Lozada: Gloria Macapagal-Arroyo wanted $329-M deal for Abalos

MANILA, Philippines—Witness Rodolfo “Jun” Lozada on Tuesday testified that then President Gloria Macapagal-Arroyo had told Romulo Neri to give the $329-million National Broadband Network (NBN) project to then Commission on Elections Chair Benjamin Abalos.

Lozada made the statement in a Sandiganbayan hearing in the course of being grilled by Abalos’ lawyer, Gabriel Villareal, on his role in the project to digitally connect government agencies nationwide, particularly on his request to Abalos to cut the latter’s purported commission from the deal to $65 million from $130 million.

Neri was then secretary general of the National Economic and Development Authority. Lozada was his technical adviser.

Neri and Abalos are undergoing trial in the Sandiganbayan on graft charges in connection with the fraud-tainted NBN deal.

Lozada said Arroyo, now the representative of Pampanga’s second district, had wanted Abalos to get the deal. “The President has given instructions, as Secretary Neri made me understand, that the project must be given to Chairman Abalos,” he said.

In an earlier testimony before the antigraft court, Lozada said Abalos—who, he said, was working with the project proponent, ZTE Corp. of China—asked him to protect his $130-million commission in the project.

The deal with ZTE Corp. was eventually scuttled in the face of a public outcry over the alleged overpricing.

<strong>‘Don’t leave’</strong>

On Tuesday, Lozada said he had wanted to leave the project because of Abalos’ purported threats, but that Neri told him not to do so in order to prevent the “theft” of the $130 million.

“Sabi nya, wag ka na umalis dyan. Pag umalis ka, buong-buo yan mananakaw nila (He told me, ‘Don’t leave the project. If you do, they will be able to steal the whole amount’),” he quoted Neri as telling him.

“At that time, I accepted the logic of Neri,” he added.

Justice Jose Hernandez asked Lozada if that meant that it was OK to steal as long as the government would still save money.

The witness said he did not agree with the way the statement was posted.

Lozada was also asked if he wondered why Neri did not just come out to say that the project should be canceled because the government would lose money on it.

He replied: “That was one of the reasons I believe Secretary Neri said the former President was evil.”

Lozada also said Neri had told him of informing Arroyo about his (Neri’s) being offered P200 million to approve the project. He said that despite the information, Neri was instructed that the project should still be approved.

<strong>‘Permissible zone’</strong>

Lozada was also asked about his earlier testimony at a Senate committee hearing in which he referred to a “permissible zone” and a “forbidden zone” when it came to his moral psychology.

Villareal asked the witness if the alleged $65-million overprice in the NBN deal was within his “permissible zone.”

Lozada said what he considered permissible was small percentages. He also said he and Neri could not do anything about the $65-million overprice.

Villareal then said Lozada had proposed the $65-million margin to the NBN proponents.

Still under questioning by Villareal, Lozada said Abalos had told him at the Wack Wack Golf and Country Club in Mandaluyong City that if the NBN deal would be approved, Abalos would allot P200 million for Neri.

Lozada quoted Abalos as saying that this would be unlike the case of other people he was talking with, who would have to wait for the loan proceeds.

He said he told Abalos that he and Neri should be the one to talk about it. He also told Neri about Abalos’ offer, but said he could not recall Neri’s reaction.

Villareal said that in an earlier testimony, Lozada claimed he could not recall any violent reaction from Neri.

The lawyer added that the significant testimony was the lack of any violent reaction.

Abalos has been charged in the Sandiganbayan in connection with his taking an interest in a project that was not related to his duties as Comelec chair.

<strong>South Rail project</strong>

Villareal also asked Lozada to confirm his earlier testimony that there was an overprice in the South Rail project, where he had participated.

He asked whether Lozada did anything about it.

Lozada said he had reported the matter to Neri but that he could not recall exactly when.

Villareal also asked Lozada to confirm if he was acting as Neri’s technical adviser even when he was working for the government as head of Philippine Forest Corp.

Lozada replied in the affirmative.