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Arroyo couple sued over NBN-ZTE scandal

MANILA, Philippines (Dec. 30, 2011) - The Office of the Ombudsman filed graft cases against former President Gloria Macapagal-Arroyo, her husband Jose Miguel Arroyo and two former officials in connection with the NBN-ZTE scandal that errupted in 2007.

The NBN-ZTE deal became a by-word that refers to the aborted $329-million national broadband network (NBN) deal between her administration and ZTE Corp. of China and was a subject of a senate investigation.

Facing charges with the Arroyos are former elections chairman Benjamin Abalos and former transportation and communications secretary Leandro Mendoza.

But the Office of the Ombudsman, which filed the case, found no probable cause to indict the four for plunder. Unlike plunder, violation of the anti-graft law is a bailable offense.

Mrs. Arroyo is under hospital arrest, without bail, for electoral sabotage. Party-list group Bayan Muna filed the plunder case against the Arroyos.

“That contract was abrogated so there’s no damage done,” Mr. Arroyo told The STAR, referring to the NBN contract.

Ombudsman Conchita Carpio-Morales approved the recommendations of a special panel of investigators indicting the former first couple and the two former officials for violating Sections 3(g) and 3(i) of the Anti-Graft and Corrupt Practices Act. She said the four should be held accountable for entering into a contract that was “grossly disadvantageous” to the government. Based on the report of the special panel, the cost of the cancelled NBN project should have only been $130 million.

Carpio-Morales also filed a third criminal case for violation of Republic Act 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees against the former president.

“GMA (Gloria Macapagal-Arroyo), despite knowledge of the irregularities, authorized Mr. Mendoza to sign the contract in her behalf. By affixing his signature in the contract, Mr. Mendoza was put on notice of those irregularities that led to its signing, given that it was DOTC, of which he was then Secretary, which approved the recommendations of the BAC (Bids and Awards Committee),” the special panel of investigators said in its report.

“The signatories to the NBN-ZTE contract are criminally culpable. The moment a public official signs a grossly disadvantageous contract, he incurs criminal liability even if the contract has been cancelled,” the report read.

Explaining the inclusion of the former first gentleman in the list of respondents, investigators noted his “unusual interest in the transaction, as gathered from his acts of playing golf and having lunch with ZTE officials in Shenzhen, China, and initiating a reconciliatory meeting between (Jose) De Venecia III and Mr. Abalos” who had different proposals in mind on how the NBN project should be carried out. De Venecia, a son and namesake of a former speaker, is a businessman engaged in telecoms development. “His (Mr. Arroyo) active intervention, as reflected earlier, in the transaction makes him a conspirator in the approval of the ZTE’s proposal and the eventual signing of the contract,” according to the Ombudsman investigators.

The investigators also noted that a day before the signing of the contract on April 20, 2007, “GMA was already fully aware of all the irregularities attendant thereto” but still “fast-tracked the conclusion of the contract.”

“That GMA gave her imprimatur to the irregular and grossly disadvantageous contract should dissipate any doubt about her personal interest therein,” their resolution read.

In indicting the former president, the Ombudsman also cited her having played golf and had lunch with ZTE Corp. officials in China.

“Indeed, it cannot be gainsaid that GMA’s acceptance of the invitation for a round of golf and lunch with ZTE officials in Shenzhen, China during the pendency of the negotiations towards the consideration of the grant of the ZTE proposal constitutes a violation of Section 7(d),” the special panel of investigators said.

Photographs of Arroyo playing golf in China came out shortly after the NBN-ZTE transaction was exposed in 2007. This further fueled speculations that the Arroyos were directly involved in the transaction.

Presiding Sandiganbayan Justice Francisco Villaruz Jr. set the raffling of the case on Monday next week after New Year’s Day.

In the same resolution, the investigators said that based on testimonies of three witnesses, there is not enough basis to indict the Arroyos and former administration officials for plunder.

The complainants led by Bayan Muna Rep. Teddy Casiño and former Gabriela representative Liza Maza had claimed that the Arroyos along with other individuals including former National Economic and Development Authority (NEDA) director general Romulo Neri received $35 million in commissions and kickbacks from ZTE Corp. in exchange for the approval of the NBN deal. Aside from De Venecia, the other witnesses were Dante Madriaga and Leo San Miguel, a consultant to ZTE. The witnesses presented their testimonies before the Senate then hearing the NBN controversy. But the testimonies of the three, according to the Ombudsman, “cannot tend to prove that money changed hands.”

“We can, of course, draw inference from them that, among other things, Mr. Abalos was the one who lobbied and pushed for the ZTE proposal, and the one who received the alleged kickback,” the resolution read.

“GMA may appear to have used her position to fast-track the ZTE contract, but there is no sufficient evidence to link her to the receipt of the alleged payment of commissions (and or) kickbacks,” it said.

Reacting to the filing of the cases, Mr. Arroyo said they cannot be held liable because the NBN deal didn’t push through. “Also why was she (Mrs. Arroyo) charged, when she did not sign it (contract). There is no contract so there is no corpus delicti,” Mr. Arroyo said.

He said he and his wife would likely be surprised by the filing of the cases. The former leader has been banned from using mobile phones and laptop computers while under detention at the Veterans Memorial Medical Center. Mr. Arroyo said they would have to consult with their lawyers in January to study their next move.

Meanwhile, Malacañang welcomed yesterday the filing of criminal charges against former president Macapagal-Arroyo in connection with the allegedly overpriced NBN deal.

“The Filipino people have long been waiting for closure and this is the process by which we as a people can get closure,” deputy presidential spokesperson Abigail Valte said in a press briefing.

Valte said it would be up to the Office of the Ombudsman to explain the cases it decided to press against Arroyo.

Asked whether the arrest and detention of Arroyo on charges of electoral sabotage could be considered as the administration’s biggest achievement in the fight against corruption, Valte said not necessarily because a lot of efforts had been exerted to cleanse the government.

Meanwhile, lawyers of Mrs. Arroyo yesterday arrived at the Pasay court for a hearing on their petition for bail only to find out that Judge Jesus Mupas is on leave until Jan. 6.

“We really do not begrudge the judge for going on leave but when one is handling a case where the accused are detained, he should have given it a priority,” Arroyo’s lead lawyer Jose Flamiano told The STAR.

But Flaminiano’s team, through co-counsel Laurence Arroyo, had been informed by the court last Monday that Mupas was already on leave and could no longer tackle their motion for bail. He will report back to work on Jan. 9, 2012. Flaminiano said given the urgency of their pleadings, Mupas should have cut short his leave or gone to work on a half day just to hear the petitions.

“Something could have had Mupas arrive. Say, he could have set the hearing for the first working day next year,” said Flaminiano.

Flaminiano added that he suggested to clerk of court Joel Pelicano for Mupas’s substitute judge or the executive judge to preside over the hearing yesterday “but both of them were not around also.”

Flaminiano said he is appealing to Mupas to cut short his vacation so they can tackle their motion for bail on Jan.2.

“We cannot really compel him but we hope he shortens his leave so we can tackle the motion for bail,” said Flaminiano.

Electoral sabotage is a nonbailable offense but an accused can seek bail proceedings.

Mupas earlier turned down Arroyo’s request for furlough from Dec. 24 to Jan. 2 for security reasons.

“Besides, this would avoid possible unnecessary security problems and complaints of residents of La Vista who would be subjected to security restrictions once Arroyo is allowed to stay at the exclusive subdivision for the holidays,” he explained. (From