Ping links FG to banned contractor in WB mess

Sen. Panfilo Lacson linked First Gentleman Jose Miguel Arroyo yesterday to one of the contractors blacklisted by the World Bank for “collusive practices” with officials in the rigging of bids for a road project funded by the international financial institution.

Lacson said Eduardo de Luna, president of the blacklisted E.C. De Luna Construction Corp., met with the First Gentleman at least 20 times in 2002.

The senator made the disclosure to counter De Luna’s claim that he only had three casual encounters with President Arroyo’s husband through a common friend, identified as Restituto “Resty” de Quiros, a former radio broadcaster and now a board member of the Philippine Charity Sweepstakes Office.

When Lacson confronted De Luna with Mr. Arroyo’s personal appointments book provided by Eugenio “Udong” Mahusay Jr., the contractor said: “I’m not close to the (First Gentleman).”

Mahusay was supposed to be a witness in the investigation into the alleged ill-gotten wealth kept by the First Gentleman under Jose Pidal accounts. But Mahusay later backtracked after he was reportedly convinced to return to the Arroyo camp by former Presidential Management Staff chief Michael Defensor.

Lacson also asked De Luna if he was the contractor who brought P70 million to the LTA Building on Perea street in Makati City where Mr. Arroyo holds office.

He said this happened in April 2002 but he was not sure whether the alleged bribe money was for the EDSA rehabilitation or the Ninoy Aquino International Airport access road project.

Based on his information, Lacson said former Public Works and Highways secretary and now Metro Manila Development Authority chairman Bayani Fernando did not want to sign the contract, triggering his removal from office just a few months after his appointment.

“Bayani (Fernando) sat on the awards, he did not want to sign inspite of the giving of P70 million to a very powerful person holding office in LTA building,” Lacson said.

“You (de Luna) had to go back to him (Mr. Arroyo) para sabihin paano ito naglabas kami ng P70 million inupuan ang award ‘di kami makasimula (to tell him ‘what now, we’ve released P70 million but they sat on the award and we can’t start’),” Lacson said.

“Account ito ng mga witnesses (These are witnesses’ accounts),” Lacson said.

The senator told De Luna that there were witnesses who saw him get out of an elevator at LTA but at the wrong floor. Lacson also related accounts of how the bag De Luna’s group was carrying burst open, scattering wads of cash on the floor.

“There were witnesses who saw this particular incident,” Lacson added.

But De Luna said he did not know of any such incident and even advised Lacson to present a “witness” or evidence to determine who was telling the truth.

Lacson said the P70 million was five percent of the project cost of P1.4 billion.

The appointments book presented by Lacson showed that De Luna and Mr. Arroyo met on several occasions in 2002 in different locations and with different personalities, including then public works secretary Simeon Datumanong, former Agriculture undersecretary Jocelyn Bolante, De Quiros, and a certain Willy Tecson.

De Luna denied meeting the First Gentleman with Bolante and Tecson. Lacson clarified that he was also not sure whether they were together in one place at the same time.

But de Luna said he and the First Gentleman stood as godfathers to a child of De Quiros and one of their three meetings was during the christening of the child.

Casual meetings

Upon questioning by Sen. Francis Pangilinan, De Luna maintained that he was only accompanying De Quiros to his meetings with the First Gentleman and that one time at the LTA office, “I only said ‘hi’ (to the First Gentleman) and then waited outside (for de Quiros).”

“I have no dealings with the First Gentleman,” De Luna said.

Lacson said the incident was relevant to the investigation into the WB exposé.

“How come some big contractors managed to pocket big contracts? Is there a syndicate in the DPWH (Department of Public Works and Highways)? Is there a fixer? These will be asked later on and I will mention some names. That is the relevance I am trying to establish,” Lacson said.

Lacson said he has other witnesses but “they are very much afraid to come out for obvious reasons.”

Sen. Miriam Defensor-Santiago, chair of the Senate economic affairs committee leading the investigation, said there must be a witness to contradict the claims of De Luna.

“Well, I don’t know at this point if there is a strong connection on the basis of the testimony because apparently, he’s (de Luna) trying very hard to make the audience perceive that he is a casual acquaintance of the First Gentleman,” Santiago said.

“So we now have to have strong evidence to overcome his protestations of innocence because the presumption is in his favor. That is why this eyewitness that one senator has adverted to has to come out. Otherwise, I have no choice,” Santiago said.

Fuming Miriam stops probe

A fuming Santiago moved for the termination of the investigation and called for the dismissal of Finance Secretary Margarito Teves and Public Works Secretary Hermogenes Ebdane Jr. and the impeachment of Ombudsman Merceditas Gutierrez for failing to act on the World Bank report.

Santiago said the investigation would only open again if new witnesses come forward to back Lacson’s allegations.

Santiago said the investigation was an “exercise in futility” because the resource persons, including De Luna himself and Ebdane, were merely stonewalling and in a “conspiracy of silence.”

She stressed that it was pointless to stretch a hearing where resource persons were unafraid to lie under oath.

“In other countries, the moment you say ‘I remind you that you are under oath,’ they turn pale and they immediately tell the truth. But in this country, no,” Santiago said.

Santiago also wanted to cite Teves and Gutierrez in contempt and send them to Pasay City jail for snubbing the hearing without even bothering to send representatives. She gave them seven days to explain in writing why they should not be cited in contempt.

“Have you ever heard of any report from the Ombudsman or Department of Finance regarding the blacklisting by the World Bank? I don’t know of such report. I don’t see it in the Internet, it’s not posted there. So I presume they did nothing,” she said.

“Of course they can claim they are still in the process of investigation. My foot,” Santiago said.

“Depending on the consent of my colleagues, I will recommend that the President dismiss Secretary Teves and Secretary Ebdane, and I will recommend that the House of Representatives initiate impeachment proceedings against the Ombudsman for gross neglect of duty,” she added.

The senator lamented that Philippine government officials had not even lifted a finger to verify or act on the WB report.

De Luna claimed he was interviewed for “five minutes” by two WB representatives regarding the project.

When asked about who his contact persons were at the DPWH, De Luna said he knew almost everybody at the department.

The same reply was given by Gerardo Pancho, president of CM Pancho Construction Inc., which the WB has temporarily banned.

Asked by Senate President Juan Ponce-Enrile as to who could be part of his cartel, De Luna said there was none. This prompted Enrile to remark: “So how can there be a collusion? Are you colluding with yourself?”

Enrile and Santaigo said it would be impossible for the WB to make such a report without basis. But they admitted the Senate has no power to order the WB to release the details of its report.

DPWH admission

During the hearing, Ebdane admitted that his department did not and would not sanction contractors based on the WB findings because the government follows its own set of rules.

“To be frank, we have not identified” those allegedly in a cartel.

“The debarment is binding on WB projects. (But we have to) give them the benefit of the doubt and allow them to participate (in other projects),” Ebdane told the senators.

Upon questioning by Senators Manuel Roxas II and Ramon “Bong” Revilla Jr., Ebdane said the government pushed through with the National Roads and Improvement Program 1 even after the WB found there was collusion.

Ebdane also said he “jumped the gun” on the WB and recommended that the project be funded locally.

In a prepared statement that he was not able to read, Ebdane cited the recommendation to drop two of the 10 projects under the NRIMP 1 because of three successive failures of bidding.

“The recommendation to drop these projects from NRIMP 1 was precipitated by the World Bank letter to DPWH that in view of the alleged collusion, they did not concur with the results of the bidding,” Ebdane said.

Ebdane said that through local funding, the government was able to save money because the cost of the project became lower with the provisions imposed by the department.

Ebdane also claimed the DPWH had blacklisted 700 firms in 2007 for various violations and would add 300 more based on their assessment as of December of 2008.

But Ebdane said that the three Filipino firms banned by the WB were not included in the blacklist.

“What kind of regulation is this? The firm has already been blacklisted but under their (DPWH) regulation, they can participate in other biddings. There seems to be no discipline (at the DPWH),” Santiago said.

Santiago expressed hope Lacson could find a witness or evidence to prove the bribery of government officials by contractors.

“It is quite difficult if Senator Lacson just said it. We need to have evidence. His evidence is the appointment book of the First Gentleman. But you have to authenticate the book, etc.,” Santiago said.

“Senator Lacson is apparently still in the process of persuading this witness to come out to testify in public,” Santiago said.

“Under the existing guidelines of the Department of Public Works, there is no concept of preventive suspension. You have to suspend the firm so it cannot go around destroying evidence or threatening witnesses,” she added.