GMA business allies seek separate ZTE probe

Business groups allied to Malacañang yesterday expressed desire for the government to create an impartial body to look into the scrapped national broadband network (NBN) deal even as President Arroyo was hopeful that the investigation of the Office of the Ombudsman would be “swift and fair.”

“It is important that an impartial commission from the private sector handle the ZTE controversy so that there would be no perception of whitewash, since everybody says even the Ombudsman is partial,” Philippine Exporters Confederation President Sergio Ortiz Luis Jr. said.

The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business group perceived to be close to Malacañang, also told the government to quickly resolve the issue or risk losing foreign and even domestic investment.

In an interview, PCCI chairman emeritus Ambassador Donald Dee said potential investors are likely to wait for the government to finish its investigation on the botched $329-million deal before infusing money in the country.

“Definitely if this drags on the investors may be discouraged,” Dee said. “We are not the only investment destination in the world.”

According to Dee, investors are closely watching the ongoing Senate investigation and if the matter is not resolved, there is a big possibility that potential investors will put their money elsewhere.

The group, together with some representatives of the business sector, the church and academe, asked Trade Secretary Peter Favila to create an impartial body to look into the controversy.

“They want the creation of an independent commission. They also want to bring this to a closure at the soonest possible time,” Favila said.

“They want us to move the economy forward – not that we forget those who are accountable in the ZTE issue, but I believe that we must go through the process,” he added.

According to him, the private sector would like to see an impartial body like the Melo Commission to look into the cancelled broadband deal.

GMA: Strengthen rule of law

In her opening statement at the Procurement Transparency Group-National Economic and Development Authority (NEDA)-Cabinet Group meeting in Malacañang, Mrs. Arroyo noted the administration has strengthened judicial and anti-graft institutions, including the Ombudsman.

“We are hoping the Ombudsman’s investigation would be swift and fair, without bias, without politicking and without drama,” Mrs. Arroyo said in Filipino. “Only the truth, in accordance with the law, based on strong evidence, and with due respect to the rights of the accused and the accuser.”

She said the Ombudsman’s investigation is part of the democratic system to resolve issues and allegations in a peaceful, truthful and sober manner.

The chief executive said it is in this manner of fighting corruption and upholding the law that the Philippines will be respected as a democracy “with an economy that is gaining maturity, respecting human rights, following the judicial process, and carefully studying national issues.”

“Let us strengthen the rule of law and the justice system, which are the keys to peace and progress,” she said.

Mrs. Arroyo last week said she was taking “the ZTE issue very seriously” and pointed out that she had “moved quickly to cancel the project as soon as she could after proper consultation with the government of China, our biggest export market.”

She said she cannot comment more on the case until investigations are complete. “We do not tolerate corruption,” she said.

The President noted that allegations of corruption “have regularly emerged even in previous administrations as part of our less than impressive political culture.”

She said, “I just hope this set of charges will not be a political football.”

Mrs. Arroyo said it was a sad fact that the Philippines has a legacy of political corruption and added that while this legacy will not be erased overnight, her administration has made tremendous strides. 

She said the government has made anti-corruption one of the key areas of focus for reform in the remainder of her term.

Tanodbayan urged to inhibit

Meanwhile, Rep. Risa Hontiveros urged Tanodbayan Merceditas Gutierrez yesterday to take a leave of absence so she won’t be able to influence the Ombudsman’s investigation into the NBN deal. Gutierrez inhibited herself from the case on Monday since one of the accused, First Gentleman Jose Miguel Arroyo, was her law school classmate. The other accused is former Commission on Elections chairman Benjamin Abalos.

“Contrary to her claim that she only wishes to make the proceeding credible and beyond doubt, her belated decision to inhibit has no effect since she already made crucial decisions that could influence the outcome of the inquiry,” Hontiveros said.

“For all we know, she could be working behind the scene. It is her closeness to Malacañang that fuels suspicion that the inquiry would be resolved in favor of the First Family and Abalos,” she said.

She added that even the panel Gutierrez created to handle the investigation is now suspect.

Other critics of the Ombudsman said her office sat on several important cases involving Arroyo administration officials, including those in which the evidence of guilt is strong.

They cited the cases of former justice secretary Hernando Perez, who was investigated by Swiss prosecutors for laundering $2 million in Swiss banks. The money was allegedly extorted from former Manila congressman Mark Jimenez.

Also cited was the P725-million fertilizer scam involving former agriculture undersecretary Jocelyn “Jocjoc” Bolante.

More than a year ago, in the latter part of 2006, Gutierrez announced they would soon file extortion and graft charges against Perez, who was her boss at the justice department when the latter was Mrs. Arroyo’s justice secretary.

However, the charges have not been filed with the anti-graft court Sandiganbayan up to now.

Officials of the Ombudsman’s office claim they are still studying Perez’s motion for reconsideration.

Formoso lashes at Joey

In a related development, Transportation and Communications Assistant Secretary Lorenzo Formoso III, a member of the technical working group on the NBN project, yesterday appeared at the inquiry conducted by the Department of Justice (DOJ) and defended the awarding of the $329-million contract to ZTE Corp. of China.

Formoso, who represented DOTC Secretary Leandro Mendoza in the inquiry, told the panel of investigators that of the three firms interested in the NBN, only ZTE satisfied the project’s financial and technical requirements. Aside from ZTE, the American group Arescom and Amsterdam Holdings Inc. (AHI) bid for the project.

Formoso told the panel that the DOTC’s technical working group had executed “due diligence” in evaluating the capabilities of the three companies prior to the awarding of the contract to ZTE. The technical working group is composed of engineers from the DOTC and the Commission on Information and Communication Technology (CICT).

In addition, AHI, which is owned by Jose “Joey” de Venecia III, could only offer CDMA technology as against the wimax technology being offered by ZTE. According to Formoso, wimax offers a wider wireless broadband coverage than CDMA.

Formoso said top telecommunication companies in the Philippines are now using CDMA technology and that De Venecia’s entry will only “crowd the market.”

He also said that ZTE had offered the best deal for the technology they are offering. According to Formoso, ZTE is offering to set-up the NBN project that would link all government agencies down to the barangay level.

For the project, China is offering to extend a loan package spread over 20 years, with a five-year grace period and a three percent interest per year, according to Formoso.

“Most of the telecoms projects are on 10-year loans at higher interest rates,” he said.

Formoso also lashed out at De Venecia for having profit as his primary motive for the project.

“His primary motive was to make money. He did not cover the missionary routes. He focused on the first- and second-class municipalities. There is money to be made in these areas,” he said.

When quizzed why the NBN project that was originally proposed by ZTE at $262 million had ballooned to $329 million, Formoso said the original price would only cover 30 percent of the country.

To cover the entire country, it had to be expanded to cover even missionary areas, Formoso said.

He stressed that AHI’s unsolicited proposal under a build-operate-transfer scheme was not deemed possible by the project’s technical working group since under the law, unsolicited proposals are not allowed for BOT projects unless a new technology is involved.

Formoso told the DOJ panel that the technical working group also did not consider AHI’s unsolicited proposal, as they would violate Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.  – With Jess Diaz, Mike Frialde