Friday, February 29, 2008

Was down payment released to ZTE?

GOTCHA, Published in The Philippine Star, Friday, February 29, 2008

Many Catholics regard their bishops’ statement too weak on the ZTE scam and attendant admin attempts to silence whistleblowers. Angrier ones are resorting to church protests. E-mail is spreading to not give to Offertory collections during Mass in dioceses where bishops are perceived to be pro-Gloria Macapagal Arroyo.

The discontent stems from a misconception of the bishops’ role in the two People Power revolts of 1986 and 2001. Manilans wrongly think that all bishops called for the ouster then of despot Ferdinand Marcos and grafter Joseph Estrada. In truth only Cardinal Jaime Sin and his auxiliaries in the then-gigantic Archdiocese of Manila (now cut up into four) led the street protests. And only a few other bishops elsewhere supported them. The rest of the prelates then, as now, steered clear of the political act of calling for a President’s resignation.

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At any rate, today’s bishops do come around to seeking something political — the repeal of Arroyo’s Executive Order 464. For them the order, which requires executive officials to seek the President’s written consent to appear in any congressional inquiry, is a bar to the truth. Search for freeing truth is the moral bar that bishops crossed into politics. They believe that if unfettered by E.O. 464, Sec. Romy Neri and more may speak freely about the ZTE scam and other anomalous Chinese projects.

Malacañang is set to ditch the order to appease the bishops. But it will be an empty victory for the latter. For, even without E.O. 464, Arroyo can still compel her Cabinet members to raise “executive privilege” to keep mum about everything. “Executive privilege” is a constitutional right of the President and her subordinates. It is what Neri invoked in the Senate last Sept. to avoid disclosing what Arroyo told him after he reported to her a P200-million bribe offer. “Executive privilege” is what the Supreme Court will define on Mar. 4, in Neri’s constitutional question if the Senate can compel him to break it.

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Common sense tells us that executive privilege cannot be used to cover up crime. Too, that it cannot be invoked if it comes into conflict with the people’s right to know matters that concern them directly.

For instance, Malacañang cannot hide behind executive privilege if the question is asked: has the government paid any down payment to ZTE?

This query stems from a pesky Article 8 of the DOTC-ZTE contract of Apr. 21, 2007. It stipulates that a 15-percent down payment is to be made “within ten days from contract effectivity.” And since the contract is worth $329.48 million, that 15-percent down payment is all of $49.4 million.

From the context and wording, that amount was to come from the DOTC, and not from a forthcoming loan from China Export-Import Bank. Official development assistance customarily treats down payments as the contracting government’s counterpart funding for a project. This is to ensure that only bona fide clients get the loans. And so the DOTC must answer: has it paid ZTE $49.4 million?

If so, the deal was consummated before Arroyo announced its scrapping in Sept. Incidentally, Malacañang has yet to show any document as proof of that cancellation.

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The $49.4-million down payment glares all the more in light of Dante Madriaga’s testimony at the Senate. The former ZTE technical consultant revealed that the Chinese firm released $41 million in three parts to its Filipino lobbyists. The first $1 million supposedly came in Aug. 2006, as representation allowance. The next $10 million came in Mar. 2007, after Neri’s NEDA endorsed the ZTE project. A final tranche of $30 million came after the contract signing on Apr. 21, 2007. Madriaga swore that the First Couple got half of each release. The lobbyists would have received another $5 million, making it a total of $46 million, had they gotten Joey de Venecia III to back off as competitor.

The figures $41 million and $46 million are too close for comfort to the $49.4-million down payment required by ZTE. The latter figure begins to look like a reimbursement for what Madriaga called “advances”.

ZTE of course denies having bribed any Filipino official. But it did incur huge expenses in preparing financial papers and engineering designs, and presenting these to the Philippine government in five-star hotels and first-class diners. Yet ZTE today has not claimed damages from the contract cancellation. Could it be because the government already paid $49.4 million in taxpayers’ money?

Executive privilege cannot bar Malacañang from answering that basic question of public interest.

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E-mail: jariusbondoc@workmail.com