Two months ago, I asked you if we should post a comment from a politician or a political group. Somebody had written what amounted to an invitation to readers to join “Team Gordon,” and I didn’t know what to do.

I like what Kabayan said in response, and his pragmatic frame of mind: Let’s post it, he said, and if what happens after is not to our liking, then “discontinue the experiment.” I also like Bert’s evocative suggestion: Post them all, he said, and we will “clobber them with kisses, or with stones.”

A couple of other loyal readers said perhaps we shouldn’t entertain posts like this; I hear them, but perhaps if we adopt Kabayan’s experimental approach they can see their way to a qualified Yes?

Here, then, is that two-month-old post from Gordon’s camp.

Vision. Experience. Track Record.

These are the criteria for leadership that should guide us in choosing the next President in 2010.

Dick Gordon is the only one with Vision, Experience, and Track Record.

He turned Olongapo City around, made subic an investment and tourist destination, and brought about the resurgence of tourism in the Philippines.

Through his long involvement with the Philippine National Red Cross, as governor and Chairman, Gordon has brought help to those struck by calamities and diseases.

As Senator, he has worked on bills and resolutions aimed at repairing our people’s faith in government institutions.

As President, we are certain that ONLY DICK GORDON’s TRANSFORMATIONAL LEADERHSIP can bring about CHANGE that is FOR REAL, FOR BETTER, FOR EVERYONE, AND FOR GENERATIONS TO COME!

Visit our blog at www.teamgordon2010.blogspot.com and find out how you can help elect Dick Gordon for PRESIDENT!

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The Pacquiao-Barrera fight is about to start. The Pacman’s ghostly visage the last few days, the result of a down-to-the-wire struggle to make it to the weight limit, worries me. I’m hoping the science he has learned from Freddie Roach will be enough to see him through.

More than two years ago, I covered Pacquiao’s training camp in the now-famous Wild Card gym (it was, most assuredly, a welcome break from political journalism). I hope you don’t mind if —- like a prayer —- I publish the story that came out in the March 20, 2005 issue of the Inquirer.

Pacquiao’s Wild Card advantage
Freddie Roach’s championship gym adds technique and discipline to boxer’s power and speed

By John Nery

You could say the whole point is to live up to the gym’s name.

A wild card, of course, is American slang for something unpredictable, an unforeseeable factor. That makes Freddie Roach’s Wild Card Gym, in Hollywood, the perfect place to train Manny Pacquiao. You could say the million-dollar boxer’s “longest training camp” was designed to make him less predictable.

After beating the first of the Mexican trinity of boxing icons, Marco Antonio Barrera, into submission, Pacquiao showed his limitations when he drew with the second, Juan Manuel Marquez. He had famously knocked Marquez down three times in the first round with his thundering left cross; but success with his most potent weapon made him forget everything else in his armory.

That night last May, to hear the laidback Roach say it, “he got kinda happy with the left hand.”

After getting his bearings in the first two rounds, Marquez figured out how and when to avoid Pacquiao’s left, or at least contain the damage. After the controversial draw, some boxing experts immediately said the Marquez match proved that Pacquiao was a one-dimensional fighter. Rather memorably, one boxing writer said Pacquiao showed up at the MGM Grand Arena without a Plan B.

So you could say that the whole point of his eight-week training, in preparation for today’s fight against the third person of the Mexican trinity, Erik Morales, was precisely to furnish him with Plan B, and perhaps C and D and E as well.

“I’m just making Manny a more complete fighter,” Roach told the Inquirer and InqTV last month, in his cramped office inside Wild Card.

The smell of sweat

Wild Card, located at the corner of Santa Monica Boulevard and Vine Street, in the heart of Hollywood, is a small, simple, four-walls-and-a-ring affair. It sits on top of a Laundromat; you enter through a solitary door at the back.

When you walk in, you immediately smell the faint scent of sweat. Even on Sundays, when the gym is technically closed, you can smell it. (Technically, because some die-hards continue to show up, and some of the trainers live in the gym.) The windows are never opened. “Everybody’s trying to make weight,” one of its seven trainers once said.

As you walk in, there is a workaday counter to your left. That’s where much of the business part of the gym is conducted: ex-heavyweight Justin Fortune advising a gym regular, ex-featherweight Pepper Roach (the coach’s brother) answering the occasional phone call, ex-light heavyweight Maka Foley collecting the dues.

(The rates are $50 a month, or “$5 a day if you come once a week,” in Pepper’s words. The dues allow you to use the gym, but to hire the services of a trainer you need to pay them by the hour. Some charge $50 an hour, others $25, still others $10.)

In the center of the gym is a standard Everlast ring. Gym bags and duffel bags line one side of it.

There is a treadmill, a couple of double-end bags, three speed bags, four punching bags.

The walls are plastered with boxing pictures, fight bills, posters of famous boxers. In the middle of the gym, along one side of the ring, is a black-and-white picture of a young Muhammad Ali. It looks to all the world like an icon on a boxing altar.

Across the gym from this picture, on the outside wall of Roach’s cramped office, is another picture of Ali, no longer young. He is inside a ring, giving pointers to his daughter Laila, who of course took up the unforgiving sport after him. It takes some time before your eyes adjust, and then you realize that the picture was taken in Wild Card.

Roach has said in more than one interview that Ali’s visit was the happiest day of his life. Coming from a man who was inducted into the Boxing Hall of Fame for training numerous world champions, starting with his first one, four-time champion Virgil Hill, and including James Toney and Mike Tyson, this is saying something.

Working the mitts

Like his two brothers Pepper and Joey and his father Paul, Roach fought as a featherweight, but a knee injury stopped him cold. Today he walks with a limp, but if you only saw him inside the ring, working the punch mitts, and unless you knew about it beforehand, you wouldn’t know his knees had betrayed him.

When Pacquiao is in training, he follows Roach’s regular schedule: sparring sessions three times a week, and punch mitts on alternate days.

One session started with Pacquiao rattling off with a series of right hooks, seven or eight of them, in quick succession.

They then quickly settle into a routine, trying or practicing certain sequences. Two right jabs, a left cross, then a right hook. A right jab, a left hook, a right hook, then a right to the side. Two right jabs, then a left hook.

Pacquiao punctuates the sequences with his own sound effects. A one-two combination: “pak, boom!” Two rights then a left hook: “pak, pak, boom!” A prolonged sequence: “uhm, uhm, uhm,” then, “boom!”

(At one point, bothered by the headband he was wearing, he takes it off and throws it across the ring.)

Roach, who has taken off his eyeglasses, is all business. “One-two,” he calls out. Or “Four,” meaning two right jabs, a left hook, then a right. “Again.” And then “Again.” He grunts instructions or encouragement. “Good.” “In.” “Under.”

Working with the mitts, Pacquiao and Roach talk all the time. In another session, for instance, Pacquiao stops in the middle of a round and looks up at Roach. “Sometimes,” he says, outlining a right cross to the body, “but sometimes,” he continues, exaggerating a right hook. His trainer nods. Good. Okay.

When the automated bell rings, they take a break for 30 seconds. When the bell rings again, they jump back to the center. Each session runs three minutes, like a regular round in boxing. On a regular day, they do six or seven rounds.

“My philosophy on boxing is we box three days a week, and the other three days we work on technique with the mitts,” Roach explained.

Technique, you might say, is just another word for Plan B.

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Today’s Inquirer editorial references a photo found in such sites as that of the UK’s Daily Mail.

The image is profoundly disturbing. The picture, published in many newspapers, shows a dead Burmese monk, floating face down in a murky river. His saffron robe has turned pale; it has turned the color of human flesh, drained of blood. Hints of saffron can still be glimpsed, partly hidden by the body of the slain protester. The close-up photograph suggests that the rivers of Burma (Myanmar) have been turned into makeshift graveyards, full of other bodies.

The detailed story in the Mail is worth a close read. But here’s the most disturbing of the photos included in the story:

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What a month. A former president convicted on plunder charges; another president, in the vortex of the ZTE controversy, staring into the abyss.

I hope you will agree with me that the sheer amount of information available to us at this particular moment in our history has educational value: that is, they teach us (if we are willing to learn) valuable (if sometimes discouraging) lessons in citizenship and governance.

Because we are forced to process so much information, we find ourselves sharing in the work of reporters and analysts and opinion-makers. (This may well be the first lesson in citizenship; in the age of the blog, we are all, potentially, members of the fourth estate.)

But forgive me, I did not set out to talk theory. All I really wanted to do was to offer a reflection on something that has bothered me in the last four weeks or so. At the risk of leaving context behind, let me get straight to the point: I worry sometimes that we can easily mistake remembering for reporting.

In the first 24 or even 36 hours after the Estrada plunder conviction came down, speculation that the decision was “1,000-plus pages long” hardened. Indeed, in this blog, some of our commenters advised or teased or taunted their partners in the conversation to read the 1,000-page decision first, before jumping to conclusions. And yet—-and here is the worrying thing—-they themselves were jumping to conclusions, because in fact the decision was “only” 262 pages long (nowhere near the 1,000-page milestone).

I hasten to add that I saw this tendency, to accept something reported in the media and remember it as stock knowledge, at work in many other forums, too, especially in text messages sent to and read by radio news commentators.

After the first Senate hearing on the NBN-ZTE arrangement, when Joey de Venecia dramatically reenacted Mike Arroyo’s alleged intervention in the deal (”Back off!”), some included a superfluous, indeed non-existent, detail in their recounting. I read in one piece (which I cannot link to) and heard in a number of conversations that the young De Venecia had 1) stood up, 2) turned to his seatmate Vice Governor Rolex Suplico, and 3) pointed a finger at him, “two inches” from his face. Fine, except that there was no standing up involved. The two witnesses were seated the whole time.

And yet—-the worrying thing—-many of my friends (reasonably intelligent, I would think, at least most of them!) had remembered it differently.

If, weeks from now, one of us “remembers” Mad (este, Maid) Miriam as walking out “in a huff” from last Wednesday’s Senate hearing, let’s all do our bit of reminding. It did not happen that way. Yes, and contrary to Miriam’s later rationalization, she did walk out. But there was no drama in the actual, the physical, act. After her outburst (against the “commissioners,” and against the Chinese who “invented,” she said, both civilization and a culture of corruption), she stopped, drank from her bottle of water, puttered about for a few seconds, and then, while another senator was talking, left her seat. No huff, all puff.

Details, I know, and even minor ones. But facts, dates, the words actually said: It is these details that make the testimony. Granted, we do not need to be journalists to be reporters (and why should we want to be?). But we all need to be faithful “reporters” to be witnesses of history.

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Background for the hearing: Neri: No turning back: But wary his testimony could lead to another EDSA. At the same time Neri to invoke executive privilege in ZTE deal inquiry, while the Inquirer editorial warns of a Bodyguard of lies.

See Inquirer.net’s NBN Deal for background on the controversy.

9:28 am Romulo Neri and Benjamin Abalos (accompanied by his son, Rep. Benhur Abalos)  have arrived at the Senate. Sec. Leandro Mendoza also there (other cabinet members expected to arrive), columnist Jarius Bondoc.

9:34 Like a dinosaur from the mists of time, former Sen. Maceda lumbers over to talk to the media and rumbles about how people will find it odd if Neri backtracks on the stories circulating. Says if still a senator, he’d ask one fundamental question: what was Abalos doing acting as intermediary for an executive contract?

9:37 Ricky Carandang says gallery’s filling up, “it’s rarely been this full.” Camera shot of Neri looking very quiet and extremely tense. Many Ateneans reportedly in gallery to lend Neri moral support.

9:46 Meeting called to order. Opening remarks of chairmen. Cayetano rattles on with bible quote again, points out conflicting testimony of witnesses present, and for conclusions to be reached re: process and whether anomalies in ZTE deal. Acknowledges Abalos and Neri. At 11:55 last question will be asked, then lunchbreak, then resumption at 12:30. Over lunch, senators to discuss administrative matters. Villar, Lacson, Pimentel, Estrada, Santiago, Pangilinanan, Legarda, Arroyo, Escudero, Enrile, Madrigal, then chairmen will ask.

Roxas: There was a compliance with information request pertaining to annexes of ZTE contract. Some requests for confidentiality and/or restricted access made, will be taken up by committee in caucus. Welcome, welcome, this a joining of the issue, he-said she-said situation, we look forward to resolving it.

Cayetano: Mendoza, Formoso, Ramon Sales, Abalos, Neri, Suplico, Bondoc, Joey de Venecia, regrest from Teves and Favila on official trip; Soneja present. Second letter of regret from Jimmy Paz, one more invitation to be sent to him. Opening statements will be allowed, please stick to ZTE issue.

9:51 Pangilinan: Appeal to chairs and audience, this issue has been well, intense, and uh, emotional, may we appeal to keep it down and to exercise restraint, we don’t want it to turn into an emotional and difficult situation for the senators and the guests.

Cayetano: Yes, no clapping and jeeering, please. Reminds that Executive Secretary promised records by Monday but not yet delivered. Lacson asks for more documents.

9:53 Oath administered to Abalos and Neri.

Abalos: Honorable ladies and gentlemen. Recent developments have hurt me and my family. A son of a friend through innuendos and falsehoods have implicated when all the papers submitted will show it was he who lost out. Joey dee Veeneecia has launched a well funded personal attack on me for first, lobbying for ZTE, second for bribery, third, bagging it… fifth, bugging his phone. Sen-aytors know I have no capacity to eavesdrop, and neither power or authority to award broadband contract to any party. As early as 2nd of December, when JDV# alleged that I pursued him, the government had already designated ZTE as prime contractor. ZTE contract is not own doing. JDV3 says I bribed him Dec. 15? Per letter of Chinese government to Philippine government they’d already designated a contractor. Why would I approach him to bribe him out? Let’s be honest JDV3, this is a concessional or tied loan, it’s the lender that designates their contractor. That is what we have to look into, that’s the whole trouble, when you are borrowing, you have to accept conditions of the lender. This is what’s painful. Well thought out and well funded piece of propaganda. Not impelled by honest motive or desire to expose irregularity, it’s meant to humiliate me, the government, and its officials, to reverse award of contract to give it to him. Appears he’s won, he’s brought government to its knees. Against advice of my counsel and friends, I’ve decided to appear to defend myself and our country and officials including the President. I have nothing to hide, by God’s grace I will defend myself against the fall and perjurious claims of JDV3. I hope they will see their errors. What does it profit a man if he gains the whole world and loses his soul? What does it gain JDV3 if he gains contract and loses his soul by means of lies. Why would we go to China times and Shenzen, why has he not produced plane or train tickets? You do not cry rape six times! If I invited him is it not strange I didn’t pay for tickets? I never paid for his tickets. He said he’s seen me several times either at Wack-Wack or Comelec. He never said I saw him in his house or office is, because I never did that. Truth is I don’t know where his house. Human nature for person seeking favor to seek out his benefactor? So why is he going to see me? Why did he have to come and see me if he says he doesn’t do business that way? Why did he go to Shenzen with me? SC says statements by witness have to be credible and made by credible witness. He does not deserve to be believed. I am at your disposal.

10:01 Neri: I am respectfully submitting memorandum for clarifying matters. (explains memorandum’s contents: how NEDA evaluates projects; project milestones, etc. Explains members who sit on cabinet committee (ICC); how they work with NEDA secretariat, how it provides evaluations; NEDA board then review feasibility: technical, cabinet, boards levels and then NEDA board chaired by President. Milestones: NBN was process for ICC review as submitted as DOTC and CICT; conceptualized as per cybercorridor SONA scheme; NBN officially endorsed by CICT on 20th October 2006, as government and not BOT project;; 23 March 2007 endorsed by DOTC based on awards committee endorsement as per president’s instructions, including March 1 2007, network must be owned by government; 29 March 2007 approved per merits.)

10:06 Neri: NBN project’s merits then described: technical description…(jives with Yugatech description, without mentioning specific contractor). It was found to be economic viable. I would like to add that when Joey de Venecia presented to me his project also he promised to bring down costs of telecom in this country by 1/2. I found it interesting. If we could share benefits, that would be great. I wrote to encourage him but that don’t mean NEDA approval. I went along with the project if I can reduce profits of existing players by 1/2 and share it with Filipino people, I would recover costs of NBN project in one year. That was my hidden agenda. It went through all the techincal steps. Let me make it clear: NEDA does not choose suppliers. We shop around for best means, for example, in this case, a country-to-country agreement. Some benefits, China can provide loans which effectively gives us a big discount.

10:10 Villar: Thanks to all for being here. Sec. Neri, I’m just asking, was there a message from the President to you coming here or did you talk?

N: We haven’t talked for several weeks already.

V: From Malacanang?

N: I get to talk to some Palace officials.

V: About this hearing?

N: I can’t avoid talking to them…

(Joker can’t hear)

V: Regarding your transfer from NEDA, I know you like economics a lot, then suddenly you’re moved to CHED. Was there a connection?

N: When I was asked to transfer, Ermita and President told me she needed me there. I had unique talents and capabilities. Out of the box solutions.

V: Did you expect to be there permanently?

N: One year, maybe six months?

V: You preferred to stay at NEDA?

N: Even at DBM I didn’t want to go, but after 5-6 months I went back to NEDA.

V: And you didnt suspect ZTE connection?

N: It didnt occur to me.

V: You’ve been hearing statements. Do you think someone is lying?

N: I’d rather you ask me direct questions as to the facts. My opinions arent as important as statement of facts.

V: Is Joey de Venecia lying for example?

N: Cannot say for sure. Didn’t go to meetings.

V: Abalos?

V: We met several times.

V: Is he lying?

N: Let me give you facts. Chairman Abalos came to visit me at Neda, I forgot the dates, looked at calendar. Sometime last last year, early this year… I cannot recall what we discussed, frankly, I have poor memory… But I believe we had lunch meeting arranged by Chinese embassy, one or two Chinese officials of embassy and of ZTE, Abalos there with us. I left meeting before dessert because ZTE officials were heavy smokers, couldnt stand smoke, dont know what transpired. Then a golf game at Wack-Wack.

V: Long game?

N: Nice game, Chairman was charming. Something he said surprised me. He said, Sec. may 200 ka dito. Since he was host, I chose to ignore it.

V: What did you say?

N: Too shocked to say anything. Told my staff to be careful assessing project and with the costings, told my NEDA staff what was told me.

V: Did you think what the 200 was for?

N: I guess- you know how it is in golf, you hit the ball, walk, discuss things a little…

V: That’s all ?

N: Uh, for the moment that’s all I have to say.

V: In the discrete investigation of the executive were you invited to shed light on this deal?

N: I was not asked.

V: Never asked?

N: Never.

Cayetano: 200? million? thousand?

N: No amount.

C: Abalos, will you confirm or deny that?

A: What’s the 200? He himself doesn’t know! (crowd laughs)

10:19 Lacson: Neri, you stated in any national project the role of NEDA is to evaluate and submit recommendations. So what was role of NEDA?

N: Asses project viability and consistency with long-term development goals.

L: Rely in-house or engage outside help?

N: In house staff found it economically viable, economic rate of return of 29%…

L: Including concept and scheme?

N: I don’t understand…

L: You were arguing about scheme as presented by Telof officials, they were for inclusion of loan agreement, in fact you asked that justification being given was same used for pushing through for past projects like Telepono sa Barangay a white elephant of sorts.

N: Normal during ICC to debate merits of a project. Knowing DOTC had failed in the past, I asked Formoso how sure are we this wont be a white elephant.

L: What was your own evaluation?

N: Well as I said-

L: Were you all for it?

N: I was more for it not because of evaluation of NEDA staff, garbage in garbage out, no capability to verify costs and savings…

L: I will rephrase, are you for government owning project like that or rather government rely on private sector?

N: Given the fact we have one of the highest telecoms costs in the whole world, despite private sector doing it and regulator, this is one case where I thought it would do a lot of good for public sector. That’s why I encouraged Joey de Venecia because it would add to competition. Advantage of loans is government can source them very cheaply. PLDT and Globe: American complained on costs, $1 mbs, 22c in Japan, US 11c mbs, RP $20 mbs. We could bring our costs for cellphone down by half, if we could bring broadband down to that of Japan and US it would be great.

L: When did you play golf with chairman? Around time you signed off project?

N: Much earlier than March 26…

L: March 26 to April 20?

N: Much earlier, January, February….

L: Discussing golf balls?

N: No…

L: How did 200 enter the conversation? In vernacular or English?

N: Sec, may 200 ka rito.

L: Where did that come from?

N: I guess we were discussing NBN.

L: What did you think when he said that?

N: Surprised… shocked, I guess.

L: Why?

N: I’m not used to being offered.

L: Bribe?

N: Yes.

Rather big.

(audience titters; Lacson clarifies that Neri assumed 200 referred to a figure at least in the million)

L: Did you tell the President?

N: Yes.

L: What did she do?

N: She told me to ignore it, we then discussed other things.

L: How did you report it?

N: Over the phone. Chairman Abalos offered me 200 million pesos.

L: What did she tell you to do?

N: Not to take it.

L: News of a Palace investigation.

What did she do?

N: I was not privy to any investigations.

L: Was she shocked?

N: It was over the phone, I didn’t see her facial expression.

L: As early as Nov. 21 you were in agreement with President it should be pay as you use, BOT, etc. You were both in agreement. Then all of a sudden, all the proposals violate the President’s past guidelines.

N: Well, we differed to implementing agencies choice.

L: DOTC?

N: Yes.

L: NEDA performed ministerial job?

N: No, we evaluate viability.

L: It didn’t occur to you you violated past policies?

But you endorsed? When did you approve?

N: March 29, 2007

L: Endorsed April 20, 2007?

N: It’s on supply contract endorsement…

I have a letter to Minister Bo Xi Lai and China Eximbank endorsing the financing….

L: But you were arguing against proposal of Formoso?

N: Part of healthy debate, in the end, collegiate decision, I’m just one member of ICC.

L: After arguing against proposal, nevertheless you endorsed-

N: For financing, one of several projects… We endorse it to them for their consideration.

L: Abalos, you said in a radio interview, you didn’t invite J3 to go to China in December 2006.

Abalos: It was not I who-

L: Why did he invite you?

A: Well, I didn’t know as early as December 5, he must have discovered as early as December 2, ZTE was already designated as supplier by Chinese government… knowing i’m very close to these people which I do not deny, he then pursued me, and it seems he had strained relations with them as one of his companies, I think broadband, had business with ZTE but they defaulted on payment…. He said because of strained relations he wanted me to be a bridge so he could dip into the project.

L: But ZTE had already bagged the contract?

A: I do not know but they were designated-

L: But poject not approved yet. Neri, Dec. 2, was it already approved?

A: I only have October 20, I’m not aware of any Dec. 2

L: So Dec. 2, still under evaluation? How would J3 request Abalos to provide a bridge when there was no project approved yet by NEDA? To either of you.

A: I have here copy of letter, my counsel secured….Addressed to Mike Defensor stated it may interest to know that ZTE a reputable firm in China, responded to this undertaking and consequently, Chinese government designated it as NBN “frime” contractor.

L: Mr de Venecia?

J3: This is 1st or 2nd time I’ve heard this in 3 days. Why is Abalos involved in NBN? To rebut him, I divested my shares in multimedia telephony, in 2003, bought by Anscor, Ricky Razon… I have documents that show in 2004 supply contract between my former company and ZTE with regards to vendor contract. I don’t need Abalos to lobby for me because I already know ZTE.

Lacson: I have letter from Soneja. Why would send this letter from Soneja to JV3 if the deal had been approved? (reads letter: March 1: we ask you to submit your final proposal…) If deal was finished why would they ask other proponents?

A: I have letter from Chinese ambassador…

L: Why would they ask for final proposals if, as you say, everything was finalized in Dec. 2? But these letters are after, and so why would Joey ask you? Was DOTC just pulling the leg of other proponents?

A: Well, here’s letter, it’s because of the letter that probably, J3 learned of designation…

10:40 Enrile: Fairness suggests if a witness presents document we consider it and look at it and not brush it aside.

[Lacson and Enrile with Cayetano refereeing, wrangle; Lacson says he read the letter; Enrile surprised; Escudero points out letter Enrile mentioned is Annex “G”; Enrile insists it be read into the record; Cayetano says let’s not derail; Enrile insists on motion]

10:43 Read’ Chinese ambassador’s letter: We agree to support NBN and provide financing through China EximBank… It may interest your honor that ZTE corporation responded to this worthwhile undertaking… consequently, the PRC designated it as the the NBN project’s “frime” contractor, signed, Ambassador, PRC.

B: Addressed to whom?

A: Michael Defensor, Presidential Chief of Staff.

10:45 Lacson: Do you categorically deny statement by Neri?

Abalos: I cannot recall. What is that 200?

L: You do not deny it?

A: Even he himself says it was his assumption it was 200 million… What could be my reason?

L: What you’re saying is Neri is lying under oath?

A: He is, as far as he is concerned.

L: To DOTC. Does Chinese government own an NBN?

Formoso: Yes, well, basically through three companies… All government-owned.

L: de Venecia?

J3: Sorry, was reading my prayer for courage.

A: Thanks to Formoso for saying ZTE is government owned corporation. See, in that case, would I bribe the Filipino people?

10:48 Cayetano:  A. you said, this is a tied loan so how could you bribe J3?

A: No, as far as J3 was pursuing me, why he was in Wack-Wack several times…

C: But everyone defending the contract said it’s a tied loan, we have no choice. But isn’t it true if de Venecia was chosen this would be BOT?

A: I don’t understand the work of this, if it’s a tied loan, no choice.

10:49 Lacson quotes Twain to de Venecia and Neri: courage is mastery not absence of fear.

10:50 Estrada: Neri., Abalos just said you were lying under oath. Is he also lying under oath when he forgot or cannot recall bribe offer?

N: I have a very clear recollection of that incident. Perhaps Chairman forgot about it.

Abalos: I said he’s lying when he said I offered him 200 million pesos.

E: Aside from Mrs. Arroyo, did you tell anyone of this 200 pesos, 200 thousand or 200 million?

N: My lawyers.

E: Would you confirm Mrs. Arroyo told you not to accept bribe?

N: Yes.

E: But she instructed you to approve the ZTE.

N: Well, I let the process push through, much as I told my staff…

E: Were you not pressured to approve?

N: NEDA and boards collegial bodies.

E: You expressed reluctance?

N: NEDA ICC minutes shows usual debate… healthy debate.

E: At first you expressed reluctance?

N: No I like the project.

E: BOT basis?

N: We live it up to the agency as to how its structured.

E: Abalos’s involvement?

N: I cannot say, we had several meetings, there was the meeting upon invitation of Chinese embassy. I told ZTE of President’s preference that it be BOT, probably BOT. Take or pay. I made it clear those were wishes of President.

E: Do you know J3?

A: I met him only last December 2006.

E: In J3 affidavit, upon your initiative, you had breakfast with him at Speaker’s house in December.

A: I don’t know what he means by upon my initiative, I remember I was invited by the father then, when I arrived, Joey was there.

J3: I got a call from my father, sent a text a message… I got voicemail from Abalos saying he wanted to meet. Then my dad called saying Abalos really wants to meet you, so I will have you to breakfast. So we all met at my father’s house upon the request of Chairman Abalos. In fact I’ve asked my dad and he said he did not know, in fact he just did Abalos a favor.

E: After meeting at Speaker’s house, you met J3 again at Wack-Wack… Can you confirm this?

A: It was not once twice or even five times, he has been pursing me! Even going to my office!

E: Going to meetings?

A: No meetings! Each time I see him as son of Speaker of course I have to entertain him!

N: Did you offer him 10 million dollars to drop NBN?

A: He was pursuing me!

E: Did you offer 10 million bribe to J3?

A: Definitely not!

E: J3 did he?

J3: Yes he did, December, roughly 8:45.

E: Who was there?

J3: In his big office, gentlemen you mentioned, plus my technical person then went to his smaller office…

E: Abalos, J3 testified numerous trips to China, does Comelec have any business in China?

A: Presupposes you believe him!

I vehemently deny I made many trips, only three trips to China!

E: October 30 2006.

A: Yes, a long holiday.

E: Nov. 25, for HK. Dec. 23 for HK. Feb. 22 with Mrs. Arroyo, a presidential flight…. March, Honolulu… April, HK. July, 2007, Singapore… August 10, HK… Do you deny this?

A; I do not deny, except that presidential trip in February?

E: But this was given by BI…

A: I am qualifying, except that February presidential flight, I cannot recall…

E: HK?

A: Yes, I admit.

E: Why are so much involved with ZTE? What does ZTE have to do with your official function as Comelec Chair.

A: Nothing, they became friends, I have close relations.

E: So you brokered the deal?

A: Definitely not, it’s a state-owned corporation, nothing to broker.

E: Never brokered?

A: Under oath, never brokered as far as NBN is concerned.

E: Uh, well, thank you.

11:02 Santiago: 2 minutes for observations. A Trial becomes a question of credibility. From experience a judge knows its not battle of telling the truth or who telling lies, but rather, people telling part of the truth to benefit their side. Also possible, all parties could be telling lies. Just because one person pro-ven to be telling a lie it doesn’t mean other person telling the truth. Difficulty is detecting not only lies, but half-truths. Parties agree contract involved 300 million Us dollars. 10% usual commission or kickback is 30 million dollars, 1.5 billion as in Belgium pesos. No wonder these people are at each other’s throats! I  my experience as BI commissioner is they won’t kill an official doing their job. They’ll simply take leave of absence for head of office to go away. This is not a normal case of a disgruntled party only, but a double-cross syndrome. A double-cross is this: when official promises something, accepts bribe, then exposes transaction because maybe rival syndicate has higher offer. Now our job is to find out who double crossed whom!

(crowd titters)

Santiago: Neri, I respect you (praise, praise) you say, when you heard Abalos offer you 200 period, you were surprised and told President. She said don’t accept it. You understood it in context of bribe and assumed 200 million pesos.

N: Yes.

S: But you are generally in favor of an NBN whatever implementing agency.

N: Yes, to bring down telecoms costs.

S: From the paper, your statement: 10 October 2006 was when J3 first submitted proposal; so this means proposal was not submitted by Bandila Holdings, Inc. not Amsterdam?

N: We do not entertain from the private sector, only from line agencies. Said proposal was sent to CITC for appropriate action.

S: My point is J3 was communicating with government agencies as Bandila and not Amsterdam?

N: I am not familiar with corporate structures. These may be based on letterheads.

S: So he didn’t have capital, he partnered with Chinese.

N: Yes.

S: So he’s not Filipino proponent! Chinoy proponent!

N: I cannot make that judgment.

S: Mr. de Venecia only had 312,000 pesos as paid up capital in Amsterdam. He seems to have been acting as a broker to get commission, There’s trouble because others wanted in, with 1.5 billion at stake others asked why only him! That’s my conclusion. Neri, you didn’t even consider de Venecia offer because it should be DOTC?

Yes, we only entertain from line agencies.

S: Mr. Abalos, you said J3 contacted you because you’re close to ZTE. Why are you close?

A: Started Jan-Feb 2006 when I met them through common acquiantance, they met me at Wack-Wack, and showed me beautiful project proposal for Mindanao, Davao Special Economic Zone…

S: I am not interested in that project. For record China invented civilization in the East, but they also invented corruption that’s why these Chinese like inviting people to golf, etc. As officials we know we’re being invited not for our good looks… On record, let me put it on record: I resent being made party to this squabble! You’re just fighting over kickbacks! You’re wasting Senate time! (Santiago leaves Senate)

11:13 Cayetano: Noted.

Pangilinan: Feeling better?

N: Taking antibiotics.

P:  You mentioned talking to Abalos.

N: 3 occassions. He went to Neda. Lunch, golf. Meeting ZTE officials.

P: Phone calls?

N: I don’t have his phone on my-

P: What is your response to claim he has nothing to do with NBN? Agree?

N: I cannot, I only saw him

P: Your own view, not expert

N: I remember in conversation with Chinese he seemed to have played-

P: Was he trying to convince you?

N: I don’t think so, it was his technical people who made the presentation-

Whose technical people?

N: I cannot recall-

At Wack-Wack?

N: Yes.

P: Any government people at golf game?

N: No.

P: Returning to “may 200 ka dito” who else was in golf cart?

N: Only us.

P: You said to your staff, be careful, after offer, who?

N: I met with technical staff, and I relayed it…

Asec. Benie Reynoso is here…Ronnie Corpuz….

P: Who paid for golf game?

N: Ah, I’m sure I didn’t pay. When I go there members who invite me…

P: Meals? Meetings?

N: Chairman’s office I believe, or one of my offices.

P: Did you read about bribe to de Venecia?

N: Yes.

P: Your reaction? Surprised?

N: Since I wasn’t privy, I let it pass.

P: You didnt accept 200 million?

N: No.

P: Did any government official other than Abalos follow up?

N: Not that I know of.

P: Mendoza?

N: No, the one who presented this to ICC was Formoso.

P: Did FG ever raise issue this with you?

N: No.

P: Anyone claiming to represent FG?

N: No.

P: Meeting with Abalos on NBN?

N: On three occassions.

P: Ever wondered why?

N: Yes.

P: Wondered at clout or his jurisdiction?

N: I guess it entered my mind. When people ask me for meetings, I accept, in this case he wanted to come to my office, I had no reason to refuse. In the case of Chinese embassy, they invite us whenever major corporations come over.

P: Did you ever discuss it again with the President, the bribe?

N: No.

P The deal, did the President follow it up?

N: May I claim executive privilege, because this involves conversations between me and the President.

P: Executive privilege can be claimed only by the President and Executive Secretary.

N: Conversations, too.

P: We will see if we will accept it. So you are invoking executive privilege with regards to additional discussions concerning ZTE-NBN with the president. So there were additional conversations…

N: As I said, executive privilege.

P: Abalos, you said you had nothing to do with NBN-ZTE. Confirm you met Sec. Teves in his home?

Abalos: Clarify: it was with reference to Davao Special Economic Zone. Second time, was because ZTE asked if they could have dinner in Wack-Wack with Sec. Mendoza, they asked me to sponsor. So I obliged because they have been nice to me. Whenever they come here I host them. It just so happens I played golf, so I sat down with them for a while, then Sec. Teves came along then I left.

P: So you didnt discuss deal with Mendoza et. al?

A: Pleasantries… I recall Teves was the person being talked to by Chinese.

P: Recall meeting where you and FG there?

A: Part of my morning routine to pass by Wack-Wack, I see a lot of people there. Coffee… After shower… I greet every table… I remember I saw Sec. Mendoza then FG arrived, we were chatting, I left, when I returned, I saw J3 whispering with Mendoza, I said, I have to go… FG was on other side, you know people come up to you, so he was talking to someone so I bidded goodbye.

P: So you didn’t see the finger-pointing?

A: No, it would have been big news in Wack-Wack if true.

P: Did you and FG ever discuss ZTE?

A: Never.

P: Phone, anywhere?

A: No.

(Pangilinan repeats instances of Abalos meetings, review, review)

11:29 Cayetnao: You said you sponsored Wack-Wack dinner. You called Mendoza for meeting for ZTE?

A: No, Mendoza not member of Wack-Wack, he cannot invite guests.

C: Clarify?

Teves said Mendoza called him, he said he was called by you. So let me ask Mendoza, you aid, you didn’t organize dinner.

Mendoza: Abalos is right. ZTE invited me. They also invited Teves since he would do loan agreement.

C: You could have met ZTE anywhere.

M: Yes, they go to my office, they arrange meetings, this is implementation meetings.

C: We’re trying to figure out why Abalos keeps popping up. At start of this fiasco, you were telling media, only your daughter was close to ZTE. But now, are you changing your…

A: My daughter came to know ZTE because of me….

C: Your first interview on ABS-CBN, you said you didn’t know ZTE only your daughter…

A: I don’t recall. I said my daughter came to know ZTE because of me.. My daughter imports merchandize from China, they said let’s help your daughter…

11:33 Pangilinan: Mr. Chairman, On record: I do not agree with invocation of executive privilege, we should discuss this at 12:30, we should settle it.

Biazon: Well, uh, [long-winded repetition of points] Sen. Santiago says three reasons to invoke: when eliciting diplomatic, military, national securityy…answers on official secrets so which is it?

Neri: I refer to EO 464, it refers to conversations by the President with cabinet officials, it was held valid by SC…

B: What had been explained is the only three things that may be cause for invoking is if discussion discovering diplomatic, military secrets or national security…

11:36 Enrile: Witness invoked a privilege. Up to committee to dispose of it. Either we say we compel him, or we decide what to do, instead of arguing with a witness. We cannot compel him to open his mouth.

Cayetano: Pangilinan and Biazon have asked we discuss this at lunch…. [returns to Abalos first saying his daugher dealt with ZTE.. suggests Abalos broked for ZTE, Abalos denies it]

11:39 Legarda: In your letter to J3 you(meaning NEDA) expressed support for Amsterdam broadband project. I presume there was a study?

N: My impression of that letter is that it was just to encourage him to proceed with his project. When he presented, it promised to reduce costs of telecoms by 1/2. I thought it was a great deal for consumer welfare, no costs to government. But I cannot commit government, just encourage him.

L: Does this mean exclusion of other proponents?

N: Not at all.

L: Letter of Ramon Sales of CITC he categorically stated that he cannot opine on cability of proponent, namely AHI to undertake project, financially or technically as AHI has not identified strategic partners. Did you get this?

N: I believe so.

L: Your reaction?

N: I believe my encouragement came before CITC letter.

L: How did CITC letter affect your views?

N: At this point we left it to line agencies to decide.

L: Did you endorse any proponents of NBN?

N: No, in terms of choosing one over the other, no.

L: Broadband is important to you?

N: Yes. Because $20 mpbs here.

L: Did NEDA ever study local, domestic providers to supply?

N: We don’t dictate manner in which it will be implemented. CITC first, then transferred to DOTC.

L: Originally you preferred BOT. Was there voting, were you outvoted?

N: Because we defer to line agency for implementation.

L: Any official higher than you who dictated -did anyone dictate that you set aside AHI?

N: As I said I would like to invoke Sec. 2a of EO 464.

L: Are you saying there was any government official who instructed you to favor ZTE? Was this conveyed by your invoking executive privilege-

N: No official higher than me other than the President your honor.

We don’t vote on manner of implementation. We vote on whether viable or not.

L: Were you overruled?

N: As I said collegial, my own personal preference doesn’t matter anymore.

L: Did you discourage president from pursuing this project?

N: As I said this is covered by executive privilege, conversations with the President.

L: Did you have any involvement in this?

Abalos: I cannot comprehend why anyone thinks I would have a personality to be involved.

L: Were you ever asked to broker and authorized to offer remunerations?

A: I have not.

L: Any speciality in this field to be embroiled in this?

A: I don’t even know what is this broadband.

L: Were you authorized, officially, or unofficially, or asked to provide any amount for compensation or bribe to any private citizen or official?

A: Never authorized by anybody or contacted by anybody much less China to do what has been charged of me.

11:50 Cayetano: J3 are you a member of Wack-Wack?

J3: Not a member, only way is by invitation.

(discussion: should they break for lunch?)

11:53 Arroyo: This is hearing where we cannot really establish truth. So how do we decide this? Brief background. I will not interpollate Abalos because I have publicly stated I have innate prejudice against him. I didn’t attend proclamation because I didn’t want him to raise my hands. So I won’t interpollate not because he’s innocent but innate prejudice. Case here is word of one against word of another. Let me state by referring to Amsterdam Holdings Inc. from SEC records, company was incorporated…. primarily for investing purchasing, holding own… use… etc. real and personal property of every kind and description… Financial statement of August 8, 2007 states company is not owned by de Venecia but a Mr. Saus (?) who owes 99.9%. With this basis, I will now ask. Chairman Neri, you talk about viability, have you ever wondered how viable considering capital?

Neri: Endorsement does not make judgement of viability. Just concept. It has to pass through three layers.

A: You have to give us sensible answer, I wrote the law.

N: When J3 gave us concept, it was to bring telecoms cost 1/2, government would be one of the clients, so I said proceed, go ahead with idea. I said I liked concept. It did not mean NEDA approval.

A: I don’t think you’re doing your job, especially after you said you don’t entertain proper proponents. What did you approve? So here’s a concept. So, what did you recommend?

N: What we approved at NEDA board was NBN project. As to manner of procuring contract, we leave it to line agencies.

A: What are doing here? Chairman is President, only two agencies chaired by President, NEDA and National Security Council. You’re saying you’re doing ministerial job of clerks.

N: Normally private sector goes to bond market, around 9%, a concessionary loan from china at 3%. We do not impose on line agency manner of procurement.

A: You’re being evasive. Give us some light.

N: If you were to choose manner of contracting, we’d be deluged with proposals from suppliers.

A: Here’s Republic of China through EximBank offering loan. Any other party involved? In concept? Concept! You don’t even want to call it a project?

N: What was submitted to us was NBN…

A: Two different things! So what are we doing here?

N: I don’t know, your honor.

A: We don’t want be to be caught in these charges and counter-charges involving bribery. We want information. NEDA is composed of board and secretariat, and board is also composed of cabinet members…

N: Yes.

A: You head head secretariat as Director-General of NEDA. Which discussed this board, or secretariat?

N: First, level of directors, nitty-gritty. Then secretariat, chaired by Finance Sec., then board chaired by President.

[Neri explains advantages of government to government loans, because governments can secure lower interest]

A: I thought we are trying to privatize, why reversing policy?

N: I’m just pointing out advantages of government securing lower interest.

A: While you’re saying the one DOTC wants this, here comes J3 inserting himself, with a low capitalization, why didn’t you just say, J3 you can’t come in here, you never said that he was out bounds, why didn’t you?

N: I didn’t think he was out of bounds.

A: Why is it?

N: If they really want a project assessed, we course them through ICT. Let me read you letter. As far as it’s consistent with government policy, let me express support for ideas.

A: You commend him for presenting good project. Yet you do not know he could not-

N: I did not know that, we do not conduct financial audits.

A: Uh, so what is your position. You’re alter ego of President when it comes to this.

N: My position is we liked broadband project, we want to bring down costs.

A: So you like concept of DOTC?

N: We approved project proposal of DOTC.

A: How about that of Joey?

N: As I said we support objectives of his project.

A: What do you mean?

N: Big difference. We approved his intentions.

A: Otherwise, he’s disqualified?

N: That’s up to DOTC.

We encouraged the objectives.

A: You encourage objective, don’t encourage proponents, that’s splitting hairs.

N: Let me reiterate, we express support to objectives.

A: My observation is the problem is we thought you’re the hero, your indecision precisely caused problems. When we created NEDA we enacted this, Winnie Monsod insisted on this, this is a constitutional body…

N: It’s under office of the president.

A: No, it’s under constitution…

N: Not an independent body…

A: When we created, idea was for NEDA to direct development of the country, but you don’t want to assert it, in fact Winnie Monsod said she wanted it as a counterfoil to the Banko Sentral…

12:10 Cayetano: You say broadband costs are high, this would bring them down.

N: Yes.

C: But DOTC said only government would use it.

N: That’s why I had my hidden agenda as I said, if general public was given access, it would lower costs

[Neri and Cayetano basically say that as project emerged, strictly government network, while Neri was hoping policy could be reversed to allow general public]

12:12 Pimentel makes a rant about not focusing on low capitalization, as many companies increase capital once projects are bagged.

J3: To clarify to Arroyo- (explains his capital is higher than reported, at 25 million today versus 300k as mentioned by Arroyo; said capital is OK for business proposal purposes)

Pangilinan: Neri, Are you invoking executive privilege on authority of the President?

N: Yes

P: Proof?

N: I can secure it, I was told-

P: Who instructed you?

N: Executive Secretary told me to invoke it.

[Pangilinan reads SC decision, saying President cannot authorize her subordinates to exercise the privilege…]

12:15 pm lunch break

(12:48 pm News that Neri’s been whisked away to Presidential Legislative Liaison Office, 4th floor of Senate)

12:53: Solita Monsod, called on ANC, says Neri seems perfectly credible as far as she’s concerned. Regarding Abalos: he’s telling a lie. When Abalos was MMDA, and she was radio commentator, he said with absolute confidence and sincerity, garbage was being solved. Gov. Roman of Bataan called and privately told her Abalos was lying through his teeth. So Monsod called up Roman in public, so not unusual to have two officials saying opposite things; she called up Abalos and confronted him with Roman’s statement, Abalos said of course not… She objects to Santiago’s slur on the motives, that it’s just a squabble over bribes. Monsod believes it’s a very important issue, strikes at heart of corruption government, and whether it’s aided and abetted by China, should interest Filipinos and Chinese. After all, Chinese government executes corrupt officials.

Suggests three questions:

1. Project needed?
2. Private or public sector should do it?
3. If government should do it, is it done at extremely high cost? This is where corruption comes in…

She criticizes senators for not doing homework, criticizes government for dragging feet on providing technical data and hard numbers that independent body of professionals could then verify; criticizes disorganized questioning and wonders why some are zeroing on on comparing de Venecia’s proposal when de Venecia has already said he won’t pursue it. Says by invoking executive privilege, obviously Neri doesn’t want to implicate president, but it’s kind of late to do, because he said he told the President about the bribe, he can’t be selective in executive privilege. Some cackling re: President’s husband, “back off,” and how Joey was careful not to imply anything beyond the finger-pointing; Monsod says Abalos was being sly because he said it ould be all over Wack-Wack if true, but Monsod: “it’s not like it was in the verandah, good grief!” Says something’s wrong with timeline, why were they stringing de Venecia along? Strongly suggests what happened is an ex post facto nationalization.

1:20 pm Cayetano on ANC, on senatorial caucus re: senatorial privilege: We will decide whether to compel witness. Free to invoke privilege on a case by case basis. But step after that is contempt, which will delay matters. For now, we will note manifestations for the record while Senators have not asked all their questions.

1:30 Enrile insists meeting starts : Enrile asking questions concerning incorporation details. Ernesto C. Garcia your managing director Dec. 8, 2006 sent letter to NEDA? Then letter sent to CIDC? Original project named Orion Network?

J3: Yes.

E: Dec. 4, 2006, letter from Garcia to Leandro Mendoza. (reads it into record): Sec. Mendoza, My name is Sonny Garcia, and I work closely with Joey de Venecia, particularly on proposed NBN communication infrastruction (Orion Network) the Speaker’s office had instructed me to forward the attached material to your office, ASAP. Call me for any questions. This was received by Mendoza’s office on Dec. 5. Then attached is a draft letter to Romulo Neri from Mendoza (reads it into record) Dece. 4, 2006 Dear Neri, we are pleased to endorse the proposed project (Orion Network) a 100% pure private sector investment in the Philippines, which confirmed it will not seek financing from DOTC or loan or guarantees from government, the proponent, Amsterdam its partners from PRC and NGO “Liga ng mga Baranggay” have committed to develop network. The proponent only asked that government designate DOTC inasmuch as it would allow ease of integration of services with e-learning e-government, we are pleased to endorse as it meets government’s policy of interconnection to afford universal access, and supportive of government’s priority of developing infrastructure with no cost or risk to government… DOTC accepts opportunity to be lead agency and submits full endorsement for your evaluation. Do you confirm your managing director wrote this letter to DOTC?

J3: Yes.

E: I asked you before, whether your father the Speaker had any interest. Now this letter mentions Speaker’s office. You sent draft to be signed by DOTC secretary. What is this?

Mendoza: I immediately forwarded it to Telof for comments and I never signed endorsement.

E: Was this referred to your office?

N: We don’t remember that letter it’s not in our files.

E: You said improper for BOO to go directly to your office. Why, in this particular he had temerity to write directly to NEDA?

N: They probably don’t know procedures. We do get different proposals from different companies. We endorse it immediately.

E: Did you have any hand in North Rail?

N: NEDA ICC.

E: Project of Speaker, wasn’t it?

N: I can’t say for certain.

E: I was the one who exposed it in the Senate.

In other words this was no other than project of Speaker.

N: I cannot say one way or another.

1:42 Zubiri: I manifest on record,TV  showing those absent. I haven’t been absent! I was attending hearings! I cede my time to Sen. Arroyo. (Cayetano: noted, Pangilinan asks for order of questioning; meeting to be extended to 4:30)

1:46 Arroyo: Joey can you provide committee with statement from SEC to this effect, in Amsterdam, your name doesn’t appear at all, you’ve been using Amsterdam as front company but your name doesn’t appear at all. Your name doesn’t appear as stockholder or owner, it’s under name of Saus. So give us evidence you have interest in this company. You’re principal proponent but your name doesn’t appear.

J3: I will. I addressed that with Enrile, I will provide documents.

1:47 Escudero: Where we are now, legally and administratively. Abalos has been citing a Dec. 2 but root of it all is a MOU  between RP represented by Favila, and ZTE. The MOU cites cooperative agreement of two parties, RP and ZTE, to work together in development and implementation of projects, including NBN, and includes RP through DOTC…NEDA…. shall provide necessary assistance for implementation… And, announcements, unless otherwise provided by law, neither party shall release contents of this agreement to any other party without permission… As early as July 12, 2006 ZTE has practically been awarded this and other contracts by national government, and bound by secrecy not to reveal it. Neri says he has nothing to do with awarding, but under law, EO 423 and Procurement Law, NEDA sec-gen is alternate chair for clearance, he needs to give clearance for contracting. As DOTC submitted documents say, this is ODA… under the law, ODA law and procurement law must be followed.

Es: Neri, you mentioned it’s in the interest of government and people for government to own NBN. Under executive, aren’t you bound by policies mandated by Congress? Doesn’t law state policy is to privatize telecoms? Not for NEDA to change that policy.

N: I’m not too clear on that policy. There are cases when government’s entry is desirable. A good case is MRT-3. Cost of financing too high. Government could get cheaper financing.

Es: Without arguing, you’re bound by Congressional policy. If you disagree, go to Congress. Telecoms policy specified by law.

N: I defer to DOTC on what they’ve done on this.

Es: You mentioned you’re unfamiliar with awarding contracts. You’re alternative chair of board?

N: Policy making body. In this case, I have a letter we were requested by Mendoza to seek permission to sign-

Es: A direct contracting contract-

N: Yes. We advised it’s not NEDA who makes this decision, we referred it to GPBB(?)

Es: Re: Letter of Mendoza to Neri, it cites MOU. Your action, when was it?

N: Our letter April 19.

Es: Essentially not giving your consent and permission.

N: Because we cannot give consent, NEDA not proper approving body for contracts.

Under EO 423 sec. 4 approval of NEDA director-general necessary to engage in procurement other than public bidding-

N: As GPBB not NEDA-

Es: (reads EO again)

N: It has been amended. Now exclusive prerogative of DBM Secretary. Amendment to EO 423.

Cayetano: When was amendment made?

N: I’ll check.

Es: Why did Mendoza write you if amended?

N: We were puzzled. That’s why we referred to other agency for proper processing.

1:58 Escudero: May we ask Sec. Andaya to help. Was EO 423 amended or not?

Abalos: Yes, amended, head of GPBB is Sec. of DMB, not NEDA co-chair.

Es: With reference to what I quoted, was that amended?

A: Yes, by EO 465, it’s now Sec. DBM.

Es: Did you approve?

A: We said DOJ opinion needed.

Es: Mendoza, why did you enter contract on April 21, without NEDA, DBM, GPBB, or DOJ opinion…

Mendoza: Well, there was NEDA approval of the project, so what we did was we inserted provision that there would have to be DOJ approval.

Es: Law says these opinions required, why didn’t you wait for DOJ opinion before signing contract?

M: We believed it was an executive agreement, so we asked DOJ, so in signing we put it as a condition.

Es: This is covered by procurement law?

Andaya: Covered in that provisions are there but if under government-to-government….

Es: But requires announcement provision?

A: Upon actual procurement…

Es: Procurement of goods or infrastructure.

A: Both.

Es: Rules differ for both but more infrastructure…

A: But infrastructure doesn’t allow direct contracting-

Es: But agreement says-

A: We never gave permission for direct contracting. Government of China picked ZTC. Not DOTC.

Es: But we approved the Chinese choice. We could have said no-

A: How could we say no, that was government-to-government agreement.

Es: But this is a debt, we have a right to accept debt proviso or not, we acceded to Chinese choice of contractor. Which is why Mendoza asked your permssion and Neri’s.

A: Let me answer bluntly. Two provisions quoted by Mendoza, direct contracting, and second opinion whether this was executive agreement or not, granting an exception. We didn’t bother answering first. No directing contracting. We answered second, whether government-to-government. GPBB not in a position to answer, so we said refer it to DOJ. That is the gist of letter and our response.

Es: Was EO amended saying if ODA, it falls under GPBB will issue guidelines under ODA? So these contracts fall under GPBB? So you have a say?

A: We can issue guidelines for a particular body, we’re only policy making body.

Es: So was DOTC right to sign contract even after you told them to seek DOJ opinion?

A:If they are in the belief it’s an executive agreement and they believe, they’re correct.

Pangilinan: In other words your recommendation does not matter.

A; It would matter to them. GPBB not in the position to determine if its an executive agreement. We understand the EO grants an exemption to the law.

Roxas: This seems to be current refrain, from Neri, from Andaya. That we’re not in charge, we have no say, we’re processing. It’s somebody else who makes decision. My question is how did we get this far? 330 million dollars is seemingly going to be borrowed… Neri and Andaya passing the buck…

A: We’re not avoiding. If you read RA 9184 no agency, really, will say if something is an executive agreement exempted by law or not, it’s the executive agency which will determine whether covered or not, so we suggested to DOTC seeking legal comfort from DOJ but it’s not required. If executive agreement, it’s not covered, so we don’t have to say anything…

R: Maybe technically law doesn’t say GPBB will do it, but as DBM, no one will move unless it’s clearly under procurement law. For NEDA, they could be more zealous in scrutinizing projects…

2:13 Cayetano: We asked DOTC for clarification on series of events, no one mentioned EOs had been amended, processes enumerated to us lists NEDA approval, but NEDA then says they don’t, it seems what’s on paper, what’s been submitted by DOTC is different from what they’re doing. So why didn’t DOTC write you saying theyre withdrawing their letter, after all we can only follow official documents because the paper trail and testimony are different.

2:16 Escudero: You were capable not to mention ZTE. Does NEDA have any other basis for establishing benchmark other than what was submitted by DOTC, which is essentially ZTE proposal?

N: Yes, ever since I entered NEDA, I insist on price comparisons. Put comparators.

Es: Are there?

N: Difficult. They tried. Checked everywhere, very complex, hard to make price comparisons. Best is if we bid it out, say Arescom makes better bid, if DOTC was right, and others did apples-to-apples comparisons, same scope, best to bid it out.

Es: That’s what law says. So you don’t have data to say this is cheaper and should be entered.

N: No.

Es: So you wouldn’t know.

N: NEDA tried its best. Only basis is rate of return, if benefits exceed the costs, based at NEDA staff assessments, 29% rate of return is high.

Es: And overpricing?

N: We would have no basis for determining, best would be to bid it out.

Es: So we’re entering blindly into deal with ZTE.

Sales: Yes, we said so in our letter.

Es: And if basis comes solely from ZTE, we have no basis for comparison-

Sales: When AHI was disqualified, it became a one horse rase.

Es: So NEDA and CITC had no basis for establishing benchmark.

Neri: Yes, even CITC had difficulty making price comparison.

Es: Even if you’re impeachable officer, you were invited to give your side. You said de Venecia is lying because he wanted in?

N: Yes.

Es: Neri says, you said have 200 for him, in apparent attempt to bribe him. If de Venecia’s objective was to damage you, what would Neri’s motive to say this be?

Abalos: First, it’s not clear what that 200 Neri says is, and Neri says it’s only his estimation. What’s emerging is Neri says he does not entertain private proposals but he entertained de Venecia. What did he do? He answered, and said we support it. And yet Joey’s capital is small. When you hold a paper like this, you can already peddle it and make money out of it! If there’s any brokering it was done by Neri.

(crowd laughs)

Neri: The letter we sent to de Venecia was we support objectives. NEDA is careful with such drafts, I cleared it with staff to make sure what we say is precise.

Es: Neri was clear, in golf cart, he said you said there was 200-

Neri: Let me clarify, only Abalos at NEDA, not clear to me why; second was playing golf, which is when this happened; third time was at Makati Shangri-La at invitation of Chinese embassy with ZTE officials.

Es: To be precise-

N: “Sec, may 200 ka dito”

Es: Abalos, what do you say?

A: How to scrap this? Mix it with shady allegations like bribery. What 200? He does not even know himself, whether 200 pesos, 200,000 pesos or 200 million, only his assumption it’s 200 million! It’s clear, what is he saying? We do not entertain private proponents, but what did he do, he responded by means of a comfort letter. Show this letter I tell you his capitalization would reach to hundreds of millions of pesos?

Es: According to testimony, there were up to 15 meetings re: ZTE broadband. You admitted meetings with Asec. Formoso, with Teves, Mendoza, Neri… Is your position all 15 meetings were coincidental in that you happened to be there?

N: I don’t recall 15 minutes, I only recall meeting with Formoso and Sales, Joey de Venecia has been hounding him, he has been pursuing me!

Es: Neri says three meetings you were there and ZTE officials.

Abalos: First, it was just me, he says only once with me and ZTE…

Neri: Correction, in golf just me and he and some friends, two flights…

[Escudero clarifies meetings]

A: It was I who sponsored dinner for ZTE upon request of ZTE because they had dinner with Mendoza…

[more clarifications, Escudero says I stand corrected, about 11 meetings]

Es: And China?

A: I finally gave in, that’s why I accompanied him to Zenhen.

Es: Confirm Kempinski Hotel meeting?

A: Yes.

A: Read affidavit?

A: Yes

Es: Correct?

A: Only so far as being there, but as far banging my fist, how ridiculous would it be, you’re in a Communist country you’re banging your fists, they may not let you leave…

Es: One of you here is lying.

2:31 Cayetano: Abalos says he only bumped into Joey in China. You said you didn’t go there…

Abalos: Not everything reported in the papers is true. Like those sexcapades. Too much!

Roxas: Joker woke up when they mentioned sexcapades!

(giggle giggle)

Abalos: What did Arroyo say? With this, (letter of Neri) you can easily generate funds! What he asked is for me to bridge him with ZTE!

C: Your testimony is, he (de Venecia} pestered you to accompany him to China…

2:33 Pimentel: Neri, before hearing this morning, you were reported in papers as flipflopping over whether to attend, then supposed to go with President. Did you get order from President?

Neri: DFA informed me Friday evening, that Pres. needed me in NYC on meeting on millenium challenge account. My visa to USA was expiring Sep. 29 so I had to go to DFA to help with visa being validated, so we made arrangement. I announced also to committee in the House… That evening, I guess because of.. texts going around, partly because of that, maybe too much public objection, I was instructed to stay behind.

P: By whom?

N: Secretary Ermita.

P: Visa cancelled?

N: Never cancelled, expires Sep. 29.

P: Not cancelled?

N: I don’t think so.

P: not sure?

N; I don’t know, not informed either way, not gotten my passport yet.

P: An aide named Willie?

N: I don’t know- last name?

P: I don’t have last name. I understand this morning you were threatened-

N: I’m not aware

P; In any event this text was supposedly relayed: If your boss mentions my name I will break with my own hands every bone in his ody-

N: Not aware-

P: Any other threat?

N: None that I know of.

P: I understand you’ve incurred the ire of some business people, because of your stand of privatization of arrastre service?

N: There’s a monopoly, I favored allowing Harbor Center to compete, as our containter fees among highest costs in the world for containers…

P: Among those angry is Ricky Razon?

N: Well, met him at reception for Equitorial Guinea president, Speaker’s mother-in-law’s house, Forbes Park, it was there he accosted me, in effect telling me, in effect, you will allow Harbor Center to operate over my dead body.

[Pimentel asks if other confrontations with Razon; Neri says no; Pimentel suggests Razon sent threatening text]

N: It’s not just in containers I want deregulation, in power, airlines, etc. Also.

P: March 29 approved project?

N: Yes.

P: Took till April 20 to formally endorse approval to Mendoza.

N: Uh, I don’t have exact date we informed Mendoza of NEDA board approval.

P: Supply contract-

N: We don’t approve supply contracts.

P: No, you endorsed stand of NEDA saying to Mendoza you had no such objections-

N: We have no such endorsement.

P: No?

N: No. We don’t even have copy of contract, so we cannot endorse contract.

P: No copy of contract?

P: We don’t work on contracts.

2:43 Pimentel: March 29, your baord approved. But you approved April 20. There’s a gap. What took you so long?

N: Uh, I’m not sure about delay, this is normal, we don’t normally endorse projects for Chinese financing…

P: Could it be delay was caused by your ambivalent attitude, as you admitted, you personally were for no use, no pay…

N: I don’t get question, I cannot explain why this is April 20…

P: Your own stand on the issue you expressed view, probably best thing to do was BOT kind of thing…. All of a sudden, it changed.

N: As I said, this was based on previous instructions of the President. In the end it depends on the DOTC…

P: Abalos, do you know Evelyn Catherine Silagon.

Abalos: You know I was shocked by that text message…

P: Text message?

A: Yes, text messages that I fathered a daughter who is 9 years old, good thing my wife would not believe that… There you can see the smear job is intense…

P: So you don’t have a daughter by her, you have a son…

A: Please sir, not like that… I came here on my own will…

P: Where did you get idea this is from a text message?

A: I received that text message last night, even my children received it… It even says current account of that lady, and even driver furnished by me through Napolcom, I have no connection to  Napolcom.

P: So you don’t know her?

A: I beleive she’s a media lady, I beleive I came to know her when I was in MDDA. What I deny is imputed relations to her, very unfair.

P: Imputed business relations?

A: With her?

P: Yes, meaning using her as your front.

A: Not even that, I have not seen her. Months, your honor.

P: Charge against you is facilitating consummation of this deal with government.

A: As a matter of fact, I felt elated, meaning people thought I had such influence. But I don’t have that influence.

P: During election period you considered yourself the most powerful person.

A: I never entertained that idea. In fact you never approached me and yet you’re winning.

P: When you brokered a deal thats what estafadores do

A: I’m not an estafador

P: I’m sorry if you feel alluded to. During election period,Abalos as Comelec chair is perceived as very powerful. Where did you celebrate your birthday?

A: Had to cancel grand celebration… Party at Comelec…

P: You denied you called up Teves to ask ZTE officials to see him?

A: No, I did not deny, in fact I called to introduce ZTE official to him…

P: Shows how powerful you are, that Teves received them on a weekend…

[ 2: 54 have to interrupt to write my column; meeting temp, suspended 3:05 but wil lresume at 4 pm; mainly wrangling between Pimentel and Abalos involving, eventually, Abalos’s alleged run-in with the Zubiris at the Makati Shangri-La, Pimentel is one cranky old coot; hearing suspended so Senate session could begin and be suspended.]

3:33 Hearing about to be resumed. Lito Lapid has arrived! Angara said he’s not attending out of delicadeza, as his law firm is representing ZTE.

3:37 Pangilinan manifests continuing objection to Neri’s refusing to answer questions on the grounds of executive privilege. Cayetano confirms Senate agreed: 1. committee will decide claim when it is made, and compel answer if claim isn’t valid; 2. continuing objection to keep questions going; 3. commends Neri for candidness in some areas but asking him to be more forthright in all respects.

Biazon: Neri, you indicated you are going to try to secure written order from Executive Secretary.

Neri: Usec. Gaite is working on it, for signature of Sec. Ermita.

Zubiri: My name was mentioned when I was attending to budget hearing. May I make manifestation, I would like to state for the record that we did not have a secret meeting with the Chairman, chance encounter happened during parent’s 45th wedding anniversary, it can be confirmed by management of hotel, I am not that dumb to have a secret meeting with chairman.

Pimentel: That issue is not going to rest. We can discuss that in another forum.

[more blah blahs]

3:42 Madrigal: Chairman Abalos, you said it is easy to raise funds with a piece of paper. That’s a novel idea. Could you tell us how you raise funds with a piece of paper, is that something exclusive to government officials?

A: With a comfort letter from NEDA, you can easily raise capital.

M: So that’s influence peddling, a corrupt practice.

A: I think Sen. Arroyo will join me in that position of mine

(crowd laughs)

M: So you’re experienced with these things?

A: I am not a finance man!

M: So how do you know?

A: It is common sense! You can easily enhance your capability to encourage investors.

M: I fail to see point, perhaps I have no common sense when it comes to fund raising.

Who is your travel agent?

A: I have no particular travel agent.

M: In HK you have had 5 trips from Oct. 2006 to August 2007… according to BID…

A: In August, I was in Singapore, I think…

M: We would like to know if your travel agency is the same travel agency used by other government agencies or relatives?

A: Not really…

M: You don’t who pays for your trips…

A: It’s not true they were paid for by ZTE people. October trip paid for me, December trip with de Venecia paid by me…

M: So you say you paid for all your trips? But you said they were in official capacity? Which were official?

A: Singapore was charged to office…

We have list of trips, can you identify… October 30, 2006 till Nov. 4, 2006 where you were with President and Speaker at that golf game did you pay for that?

A: Yes, long holiday, All Saint’s Day. I learned they were in HK, I called FG… I was in Shenzen, that’s where we were having vacation… They were my hosts in the golf course.

M: Categorically deny conversation re: ZTE when with Speaker and President at Shenzen?

A: Yes.

M: Even telephone?

A: More so telephone, don’t know how to reach her on telephone especially in China.

M: Here’s something in Ricky Carandang’s blog… He says it was all the result of the micromanager-in-chief’s meddling… (quotes Carandang blog, specifically, Speaker’s account to Carandang that President spoke to Abalos, as recounted by Speaker himself):

This morning on ANC, Marieton Pacheco and I interviewed the Speaker who confirmed a story told by his son Joey before the Senate last week: that sometime in October 2006, the elder De Venecia, President Arroyo, and Comelec Chairman Benjamin Abalos were in Shenzhen to meet with Chinese officials about a number of things.

As JDV tells it, he and his president were on a bus from Hong Kong to Shenzhen when she had a phone conversation with Abalos. Apparently Abalos had flown ahead to China and was waiting for them there so they could all play golf.  During the phone conversation, Arroyo asked Abalos why he couldn’t tweak ZTE’s broadband proposal so that there would be no need for the government to borrow money or issue a sovereign guarantee for the project.  In the presence of the Speaker, she asked Abalos why he couldn’t get ZTE to submit a proposal similar to the one submitted by Joey De Venecia’s company, Amsterdam Holdings, which had no up front cost for the government.

JDV says he didn’t know how Abalos replied to the President because she was speaking to him on the phone. He said that they only met with Abalos after they arrived in Shenzhen.

M: Do you categorically deny that this incident happened?

A: This is hearsay-

M: So you deny?

A: I do not know what incident, the talk between JDV and the President-

M: So you deny-

A: I cannot admit or deny, hearsay

M: Are you angry at Neri?

A: No. I was suprised.

M: You called him a liar twice or three times. Do you stand by that?

A: The lie I said was that I was bribing him with 200 million pesos…

M: Are you willing to be the fall guy-

A: Fall guy for what?

M: When you called on Mendoza and Teves to meet ZTE officials, did you consider delicadeza considering Mendozas son and Teves’s nephew were candidates…

A: I never called Sec. Mendoza. If I never even called him, I don’t know where delicadeza would come in.

M: Neri, are you constrained from divulging other things.

Neri: I’m considered alter ego, so I have to follow rules.

M: So you believe you’re constrained.

N: There are matters said in confidence said between President and members of cabinet, I believe SC has considered this.

M: Have you considered resigning because of need to tell truth?

N: I don’t know if related, I’ve considered resigning because of pressures of job. As far as so-called truth is concerned…

M: Never considered resigning to tell truth?

N: As long as I’m in cabinet, I am constrained, even if I left, some things would be covered…

M: As a patriot?

N: Perhaps if high crimes were involved…

M: Is plunder not a high crime? Corruption?

N: I have no evidence…

4:01 Aquino: Mendoza, appropriate to say Formoso is technical guru as far as this project is concerned.

Mendoza: Yes, he’d be in charge if it pushes through.

Aquino: Formoso, your formal training in law. Any formal training in ICT?

Formoso: On the job.

Aquino: You were compliance officer of Chica holdings?

F: Yes, also Chica Asia…

A: Compliance in terms of laundering laws?

F: No, software, telecoms, when you do software development as well as applications, to ensure complies with certain standards…

A: You were chief legal counsel for CICT?

F: Deputy commissioner, chief legal officer Pena then Sales.

A: So mainly ICT or legal?

F: Mainly communication aspect of ICT sector.

A: Was 5.1 billion funding adequate for needs?

F: 5.1 was a very estimate, at this point I can’t recall how it was arrived at.

A: To Neri, NEDA serves as check on ODA?

Neri: Yes, NEDA reviews viability of projects submitted by line agencies.

A: In terms of approving any project, isn’t it wrong for an evaluation to be based purely on the basis of information provided by the propnent?

N: We tried but failed to independently verified… (repeats his view that original proposal promised reducing data costs by half, huge savings of 2% of GDP to the consumer; Neri goes over how US research firm OVUM shows how expensive data costs are in RP)

A: Is that data correct?

N: Even if it’s hot $20, it’s still 200 times US costs…. (Neri explains how attractive Chinese concessionary financing is, whether North Rail or NBN…)

A: Real issue is, under contract of North Rail, contractor will submit preliminary schedule for review… Prepare detailed engineering specifications for approval of purchaser… Are we buying something that has yet to be determined later? First it was 15.1 billion for NBN then they tell us its 16 billion, in effect, we’re being told to subsidize R&D on the part of the end user, because of large engineering research costs… Is it even clear government knows what it specifically wants?

N: NEDA is not involved in details of contract. That’s DOTC. NEDA tries to verify feasibility of costings, sometimes we would make comment and bring it down, but in others, we rely on line agencies. For this, we’d rely on CITC and DOTC.

A: Strange that when you contract with supplier of any product, that client isn’t specific in saying, this is what we need, so supplier can cost it? Instead we’re saying we’re going to spend this amount, and then they tell us how it will be filled?

Mendoza: Ah, well, ah, the detailed study had been conducted by CICT, so we came on board later… So Formoso did early evaluation…

Formoso: As in any communications project… what you have is initial engineering design, but until detailed engineering design which comes only after contract, that’s when cost of specific site, used, etc. Engineering costs includes civil works… 60-40 to 50-50 that civic works will constitute in total project costs.

A: 329 million, how did you arrive at this?

F: Bill of quantities, indicating what project will include in terms of equipment, services, civil works…

4:20 Honasan: Neri, give me job description of NEDA, specially when this project was being planned.

Neri: (explains structure of NEDA; if private sector proposals, they forward to line agency; then line agency submits to NEDA for evaluation: technical board… )

H: You are at fulcrum of this, the least suspect. Whatever you say will shift center of gravity of issue unless your credibility as issue. According to flowchart, in 17 stage process, NEDA appears in No. 4 box (endorsement approval) and certification by NEDA that proponent agency has complied with requirements, so you’re principal adviser of president…

N: Theoretically, your honor.

H: Suppose NEDA doesn’t give stamp of approval?

N: It will not be approved and won’t push through.

H: If there are contending opinions line agencies, how is it resolved?

N: Discussed in various committees and finally board which just confirms, there are debates.

H: Is there a timeline for debates, normally?

N: Normally during ICC meetings, depends on chairman is efficient? Teves tends to be more patient, I’m faster…

H: Any point you felt process was being short-circuited?

H: Submitted to us November, so not exactly rushed.

H: Never did you feel process was… unecessary intervention?

N: Sometimes when ICC and NEDA board together, it was found proper to put the two together, for example when in Pampanga… so in this case, since there was supposed to be signing in Boao, we put the two together, this is not unusual….

H: Asks about security risks, were they factored in?

N: (dodges, tries to pass to Mendoza; Honasan says he asked Mendoza; Neri says it seems this is the reason Mendoza preferred government-to-government)

4:29 Cayetano: Process took 6 months. Normal?

N: Sometimes 8 weeks.

C: Give me some examples of projects that took 6 months, just submit it?

N: Yes.

4:30 Biazion: How long did North Rail, inception to signing of loan, take?

N: Chinese took about a year.

4:31 Revilla: Well uh, I’d like to ask Abalos, uhm, Estrada said records in BID enumerating your trips, 7-8 trips, 4 of which were HK? What were the purpose? Official?

A: Three, I went  on to China, the rest, HK only.

R: Connected to ZTE?

A: For China, we went on holiday, ZTE was our host. December, we met Joey.

R: You said you met ZTE people early 2006. Correct?

A: Yes.

R: Who?

A: VP Mr. Yu.

R: Introduced by mutual acquintances?

A: A certain [unintelligible]

R: You weren’t imperiled by your friend?

A: Good friend.

R: People pointing to you. If you think they’re lying, what do you think is their motive?

Abalos: A concerted effort by people who want to derail contract. I think they succeeded.

R: So they were succesful.

A: They were succesful at that.

R: I’m not taking sides, even if I’m an administration senator, I only am on the side of the truth. Neri, uh, when Abalos told you there was 200 for you, you were shocked?

N: You can say that.

R: Because of that shock, you consulted your lawyers and told the president.

In the spirit of transparency why did you speak only now?

N: There are matters best said under oath, otherwise you can be held by libel.

R: OK (sighs). Mendoza, Malacanang has statement that RP-China relations have been strained by this controversy. Up to the point where uh, we have to court China again, what led Malacanang to this conclusion?

Mendoza: We used to have very healthy relations… Any movement towards cancellation as I said, might, you know, cause some strain… Sec. Favila when he announced suspension of project, made mention of efforts by RP government to continue dialogue with China… I do believe the DTI Sec. will meet with the Minister of Commerce in the very near future, then we will know if there is strain or not.

4:38 Pia Cayetano: President ordered investigation. When? Who were investigated? Results other than general statement no evidence of bribery?

M: I’m not party to investigation.

PC: Were you investigated?

M: I read investigation was discrete investigation. When you say that, it’s not open, people are not called to investigate. I have never been called.

PC: Weren’t you surprised you were never called?Shouldn’t DOTC side have been taken?

M: Normally, in discrete investigations you get information from other sources.

PC: Formoso? Were you investigated?

F: No.

PC: Neri?

N: No.

PC: Suplico?

Suplico: No.

PC: Abalos?

A: I don’t know.

PC: Sales?

Sales: I don’t know, easy to go to money-laundering reports and check us.

PC: Was anyone here investigated? Joey de Venecia? Bondoc? (both say no) Does anyone know who was investigated? Was it so discrete we can’ty verify the discrete investigation?

(silence)
Neri, did this investigation happen after you informed the president of the bribe attempt?

N: I don’t know, I’m not aware of any investigation.

(Pia Cayetano flounders, no one knows anything so she can’t ask anyone anything about investigation president had announced)

PC: So President’s response, she said, don’t accept bribe?

N: She said don’t accept-

PC: Anything else attached, like proceed with this?

N: As I said this is where I invoked executive privilege…

PC: Was there any other statement after don’t accept, from President on what to do?

M: As I said, part of a longer conversation, and as I said President regularly calls me up- beyond what I said I’d like to invoke executive privilege.

Biazon: are you invoking executive privilege on your own behalf, or on behalf of the president?

N: I have been instructed to invoke it - on behalf of the President…

Allan Cayetano: Instructed by executive secretary, they told you what you can or cannot say? Like Abalos?

N: Left it up to me

(Alan Cayetano suggests this indicates Abalos is being made fall guy; Biazon pursues what Neri’s parameters are for invoking executive privilege: one parameter is seriousness of issue; who determines? I do, Neri says)

Cayetano: So if it’s serious you will claim executive privilege.

N: As I said, hypotehtically perhaps if I know if a high crime is being committed-

So if its embarrassing-

There are things that we say that are embarrassing to each other…

4:48 PC: Why did President have to suspend contract if there was SC TRO?

Mendoza: TRO judicial recourse, suspension is an executive action. My interpretation is even if TRO lifted, President still wants it suspended, we don’t proceed.

PC: Was statement necessary since we have separation of powers? What was necessity for President to come in at this point?

M: It’s an executive action, I agree with President.

PC: Without President’s executive action, there would be doubt on your part if judicial action holds any water?

M: No.

PC: What was effect of President’s suspension considering SC had issued TRO?

N: I guess she’s willing to reconsider, that was message, possibly bid it out or BOT.

PC: So whatever orders given behind closed doors, would be put on hold. Safe conclusion?

N: Yes, and could lead to improvement of process. I think best to subject contract to price challenge. So competing claims can be resolved. For example Arescom-

PC: When you earlier testified NEDA does not pass upon details-

N: We review contracts after they’ve been signed, to see if consistent with what NEDA approved.

(Pia Cayetano and Neri rehash NEDA processes; basically NEDA submits to judgment of line agency)

PC: You required interpreters in negotiations with ZTE?

Mendoza: Well, I wasn’t the one who made negotiations, it was our technical staff, and they said no use for interpreters.

PC: Do you or your staff know that Joseph Dy served as interpreter?

M: Well I don’t know Joseph and they don’t know Joseph…

PC: Bondoc, care to tell us whether you have any indication who is telling the truth and who is lying? If you care to?

Allan Cayetano: No libel, you can answer freely…

Bondoc: (evades question)

PC: I will not force you. (Bondoc suggests consulting a document, letter from Mendoza and Sales to Neri, where they give DOTC and CITC endorsement of project, citing NEDA request for endorsement of ZTE and CyberEd projects)

Cayetano: Says officials told Senate that ZTE requires interpreters.

M: When it comes to technical staff, they’re really trained in English…

5:02 Pangilinan: Point of information, regarding invoking executive privilege. Question that triggered Neri’s invoking it, was “were there any other conversations between you and President on NBN after you reported 200 million bribe.” We do not agree, we object to invocation of this privilege, but we are waiting for document (from ES) to see what we will do legally.

Cayetano: Sen. Santiago sent copy of her privilege speech on executive privilege.

5:04: Villar: When you were transferred to CHED, before or after golf game?

N: Golf game sometime January, my transfer was around August.

V: How’s your security?

N: I have security assigned to me… Of course family worries when there are rallies in front of my house.

5:05 Pimentel: Did you not find anything wrong with your transfer from NEDA to CHED?

N: Well, people resist change…

P: But you’re not qualified..

N: I did not know until 2 or 3 weeks after it happened, my lawyers and Malacanang lawyers…

(Pimentel grumpily says President should have known, and that Neri’s still there; Neri says Malacanang lawyers based on SC decision say it’s legal if in an acting capacity)

5:07 Gordon: Is NBN a priority?

N: In Medium Term Development Plan. MTPIP is worth 2 billion….

G: Which is top priority?

N: There are many.

G: Number one?

N: Education, health…

(Again, Neri reiterates advantages of government taking over some projects because it can borrow at a cheaper rate… Gordon asks questions about MRT, where private sector borrowed higher, government wants to take over as it can borrow at 6% vs. 15%, Mendoza says MRT under negotiation, Gordon complains process is slow)

Gordon asks transcript of minutes of NEDA meetings be subpoenaed. Cayetano said Ermita had committed to supplying documents last Monday, but they will follow it up and issue subpoeana duces tecum if not received by tomorrow.

G: Is this ODA?

N: The way it turned out.

G: Grant component?

N: The low interest rate, value differential translates to 25% discount.

G: How come no competitive bidding among Chinese?

N: There is no bidding in this case, Chinese practice is to nominate a supplier, before they process a loan agreement, there has to be a prospective supply contract. You can say it’s supplier-driven.

(Gordon displays his knowledge of Subic and asserts this process is wrong, he always said so, he will always say so, etc. Neri gives answers regarding processes followed by government; Neri and Gordon agree future policy reform is that government should not accept if suppliers dictated by loans in contravention of Philippine laws).

G: Why do you go to China almost every month?

A: Part of what we call overseas voting…

G: Shouldn’t you report to us, as oversight? So we can accompany you and check?

A: The report we give is after the exercise…

(Gordon irritated: October 2006, November 2006…December… February 2007… )

G: I looked at process of approving loan and affidavit of de Venecia… Process of approval seems to coincide with these trips. Timeline of NBN project and these meetings and trips, the important dates seem to be related. (rattles off dates and incidents in de Venecia affidavit). Is everything de Venecia saying true?

A: Don’t you wonder why Joey goes all to the places I was at? He never said I went to his place. It means he was pursuing me. He wanted to use me as a bridge to restore his relationship with ZTE, because he found out they’re the designated contractor. And I admit I’m close to ZTE.

G: Why is Neri saying you offered him 200?

A: Like I said when, did Joey enter his application? December. 5. Document I showed said ZTE was already designated contractor (Dec. 2) And yet he says I made offer to him on Dec. 15? Why would I?

G: Maybe simple, two people connected to the contract. Neri and de Venecia. Why did both say you offered them bribes?

A: To destroy the existing contract! And he succeeded.

G: I know Neri, not de Venecia. It’s only now that he’s said you offered him 200 whatevers. But when de Venecia says it, too, I’m wondering why you always end up being mentioned?

A: Neri keeps saying I said “there’s 200 for you” but never what that 200 was… (discussion moves on to JDV telling Abalos that JDV3 complained it seemed JDV cared about Abalos more than about JDV3)

(Gordon and Abalos revisit their grudge match on election automation: argue, argue, argue about election automation, including machines, voter ID’s, etc etc etc, details going back to Tantangco Comelec and 1994!)

5:34 Gordon and Abalos still rehashing election automation controversies. Gordon hits Abalos letting himself be wined and dined and golfing at foreign expense. Abalos says its just reciprocity. Gordon asks whether it’s just a coincidence Abalos was having golf trips paid by ZTE coinciding with time contract for NBN was pending, Abalos insists he has nothing to do with it.

5:40 Pimentel: Abalos, did you and your family go to China April 14?

A: Let me check passport.

Who paid?

I did.

Do you have tickets?

Who keeps them? I don’t.

When you travel, how do you travel?

Usually Philippine Airlines.

Let us subpoena Philippine Airlines for records of trip of Abalos on April !4.

Cayetano: Yes. We will also ask for your passport.

A: Yes.

Cayetano: For record, ZTE officials close to you?

A: Mr. Yu.

C: In meetings mentioned here, Yu was in all of them?

A: When he is here, he calls me up…

C: In Wack-Wack with Mendoza?

A: I think he was there. And some others, Fan Yang (?) and other local people… I’ve never been invited by Chinese embassy…

Neri: Chinese commercial counselor was there.

Biazon: Who was invited to lunch by commercial counselor?

N: I was.

B: Did you invite Abalos?

N: No.

B: He (Abalos) was there.

N: Yes.

Biazion: Were you invited?

Abalos: I don’t remember, I’ve never been invited by embassy of China…

Biazon: Date?

N: I don’t remember… 2007… I left early because of smokers…

5:47 Roxas: Mendoza, looking at 2008 National Expenditure Program… 3.5. billion allotment for foreign-assisted projects of DOTC? ZTE part of this?

M: No.

R: We are supposed to advance 15% for ZTE, so this isn’t that advance?

M: Not included in 2008.

R: I looked at 2007, 2006, 2005 GAA (budget), I don’t see broadband project.

M: None.

R: So this only became a priority now, if it had been a long-time priority it would have been at least submitted… If super-priority, it would have been included in request.

M: Well, ah, if you see what we submitted… dispositions of communications, we entered in this February of 2007 for implementation. Previous years, CICD in the past would have handled this.

R: Not in CIDC past budgets. Neri, before DBM assumed heading GPBB, NEDA headed it.

Neri: DBM always chair, NEDA co-chair.

R: We had National Procurement Plan, listing wish list of big government projects.

N: Yes, every agency required.

R: Yes, GPBB supposed to get wish list to understand what each agency wants, and to review it. That’s the purpose?

N: Yes.

R: Looking at Annual Procurement Plan, broadband isn’t here…

N: I wouldn’t know.

R: If this was such a priority, so important, it’s odd that it’s not listed, and appears just now.

N: Originally conceived as BOT project.

R: Aha! If conceived as BOT, government wouldn’t borrow, and user pay? Government guarantee not required.

N: If solicited, allowed guarantees. If unsolicited, no guarantees.

R: So, sequence of events. From the time this amazing golf game took place, around the end of January… Since February 2007, through the NEDA meetings, at least two, March 26 and March 29, did this subject of bribe ever come up again? Ever wonder why after you reported it to President, when ZTE came up again, didn’t you wonder why it came up despite reporting?

N: Not envisioned as ZTE project. When NEDA approves project, no supplier stated. We avoid mentioning supplier, as it’s prerogative of line agency.

R: Process of NEDA not supplier but project focus, but clearly NBN approved, didn’t you wonder, this is the project where I was offered a bribe.

N: I private mentioned it to my staff, as I said, be careful, price may be higher than warranted.

R: Immediately after golf game?

N: Somewhere there.

When taken up in NEDA-ICC-cabinet, didn’t anyone wonder, including your staff, wonder?

NEDA staff was positive about project, excellent rate of return.

What does that have to do with this is not PLDT, not SMART, you were offered a bribe, instructed not to receive it, yet this project was still be discussed as if nothing happened?

N: NEDA has its own process, I don’t want to interfere with technical process.

R: But as cabinet member, you know part of your job is judgment, didn’t you remind executive secretary anyone, this is what I mentioned… How did this enter agenda?

N: NEDA passes judgment on the basis of viability, bribe offer not necessarily relevant.

R: I think it’s relevant, your duty is to remind of possible peril.

N: I think I did my duty in this case.

R: Bribe notwithstanding, so you were still supportive of project?

N: That’s right. We recommend on the basis of economic data.

R: That’s a stunning revelation.

N: I guess, judgement call on my part.

R: Here are copies of joint board meeting where the NBN was approved, around March 26-29. Also Nov. 21, 2006 NEDA meeting, that’s before the golf game. Familiar with this?

Not in my files. What does it say?

This project was discussed, and there’s a back and forth between you and the President, where she says this must be BOT, President favored CyberEd, she favored it because it focused on education, and President emphasized NBN has to be BOT. Government would not spend for it, in fact this broadband project ought to be not undertaken by government.

N: That’s right. When I met ZTE under auspices of Chinese commercial counselor, I told them to submit as unsolicited BOT.

R: What happened between November and March that all these reservations were changed? Now it’s a government undertaken contract, requiring a loan, a loan tied to a supplier not tied to our procurement process? What considerations led us to this today?

N: We left it up to line agencies to determine best procurement process. We just urged ZTE to do it that.

R: So what use is NEDA? If its agency driven, then of course they will push what they want, but NEDA is supposed to process and filter to see if really good for government?

N: If we were to choose mode of procurement-

R: No, the policy is, private sector, BOT, user pay-

N: We cannot impose it.

R: Why not? Constitution says NEDA highest policy making body? Why can NEDA be ignored by a line agency?

N: When NEDA approved it March 29, we just approved project itself.

(Roxas scolds Neri over abdication of responsibility by NEDA)

N: If we were to do BOT, then the pending BOT application was AHI.

I’m looking at approval process. That’s the most important element, that’s where billions of government money go through.

(Roxas says approval and implementation distinction is false, that NEDA is surrendering check-and-balance obligation; Neri disagrees)

You yourself pointed in NEDA that this may have to be raised with President, as the way the deal was going goes against existing policy-

Yes.

(Neri wants to pass it on to DOTC to answer; Roxas refuses)

6:10 Cayetano: Isn’t it true if there’s a difference if NBN was through BOT or through loan, as economic benefits wouldn’t be there as public wouldn’t have access?

N: Rate of economic return would be same.

C: But really, there’s two different projects. Original proposal allowed public access. As approved, NBN wouldn’t allow public access.

N: You only look at right hand side of balance sheet. We don’t look at right hand side, which is financing. Economic rate of return different financial rate of return.

Roxas: Modigliani paper says this, don’t make us bola-bola…

N: If private sector 11% goes out, if government, only 3% goes out.

R: But you’re only looking at it at closed loop. doesn’t mean if Chinese offering 3% doesn’t mean it’s only source of financing.

(Roxas and Neri clash on most beneficial means of financing, whether government or private sector can borrow money more cheaply; Neri says money at 3% had to come from China; Roxas offended, says who says we have to borrow from China? Wer’e not in business of mobilizing Chinese funds… Neri says perhaps this might be so…Roxas snaps and says he won’t ask anything further)

6:18 Mendoza, Sales, then review time line for submission of various proposals and when various committees asked for completion documents. de Venecia III says full submission was made to DOTC on December 5, 2006. DOTC even asked AHI to fill in NEDA forms. Endorsed to NEDA by Sales and Mendoza for NEDA further evaluation. Says he’s sorry people perjured themselves. Says he has documents signed by Sales and Mendoza and Asec. Saneha.

Sales: What I understand is that they did not complete documents…

Cayetano: Earlier you said they only gave you a PowerPoint…

S: PPT to us, documents to DOTC…

J3: Documents to DOTC but Sales, may I remind him, signed endorsement letter which means the attached documents too.

C: Endorsement from DOTC. True?

N: DOTC can only endorse one project at a time.

C: de Venecia says it was endorsed to you.

N: Not formal endorsement. Just submission. What DOTC submitted to us was evaluation of two proposals.

C: You wrote to DOTC telling them to consolidate ZTE and Amsterdam proposals. Either you’re not being accurate or not truthful.

N: I don’t remember

(huddling by Neri and staff; pointing to papers; Reynoso sworn in)

6:26 Asec. Reynoso: The ah, March 1 letter of DOTC together with CITC in response to NEDA letter of Feb. 20.

C: And that letter was in response to what?

R: Cabinet meeting in Malacanang where it was instructed to sort out possible overlaps in proposals (NBN and CyberEd), so that there will be no waste of resources. It was DOTC that mentioned ZTE and Amsterdam, we in NEDA mentioned that.

C: In this document: it says CyberEd overlaps NBN.

R: Yes, findings of DOTC and CITC.

C: Yet NEDA approved both?

R: Ah, there is a subsequent communication from DOTC assuring there will be no overlaps.

C: We already asked Formoso and he said he says they didn’t talk to DepEd.

R: That goes beyond NEDA.

C: How come everyone’s pointing to the other person? 40 billion, but no single official saying I’m in charge, it’s my fault.

R: We only review what’s submitted to us.

C: So NBN and CyberEd should proceed side by side?

R: We agree with DOTC and CITC…

C: Which is?

R: What we want is a single platform that can be used by all government projects.

C: So, NBN or CyberEd, it’s one or the other?

(bureaucratese non-commital answer)

C: You interpreted bribe to be 200 million right? But sure only of “200″ right?

N: Very sure.

C: So only discussion is if its 200,  or 200 million, but either way still a bribe?

Neri: Yes.

C: If you were offered 200 million and there are others to approve, possible others offered bribes, logically?

N: Possibility occured to me, yes.

C: If that’s true, then overpricing was large.

N: As I understand projects of this magnitude have certain project margins.

(discussion goes to how Neri asked staff to check for overpricing but they couldn’t find figures; Neri says the problem of being unable to check, is precisely why he would prefer things bidded out, so you don’t have losing bidders complaining)

6:36 Biazon: Neri, here’s fax from Department of Finance on flowchart of Chinese ODA loans…

(asks about procedures, do agreements with China for cooperation exist? Neri says yes, signed on June 5; Biazon goes through flow chart detail by detail with Neri; NEDA board is chaired by President is end result of flowchart; supply contract, after winding through flowchart, doesn’t become effective without loan agreement)

B: What is basis for this flowchart?

N: Country’s rules. Flowchart for France is similar.

B: Basis?

N: ODA Act.

B: Same flow chart followed in North Rail?

N: Whole process was followed, there’s a loan agreement…

(more persnickity niggling over flowchart steps and details; every time Neri explains something, Biazon says, I know! etc, etc. North Rail and every possible iteration on Chinese projects is brought up)

6:51 Biazon:  We are engaged in a policy of increased engagement with China…

N: They have tremendous reserves….

B: If all projects are like ZTE, we should examine…

N: I think this a good policy. North Rail was a good project [but] Japan proposal was cheaper.

(Biazon points out rail costs in China cheaper than what China being paid for North Rail; Neri points out details)

B: I know that!

N: But it includes rail carriages, etc.

(more wrangling… now on to South Rail)

6:55 Roxas points out, wearily, that first round of questions has just ended.

Villar: Please limit questions, we still have session.

Lacson asks about obsolescence of technology on a per year basis, technical and functional.

Formoso: 15 years total,  6-7% a year.

L: After 15 years, completely obsolete.

F: Yes.

L: Upgrading and maintenance, who?

F: Us.

L: How much more to maintain and upgrade to catch up with technology?

F: Consumer products different from capital equipment. Consumer products have planned obsolescence…

L: How much more?

F: to maintain functional capabalities, 1 billion a year.

L: Only?

Y: Yes

(more pointless discussions on contracts; Lacson asks Neri if it’s possible to prove overpricing; Neri says unproveable, national interest determined by rate of return; Lacson asks whether he brought up bribe attempt with President as a threat and Neri once again invokes executive privilege)

7:00 Lacson asks Bondoc about details of bribe; Bondoc says he needs permission of Neri to divulge. Neri says he denies Bondoc permission. Lacson scolds Neri for missing his defining moment.

I will be the judge of that, Neri replies.

7:05 Estrada asks Neri why he thinks ZTE people are agressive, pointless discussion on why smoking in Neri’s presence is aggressive… Estrada asks about President’s interest in project, Neri says he’d rather not comment. Estrada says he respects that.

Estrada: Abalos, how many official trips, unofficial, to HK?

A: No official trip to HK.

E: Are you willing to submit passports? Official and regular? How many?

A: I only have one. No red passport.

E: But you should have an official passport.

A: I think I only used it once, when I was MMDA.

E: Not issued one as Comelec Chairman?

A: I don’t remember, but I remember when I was with MMDA… Whenever I travel, I travel with my wife, and I stopped using red passport because she has to use another que…

(Estrada says de Venecia says, Abalos intends to enter telecoms when he retires; Abalos says, that’s J3’s version, not his; Abalos confirms yet again he’s friends with ZTE people)

(silly questions on whether Abalos would advise President to cancel deal; Abalos said he doesn’t want to speculate on advice; rehash of contradicitions between Abalos saying FG wasn’t at meeting, and FG lawyer saying FG was at meeting; Abalos replies, he was asked about a reconciliatory meeting, and he denied there was ever such a meeting, he had never been called to one; reiterates his morning routine and how he bumped into FG)

7:14 pm (round and round they go…. repeat of last week’s Abalos and de Venecia questions concerning Wack-Wack meeting)

7:15 Roxas:  I have note from Trillanes. He wants this asked of Neri: Was there anyone who ordered you, compeled you, or tried to influence you to approve NBN project?

N: None, followed process.

Enrile: Is this precedent that if we are absent we can send a question and be asked by any member?

R: Under the circumstances…

E: Circumstances doesn’t matter, he has not answered role call, he is not in attendance, he was given privilege of answering question.

R: Since I asked question, under circumstances of Trillanes, he asked, his name is read…

E: I ask because I was incarcerated twice and never given than privilege.

R: Well, perhaps your question is better asked of your colleagues of the time.

E: If this is a precedent I would like to exercise that same right!

C: Roxas asked in same way we ask in the manner public texts us to ask.

E: I don;t mind, if someone texts me, I will own the question, I will ask on my own behalf.

R: Let record show then I asked the question but it was brought to me by Trillanes.

A visibly irritated Lacson moves hearing to be held in Marine HQ since colleague is helpless. Cayetano soothingly says perhaps for meeting after tommorow, and meanwhile refer Enrile’s inquiry to committee on rules. Lacson asks Suplico if an impeachment complaint will be filed versus Abalos, Suplico says yes, tomorrow.

7:20 Pangilinan asks more details about Wack-Wack meeting, kind of table, how many chairs, etc. J3 says FG was at head of table… More persnickety baranggay cop style questions from Pangilinan. Asks Neri how he responded when Abalos offered bribe, Neri says he ignored it. Then Abalos, Neri asked, did what? nothing, says Neri, they proceeded with the rest of the golf game. Discomfort? Yes, says Neri, but you can be polite also.

7:25 Biazon asks Neri, if NEDA didn’t approve project, that would kill it? Neri says yes. Biazon asks, you were quoted yesterday that what you are going to reveal here could cause another Edsa?

N: I never said that. Press was speculating, I guess. I don’t give myself that importance.

7:27 Pangilinan asks Formoso, did anyone approach you and offer you money for ZTE?

Formoso: Unfortunately no.

(crowd moans; Formoso apologizes, says he’s tired)

Mendoza also says no one offered him money.

(Pimentel asks, grouchily, why he’s being skipped over; Cayetano soothes him)

7:29 Estrada scolds Formoso:  you’re so arrogant! Formoso apologizes. (pot calling kettle black moment, folks!)

Pimentel: Bribe is a crime-

Neri: If you accept.

P: Even offer is a crime.

N: That’s why I consulted my lawyers.

P: what did you do?

N: Reported it.

P: To police?

N: To President.

P: Yes, then she told you to not accept bribe, then to approve contract-

N: I don’t approve projects, it’s a collegial decision, chair of NEDA-ICC is Sec. of Finance, chair of NEDA board is the President… I sign decisions…

P: In effect, your signature is important…

N: Standard SOP…

P: If you do not sign, then there’s a delay….

N: I see no delay, if approved, it’s approved.

P: Approval was done sometime in March, then took you 19 days to signify your approval-

N: NEDA board approved it March 29

P: Then you forwarded it on April 20

N: Yes. letter to Minister Bo Xi Lai, endorsing NBN for financing.

P: See, that’s how important your signature is.

N: Part of listings for the projects.

P: Causing a delay in your communications would have repercussions on implementation… Why 19 days?

N: Normally, this one takes time, and I think we did it in time for the President’s trip to China.

P: What is it in your communications with President that you consider privileged?

I cannot answer that.

Why not?

As I said, it covers my conversations with the President.

Cannot be on your mere say so; you have to explain why, what it was you talked about and why it falls under ambit of executive privilege. This committee in final analysis decides whether you properly invoked executive privilege. If you don’t tell us, we can compel you.

As I said we have to respect communications between President and her cabinet members.

Before I move we compel this recalcitrant member of the cabinet…

May I posit a question… Neri, in your opinion, was the conversation that you had with the President, involve a matter a matter of executive privilege on her part?

I would think so.

You think so. Did you ask permission of President?

President is abroad, I asked permission of Sec. Ermita.

7:38 Pangilinan: I think the witness should be afforded reasonable time to consult with President and Executive Secretary in invoking claim of executive privilege, then we can decide if such explanation is acceptable. The courts have spoken that we afford Neri reasonable time.

Pimentel: What I worry about is that we call people here, and they say they can’t testify, and we let them go, that’s a setback for our legislative duties. Let me read sentence from case of Ermita vs. Senate: SC hold Congress undoubtedly has right to information from executive… Executive must state reason why executive privilege should be accepted. Neri should tell us the reason, our desire is to prevent just anyone impeding right of this body to elicit information… I am very reluctant to let go of Mr. Neri even on advice of Majority Leader.

7:41 Escudero: Ermita case is clear. Must be invoked upon specific instruction of President, you cannot invoke it now and then clear it with President. Neri, you were asked reason why? National Security or foreign relations?

N: But 2a of EO 464 includes… conversations between Presidents and officials…

Es: SC said you cannot invoke it on mere whim.

N: I will need time to consult with a superior for the reasons.

Pangilinan: (Reiterates his point, based on SC and EO 464…. if reasonable time passes, Congress no longer bound to respect claim, says there’s basis to Pimentel fear Neri might not show up next time, but hopes Neri will help settle issue)

(Pimentel says reasonable time applies to cabinet members yet to appear; but Neri is already here, has been given permission, therefore claim of privilege can only be made per question, but with cabinet member explaining why. Says he isn’t inclined to let Neri leave; Neri can’t just make blanket claim of privilege, if I’m forced to do it, I’ll move that Neri be sanctioned with contempt.)

Cayetano: There’s a continuing objection, we’re merely tolerating Neri’s claim until we can resolve it further.

7:48 Enrile: How is witness in situation where executive privilege might be invoked to act? When witness is asked a question and thinks an answer would in effect would bring executive privilege into play, his answer might involve executive privilege, so he ought to consult with President before answering…

Gordon: (goes over case and contents; says claim of executive privilege can only be made prior to cabinet member’s appearance)

Enrile: Then if a witness like Neri is asked a question which in his opinion would involve executive privilege, might he not ask permission to consult President? If ruling of body is negative, then we take the plunge!

Pimentel: The Senate must be fair. I would rather give Neri a chance to explain to us, even if in executive session, to known exact answer he wants to keep under mantle of executive privilege, then in executive session without publicity we can determine if it’s valid.

E: What is question being asked of him, so he can determine if it’s under exec. priv. and whether he needs to consult?

P: Question what was President’s reaction when he told her of bribe, that was kept hanging because he says he wants it covered by exec. priv. which neither President nor Exec. Sec. have invoked. Remember, Neri is head of CHED, not a cabinet line official if we want to be strict. My position is we can hear him, then we can decide, in executive session.

E: My recollection of Q&A is that his answer was, President said do not access the bribe, but approve the project, contract?

7:56 Legarda: To clarify, where did Nery invoke privilege? I asked him, were you dictated upon by anyone, is there a higher official that sought to prioritize ZTE, Neri said I’d like to invoke 464… I said, I wasn’t even referring to President, Neri said I can”t comment, so I said are you then saying part of conversation with President? He invoked 464 then said, there is no official higher than me than the President…

Cayetano: Will you reveal this in executive session?

N: I will have to get instructions from superior.

C: Will you reveal nature of information executive session?

N: I will ask him.

(Neri says he will ask Gaite who will contact Ermita, Pangilinan meanwhile goes into according witnesses leeway to engage in consultation with President, urges liberal view of rulings)

8:00 Biazon: Did President or Executive Secretary anticipate question for which you cited executive privilege?

N: I believe so.

B: So they told you to invoke it for those questions?

N: I’ve been instructed to cite executive privilege for anything beyond what I’ve said.

B: You’re invoking executive privilege on specific question was your judgement?

N: Yes.

B: Which of the three instances which would allow executive privilege to be invoked, applies? Military secrets? Diplomatic issues? National security?

N: I’m not a lawyer, but based on notes of my lawyers, it says all conversations, conversations, between President and officials, etc.

8:05 Arroyo: The Senate won case on EO 464 but we were given certain limitations. My respectful submission is we should go easy, let’s not cross the line, we’ve won, let’s keep it that way. A secretary who appears here would not know what questions will be.

Lacson: He is not a cabinet secretary.

A: Hecklers. We are not policemen here. Neri says he will ask his superiors. We asked which of the three, we don’t know what his superiors will answer. We’ve been here 11 hours, we cannot even give him a little courtesy and consideration of asking his superiors? It’s not fair. Majority Leader explained doctrine very well- yes you can consult, because you can’t anticipate every question, then by all means he has right to invoke privilege subject to reaction of superiors.

(Pimentel says problem is Neri says he’s a low level person then claims executive privilege which can only be claimed by high level officials; reiterates executive session where Neri can explain why he’s invoking executive privilege)

(Cayetano tries to clarify issue further, points out Nixon case, etc. goes against claim of generic privilege)

(Biazon reiterates silly question, would answer cause another Edsa? Neri says he doesn’t think so)

8:11 Legarda: reviews Neri testimony that he is not in any position to implement contract, only approves concept, Neri agrees. If that’s so, isn’t it illogical, somewhat unbelievable, that anyone would try to offer you a bribe if you seem and allege to be so powerless, that your task so ministerial? Neri replies that is your interpretation of what I said. Legarda: that’s why I’m asking you… Is it not illogical people would even bother to wine, dine and play golf and offer huge amount?

N: I think your interpretation of powerlessness is not exactly correct. The secretariat is under me, we can process project… project proposals, difference between project proposal and a contract….

(Legarda asks some more, why Neri reacted the way he did, Neri says different people react different ways)

8:17 Escudero asks Formoso if 1 billion budget he mentioned, isn’t already the budget for Telof, so no basis actually for that figure for NBN? Formoso says figure based on past budgets for past phone system maintenance. Escudero asks about useful lifespan of project, 15 years for equipment? Yes. Asks Neri,

Es: How long will we be paying?

N: 20 years, Neri.

Es: So after useful life, we will still be paying?

N: That’s possible, but could be matched to useful, but useful to extend payment period the longer it is, the lower the value of the money.

Es: 16 billion for ZTE, but at end?

N: the longer we pay, the less we pay.

Es: 16 billion becomes 25?

N: In nominal terms, perhaps 20 billion; but if you present value it, about 10-11 billion. Depends on final negotiation of loan.

Escuero asks, you’re alter ego of President? Yes, all cabinet members, NEDA sec-gen is cabinet rank. So you don’t do anything without permission of President? Neri: That’s a rather narrow definition. Discussion why policies exist: so president’s subordinates have freedom of action.

(Escudero delves into obsolescence, how it’s factored in, Neri says we check revenues, cost, many factors, you could have old taxi and still generates revenues, be useful still be valuable; Escudero scolds Formoso for bribery joke; Ceyetano asking where government makes money; they all lose money because it’s a public good; it’s not just financial benefit, it’s economic benefits that NEDA looks at, Neri explains; many projects of DOTC are not doing well; Enrile explains government tends to lose money because it provides services others aren’t interested in attempting)

8:27 Villar makes motion to have executive session… Neri will join Senators in executive session. Madrigal asks Neri what parameters are for Neri’s invoking executive privilege, anything he’s revealed concerning conversations with president, have been revealed with her permission? 200 bribe has permission of President? Neri says, Executive Secretary’s permission. Madrigal asks, so you had executive authority to impugn Abalos’s reputation? Not my intention, Neri says. Madrigal says he’s protecting FG and President, Neri answers heatedly, no. Enrile and Madrigal start squabbling. Cayetano intervenes and says they will now go into executive session.

(Madrigal gets reiteration of government policy to privatize telecoms from J3; Gordon tries bully his way to ask question; Cayetano tries to convince him to yield as others yielded; Gordon being bullheaded; Gordon says his concern is if they go into executive session everyone will go home)

8:35 Senators poised to move to lounge for executive session; Abalos asks for continuance; Gordon complains everyone will want to leave; Legarda says let Gordon asks his questions; Legarda squabbles with Gordon; everyone shakes head over Gordon’s insistence; Gordon wrangles with Cayetano; who holds his ground; more quibbling; Gordon and Cayetano start quarreling)

8:38 Gordon asks his question anyway. Neri asked to repeat Abalos’s offer. Gordon asks yet, you were not chagrined. There are basic courtesies, Neri replies. What was obligation in exchange for offer, Gordon asks? Neri says he doesn’t know what bribe was supposed to be in exchange for.

G:  Possible offer was made to others involved in contract?

N: Nothing is impossible.

(Gordon drags out his questioning, getting Formoso to explain costs of bandwidth….)

Thank God Gordon stopped his stupid questions at 8:47 pm. Other witnesses excused, Hearing tom. 9:30 with 2 UP professors, de Dios, Fabella, and Jose Lichauco, and private sector operators on technical side. Today’s witnesses not required to attend. DOTC just asked to send rep, so they can refute what resource people might say. Abalos croaks thank you.

Executive session finally to start, with Neri, lawyer, and Blue Ribbon Committee lawyer.

(My comment: personally I haven’t been so close to agreeing to the abolition of the Senate in my life as I am now: stupid, stupid childish people! But then what would be worse is if these stupid, stupid childish people weren’t in office and left things entirely in the hands of the usual suspects in the House and the Executive; but really, stupid, childish, undisciplined, grandstanding, small-minded people could have come together and asked the relevant questions in 2 hours and pinned Neri, Abalos, and everyone including the President to the wall!!

One piece of advice for senators: COMPLETE STAFF WORK. One description of Neri: Switik.)

Postmortem: Lawer Marichu Lambino explains in her blog, what the President and her people have admitted and not admitted, to date, including Neri’s testimony.

Final update: 10:32 pm It seems Romulo Neri excused himself from executive session, saying he wasn’t feeling well (See Fever downs Neri; closed-door ZTE probe fails to push through). Meanwhile, Talks of bribery in NBN deal ‘uncorroborated’–Ermita. From New York, Jove Francisco blogs about President’s impending arrival in the USA:

Though the palace is quite aware of Secretary Romulo Neri’s appearance in the broadband deal investigation … it was impossible for the chief executive to have personally monitored the goings on at the upper chamber because she was in transit to New York.

Even Press Secretary Ignacio Bunye wasn’t abreast of what happened and even asked the members of the media delegation who arrived in the US ahead of the presidential entourage to brief him of what occured during the investigation.

Bunye managed to give a “blanket statement”: “I dont know what will be next, what’s important is that the president allowed Neri to testify and we will see what needs to be done”

Nonetheless the palace thinks Neri acted in good faith when he testified before the Senate.

Bunye: “The President has authorized Secretary Neri and at the very least, we can attribute good faith on the part of Secretary Neri.”

But when asked if the palace believe Neri is telling the truth…. Bunye just said: “as to whether he is saying the truth, it’s difficult to say because we were not there,”

Malacanang has gotten its second wind.

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in tomorrow’s Senate joint committee hearing?

In my own blog I wrote about the dissatisfaction I felt with the quality of questions asked in last Thursday’s hearing. I am sure I was not the only one dissatisfied; a writer in today’s Letters page also took our honorable senators to task for asking “fatuous” questions (although the first two hearings of the three Senate committees investigating the NBN project seem to have been conflated in the letter).

This dissatisfaction was reflected, in part, in yesterday’s Inquirer editorial, which proposed three questions that needed asking.

I realize that many of our senators do not know how to ask simple questions, because they are not so much interested in ferreting out information as in imposing an interpretation. And, man, the things they say before they ask their questions! As we say in Tagalog, ang daming palabok. Many of our honorable senators seem to be driven by a need to make a mini-speech every time they speak. (Contrast this approach with the questions the justices of the Supreme Court ask during oral arguments.)

In last Thursday’s hearing, to choose only one out of many possible examples, Sen. Jamby Madrigal tried to open the sexcapades can of worms. I gather she wanted Star columnist Jarius Bondoc to reveal more allegations of sex-for-hire, but her question was all wrong. She asked Bondoc about his sources, which of course the columnist declined to answer. With that, Madrigal’s line of questioning immediately petered out. (No pun intended!) She remarked, weakly, about his use of the word “molls” to describe the Chinese prostitutes who allegedly slept with the unnamed election official. That sounds very “gangsterish,” doesn’t it, she said. (And what, really, could Bondoc say to that?)

Then she said: “Molls, girls, babae … or birds as they say in England.” Aside from displaying her knowledge of the various ways to call women-for-hire, what did this particular “exchange” (I put that, most carefully, in quotes) prove?

And yet, I still remain optimistic, that a senator or two would know which crucial questions to ask, and of whom.

Who among us remembers that a key piece of the Jose Velarde puzzle came to light during the Estrada impeachment trial when a non-lawyer, Sen. Loren Legarda, asked star witness Clarissa Ocampo the right, the crucial, question? This came at about 5:11 pm on January 2, 2001, on Ocampo’s second day of testimony (the first was on December 22, 2000, when she courageously identified Estrada as the signatory of the newly opened Velarde account).

On her second day of testimony, after the House prosecutors were done questioning her, it was the senator-judges’ turn. Legarda asked Ocampo an open-ended question: Considering the risks you are taking, why testify at all? Ocampo’s three-part answer revealed that Estrada’s camp, with the apparent connivance of Ocampo’s own bank management, was preparing new papers to transfer ownership of the Velarde account to Erap crony Jaime Dichaves, and right in Estrada counsel Estelito Mendoza’s own office. Pandemonium.

Ang daming palabok! All I want to ask is, if you were a senator, what question would you ask in tomorrow’s hearing?

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(I also posted this in my blog, but decided to re-post it here, because well, it seems interesting enough to repeat)

Monday Sunday, September 23, marks the 35th anniversary of martial law. Touched by an Angel recounts what it was like to be a teen during the martial law years. For me, September 23 comes a few days after my dad’s death anniversary (September 18), and so I tend to be pensive around this time of year, anyway: the two dates inspired this essay.

My last two columns on September 17 and September 20 dealt with Marcos in retrospect. Two newspapermen arrested by Marcos recount their experiences.

First, Juan Mercado in Pale ink and memory:

And we of the grey hair, bifocals and arthritic knees – what do we remember? Singing “Bayan Ko” or cracking a joke about the “New Society” invited a beating or detention, oftentimes both. We also relearned what Japanese Kempetai brutality taught earlier: political jokes are serious business.

We hurt so much then, so we laughed. Remember the joke about emaciated and fat dogs lining up for US visas? “Martial Law is obviously good for you,” the scrawny mutt told the obese mongrel. “So why do you want a visa?” he asked. The reply: “I want to bark.”

Jokes against “Big Brother,” George Orwell wrote, are “tiny revolutions.” Wit and humor have always been rapiers against dictators. They were then thrust into Bagong Lipunan camp followers: Fabian Ver, Estelito Mendoza, Juan Ponce Enrile, Eduardo Cojuangco, even a minor functionary in San Juan named Mayor Joseph Estrada.

And then Amando Doronila in Proclamation 1081:

The date of its announcement was falsified. So, when President Ferdinand Marcos appeared on TV at 7:15 p.m. on Sept. 23, Saturday, to announce the proclamation of martial law in his stentorian baritone, the announcement was anti-climactic. The proclamation was dated Sept. 21, Thursday.

Arrest orders of targets, including opposition figures and newspapermen, were served beginning at midnight of Sept. 22, Friday, straddling Sept. 23. In the first round of arrests, I received a phone call at home in Blue Ridge, Quezon City, from a close friend who said, “Martial law has been declared. Secretary [of Defense Juan Ponce] Enrile has been ambushed.”

I told myself, “This it.” I immediately rang the graveyard shift editor at the Chronicle. No one answered. I switched on radio and TV. They were all dead…

From midnight of Friday, the first wave of arrests was carried out. Troops descended on all newspapers, padlocked them and nailed the proclamation dated Sept. 21. Marcos trumped Aquino and shocked the country with superb use of the element of surprise by manipulating the dates of the proclamation.

Doronila also quotes from the Marcos diaries. These were hand-written diaries written with an eye for posterity by Marcos, usually on Palace stationery. I have copies of some of them, given to me one day by a colleague some years ago, and I thought the best commemoration would be to reproduce extracts from those diaries (I normally only recommend books I’ve read, but you may be interested in “Delusions of a Dictator: The Mind of Marcos As Revealed in His Secret Diaries” (William C. Rempel, which I haven’t read but seen in the bookstores).

January 2, 1971, Saturday, 10:00 pm

…And when I watch the supposedly patriotic men, in their selfish and egoistic ways, wreck our republic, I almost lose my objectivity and dispassionate attitude as anger boils within me and eggs me to immediately put into effect the plan to establish martial law. This I must avoid.

For I will not declare martial law unless there is anarchy or the beginnings of it which prevents the functioning of courts and other government offices, even if the constitution authorizes me to do so when there is “imminent danger of invasion, insurrection or rebellion -and there is actually rebellion going on now.

The silent conspiracy against our republic is joined in by well-meaning men who use the inequities of our society and despair that they can ever be rectified except by radicalism and violence. For there are many valid grounds of grievance as the rich and powerful disregard or are insenstive to the dreams or even the frustrations and pains that torture the masses of our people.

So I must be deliberate, prudent, and wise.

Jan. 2, 1971 Sundat (Jan. 3, 1971 3 am)

…Gen. Yan called up to say he was not informed of the retirement of the generals. He seemed to be sulking. I reminded him that we had been talking about retirement of all generals by Jan/ 13, 1971…

Jan. 3, 1971 Sunday

…I had a light lunch of docon and paltat.

Was in Gabu and taking off by 12:35 and in Nichols Airbase at 1:45 pm where Imelda and the children were waiting for me with pospas which I ate in the car. My tummy shows some [illegible] so I take something every two or three hours. It is most probably due to the tension arising out of the plan for the proclamation of martial law…

We must refashion this society.

We must wage our own revolution.

The concept of ownership must be changed so the small people have a chance. All the crooks in government must be booted out. The media must be geared to development and progress, not to destruction and retrogression.

Jan. 4, 1971 Monday 10:00 pm

…Today (this morning 11:00 am up to lunch at 2:00 pm) in a conference with Sec. Juan Ponce Enrile, Sec. Alex Melchor and Gen. Yan, I ordered the setting up of a Special War Center, an Internal Security Agency, a Psy-War Branch all under the DND as well as the creation of a new command, the Metropolitan Command, that will cover the provinces of Cavite, Rizal, Bulacan, Bataan, the Pasig Task Force and the PGB under Col. Ver.

I ordered the transfer of Gen. Fidel Ramos from the 3rd Brigade to the 2nd PC Zone vice Gen. Zosimo Paredes whom I am retiring. Col. Palacios the CO of the 1st Brigade goes to the 3rd Brigade vice Gen. Ramos.

The Special War Center personnel may also be placed as a component unit of the command of Col. Ver’s, as Metropolitan Command CO. It integrates all the special forces of the major services, the special forces and rangers of the Army and Constabulary, the air commanders of the Air Force and the Navy’s marines and other teams. They will be retrained under chosen officers for special missions.

As I plan it, in the event of violence in the city, the Metrocom under Gen. Ordonez will seek to hold back the mass of rioters with his 1,400 men. If theyt are unequal to the task or special task forces are necessary, the Metropolitan Command comes in. If still unable to contain the violence, then the entire Internal Security Forces under Maj. Gen. Romeo Espino, Vice-Chief of Staff under whom both Gen. Ordonez and Col. Ver will be subordinated comes into the metropolitan area.

In the meantime outside of the NBI-Metrocom teams that will be fielded, Col. Ver will have special teams to arrest target personnel or take target areas. This will assure performance in the event that NBI and Metrocom are committed prematurely to the routine of maintaining order.

I have ordered the PC and 1st Infantry Division at Fort Magsaysay as well as the 51st Engineer Brigade brought up to full strength.

The P3 million needed for the procurement of 3,000 Armalites for the PC, I have ordered to be released and the guns delivered not later than the end of February.

The engineers should be ready to take over the public utilties like Nawasa, Meralco, PLDT, Butel, PNR, PAL, Air Manila, Fairways, land transport as well as shipping.

But the media which according to Sec. Melchor Ambassador Byroade calls a serious threat to security, calls for a separate operation. We have to take them over immediately.

The Psy-War Branch should use them for the purposes of the military administration.

The framework of government and present officials should be kept and all laws except those I suspend kept in force unless changed by edict by me.

But a new plan of government and society must be worked out…

While private property will be recognized and respected, they should be run for the state. Their profits should go to a fund for investment and development…

All able-bodied men must be put to work. There must be total exploitation of natural resources.

This must be a complete revolution.

Jan. 8, 197110:40 pm

…I am also working on the political philosophy that should be able to rally all the classes of our people in the event of a take-over.

And classifying the records that have to be duplicated and stored in a place other than Malacanang.

Jan. 9, 1971 Saturday, 11:00 pm

Bongbong left by Qantas via Hongkong, New Delhi, Teheran, Athen and London.

I talked to him, and his sisters, Imelda and Kokoy about the possibility of his mother and two sisters joining him if there should be trouble here; that whether I am there beside them or not they (the children) should value education and get a doctorate degree because even if we should lose our fortune and position here in the Philippines, then they could work their own way in the world; that if for any reason we should be separated and I should not be able to guide them after normalcy returns to the world or the Philippines as the case may be, they should return to the Philippines where their roots are; that I would prefer them marrying Filipinos…

Jan. 11, 1971 10:15 pm

…Tonight they have started to stone even private cars. It is expected that it will be worse tomorrow….

We will keep watching for the need of the use of emergency powers….

Jan. 12, 1971 1:55 pm

…Freddie Elizalde showed me a copy of an editorial which Chino Roces wanted to be pooled by all the newspapers castigating me and asking for my resignatio and that of the cabinet. For good measure the editorial included the Vice-President. It was opposed by Freddie and Ugarte. And Teddy Locsin opposed the demand for resignation.

What a ridiculous spectacle Chino Roces is making of himself. He is supposed to have said that I engineered the drivers strike and am leading to a declaration of martial law as there will be violence tomorrow and in the days to come, and he predicted that at least ten men would be killed tomorrow…

…The timetable is being pushed too fast by the leftists. It may be earlier than we think.

Jan. 13, 1971 1:00 am

The congressmen close to me, Cong. Cojuangco, Frisco San Juan, Ali Dimaporo, Jose Aspiras, Navarro, Lucas Canton, Roque Ablan all proposed for the use of my emergency powers. “We cannot understand why you are so patient. Do not wait until we are completely debilitated and the people is against us. It will be too late. One swift blow and we remove the cancer from our society,” they all said.

I could only aswer that it may be sooner than we think…

Jan. 20, 1971 Wednesday 9:30 pm

…The Liberals have taken out a full page advertisement on martial law declaring they would not attend sessions if martial law is declared.

I have had to reiterate my stand that martial law is the last recourse -that I would resort to it only of there is massive sabotage, terrorism, assassination and a violent grab for control of government…

Jan. 23, 1971 Saturday :25 pm

…I met Andy Soriano and Sebastian Ugarte of the Herald this morning. I explained that the fight against the oligarchs was not against bigness but against the use of bigness to oppress our people and intimidate the public officials for more financial gain.

He seemed relieved but still worried about anarchy. I had to assure him when I called him back alone that if the situation deteriorates, I may have to use my extraordinary powers like declaring martial law. Her seemed relieved and said, “you would be surprised at the number of people who would welcome it.”

Jan. 25, 1971 Monday 11:15 pm

This is the turning point. The congressional opening and State of the Nation address ceremonies were peaceful.

And the whole nation heaved a sigh of relief. For many had left for the provinces and for abroad to avoid the imagined dangers of a revolution.

Chino Roces, Manglapus, the radicals who have been predicting the start of a revolution today must be disappointed.

Jan. 27, 1971 Wednesday 11:00 pm

…I met with the egalitarian intellectuals of the UP tonight, Cesar Majul, Ruben Santos, Bonifacio and Almonte.

They are all enthusiastic about the Democratic Revolution. Now we have to reduce the theory and ideal into practical programs to be implemented…

Jan. 28, 1971 Thursday 9:30 pm

Met about 25 of the leading businessmen of the country in a merienda hosted by Andy Soriano at his Forbes Park home this afternoor at 4:00-6:00 pm.

I informed that the the communists or subversives were slowly sapping the vitality of our country;  that the communists are presently in no position to start a rebellion or a revolution but in two years or three there would probable be a need for a revolution, the communists would nearly take over -or the military.

But my democratic revolution offers an alternative or option. So I asked that it be supported to abort a communist take-over.

Bert Villanueva said they were all for my objectives but what were the specifics…

Don Manolo Elizalde started the exchange of views after my opening statement to the effect that it was not my intention to go after any particular businessman or corporation…

Jan. 30, 1971  Saturday 10:00 pm

…The City Mayors came to pledge their total and complete support for the Democratic Revolution.

The governors have done likewise.

The local officials are now enthusiastic and prepared to openly fight communism.

Feb. 1, 1971 Monday (I write this as I await some callers across the river)

“there is bound to be an inevitable confrontation between the communists and our democacy in the military front,” I have always said…

…The communists gamble that the Republic will be too weak by then as they will have sapped our vitality…

…I have also said that if we do not now take measures of self-preservation, this will come about.

My democratic revolution will rally the great majority of our people around our republic…

So if there is going to be an inevitable collision, then perhaps we should induce it now while communists are weak and disorganized.

April 17, 1972

…Frank Starr implicates Col. Lino Aragon Angara, nephew of the late Pres. Quezon, in a plot to assassinate me on July 17, 1972.

The sworn statement of Starr which is hereto attached is apparently credible and has the marks of authenticity.

What is disturbing is the supposed statement of Angara “Marcos will be killed xxx And when he is dead the Vice President will become President and then our group takes over control of the Philippines.”

Starr says he told me (Angara) of his contacts often with the Hon. Vice President Fernando Lopez and this report is made in sincere interest to [illegible] maneuver and shape or form to breed distrust between the President and Vice President of the RP. But in fairness to the Truth, and facts statements must be made accordingly.

“I spoke to him (Angara) on at least 7 telephone calls and he said he had gone down to meet the Vice President Lopez in his home province.”

This is not the first time that the Lopezes have conspired against my life. Since 1969 they have so at least three times.

The old plot of Eleuterio Adevoso under Osmena was connected to the Lopezes.

And the Lopez financial and propaganda support for the NPA through Heny Lopez and the ABS-CBN included as one of the objectives my assassination. Thru Commander Melody of the NPA was assigned to this mission. Commander Melody confessed this.

On the Adevoso plot, our asset within the conspiracy, Joe    , revealed that the Osmena and Lopez camps were involved.

Then when on January 1970, Lopez and I parted ways, Serging Osmena suggested to Ining Lopez my assassination and this idea was picked up and being implemented.

Chino Roces had in 1979 repeatedly voiced his demand that I be liquidated as this was the only way for them (the activists) to take over.

And Roces and Ining Lopez have joined in partnership against us.

They have also joined hands to blacken my character. Thus they contrived the Dovie Boehms case. The funds sent to her in California have been traced as coming from the Lopez camp.

They escalating demonstrations, mobs and riots, all supported by the Lopezes.

And now the Lopezes have joined up with Roxas and his father-in-law, Amading Araneta.

But apparently they are desperate and may be planning assassination to prevent my declaring Martial Law!

May 8, 1972 Monday 11:25 pm

… After the meeting I directed Sec. Ponce Enrile, the Chief of Staff, Gen. Espino, Vice Chief of Staff, Gen. Ileto, PC Chief, Gen. Ramos, PA Chief, Gen. Zagala, Air Force Chief, Gen. Rancudo, 1st PC Zone Commander, Gen. Tomas Diaz, IV PC Zone Commander, Gen. Encarnacion, Asst. Chief of Staff, J-2, Col. Paz, to update the contingency plans and the list of target personalities in the event of the use of emergency powers.

I directed Sec. Ponce Enrile to finalize all documentation for the contingency plans, including the orders and implementation.

May 12, 1972 Friday 12:30 pm

The entire country continues to speculate on my visit to the brothers Lopez. The comments all seem favorable, specially after my statement that I have reestablished my friendship with the Lopezes for national unity in view of the national interest.

The opposition is still in a state of shock while the Nacionalistas are jubilant.

Gerry Roxas and Ninoy Aquino are meeting with Ining Lopez on Sunday but Kokoy has been told not to be concerned as Ining will make no commitments. And that whatever obstacles to the rapprochement will be overcome.

The general impression is that I have just accomplished a political coup! As Gerry Roxas is supposed to have said: “Titiklopin na yata tayo.”

June 4, 1972 Sunday 11:00 pm

I have just answered a letter og Concon President Macapagal wherein he asks whether I or Imelda are running for President in 1972. I wrote him through Kits Tatad that neither Imelda or I intend to run -I because I am disqualified by the constitution from a third term and Imelda because she has no intention to do so.

I asked him to do me the honor of furnishing me the original of his letter which he sent to media, so that I could answer him in more detail. And that he should exercise the leadership that is sadly lacking in the convention.

Apparently Pres. Macapagal has decided to lay the blame on me for the failures of the convention.

Typical traitor and coward!

But from my point of view the Concon has become useless. Anything they will approve now will be rejected by the people in a plebiscite.

Sept. 7, 1972 Thursday 9:10 pm:

… This afternoon I spent in finishing all papers needed for a possible proclamation of martial law, just in case it is necessary to do so.

Sept. 8, 1972:

… Sen. Aquino is, of course, playing a double game. He was in danger from the Maoists, as reported by him to Sec. Juan Ponce Enrile….

So I believe he negotiated in a meeting with Jose Maria Sison and is protected from that side.

But now he is convinced he is also in danger, from the government. So he goes through the motions of giving information to the Secretary of National Defense to get protection from government.

And I believe that he will, however, help the Moaists more than the government.

Sept. 9, 1972, Saturday, 12:35 pm:

…Sec. Ponce Enrile and I finished the material for any possible proclamation of martial law…

Sept. 10, 1972, Sunday, 12:30 pm:

It is now my birthday. I am 55. And I feel more physically and mentally robust than in the past decade and have acquired valuable experience to boot.

Energy and wisdom –the philosopher’s heaven.

Sep. 13, Wednesday, at 11:00 pm:

…So I met with Johnny Ponce Enrile, Gen. Tom Diaz, Col. Montoya, Col. Romy Gatan, and Danding Cojuangco this evening at Pangarap and we agreed to set the 21st of this month as the deadline.

In the meantime Sen. Aquino in a privilege speech, today, claims we have an OPLAN Sagitarrius, which allegedly includes placing Greater Manila under PC Control preparatory to proclaiming martial law.

This is nothing but the contingency plan for the coordination of the local police forces and the Armed Forces in case of insurgency.

It is ridiculous to ascribe it to the plan of martial law since it referts to calling out the troops to quell a disorder.

But of course the media will give it all kind of meaning.

But, again, perhaps it is best that the political opposition start a debate that will get the people used to the idea of emergency powers.

Sept. 14, 1972, Thursday, at 11:50 pm:

After golf, at 9:00 amat my room at Pangarap while taking breakfast, I told the SND, C of S, Major Service Commanders (Gen. Ramos, PC, Gen. Zagala, PA, Romando, PAF and Commodore Ruiz, PN) Gen. Ver and Gen. Paranis that I intend to declare martial law to liquidate the communist apparatus, reform our government and society, then have the Concon ratify our acts and the people can confirm it by plebiscite and return to constitutional processes; but that I needed at least one year and two months; that this would be a legitimate exercise of my emergency powers under the constitution as clarified by the Habeas Corpus case by the Supreme Court last January; that we need to cure the ills of our society by radical means (I mentioned corruption, tax evasion, criminality, smuggling, lack of discipline, unequal opportunities) so we must keep our moves clean and submerge self-interest.

I asked for any objection to the plan and there was none except for the observation of Gen. Ramos that the closing of the media should be done by a civilian minister supported by the military, and Gen. Gen. Romando who wanted missions definitely assigned to each branch of the service.

Sep. 18, 1972, Monday, at 12:50 pm:

…We finalized the plans for the proclamation of martial law at 6:00 pm to 10:00 pm with the SND, the Chief of Staff, major service commanders, J-2, Gen. Paz, 1st PC Zone Commander, Gen. Diaz and Metrocom commander, Co. Montoya, with Gen. Ver in attendance.

They all agreed the earlier we do it the better because the media is waging a propaganda campaign that distorts and twists the facts…

So after the bombing of the Concon, we agreed on the 21st without any postponement.

We finalized the target personalities, the assignments, and the procedures.

Sept. 19, 1972, Tuesday:

Released the report of Sec. Ponce Enrile of Sept. 8, 1972 where he reported that Sen. Aquino had met with Jose Maria Sison of the Communist Party and had talked about a link-up of the Liberal Party and the Communist Party…

.So since I invited Sen. Pres. Puyat, Speaker Villareal… I explained to the media which was covering us that when I invited the leaders of the Liberal Party I had wanted a private conference where we could, as Filipinos and for the welfare of our people, agree that neither party (Nacionalista or Liberal) would “link-up” with the Communist Party but their refusal to attend indicated that the Liberals were in on the deal to “link-up” with the Communists through Sen. Aquino…

Sept.. 20, 1972, 10:40 pm:

…This afternoon General Staff with the SND and the Chiefs of the major services came to see us to submit the Assessment of Public Order wherein they recommend the use of “other forms of countering subversion/insurgency should be considered.” This means they recommend the use of Emergency Powers including Martial Law, formally.

Sept. 21, 1972, Thursday (Sept. 22nd at 1:45 am.)

Delayed by the hurried visit of Joe Aspiras and Nating Barbers who came from the Northern bloc of congressmen and senators who want to know if there is going to be Martial Law in 48 hours as predicted by Ninoy Aquino.

Of course Imelda and I denied it.

But Johnny Ponce Enrile, Gen. Paz, Gen. Nanadiego, Kits Tatad and I with Piciong Tagmani doing the typing finished all the papers (the proclamation and the orders) today at 8:00 pm.

[U.S.] Amb. Byroade came to see me at 11:15 pm and was apparently interested to know whether there would be Martial Law. He seemed to favor it when I explained it is intended to primarily reform our society and eliminate the communist threat. But he suggested that a proclamation before the American elections may be used by MacGovern, the Democratic presidential candidate, as proof of the failure of the foreign policy of the present president.

Sept. 22, 1972, Friday, 9:55 p.m.:

Sec. Juan Ponce Enrile was ambushed near Wack-Wack at about 8:000 pm tonight. It was a good thing he was riding in his security car as a protective measure…

This makes the martial law proclamation a necessity.

Sept. 23, 1972, Saturday, 12:20 pm:

Things moved according to plan although out of the total 200 target personalities in the plan only 52 have been arrested, including the three senators, Aquino, Diokno and Mitra and Chino Roces and Teddy Locsin.

At 7:15 pm I finally appeared on a nationwide TV and Radio broadcast to announce the proclamation of martial law, the general orders and instruction…

I was supposed to broadcast at 12:00 p.m. but technical difficulties prevented it. We had closed all TV stations. We have to clear KBS which broadcast it live. VOP and PBS broadcast it by radio nationwide.

Sep. 24, 1972, Sunday, (1:25 am Sept. 25):

Diokno, Chino Roces, Max Soliven etc. have filed a petition for a writ of habeas corpus before the Supreme Court.

I asked Justices Claudo Teehangkee, Antonio Barredo, Felix Macasiar and Felix Antonio to see us. They insisted that the government should submit to the Supreme Court for the Court to review the constitutionality of the proclamation of martial law, Proclamation No. 1081.

So I told them in the presence of Secs. Ponce Enrile and Vicente Abad Santo as well as Sol. Gen. Estelito Mendoza that if necessary I would formally declare the establishment of a revolutionary government so that I can formally disregard the actions of the Supreme Court.

They insisted that we retain a color of constitutionality for everything that we do.

But I feel that they are still image-building and do not understand that a new day has dawned. While they claim to be for a reformed society, they are not too motivated but are too bound by technical legalism.

Sep. 25, 1972, Monday, 12:15 pm:

…The public reaction throughout the Philippines is a welcome to martial law because of the smooth, peaceful reestablishment of peace and order and the hope of a reformed society. In fact most everyone now says, this should have been done earlier…

…It is indeed gratifying that everyone now finds or discovers I am some kind of a hero!

There is nothing as successful as success!

Jan. 13, 1973 Saturday

…I also conferred with the Speaker and House Majority Floor Leader (Villareal and Veloso) informing them of my plan to push through a new constitution that may be different from the draft by the Concon. It would be unicameral with a definite period for an interim government; that we would have to retain powers to prevent a constitutional crisis but by virtue of the will and decision of the people, that we would have to adopt a unicameral legislature, that we would want on the morning of the 17th to make a final decision.

And Delegate Duavit that we would have to prepare a new constitution more acceptable to the people, perhaps writing several drafts or alternative proposals and asking the citizens assemblies to choose one…

Jan. 23, 1973 Tuesday (Written at 12:00 pm Jan. 24th as I stayed up to 2:30 am with Justices Barredo, Makasiar, Antonio and Esguerra, Sec. Ponce Enrile and Abad Santos and Mendoza)

…Prepared our position with Sec. Abad Santos and Ponce Enrile and Sol. Gen. Estelito Mendoza, on the Ramon Gonzales petition of prohibition and injunction against Decree 1102 on the ratification of the new constitution. This has caused us worry as it might push us to a revolutionary government…

Jan. 24, 1973 Wednesday 12:15 pm

Had as usual only 6 hours sleep and seem to be tense because of the possible constitutional crisis that may come out of an adverse Supreme Court decision on the petition against the ratification of the new constitution.

So I worked up to 12:00 am on the presentation of the problems we are facing and the absolute necessity of referring the matter to the citizens assemblies as well as the possible approaches and solutions.

Then worked on the orders implementing the New Constitution.

As I tentatively meet the members of the Supreme Court on Saturday or Monday evening. The Chief Justice called up Sol. Gen. Estelito Mendoza Monday morning Jan. 22nd, to tell him that the court was at the disposal of the President for dinner…

Jan. 27, 1973 Saturday 11:50 pm (on board the 777 to sleep here for an early start at 7:30 am tomorrow with Dr. & Mrs. Sharon for Talaga)

…Chief Justice Concepcion is sick in the hospital and may not be able to attend the dinner on Monday.

It is apparent that the other justices are in favor of dismissing the petition questioning the validity of the ratification of the New Constitution.

But they want to be assured of their continuance in office under the new constitution with new appointments…

But everybody else has accepted the new constitution and as we put it in the dinner conference we held tonight, how do the justices expect us to “unscramble the eggs already scrambled”?

We have to handle them with finesse as the Supreme Court might become the rallying point of the opponents of reform.

Jan. 29, 1973 1:00 am Jan. 30th

the dinner with the Justices without Chief Justice Concepcion who is sick in Sto. Tomas Hospital turned out well.

Casually I turned into the problems the country was facing requiring an unquestioned position of leadership for negotiations. As Justice Fred Ruiz Castro said, “I get the message, Mr. President.”

Feb. 13, 1971

…The dilemma of all the developing countries is still freedom in its traditional concept or survival.

Perhaps too simplistic but true. In our case survival (physically) from the anarchy, violence, and chaos of actual rebellion…

In our case, too, providentially, there was written into our constitution the power to proclaim martial law which would authorize not only an assurance of flexibility in eradicating the rebellion but of instituting reforms that would prevents its recurrence and create a new society…

Mar. 2, 1973 2:00 pm

With the country and people moving forward steadily, investments coming in, confidence reinstated, people hopeful and achieving, there is pride for our Republic and nation.

And many people are beginning to claim they had known all along that martial law was the only solution.

Occasionally, however, some people feel that we are back in the Old Society and suggest I share in the profits and material rewards of the civil order I have been able to reestablish.

Poor, deluded souls! They cannot seem to realize that to steer this country through these critical days, I have to be above the material attractions that have a tendency to claim you and enmesh you in petty and selfish interests.

To keep the objectivity and wisdom of judgment that is necessary for leadership, I must stay away from these mundane considerations.

Apr. 2, 1973

…Dr. de Vega has just written me that the Supreme Court has resolved the pending suit in the New Constitution and as of this moment is distributing its decision in favor of our position - 6-4.

The four dissenting Justices are:

1. Chief Justice Roberto Concepcion
2. Justice Calixto Zaldivar
3. Justice Enrique Fernando
4. Justice Claudio Teehankee

Apr. 15, 1973 Sunday

…In the conference which I held with the “Originals” (with Col.    , the J-3 and Gen. Tamayo, Chief of Logistics included) at 4:00 pm, Saturday, April 14th, I informed them:

1. That I had written a Political Testament which I directed them to follow, indicating the successor to me in case of my death or disability; that this was necessary in view of the fact that even now there was rivalry among various leaders; that it was necessary to continue our policies even if I should not be capable or around to lead, otherwise our constitutional revolution would ultimately fail; that even Alexander’s empire had broken up because he had merely said, “To the strongest belongs his empire”; and that I assessed the various personalities aspiring for leadership.

2. There was need to review our pledge to our commitment because there is now apparent weakening of the elements of our revolution. A corruption and loss of ideals has set in…

April 16, 1973 Monday 8:15 pm (after dinner and meditation aboard the 777 at Talaga Bay)

….One of my advisors wrote to me of spiritual retreats that I should not be in the company of my subordinates. I must tell him when I see him one cannot call God a subordinate! For that is the company I keep.

May 5, 1973

…We may have to hasten the process of normalizing by:

1. Conducting elections of an Advisory Legislative Council under the supervision of the Comelec by the Citizens Assemblies.

2. The old newspapers must be investigated formally and their closure directed after formal hearing.

3. The same for other media.

The financiers and oligarchs who may finance further violence should now be neutralized.

Formal charges have to be filed against Aquino, Diokno, Roxas, Mitra, Felipe, Manglapus even if the trials may be delayed.

We must now reduce the number of detention prisoners.

Continue the reorganization of the government.

Push away the capitalists trying to get close to me.

July 5th and 6th, 1973 Friday, Saturday, 12:15 pm (at Hermano Mayor)

…Have been planning on the referendum and the development of a constitutional situation where the powers of martial law can be exercised without a proclamation or continuance of martial law…

July 25th & 26th, 1973

This is the first election where I have not delivered a single speech or moved to campaign.

And I may not even vote.

Strange feeling -to be able to win without any effort.

But I am busy on the actions I intend to take after the results of the referendum are released by Comelec.

July 27, 28, 1973 Friday & Saturday, 11:00 pm July 28th

The referendum vote is overwhelmingly Yes. And a great percentage of those qualified registered and voted -about 80% to 95% registered and voted. I similar percentage may have voted yes.

And Imelda was worried that the people may vote against me and my administration.

This is the first time I have won a popular mandate without working for it. No campaigning. No speeches. No expenses. And no headaches.

Sep. 22, 1973 Saturday

I have often said achievement is but the meeting or congruence of preparation and opportunity.

But Father Donalan told Imelda that in addition to this I have had luck….

I admit that I have had phenomenal luck in time of war as well as peace.

And there must be a Guiding Hand above who has forgiven me my sins, of which I have had more than my mortal share, and led me to my destiny.

Because all the well-nigh impossible accomplishments have seemed to be natural and fore ordained. And into the role of supposed hero in battle, top scholar, President I seemed to have gracefully moved into without the awkwardness of pushiness and over anxiety.

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(term borrowed from Me, Myself & Eileen)

Please note this is not a literal transcript of the proceedings; it will also include my impressions of the goings-on.

2:03 pm Earlier today, a false alarm ushers in today’s hearing in the Senate on the NBN and the ZTE deal. The Cabinet has been ordered to make a show of force at the Senate.

2:15 Romulo Neri says he won’t attend because of “intestinal flu,” says ANC report from Senate.

2:16 Sec. Larry Mendoza being interviewed by Ricky Carandang. Asked by Carandang about meetings -was Abalos was in meeting? I don’t want to preempt process of investigation, says Mendoza. Pressed on FG lawyer’s saying Abalos was there, Mendoza says, I’m sorry ah, I don’t want to preempt investigation. Says he will go into the merits of the NBN and of the proponents.

C: What’s status of contract, anyway?

M: Contract itself had three conditions, only one satisfied so far… Still a long way to go.

C: Pushing through despite everything?

M: We will just await decision of Supreme Court.

C: What if contract doesn’t push through, are you worried government might lose face with China?

M: Yes, that’s true… We have great relationship…

C: And ZTE?

M: Still committed. Went to my office yesterday and reiterated support for project.

C: I understand some cabinet members opposed the deal?

M: It went through the processes. I haven’t heard of any cabinet secretary opposing the deal… None at all.

C: Is Joey de Venecia lying?

M: Well, ah, I dunno.

2: 41 Coverage on TV begins.

Sen. Enrile: Is offended. He’s reading from transcript; says Att. Habawel (?) that JDV3 may have violated attorney-client privileges with the PECABAR law office. Wants to read into the record what Atty. Habawel said.

“Memo for JPE from DBH Re: Jose “Joey” de Venecia III (all caps)

“Sir:

“1. Joey first retained my services in my personal capacity (at that time not connected with Pecabar) as counsel for Multimedia Telephony to prosecute certifcate for public convenience and necessity for Internet-IP-Access-Node (docketed as an NTC case).

“2. When I rejoined PECABAR October 1998, became general partner… Since then I’ve handled for Multimpedia Telephony the following cases:

“i. NTC Case 99-206 An application for CPCN…
“ii. NTC Case 2000-142 An application for CPCN to render universal mobile telecoms service (3G)
“iii. NTC 999?? for radiomarine which someone opposed

“3. Joey does not appear to be stockholder of Multimedia Telephony Inc. (please see attached articles of incorp.) but he acted as its CEE.

“4. Multimedia Telephony Inc. terminated its general retainer with PECABAR  01 July 2002 all pending cases terminated by 2005.”

Enrile: I think telephone call by J3 call to this attorney was an attempt to dissuade me from participating in this investigation. I want to show J3 that this machination will not deter me from participating in this hearing.

2:47 Of course Sen. Cayetano has to quote the Bible and preach. I’m happy the cabinet members are here, but you should be doing it anyway even if it’s for anything non-controversial. Mendoza has asked permission to make a presentation to enlighten everyone on “significant technical issues.” So, OK. If Mendoza can integrate into opening statement.

Cayetano: Today’s guests:,DOTC Sec. Mendoza, Finance Sec. Favila, Asec. Lorenzo Formoso III  of DOTCTelecoms office, Elmer Soneja, DOTC. Abalos invited; Gabriel Villarael says Abalos accepts but is constrained to be excused today but will attend next week (Wednesday and Thursday); Neri has intestinal flu (get well soon!) so he’ll attend next week. Bondoc, Suplico, etc. also present. Everyone under oath, OK?

2:52 Pangilinan: before oath, is document read by Enrile accepted by committee and if so, can we have copies?

Enrile: I move I be permitted to present these documents formally, etc.

Cayetano: Okidoki.

(Enrile grumbles about capitalization of de Venecia company)

Roxas: Welcome to everyone, cabinet members’ presence is useful. If there is any indication this is toxic, this is proof: Executive Secretary is here, a whole list of officials; this situation makes me wonder what’s so marvelous about this transaction that entire government has to grind to a halt…

Biazon: Ah. First, thanks to Executive Department for removing a block that is cause for concern, insofar as full-blown constitutional confrontation between two co-equal branches. So we don’t waste time of cabinet, in your presentations this chair would like to hear answers to some questions so you’ll be guided.

First would be, a presentation of a feasible feasibility study regarding program. Components of program, elements, no?

Second, eh, would be uh, were there competitors in this program? Proponents?

Third what were differences in different proposals and factors that led to selection of ZTE.

The other question is: the sequencing of certain parts of the processes. Which came first, the contract with suppliers/contractors or whether preceded by loan agreement, or preceded further by approval from Monentary Board, meaning, we need to know sequencing because there are laws that dictate proper sequencing…

Is there a contract?

2:59 Ermita, Teves, Apostol, Divanadera, Albastro, Andayo acknowledged; also Sec. of Ecclesiastic Affairs (?).

Cayetano:  ZTE officials are here saying they offered no bribes. We tried inviting them, but no one at addresses. Sec. Mendoza,  can you tell them we’d welcome them if they’d like to defend project and good name of company.

M: With pleasure.

C: Escudero asked me to formally ask DOTC to ask for annexes A to K of contract. Do you have it with you?

M: Very voluminous, we don’t have it, but we’ll provide copies.

Lacson: I also asked for copy of loan agreement.

C: Do you have it, Sec. Mendoza?

Lacson: Not necessarily Mendoza, Teves here…

M: Can we recognize Teves?

C: We recognize Teves even if not invited, welcome.

L: I’m not even sure if there’s a document for 1.8 billion loan. It was in papers mentioned by Suplico and de Venecia….

C: That’s true, are there any other documents? We’re not sure even which is which…

M: There’s another document.

Teves: I don’t have copies of loan agreements pertaining to portions as loan agreements, North Rail, etc. There’s a 500 million item here, but unutilized, it’s supposed to be endorsed to include South Rail and Angat Dam and low-cost housing, and recent amount I signed was MOA for 400 million, not yet turned into into loan like other two, I didn’t bring it but will submit at proper time.

3:06 B: Says these should all be repeated under oath; Teves placed under oath. affirms what he said was truthful.

Mendoza begins opening statement:

Hi, hello (interminable list of officials to greet)… First, thanks to Senate for giving us chance to appear and give its side on “alleged” controversy. With me are almost all members of cabinet, not only those with knowledge of the implementation of NBN project, but other members with expertise on procurement. Also with me are officials of DOTC, CICT, Telecommunications Office who came up with protocols; also members of bids and awards committees and technical working groups that analyzed bidders and processes to follow.

Pimentel: Considering manifestation of Mendoza about participation of cabinet members in formulation, negotiation, execution of contract and naming subordinate officials, now that they’re here, I’d like for them all to be sworn in so now committee can take jurisdiction over them and summon them at proper time. Otherwise they might allege excuses not to appear.

C: Any objections?

Pangilinan: Not an objection, but we need to list down who will take oath…

Pimentel: Well Mendoza mentioned cabinet members here, that would include Devanadera, Andaya, Atienza (I dunno what he’s done), Ermita, too. Let’s start with cabinet members named and here.

Pangilinan: I wrote them down… (rattles off names)

C: Place them under oath.

Oath administered; C. adds, NEDA deputy director-general; Pimentel says, Apostol, too, he has a lot to say (giggle, giggle from audience). C. asks “Mr. Wetness” to approach microphone, tee hees from audience.

Apostol: In congressional investigation, only if we’re called as wetness we’ll be sworn, if we’re only bystanders, no more.

Pimentel: We’re making you witness.

A: Only if letter, not now!

Enrile steps in: It’s mandate of Constitution we respect rights of people appearing before our proceedings. I tend to agree with gentleman that bustanders not expecting to be called to witness stand should be given time, it’s an ambush to do that. We should not demean preceding by doing this.

Pimentel: Were only trying to respond to situation where members of cabinet resisted calls to testify…

E: Anyway I will reduce my statement to form of objection and I call for a vote.

C: Let’’s clarify. When Sec. Teves made oath I said other secretaries who felt they might be asked to testify could take oath, we decided in caucus to extend courtesy. So if you don’t want to take oath, you’re put on notice you will be invited to testify next week. Is that OK, Enrile?

Enrile: Rather odd to put them under oath when they voluntarily appeared in this hall. Shows if there’s a need, then they will come.

3:19 Pimentel: I based on statement of Mendoza that cabinet and DOTC tech people are here to provide support to his testimony; if not necessary to put them under oath now, is there substitute device where we can acquire jurisdiction over them? Link to contract has been established.

E: What I want to avoid is to create impression, even if not your intention, that this proceeding is used to harass.

P: Is there way to make them sign they’ve appeared”

C: Alternative is we’ll ask them to take oath if called and if they volunteer to assist Mendoza.

Biazon: Let’s ask Mendoza to clarify. Was mention of other cabinet members to advice this hearing that those he named are being offered as potential resource persons or are they here as bystanders?

E: Let’s hear this witness first. Now we’ve forgotten what he said before. To keep orderly proceedings let’s have him finish statement.

B: I need answer. Are other cabinet members here potential resource persons or bystanders?

M: Moral support, your honor.

Pangilinan: So we can move forward, Teves, who wasn’t invited, showed willingness to step forward. So if anyone mentioned, we can ask them if they’re willing to take oath and testify.

Pimentel: Fine.

(wrangle, wrangle)

Apostol: May I be allowed to go back to my seat!??

(Tee hees)

Mendoza resumes: Also with me are those who investigated stolen contract and others involved in four other contracts signed in Goa, China. Let me update you on present status on cases filed against DOTC…

1. Petition dated 01 August for TRO filed by Vice-Gov. Suplico against NEDA, DOTC, COTC, Telof, ZTE, AHI, etc. Petition seeks to prevent execution of project, compel production of contract, and declare it null and void.

2. Petition for Mandamus, TRO 07 Sept. 2007 filed by Amsterdam Holdings Inc. vs. DOTC, etc., prays to compel respondents to commence any activity re: NBN project and access documents.

As of 11 Sept. SC issued TRO for Suplico petition. Suplico also filed contempt complaint against me (Mendoza) for Star advertisement for trying to influence SC.

Carlos Padilla also filed complaint at Ombudsman but we haven’t gotten formal copy.

We welcome complaints so we can settle in proper forum all accusations. We will, we will, rock you.

At risk of being held in contempt by Sc, we will brave the tumultuous waters and tell all. Government’s been treated unfairly for respecting sub judice rule. Yet critics have temerity to peddle lies.

We can no longer bear to keep our silence. It’s now or never before Filipino people.

This now involves our relations with foreign states. We have pending agreements with People’s Republic of China. International perception might view current accusations in an unfavorable light, relentless microscope of media might frighten investors.

These issues are emotionally charged are at the end of the day, merely highly politicized statements. We should stick to the facts and maybe finally remove brooding dark cloud over NBN.

This project is needed by the Filipino people, to improve the services provided by all the branches of the government.

We will show, through this presentation, that there’s no stain of wrongdoing in this project.

Atty. Formoso will do the presentation.

3:32 Cayetano: Before you present, do you have hard copy.

Formoso: We’ll get it now.

(lights are dimmed for presentation)

3:34 Formoso: Well try to show NBN will save billions; that ZTE offered best cost; the nation will gain, and law followed.

Roxas: Other members can’t see clearly, hold on.

Cayetano: Projector’s crooked.

Gordon: Turn off the lights!

Pimentel: I hope Formoso didn’t do this deliberately so we can’t follow it.

Formoso: No!

(Cayetano and Formoso debate background color of PowerPoint slides…. why is it red? Wasn’t red, Formoso says… friendly banter… fiddle, fiddle…)

[PowerPoint Formoso’s presenting is the one Formoso presented at the Ateneo last June; Formoso’s Power Point is available at the PCIJ Blog; it’s a longer version of their ads; see NBN deal articles: if the DOTC had sense, they’d have put the PPT online, but sorry, no luck; to understand objections, see Lacking a backbone: The controversy over the “National Broadband Network” and Cyber-education projects]

Formoso presents the above from 3:40-3:50

3:50 Mendoza: In closing, DOTC thanks you for your indulgence. Thank you.

Cayetano: Please establish two definitions. Broadband and government-to-government, please.

Mendoza: Can I we ask uh… Formoso to answer.

Formoso: Uh. Broadband is a term is used to describe a transmission system that is rated speed 200 kbs to 100 mbs or higher, it’s a unified form of communications where unlike before voice and data ran on different channels, its now on the same channel because packetized, and runs along broadband highway. Another analogy is a pipe… Government-to-government, if you look at projects, 92-98, national phone, regional phone, telepono sa baranggay, were all premised on a loan with foreign creditor nominating a home-grown contractor.

C: So for DOTC it’s government-to-government even if signed with specific contractor, if funding from a foreign government.

F: Well, kinda…

C: When you have loan with different country, that’s clear, but here it’s with a supplier, so your interpretation is, contract with ZTE government-to-government even if no Chinese official signed.

F: Well, we assume, if Chinese government said they’d do loan if ZTE chosen, so we consider that government-to-government…

(Cayetano and Formoso explore further; Formoso says ZTE deal is in the nature of an Executive Agreement is in the law: in fact, if there’s an Executive Agreement, the procurement law says the agreement will be followed, not the prodecures of law.)

3:56 Lacson: what document did you sign in China?

Mendoza: Supply Contract Agreement. Conditional contract.

L: Is this the same document? (reads document)

M: Yes.

L: If a contract, did you go through public bidding?

M: Executive Agreement, so no need to.

L: Is this a contract or an executive agreement?

M: Before you sign contract, you establish there’s an Executive Agreement between RP and PRC. Then there’s a government-to-government contract; in system of Chinese concessionary loans, they designate contractor.

L: when you sought DOJ opinion you weren’t sure. In fact here’s July 26 opinion, and questions you raised were if the contract could be deemed an executive agreement, and if so, whether the mode of procurement fell under direct modes of procurement which is direct contracting. So when you signed you weren’t actually sure you signed a contract?

M: No, there are three requirements, this was one of them.

L: To sign, you needed loan agreement. Based on past DOJ opinions, to qualify they said there were already loan agreements. In all DOJ opinions, a loan agreement is a must?

M: Well ah, if I may clarify.

Acting Secretary of Justice is here, maybe she should reply.

C: Is Acting DOJ willing to reply?

M: Usec. Paras from DOJ is here and willing.

(Paras sworn in)

4:02 Paras: I am Chief State Counsel of DOJ. My office renders opinions, I’m also member of inter-agency committee to review foreign loans. This issue came up when they asked, is this executive agreement to constitute a rather exceptional way to award, as provided by law, and we said, it is, because it includes an exchange of notes between the Presidential Chief of Staff and the Chinese Ambassador, where PCOS asked, if, indeed, ZTE was their designated contractor and Chinese government said yes.

Cayetano: I’m confused. Referring to this other case… But document says this is approved, provided an agreement is concluded with Chinese EximBank, so this is a contract?

Abaya vs. Ebdane says there was a loan agreement. That was reference made by SC to affirm there was an executive agreement. But no loan agreement here, so how can it be classified as an executive agreement? So what was signed in Hainan, this document, was a contract or loan agreement?

Paras: Your honor it was a contract…

C: So if a contract, it should go through public bidding?

P: Under the fax presented to me, it’s not subject to public bidding.

C: Why?

P: Because there will be a loan.

C: Because contract says its subject to an opinion and then a loan…

(Lacson is irritated)

Mendoza: We can ask Andaya to explain…

Lacson: We will accept your pinch-hitter who was co-author of procurement law.

4:08 Andaya: We’re arguing there’s not an executive agreement.

L: In Hainan was this contract or executive agreement?

A: It is part of an executive agreement.

L: Was there public bidding?

A: If funding from abroad, it doesn’t fall under procurement law; the contract is a part of an executive agreement and the agreement becomes one, upon approval of loan and with OK of monetary board, so nothing has happened.

L: So is this government-to-government, isn’t a stretch?

A: The story isn’t complete. Starting with designation of supplier. But the loan portion hasn’t even been begun by Teves, who would do loan agreement that completes this whole thing…

L: Are you familiar with this document on guidelines governing contracts and procurement? Not allowed during election period.

A: There are exemptions for foreign projects.

L: The one who gives exemptions is Chairman Abalos?

A: Yes, but this is only a part, because all of these are small parts of a bigger contract, if there’s no loan agreement, there’s nothing…. this is merely kropek … This is unenforceable contract.

C: Was there exemption given by Comelec?

A: There is no need, no basis to give, since there is no loan agreement…

L: Was there due diligence?

M: Actually, yes, all projects have feasibility studies…

Biazon: Do we have copies of these feasibility studies?

M: Yes, and we’ll furnish.

L: Do you have good sources for your articles, where you state ZTE is in hot water in other countries, including illegal contracts, and even blacklisted for overpricing and price-dumping?

Bondoc: I interviewed sources from Telecoms industry at least 4 persons, and they pointed me to articles.

L: Mendoza, in conducting due-diligence did you encounter this information?

M: Never.

C: I heard in Thailand, ZTE entered into bid with government and there were complaints. Did you hear about this?

What we heard is ZTE is not blacklisted, it’s listed in stock exchange of Hong Kong and Zhenzehn…

Are we saying, is that this type of contract is like transformers, if no loan, it’s subjected to bidding, but if a loan, it becomes an executive agreement? It cannot be a hybrid. Is your testimony and that of DOJ that there is such a thing as convertible contract.

M: No.

C: But you signed a contract.

M: Not a contract, an agreement…

C: So you can put a supply contract ahead of a loan agreement?

M: Well, there’s different ways for different countries. In China, the supply contract came ahead, but in Japan and France loan came first.

C: But if subject to loan, and loan never came, you may have violated

M: No contract, because conditional…

C: No, there’s a contract because there’s a meeting of minds.

M: Well, the position of the government is this is an executive agreement.

C: So, supplier’s contract, and loan agreement, at which point it’s executive agreement, but right now, you have supplier contract but no loan agreement.

4:21 Estrada: Formoso, what’s your involvement here.

F: Other than in having a part in evaluating and signing as witness, that’s it.

E: Did you sign in Goa.

F: Yes.

E: How many times did you fly to China?

F: Twice.

E: Were you assigned as chief negotiator with respect to NBN?

F: DOTC, not me.

E: How many times did you meet ZTE officials with regards to this project?

F: Since August last year, I’d say 5 or 6, mainly with technical people.

E: Ever met with Chairman Abalos?

F: As part of my CTCE duties, asked by Sales to accompany meetings of advisory council. Met first time was December.

E: Give me an honest opinion, what do you think role of Abalos was in this NBN deal?

F; I was in Comelec as part of my advisory council meeting.

E: Have you talked to Abalos regarding this project?

F: Never.

E: To Joey de Venecia?

F: Yes.

E: Where?

F: Comelec.

E: Did they talk about this deal?

F: No idea.

E: Why did you choose ZTE over Arescom and AHI… When President laid down conditions: BOT, paid for by private funding; and no government subsidy and pay-as-you use, result is reduction in government telecoms expenses. My understand of your presentation is loan agreement, unlike others which didn’t have loans?

F: Arescom had a loan, and less preferentials. ZTE more advantageous compared to ZTE. Arescom limited to 21 sites unlike national coverage with ZTE. AHI says no cost but no such thing as a free lunch; we think it would be unfair to existing telecoms players to select Amsterdam and then use its network to help leverage it into competing in telecoms sector.

Escudero: Uh, thank you. Um… Mr. Bondoc, do you know Presidential anti-graft investigator named Vida Sorobocar who was assigned to investigate this deal?

Bondoc: She emailed me asking me to provide documents into possible investigation of Secs. Mendoza and Soneja on this deal.

E: Then?

B: I got email that she was sacked for communicating with me.

E: What was your reaction? After you gave her information?

B: I didn’t, I published it in my column and felt she’d been fired because of what I wrote.

E: I move to invite this official of Presidential Anti-Graft Commission…

C: you signed supply contract?

M: Yes.

C: Look here,  your contract with ZTE, it says, whereas executive agreement it says, does it mean there’s an executive agreement?

M: Well this means there was an exchange of notes, that’s why we asked DOJ opinion…

C: So you were lying to ZTE? Is there an executive agreement?

M: None.

C: So there was fraud, you were saying to ZTE there was an executive agreement…

M: But it’s conditional…

C: But you just said to the Senate there’s no executive agreement. But in this document you said to ZTE, there is. It can’t be there is and isn’t one.

M: May I consult lawyer who prepared this contract?

C: Yes.

4:34 Atty. ___ testifies

Lawyer: Sir, as based on this statement, executive agreement was entered into, where China agreed to finance NBN if ZTE was chosen. Reason for this was statement of Abaya vs. Ebdane, where SC said an executive agreement also includes an exchange of notes…

C: But if no loan, is that an executive agreement?

Lawyer: It’s all part of the project…

C: Is or was. Differences. Notes themselves are executive agreement?

Lawyer: No.

C: So no agreement?

Lawyer: So far, no.

C: Why did you let Mendoza sign if there was no agreement?

Lawyer: Started with process with exchange of notes, that’s premise for supply contract, then culminating in executive agreement.

Escudero: Referring to contract: ratification by RP and PRC of executive agreement, evidenced by letter ofChinese Ambassador to PCOS Defensor relating to NBN and letter of NEDA… there is executive agreement based on the letters? Do you have the letters?

Lawyer: Yes.

Escudero: So there is an agreement based on the letters…

Lawyer: No, not merely on basis of letters. The basis is culmination of all things…

E: It says here, agreement evidenced by letter… Perhaps that is source of confusion? Contract itself is best evidence, it says, there was an an executive agreement, as shown by letters, so can you show letters?

C: So uncomfortable for Senate to be told there’s no executive agreement, but two portions of contract refers to executive agreement….

Pimentel: You know, lawyer has obligation not to get trouble… the difference between “there was” an executive agreement and “there will be” is precisely the question, why did you use language there was one, when you say there still would be one.

Lawyer: We merely premised it on the letter, on the statement of Supreme Court.

P: Excuse me, formulation of your contract is not based on Supreme Court decision, it’s on your appreciation of facts before you, there’s fudging of the facts, for Heaven’s sake someone is pulling our leg.

C: Presumption is good faith. So they assume we will follow law, is what Chinese assume. You state in contract you drafted that there is an executive agreement, so if we ask the Chinese they will say yes, because our document says so, but if we ask your Secretary, he will say there isn’t. Either there was one that was ratified, or not. So when you say there’s an agreement, there’s a loan?

Lawyer: Yes.

C: And a loan requires monetary board approval.

Lawyer: Yes.

C: So Chinese will assume we acted in good faith and so it means they assume monetary board approved loan, so.. why would you tell ZTE there’s an executive agreement, if there isn’t one…

Lawyer: There’s no executive agreement so far.

4:45

Santiago:  No official made a follow up on ZTE with you?

Mendoza: No, M’am

S: No one broached it all all?

M: Well, ah, it’s practice for people to inquire…

S: So that’s your historical experience. So it’s discretion as the better part of valor

So any public official who made follow-ups with you?

M: Well uh, maybe on AHI…

S: Amsterdam?

M: Well, the son was introduced to me by the father…

S: Speaker?

M: Yes.

S: What did he say?

M: Well, that the thing is good for the county…

S: Well, to be seen if that’s a violation of law. But you are saying it was Speaker who introduced his son to you at Wack-Wack?

M: No, earlier part of 2007, at Speaker’s house where he invited me for breakfast and then introduced his son?

S: All of a sudden, saying this is my son of whom I am well pleased…

M: Well, bringing up Amsterdam..

S: I am holding up study by Fabella and de Dios… Last sentence says we don’t need NBN. Are you familiar with this paper?

M: Not very much.

S: Are you familiar with provenance of paper, where it came from?

M: We do not exactly know who funded the paper, there was a lot of media blitz practically demonizing ZTE, well, this is one of the groups…

S: You weren’t curious to find out who was behind this paper? Let me make it easier for you. There is data that this paper was produced under auspices of Agile, financed by USAid.

M: I am familiar with Agile… I don’t know if two professors are identifiable with particular NGO.

S: On to certificate of incorporation of AHI. Authorized capital stock is 5 million. Paid up capital is 325,000 pesos. Were you able to verify this document?

M: We have copy from SEC.

S: Has it been since amended?

M: We dunno.

S: If we go by this, AHI, was trying to bid for project 300-400 million dollars? Were you able to find out more in this respect? How can a company possibly bid?

M: 242 million dollars, 12 billion pesos, one reason why TWG concluded that AHI lacks necessary requirements.

S: Let me go back to incorporators. One is Chinese, another American. Did this ring bells and whistles, as ex-military man, did you realize that China and US engaged in a very bitter struggle for economic dominance. Was this part of turf war between two nations?

M: I may not speculate, there isn’t a war, but Chinese products are getting out of the market, and I don;’t know the reason…

S: Did you see headline, de Venecia owes telecoms firm $12 million. Were you aware?

M: Well, I think it’s ZTE that furnished that, and they say it’s true.

S: Thank you Senator Madrigal, I will kiss your feet later.

4:58 Madrigal: When you went to see Speaker, was it to ask help for you son running for congressman in Batangas?

M: No.

Ma: Did your son win?

M: Yes.

Ma: Congratulations. Could you elaborate on your being quoted as saying…

M: I deny that.

Ma: You’re under oath.

M: Yes.

Ma: So what was reconciliation meeting about?

M: After Speaker introduced his son, his son went to my office several times, I endorsed him to TWG, and several times while engaged in my duties, speeches, dinners, I used to find him hanging around in the area.

Ma: With all due respect. Were you or were you not in Wack-Wack with Mike Arroyo (and names)

M: When?

Ma: After you had your meeting in March or mid-March…

Ma: Do you categorically deny?

M: I need to know exact date… I am head of national golf association….

Ma: Do you even recall, or not choose to recall this meeting?

M: I saw Joey de Venecia sometime in March…

Ma: Abalos, Ruben Reyes… de la Torre, do you deny being in your presence?

M: No..

Ma: Yes, no?

M: Well, I need explain…

Estrada: Madrigal is asking, was there any time you, the FG, de la Torre, etc. meet in Wack-Wack?

M: There was a time when I met de Venecia and FG.

Ma: when did you meet Formoso?

J3: At Comelec.

Ma: Did you expect? Surprised?

J3: Was surprised to see him there, because I thought it was just Abalos, and Formoso had been avoiding my calls, and remember, Formoso, we ate ensaymada…

Ma: Do you recall that?

F: Yes.

Ma: So proceed.

J3: This was part of numerous meeting Abalos and I had, and he said to Formoso, “you see, Joey and I are now partners”

Ma: What did that mean?

J3: I took it mean that to Abalos it was important that to the approving officials, they’d know we were partners so there’s no confusion it’s important…

Ma: Referring to Standard headline which alleges Senator Serge Osmena was go-between?

J3: I’ve been introduced to him in mid-90s in NTC.

Ma: So you would say report in Standard that you tapped Serge Osmena and Standard columnist Tony Abaya is inaccurate?

J3: I don’t know him the way they imply.

Ma: Why would Standard which cites a Palace source, why would they try to implicate Serge?

J3: I dunno.

Ma: To Bondoc, Regarding sexcapades stories, who were your sources? Were there eyewitness?

B: I can’t reveal them.

Ma: You stressed gifts, aside from “advances”, the ZTE executives met him with two girls…. (recites lurid details, asks Joey to comment on Luli’s comments on his hair, would it diminish his credibility? No, J3 says)

Ma: Will you tell hearing what you said about First Daughter’s drug allegations. We should not denigrate those who have fallen on this path and tried to change their lives.

J3: I believe most people make mistakes. I experiment in Boston when I was 18-19. After a year of experimenting I saw my GPA drop. I went to Beth Israel Medical Center, I checked in, they have me medication to wean me off. Since I was 20 I have not taken drugs or even beer. I’m on board of New Beginnings, I brought AA here… I think if you learn from it and correct it, you can move on, I’m not ashamed of it, it’s made me a better person…

Ma: you’ve been sober for 20 years?

J3: Exactly 22 years.

5:16 Pimentel asks how contract was “lost.” Mendoza says it’s easy to reconsitute, but he asked NBI to conduct investigation. Findings: not jusat ZTE contract was lost, it was stolen with 4 others.

P: By whom? Bedol?

M: No. Emmanel Ang, our commercial attache, was responsible.

P: Charges filed?

M: Well, the NBI is here… it filed a case before DOJ. I mean, Ombudsman.

P: So case pending for loss of documents?

M: Yes.

P: Did you inform ZTE documents were lost.

M: Yes.

P: What did it say?

M: They waited for conclusion of NBI investigation. Then we reconstituted contract.

P: How many copies did you sign in Bao?

M: That’s odd. Only one copy?

P: I stand corrected, one copy for us, one copy for ZTE.

M: So the copy of ZTE basis for reconstituting?

P: No, because copy of ZTE was also stolen.

(crowd laughs)

M: We have control copies for reproducing… on computer…

P: How long reconstitute?

M: After investigation.

P: When?

M: May 24.

P: So loss reported June 20 at forum at Ateneo. So you’d reconstituted contract, but then your Usec tells forum it had been stolen.

M: Clarification, Formoso only reported it stolen.

P: No, Formoso, on June 20 at Ateneo, said he doesn’t have copy, because it was stolen or lost. In fact, first time official recognition contract was lost or stolen.

M: Formoso is here.

F: I did disclose contract was lost. I did say it had been reconstituted based on control copies. I said I didn’t physically have a copy.

(long wrangling on why he said it had been stolen)

5:23 Cayetano: Did you scan original contract?

M: There was a remaining impression on the computer…

C: No scanning…

M: Second signing was when?

(wrangling over barcodes, which copy had a barcode, which copies were signed, who signed what, when, where, first and second time around…)

(shouting by young lady; crowd murmurs…)

Pimentel: Sometime later, Lacson will show that supposed first and reconsitututed copies have signatures on exact same places… Anyway, Mr. Formosa, you were a consultant of Abalos in Comelec before you went to DOTC?

F: No, I never worked for Comelec.

P: Somehow your name was linked to MegaPacific contract…

F: That would be strange… First time I met Chairman was when under part of my obligations as member of advisory council for poll automation of May 2007 elections, I was required to assist….

P: You were also at Wack-Wack when FG pointed finger at J3?

F: I wasn’t there.

P: You were there on some other occassion with Abalos?

F: I don’t play golf, have only been there for some other functions.

P: Mendoza, you’ve heard of bribery in this case?

M: Insinuations of bribery, sir?

P: Including offers to Sec. Teves? Did you hear about that?

M: No, never.

P: Mr. Neri?

M: No knowledge.

P: Not even heard? Not even in papers?

(cranky wrangling by the two)

M: I don’t know what to believe in media anymore.

P: A sentiment I share.

(Oooooh from crowd)

Biazon: The gallery is advised not to make disturbing noises while these proceedings are going on.

Were contracts lost in room?

M: On the way to the room.

B: Were other items other than contracts stolen?

M: Only contracts.

B: There were two signings. Original and reconstituted.

B: Which did President attend?

M: Boa.

B: Original?

M: Yes.

B: That was the time the FG was in hospital?

M: Yes, I believe so…. Can I make further statement? Actually it was a sidetrip, main reason was to attend Boa forum.

5:34 Aquino: Three offers?

M: AHI was unsolicited, Arescom and ZTE backed by loans.

(Noynoy Aquino asking extremely dorky tech-related questions; he’s zeroing in on whether or not the parameters established by government for the NBN, were even necessary)

5: 43 Roxas says he’s offended by Formoso’s computation of savings; because government spending for talking to outside world isn’t included; costs saved will only cover government-to-government calls; but will stay pay charges outside the system, so it will not incur major savings; Roxas showing a temper for first time; says Formoso is obfuscating the issue; Formoso admits computations don’t admit that government’s costs outside NBN system persist).

Aquino: You advocate this for two reasons. First, savings. Second, security.

F: Yes.

A: Is there any fully secure system in the world? Foolproof?

F: No. If you’re dedicated enough you can hack any system.

A: This is supposed to give us security, but being set up by another country accused of hacking… So all we’re left with is supposed savings? 5.1 billion for a much smaller scale endeavor was original idea, and there’s a law saying private sector should be engine of growth for telecoms. This NBN doesn’t seem to comply… So why should be undertake this project?

F: RA 7925 was supposed to foster competition. Not to prohibit a gov’t telecoms system, which would be absurd, for example in terms of the military. It requires privatization of government telecoms facilities, if it competes with private sector.

5:50 Honasan yields his time to Aquino. Naks!

A: Clarify why there seems to have been a reversal of the President’s past policy, supposedly at the cabinet meeting?

M: Well from BOT to direct loan… and government doing the project, was discussed at Neda sometime in March… While it’s true if there are available private telcos; but they only serve profitable areas. What of 4, 5, 6th class municipalities? There are no providers. Very good if private entities do it, but when? We have been looking forward to covering, geographically, a bigger area than 1-3rd class municipalities. If we wait for private enterprise, it will take time. This is why the President the approved the government undertaking this broadband project.

5:54 Biazon: There’s supposed to be 300 base stations in this sytem?

F: Yes.

B: Each base station could serve 30 km line of site? Difference if non line-of-site.

F: Yes, signal would be degraded, maybe 15km.

B: It cannot serve whole country?

F: We did calculations, we could serve entire country.

B: Can you submit locations?

F: Yes.

5:55 Honasan: Aquino laid premise for my questions. Beyond technical, legal, and cost-benefits, I want to bring up non-quantifiable national security questions. Bush signed a law which I will bring to chamber’s attention. Mendoza, assuming NBN breaks down, who will fix it?

M: Part of contract is operation and maintenance.

H: ZTE? Another foreign entity?

M: Let me explain. We considered issue of security. We will ensure there’s no leakage, I’m from military. When someone gives us a system, there’s chance there will be leaks. But we will get third party to ensure there’s no leak.

H: UP Econ says even maintenance is beyond us, what about security. Formoso in briefing said there’s a security audit, encrypting, protocols, etc. But in my view, a fountain cannot rise higher than source, even if there’s a third party, fact is foreign entity is setting up the network… (then cheers up Mendoza by saying they’re both Mistahs, and that his answers are between him and God, Senate, country, and long gray line, so is that Olrayt to you? Olrayt, Sir! M. says)

6:00 Villar: I was watching TV earlier. I’d like a summary of process from beginning to end, everyone involved, step-by-step and where we are, and what needs to be done to complete the transaction. Things are so confused, so please enumerate everyone involved… Any reports of unusual movements of funds, from Anti-Money Laundering Council? Oh, and I thank cabinet men for their unusual presence here, let’s hope Palace continues cooperating, as we’re only doing our jobs…

6:02 Arroyo: I’d like to echo Senate President’s words. Last night we were discussing what if this case reaches Supreme Court, this relieves us of the tension, we, in the Senate did not want a case.

6:03 Escudero: Here’s list of more documents we want from DOTC… You signed a supply agreement, the President was a witness. This means you had full authority of President?

M: Yes.

E: There’s a document?

M: Yes.

E: We’d like copy.

Supply agreement plus loan agreement, per DOJ, then is executive agreement?

M: Yes.

E: the procurement law exempts bidding, if there’s an executive agreement. So why did supply contract come ahead of an executive agreement when you’re not yet exempt from procurement law?

M: Well, it’s the way they do it in China.

E: That applies to China. But under our laws, we cannot put a supply agreement ahead of an executive agreement.

M: Well in effect, there’s a foreign loan, and in that case we adhere to process of foreign government.

E: Even when it contravenes our own?

M: Well, there is no contract, this is just a supply agreement…

E: But agreement awards contract…

M: But it’s not in operation yet…

(Escudero then looks at whether it was wise for NBN to be government-done, when typhoons would lead to perpetual spending for repair, which private sector would have assumed; Ecudero then homes in on whether Formoso classified obsolescence; Formoso admits they did not take obsolescnece into account, or factor in costs for typhoon damage repairs)

E: Is American version of NBN owned by government?

F: No, parts, Defense, State, owned by government.

E: Any government that owns entirely?

F: Taiwan…

(list of states to be furnished)

E: There’s national policy for private sector to do this. Why are we reversing policy and under what authority are you doing that?

F: Law says privatizing networks for public use. Only means government can’t compete with private sector, but government can operate its own if not in competition with private sector.

E: What is legal authority are you basing government owning its own broadband network?

F: May I refer you to e-commerce law (Formoso goes and looks for copy)

E: Mendoza This is not BOT. ODA?

M: No. Concessional loan.

E: What’s difference?

M: Concessional loan interest slightly larger.

E: Only difference?

M: I stand corrected, DOF says this ODA.

E: RA 8182 says express approval of Congress must be secured by executive after 1995, for all ODA. Do you have Congressional approval?

M: Uh… may I have some moment?

6:17 Sec. Andaya replies: The legal basis for the financing is through the Foreign Borrowings Act, not the ODA Law. ODA has 25% grant package, upon referral of records, this was covered by FBA… Congressional Approval, anyway, is secured through approval of the Budget.

E: ODA or not?

A: In nature, it could be ODA, I’m just saying the legal basis is FBA…

E: This is not in budget?

A: No.

E: Is a Forward Obligation Authority to be issued?

A: Not yet.

E: What are required.

A: Teves will have to secure FOA, stating how we will use it, and pay it, and approval of Monetary Board, then he can enter into contract, our government has given neither.

E: Congress will be informed?

A: It would be, if under ODA, it would be in the Budget….

(Biazon clarifies the NBN can’t be implemented yet, because no loan, and no Congressional authority; says project is like North Rail, with similar problems)

6:23 Roxas: You said this is not through ODA but FBA. This is legal, you say, and amortization will not even pass through Congress, because it would fall under automatic debt payment, with FOA and monetary board approval; after all, loan would not even go to us, but directly to ZTE, but also, every year, there’d be automatic appropriation for debt… Amortization, earlier, would be paid at 1 billion a year, and automatically. In fact, this will only pass scrutiny once,

A: To use the loan, it would have to appear in the budget. But to pay the loan, it would appear in the budget.

R: How? Amortization will be automatically appropriated.

A: Yes.

R: This is not a loan of the Congress. But we have a loan, and money released to ZTE. Then ZTE will put it up, even if we don’t have the budget. What you’r saying is there’s only two requirements FBA and monetary board. Then China EximBank releases loan. That money will not pass through us, it will go straight to ZTE, it will go from one book entry to another in China.

A: We will have book entries…

R: Yes, debit credit, but the whole thing goes from one Chinese pocket to another. Is there any other guarantee?

A: Well, the Supreme Court….

R: Good thing this has reached SC.

6:29 Arroyo: In the end what Supreme Court decides will be the decision. We are discussion question we cannot resolve. Has there been any damage to government?

Ar: We haven’t spent a peso.

Ar: Why don’t we abort this?

M: I cannot answer that, I’m just a member of cabinet, this was debated in NEDA…

Ar: Will this affect RP-China relationship if cancelled?

M: In effect, yes. There might be some international repercussions, if we don’t wait for resolution of Supreme Court.

Ar: Re: executive agreements. There are three kinds: contract to do something, perfected contract, and consummated contract. From what I gather this isn’t even a perfected contract. If that is correct, there seems to be a battle among “commissioners” and this is the problem we have… To Mr. de Venecia, is it correct your paid in capital is 312,000?

J3: 25 million pesos, paid-in. Incorporated two years ago.

Ar: With 25 million paid in, contract would require 300-400 million dollars, what you are going to implement 12 billion peso deal, there’s a gross disparity.

J3: In terms of infrastructure, especially telecoms, you then make a capital call.

Ar: We don’t like using a franchise to leverage capital.

J3: No, we already have options for two stockholders. And when when awarded through public bidding, then they’d subscribe…

Ar: Mendoza, Madrigal asked you, I ask you point blank: Any occasion, any time, where Mr. Arroyo told de Venecia to back off?

M: No.

Ar.: Are you sure?

M: Let me make amplifications, there was occasion where FG arrived… FG said to me, who is he? I said that is Joey, son of the Speaker. What is he doing here? And I explained he was following up contract, and FG asked, why is he doing that, he is the son of the Speaker, that is irregular? Then he just went away… Well, I’ve known FG, he’s a mild-mannered guy, I’ve never seen him, well, ah, angry…

Ar: You don’t have to elaborate. Favila, re: aborting this deal. This deal has caused so much stress, is it still worth it?

F: I was at meeting where Hu Jintao and GMA discussed ministers figuring this out. I met my Chinese counterpart I did mention there were issues, things that needed to be done back home, and even of cases where petitions were filed with SC, the Minister said he understood rule of law had to be observed, I would like to believe I got an opening when I reminded him we need to wait for SC ruling. Minister Bo Zi Lai, in my previous encounters, is a man who keeps an open mind… It’s worth exploring, at my level, I am prepared to bring up options with him and discuss them thoroughly, I just can’t second-guess how they respond.

Ar: Well if it takes SC two years to decide this, what happens to NBN? Nothing. To speed up something so we can move on, so we don’t have to keep investigating…

Mr. de Venecia… there’s allegation by Sec. Mendoza that Amsterdam does not have a track record. Let me ask you.

J3: We have a track record. We have 100 years of experience with combined people. More cell site installed by us than ZTE. Broadband Philippines. An 800 seat call center. Mobile information network. A paging network….etc., etc. I as a 44 year old professional, have raised funding from George Soros, etc… I have the respect of investors in New York and the Middle East… I am competent in raising infrastructure finance for projects that make sense…

6:45 Enrile: If you were not the son of the Speaker, and given the very thin capitalization of Amsterdam which on paper you don’t even own, an you explain to us why the government has entertained your NBN proposal? So much so that you have them a presentation?

J3: Our interest was Bulid, Operate, and Own, it has merit because it doesn’t require government to spend, borrow, or subsidize, and it’s going through a process that has existing rules and guidelines for investors to come to the Philippines and make proposals. We made unsolicited proposal which is the way to bring up something to government. Our capitalization for a company doing business development is a lot of money. But even if contract were rescinded and rebid, we’re no longer interested.

Enrile: Formoso, what was capitalization of Arescom?

F: 625,000.

En: You also entertained them.

F: Yes. We had to.

En: Why do you entertain?

F: With the understanding they would be funded by US EximBank…

En: Suplico, my godson, have you ever acted as lawyer for de Venecia?

Suplico: No.

En: No?

S: No.

En.: Ever been a lawyer of Broad Band Philippines?

S: No.

En: You owned Broad Band Philippines, de Venecia?

J3: I was a shareholder.

En: How many shares?

J3: In 1997, I became a shareholder…

E: how much?

J3: It varied. 1 share has chairman, when my American partners moved, I had to buy their stake…

En: I am a little bit sleepy. Before you sold, what was your holding?

J3: Roughly 65%.

En.: You never appeared as an owner…

J3: Company was incorporated in 1993.

En.: Your name appeared in stock transfer book?

J3: Yes.

En.: True that ZTE supplied equipment?

J3: Yes, but I sold to Sorianos, Ricky Razon, Ibazeta, Cuyukieng, etc.

En.: Remained profitable?

J3: Yes, I remained Chairman, they secured loan from ZTE… they have an outstanding loan, I’ve only attended three meetings… They have outstanding loan, but people running the company when I left were Friz Server and Ibazeta…

En: How did you become owner of Amsterdam?

J3: Was already a shell company, I was looking for holding company, I am beneficial owner…

En.: In all companies you end up being stockholder, your name doesn’t appear… Does Amsterdam Holding have power to invest in telecoms business?

J3: It’s an investment vehicle… If we were granted opportunity then we would increase capital and purchase franchises… This is process how we would address NBN. My understand from NTC is if we undertake project purely for government, it wouldn’t need a telecoms franchise. If we sold bandwidth, we would need to buy franchise, and we were looking at three companies.

En.: In Multimedia Telephony Inc., you did not appear as real owner. In Broadband Corp you did not appear as real owner. In Amsterdam also. Why submerge your identity in companies in which you had interest?

J3: Multimedia Telephony owns Broadband -it’s a brand. Amsterdam Holdings, as a businessman, and you might sympathize with me, I want some flexibility, when I know what I want to do, then I come in.

En.: Well, I’d understand if you weren’t son of the Speaker.

J3: My father is a politician. I am a purely professional businessmen. I’ve never asked my father for anything since I was in college. My name might open doors for me, especially abroad, but I am an independent businessmen with right to do business in the Philippines.

En.: To Mendoza. Who has control of effectuation of this contract. Purchaser, the Philippine side, or supplier?

M: Philippine side.

En.: And this will not proceed unless notice given by purchases of supply.

M: Yes.

En.: And this will only come when notice is given of effective date?

M: Yes.

En.: And that effective date will only come when all conditions have been satisfied.

M: Yes.

En.: So this is not truly a contract, because a lot has to be done for it to be a contract?

M: Yes.

En.: So up to now, this is a piece of paper. What in 2nd semester law school, is a contract in the process of becoming.

M: Yes.

En.: Until all conditions have been met, so nothing will happen.

M: Yes.

7:02 Zubiri: Formoso, you claimed it would be dangerous to give this to Amsterdam holdings, because it would use it to sell bandwidth to the public. Expound?

F: What Amsterdam would do is wait for award of contract then raise funds. That’s their benefit. What they’d have is executive performance undertaking, where government would be forced to go to them but they’d sell to the public, which is why their system is geared to

Z: Is this true?

J3: Our proposal was for government to have 25% savings on existing expenses. If I bill DOH 2,000 pesos, they can compare to market; if we aren’t lower by 25%, then they don’t have to pay us; but if we are lower by 25% then they have to pay us for that specific service.

Z: Being chairman of franchise committee in the House, there is a need for telecoms companies to get a franchise. Even then, they need concurrence if they buy. Would you be allowed to operate without Congressional franchise?

J3: I am aware. I’ve been in industry for a long time, I’ve met you and your dad because of your committee. Once we start selling to the public, we’d need franchise. What we need is a company with a particular spectrum, then we’d buy one those companies….

Z: The point, Joey, since we met long time ago, you’d have to get franchise. Under the law, you’d have difficulty, because you’d have to divest, being the son of the Speaker. To be fair, I’ve said no to people asking for a franchise. A word of caution, now there may not be a conflict of interest. But in the future, please be cautious.

To Mendoza/Formoso: On plan to get NBN from China, we’re giving out our entire communications network to a foreign entity; under Constitution there should be 60-40 provision of ownership, for the reason of security.

F: Well, you’d know where security breach took place, so people would be answerable, you could ask what happened.

Z: Can’t local companies do this? They’re crying foul.

F: Cost and security. On point of cost, we’d pay much more. Security aspect, better our servers for government information be in custody of government.

(Z. asks about obsolescence; 10-13 years lifetime F. says; Z. asks what’s to stop it being a monument to waste; F. says past deals were done at end of useful life of technology; but the NBN is at begining of useful life)

7:16 Zubiri: Mendoza, what is categorical answer. Has government spent a peso on this NBN to date?

M: Not a peso.

Z: To Andaya who is looking younger and younger, same question? A single peso released?

Andaya: Not yet.

Cayetano: By government, you mean. But ZTE could.

A: No, there’s no perfected loan. Even if true, we have no obligation.

7:18 Legarda rehashes previous question. Mendoza rehashes his replies.

7:26 Legarda: Is there an executive agreement or not?

M: Not yet. It’s still in process.

L: Even if the supply contract says there was an executive agreement signed?

M: This was explained by the one who wrote the contract, this may be explained by maybe there was some error… Uh, well, if the other party thinks it’s OK…

L: There is an admission by the executive that there was an error in which the document was drafted and signed?

M: Well, no, the executive agreement is under process…

(continued debate on “is” and “was” and differences in terms of English usage; Mendoza insists lawyer said intent of document was clear to both parties; Mendoza says there are many angles; government thinks, though, best angle to pursue is the Supreme Court, they will follow the rule of law…

L: Has there been any offer in kind or cash, of any bribe, offer, for approval of ZTE?

M: None.

L: Sure?

M: Yes.

7:32 Cayetano: When you went to China, did ZTE pay for your ticket?

M. No, my office.

C: So it’s not true that government hasn’t spent.

7:33 Pangilinan: Two issues. First, legality of contract. Second, was there corruption? Third, was Abalos broker? Fourth, if so, who was in it with him? Only the first question can be resolved by Supreme Court.

P: Who negotiated with China, and why didn’t they put loan agreement first and supply contract next, unlike practice with Japan and Korea?

M: That’s the rules in China.

P: Can we have copies of those rules?

M: Yes

P: So if the rules of China contravene our own, we’ll accede?

Andaya (jumps in): Can we ask what law was violated?

P: Procurement law.

A: The law you cited doesn’t cover this transaction. This transaction is covered by another law, since it involves funds from abroad.

P: Maybe so, if we knew what sort of thing this is, if it’s an executive agreement or not… If we’d had proper bidding, we wouldn’t have this problem. For example Nlex, or Maynilad, Sale of Fort Bonifacio… But those without transparency have problems.

Returning to Abalos. Mendoza said at Wack-Wack, Abalos was there. Did Abalos talk to you about ZTE?

M: No. Never.

P: So he was there by chance?

M: Yes, coincidence.

P: Formoso was at Abalos’ office, and de Venecia was there.

Formoso: Yes.

P: Abalos didn’t approach you to discuss ZTE when de Venecia was there?

F: No. We discussed project of Joey, NBN.

P: Yes, NBN.

F: Yes, but Joey and I discussed it but Abalos didn’t say anything.

P: So your were in office of Chairman. de Venecia was there. You were discussing NBN deal with de Venecia. But Abalos was there being quiet.

F: (heated reply: de Venecia was hounding me!)

7:43 Escudero and Andaya then grapple on procurement law; law states no distinction as to source of funds; Andaya says the IRR’s don’t make those distinctions; Escudero says the IRR’s, if that’s the case, contravenes letter and intent of the law; Andaya concedes!

7:46 Biazon rehashes Escudero’s points. Andaya concedes again. Cayetano asks very good question: as author of the law, what was your intention? Andaya concedes, yet again, that the law did not want to make distinctions. But that conditions and commitments to foreign institutions makes government submit to rules that differ from ours.

7:48 Estrada asks pointless question; Gordon is at the bat. Who set priorities for NBN?

M: Well, President said cybercorridor connecting entire country… Only way to do it is through NBN.

G: Didn’t anyone say there are higher priorities? Schools? elections?

M: There’s money for that.

G: Will you use NBN for computerization of elections?

M: No.

G: Makes me nervous, Abalos is there. Instead of computerizing elections he seems more interested in this broad band…

(rehash, rehash)

7:55: Gordon does point out that government has a broadband (fiber optic) backbone installed: Transco!

Formoso admits that yes, this is so: but it’s point to point, but what they want is a system that allows branching out in between; Gordon skeptical of the need for this, considering the least-developed municipalities don’t even have computers.

Gordon points out J3 knows big shots; J3 says he was invited by his dad to his dad’s house; that Mendoza was there to ask his dad’s help for his (Mendoza’s) son’s candidacy -the Lakas certificate- and it was then J3 mentions to Mendoza that he had a pending proposal; at which point Mendoza says the problem with your proposal is the Old Man is mad at you; which is why Mendoza then set up reconciliation meeting at Wack-Wack.

8:00 G: Why didn’t you report Abalos when he offered you a bribe?

J3: He said he was having his Last Hurrah. I told him telecoms isn’t sexy the way it used to be. What I said was you can be a director of company after you retire.

(Gordon then makes points about telecoms budget of government going down steadily; asks cabinet members with money that would be allocated, was it really priority or was it donor-driven, pushed by China but why not spend 15 billion pesos on something else? Mendoza says ICC and NEDA discussed it. Gordon makes pitch for money to be used for automating elections instead. Mendoza says well, we have case in SC and Ombudsman… Gordon then launches rant to point out foreign governments when they lend, insist what they lend is spent on their products)

8:06 Enrile: Is the reason you don’t put your name in companies you own, because there’s an anti-graft provision prohibiting you from engaging government clients?

J3: We’ve engaged government subscribers before, PECABAR never brought it up.

E: You knew anti-graft law proscribes you from getting interested in contracts where government money is involved.

J3:  Nope. I’ve been in business even before my dad was Speaker. And contracts signed when my dad wasn’t Speaker. And our proposal goes through a strict process in which my father is not involved.

E: But you are not allowed to be involved.

J3: No, the law says the officials cannot have discretion, and the process has to follow the procedures. My father never had discretion and all procedures were strictly followed as the law says.

(Enrile snorts and has to retreat: a rare occurrence that he was beaten on a point of law!!!)

8:11 Gordon and Formoso rehash details of why Transco fiber optic system exists, and why, then, NBN is needed.

8:16 Escuero points out Telof is office that will maintain NBN. 100 million budget and 700 million personnel allowance. Points out office to manage NBN is in current business of delivering telegrams and using bicycles.

8:18: Cayetano asks why CyberEd is required at additional cost when there’s NBN. Formoso can’t answer.

M: Sec. Lapuz will reply on that.

Formoso and Cayetano discuss why CyberEd is needed when NBN can carry video also; Cayetano asks why Formoso has spent hours trying to convince the public to support NBN, when he hasn’t tried to explain to Sec. Lapus that he could save  25 billion by using NBN instead of setting up CyberEd.

8:22 Cayetano asks Mendoza to repeat statements that FG is mild-mannered. When Mendoza repeats it, Cayetano says he obviously didn’t see FG losing cool during ethic hearings.

Biazon asks Formoso how many base stations Smart has; Formoso says ask NTC, companies view it as trade secrets. Biazon wants to know how many Globe, Sun, Smart have.

J3: NTC has that, each base station has a radio station license.

Biazon: I heard there’s 12,000… Anyway…

(Biazon then asks Formoso to attend wiretapping hearings)

B: So will you attend?

F: Of course I can’t say no.

B: Y-ees.

8:27 Cayetano brings up CITC plans 100% connectivity planned for major municipalities; 4th class by 2010; the ICT road map, then, meant private sector could do it by 2010. But then, he asks Formoso, why have you been telling us that private sector can’t do it? But this report says it was planned and seen as possible.

Formoso seems a bit stumped.

F: Well, it’s a road map, not a factual statement; but with NBN we are saying we will do it this way.

8:31 Pangilinan: Yes or No, Sec. Teves: You were interviewed on TV saying Chairman Abalos approached you on NBN deal.

Teves: Can I relate what happened? The first time Abalos called me was probably more than a year ago. When Ricky Carandang asked about that incident, I said I couldn’t recall. Upon further reflection, Abalos asked if he could bring businessmen but they were leaving; so I said Ben, is it OK to bring them over weekend? I had no idea what would be brought up.

What I did recall was meeting Chairman Abalos and Sec. Mendoza on broadband in Wack-Wack. As Sec. Finance, I thought it would be important for me to get information on this project.

8:35 Estrada: Why was contract rushed? Why did President go?

M: There were 5 contracts, and President was there because she was at Boa Forum, and we happened to sign.

E: And at a time when her husband was gravely ill?

M: Yes.

E: Are you aware of letter of Amb. Kenny?

M: No.

8:35 Roxas asks about fifth and sixth class municipalities… Mendoza says there’s plenty. Roxas says only 1,500 or so municipalities of all kind, so how many of the 5th and 6th class don’t have access? Formoso says we need to spend 15 billion to connect these? Formoso says they’ll send data. Roxas says, you defend this proposal so avidly, why don’t you know? Again, how many of these 5th and 6th class municipalities don’t have any telco access? This is why credibility is low; when we ask you actually how many municipalities stand to benefit from NBN, you don’t know! Mendoza, is it possible most municipalities already have telco access? Mendoza, we don’t have numbers, we can’t say right now. Roxas asks Formoso: there are 25,000 “end points” what are those? Formoso says, they’re base stations.

Roxas: basically antennas?

Formoso: Yes plus VOIP phone. Terminals.

R: So these terminals, what will they be like, these 25,000 terminals.

F: Small, just enough to have a surface to receive signals.

R: So wherever they are, within a certain radius, this is the transmitter people would use. According to your program, government offices, employees would use these antennas… Would private people use them?

F: No.

R: So within these 25,000 endpoints, all government agencies would use them, government-to-government; so from Senate we can call 5th class municipality.

F: Yes.

R: Why then, spend 330 million when we can reach them?

F: The level is not the connectivity we want.

R: So instead of 4 cylinder we want 12 cylinder.

F: More functional.

R: But functionality we want is what we use. If for example your records aren’t digitized, they can’t use VOIP.

F: But there’s VOIP.

R: We can videocam-

F: Not necessarily, just voice…

R: But then 330 million for an exclusive system, which only government would use? Why aren’t we more selective and specific in targeting spending, to bring those who really need it?

F: We’re sending you annexes…

R: You can’t answer, my experience is if proponents can’t answer immediately they don’t know the whole score. We’ve been here for hours. Is this really the best use for the money, for our borrowing capacity?

F: Back bone is only 18% of cost…

R: That’s 16 million dollars. That’s a lot of money… Mendoza, this Telof, this is one of the agencies slated for rationalization, isn’t it? I recall cabinet meetings where this was determined as an agency to be shut down.

M: Yes, part of the rationalization… Reduced and relocated.

(Roxas and Mendoza exchange opinions on government priorities and the while elephant known as Telepono sa Baranggay)

R: This seems to me a project in search of a rationalization.

8:52 Estrada: Sec. Teves, you admit you met Abalos and Mendoza.

T: Yes.

E: Mendoza claimed Abalos never approached you regarding NBN. So what did you talk about?

T: There was a meeting in Wack-Wack regarding NBN. There I was given information that I would meet ZTE officials. I was invited by Mendoza and Abalos would be at that meeting.

E: That meeting took place?

T: It took place, in a room near golfer’s verandah, it’s a small restaurant now.

Cayetano: More a huddle or a real meeting?

T: I came late. I had previous dinner. It was almost finished when I joined.

C: Date?

T: Can’t recall.

C: Mendoza?

Mendoza: ZTE called me, they wanted to meet at Wack-Wack. One issue was how it would proceed, ZTE said ChinaEximbank was ready. I said it should be DOF Sec. to talk about this.

C
: When?

M: Can’t recall.

C: What was Abalos’s role there?

M: He just happened to be there.

C: ZTE officials most likely weren’t members of Wack-Wack, so most likely you need a member to be there.

M: Well, the Chairman, he’s in and out of Wack-Wack…

8:56 Cayetano: Thank you. This hearing is suspended.

***
What now? What next? Some ideas in Uniffors.

For the technical aspects of things, go to Yugatech: Making Sense of the NBN Project.

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ON June 15, 2007, I wrote a blog entry titled “New Asian alliance,” pointing in turn, to an article by Brahma Chellaney, a professor of Strategic Studies at New Delhi University, titled Playing the new Great Game in Asia and beyond. The article said a new exploratory alliance, had emerged in our region:

A nifty new enterprise to discuss security dangers in the Asia-Pacific and evolve a coordinated approach — the Quadrilateral Initiative — has kicked off with an unpublicized first meeting. U.S., Japanese, Indian and Australian officials, at the rank of assistant secretary of state, quietly met recently on the sidelines of the ASEAN Regional Forum (ARF) gathering in Manila.

The emerging four-power alliance was aimed at China. Writing in the Asia Sentinel, Gavin Pao took a look at where that exploratory alliance is, at present:  Strategic Chess: Do four-power military exercises and the Shanghai Cooperation Organization foreshadow a new sphere of conflict? In it, the author writes  that a massive naval exercise took place at the same time as the APEC Summit. Participants in the exercise were members of the Quadrilateral Initiative -referred to in the article as the Quad Alliance- which has its own security focus, the Malacca Strait. That focus, in turn, represents a threat to Chinese interests:

All four Quad countries are keen to ensure that the Malacca Strait between Malaysia and Indonesia, the world’s busiest waterway, is kept free of threats. Roughly 30 percent of the world’s cargo trade passes through the strait and the need to ensure safe passage is certainly paramount. The strategic importance of the strait as a conduit for oil imports is sacrosanct to a number of countries, including China, Japan and South Korea.

However, with the Quad exercises being conducted with a heavy arsenal that included aircraft and submarines, it is clear that potential threats posed unconventional forces, like terrorists or pirates, have hardly been accorded first priority. Moreover, effective patrolling of the strait can be enforced primarily through close coordination between Malaysian, Singaporean, American and Indonesian intelligence agencies, without any need for substantial Indian or Japanese involvement.

The irony regarding the argument for protecting the Malacca Strait is that controlling it through a forum in which China is not involved effectively hangs a psychological noose over China’s head. Roughly 60 percent of China’s foreign trade and 75 percent of its oil imports also pass through the Malacca Strait, and it explains why China has been so aggressive in creating new transport outlets for itself away from the coast.

The story goes on to discuss how the various members of the Quad Alliance are responding to China, with Australia cozying it up with Beijing and other countries being more ambivalent. And how Beijing sees its prospects:

China, meanwhile, remains confident in its backyard, with much of the region under its sway. While ASEAN countries still look to the US as the region’s ultimate guarantor of security, Beijing has played a skillful diplomatic game in Southeast Asia, according the region top priority during a time when the United States has tended to take ASEAN for granted, as symbolized by Condoleeza Rice skipping several key ASEAN summits. Philippine President Gloria Arroyo even referred to China as a “big brother” at an ASEAN summit this year.

In contrast, if you look at my July 26, 2007 entry on the debate on where American commitment to Philippine security really stood, Filipino officials, like their Asean counterparts, get mixed and usually not very encouraging messages from the USA. American think tanks, on the other hand, are quite aware of the ebb and flow of American prestige vis-a-vis China in the Philippines, and have tried to influence official policy. But they’ve failed.

A reason may be that the Bush administration has nailed America’s future to Iraq: the American historian (and blogger) David Kaiser says the US faces a Turning Point so significant it represents the fourth great crisis of American national life:

The fourth great crisis of our national life is upon us. The first (1774-1794) created our republic; the second (1857-68, or 1857-72 in the South) preserved it; and the third (1929-45) made us a leading world power. Ever since Strauss and Howe published The Fourth Turning at the end of 1996, their readers have been speculating about when the crisis would come, and what it would be about. President Bush’s speech last Thursday, in my opinion, answered those questions. We now know the issue that the next ten years will decide: the nature of the United States’ role in the world in general and the Middle East in particular. We shall either emerge, for good or ill, as the world’s remaining imperial power living in a long-term garrison state, or we shall step back and begin to allow the world to take care of itself again.

There seems little place in this American crisis, for South East Asia. Which brings us to the Philippines and the administration’s “China card.”

Back in October, 2005, I’d pointed out in my blog (see IV, 2) that one political card the administration was playing, was the “China card.” This was most obviously played on July 8, 2005 when both Secretary Romulo and Speaker de Venecia (de Venecia, particularly insistently) said China supported the President.

This was at a time when the United States seemed ambivalent, at best, about the administration and was even suspected of maneuvering to kick the President out. China maintained an official posture of enthusiastic support for the President, and began giving token aid to the AFP, which traditionally, has been totally dependent on American assistance and thus, susceptible to American pressure. That assistance remains small, but China continues to increase it, little by little, as well as aggressively pursuing commercial contacts and official assistance, as demonstrated by the ZTE deal.

The President hasn’t been shy about singing the praises of China, just as China sees potential in Philippine investments to help supply raw materials. And of course it may be as simple as this: it’s easier, more pleasant, even more dignified, to do business with the Chinese than say, Europeans and Americans with their rhetoric about “transparency” and “honesty,” which the targets of Western preachiness tend to view as sanctimonious pap.

Our country and government is neither China’s biggest market or even a very large factor in the Chinese scheme of things. But influence is gained one small and big government at a time; what makes us important, in a sense, is if the UK and Japan served as super carriers for the projection of American power in Europe and Asia, the Philippines served as an escort carrier (when the bases existed) or escort destroyer (today) for the projection of American influence. In turn, Philippine governments tried to extract concessions from the US with varying levels of success.

Geopolitics is also domestic politics. China wants to be a Superpower, America wants to remain the only one, the Philippines, like Japan and indeed, also the rest of Asean, likes cozying up to America to counteract China, but China proves more attentive and generous than America… Domestically, the President has used China as a foil to America, and America seems to have resigned itself to realizing it needs the President, for now…

But think of this. The ZTE deal triggered a protest from the US Ambassador. The same deal has also reminded Filipino businessmen that contrary to their belief, up to this point, that the virtue of the President was she played politics ruthlessly, but unlike Estrada (and of course, Marcos) she intended to keep her hands off business, and in particular, big business. But the ZTE deal has intruded into the turf of big local players (PLDT and Globe, for one, the telecoms giants who could have profited from a national broad band scheme), as well as American business interests. So their hackles have been raised.

The easiest thing to do would be for the President to scrap the deal. But the Chinese have invested; if testimony is to be believed, money has exchanged hands. It becomes, then, a question of face. Face is something that is priceless; and if face is lost, the consequences go beyond dollars and cents.

This, then, is the dilemma of the government. Just as it’s begun to enjoy its cozy relationship with China, domestic politics has taken on an international dimension.

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And just like that, Mike Arroyo is back on centerstage, in his customary role as political arch-villain.

I realize that many people who have helped in Gloria Macapagal Arroyo’s four national campaigns have, in one way or another, a story to tell about The Husband. Now we have Joey de Venecia, the Speaker’s son, with his own story — not about a campaign but about an unusual meeting of heavyweight political players. Unfortunately for Mike Arroyo, the young De Venecia, even with all the political baggage burdening him, came off today’s Blue Ribbon-plus hearing as very credible indeed.

Manolo did a yeoman’s job in liveblogging the hearing; Inquirer.net’s news report is I think already on its third update. Veronica Uy writes:

De Venecia said Abalos told him, “I forgive you for your sins.” But De
Venecia said he did not react and instead proceeded to explain the advantages of his company’s proposal — that it would cost the government nothing in terms of a sovereign guarantee, equity, or subsidy.

De Venecia said that it was here that Arroyo approached him and with a finger that was about “two inches from his nose,” told him to “back off.”

De Venecia said he took the First Gentleman’s words to mean that “iwanan mo na itong proyekto [leave this project].”

De Venecia said when he tried to explain how his company’s proposal was more superior to that of the ZTE Corp., the First Gentleman stood up and left.

And that, at least for Mike Arroyo, appearing like the deus ex machina itself in that “reconciliation” meeting at the Wack-Wack Golf Club sometime in the middle of March, was that. As far as I can make it out, those two words — “Back off!” — were the only words Mike Arroyo said to the Speaker’s son (by his first wife).

“Back off!” The First Gentleman may have left for a “two-week European vacation” (or so one of his doctors said late today), but he will find that when he comes back those two words will retain their haunting quality, their eerie intimation of a vengeful ghost about to wreck an overlong political banquet.

PS. PCIJ has Joey de Venecia’s opening statement.

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