New witness links Mike Defensor
Madriaga: He brokered kickback of First Couple
By Dona Pazzibugan, Juliet Javellana
Philippine Daily Inquirer
First Posted 01:42:00 02/29/2008
Filed Under: NBN deal, Graft & Corruption
MANILA, Philippines -- Michael Defensor, a former chief of staff of President Gloria Macapagal-Arroyo, played a key role in the $329-million broadband deal with China’s ZTE Corp. besides giving Rodolfo Noel Lozada Jr. P50,000 to allegedly keep him from testifying on the anomalous contract in the Senate.
Senate witness Dante Madriaga disclosed Thursday that Defensor took part in discussions on the National Broadband Network (NBN) deal purportedly to look after the First Couple’s financial interest.
At the hearing conducted by the Senate blue ribbon committee’s technical working group (TWG), Madriaga said Defensor attended the meetings of the group of then Commission on Elections Chair Benjamin Abalos Sr., who has been accused of brokering the deal, to discuss the “commissions” for Malacañang.
Battery of questions
Madriaga’s latest disclosure was still part of his Senate testimony as he submitted himself Thursday to a battery of questions before the TWG, composed of the legal staff of senators.
The TWG asked Madriaga to substantiate his impromptu testimony at the Senate hearing on Tuesday at which he named the President and her husband, Jose Miguel Arroyo, as part of the “Greedy Group plus plus” that demanded huge kickbacks which jacked up the cost of the NBN project from $130 million to $329 million.
At the TWG hearing, Madriaga handed over a document called “National Broadband Network Project Overview Statement” signed by Howard Xue on behalf of ZTE and Leo San Miguel and Madriaga as consultants.
He also gave a copy of an undated memorandum of understanding on several projects, including the NBN, between ZTE International Investment Ltd. (sister company of ZTE Corp.) and the Philippine government.
It was signed by Yu as then president of ZTE International Investment and Trade Secretary Peter Favila, and by ZTE Corp. chair Hou Weigui and Defensor, who was then the presidential chief of staff, as witnesses.
In a brief interview after the hearing, Madriaga said he was told that Defensor was present at the meetings in which the Abalos group and ZTE officials discussed under-the-table matters.
Asked if they were talking about “commissions,” Madriaga replied: “Yes, ang pinag-uusapan doon, ‘others.”’
He stressed, however, that he saw Defensor at a meeting only once.
Defensor denied Madriaga’s claim. “That’s a total falsehood. I don’t know how much he is being paid to say those things,” he said in a phone interview.
Defensor said he was not present at a meeting attended by Abalos and ZTE officials at the Wack-Wack Golf and Country Club sometime in June 2006. “No, I haven’t sat down with the ZTE people,” he said.
Madriaga said he saw Defensor at that meeting in Wack Wack.
“I don’t know him. I’ve never seen him. I’ve never spoken to him. I don’t know where he’s coming from. From what I heard, he’s been asking money for his testimony and the Inquirer even printed that,” Defensor said.
$181M in kickback/profit
Claiming to be a ZTE technical consultant to the project, Madriaga said the First Couple along with ZTE Corp. and the group of Abalos stood to pocket a total of $181 million in kickbacks and [profit] from the Chinese government loan that would have financed the project.
Madriaga said he saw Defensor at a meeting on June 18, 2006, at Wack Wack in Mandaluyong City. [Abalos served as president of the Wack-Wack golf club and mayor of Mandaluyong.]
The witness said the meeting was attended by Abalos, his chief of staff Jimmy Paz, his associates Ruben Reyes, former police official Quirino de la Torre and former Home Cable owner Leo San Miguel.
ZTE executives Yu Yong and Fan Yang were also at the meeting, according to Madriaga.
He said the ZTE officials and the Abalos group were just beginning their discussions at the time.
He said he only saw Defensor once but his [Madriaga’s] immediate boss, San Miguel, had told him that Defensor was at the other meetings of the group up to October 2006.
Asked what Defensor’s involvement was, Madriaga said: “Tinitignan niya kung ano ang ginagawa dito para sa Palasyo (He was trying to determine what the group was doing for the Palace).”
He was not asked to elaborate.
No hand in deal
At the Senate hearing on Feb. 11, Defensor insisted he had nothing to do with the NBN deal.
Defensor defended his act of giving Lozada P50,000 on Feb. 6, the eve of Lozada’s press conference at La Salle Green Hills in Mandaluyong City, saying it was for “pamalengke” (grocery money).
Lozada said Defensor told him to deny that he had been abducted by government agents on Feb. 5 to prevent the Senate security staff from taking him into custody. At the time, Lozada was facing an arrest warrant for ignoring summonses to attend the Senate investigation of the deal.
Letter to commerce minister
At the hearing, Defensor said he merely wanted to help Lozada, whom he considered a friend. It was Defensor, when he was environment secretary, who had recommended Lozada to head the Philippine Forest Corp., an attached agency under the Department of Environment and Natural Resources.
Defensor Thursday said his only involvement in the NBN project was when he wrote a letter in November 2006 to the Chinese commerce minister, Bo Xilai, in his capacity as presidential chief of staff.
“My letter was very official. It purely stated that we have this project, and we understand that Chinese companies are interested. But that was my last act (concerning the project). After that, I was never involved anymore,” Defensor said.
He said the NBN proposal went through the process of approval by the National Economic and Development Authority (NEDA).
Defensor said he knew nothing about the allegations of overpricing and bribery.
On Nov. 21, 2006, Defensor wrote Bo to verify and confirm the interest of Chinese companies “in arranging a comprehensive solution, to include financial and technical support, for the development and implementation of the NBN and the Distance Learning Project of the Philippine government.”
Info on kickbacks
In response to Defensor’s letter, Chinese Ambassador Li Jinjun wrote back on Dec. 2, saying that the Chinese government intended to support the NBN project and that China had designated ZTE as the contractor.
Madriaga said he got his information about the kickbacks from his immediate boss, San Miguel, such as the $30-million advance purportedly given to the First Couple after the President witnessed the signing of the supply contract between Communications Secretary Leandro Mendoza and then ZTE Corp. vice president Yu Yong in Boao, China, on April 21, 2007.
Aside from the $30 million, Madriaga said San Miguel told him that their group had previously received $11 million in advances from ZTE.
Defensor resigned his Palace post in February 2007 when he ran for senator in the May 2007 elections. He became the presidential chief of staff in January 2006 after his stint as environment secretary.
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