NBN DEAL CAST
by GMA News Research
Last updated: September 19, 2007
It could well be a scandal waiting to happen.
The usual suspects, in a manner of speaking, are there: on one hand,
a losing project proponent and an opposition leader taking advantage of his
parliamentary immunity through a fiery privilege speech; on the
other, a host of powerful men and political lieutenants all
connected to the President.
But what make the national broadband network deal most disturbing
are two firm facts.
For one, this is the second big controversy to link and drag down
President Gloria Macapagal Arroyo and Commission on Elections
Chairman Benjamin Abalos.
The first, of course, was the “Hello, Garci" wiretapping scandal, at
the time in 2005 the most serious political crisis to visit the
For another, the national broadband network deal seems to be a
harbinger of what could be an imminent decline of the supposedly
formidable pro-Arroyo political coalition.
Abalos, supposedly the advocate of the firm that got the broadband
project, is cast
against fellow Lakas-CMD stalwart and Arroyo ally, Speaker Jose de
The speaker’s son, Jose “Joey" de Venecia III, heads the firm that
submitted an unsolicited proposal to DOTC on the NBN project.
Jose de Venecia III
A son of
House Speaker Jose de Venecia, he is the majority shareholder of
Amsterdam Holdings Inc., one of the interested proponents of the
In a letter dated October 17, 2006, Secretary Romulo Neri, then director-general of the
National Economic and Development Authority (NEDA), had conveyed his support for AHI’s proposal for the NBN.
Neri had served earlier as head of the Congressional Planning
and Budget Office (CPBO) under Joey’s dad, Speaker De Venecia.
nine-page affidavit dated September 10, 2007, de Venecia said
Comelec Chairman Benjamin Abalos offered him $10 million “in
exchange for AHI’s backing off and withdrawing completely from
the NBN project.” Abalos, he said, will be getting $130
Senate hearing on September 18, 2007, Joey de Venecia said First Gentleman Jose
Miguel Arroyo personally told him to “back off” from pursuing
the NBN project.
de Venecia and President Arroyo are long-time allies. Speaker De
Venecia is secretary-general of the ruling Lakas-CMD, while
President Arroyo heads the KAMPI (Kabalikat ng Malayang
Pilipino) party that is allied with Lakas-CMD.
Minority Leader Carlos Padilla (Lone District, Nueva Vizcaya)
privilege speech on August 29, 2007, Padilla said Abalos helped ZTE
bag the $329-million contract. He said that weeks before the
contract was signed, Abalos played golf with
ZTE executives in Mandaluyong City, where he once served as
mayor. Padilla said ZTE
paid for Abalos’s unofficial trips to China.
It is not the
first time Padilla exposed an allegedly anomalous government
In February 2003, Padilla had delivered a privilege speech
questioning the government’s importation of 600,000 metric tons
of “rotten" rice from India. The P9.5-billion contract was won
by Kishore Hemlani, who is said to be close to First Gentleman
Jose Miguel Arroyo.
First Gentleman Jose Miguel Arroyo
The NBN deal is at the ninth
controversy to hound the First Gentleman.
He had also been implicated in the
He allegedly received a P50-million bribe
for the President to recall her veto of the franchise bills of
the Philippine Communication Clearinghouse and APC Wireless
Interface Network in 2001.
He allegedly used PCSO funds to bankroll
the campaign of certain senatorial candidates in the 2001
elections and to bribe the media.
In 2003, his name surfaced when one of his
friends, Kishore Hemlani figured in the contract involving the
importation of P9.5 billion worth of rotten rice from India.
In 2003, Sen. Panfilo Lacson accused him of
maintaining the secret “Jose Pidal bank account to launder
He stayed in a $20,000-a-night MGM Grand
Villa in Las Vegas, Nevada, during the Pacquiao-Morales fight in
March 2005. Arroyo’s camp said the accommodation was
complimentary and not paid for by public funds.
In April 2005, a police official accused
him, his brother Rep. Ignacio “Iggy"Arroyo and son Rep. Jose
Miguel Arroyo of receiving jueteng bribes. The First Gentleman
His close friend and fellow Makati Rotarian
Agriculture Undersecretary Jocelyn “Joc-Joc" Bolante was accused
of diverting agricultural funds to the 2004 electoral campaign
of President Arroyo.
Then opposition Rep. Alan Peter Cayetano
exposed in August 2006 that a member of the Arroyo family
maintained a bank account in Germany amounting to hundreds of
millions of dollars. Mr Arroyo flew to Germany later to secure a
certification from the bank to disprove Cayetano's claims.
Comelec Chairman Benjamin Abalos
Abalos denied lobbying for the ZTE deal
supposedly in exchange for money or sexual favors but admitted
that he knows some ZTE officials, as they are golf buddies.
Abalos acknowledged as well that he made four trips to China.
Abalos was chair of the Comelec when it got
embroiled in the “Hello, Garci" scandal — the alleged wiretapped
conversations between President Arroyo and then Comelec
Commissioner Virgilio Garcillano, on rigging the results of the
Abalos was Comelec chair when the poll body
approved the anomalous P1.3-billion contract with the Mega
Pacific Consortium for the purchase of automated counting
machines. The Supreme Court voided the contract in January 2004.
PCIJ reported that Abalos went on a spending
spree shortly after assuming the Comelec chairmanship: he
authorized a performance incentive pay equivalent to a month’s
salary for the poll body’s 5,200 personnel and approved the
purchase of seven new cars for all the commissioners.
DOTC Secretary Leandro Mendoza
Mendoza and ZTE Corp. Vice President Yu Yong
signed the US$329.5 million contract for an NBN on April 21,
2007. President Arroyo herself witnessed the signing in China.
The deal is one of “five landmark economic agreements" between
the Philippines and China.
The Senate summoned Mendoza in September 2005
during a probe of the $503-million Northrail project funded by a
loan from the Chinese government.
President Arroyo appointed Mendoza as chief of
the Philippine National Police a few months after she assumed
the presidency. He is a member of the PMA Class 1969.
Soon after his police service stint, Mendoza was
one of the retired generals appointed to government posts by
Former Neda Director Romulo Neri
Based on the
draft minutes of the Special Joint ICC-Cabinet Committee and
Technical Board meeting on March 26, 2007:
expressed concerns on the terms and conditions of the proposed
loan agreement. He noted that the terms are not as friendly as
the other government contracts with China such as the Northrail
and Cyber Education Project and are “actually almost
out that the government will not benefit much on the purported
savings from internet connection because the government does not
have much internet connection. “Neri said that the presentation
of benefits focused more on the benefits of the government from
the project rather than on the advantages of having a single
platform which can cater to the needs of multiple users.”
how the Chinese company can provide 4G services when China
itself is still struggling with 3G technology.
concerned that the terms of the project may not be as the
President wants. He twice said that the project should be
discussed with the President again, especially regarding the
loan terms and the benefits.
days after the meeting, on March 29, 2007, the Neda Board
approved the project evaluation report of the ICC on the NBN.
Newsbreak, citing sources,
reported that Abalos offered Neri P200 million in
exchange for the approval of the contract. Newsbreak said
Neri was removed from Neda two days after informing the
President of the bribery attempt; “the President allegedly
said he can forget the money but he should go ahead and
approve the contract.” Neri would not confirm or deny the
27, 2007, Neri confirmed that he was moved out of Neda and
transferred to the Commission on Higher Education.
Lorenzo G. Formoso III
Formoso, who is also a Commissioner of the Commission on
Information and Communications Technology, was appointed
assistant secretary in September 2006.
expertise in the telecommunications industry and legal
consultancy work with multilateral development institutions.
He is a member
of both the Philippine Bar and
the State Bar of California.
Joey's affidavit, Formoso attended the former's meeting with
Abalos in Comelec in December 2006.
During a forum at
the Ateneo Professional Schools in Makati, Formoso disclosed
that the signed copies of the NBN contract were stolen.
with Mendoza and DOTC Asec Elmer Soneja, is a respondent in the
graft charges filed before the Ombudsman by Padilla over alleged
anomalies in the awarding of the project to ZTE.
DOTC Assistant Secretary Elmer A. Soneja
An acting DOTC assistant
secretary since October 2006, Soneja was appointed in May 2007
by President Arroyo to the post of DOTC assistant secretary.
chairman of DOTC's Bids and Awards Committee on Information and
Communication that handled the NBN deal.
Joey's affidavit, Soneja
the former's meeting with Abalos at Wack Wack Country Club.
Soneja is also a respondent
in the graft charges that Padilla filed before the Ombudsman.