both men have denied any wrongdoing.
Joey's company was among the bidders for the NBN project under a BOT proposal but lost to ZTE's supply contract under an Official Development Assistance (ODA) with China.
Joey dragged former Commission on Elections chairman Benjamin Abalos Sr. for brokering the deal with ZTE and First Gentleman Jose Miguel Arroyo as among the recipients of the deal's commission.
Former socio-economic planning secretary Romulo Neri appearing in a Senate investigation last year said before the project was signed in China he already informed the President of the P200 million offer of Abalos in exchange of endorsing the NBN-ZTE deal.
Neri also told Senators in the same inquiry that the project should be build-operate-transfer (BOT), however it eventually became a loan agreement.
Allegations of corruption and bribery in the NBN-ZTE deal was further corroborated when Rodolfo Lozada Jr. testified in the Senate about a $130-million kickback demand for the First Gentleman and Abalos in the $329-million NBN deal.
Lozada testified before the Senate that the project should have cost only US$132 million but was padded all the way to US$329.48 million because of kickbacks and commissions.
In the same radio interview Arroyo said the government has also taken other steps against corruption, including increasing the budget of the Office of the Ombudsman and having various groups monitor government procurement.
Earlier this week, she suspended 11 ODA projects, and had a procurement transparency group to monitor biddings.
"The group included the Bishops Businessmen's Conference, Makati Business Club and Transparency and Accountability Network," Arroyo said.
"This is one of the reforms in the system that we have undertaken," she added.
So far, she said the group had identified top 20 biggest projects to watch.
The NBN-ZTE deal has rocked Arroyo's administration and fueled rumors of a new coup attempt by disgruntled military officers.
The scandal has galvanized opposition groups and intensified their calls for Arroyo's resignation.
The military has been placed on high alert, beefing up security in Manila ahead of planned protest rallies next week. Arroyo has survived three impeachment bids and four attempted coups in her seven rocky years in power. (AP/Sunnex)For more Philippine news, visit Sun.Star General Santos. (February 24, 2008 issue)
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