MANILA, Philippines -- China?s ZTE Corp. has advanced a total of $41 million to a ?greedy group? to ensure that the government?s national broadband network (NBN) contract would be given to the telecommunications firm, a new witness in the controversy told the Senate.

At the same time, Dante Madriaga, a former consultant of ZTE on the NBN deal, said of the alleged $200 million contract overprice, half would have gone to a ?Filipino group? and the other to the ?Chinese group.?

Madriaga identified members of the ?Greedy Group Plus Plus? as resigned poll chief Benjamin Abalos, Ruben Reyes, Leo San Miguel, retired General Quirino Dela Torre, and the ?First Couple.? He called Abalos, Reyes, San Miguel and Dela Torre as the ?Gang of Four.?

?From the very beginning I knew that they (First Couple) were part of it. My boss (Leo San Miguel, a former owner of Home Cable) said that ?we are protected, nothing will block us,?? Madriaga said at the Senate hearing.

He said the information was given to him by both San Miguel and ZTE Corp.'s Fan Yang, who disbursed the money.

Asked by Sen. Jinggoy Estrada who was the greediest of the group, Madriaga said: ?Since I am in the Senate, the First Couple is involved here.?

Malacañang Tuesday night dismissed Madriaga?s testimony as ?hearsay.?

Anthony Golez, deputy presidential spokesperson, said Madriaga?s claims were ?no different? from the allegations made by another Senate witness, former NBN consultant Rodolfo Noel ?Jun? Lozada Jr.

?These ?allegations by installment? unless proven through the process dictated by our laws would only remain as allegations. We also find it difficult to believe a mere technician-consultant of a company would know so much about the President or her family,? Golez said.

Lozada confirmed that Ruben Reyes, who is secured by the Presidential Security Group, was also responsible for wiretapping against crime and terrorism.

The new Senate witness said ZTE had advanced $41 million to the Filipino group in three installments.

The first tranche was $1 million released in August 2006 (for representation); the second was $10 million in March 2007 as success fee after the National Economic and Development Authority (NEDA) approved the project; and the third was $30 million after President Gloria Macapagal-Arroyo attended the signing of the contract in Boao, China, and this amount was to be used ?in aid of elections? or support for administration candidates in the May 2007 national elections.

Madriaga said the $100 million that would have gone to the Filipino group was to be equally divided between Abalos' group and the First Couple.

The Filipino group even disputed the 50-50 split with ZTE because it felt that the Chinese company was earning more considering that it was the manufacturer of some of the equipment to be used for the project, according to Madriaga.

ZTE initially offered to undertake the broadband project, which sought to digitally link government offices nationwide, for $130 million.

The cost was based on the original proposal of the American firm Arescom, Madriaga?s former employer.

At $130 million, Madriaga said the actual project cost was only $50 million, with ZTE and Filipino group getting $40 million each.

?It (the actual project cost) is small. ZTE wanted to overprice it only by $25 million, but ZTE had to give in to what the Filipinos wanted,? he said.

Arescom offered to undertake the project with a wider coverage.

To match Arescom?s specifications, Madriaga said ZTE raised the project cost to $189 million, with $109 million in kickbacks split evenly between the Chinese firm and the Filipino group.

The project cost was raised a third time to $269 million to increase the coverage with the kickbacks rising to $140 million ($70 million each for ZTE and the Filipino group).

The project cost was jacked up a final time to $329 million ostensibly to ensure full nationwide coverage.

The final cost raised the kickbacks to a whopping $170 million.

Madriaga claimed he did not get any money because he had no participation in the transactions. ?I only wanted them to pay me,? he said.

?The kickbacks would grow exponentially at $329 million,? said Madriaga, a communications engineer who used to package projects for the Department of Transportation and Communications.

He said the release of the advances did not go smoothly.

At one point, Fan Yang, ZTE executive director, got irritated because the Filipino group could not control Jose ?Joey? de Venecia III, head of Amsterdam Holdings Inc. (AHI) that proposed to undertake the NBN project on a build-operate-transfer scheme.

?ZTE asked: What kind of support are you giving when you can?t handle one person?? said Madriaga, who said he met with Fan 15 to 20 times.

Madriaga said the ?Greedy Group? had also asked for $5 million for De Venecia. The AHI head walked out of a meeting in China so the payoff did not push through.

?If Joey and the group would agree, they would give the $5 million to Joey,? he said.

Madriaga said he was at the Wack-Wack Golf and Country Club in Mandaluyong City during the ?back off? confrontation between De Venecia and the President?s husband, Jose Miguel Arroyo.

?I was not inside the private room? but ?I heard First Gentleman cursing when he stormed out,? he said.

?P... i... bata to mahirap pakiusapan ([Curse] It?s difficult to make a request to this kid),? he quoted the President?s husband as saying. ?I heard it personally when he left. He was wearing a barong Tagalog.?

Lozada also linked the President?s husband to the deal.

Madriaga said the meeting took place on Dec. 4 or 5, 2006.

?That was the time when the First Gentleman was confined in the hospital,? Golez countered. ?(This) destroys the credibility of Madriaga instantaneously,? he said.

?(I)t is the height of absurdity for Madriaga to allege before the Senate that the First Gentleman was off and running playing golf on Dec. 5, 2006, right on the very day of his discharge from St. Luke?s,? Arroyo?s lawyer Ruy Rondain said in a statement.

Madriaga said he met Abalos three or four times with Reyes, Dela Torre, San Miguel and the Chinese. He said that in one meeting, he saw Abalos with former Presidential Chief of Staff Michael Defensor.

Madriaga said Fan was afraid of being fired if nothing came of the project.

?But Fan Yang said ZTE will not give out the money ($30 million) until we see your President in the contract signing. That is the only reason why the President went to Boao,? Madriaga said.

Ms Arroyo flew to China to witness the signing of the deal on April 21, 2007, leaving her husband who was then recuperating from open-heart surgery at St. Luke?s Medical Center in Quezon City.

The $329-million NBN contract was signed by Communications Secretary Leandro Mendoza and ZTE vice president Yu Yong.

Two weeks after the signing, Fan expressed the hope that it would all go smoothly, according to Madriaga.

?She was replaced recently because ZTE was cleaning house,? he said.

An Arescom official, Steven Lai, first offered the NBN project to ZTE, which then contacted a daughter of Abalos, according to Madriaga. (Abalos? daughter has a business in China.)

Then Comelec Chair Abalos and his neighbor, Reyes, got in touch with his buddies De la Torre and San Miguel.

Madriaga said it was Reyes who got the $1 million and $10 million through the Hong Kong account of his Cayman Islands firm, the designated clearinghouse for the Filipino group.

?I am not privy to the cash disbursement. There are no ?bayong bayong (native bag) ? of cash delivered here,? he said.

Only Abalos and Reyes got a piece of the first payoff of $1 million. Both got the lion?s share of the kickbacks, while De la Torre and San Miguel had to divide the balance, according to the witness.

Madriaga also claimed that half of the $10 million went to the First Couple, while the rest was divided among the other members of the Greedy Group and several Cabinet secretaries.

He said he was 110 percent sure that he would stand by his testimony. ?If I turn around, my children will kill me,? he said.

Asked to described Fan, Madriaga compared her to Sen. Loren Legarda, ?not as beautiful but with bigger bumpers,? drawing laughter from the audience.

?She looks typical Chinese, in her mid-30s, 5 feet 3, 5 feet 2, with short hair. A little heavier than Senator Legarda,? he said.

He said he was ZTE consultant and partly liaison officer from May 2006 to March 2006, reporting directly to San Miguel.

Madriaga said he had long wanted to testify in the Senate but was afraid for his life, especially for his seven children.

Sen. Panfilo Lacson moved to summon the Gang of Four, specifically Reyes and San Miguel.

De la Torre (a classmate of Lacson) has a terminal disease, San Miguel is still in the country, and Reyes left for the United States in October last year, according to Madriaga.

?If I know 80 percent, Leo San Miguel can give you 100 percent,? he said.

Sen. Aquilino Pimentel Jr. said he would invoke the extradition treaty to force the witnesses who fled to the US to come back.

Contrary to the government?s claim, the NBN contract was not lost as claimed by Telecommunication Assistant Secretary Lorenzo Formoso III at a business forum in Makati (on June 21,2007), according to Madriaga.

Madriaga said it was San Miguel who told Formoso to tell the businessmen demanding a copy that the contract was lost.

?It?s impossible for it to be lost [because there are soft copies]. The telecom group (Globe, Smart and Digitel) were the ones asking and they know the pricing,? he said.

Madriaga said the flaw in the contract was the pricing, and not technical or legal aspects.

?The scope of work was straight to the point, and telecoms people know how much the services and the equipment are,? he said.

Testifying without a lawyer, Madriaga refused to authenticate the documents he submitted to the Senate, including a newspaper column which he said could be used by the senators as a guide.

Earlier in the day, Deputy Executive Secretary Manuel Gaite told the Senate the P500,000 he gave Jun Lozada through his brother, Owe, came from an uncle who loaned him money to renovate his parents-in-law's house, where he and his wife were staying.

But Gaite said he did not volunteer the money to Lozada, claiming that the request for funds was ?initiated? by the former government consultant who had sent a text message to him.

"This was initiated by Lozada...I believed him. I pitied him," Gaite told the Senate that was investigating allegations of corruption over the $329 million national broadband network contract between the government and China?s ZTE Corp.

Gaite said he gave the money out of pity and belief in Lozada who at that time he thought was in London.

"There's no rational justification. I was moved by my faith and conscience," he said.

Gaite said he only asked Lozada?s brother to sign a paper confirming receipt of the money.

But the senators expressed disbelief that Gaite had given such a big amount of money to someone he claimed to have met only twice.

But Gaite said that when he decided to give the money to Lozada, ?it didn?t occur to me that it would be a loan or what. I just thought that when Jun comes back, we will just talk about it.?

Senator Alan Peter Cayetano asked, ?Why that big? Why to someone you?re not even close to??

?I cannot believe that a lawyer of your caliber would give out that big amount of money just like that,? Pimentel said.

?Your cavalier attitude [toward that big amount] is not OK with me,? Pimentel added. ?There are loose ends to your story.?

When asked why his story differed from what his boss, Executive Secretary Eduardo Ermita, had said about the money having been given by private donors, Gaite clarified that the funds came from his wife?s sister, and his uncle, Melquiades Gaite, to whom an inherited lot in Bicol would eventually be sold.

He explained that he would get money from his uncle whenever needed.

?So you?re making a liar of your boss, Secretary Ermita?? asked Lacson. ?You?re so generous.?

Gaite reiterated that ?no government fund was used.?

Recalling his ties to Lozada, Gaite said he met the former government consultant through ex-socioeconomic planning secretary Romulo Neri.

Reacting to Gaite's testimony, Lozada admitted that he had sent a text message to Gaite seeking help because he was running out of funds and said he didn't think the money was a bribe for him not to testify before the Senate.

?I don?t remember saying it was a bribe?I never said that it was a bribe,? Lozada said. ?I was always clear to government friends that I was in Hong Kong,? he said.

Lozada said he came home on February 5, a day after his brother got the money from Gaite because that was the instruction of Environment Secretary Jose ?Lito? Atienza.

Lozada authorized the Smart and Globe telecommunications companies to reveal the text messages between Lozada and Gaite, Lozada and Neri, and Lozada and Atienza.

Earlier on Tuesday, the Senate deliberated on whether an order of arrest against airport and police officials implicated in the alleged kidnapping of Lozada, the key witness in the NBN controversy, should be issued after they snubbed for the second time the Upper Chamber's invitation.

On the motion of Senate President Manuel Villar, the Senate will ask the uniformed personnel to show cause why they should not be cited in contempt.

Senate Majority Floor Leader Francis Pangilinan clarified that the Senate would then decide if the response would be acceptable before an order of arrest would be issued.

Those who were not present were: Police Security Protection Office's Chief Superintendent Romeo Hilomen, Senior Superintendent Paul Mascariñas, Chief Inspector Julio Gorospe, Senior Police Officer 3 Lou Ochea, Senior Police Officers 2 Glicerio Gallinera, Jaime Halog, Nelson Malto; Senior Police Officers 1 Jose Batotoc and Igmedio Suela, Police Officers 1 Mauro Lim Jr., Julio Ponta-oy, and William Quililan;

Chief Superintendent Atilano Morada and Rodolfo Valeroso of the Aviation Security Group, and Manila International Airport Authority's assistant managers retired Brigadier General Angel Atutubo and Engineer Octavio Lina.

These witnesses were scheduled to testify this Tuesday when the Senate resumed its investigation on the NBN fiasco.

A few minutes before the start of the inquiry, Senators Lacson, Manuel Roxas II, Rodolfo Biazon, Cayetano and Pangilinan debated whether to accept Dante Madriaga as a witness.

Cayetano said Madriaga's credibility had not been established, but Lacson said he was willing to vouch for him.

Lacson said senators could ask Madriaga about the alleged P5 million to P10 million the latter allegedly wanted in exchange for his testimony.

At the same time, Cayetano said the three committees hearing the broadband deal would have to assess Pimentel's proposal to have Reyes, San Miguel, and Jimmy Paz, Abalos's former chief of staff, extradited from the United States, if indeed they are there.

He also said the committees leading the inquiry would also study Senator Francis Escudero's proposal to initiate a court case for a hold-departure order on all those mentioned in Madriaga's testimony if they are here.

"Until then, we would have to contend having them put on the Bureau of Immigration's watch list," he said.

While he believes in general what Madriaga testified about the kickbacks, Cayetano said he has to be cautious about believing it hook, line, and sinker because of allegations that Madriaga, through brokers, asked for P5 million to P10 million. With a report from Christine O. Avendaño