JDV details secret Arroyo-ZTE meeting
By Juliet Labog-Javellana
Philippine Daily Inquirer
First Posted 01:04:00 11/23/2008
Filed Under: Graft & Corruption, Government, Politics, NBN deal
MANILA, Philippines—Benjamin Abalos was thoroughly at home in the ZTE headquarters and hogged the discussion on the National Broadband Network project. President Macapagal-Arroyo made no comment and her husband, Jose Miguel “Mike” Arroyo, hardly said a word.
But after lunch, Mike Arroyo suggested a formula that would eventually see the awarding of the NBN project to the Chinese telecommunications company.
This was how former Speaker Jose de Venecia Jr. recalled a secret meeting on Nov. 2, 2006, at the headquarters of ZTE Corp. in Shenzhen, China, which, he said, sealed the $329 million (P15 billion) project that was mired in controversy and eventually scuttled.
And he has a “family picture” of that meeting in Shenzhen to prove his claim.
The Pangasinan congressman talked about the secret meeting in his biography, “Global Filipino: The Authorized Biography of Jose de Venecia Jr., the Visionary Five-Time Speaker of the House of Representatives of the Philippines.”
The biography to be launched in Washington, D.C. this week and written by veteran American journalist Brett M. Decker, an editor of the Wall Street Journal in Hong Kong, devotes several chapters on the scandals in the Arroyo administration.
De Venecia, who was ousted as Speaker in February, or months after his son and namesake blew the whistle on the alleged overprice and kickbacks that attended the NBN project, has promised to testify on Monday at the House deliberations on the impeachment case filed by his son Jose “Joey” III, Iloilo Vice Gov. Rolex Suplico, lawyer Harry Roque and the mothers of three missing activists.
The grounds cited in the fourth impeachment case against Ms Arroyo include the NBN-ZTE project, the P728-million fertilizer fund scam, the alleged bribery of congressmen to support a weak impeachment complaint, and human rights violations.
‘Backroom Mike’
In the book, De Venecia said that after a round of golf and lunch at the ZTE headquarters, the President changed her policy of undertaking the project on a BOT (build-operate-transfer) scheme to a government-to-government contract that required a Philippine government loan guarantee and was awarded to the Chinese telecommunications company.
Joey de Venecia’s firm Amsterdam Holdings Inc. was sidelined in the NBN project. He later testified in the Senate that Mike Arroyo had bullied him to “back off” from the project, and that Abalos, then chair of the Commission on Elections, had offered him a huge bribe to walk away.
In the book, De Venecia indicated that the President’s influential husband had a role in the “backroom negotiations” that favored ZTE.
“Big Business on the Putting Green” was how author Decker described the Shenzhen incident based on De Venecia’s recollections.
Game of golf
On All Saints’ Day of 2006, while he was on vacation in Hong Kong with his wife Gina, De Venecia was invited by the President to play golf with her and her husband in Shenzhen.
He was then Speaker and a staunch ally of Ms Arroyo who backed her against moves for her ouster at the height of the “Hello, Garci” electoral fraud in 2005.
He had no idea that they were going to play the next day at the ZTE golf course and have lunch at its offices.
De Venecia said that during the one-and-a-half-hour drive to Shenzhen across the border from Hong Kong, Ms Arroyo initiated a discussion on the NBN project, where she “made clear in no uncertain terms ... that she wanted the NBN project undertaken privately by build-operate-transfer.”
“She praised my son, Joey, for his BOT proposal,” De Venecia said. “As the original proponent of the successful BOT law in the Philippines, which became a model for other Third World countries, I fully agreed with the President’s position on the NBN project, and I thanked her for her kind words about my son.”
Surprises
But he was in for a couple of “surprises,” De Venecia said in the book.
The “first surprise” that greeted him on arriving at the Shenzhen Golf Course at 8:30 a.m. on Nov. 2 was the “dusky and amiable” Abalos, who led the group of Chinese personalities in welcoming the President’s party.
De Venecia said Abalos, who quit his Comelec post at the height of the scandal late last year, introduced his companions as officials of the telecommunications company, the purported “main bidder” in the NBN project.
They ate rice porridge and shrimp dumplings before proceeding to the fairways.
The book continued:
“Then came the second surprise: Abalos led the discussion on various matters but primarily he talked about the ZTE group and its capabilities.
“The Speaker had the growing sense that Abalos was thoroughly at home in Shenzhen—so at home, in fact, that as the President and her party stood up to tee off, Abalos announced that lunch would be served at ZTE headquarters, and it would feature the well-known Shanghai crabs, which were then in season.”
Absent reporters
After the golf game, De Venecia and the other Filipinos arrived at the ZTE headquarters at past 2 p.m. and were welcomed by its officials.
The same officials presented Ms Arroyo a bouquet of flowers and took her on a tour of the ZTE showrooms and products.
De Venecia noted that the Malacañang Press Corps was “conspicuously absent.” (The Shenzhen visit was a side trip to Ms Arroyo’s visit to China, which was covered by the press.)
At the ZTE executive dining room, the book said, the guests were seated at a big roundtable for 10 to 12.
Ms Arroyo sat between her husband and ZTE chair Hou Weigui; De Venecia sat between Hou and ZTE international president Yu Yong; Abalos sat directly across from De Venecia and flanked by two senior ZTE officials.
“At that lunch, the Shanghai crabs were cooked as excellently as promised, and lunch being at three hours past noon, we all had good appetites,” De Venecia said.
Abalos leads discussions
According to the book, “Abalos was virtually monopolizing the discussion. He pointed out how much the Philippines needed to modernize its telecommunications capabilities, just as China is doing, and how ZTE could help provide the Philippines with good equipment and technology.”
For the first time, the NBN project was discussed “and De Venecia could not forget what Abalos and the ZTE officials assured the President,” the book said.
“They said that the broadband project could be financed by the China Export-Import Bank under terms similar to the project loan of NorthRail.”
“I didn’t comment on that suggestion. Nor did I hear any comment from Mrs. Arroyo. As always, the First Gentleman said hardly a word,” De Venecia recalled.
Sticking to her word
On the way back to Hong Kong, the President said that if Abalos and the ZTE officials were interested in the NBN project, they should submit a BOT proposal “competitive with” the proposal of Joey de Venecia or other companies.
“In other words, the President was continuing to stick by her word that the expensive project should not cost the Philippine taxpayers any money,” De Venecia said.
He added: “But when the President and her group returned to Hong Kong, before they disembarked from the coaster, the President’s husband began suggesting that the best formula would be for a government-to-government loan, even if the Philippine government then would have to take a project loan from China with a Philippine government guarantee, to be paid by the Filipino people.”
“Backroom negotiations” after the meeting led to the junking of the government’s BOT policy and the awarding of the contract to ZTE, according to the book.
Turning point
It said De Venecia thought the trip to Shenzhen was the “turning point” for ZTE, which was awarded the project four months after the President’s visit.
“That was the first and last time I talked about the NBN project with the President,” De Venecia said. “In hindsight, I would say I was brought to Shenzhen to play golf and have lunch with the President, the First Gentleman, Abalos and the ZTE officials, to show that the father of the owner of one of the companies interested in the NBN project was cooperating with them. This they did to redeem whatever promises they may have made to ZTE and other persons involved in the project,” he said in the book.
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