Liveblogging ZTE hearing

Prior to 10:00 am: Jose de Venecia III, complete with mullet, lounging in Senate session hall.

Platitudes from Cayetano.

Platitudes from Roxas.

Enrile says he has a paper that purports to be the contract, and that it’s non-binding on anyone.

Enrile vs. Cayetano (Allan) and Escudero on points of contract law. Very interesting! Escudero asks for subpoena duces tecum to ask government for all documents mentioned in the paper Enrile read.

10:05 Roxas rues absence of government officials.

10:07 Cayetano reviews Senate

Secs. Mendoza, Favila, Neri, claim there are cases pending in court so they cannot testify under principle of sub judice.

Chairman Yu Yong of ZTE can’t be located.

Lorenzo Formoso of DOTC is a no show

Ramon Sales is present.

Jarius Bondoc is present.

Jose de Venecia III is present.

Vice-Gov. Rolex Suplico, petitioner before Supreme Court is present.

10:09 Enrile asks witnesses be placed under oath. They’re sworn in.

10:10 Cayetano goes over housekeeping rules. Biazon clarifies if Sales occupies any government position. Sales says he resigned in May and was accepted in June.

Escudero says sub judice cannot be accepted by Senate as an excuse for non-appearance. Adminisitrative, civil, or criminal ongoing cases, a long line of decisions says, cannot be used to avoid appearance before Congress. He is prepared to file subpoeanas ad testificandum if they don’t appear today.

Pimentel chimes in that it’s not good to see recalcitrance so early on.

10: 14 Escudero changes his comment to a motion to issue subpoeans ad testificandum. Pimentel seconds motion.

Lacson asks a protocol question: order of arrival of senators? (huddle, huddle)

Cayetano reads list of senators who are present, according to when they showed up, apparently for early bird brownie media points.

10:16 Jarius Bondoc reads his opening statement. He’s ready to cooperate. But stresses he will need to protect identities of his sources. He submitted yesterday all his published articles on the matter. Attys. Joseph Tan and Allan Guevara serve as his counsels.

10:17 Ramon Sales: his point of view business point of view; concern is rising telecoms costs of government, which stands at 4 billion pesos a year. For next 20 years, which is period covered by NBN, that would be 80 billion pesos. ZTE proposal would have reduced costs by 1 billion a year from 4th to 20th year, saving 17 billion. At cost of 63 billion, assuming cost of telecoms to government would be constant. 330 million dollar loan would translate to higher or lower values, depending on when computed. First 3 years at 4 billion; 4th and 5th years because of grace period; 6th, 900 odd million; total 34 billion cost so even more savings; that’s why they support ZTE deal.

10:21 Suplico: Contract 330 million US or 16 billion pesos. Payable over 20 years, after grace period of 5 years. Opposes a contract he hasn’t seen, and doesn’t agree with, and so, he filed case in Supreme Court.

10:22 Joey de Venecia (after encouragement from Cayetano to name mystery man). Enrile buts in, asks if witness has affidavit, asks for copy. Back and forth between JDV3 and senators: comments on is this the affidavit, yes it is, sure? yes, sure, let’s xerox, ok, but if we xerox, initial each page, sure, ok, wonderful…

10:26 Neri sent letter saying he had to attend hearing with Angara, but that even if in Senate, he has to abide by Memorandum Order 108, which requires him to secure presidential permission. Pimentel says guards should be posted at Angara committee room and bodily bring Neri to committee hearing. Senate has to insist on its prerogatives.

Enrile asks if subpoena has been issued and has it been defied? Otherwise, as of now, status of Neri was he was invited, and so, no compulsory process to be defied; coercive power of Senate would be improper at this time.

Pimentel modifies move and says let’s issue subpoena and serve it immediately, and prevent Neri from leaving before it can be served. But Cayetano says, the committee of Angara has adjourned and no one’s there. Enrile has no objections, but asks chair to rule can Senate detain anyone without benefit of a subpoena? Cayetano: Enrile is correct, a subpoena has to be issued; sargeant-at-arms can only inform Senate if Neri is around, and tell Neri to expect a subpoeana. Senate will not assume Neri will defy subpoeana.

10:31 Arroyo: we must be careful and circumspect about subpoenas, lest Supreme Court hears we break our own rules. We have to vote on issuing a subpoeana. And it requires notice. And we cannot expect immediate compliance, everyone given a chance to think it over, and never to be rushed. Enrile chimes in that when he came in the morning, the CHED budget hearing was almost over, and so let it not be suggested Angara’s hearing was terminated in anticipation of the ZTE hearing.

10:34 Cayetano, we will follow rules, subpoeana will be signed by committee chairman and then by Senate President, no compulsion on Neri immediately, but in time for him to attend next Thursday. For the record, Neri left Senate 10 minutes ago. Pimentel asks if Neri’s going to Hongkong. Cayetnao says that’s a mystery to him.

Cayetano says normally Senate doesn’t go this far, but claims of sub judice and EO 464 compels Senate to issue subpoeanas; Pangilinan suggests subpoeanas be issued to everyone who failed to appear. Biazon reminds peers of 3 day rule, so subpoeana won’t apply either. Cayetano says let’s discuss it later. Points out also, that Chairman Abalos has not formally replied, only media reports he won’t show up, so Abalos should be included.

10:37 Back to JDV3: only at the tip of this “abdominal iceberg” and only tip of the massive mountain. Unwittingly exposed he was, he claims, to ZTE deal. In 2006 Amsterdam Holdings filed proposal under BOT LAw. But there wuz rigging afoot! Since he was original proponent, he was approached by unlikely but very powerful person, offering technical partnership to push deal through. Eventually persuaded, badgered, and cadjoled, to fly to China to discuss partnership. There he found out, early as then, it was overpriced by a 100% or 130 million dollars to accomodate kickbacks. Official had temerity to name “my president” GMA, and dear old dad, as recipients of kickbacks. He wuz shocked! Offended! Aghast! Pulled aside the high official -the Comelec Chairman- to remind him neither the president nor the speaker was aware of intricate technological details. He could not stomach the fact that “my president” and dear old dad would be dragged into a deal with kickbacks.

He had reservations then, concerning ZTE’s proposal to piggyback on his proposal. His group had offered technically superior proposal, and neither he nor foreign partners would accede to graft, corruption, or massive plunder! He told his partners of his refusal to partner-up with ZTE. Shortly after these conversations, he received enraged call from Senior High Official: how did you know? Official shouted he had cellphone was bugged and could send JDV3 and JDV transcripts. JDV3 said, go ahead. No transcript ever arrived.

Leandro Mendoza encouraged patching things up. JDV3 said ok, I’ll attend reconciliation meetings. “Mystery Man” was at one of them; his (Mystery Man’s) participation remains unclear to me. It appears AHI’s unsolicited proposal was shelved in favor of ZTE. While I don’t care anymore, my company has filed motion for details of ZTE deal to be made public. Beyond that, I have no more interest in NBN project.

Am I sourgraping? If this deal goes through, it’s loss of entire Filipino people! I have an affidavit, detailing graft, corruption, and betrayal of public trust! I have named that Senior high Official in my affidavit, and hereby name it before you, under oath: it was Comelec Chairman Benjamin Abalos! He pushed for ZTE deal! He stool to receive kickbacks from colossal overpricing! He shouted at me! Bugged me! Threatened to have me and Jarius Bondoc killed! And when daddy said let’s drop the deal, it was Abalos who countered, “that means Joey would win!”

I cannot deny it was First Gentleman Mike Arroyo at the reconciliatory meeting. He’s the Mystery Man. But I dunno if he has anything to do with the deal. I don’t want to malign anyone. My apologies and regrets to ret. police Gen. Edgar de la Torre who I mistakenly named as part of abalos’s cabal. It was ret. gen. Quirino de la Torre who accompanied Abalos.

But aside from that, I stand by contents of my affidavit.

10:51 Chairmen waive their questions.

Jinggoy Estrada begins questions. Clarifies -what does your president and your speaker know? JDV3: they don’t know technological complexities, but they’re aware of deal.

Estrada points out President went to China to witness signing of deal. Bribe offer of 10 million dollars made in December.

Estrada, are you aware of consequences of this? Do you intend to bring down Arroyo administration? JDV3 I don’t intend to do that? What of compromising your dad’s position?

JDV3: my father is a staunch ally, this transaction is independent of that relationship.

Estrada: you said, Mystery Man was Atty. Arroyo. When did you first see him?

JDV3: earlier this year, Wack-Wack, it was Atty. Arroyo with Abalos, Jimmy Paz, Quirino de la Torre, Ruben Reyes and Leo San Miguel.

Estrada: What were exact words Atty. Arroyo told you?

“Back off,” says JDV3.

Estrada: “Back off” were exact words? In presence of Abalos, etc? I have a waiter friend there, can you demonstrate how it was done?

May I use seatmate as model? (giggle) shoves finger in face of Suplico and yells, “Back off!!”

Estrada: so what did you say?

JDV3: My deal’s better! No sovereign guarantee! No cost to government! But while I was talking to him, he stood up and went to other side of conference table and I ended up talking to nobody.

11:00 Lacson weighs in. To your knowledge, was there any other instance, here or abroad, where Atty. Arroyo met with Chairman Abalos or ZTE officials, if so, when and how did you know?

JDV3: To my knowledge, I dunno. Only saw him at Wack Wack.

Lacson: Supply contract signed by Sec. Mendoza, which we all have a copy, signed in presence of the President. Mention was made of letter of Sec. Neri, which is in complete contrast to his statements to technical board, where Usec. Formoso endorsed ZTE deal. What made Neri change his mind, when after opposing it he then endorsed and signed it?

JDV3: Dunno protocol rules of NEDA ICC board. Neri approved ZTE NBN broadband deal.

Lacson: The finger, the finger, two inches from your face.

JDV3: Close to two inches.

Lacson: What did he mean back off what, back off where?

JDV3: For us to withdraw BOT application from DOTC.

Lacson: Meaning of back off?

JDV3: You know, back off-

Lacson: Don’t join na?

JDV3: Yeah, don’t join… But when I explained he refused to listen and just left me.

Lacson: In fairness to Gen. de la Torre. Here’s two pictures, one of them belongs to del la Torre who is here and an old pal from PNP. Can you identify who these people are? (hands photos to aide)

JDV3: Picture to my right is Edgardo de la Torre. He was not present. This person is Quirino del la Torre. He was present in all meetings concerning this project.

Lacson: his participation?

JDV3: Just listening, like the others…

Lacson: Your affidavit. Dec. 2006, Kempinski Hotel meeting, Abalos showed you a ZTE draft proposal. 262 million dollars. Covering only 30% of entire country. So if it covered entire archipelago would price treble?

JDV3: Yes.

L: How do we account for increase? Hainan signing by Mendoza, 329 million plus plus, how did 67-68 million get added?

J3: Dunno, number surprised me, was expecting 262 million dollar.

L: Familiar with change order clause? Wuzzat?

J3: Variation order. Owner can make changes while contract being implement,

L: So it could go higher? Even to 800 million?

J3: Depends, in technology obsolescence requires changes, reinvesting every 3-6 months.

(more blabla re how contracts work out)

L: In your affidavit, says here, you’re referring to Suplico’s SC petiition… 25 August 2007 loan agreement to finance several agreements signed by Teves and Mendoza for RP and Chinese official… 1.8 billion dollars in loan? You have copy?

J3: Nope. But as I understand it, 1.4 billion refers to other infrastructure contracts, .4 billion is loan credit for NBN.

L: Suplico, you have copy?

S: Nope, I referred to ads in the papers.

L: Gimme subpoeana duces tecum for loan agreement!

Cayetano: Yes!

11:12 Escudero makes motion for invitations for people mentioned by JDV3.

Pimentel: you forget mystery man.

Estrada: Yes, mystery man!

Pimentel: And who he?

Escudero! Atty. Arroyo! We shall do so. For all.

Pimentel then points out invitations for people of good faith. But when people fly the coop… Flight indicates guilt. Why not subpoeana for those who leave country?

Escudero: I modify and make motion, issue a subpoeana.

Pangilinan: Well, uh, normally, uh, we invite, but uh, because this is precisely unusual, uh, well, plus wiretapping, there appears to be resistance, unusual circumstances calls for unusual approaches so, I don’t object.

Arroyo: As I stated earlier. This incident on subpoeanas will reach Supreme Court. I think we should lay foundation for Supreme Court not finding fault with our process. Better for us to be prudent so we will win the case. SC is careful about saying rights of witnesses in proceedings should be respected. We cannot presume wrongdoing. I change my vote…

Cayetano: We will issue invitations first out of courtesy, and I understand legal advice of Arroyo to follow rules strictly. May I note for record not within our rules to issue invitation before a subpoeana. Within our rights to issue subpoeana immediately.

Enrile: I will abstain.

Arroyo: Yannow, I argued 464 before SC and bore brunt. So I am careful that we should win. I articulated my views in anticipation. Our rules say in effect we should issue invitations. If witness fails to show up then we issue subpoeana. If still not there, then we can vote to issue a contempt citation. Supreme Court is very careful we follow our own rules. Don’t forget! That’s why I change my votes. I’ll just abstain.

Enrile: Would provisions of Constitution be part of rules of this house?

Arroyo: Superior to the rules of this house!

Enrile: So follow Constitution.

Roxas: Only question is whether invitation or subpoena. We can decide that later. Let’s not waste time. I think we can discuss this later so we can move forward with questions.

Escudero: I submit.

Estrada: Anything in our rules that say we cannot issue subpoeana ahead of invitation?

Cayetano: Our obligation is only to give person enough time to make up their mind. No violation of substantive rights if we go straight to subpoeana. But I agree with Arroyo that traditionally we issue invitation first before subpoeana.

Escudero: Precisely we’re according them due process by letting them be heard so they can respond to JDV3. They should embrace invitation or subpoeana.

Cayetano: Noted. Discuss later.

Escudero: Could you submit AHI proposal to us, so we can compare to ZTE and also, your articles of incorporation so we know your partners. You always mentioned “my president,” is it because you voted for her or supported her?

JDV3: Ya.

Escudero: Well then she’s not my president on that basis. But it’s more proper to refer to her as “the president.” You said she had no involvement. On what basis?

J3: It was only Chairman Abalos who approached me for a cooperative project on NBN broadband.

E: How would you then explain presence of Atty. Arroyo at meeting where he shouted at you? Isn’t that sign of involvement of “your president.”

J3: It wasn’t “my president” who said it.

E: Isn’t Larry Mendoza alter ego of president and so what he does presumably is president’s doing?

J3: I agree with you that Sec. Mendoza is alter ego of president at DOTC. But president wasn’t involved in bullying me, and so she may not know.

E: Can president cancel contract? With her powers?

J3: Yes.

E: With all you’ve said, why do you think she refuses to cancel?

J3: Maybe she wants it reviewed so maybe, that’s why she hasn’t rescinded.

E: If she pursues it regardless, will your view remain the same?

J3: If after her own evaluation she refuses to rescind, and since it’s an onerous contract, then I guess that she knows this contract is beneficial to the country that she believes the contract signed is ok and the laws signed by Suplico to SC as supposedly violated is inaccurate.

E: How much in kickbacks has ZTE already given?

J3: Dunno.

E: And overpricing?

J3: 130 million, 130 million, one hundred percent, 260 million.

E: You mentioned cabal of Abalos. Who are they who receive kickbacks?

I know who was with Abalos but I don’t know if they received kickbacks.

E: Would they sit with Abalos out of deep friendship or would they sit out of chance they’d receive benefits?

J3: I have no way to question their motives for sitting there. All I can say is Jimmy Paz is chief of staff of Abalos. Dunno if they receive money or kickbacks.

E:You said you’re ready to face consequences. That includes violation of Art. 5 of Anti Graft Law which prescribes any relative of speaker; it also includes spouse of the president, from intervening in government transaction or business.

J3: RA 3019?

E: Yes. : Would that apply to Atty. Arroyo.

J3: Well, uh… People should have written spouse of president… Would have been written….

E: Just to clarify. How long have you been dealing in this line of business?

J3: Since 1989.

E: Do you intend to file case for violation of wiretapping law against Abalos?

J3: I have to consult my lawyers, I know it requires me to file case…

11:31 Enrile: do you have copy of your proposal? Gimme copy.

J3: Sure.

EN: Reconcilation meeting in Wack-Wack. Who called it?

J3: Offered by Sec. Mendoza, reconciliation between Abalos and myself.

EN: Mendoza there?

J3: Yes.

EN: Who else? Abalos. You? Was Abalos in golf attire?

J3: No, barong. Mendoza also.

EN: Atty. Arroyo not in golfing attire?

J3: White barong tagalog.

EN: Wack-Wack rather large. Where there.

J3: Function room, diagonal to verandah.

EN: So meeting was to reconcile parties regarding contract? Reconcile parties with respect to contract?

J3: Yes, reconcile parties to contract and also restore personal relations.

EN: When meeting was called, was your statement that your telephone was tapped, already occured?

J3: Yes.

EN: Threat was already made against your physical safety?

J3: No. Threats were made after I exposed Abalos offered me bribe.

EN: After that meeting?

J3: 10 million bribe December, reconciliatory meeting was in March.

EN: So meeting was to patch up things between you and Abalos, which was getting passionate, in its enmity?

J3: Well after phone call made to me by Abalos… I stand corrected, it was made to me… (pauses) mid-February where Chairman called me saying those profane words, accusing me of mentioning to my partners that contract was overpriced…

EN: So before meeting in Wack-Wack? When again was it?

J3: Mid-March 2007.

EN: Choleric meeting?

J3: Huh?

EN: Choleric! Choleric! Heated!

J3: Abalos said, Joey I forgive you for your sins.

EN: And?

J3: I said is the deal still on?

EN: Did Mendoza say anything?

J3: Yes. As he invited is all, he said, Joey, the Chairman is here, the FG is here… And Chairman said, Joey I forgive you for your sins.

EN: You just folded your arms, I suppose atmosphere was tense?

J3: I just ignored the statement because I don’t know what sins he meant.

EN: You were offended?

J3: No.

EN: You didn’t ask for clarification?

J3: No. I was more interested in knowing if the deal would continue or not.

EN: Apart from you and Abalos and Sec. Mendoza and FG, did anyone say anything in meeting?

J3: No.

11:42 Pangilinan: meeting was mid-March, why don’t you know exact date? Would you know what it was.

J3: I don’t know exact date, met Mendoza at my father’s house mid-March because he was seeking dad’s support for congressional candidacy of his kid. Mentioned to Mendoza we submitted proposal, hadn’t heard anything. Mendoza said, you know, your proposal’s tough because the Old Man is really, really mad at you.

P: Abalos?

J3: Yes.

P: It can’t be you suddenly got yelled at by FG after Abalos said he forgave you. How did it come to that?

J3: Abalos said I forgive you, I asked what was status of proposal to cooperate with AHi. That’s when Atty. Arroyo immediately jumped in to tell me to back off.

P: Binara ka niya?

J3: Sinindak niya ako.

P: Dinuro?

J3: I guess dinuduro is correct synonym for sinindak…

P: You said Abalos screamed at you, then Arroyo poked you, how do you explain the animosity?

J3: I understand Abalos and Atty. Arroyo are close friends, including Sec. Mendoza, and they play golf, they’re buddies… I have no other information on why FG was getting involved, since Abalos couldnt get me to back off, I guess he asked FG to intervene.

P: So back off was to get you to withdraw your proposal. Threatening, menacing finger-pointing for you to withdraw?

J3: Yes.

P: You assert the President may not know what’s going on. You’re not with her all the time?

J3: Yes. Don’t see her much.

P: So you wouldn’t know what she talks about, even with her husband. So you can only testify to your own personal knowledge.

J3: Yes, so my personal knowledge is president not involved.

P: But you don’t know that for a fact.

J3: Ya.

P: When was bribe offered?

J3: Ten million dollars? December 16, 2006.

P: Why didn’t you take it?

J3: Is that a serious question?

P: Well, you know, it’s 460 million pesos, temptation’s too great…

J3: Well, it was offered by a public official, well I was trying to get rid in a small part of corruption, and I didn’t want to be involved in corruption of any public official…

P: How was it offered?

J3: Personally offered to me in private office of Chairman Abalos in Wack-Wack.

Biazon: This was done in presence of certain personalities?

J3: No. Alone.

Pangilinan: Who ushered you into office?

J3: Abalos.

P: Was there secretary around?

J3: Don’t remember.

P: No one could corroborate you were there?

J3: We were having breakfast right beside office of Chairman… People always with Abalos there, one of my people, Ernesto Garcia accompanied me.

P: You know of other bribes how?

J3: I know of offer to Neri through papers.

P: But unaware of any other?

J3: No.

P: What was overprice again?

J3: In meeting in Zhenhen, it was 100% overpriced.

P: Earlier you said, there were kickbacks, I’m trying to establish which of these were kickbacks. So only 10 million you know of as kickbacks?

J3: No. When we were in Zhenhen, Abalos had asked ZTE officials for balance of his kickbacks because he’d be very busy with elections, he also claimed he’d be most powerful person in the country at the time… Chinese official said we can’t give you anymore until agreement signed with China import-export bank, that’s where Abalos lost his cool and banged his hand on table saying the president was expecting her share, at which point I asked for sidebar and chided him… Then Fan Yang said, “Mr. Chairman what about the monies we have already given to you?”

P: In English?

J3: Yes.

P: So you were offered 10 million dollars, 460 million pesos. If your story is true, then advances given Abalos was more than 10 million dollars.

J3: I don’t it would be safe to conclude that.

P: Intelligent guess?

J3: I don’t think so, he could have offered me and hoped to get more later…

P: Why did it take you so long to divulge name of First Gentleman? Why wait to do it here?

J3: I never have stopped trying to talk to DOTC, we continued by letters, email, additional presentations, then I find out on April 21, the contract was signed for 329 million dollars, so for clarity, I never stopped pursuing all the issues to the BOT and the bribe, the bribery attempt of Abalos to me I decided at that time to ignore, because I was open to a cooperation but not accept that. With regards to FG, I was asked in radio interview and I told Ricky Carandang that is a loaded question, and would prefer to answer in appropriate forum under oath.

P: So you believe contract grossly disadvantageous and rescinded?

J3: For the record, AHI has gone to SC to ask for writ of mandamus to ask DOTC to give AHI copy of supply contract.

P: For Mr. Sales: you resigned in May? Why?

Sales: Yes. Poor health.

P: Nothing to do with contract?

S: The media.. I was in bed, sick… contract made me very depressed, so I resigned May, accepted June or July.

P: Been in IT long?

S: Since college.

P: Depressed by contract?

S: Negative perception of whole thing… I was not party to creation of contract, not signatory, haven’t read it…

Pangilinan suggests Sales be given copy so he can comment on it.

Cayetano: did you write to NEDA regarding NBN?

Sales: I wrote to NEDA… they found us slow… I sent letting giving comment on ZTE. Then they asked, re: ATI. Did that too. I think NEDA took it as endorsement.

(Cayetano asks for copies of different analyses. )

C: Did you assess Telepono para sa Barangay?

S: No.

C: Aware what happened?

S: Yes. Technology overwhelmed by mobile technology.

C: We spent 20 billion pesos on useless technology.

S: Yes.

C: How long do you think broadband will be useful technology for government.

S: Let me explain. Telecoms network now migrating to NGN (Next Generation Network)… involving MPLS… backbones of our carriers are now NGN compliant. We realize problem with TSB was tail end of technology, overwhelmed by mobile technology.

C: We can’t tell whether tail, end or middle of new technology?

S: We can, but what’s clear is old technology like radio transceivers, microwave, satellite moving to internet protocol… requires lots of civil works…

C: If private business invests in broadband, they make money, then upgrade, which means service continues to be upgraded. But government doesn’t engage in continuous upgrading so stuck with outmoded technology?

S: Fair statement. PLDT and Globe, and Telecphil have moved to NGN…

C: Yes, so they will move to next technology as part of their business, but government wouldn’t

S: YMAX is next tech, but carriers not moving there as they’re commited to 3G….

C: Well, but business has incentive to pursue next shift, but government’s always in danger of being saddled with yesterday’s useless technology… There’s a probability?

S: There is a probability, but difficult to accept that telecoms costs of government keep rising up by the billion.

12:09 Arroyo: I hate Abalos. My Blue Ribbon said he should quit. So when proclamation of winners in May was made, I didn’t go. But you all went. And were happy to have your hands raised by him. So I don’t want to ask questions, it’s unfair.

12: 14 (Biazon rambles on about books on automobiles and planned obsolescence, and Sales tries to answer; Biazon reminisces he once used a cellphone as big as a refrigerator, now they’re tiny; Sales tries to answer that equipment even if old, was still ok for 30 years, BPI used certain machines for ages; Moore’s Law is dead, chips are not significantly getting cheaper and cheaper today, multiple processor chips, you see)…

(blablabla, we senators loves them thar interweb)

12:20 Pimentel: Any reply to Ms. Fang’s statement in Kempinski, saying they’d already given advances to Abalos?

J3: No.

P: Did Abalos ever tell you he recieved an advance on commissions that Ms. Fan mentioned?

J3: No.

Aquino: For Mr. Sales. (technical stuff, basically, that scope of plans have expanded over years)

12:27 *am breaking for lunch while Noynoy engages in a NerdFiesta*

12:43 At this point, Madrigal is asking JDV3 about differences in what’s proposed by various deals…

M: Weren’t you surprised the government, instead of considering your proposals separately, wanted you to combine proposals with ZTE? And what was Abalos doing brokering a telecoms deal? Or did you take it as a matter of course since Abalos is close to powers-that-be.

J3: Of course, I was surprised Abalos wanted to be involved in telecoms industry-

M: As a Last Hurrah.

J3: As a Last Hurrah. Of course he had some techical people… Quirino de la Torre headed computer center of PNP….

M: As Comelec Chair shouldn’t Abalos concentrate on his reputation instead of brokering a deal?

J3: Abalos should concentrate on his job. Highly irregular to be involved… primarily with DOTC.

M: What did you feel when you saw Mike Arroyo at Wack-Wack meeting? What did this mean, did Abalos bring in big guns? And what did you answer FG when he told you to back off?

J3: This was before he was hospitalized, for the record. But the feelings I had at the time was that he was there to support Chairman Abalos in his desire to get ZTE to get contract under government-to-government loan. I was surprised, I didn’t know how to address him, so I said “Mr. Arroyo… the policy of Mrs. Arroyo’s government is to do it… under BOT… which won’t require guarantee, subsidy, loan, in any way… But a government loan has to be part of debt burden… Then other costs, because this is a BT, build transfer contract…”

M: Then what happened?

J3: He got up and went to other side and talked to other people about politics, government…

M: Why interesting to Mr. Arroyo for you to back off?

J3: I know they are very close friends.

M: Cronies. Deal hatched among cronies.

J3: I don’t know if friends are equivalent to cronies.

M: Pejorative, when it comes to political lingo.

M (to Bondoc): With regards to threats on your life. From whom? How serious? Were you followed? In what form were threats made?

Jarius Bondoc: Abalos went to JDV’s house and told him “I will kill Joey and I will kill Jarius.”

M: Any other threats? Under surveillance?

Jarius: Sort of.

Up to today. Still afraid?

Not anymore, I’m over it.

M: Is this conduct becoming of a Chairman of the Comelec?

J: Certainly not. I called Speaker and asked him about. At first he said, don’t mind what happened. I persisted, asked if my life is still in danger; Speaker replied don’t take those words seriously.

12:55 Cayetano (the Pia): You mentioned requirements president has set forth for this project. How did you become aware of these requirements?

J3: Given to me because of the uh, inquiries I’d made at NEDA on process for making proposal for government, I wasn’t so familiar with BOT… NEDA explained unsolicited and solicited proposal routes.

C: As to specific requirements laid down by president -obviously discussion then, for president to be specific. So you were aware of interest of government in such a program.

J3: I understand she made reference to cyber-corridor at SONA last year… Thus establishing to some sort of infrastructure.

C: So taking off from that, you made certain people know you wanted to find out how to make some sort of proposal. You made, submitted proposal, then you were told Abalos wanted to see you. First time you were aware of existence of another party? Up to that point you didn’t think you had a rival, as you’d made unsolicited proposal?

J3: Well, with ZTE yes… but any other group PLDT, for example, could have made a proposal.

Well, I was then told Arescom had made proposal, and had commitment from US Eximpbank, two cabinet officials had gone to confirm, then when I made proposal they made inquiries about their proposal, apparently a year older than mine, at which point US Ambassador Kenney made diplomatic appeal for transparency….

C:So at this point there are three interested parties? At this point shouldn’t there be bidding?

J3: First one to file is evaluated by DOTC TWB then endorsed to NEDA. Original proponent by law.

C: AHI?

J3: no. Endorsement made by Mendoza and signed by Sales, listing different principals: AHI no loan, ZTE with loan, CyberEd project, an overlap to NBM.

Sales: Letter we composed after NEDA board approval.

C: Of what?

Sales: Of what? NBN project.

C: Just NBN project in general? Without anyone specific?

Sales: Well, ZTE was only one proposed at that stage…

C: Well, I’ve seen endorsement document describing three proposals, AHI, ZTE, and CyberEd, then it went to NEDA… once approved, then scope of work and proponent subjected to a Swiss Challenge, if lower bid, then proponent has to write to match new bid.

J3: Endorsement letter signed by Sales and Mendoza to Neda was achieved. But at NEDA … I hear its ICC made an approval, but what that was, I didn’t know, then I found out it was ZTE that was going to get loan under an executive agreement.

C: So skirting of process you described? Unsolicited bid, parameters, then decision, awarding, with person making bid to meet Swiss challenge…

J3: In fact, ZTE’s proposal didn’t even count as unsolicited proposal because they required a sovereign guarantee.

(more technical interweb questions from C. to Sales, re: technical problems of equipment proposed)

(1:10 Pimentel and JDV3 discuss how Abalos was very powerful at time deal was being made, because no politician would oppose him; rehash of old questions)

P: Jun Lozada was there?

J3: At Wack-Wack, NEDA, meetings, yes.

Roxas: Who is this Jun Lozada?

J3: Jun Lozada is president of the Forestry Corporation… actually three letters…. When government wanted to move many of its lands to forestry, for biofules…

Roxas: There are two basic issues. First on concept of NBN, if we need it. I’ll ask Sales. As head of CICD, you concluded NBN would be good, if private sector were to do this. But you concluded since private sector was ambivalent, best for government to do it.

Sales: Essentially yes. Reason is first, to migrate government to VOIP as soon as possible, because President mandated me to do that as soon as I entered government. Response of private sector common carriers was they weren’t willing immediately. Options available were such we woudl be restricted to intranet. In government we don’t have integrated intranet. So idea began to form an integrated intranet. In NGN it effectively works both as intranet for internet access as well as VOIP since internet protocol driven.

What we sensed is private sector carriers are finished with the backbone. IP core is being installed… getting to point where digital fiber optic network to the last mile is being laid by leading ones…

R: Your conclusion was government should do this, when you said urban areas’ connectivity was OK but baranggays very far weren’t connected. What leap of logic to then say since there’s last mile I can’t connect, I will then build road from here to that last mile?

S: Where there is profitablity it would be built but in countryside there would be no profitability so we think it would take very long time for countryside to get broadband.

R: You might be building a pipe -a large pipe for broadband to far-flung bgy? So why is advocate all throughout the country?

S: Broad coverage but sparse coverage-

R: Applying technology, not sure private sector wants to do it, but apply it anyway regardless if it will be efficiently used or not?

S: Not an assumption. What is missing in telecoms policy is universal service fund.

R: I disagree what is missing is transparency. Your agency has endorsed equivalent of: we are spending so much on air travel, so let’s buy our own airplanes. Not necessarily best use of government funds. Bgys can’t connect to NLEX, let’s build NLEX for each bgy. to connect? This lack of check and balance has imperiled program, it’s cause of overpriced contract.

S: Transparency was not issue. We were prepared to share information with everyone. That’s why I’m here, which is why I’m not hiding behind any provisions of law others are hiding behind.

R: You thought ZTE contract was better, you said. What was cost of project you used in consideration of that assessment?

S: 330 million dollars, that was signed.

R: We would save?

S: 4 billion for 3 years, nothing converted. Years 4 and 5 zero cost, part of grace period. Year 6 to 20 it would be 990.

R; Amortization cost of loan?

S: Yes.

R: You’re assuming government would not have any other communications costs, stamps, fax, overseas calls? Any savings would only occur if government didn’t use these things.

S: No what I used was what Sec. Mendoza was citing, what he communicated to Congress.

R: But you did not check his assumptions?

S: No I did not.

R: Second part is, how it has been implemented today. Did you attend meetings all by yourself?

J3: At one point at Wack-Wack I was with Richard Pratt, it was there where Abalos said, Asec. Soneja, see, Joey and I are partners. In Zenhen, I had with me my Chinese financial consultant negotiating vendor financing, to help understand ZTE arrangements with Development Bank of China.

R: You were at meeting with Abalos, you’re son of high official of the land. Customary for embassy to help people of such stature. Were embassy officials present?

J3: No official government people in meeting aside from Abalos, his COS Jimmy Paz.

R: No one met you at airport?

J3: No.

R: In Kempinski Hotel meeting, there was demand for subsequent payment of commissions. Any discussion of amounts? Percentages?

J3: In terms of actual numbers overprice was based on facts I received in Manila… in the suite of Chairman Abalos I did tell him proposal of ZTE only covered 35% of country, so overprice of 100%. He understood “para tayong ginagago” he said. When we went down he was already demanding commissions due him. When Chinese told him it would take about 3 months, then he got angry and said the President was waiting for the funds, that’s when I pulled him aside and told him of the ramifications of what he was saying.

When we got back to the table he continued his tirade, saying he would be most powerful person in the country starting Jan. 15, so then Fan Yang stood up and said Mr. Chairman, what about the monies we have already advanced to you, then there was silence.

R: No talk of how much advances amounted to?

J3: No.

R: To Suplico. To your knowledge as lawyer and legislator, there is nothing that forces government to “close” this contrast, to proceed to succesful conclusion of this arrangement?

Suplico: Feasibility studies. Consultants to design it. Bidding for supplier/civil works contractor. Then second bidding for contract. So we’re now at third step.

R: On executive agreements, setting aside if they’re separate from bidding law. There is nothing to force government to proceed with this?

S: Yes.

R: No compelling reason to proceed?

S: While we have agreement signed with China April 21, contract remains to be implemented.

R: As Enrile stated earlier, there are preclosing requirements, so if not met, no obstacle to pulling out?

S: Yes.

Cayetano: when did it start?

Sales: Idea of integrated communications network for government.

C: Your idea or president’s?

S: Mandate given to me by president at Telecphil inauguration was convert entire government to VOIP.

C: Same group lobbying from day one?

J3: Yes.

Cayetano asks, rhetorically, what it means there was quid pro quo for FG to support Comelec chairman? Why did Abalos want it? Why did FG get involved and back up Abalos? Hmmm…

J3: Hmmmm…..

(Pimentel recycles old question yet again)

Bondoc: Friend Malacanang asked, how far are you willing to take this? I felt uneasy. It was some sort of veiled threat. You happen to be talking to a colyumnist that also exposed a major general. He said you better get read because they’ll get even with you. The first thing to hit you will be your TV show. A week after elections, the TV show was dead.

Roxas: How long did you have show?

B: About six years.

Pimentel: Identify the person who called you?

B: Uh. I’d rather confront him first, and ask him if it was advice of friend or a threat.

Roxas: Was this friend same person who told you show was over or was it functionary of IBC? Letter or verbal?

B: Verbal. From IBC. The manager of IBC 13. Said no more budget. Mayette… May I raise a point?

R: Go ahead.

B: I attended forum at Ateneo Professional Schools, June 20, Asec. Formoso gave AV presentation. Admitted government wanted to save 4 billion in annual telecoms expenditures, but admitted NBN will not include cell calls and services, admitted even if there is NBN,internet service will have to come from private sector still. Also said government will have to appropriate funds for operation of NBN, I understand, 1 billion a year. I understand this was basis for UP professors saying this won’t be cost-effective, in fact government will lose 6 billion in 20 years.

R: (explains he concurs; savings will be fictitious, says its like building airline to to save transport expenses)

Cayetano: Is NBN only project under CICT when you were there? CyberEd?

Sales: No, CyberEd entirely under DepEd.

!: 57 (Pimentel rehashes old questions with Bondoc) Formoso said also contract was lost?

B: Yes.

P: When was contract signed?

B: (gives date)

P: A month before elections?

B: Yes.

P: There were criticisms even then. Then according to Formoso, who isn’t here, contract was lost. I’d like to suggest reason it was lost was to give Comelec Chairmen escape clause since he was getting into contract during election period.

B: I wrote at time government must have violated 4 laws.

P: Yes. Contract Mendoza furnished us, in all likelihood, changes were made, so that contract produced before the people would be sanitized so fewer sanctions. In your opinion is that fair conclusion?

B: I wouldn’t trust any document from DOTC at this point, because it was stolen, then reconstituted, but they won’t release it on the claim of not wanting to reveal proprietary information.

P: Can someone please give layman’s explanation of broadband?

Sales: Anything beyond 64 kbps is broad band.

P: But what for?

S: For transmission of voice, data, image, video using one and the same channel.

P: Yeah, alright. Mr. de Venecia?

J3: In simplest terms, when you use phone, its just your voice. Narrowband. In broadband, you use so many possibilities, but you need a large pipe or multilane highway to accomodate. That’s why broadband.

P: Thank you.

2:03 Estrada: Who came up with phrase “Mystery Man,” was it you or Ricky Carandang?

J3: Dunno.

E: Proper to call Mystery Man or Mister ni Mam?

(No one laughs. Estrada coughs)

E:  If things continue this way will you still call President “My president”?

J3: If she knew everything, well, my esteem might go down….

{Estrada points out how President must have known; audience rolling its eyes as Estrada enumerates circumstances; J3 and E engage in platitudes on fighting corruption; violins start playing as J3 discusses disagreements with dear ole dad; E commends him, obviously hoping he’ll be to GMA what Chavit was to JEE)

2:11 Lacson: Your comments to Madrigal different from your answers to me. In Zhenzen, you said President said to Abalos why dont you do deal like joey, and you said your dad heard it and was so proud, he called you to tell you. But then you said President knew nothing. But this means President knew, even before she presided over Nov. 17 NEDA board meeting.

J3: She is familiar with NBN project. I dunno if she knows kickbacks. In fact when they played golf in Zhenzen, and in cabinet, my presumption she knew about NBN…

L: And she knew Abalos was pushing?

J3: Yes, in fact she was surprised Abalos was even there.

L: You owe me an apology, Madrigal and I had a bet which of us could get you to admit.

J3: I apologize.

Lacson chuckles humorlessly.

L: Nov. 21, 2006, at Neda, President gave clear, specific guidelines. (reads transcript) President asked, do we need government broad band? Neri said, basically mam, we need backbone, question is who will provide it.. President said, thats why you have to get it through BOT. Neri, what we have to do is structure so there’s no government subsidy. President: but not like MRT, no take or pay. Neri: But way it’s emerging is education is separate…

Sales: That was discussion on VOIP.

(Lacson quotes “thief in the night” Palace press release) So all circumstances points only to one thing. Your president knew all along there was this project, that Abalos was pushing ZTE, etc.

J3: Well, I agree with you because I’m quite surprised at change of policy. But uh, she may have been convinced of the change…

L: By whom?

J3: By NEDA…

L: Or the other way around? On March 26, meeting between ICC and TelOff of DOTC. Neri was vehemently objecting to assertions of Asec. Formoso. But Formoso using contorted reasoning, was always insisting on overlap between NBN and CyberEd… A ready answer for every objection of Neri. On April 20, no less than the US Ambassador wrote Neri a letter caution him, because Arescom was proposing a smaller budget. Then next day Neri signed project and President flew to Hainan to witness the signing. She was there for face value?

J3: With regards to the decision. Was approved by Sec. Neri, don’t want to speak for him but what he said in papers was he could not confirm or deny… I know for a fact Neri was having a difficult time approving this project because his main staff at NEDA was saying this project was not a good project. I don’t know if he was forced to sign or unilaterally decided to sign or he was forced.

L: Who could force him? The President?

J3: There’s no other-

L: No other, other than maybe Sec. Ermita. No one to force him after violently objecting. Would you still call her your President?

J3: Madame President….

(Lacson recycles question on Abalos table-pounding demanding commissions; tries to get J3 to reenact Abalos table-pounding)

L: Going to Roxas questions re: absence of embassy staff. Was that because there would be escapades?

J: (laughs) I dunno.

Cayetano declares hearings will resume on Thursday. Says people mentioned who want to say something are welcome to show up to clear their names.

2:26 Hearing of Blue Ribbon Committee suspended.