Arroyo denies graft charges in broadband deal with China firm | Inquirer News

Arroyo denies graft charges in broadband deal with China firm

/ 02:21 PM July 11, 2016


Former President and now Pampanga Rep. Gloria Macapagal-Arroyo. INQUIRER FILE PHOTO

Former President Gloria Macapagal-Arroyo filed a demurrer to evidence to the graft charges against her in connection with the anomalous National Broadband Network (NBN) contract with Chinese firm ZTE.

Arroyo, now a Pampanga congresswoman, filed her demurrer to evidence after she was granted leave by the Sandiganbayan Fourth Division to file the legal remedy to dismiss the evidence presented against her before the court by the prosecution.


READ: Court allows Arroyo bid to discredit evidence in graft raps


Arroyo was charged with two counts of graft for approving the deal despite being disadvantageous to government and despite knowing its irregularities. She was also accused of having personal gain in the contract.

The former President was accused of violating Section 3(g) of the Anti-Graft and Corrupt Practices Act when she allegedly fast tracked the approval of the project despite being disadvantageous to government.

Arroyo was charged with graft with her husband, former First Gentleman Jose Miguel Arroyo, and former Commission on Election chair Benjamin Abalos, who the prosecution alleged both used their influence to facilitate the approval of the project.

Arroyo was charged with a second graft offense for violating Section 3(i) of the anti-graft law when she allegedly approved the NBN project for personal gain despite knowing the irregularities in the project.

READ: Arroyo pleads not guilty 3 times to NBN-ZTE graft raps

The prosecution said among the anomalies Arroyo knew was the attempt of Abalos to bribe National Economic Development Authority (Neda) Secretary Romulo Neri with P200 million to immediately approve the project despite  lack of public bidding.


Lastly, Arroyo was charged with one count of violating the Code of Conduct and Ethical Standards for Public Officials and Employees or Republic Act 6713 for having lunch and playing golf with ZTE officials while the broadband project proposal was still being assessed by government.

READ: What Went Before: The NBN-ZTE deal

Arroyo was accused of violating Section 7(d) of the Code of Conduct which penalizes solicitation or acceptance of gifts in connection with any transaction of government.

The 2007 NBN-ZTE project would have interconnected government offices nationwide through broadband technology.

Disadvantageous contract

In her first graft charge, Arroyo through her lawyers said she could not be held liable for violating Section 3(g) of the Anti-Graft and Corrupt Practices Act or for entering into the contract grossly disadvantageous to government.

Arroyo said the prosecution failed to present any witness who saw the NBN contract which the prosecution presented to the court signed and executed by the parties.

She added that the prosecution violated the Best Evidence Rule when it only presented a photocopy of the NBN contract and failed to present the original contract or even a certified true copy.

“President Arroyo respectfully submits that this case should be dismissed on the ground alone that the prosecution failed to present the original or certified true copy of the NBN contract, the corpus delicti under the (anti-graft law),” Arroyo said in her demurrer.

She added that the terms under the contract were not fulfilled especially after Arroyo cancelled the project at the height of the controversy on Oct. 7, 2007, or before the complainant Teodoro “Teddy” Casiño filed the complaint before the Ombudsman.

Arroyo cited the case of then Davao City Mayor and now President Rodrigo Duterte, who in Feb. 1996 faced a graft information for an anomalous 1990 computerization contract to make Davao City a leading computer hub.

But Duterte cancelled the project and asked the contractor to return the money the city government downloaded for the project, just before state auditors recommended rescission of the project.

Arroyo cited the case which was dismissed because Duterte had cancelled the project and could not be held liable for the graft offense because there was no longer any disadvantageous contract to speak of.

“The prosecution’s argument is contrary to the ruling in Duterte vs. Sandiganbayan. The cancellation of the contract before the filing of the complaint with the Ombudsman renders it non-existent,” Arroyo said.

Arroyo also said the prosecution failed to prove that the contract was disadvantageous to government.

She said the prosecution allegedly failed to prove that the ZTE contract at 30 percent coverage in the country was more disadvantageous than the proposal of bidder Amsterdam Holdings Inc. (AHI) (represented by its president Jose “Joey” De Venecia III, the son of former Speaker Jose De Venecia Jr.), whose proposal the prosecution claimed was more advantageous because Amsterdam promised 80 percent at a lesser cost.

Arroyo said the prosecution’s own witness Engr. Dante Mariaga testified that the ZTE’s proposal was to cover 100 percent of the country, while De Venecia also admitted that Amsterdam’s proposal covered only the third class municipalities while leaving out the fourth to sixth class.

She said another prosecution witness Ruben Reynoso, director of the infrastructure staff at Neda, testified that the NBN contract was meant to cover 100 percent of the country.

Arroyo added that the contract was actually advantageous to government because it was consistent with the Medium Term Philippine Development Plan, with witness Reynoso categorically saying that the NBN project was “not disadvantageous to government.”

Arroyo also said she did not fast track the approval of the project which she said went through several layers of review before reaching the Neda board, adding that “fast tracking” a project is not even an element of graft under the law.

Arroyo also said her directive to Commission on Information and Communications Technology chair Ramon Sales to modify the NBN proposal by removing the overlapping components with the Cyber Education Project actually saved the government P3.84 billion.

“All told, President Arroyo’s directive to remove any overlap between the NBN and Cyber Education projects and for the economic managers to look into the terms of financing of the NBN project by aligning it with the Cyber Education Project saved the government a whopping P3.84 billion… Yet the Ombudsman charged her with conspiracy to violate Section 3(g) of the RA 3019? What gives?” her demurrer read.

“This is a clear case of persecution rather than prosecution,” it added.

Pecuniary interest

On her second graft charge, Arroyo said her move to “modify” the NBN contract by “reducing the project cost” “negates the charge of ‘interest’ for ‘personal gain.'”

“If she had been interested in the NBN project for personal gain, she could very well have insisted on pushing through with the NBN contract,” her demurrer read.

Arroyo also slammed as “malicious” the prosecution’s claim that her presence during the contract signing was unnecessary (although she had delegated the task to the late Transportation Secretary Leandro Mendoza) which meant that she had a personal gain in the project.

She said the prosecution failed to prove that Arroyo had knowledge of Abalos’ alleged P200 million bribery on Neri to approve the ZTE proposal.

Arroyo also said she reduced the project cost to $330 million from $379 million, resulting in $39 million or close to P2 billion in savings for government.

She added that her directive to modify the NBN proposal also reduced the interest rate to three percent from four percent, saving some P164 million a year or P1.64 billion for a period of 10 years for the government.

Lastly, Arroyo slammed as persecution by prosecution the move to pin on her the alleged offense even though the Neda board unanimously voted to approve the NBN-ZTE project. Arroyo chaired the Neda board.

“This is a clear case of persecution rather than prosecution. It was the Neda board that unanimously approved the NBN project. Yet the Ombudsman maliciously singled out President Arroyo for supposedly ‘becoming interested’ ‘for personal gain’ in the approval of the NBN project,” Arroyo said.

Lunch, golf with ZTE

On her breach of code of conduct charge, Arroyo said the prosecution failed to prove that ZTE paid for the lunch and golf game with Arroyo or if the value of the these meetings with the officials was significant enough for ZTE to ask favors from Arroyo.

“It is absurd to suggest that the fee for the golf game was given in anticipation of or in exchange for the granting of a multi-million peso project… The value of the lunch eaten by President Arroyo could not have been substantial or significant, even if she had a big appetite,” Arroyo said.

She added that the Sandiganbayan has no jurisdiction over the case because the supposed lunch and golf were held abroad.

“Here, since the ’round of golf and lunch’ took place abroad, then following the well-recognized and well-established principle of territoriality in Criminal Law, the Honorable Court has no jurisdiction over the offense charged against President Arroyo,” Arroyo said.


Besides the NBN-ZTE charges, Arroyo was detained for plunder over the alleged misuse of P366 million in charity funds for personal gain.

Arroyo has since been denied bail and demurrer, and she has elevated her case to the Supreme Court. She is under hospital detention.

READ: Sandigan denies Arroyo move to junk evidence in PCSO plunder case

On the other hand, Abalos had been acquitted of his separate graft case for allegedly brokering the deal with China in exchange for a $130-million commission.

READ: Ex-Comelec chair Abalos acquitted from graft over NBN-ZTE deal 

Abalos was found not guilty of violating Section 3(h) of the Anti-Graft and Corrupt Practices Act, which penalizes having financial and pecuniary interest in the transaction between government and the Chinese corporation ZTE.

The court said the prosecution failed to prove that Abalos lobbied the deal for a fee, adding that the prosecution was only able to prove that Abalos brokered the deal between Amsterdam’s De Venecia and ZTE and not between government and China’s ZTE.

Abalos was accused of bribing AHI President Jose De Venecia III with $10 million for his firm to back out from the project so that ZTE would bag the contract.

Abalos would later ask De Venecia for a partnership with ZTE for the latter to supply the transmission equipment, which De Venecia later ruled out, opting to continue its project proposal for the broadband deal. RAM/rga

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

READ: Arroyo pleads not guilty 3 times to NBN-ZTE graft raps

TAGS: Broadband, Chinese, FIRM, Graft, NBN, ZTE Broadband

© Copyright 1997-2024 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.