GOTCHA By Jarius Bondoc, The Philippine Star,Monday, September 17, 2007
Outcry swelled against the contentious ZTE deal the past two weeks. And what did President Arroyo finally say about that useless, costly $330-million (P16-billion) exclusive government broadband setup? She screeched that, “we must be a government that honors contracts and agreements that go through the required processes, despite media attacks.”
Arroyo in effect spelled out the official line. All the gripes of telecom experts, businessmen, state economists, sidelined competitors, legislators, and the
Trouble is, she can hardly say that it went through right procedures.
Long have legal beagles been warning that the deal breaks at least eight laws:
First is the Build-Operate-Transfer Law. Rival Amsterdam Holdings Inc. had filed in Dec. an unsolicited proposal to build the broadband system on its own. But the Dept. of Transportation and Communications sat on its papers beyond the 60-day deadline 60 days to initiate a study. When AHI began complaining in Mar., another bidder Arescom Inc. of
Then there’s the 1995 Telecoms Development Act, which ordered government to move out of the industry and privatize its networks. The ZTE deal would return government to the telecoms business — in unfair competition with private firms.
The Procurement Reform Act requires that all public contracts go through open bidding for the best price and quality. The justice department bent the implementing guidelines to declare the ZTE deal a government-to-government agreement that supposedly needs no bidding.
The Omnibus Election Code bans government offices from awarding any supply or service contract during the election period, lest a political party or candidate be unduly favored. The ZTE deal was signed Apr. 21, right smack during the congressional campaign.
Comelec chief Benjamin Abalos admitted traveling to Shenzhen four times last year on ZTE expense. The Anti-Graft and Corrupt Practices Act forbids government officials from receiving gifts of value. More so, if the gift is from a person or company trying to bag a government contract. The law further prohibits transactions grossly and manifestly disadvantageous to the public interest. Yet the government would spend $330 million on ZTE’s supply, versus Arescom’s $135 million and AHI’s offer to spend in its own $240 million at no risk to government.
The deal breaks the constitutional rule of transparency in all public transactions. DOTC officials have refused to give out copies of the contract, at first saying nothing, and then claiming supposed theft of “the only two copies,” and finally alleging confidentiality of proprietary information.
In hiding the contract, the DOTC further breaks the Anti-Red Tape Act. The law requires government agencies to produce within ten days documents needed by taxpayers. For months, DOTC officials have not bothered to even reply to requests for copies of the reconstituted contract. (Sec. Leandro Mendoza says he will ask the Supreme Court for permission to speak about the contract. It would be easier if he just gives out copies and let the document speak for itself if it truly is, as he claims, regular.)
Lastly, the deal breaks the constitutional rule of prior Monetary Board consent to borrow for any government project. By
Aside from legal issues, nagging questions confront President Arroyo about this fishy deal. For one, why did she allow the DOTC to sign a direct supply deal, coupled with a state loan that needs sovereign guarantee? This, when she insisted in a Cabinet meeting in Nov. that the broadband project be done by B-O-T, so no cost or loan to government.
Why did economist Arroyo allow her propagandists to bill this project as fresh investment from
Why is so important about a project deemed useless by experts, that Arroyo would leave a very sick husband to witness the contract signing in Boao,
Perhaps the answers to the questions lie in the Official News Release No. 5 that Malacañang issued on that fateful contract-signing day of Apr. 21:
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