Undeclared assets - Macapagal Boulevard scam etc.

THE FIRST FAMILY
PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM

The Arroyos have weathered allegations that range from keeping secret bank accounts to getting money from illegal gambling.
From overpriced highways to secret bank accounts, to gambling lords and thoroughbred horses, controversies have hounded the Arroyo administration long before wiretapped conversations implying election fraud hogged the headlines.
And it is not only the president who has more than once been asked to account for charges of improper behavior; so too have husband Mike, eldest child Mikey, and brother-in-law Ignacio Arroyo.

IMPSA
Four days after it assumed office, the Arroyo administration approved the awarding of a controversial $470-million contract to the Argentine firm IMPSA (Industrias Metalurgicas Pescarmona Sociedad Anonima) to rehabilitate a hydroelectric plant in Laguna. Justice Secretary Hernando Perez was later accused of demanding and receiving $2 million dollars from ex-Rep. Mark Jimenez, who brokered the deal. Jimenez said he wired the amount to the account of Ernest Escaler in Hong Kong on Feb. 23, 2001 from his bank in Uruguay. The former congressman was later extradited to the United States, where he had to serve a two-year jail term for federal election fraud and tax evasion.

SAN FRANCISCO
From the time she was first elected senator in 1992 up to 2004, Gloria Macapagal Arroyo had failed to declare in her sworn Statements of Assets, Liabilities and Net Worth the properties her husband, Jose Miguel ‘Mike’ Arroyo, bought in San Francisco through his California-based LTA Realty Corp. In 2003, Newsbreak reported that Mr. Arroyo acquired, resold, and managed at least five properties with a total value of at least $7.1 million in the Bay City from 1992 to 2000. The First Couple said they bought the properties in trust for Mike Arroyo’s younger brother, Ignacio or Iggy, now a congressman.

BONG PINEDA President Arroyo has been questioned about her personal connection with alleged jueteng boss Bong Pineda: She is godmother to one of Pineda’s sons. She has denied any impropriety, saying she doesn’t associate with Pineda or his crowd. In an interview with Time magazine in 2001, she said that when she was asked to be ninang, she sought and received counsel from Manila Archbishop Jaime Cardinal Sin. Recalled Arroyo: “Cardinal Sin said, as a Christian, if I am asked to be a godmother, it is my Christian duty, because the sins of the father are not the sins of the son.”

MACAPAGAL BOULEVARD
In the middle of 2002, Sulpicio Tagud Jr., then board director of the Public Estates Authority (PEA), blew the whistle on what he said was the overpricing by over P600 million of the construction of the 5.1-kilometer President Diosdado Macapagal Boulevard at the Manila Bay reclamation area. First approved during the Estrada administration, contracts for constructing the highway were allocated to three companies: Shoemart Inc. (one portion), DM Wenceslao (one portion), and Jesusito D. Legaspi Construction (JDLC for the remaining three portions). A series of supplemental contracts with JDLC were later approved by the PEA board under the Arroyo administration, increasing the original approved cost of their section of the highway. Tagud did his investigations and found that while the SM group of companies constructed its part of the boulevard at a cost of P54,000 per lineal meter, JDLC built its section at P302,000 per lineal meter.

PIATCO
The construction of the 1.1-km-long, four-storey Terminal 3 of the Ninoy Aquino International Airport (NAIA) by the Philippine International Air Terminals Co. (Piatco) has been riddled with controversies. Some of these were inherited by the Arroyo administration, while others were allegedly of its own doing. In May 2003 opposition Sen. Edgardo Angara accused Malacañang of trying to extort, through the Villaraza law office, some $20 million from Fraport, the German firm with a 30-percent stake in Piatco, in exchange for legal favor. But the Piatco scandal is a long running one. It figured prominently during the confirmation hearings for Arroyo-appointed Transportation Secretary Pantaleon Alvarez in 2002. Alvarez was alleged to have obtained an overpriced subcontract for one of the public works projects related to the airport terminal. In exchange, Alvarez, while transportation secretary, was reported to have given the firm “onerous” advantages. Piatco was also accused of paying since June 2001 huge sums of money to a public relations consultant, Alfonso S. Liongson, an associate of the First Gentleman, for getting signatures of officials for either permits or supplementary agreements to its contract with the government. Liongson reportedly used part of the money to bribe officials for their signatures. The terminal was finally mothballed in 2003 when President Arroyo revoked Piatco’s build-operate-transfer contract. In December 2004 the government took over the airport, after the Supreme Court affirmed the contract’s revocation. It remains unopened.

MIKEY’S HORSES
Newsbreak in August 2003 broke the news on a plan of presidential son Juan Miguel “Mikey” Arroyo to import 32 thoroughbred horses from Melbourne, Australia. The then Pampanga vice governor, now a congressman, denied the allegation. He admitted, though, that he was in the horse-trade business. The young Arroyo owns Franchino Farms along with cousin Franchino Pamintuan and friend Ralph Mondragon.

JOSE PIDAL
On Aug. 18, 2003, opposition senator Panfilo Lacson accused First Gentleman Jose Miguel Arroyo of money laundering for supposedly siphoning off at least P321 million in campaign funds and contributions and putting these in a secret bank account under the fictitious name Jose Pidal and in three other accounts using the names of his aides. Among the “donors,” Lacson said, was then Rep. Mark Jimenez who contributed a total of P8 million. Lacson also accused Mr. Arroyo of having an affair with his accountant, Victoria Toh. Following Lacson’s allegations, Mr. Arroyo’s younger brother, now congressman Ignacio or Iggy, came forward to say he is Jose Pidal.

AGRI FUND
The First Gentleman was linked in May 2004 to the alleged diversion of P728 million from the Ginintuang Masaganang Ani program to President Arroyo’s campaign war chest in the form of development assistance funds to local government units. Then Agriculture Undersecretary Jocelyn I. Bolante, Mr. Arroyo’s classmate at the Ateneo de Manila University and a colleague at the Rotary Club District 3830, cleared the First Gentleman of involvement. Bolante was tasked to oversee the implementation of the Ginintuang Masaganang Ani program at the time.

PHILHEALTH CARDS
Six weeks before the May 2004 elections, two lawyers from PRO-CON(stitution) filed a disqualification case against President Arroyo before the Comelec, saying she was behind the enhanced Philippine Charity Sweepstakes Office’s Greater Medicare Access or GMA program, which they claimed was meant to prop up her candidacy. Earlier, another PRO-CON lawyer filed a criminal suit, also before the Comelec, against then PCSO chief Maria Livia “Honeygirl” de Leon and PhilHealth president (now Health Secretary) Francisco T. Duque III for vote buying, intervention of a public officer, using public funds for election purposes and using banned election propaganda. Public funds were allegedly spent to enroll families in PhilHealth for one year to induce the enrollees to vote for President Arroyo. The premium cost of P1,200 for each family member was chargeable to PhilHealth and the PCSO.?The PhilHealth identification cards bore the President’s picture and the name. Their distribution coincided with the start of the election campaign.

LAS VEGAS SUITE
The First Gentleman was the subject of another controversy over his alleged use of a $20,000-a-night suite at the MGM Grand Hotel in Las Vegas, Nevada during the boxing match between Manny Pacquiao and Mexico’s Erick Morales last March 19. The story first appeared as a blind item in the March 23 column of Inquirer sports columnist Recah Trinidad, who wrote that a “heavyweight backer” of Pacquiao had stayed in a $20,000-suite at the MGM Grand. Mr. Arroyo would later say he did not see anything corrupt about accepting the generous offer of a free luxury suite from the hotel, arguing that his stature as the husband of a head of state entitled him to such perks.

JUETENG (AGAIN)
In Senate hearings on the illegal numbers game that began in May 2005, jueteng operators and bagmen said the President’s husband Mike, her son Mikey, and her brother-in-law Ignacio or Iggy were among those who received monthly payoffs from gambling lords. The payoffs supposedly ranged from P500,000 to P1 million. One of the witnesses, businesswoman Sandra Cam, testified that in December 2004, she personally delivered the cash to Mikey (in a gift-wrapped package) and Iggy (in an envelope) at the House of Representatives. The deliveries were supposedly made on the instructions of retired Chief Supt. Restituto Mosqueda, former police director for Bicol and alleged protector of jueteng operations in Luzon. On June 8, the President ordered the Department of Justice to investigate her son and brother-in-law, saying, “Nobody in my family or kin are above the law and no investigator or prosecutor could fear to uphold the law against them. I will stand for justice no matter who gets hurt.” The Office of the Ombudsman has since taken over the DOJ investigation. Both Mikey and Iggy, meanwhile, have sued Cam for libel.
Email: collator.peedee@yahoo.co.uk

Finance chief faces syndicated, large-scale smuggling raps

12/08/2007 Daily Tribune

A multimillion-peso large-scale and syndicated smuggling suit was filed yesterday against Finance Secretary Margarito Teves for allegedly causing the government at least P373-million losses in tax revenues.
Ruben Anthony Frogoso, an intelligence officer at the Department of Finance's Cen-tral Management Information Office, in a complaint filed at the Manila Prosecutor?s Office, said he sued Teves and other high-ranking DoF officials for
allegedly granting a tax-free importation permit to a large shipment of generator sets after it was already seized by the Bureau of Customs (BoC).
According to him, on April 10, 2007, the first shipment of the five units of imported generator sets and three units of transformers from Singapore-based Aggreko Pte Ltd. by the NPC Alliance Corp. (NPC) arrived at the Subic Bay Free Port.
Upon the arrival of the shipment and the filing of entry, the BoC found out that it was grossly undervalued at 98 percent discrepancy.
The BoC immediately ordered the seizure of the shipment.
NPC Alliance, however, asked the DoF to grant it a tax-free importation permit.
The request was granted, thus, depriving the government of P373 million in tax revenues, Frogoso noted.
He said the redemption value of the shipment and the issuance of tax exemption by the DoF are illegal since the shipment was already seized.
Frogoso noted that despite the harassment and threats from Teves and other DoF officials, he decided to file a complaint, saying he could no longer just ignore "the anomalies and corrupt practices committed by the same people who should protect the institutions they lead and safeguard the public's interests against graft and corruption."
"I could no longer stomach what is going on in our department and I am ready to face all the consequences of my actions in the interest of the public," he stressed.
"We should stop all these corrupt practices which are tearing our nation and people," he added.
Frogoso, who said he is willing to bring his case even up to the Supreme Court, also called on President Arroyo to act on the matter.
"The government is trying to increase its revenues and a case like this should not be allowed. I also believe the President will not tolerate this to happen," he said in an interview with reporters.
Also named as respondents in the 20-page complaint-affidavit are Gaudencio Mendoza, DoF undersecretary and head of the Revenue Operations Group; Eleazar Cesista, head of the Revenue Express Lane; Rowena Salido, assistant chief of the Customs and Tariffs Division and supervisory tax specialist; Elizabeth Santos, senior tax specialist; Karim Khatami, finance officer of NPC Alliance Corp.; and Rowena Farin, general manager of Globelink Brokerage Services. Allan A. Bergonia
collator.peedee@yahoo.co.uk

Mass action vs GMA’s ‘morally bankrupt gov’t’ set; bishops renew resign call

11/29/2007 Daily Tribune

Religious leaders, lawmakers, opposition personalities and leaders of civil society have called on the Filipino people to restore integrity in governance by doing away with the “morally bankrupt” administration as three bishops reiterated their call for President Arroyo’s resignation.
The Movement for the Restoration of Integrity in Governance headed by Bishops Julio Labayen of Infanta, Antonio Tobias (Novaliches) and Deogracias Iñiguez (Caloocan City), in a statement yesterday, claimed the President has lost “moral ascendancy and integrity” to continue leading the country.
They noted that the years under Mrs. Arroyo’s rule have gone from bad to worse.
“The Filipino people do not deserve a government that has turned against them from the start. The Filipino people’s long suffering was made more severe in six years under GMA’s rule. The record of this administration is replete with betrayal after betrayal of the people’s trust and sovereign will,” the bishops stressed.
The prelates added corruption and repression of democratic, civil and human rights have become the trademark of the Arroyo government.
“The anomalous deals it had entered into in the name of the people are bringing disasters that are far-reaching and long-lasting than natural calamities,” they said.
Despite its alienation from the people, the Arroyo administration, however, is obstinately holding on to power, which it wields by seer force, circumvention of legal and judicial processes, deception, outright bribery and corruption of whole government institutions, the prelates said.
They added it is the right of sovereign people to seek and work for meaning changes as the Arroyo administration “has lost grounds to govern.”
Tobias, in a press conference also yesterday, reiterated his call for Chief Justice Reynato Puno to head a transition government should the President and administration officials heed calls of resignation.
“We want reforms in the government…a caretaker govern-ment under civilian rule or under Puno. This is the great divide,” he stressed.
The bishops and other opposition groups, in a signed manifesto, also called for a “gathering for truth and justice” at the Liwasang Bonifacio in Manila on Friday and urged participants to “do what is right for your country.”
Apart from Labayen, Tobias and Iñiguez, other signatories include Catholic Bishops Conference of the Philippines president Angel Lagdameo, Lingayen-Dagupan Archbishop Oscar Cruz, Solito Toquero of the United Methodist Church, Eliezer Pascua of the United Church of Christ in the Philippines, Godofredo David of Iglesia Filipina Independiente (Philippine Independent Church), Fr. Jose Dizon and Sharon Rose Joy Duremdes of the National Council of Churches in the Philippines.
Supporters of former President Joseph Estrada, including Makati Mayor Jejomar Binay, Ver Eustaquio and Jose Alcuaz, militant leaders Romeo Capulong and Argee Guevarra also signed the statement and ready to join the mass action on Nov. 30.
“We cannot allow the pain and ruin of the Filipino people. We cannot have a nation without a soul, governance without morality. We must unite! We must struggle for truth! For justice! For meaningful and fundamental change!” the statement stressed.
The group said when Mrs. Arroyo took presidency in 2001, she proclaimed that she would usher in good governance, leadership by example and assure transparency.
“We are now in the seventh year of this presidency that has instead reaped pain and ruin for our nation and people,” it noted.
The anti-Arroyo forces said they are “pained by the extra-judicial killings and enforced disap-pearances which have heightened despite the fact that this pattern of abuse was brought to the attention of the president early on, long before the outcry of concerned international officials and organizations condemned them before the world.”
“Billions of pesos had also been shamelessly diverted to serve Mrs. Arroyo’s personal political interests, including the ‘abrasive’ diversion of fertilizer funds,” the group lamented.
It also scored the bludgeoning of demonstrators by police and military men “misled and emboldened by an erroneous calibrated preemptive response policy.”
The group also tackled the anomalies in the ZTE-National Broadband Network project, and the cash-gifts controversy now facing the administration.
“Worse, our values have been degraded, our collective integrity blighted by the wanton examples of bribery, graft and corruption. Parents cannot adequately answer the questions of their own children — about the ZTE, how much bribes are involved, why?” it said.
“They cannot answer how come congressmen and governors receive so much money? Who are guilty? Why do they go unpunished? What kind of justice do we have?” it added.
By Allan Bergonia and Tribune wires
Email: collator.peedee@yahoo.co.uk

INSIDE PCIJ
The truth about the OWWA funds
by: Alecks P. Pabico on 1 August 2006 at 9:08 am
(UPDATED) ALLEGATIONS of misuse of overseas workers’ funds held in trust by the government have again surfaced amid the bickering between government officials over the reported lack of money for the evacuation of Filipinos from war-torn Lebanon.
The issue has prompted a Senate inquiry that started yesterday but which was marked by the absence of key executive officials invited to shed light on the status of the funds of the Overseas Workers Welfare Administration (OWWA), citing ongoing “critical operations” to get Filipino workers out of Lebanon.
Almost three weeks after the Middle East crisis erupted between Israel and the Hezbollah armed group, the repatriation of overseas Filipino workers (OFWs) from Lebanon has stirred a controversy after Philippine Ambassador to Lebanon Al Francis Bichara said last week that money is running out for the beleaguered OFWs with no fresh funds coming in from Manila.
Testifying at yesterday’s Senate hearing via overseas phone call, Bichara, who had earlier apologized for the “confusion” his statement generated, said he is standing by his claims, insisting that embassy records show no funds have been transferred from the Department of Foreign Affairs for the evacuation of OFWs.
But the OWWA, which manages the funds coming from $25-contribution per contract of overseas workers, claimed it has already released an initial $2 million after violence escalated in Lebanon on July 14.
An OWWA official disclosed to the PCIJ that another $2 million has also been approved for release by its board of trustees last July 28 even as $2 million more is being set aside as standby fund upon the order of Labor Secretary Arturo Brion on the same day. The money is being sent to the OWWA welfare officer in Lebanon, a certain Mario Antonio, while payments for the chartered planes are said to be transacted in Manila or through Ambassador Roy Cimatu. The official however expressed surprise that Bichara, as head of mission, is being kept in the dark about the funds.
Earlier, Malacañang had also approved the release of P150 million from the National Treasury and $250,000 by the Philippine Embassy in Beirut for the evacuation of affected Filipinos.
These amounts were supposed to have covered the cost of evacuation in just a week, which OWWA Deputy Administrator Angelo Jimenez said, has already summed up to $1.5 million (P80 million), a big chunk of which were incurred for airfare expenses. Airlines are reportedly charging a minimum of P2 million per chartered flight, or an equivalent of $1,200 per evacuee.
Since “Oplan Sagip OFWs sa Lebanon” started on July 23, some 1,274 Filipinos have been repatriated back to the country — which foreign affairs undersecretary Esteban Conejos Jr. said is proof that there are sufficient funds.
Marianito Roque, OWWA administrator, also dismissed the allegations of fund misuse, saying the OWWA fund, which he said stood at P8.1 billion as of December 2004, remains intact.
Documents dated July 25, 2006 obtained by the PCIJ, however, show that the total funds, including dollar deposits and holdings, and investments in two government banks — the Land Bank of the Philippines and the Development Bank of the Philippines — now amount to P7.73 billion. The combined LandBank and DBP deposits under an investment management agreement total P6.58 billion.
TABLE 1: OWWA TOTAL PORTFOLIO
OWWA MAIN
NATURE OF FUND
AMOUNT
Capital Fund (as of May 31, 2006)
36,067,487.37
OWWA-MWLGF (LBP) May 31, 2006
43,961,409.68
OWWA-MWLGF (DBP) May 31, 2006
60,288,053.83
OWWA-SWF (as of May 31, 2006)
73,234,639.10
OWWA-IBPF (as of May 31, 2006)
14,913,103.69
OWWA-NLSF Trust Fund (as of May 31, 2006)
61,133,577.42
Tbills-CMWSP, Tbonds, LBP Bonds & Debenture Bonds(as of May 31, 2006)
371,491,073.99
TOTAL
661,089,345.08
US DOLLAR DEPOSITS
Savings Deposit
$682,501.70
OWWA-MEDICARE
Capital Fund (as of May 31,2006)
1,395,235.05
Tbonds, LBP Bonds and Debenture Bonds(as of May 31, 2006)
365,599,693.09
TOTAL
366,994,928.14
US DOLLAR HOLDINGS
Savings Deposit
$652,266.07
Time Deposit
471,314.18
ROP Bonds
640,000.00
TOTAL
$1,763,580.25
INVESTMENT MANAGEMENT AGREEMENT
LBP (as of May 31, 2006) inclusive of interest earnings
3,259,553,389.00
DBP (as of May 31, 2006) inclusive of interest earnings
3,321,451,097.90
TOTAL
6,581,004,486.90

TOTAL PhP
7,609,088,760.12
TOTAL $
2,446,081.95
TOTAL PORTFOLIO
7,733,838,939.57
Conversion Rate: US$1.00 = PhP51.00
Fund for emergency repatriation
If OWWA funds are inviting much scrutiny regarding the availability of money for the evacuation of OFWs, it is because under Republic Act No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995, the agency is mandated to administer, among others, an Emergency Repatriation Fund (ERF) to evacuate overseas workers in case of emergencies such as war, epidemic, disaster or calamities (natural or man-made).
A seed amount of P100 million was set aside for this purpose from the funds managed by OWWA, afterwhich Congress is supposed to allocate no less than P100 million for the ERF in the annual national budget.
But Congress has failed to allocate a single centavo to the fund over the years.
“Since there is no other source, presumably, the ERF gets a share from the $25 charged as fees by OWWA for every contract of OFWs,” says laywer Berteni Causing, who finds the law vague as to where the fund will be sourced.
“With about 3,000 workers leaving abroad every day, even at $1, you could just imagine how much money they are getting in a year,” he says.
OWWA places its average collection from OFWs between P800 million and P1 billion a year — though overseas workers are contesting why they get to be charged the $25 contribution when the law stipulates that “in no way shall the fees be charged or collected from the worker.”
Since the ERF is not being included in the General Appropriations Act, Ellene Sana, executive director of the Center for Migrants Advocacy (CMA), says it should still be incumbent on the government to produce the money and not just rely on OWWA.
An additional consideration, Sana points out, is the fact that most of the Lebanon evacuees are undocumented OFWs. “This somehow creates tension between documented and undocumented workers since the former are the ones who are required to contribute $25 to the OWWA Fund,” she explains.
In many cases, too, an OWWA official says, the agency has not been reimbursed for the money it advanced to evacuate OFWs, both documented and undocumented, including the last one in 2003 during the invasion of Iraq.
However, the ERF is not the only fund under the care of OWWA whose sourcing suffers from the lack of specific provisions in the law. RA 8042 also provides for the Migrant Workers’ Loan Guarantee Fund (MWLGF), Legal Assistance Fund (LAF), and Congressional Migrant Workers Scholarship Fund (CMWSF).
While the law states that money will be set aside by the national government in the budget every year for the loan gurantee fund, it also says that P100 million shall be made available as a revolving fund from OWWA. “This only means that it shall be provided from OWWA’s earnings from its operations like the charging of $25 per contract,” Causing says.
The revolving fund shall only serve as a guarantee for every loan that may be extended to any OFW or OFW family members by participating government financial institutions like the Land Bank and DBP and shall only be used if an OFW borrower is not able to pay his/her loan.
The legal assistance fund, on the other hand, will be sourced from the President’s contingency fund (P50 million), the Presidential Social Fund (P30 million), and the Welfare Fund for Overseas Workers (P20 million). The Welfare Fund is the precursor of the OWWA funds established under the Marcos-issued Letter of Instruction No. 537 and amended by Presidential Decree Nos. 1694 and 1809.
For the ongoing crisis in Lebanon, DFA’s Conejos has already requested the OWWA for an immediate supplemental legal assistance fund.
The scholarship fund, meanwhile, should receive P50 million from the equal shares of congressmen and senators, and P150 million from the proceeds of lotto operations.
Dubious investments and fund transfers
But the biggest reason for the apprehension about the OWWA funds’ status, particularly among OFWs, considering the huge amounts of money involved, is that the said funds had been the subject of a number of questionable transactions in the past.
Migrant workers’ organizations point to anomalous investments in Landoil Resources Corp. and Greater Manila Corp. in 1983 amounting to the P200 million, and the P664 million in the Smokey Mountain Project Participation Certificates (SMPPC) issued by R-II Builders owned by Reghis Romero during the time of Pres. Fidel Ramos.
To this day, investments in Landoil, majority of which was owned by House Speaker Jose de Venecia, have not been repaid. The Smokey Mountain project investment, on the other hand, was in violation of a Department of Finance circular requiring government-owned and -controlled corporations to invest their funds only in qualified government securities.
While the issue with the Smokey Mountain project has been settled with the Home Guarantee Corporation (HGC) agreeing to pay OWWA P500 million in cash in two tranches in January 2003, the rest of the balance of the P1.07 billion settlement in the form of debenture bonds remains not fully paid.
In its audit report (download here) of OWWA last year, the Commission on Audit recommended that OWWA negotiate with HGC for the immediate cash settlement of the outstanding balance of its claim amounting to P479.33 million instead of waiting for HGC to settle the account by issuing debenture bonds.
OFW groups have also denounced the alleged gross misuse and plunder of OWWA funds in relation to Gloria Macapagal-Arroyo’s candidacy in the 2004 elections involving the transfer of the P530-million Medicare Fund for OFWs to the Philippine Health Corp. (PhilHealth) and $87,757 (then P23.587 million) rechanneled to the International Labor Affairs Service of the Department of Labor and Employment.
The PCIJ reported last year that among the fund releases that were allegedly diverted to the Arroyo campaign in 2004 was the OWWA Medicare fund, the transfer of which was made possible by a resolution signed by then Labor Secretary Patricia Sto. Tomas, in her capacity as chairperson of OWWA, along with then OWWA Administrator Virgilio Angelo.
Francisco Duque III, then PhilHealth president had proposed his agency’s takeover of OWWA’s medicare functions as early as November 2002. Now health secretary, Duque is known to be a close Arroyo ally and is a long-time friend of the First Family and their neighbor at La Vista in Quezon City.
In his memorandum to Arroyo, Duque said “the proposed transfer will have a significant bearing on the 2004 elections.” Three months later in February 2003, Arroyo signed the proposed executive order.
The money enabled Arroyo to give away Philhealth cards valid for a year to people in the places she visited during the campaign. OWWA, by that time, had already been turning down health claims of hundreds of overseas workers and eventually stopped all medical reimbursements in a meeting on January 16, 2004.
Migrante also called for the investigation of other “anomalous” transactions such as the alleged P30-million transfer by the Manila Economic Cultural Office (MECO) to the Office of the President in August 2003 and the US$293,500 released to Ambassador Cimatu supposedly for massive evacuation operations in the Middle East during the U.S.-Iraq war in April 2003 that did not actually take place.
Recently, overseas workers are also protesting a Malacañang proposal to convert the Philippine Postal Savings Bank to an OFW Bank that is also eyeing P1 billion in OWWA funds as initial capital for the venture.
No legal basis for investing OWWA funds
Taking up the cudgels for OFWs, Causing says he sees no basis in law for using OWWA funds for purposes other than they were created. “It is a basic principle that no single centavo can be spent without a law saying where, how and for what it is to be spent. I dare say that investing OWWA money in any form is illegal,” he argues.
Causing likewise points out that the authorities relied on by OWWA (issuances like board resolutions) are not laws and can never be higher than the laws. At the same time, he says OWWA has no fiscal autonomy. “It cannot therefore determine as to how and where it can source its funds. It cannot therefore determine as to how its money will be spent.”
Yet as the COA report also reveals, violations are being done in this regard. In its audit, the COA found that OWWA released a total of P33.65 million to the Provident Fund of its employees from October 2004 to August 2005, despite the board’s suspension of the benefits for lack of legal basis. A Malacañang directive had also called for the immediate suspension of employer contributions to the Provident Fund last December 30, 2003.
The state audting firm maintained that as per the December 9, 2003 memorandum of the Senior Deputy Executive Secretary to Arroyo, the government would be limited only to a one-time contribution and not as a regular yearly expense.COA also reported cash advances amounting to P144 million — nearly the same amount the Office of the President released for the evacuation of OFWs in Lebanon — that have remained unliquidated as of December 31 last year.

Overcharging POEA fails to submit books ? CoA
12/19/2007 Daily Tribune Bobbit Mariano
Its records are still being hidden even from the official audit agency.
Despite raking in huge amounts from Filipinos working overseas with a $25-membership fee each, based on an overcharge of P51 per dollar against the prevailing 41 per dollar exchange rate, the Philippine Overseas Employment Agency (POEA) has been remiss in providing government with its financial records.
The POEA has failed to submit important financial records to the Commission on Audit (CoA) for this year, the Tribune learned.
CoA senior staff, Edna Rodriguez, detailed at POEA, told the Tribune that the audit agency is being delayed in looking through the financial records of the POEA due to its failure to submit documents, primarily the trial balance and bank reconciliation statements which are necessary in determining the financial health of the agency.
The trial balance is a financial worksheet prepared in each financial period while bank reconciliation matches figures from the accounting records against those presented on a bank statement which is made primarily to uncover any possible discrepancies.
Rodriguez said the CoA only received some of POEA’s vouchers, collection and receipts every month but not the two important financial records. CoA is mandated under the l987 Constitution to submit an annual report to the Office of the President and Congress on the financial condition and on the result of the operation of all agencies of government not later than Sept. 30 each year.
CoA’s auditor detailed in POEA, Rosemarie Valenzuela, only goes to the agency once a month.
Obtaining some financial documents from CoA must first have a clearance from their director, Rodriguez stressed.
Asked why POEA failed to submit the financial papers, Rodriguez said in the CoA report POEA’s failure to submit such financial records is ‘due to lack of manpower.’ She is referring to POEA’s short of accounting staff.
The Tribune reported on the lack of manpower in Poea’s accounting division in the fifth floor and discovered later that only three employees work, including the Accounting Chief at 2 p.m. office working hours.
Poea accounting Chief Lyn Adalia said some workers were not in their offices because one was absent, one was on leave, one was out distributing documents, one was in the Department of Budget and Management, while the department still has three vacancies.
Acting on the instruction of Poea’s finance director Candida Vistro, Adalia disclosed that Poea has so far remitted a total of P330 million to the national treasury and P360 million in 2006.
Adalia said the workers’ employment agency is receiving an average collection of P20 million a month, of which a large portion of the amount stemmed from the collection of processing and license fee. The Poea exit clearance for Balik-Manggagawa or Returning Overseas Filipino Workers is pegged at P100 and P900 for Philhealth Coverage Premium.
Adalia refused to disclose Poea’s quarterly financial reports which included their collection fees and remittances to the national treasury.
Poea said a returning worker may opt to have the exit clearance processed at the Rural Net and its affiliate rural banks. The worker must submit the required documents such as valid passport and re-entry visa and pay the government fees and P350 service fee.
A worker on leave with valid Overseas Workers Welfare and Administration (OWWA) membership and PhilHeath coverage will only pay P100 for Poea processing fee.
Some forms of exit clearance include: e-receipt, an integrated receipt for payments of Poea, OWWA and Philhealth fees that also serve as the exit clearance at the airport. E-receipt are issued by the firm’s central office, Poea Cebu and La Union.
The e-receipt and Overseas Employment Certificate are issued in five copies, a copy each for the Poea, OFW, LAC, airline and airport authority and are valid for 60 days.
The multiple travel exit clearance, meanwhile, is a set of two or more clearances issued to the airline cabin crew, flight attendants, off-shore workers, and other workers for use as an exit document that is valid for 12 months from date of issue.
According to Poea, an exit clearance is proof that the worker has undergone the legal and right procedure of overseas employment. Being a registered OFW, the worker is accorded the full protection and benefits from government institution while he is working abroad and upon his return to the Philippines. It also exempts the OFW from payment of travel tax and terminal fee.
Aside from various fees imposed among OFWs, Poea had allegedly engaged in money making activities such as setting up kiosks and stalls in cafeterias with a rental fee of about P15,000. Stalls inside the cafeteria are: Western Union, OFW loan one day processing, two kiosks offering house and lot sale and e-load.
At the entrance going to Balik Mangagawa Processing Center, commercial establishments were set-up which includes: Elite Travel Center, Manila International Travel and Regent Travel Corp, occupying about 50-60 sqm space. One of the tenants refused to disclose how much is his rent to Poea when asked by The Tribune.
Hundreds of OFWs were being entertained yesterday by Globe-sponsored program that includes bingo, singing and dancing. Some radio personalities and actresses like Jolina Magdangal and Katya Santos also graced the occasion.
Poea deploys a total of 2,953 daily average workers, a total of 2,234 are land-based and 719 sea-based workers. The agency has processed a total of 1.02 million working contracts this year.
Poea receives an average of 3,000 clients and as much as 5,000 clients on peak days especially during December and January in the main office alone located in Edsa corner Origas avenue in Mandaluyong City.
These clients are overseas job applicants, seafarer-registrants, name hires, newly hired workers, overseas performing artists, relatives of migrant workers, victims of illegal recruiters, foreign employers and representatives of private recruitment agencies.
Poea and Malaca recently honored 12 OFW as recipients of 2007 Bagong Bayani Awards. They are: Chitael Carmona, Vito de Raya, Cuadrato Gidoc Gaspi, Eduardo Gulmatico, Rolando Ocampo, Hazel Reposo, Jesus Sumook, Mary Jane Pajarillo-Tupaz, Josefina Villarey, Roberto Abella, Francisco Roque and Richard Gabriel.
Poea is the government agency, which is responsible for optimizing the benefits of the country’s overseas employment program. Poea’s mission is to ensure decent and productive employment for Overseas Filipino Workers.
collator.peedee@yahoo.co.uk

Palace misused charity funds, gave loans sans records – COA
10/17/07 Malou Mangahas, GMANews.TV/GMA News Research .

Months ahead of last week’s row over "cash gifts" for local politicians and legislators, the Commission on Audit had admonished the Office of the President, under Gloria Macapagal Arroyo, to hold its officers accountable for sundry questionable expenses in 2006.

The COA said the Palace had diverted donations for calamity areas to spruce up the Malacanang Golf Course, incurred huge amounts of unliquidated cash advances, issued loans without records, and could not explain big discrepancies between the booked and physical inventories of supplies, property and equipment.Sergio Apostol, chief presidential legal counsel, told GMANews.TV Wednesday night that incurring unliquidated cash advances “is normal" among government agencies."That can be settled easily. Perhaps, the receipts and vouchers have not yet been forwarded to COA when it made the audit. But I think the papers are already with the COA," Apostol said. Apostol declined to comment on other portions of the COA findings. He said he has not received a copy of the report.
The COA, in its official audit of the accounts and operations of the Office of the President from January to December 2006, rendered “a qualified opinion on the fairness of the financial statements" and listed 10 adverse “observations and recommendations."
In particular, the COA audit revealed that Mrs Arroyo’s office:
• Failed to settle cash advances worth P615 million made to officers and employees, local government units and government corporations;
• Granted P269 million in loans out of the President’s Social Fund “without supporting documents and disbursement vouchers;"
• Diverted P8.8 million in donations for calamity areas, including P900,000 to spruce up the Malacanang Golf Course, P3 million for hotel and conference expenses, and P4 million as “donation" to an unnamed foundation;
• “Improperly recorded" P112 million in fund transfers to local government units, government corporations and nongovernmental organizations;
• Erroneously recorded in the books of the Office of the President" the P48.9 million balance of a trust account under the name “President’s Social Fund-Livelihood Assistance Program" deposited with the Land Bank of the Philippines;
• Failed to reconcile booked and physical inventory office supplies, property, plant and equipment, worth P70 million in all;
• Understated the accumulated depreciation and depreciation expense accounts of property, plant and equipment worth P950 million;The COA said the audit sought to “ascertain the propriety of the financial transactions and determine the fairness of the presentation of the statements" of the Office of the President that consists of “the OP Proper and the agencies under it."The 60-page COA report was submitted to Executive Secretary Eduardo Ermita on June 25, 2007. The report was signed by COA Director IV Bato S. Ali Jr., Cluster I – Executive and Oversight director, while the transmittal letter to Ermita was signed by COA Commissioner and officer-in-charge Reynaldo A. Villar.Lawyer Susan D. Vargas, Malacanang’s deputy executive secretary for administration and finance, and Teresita P. Valdellon, department chief accountant, signed the “Statement of Management’s Responsibility for Financial Statements." ‘Best estimates’Vargas and Valdellon certified that “the financial statements have been prepared in conformity with generally accepted state accounting principles and reflect amounts that are based on best estimates and informed judgment of management with an appropriate consideration to materiality."Too, they wrote that, “management maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition, and liabilities are recognized.
"The OP Proper, COA explained, consists of “the Private Offices, the Presidential Assistant System, the Executive Offices, the General Government Administration Staff, the Internal Administration Staff, the Internal Audit Service Unit, the Locally Funded/Foreign-Assisted Projects, and other Executive Offices."In addition, “the OP directly supervises 61 other executive offices, agencies, commissions and committees that warrant the special attention of the President."COA cited that “Article VII of the 1987 Constitution vests the executive power upon the President," who also “exercises control of all the executive departments, bureaus and offices" and “ensures that laws be faithfully executed." Unliquidated millionsFor 2006 and even two years prior, COA noted that the OP had failed to liquidate cash advances made to cash-disbursing officers worth P77 million; cash advances to officers and employees worth P29.5 million, and “other receivables" worth a whopping P508 million.In its qualified comment, the audit cited that under Section 89 of Presidential Decree 1445, “A cash advance shall be reported on and liquidated as soon as the purpose for which it was given has been served."On the other hand, COA Circular 97-002 prescribes deadlines for liquidation of cash advances, and failure to do so “shall constitute a valid cause" for withholding the salary of the accountable officers. COA has proposed that the OP “compel" these officers to settle their accounts within the prescribed period, and refrain from granting additional cash advance to those with unsettled accounts.Loans sans recordsLast year also, COA said that “loans granted under the President’s Social Fund in CY (calendar year) 2003 and January 2004 totaling P269,527,000 were not booked up, thus understating the appropriate Loan Receivable accounts while overstating the Cash in Bank account."The report explained that “one of the main funding sources of OP is its share in the net earnings of the Philippine Amusement and Gaming Corporation (Pagcor), also called the President’s Social Fund."Initially, the PSF provided funds to implement the “Isang Bayan, Isang Produkto, Isang Milyon," that Mrs Arroyo eventually institutionalized through Executive Order No. 176 issued in 2002. Under the program, “to simulate economic activity and growth of small and medium enterprises" Malacanang allotted P1 million loans for a borrower in each town and city, payable to the Land Bank.
The COA determined that loans granted totaling P216 million in 2003 and January 2004 “were not recorded in the books." Just as bad, “reports required from grantees/borrowers pursuant to the MOA (memorandum of agreement) such as accomplishment, financial and terminal reports were not submitted."Donations divertedThe diversion of donations received for calamity victims by Malacanang was also discerned by COA.In 2006, COA said the Office of the President received “from various sources" donations totaling P65,413,463.79 or P65 million, for the following purposes:
• Donation for the Southern Leyte landslide, P7.1 million
• Donation for Socio-Economic Projects of the President, P35.6 million
• Donation for Typhoon Milenyo victims, P2.7 million
• Donation for the relief and rehabilitation of affected areas in Albay province, P20 million. COA’s adverse finding follows: “We noted, however, that out of the actual expenses incurred totaling P64,079,173.40 from the donations, expenses totaling P8,807.621.75 could not be identified with any of the purposes of the donations."According to COA, Malacanang had reported using the donations thus:
• Burial expenses, P795,000
• Hotel Expenses, P815,380.15
• Maintenance of the Malacanang Golf Course, P900,000
• Summit Conferences/General Assembly, P2,295,241.60
• Donation to Foundation, P4,000,000 These expenses “out of the purposes of the donations are contrary to Section 13 of the General Provisions of the General Appropriations Act of 2005," which stipulates that “donations, whether in cash or kind, shall be deemed automatically appropriated for the purpose specified by the donor."“We recommend that management strictly use donations for the intended purposes specified by the donors," COA stated.However, it took note of the explanation given by Malacanang officials that, “some donations have (a) general purpose, so they have wider discretion of what purpose these donations shall be released."Still, COA stressed that, “the provisions of the law on donations… shall be faithfully observed."Inventory discrepanciesYet another qualified comment COA made pertained to discrepancies between physical and book inventories of supplies and equipment in the Office of the President.The audit report said that under “Construction in progress – Agency Assets," Malacanang booked a balance of P198 million, but “per physical count, it has no balance since such construction of assets was already completed."Too, the Inventory Committee of the Office of the President “failed to conduct physical count of other inventories worth P13,495,998.07," and failed to file the required semestral reports on the same.
The balance sheet of the inventories reported to COA by Malacanang included:
• Merchandise inventory worth P726,339.39
• Drugs and Medicines Inventory, P264,155.15
• Medical, Dental & Laboratory Supplies Inventory, P152,286.56
• Gasoline, Oil and Lubricants Inventory, P3,511,843.18
• Other Supplies Inventory, P8,788,899.79
• Livestock Inventory, P52,474.00
However, COA determined that:
• “There was no physical count of the Merchandise Inventory and Livestock Inventory since the balances of these were carried in the book s of accounts and non-moving since 2000."
• “Drugs and Medicines Inventory have been immediately issued upon receipt."
• “Gasoline, Oil, and Lubricants Inventory had never been inventoried semi-annually or annually."
• “In the absence of the physical count, the reliability of the balance of inventories are doubtful," COA said.Dormant accountsFinally, COA said Malacanang continues to keep in its books, as of December 31, 2006, various dormant accounts totaling P293 million dating from as far back as 1992.
The biggest item under this account pertain to “Other Investments and Marketable Securities" valued at P275.6 million.“Management reasoned that their pertinent records are no longer available due to the fire that gutted the agency’s Administration Building sometime in August 1995," COA said, “hence the difficulty or the impossibility to retrieve the required papers."
Email: collator.peedee@yahoo.co.uk

Senators uncover $150-M ZTE-type
scam in Customs X-ray project

11/08/2007 Daily Tribune by Angie M. Rosales
What was an open secret in the Customs airport area and ports was only discovered yesterday by senators, and only by accident.
The scam smacked of yet another probable anomalous and overpriced deal, similar to the ZTE broadband scandal, that was accidentally uncovered by senators yesterday, this time involving the Bureau of Customs (BoC) on some of its China-supplied acquisitions of screening facilities.
It costs the Arroyo government an estimated $150 million in foreign loans.
In hearing the proposed P6.7-billion budget of the Department of Finance (DoF), senators pounded on BoC Commissioner Napoleon Morales as he failed to explain the efficiency of the X-ray machines that form part of the $1.109-billion
lone agreements the Arroyo government entered into with the People’s Republic of China through the Export-Import Bank (Eximbank) that included the scandalous ZTE deal.
In a document earlier submitted by DoF Secretary Margarito Teves to the blue ribbon committee, pertinent to the subpoenaed papers by the blue ribbon panel for the the ongoing ZTE inquiry, it showed that there were at least two projects for the installation of the mentioned X-ray machines dubbed as “non-intrusive container inspection system project.”
The two-phase projects to be executed by the BoC showed that the first one, signed in May 11, 2006 amounting to $50 million, had been completed while the second, signed last Jan. 17 totaling $100 million, is still ongoing.
Word has been out for sometime that the X-ray machines from China do not work and are not even being used.
Sen. Juan Ponce-Enrile, chair of the finance sub-committee A, took up the matter when Morales was being grilled on the BoC’s budget that was being discussed. He confronted the commissioner over reports of supposed malfunctions of some of the 30 units already put in place that are said to cost $2.5 million each.
“We want to verify reports that some of these X-ray units are not working well and that many of these machines will be installed in areas that cannot be justified,” the senator said.
Enrile was then berating Morales over the unabated smuggling problem despite repeated claims by the administration that no sacred cows will be spared as it launched a war against syndicated groups depriving the government in hundreds of billions of revenues.
Enrile, citing reports, said even after these giant machines had been installed in key ports in Manila and other major entry points of goods coming into the country, the bureau “has not been able to control smuggling.”
The senator also mentioned in the hearing that a certain “Francis Chua”, alleged to be an influential figure in the administration had something to do with the transaction.
What further earned the ire of the senator was when Morales could not confirm this information, much less provide more categorical answers to defend the implementation of the said projects except to say that “this is a government-to-government” undertaking.
Making matters worse for Morales was when he practically admitted that his agency’s P254 billion target collection next year may have difficulty in achieving in view of the depreciation of the peso against the dollar.
“It was pegged with the rate of exchange at P46 (against the dollar), whereas I understand today, we’re only using P43.88,” he said, explaining that revenue impact for every P1 would total to P2.7 billion or P5.5 billion for one whole year.
“(But) we have initiated alternative means,” Morales bragged when he started mentioning the said X-ray machines, only to be taken aback when Enrile met him head-on in questioning the soundness of the equipment with the information in his hands.
Morales mentioned that the X-ray units are set to be put in place in the ports of Batangas, Clark, Subic, Cebu, Cagayan de Oro, General Santos and Davao.
Sen. Edgardo Angara joined Enrile in airing his apprehension over the said deal not only in view of the controversy stirred by alleged overpricing in the aborted $330 million ZTE broadband deal.
Angara, in another Senate hearing, learned that the botched ZTE transaction was practically replaced by the $400 million cyber-education project also to be funded from the same China loan.
In an earlier budget hearing, Angara and Enrile questioned National Economic Development Authority Director General Augusto Santos who confirmed that while the ZTE broadband deal had been scrapped, the cyber education (CyberEd) project is still in the works.
Santos admitted that even as the issue of the legality of the ZTE contract is pending in the Supreme Court, President Arroyo already ordered it scrapped but “we are now pursuing other options.”
“The cyber education project is still being pursued,” Santos said, adding that it has been “favorably evaluated by the Neda Secretariat and duly approved by the Neda Board.”
Angara argued, however, that the CyberEd project would be a “completely wasteful spending of the people’s money” and he vowed funding allocations for the equally controversial loan deal.
Angara said studies made in more advanced countries showed that pupils would not gain knowledge from impersonal type of teaching through CyberEd project, adding it could not replace traditional teaching with teachers in direct contact with the students.
Angara added that the P26 billion that would be paid for the project would be wisely spent to improve existing school systems, build more schools and hire more competent teachers.

Email: https://login.yahoo.com/

WB stops P21.5B in RP road funding
11/20/2007 Daily Tribune

The World Bank (WB) postponed up to $500 million or P21.5 billion in potential financing for road projects, under the second and third phase of the National Roads Improvement and Management Program after discovering the first phase of the project was infested with anomalies, irregularities and corruption.
According to the WB, ‘procurement problems’ such as ‘signs of collusion and excessive pricing’ had been identified in three successive rounds of bidding in 2003 for the first phase. The WB said these contracts, worth $33 million and representing about 10 percent of the total project cost, were rejected.
The WB has already withheld the $33 million in loans to finance road-building under the first phase of the project between 2003 and 2006 amid ‘strong signs of collusion and excessive pricing.’
The first phase of the project was already 90 percent completed and the canceled contracts were meant for two provincial roads, which were to have been funded by the WB.
The Asian Wall Street Journal’s Monday issue identified state-owned China State Construction Engineering Co. as the company involved in the bid rigging.
China State Construction is one of the contractors for the Philippines’ First National Roads Improvement and Management project.
The same firm won a $5.6 million contract under the first phase of the project in 2002, but the following year, with the WB investigating issues pointing to the company having joined a cartel with other firms to rig bids for two other projects valued at $33 million, the WB decided to put a stop to this by stopping the funding.
WB vice president Jim Adams said in a statement that after an investigation, the World Bank imposed more stringent conditions on funding for the planned second stage of the project, which has since been delayed.
A Tribune source said the uproar over the anomalous project went up as high as just seated WB president Robert Zoellick who personally ordered the cancellation of the project.
The National Roads Improvement and Management Program was designed as a three-phase, nine-year project in which $150 million has already been disbursed for the first phase. Financing for the entire project is expected to reach more than $600 million.
The WB’s Department of Institutional Integrity began looking into the project in 2003 after receiving reports of bribery and rigged bidding for contracts for the project
The WB body found in October 2005, 35 instances of collusive bidding involving 16 companies working as a cartel.
Early last year, two members of the cartel were murdered while on their way to meet WB investigators, forcing the WB to pull its staff from the country.
The WB said it is currently holding proceedings against 16 firms involved in the first phase of the project to determine whether or not to pursue the remaining two phases.
Adams said that new conditions being instituted by the WB on similar projects in the country included ‘stringent anti-corruption measures’ developed jointly by the World Bank and the Philippine government.
These include independent procurement assessment and technical audit, internal controls and audits of the road management agencies, and the inclusion of a ‘citizen and road user’ monitoring group in the project management set-up.
He said remaining phases of the project had been deferred until President Arroyo’s government provided certain information sought by the lender, which has never been submitted or obtained by the WB.
Building on the experience of the first phase and the lessons learned from the INT (Department of Institutional Integrity) investigation, and in line with the World Bank’s governance and anti-corruption strategy, the Government and World Bank team jointly developed stringent anti-corruption measures for the second phase of the Program.
‘With the INT report now completed, the discussion of the Phase Two project at the Board has been deferred until the Government and the Board members receive the information they have requested,’ the international lender said in its statement.
Malaca immediately defended the country’s anti-corruption efforts but did not quite disagree with the WB’s decision.
Both Presidential Management Staff (PMS) chief, Secretary Cerge Remonde and secretary to the Cabinet Ricardo Saludo hinted that the WB action is a ‘wake-up’ call for the anti-graft bodies to do better so the anti-corruption drive of the government would be further felt.
Remonde used as example the creation of a pro-performance team by Mrs. Arroyo which aims to monitor the transparency of Chinese-funded projects and stressed that the group has already started working.
‘The creation of the pro-performance team headed by (Remonde) and composed of representatives from the private sector such as business, media, religious , youth and the academe will ensure the transparency and efficiency of road and other infra projects. The group has started working , in fact each member of the steering com has their individual set of projects to monitor to insure focus,’ Remonde said.
Saludo echoed Remonde’s claim but expressed hope that the WB would continue its strong ties with the Philippine government.
‘The government supports all efforts to curb corruption and we have many years of cooperation with the World Bank, especially in procurement reform. We expect that anti-graft agencies will look into and act on any solid evidence of corruption ,’ Saludo said.
WB stated that it remains actively engaged with government and civil society on strengthening governance and fighting corruption. With Sherwin C. Olaes and AFP

Contractors lined up for WB road deal rig probe
11/26/2007 Monday - by Angie M. Rosales Daily Tribune

The Senate will start today with contractors of multimillion-peso deals for the National Road Improvement and Management Program (NRIMP) that the World Bank (WB) had earlier suspended over allegations of corruption in its investigations into circumstances that led to the decision of the multilateral funding agency that was described as a national humiliation.
The WB had said it had shelved negotiations for the second phase of the project, worth $232 million in soft loans proposed by the government, until the government sets up measures to guarantee the project would be free from irregularities.
Opposition Sen. Loren Legarda moved for the Senate committee on economic affairs jointly with the
committees on public works and finance to invite contractors that were awarded contracts under the NRIMP projects in the Visayas and Mindanao.
“I want to know the owner of these construction companies,” Legarda was quoted as saying. She said based on the WB report suspending the NRIMP, alleged bid-rigging happened for road projects in Surigao and Negros Occidental.
Legarda said first on the Senate list was a plan to interrogate Fu Yu Cheng of the China State Construction Engineering Corp. and another company yet to be identified.
Other companies that participated in the auctions for the NRIMP were the China Road and Bridge Corp., China Geo Engineering Corp. China Wuji Co. Italian Thai Development Public Co., C.M. Pancho Construction and Cavite Ideal International Construction and Development Corp.
The Senate passed three resolutions directing the committees on economic affairs, public works and finance to conduct the investigation following a statement by the World Bank that it had put on hold the loan because of corruption and bid-rigging.
In a statement from Washington D.C., World Bank Vice President for East Asia and the Pacific Region, has said between 2003 and 2006, the World Bank rejected two large road contracts in three success rounds of bidding because of strong signs of collusion and excessive pricing.
The government, when informed of the multilateral body’s decision, tossed back the blame to the World Bank.
Budget Secretary Rolando Andaya said the WB was partly to blame for the alleged irregularities because its procurement system was prone to corruption.
Public Works and Highways Secretary Hermogenes Ebdane Jr. also said that without funding assistance from the World Bank, the Philippines would proceed with the project. The Office of the Ombudsman also announced that it was looking into the project to determine if any such irregularities existed and to file charges against those responsible.
Earlier, Legarda said that she would ask the Senate to pass remedial legislation providing for safeguards in Overseas Development Assistance (ODA) loans to prevent corruption and ensure accountability in the use of such funds for government projects.
The World Bank loan is considered an ODA since it is a “soft loan”, giving easy term of payments and lower than commercial loan rates.
In her proposed resolution for an investigation of ODA loans, Legarda noted that at least 141 ODA loans were obtained by the government worth a total of $9.5 billion as of the end of last year. ODA loan cancellations, however, amounted to $222.34 million “due to problems and bottlenecks in implementation.
Legarda also wanted to look into “tied loans” from foreign countries that obligate the recipient countries, like the Philippines, to purchase equipment, supplies and technical assistance from the lender. In the end, the recipient country ends up the loser because a great part of the loan is kicked back to suppliers, contractors and technical personnel from the lending country.
“We must see to it that our foreign loans end up to the net benefit of our people, and not just result in pink elephant projects that benefit more the lender than the borrower,” she said.
WB spokesperson for the Asia-Pacific region Peter Stephens earlier told newsmen discussions on the loan for the second phase of the NRIMP will remain on hold indefinitely until the charges of anomalous procurement during the project’s first phase have been resolved.
”The president of the World Bank has said categorically this project will not even go back to the board for consideration until all the questions have been answered and all the doubts are allayed,” Stephens said.
The World Bank’s Department of Institutional Integrity (INT) has completed a report on the corruption charges, which the international lender has forwarded to the Ombudsman.
Stephens also said that the lender’s board will need to check the phase 2 proposal to see whether all of its descriptions and processes are up to par with World Bank standards of anticorruption.
“There is no timetable (for the review). What there is, is a commitment to do it properly,” Stephens said.
A World Bank official however clarified that the international lender is not necessarily waiting for the Ombudsman to recommend that charges be filed against public officials involved, if any, in the bidding anomalies during the first phase.
“That’s a decision for the government to take… in its own time,” he said.
“When we were bidding that out, we noticed that the bids were higher and the process looked flawed so we rejected the bids… we rejected them three times and in the end we never financed those components,” Stephens said.
Because the collusion was “so stubborn and so pronounced,” Stephens said they notified the INT to investigate the incidents.
The INT then “fed information” back to the World Bank on how to prevent collusions from happening again, and also began compiling an exhaustive investigation report on what had happened and which companies and officials were involved in the collusion.

Email: collator.peedee@yahoo.co.uk

Malaca Cash gifts, Lacson to get DBM to give copies of the P500-million Saro at its budget deliberations.
11/23/2007 Daily Tribune reports :-
Denials from Malaca and the Department of Budget and Management (DBM) that there were no funds worth P500 million that went into the bank account of businessman Reghis Romero II, withdrawn from the Bank of Commerce (BoC) Pampanga branch and distributed to some 190 congressmen and local executives last Oct. 11 in Malaca won’t suffice for senators investigating the controversial ‘cash gift’ issue.
The money trail of the alleged P500,000-cash gifts Malaca reportedly distributed to governors, mayors and congressmen, which is expected to lead to the purported P500-million housing funds released to Romero, is seen to be established soon despite DBM Secretary Rolando Andaya’s denials.
Opposition Sen. Panfilo Lacson vowed to get the DBM to furnish the Senate the copies of the P500-million Saro (special allocation release order) when the Senate begins its budget deliberations on Monday to validate his charges that the Palace distributed cash gifts to local executives following a dialog with President Arroyo more than a month ago, allegedly partly coursed through the release of funds due to Romero.
‘I intend to ask DBM to produce the Saro to check on whether it passed through HLURB (Housing and Land Use Regulatory Board), HUDCC (Housing and Urban Development Coordinating Commission) or DPWH (Department of Public Works and Highways.) I intend to pursue that’ not necessarily in the (Senate’s) hearing (on the alleged Palace payoffs) because we will not be getting anything from them (Cabinet officials) but in budget hearings.
‘We will try to secure a copy of the Saro. I will use the finance committee in the budget deliberation to secure the documents. We can refer to the documents to know the movement of money from the Bank of Commerce, from Romero’s account,’ Lacson said.
The senator’s statements came as the DBM secretary belied Lacson’s allegations on the money flow from Romero’s account, with an estimated P3 billion ‘collectibles’ of the businessman from the Arroyo government.
‘I want to see the copy of the Saro as released by DBM,’ was Lacson’s response to the denials made by the HUDCC and HLURB, maintaining the validity of his information divulged during the second public hearing by the Senate blue ribbon and local governments committee into alleged Palace payoffs, citing his source of information as ‘unimpeachable.’
‘I have no reason to doubt that which was told to me by DBM insiders that it (DBM) released the funds to the account of Mr. Romero. Whether it’s HLURB or HUDCC, I intend to find out from DBM,’ he said.
Lacson clarified that he is not trying to link Romero to the alleged payoffs by picturing him as one of the purported financiers.
The senator said Romero could even be a ‘victim’ in this case, as the businessman, in an effort to collect dues from the administration may have been compelled to provide some of the funds in the purported ‘gift-giving’ that took place right inside Palace’ premises.
‘I’m trying to connect the P500 million released by DBM to Romero as collectibles and I also know Romero is a client of BoC. That’s why I’m trying to tie this all up, the possibility of the funds distributed in Malaca coming from that. I’m treating Mr. Romero not as a suspect here but as a possible victim of extortion,’ he said.
Lacson twitted the DBM’s challenge to him in producing evidence to buttress his allegations saying the burden of proof is on the senator. ‘That’s always the challenge (of the administration whenever charged of certain irregularities). But remember, we are not in the court of law. We are here investigating, looking for facts and information. We are here in aid of legislation. We want to ferret out the truth behind the mystery of the cash gifts given in Malaca,’ Lacson stressed.
He added that every Filipino and public officials like himself should find out from where the funds came.
He said he will be submitting his requirements, among which is a copy of the Saro as released by DBM in July in the amount of P500 million, whether it’s broken down in separate tranches,’ he said.
Lacson said he had also sent a formal letter to the Philippine National Police (PNP) asking for copies of Saros released to the police agency by the DBM, saying he will be pursuing this.
For his part, Minority Leader Aquilino Pimentel Jr. expressed strong suspicion that the management of the BoC is covering up its involvement in the Palace cash gift controversy to prevent Senate probers from uncovering the source of the money and the personalities involved.
Despite the fact that the bill wrappers, used in bundling the P500,000 received by Pampanga Fr. Ed Panlilio during the Oct. 11 meeting in Malaca, bear the bank’s logo and a signature of its employee, Pimentel said he found it unbelievable that the bank could not even identify the branch where the money was deposited and withdrawn.
‘Apparently, the bank is trying to cover up this mess by its vice president’s explanation going around in circles,’ he said.
Under questioning by Pimentel during Wednesday’s hearing of the Blue Ribbon Committee and Committee on Local Government, Bank of Commerce executive vice president Arturo Manuel, Jr. confirmed that the bill wrappers used in bundling the P500,000 in P1,000 denomination given to Panlilio carried the official logo of his bank and the signature of Winona Yumul-Bondoc, a cash custodian at the mini-cash center in Angeles City. The date was also indicated - July 22, 2007.
But Manuel failed to provide the paper trail of the money - from the mini-cash center to the branch of the bank where it was delivered and withdrawn. He failed to identify the branch where the withdrawal took place, saying he could not identify the owner of the deposit, the person who withdrew the money and the teller who processed the transaction.
Manuel also told the hearing that the date appearing on the bill wrapper indicates when the money was bundled and verified by the cash custodian (Bondoc), but not when it was withdrawn.
Dumbfounded by the explanation of the bank executive’s explanation, Pimentel remarked that he could not imagine a bank releasing such a huge amount of money without having a paper trail of its movements.
Manuel pointed out that the cash movements from the mini-cash center are prompted by either an excess cash being remitted to the nearest Bangko Sentral cash office, the requisition of a branch within the area or remittance of excess cash from the mini-cash center to the head office cash center.
When Pimentel asked whether the management of the Bank of Commerce bothered to conduct an inquiry by requiring Bondoc to give an explanation, Mr. Manuel replied ‘no.’
His answer prompted Pimentel to say that the bank was being insensitive for its seeming lack of interest in unraveling its own involvement in the Palace payoff scandal.
‘My God, the whole country is agog over this thing and the Bank of Commerce does not bother about it. Why would that be the case’ Can you kindly put on record why you have a nonchalant attitude about this thing?’
Pimentel then requested the Senate investigating panels to invite Miss Bondoc to the next hearing on the case.
Meanwhile, instead of refuting the allegations head on, Malaca yesterday went ballistic and skirted the issue, accusing instead the Senate and the media for coming out with ‘unsubstantiated’ allegations that Mrs. Arroyo tapped businessman and supporter Reghis Romero II to release some P500 million for the benefit of congressmen and local executives, distributed at the height of the Chief Executive’s impeachment complaint being filed at the House of Representatives.
Both secretary to the Cabinet Ricardo Saludo and DBM’s Andaya, however failed to provide information on whether the budget agency had released P500 million and coursed to the BoC, under the account of Romero.
‘Many unsubstantiated accusations have come out of the Senate investigation and some opposition senators. These claims make headlines and besmirch reputations, even if no basis is given to support them, except unnamed, maybe non-existent sources or purported evidence to be presented at the proper time and forum,’ Saludo said.
He stressed that the Senate and media are violating the rights of individuals through baseless allegations.
‘Such baseless claims broadcast live in Senate investigations may be violating the constitutional provision that ‘the rights of persons appearing in, or affected by, such inquiries shall be respected.’ For fairness and truth, we hope our lawmakers will assess the basis of allegations before they are aired in nationally televised proceedings. It is not enough to invite the accused to clear their names; the accusers must also be told to substantiate their charges. After all, the burden of proof lies with the accusers,’ Saludo added.
In a radio interview over dzMM, Andaya claimed he had verified with his office on this alleged payment, and claimed that the DBM has not issued any payment to any private individual or the HLURB.
When asked if the DBM could have coursed the payment to Romero, through the National Housing Authority (NHA), Andaya said they have yet to verify it.
Romero is a political supporter of Mrs. Arroyo and owner of RII Builders Inc., which was awarded the multibillion-peso contract for the Smokey Mountain development and the reclamation of an initial 40 hectares of land, which was later expanded to 79 hectares, during the term of President Fidel Ramos.
With Sherwin C. Olaes
Email: collator.peedee@yahoo.co.uk

Impsa Probe - Northrail Scam

Gloria, allies oppose Impsa probe revival.
01/13/07 By Angie M. Rosales,Sherwin C. Olaes & Dona Policar.

With the announced move by senators to reopen the $14-million Industrias Metalurgicas Pescarmona Sociedad Anonima (Impsa) payoff probe, Malaca yesterday gave clear signals it is opposed to the Senate’s move to revive the hearings on this matter, saying this is a waste of time, since the investigations hae been already made in the past, and that the same issue is now in the Ombudsman’s office, skirting the fact that the Impsa probe will deal mostly with the alleged payoff to powerful officials in exchange for the sovereign guarantee, while the Ombudsman’s case deals merely with indicted former Justice Sec: on extortion, graft & falsification of documents. But there is nothing Malaca can do to stop a Senate probe this time. Vows have been made that no stone will be left unturned as the Senate braces itself for the reopening of the controversial Impsa power deal, with no possibility of a stonewalling of the proceedings, as opposition Sen. Panfilo Lacson virtually expanded its coverage, to uncover what he said is the truth, not only on actual personalities involved but also the reason behind the Arroyo government’s reluctance to determine the source of the purported $2 million bribe or extortion money received by the former Justice chief. It is more believable to conclude that the said amount was part of a grand scheme that facilitated the signing of the Impsa deal that contained the government’s sovereign guarantee and not a mere case of extortion as alleged by some quarters, Lacson said in his new resolution filed Thursday, 11th January 2006.. All possible loopholes will be plugged, with Lacson vowing to insist on the holding of the inquiry even during the campaign recess, possibly to be handled by the Senate’s energy committee. Lacson’s move came following administration Sen. Joker Arroyo’s expressed apprehension in taking up the Impsa bribe probe by his blue ribbon committee citing a number of reasons, although a number of their colleagues, this early, have rallied behind the proposed reinvestigation. Senators Sergio Osme II and Ralph Recto posed no objection to the proposal of Lacson, even on the conduct of public hearings during the congressional break. Osmena also recommended the issuance of invitations or summons to concerned government officials, apart from the alleged source of the bribe or extortion money, former Manila Rep. Mark Jimenez, and officials who served under Presidents Arroyo and Estrada, specifically those who held the position of secretary in the Departments of Energy (DoE), Finance (DoF) and Justice (DoJ).Osmena said former Bulacan Rep. Wilfredo Villarama, businessman Ernest Escaler, present and former presidents of the National Power Corp. (Napocor ) as well as a representative of the Coutts Bank in Hong Kong. In a telephone interview, Lacson said he had already effected the filing of resolution No. 607, replacing his former resolution No. 477 introduced in Nov. 2002, to pave the way for a fresh inquiry and more thorough inquiry. I will leave it up to the Senate leadership, to Senate President Manuel Villar Jr. to direct whichever standing committee is appropriate to handle the probe, he said. Lacson said, if possible, he would rather that the proceedings be handled by the energy panel or the government corporations to ensure a smooth flow of the probe even during campaign recess. In introducing his new resolution, Lacson indicated that the probe should not only concentrate on the $2 million alleged bribe money received by Perez but the entire supposed $14 million payoff that was purportedly made by the Argentine firm Impsa to some government officials in exchange for the approval of its contract to build-rehabilitate-operate-transfer the Caliraya-Botocan-Kalayaan (CBK) hydroelectric plant. The said contract, that was earlier reported to have been disapproved by Estrada when he was still in office, was approved four days into the Arroyo administration, prompted by the legal opinion rendered by Perez as the newly appointed Justice secretary. Perez reversed the opinion of his predecessor, Justice Secretary Artemio Tuquero . Previous reports also alleged that in exchange for this presidential approval of the Impsa contract, $14m was allegedly deposited in the Trade and Commerce Bank of Uruguay in the Caymans and of this supposed amount, some $2 million purportedly found its way to the bank account of Escaler and Ramon Arceo Jr., Perez’s brother in law, with the Coutts Bank in Hong Kong. The said amount was later transferred to the accounts of Arceo and Perez wife Rosario in Switzerland. It will be recalled that when the Swiss government issued a report sometime ago, suspecting the amount deposited as laundered money, it made a formal request to the Philippine government to assist in determining the source of this fund. Lacson pointed out, as he had bared recently showing evidence on Justice Secretary Raul Gonzalez’s order to withhold processing of the needed papers, from the time the request was made until last Jan. 9, when the Office of the Ombudsman announced its resolution recommending the filing of charges against Perez, the Philippine government did nothing to lend assistance in determining the source of this fund. To date, statements were made that the case filed against former Secretary Perez et.al was purely a case of extortion and that the occupants of Malaca had nothing to do with the said money, he said, adding there is need to uncover the truth as it puts to doubt the sanctity and validity of the contracts entered into by the Executive Department. Lacson also reiterated the unveiling of the identity of the parties who facilitated the approval of a contract for them to be prosecuted for violation of the Anti-Graft and Corrupt Practices Act and of the Plunder Act. Also yesterday, Senator Arroyo issued a press statement belying insinuations that his blue ribbon committee stonewalled the conduct of the probe into Lacson's resolution No. 477 According to the director-general Emilia Pueyo, of the blue ribbon committee, there was no Impsa resolution some years ago. But to the best of her recollection, the blue ribbon was only a secondary committee. The Senate offices are closed so this can be ascertained only on Monday. The blue ribbon committee has no pending matter un-acted upon as the primary committee, he clarified. Nonetheless, he said in a radio interview that should Lacson introduce or re-file the resolution, he is open to the idea of reviving the probe. But he warned that the proceedings may only be redundant or an end up an exercise in futility considering that the Ombudsman had already conducted the same and even came out with a set of recommendations recently. The matter is already in the hands of the government prosecutors. We should give ample respect to the other departments of the government. Otherwise, it would look as if we’re competing with them. Sen. Arroyo admitted, however, that if the Senate leadership would accede to the proposition of Lacson, the upper chamber cannot be prevented from issuing summons or to order the investigation of anyone. Presidential Legal Adviser Sergio Apostol used the same excuse made by Senator Arroyo, saying it makes no sense reopening the inquiry since the Senate had already started the probe. They already conducted an inquiry before. They have the records until now so they can use it to file charges or have a proposed bill. There’s no need to reopen the case. Apostol said. Apostol also accused Lacson of using the Impsa deal to advance his candidacy in the May polls. Not surprisingly, administration congressmen defended the Arroyos in the Impsa bribe controversy. Lacson, according to Reps. Douglas Cagas (Davao del Sur) and Edwin Uy (Isabela) should stop being a fishwife and come out immediately with his evidence on the alleged involvement of the First Couple in the extortion case against Perez. Put up or shut up, they told Lacson. These are unsubstantiated charges similar to previous unproven charges against the Arroyos of which Ping has always been wont to do, Cagas said. Uy, for his part, said Lacson has nothing to show and that he is now dragging the First Gentleman into the issue to divert public attention that he cannot show proof of what he is saying. Ping could not even say where the $14 million comes from. So for the sake of his reputation as a senator, I appeal to him to stop wasting his time on rumors, the congressman said. Anakpawis Rep. Crispin Beltran, for his part, expressed belief that an agreement has been forged between Jimenez and Malaca, which sole intention is to unite against former President Joseph Estrada and undermine the opposition which still considers the former president as its head.
Email: collator.peedee@yahoo.co.uk

North Rail Scam
Diego K. Guerrero said...
The cast of corrupt characters in the China Eximbank-financed Philippine anomalous government projects are almost identical. The over-priced $503.4-M North Rail project really stinks. The 42-km railroad track cost about t $10-M per km. for the 100-year old diesel technology train. North Rail covers Monumento to Calumpit, Bulacan.Transportation and Communication Sec. Mendoza is the big boss of North Rail project and PNR. The late Philippine National Railways (PNR) Chairman Jose Cortez died of a sudden heart attack and left a big fortune of P560-M bank deposit. Where the money came from? House Speaker Jose De Venecia lobbied the project. NEDA chief Romulo Neri denied any irregularity in the project. The over-priced $329-M ZTE-NBN project is also finance by China Eximbank. Neri, Mendoza and De Venecia are again involved in the current scandal. Sen. Enrile belongs to the adminstration majority in the senate.Saturday, 02 12, 2005 Daily Tribune GMA’s China North Rail project reeks of graft HOUSE LEADER IMPLICATED IN ALLEGED P29-B RAIL OVERPRICE The gloves are really off.Opposition Sen. Juan Ponce Enrile yesterday heatedly denounced the North Rail project and the half a billion dollar loan secured by President Arroyo from the Chinese government during her state visit to China late last year.Speaker Jose de Venecia Jr. was also linked to the alleged overpricing of $503 million or P29 billion in the foreign-funded North Rail Project has after his name, as well as one William Go, cropped up during the hearing in the Senate yesterday.Enrile, in exposing the alleged P29-billion North Rail scam, vowed that it won't matter to him if he exposes the high and the mighty in government in this scam, saying “I will expose all of you before the Filipino people. I am old and I fear no one.”Enrile stunned senators after he had disclosed that apart from the high 3 percent interest the Chinese Bank exacts from the government, the Department of Finance (DoF) also imposed a 1percent additional interest in the project cost, a move lawmakers in the upper chamber found questionable since this insertion was never part of the original arrangement.With the additional 1 percent, this will increase the capital cost by 25 percent, Enrile stressed, adding the cost mentioned is still separate and distinct from the $82 million that will be borne by the government for undertaking the project and some P7.3 billion funding requirement for relocation of almost 41,000 affected families.It was admitted by Arroyo officials in an earlier hearing that there was no money with which to fund the relocation of the squatters in the North Rail area.Enrile, in exposing the North Rail project anomaly, said the loan for the project that was secured by Mrs. Arroyo from China's Export-Import Bank (Exim Bank) through the intercession of the government of People's Republic of China (PROC) during her state visit, is said to be a pet project of De Venecia.The disclosure is seen to steer the ongoing investigation into the hands of the powerful blue ribbon committee given the alleged big names in the government supposedly involved in the purported scam.In the hearing conducted by urban planning, housing and resettlement committee headed by Sen. Rodolfo Biazon, De Venecia was alluded to as the official behind this alleged highly-anomalous deal.Enrile revealed this information reached his office as he questioned the one-percent additional interest rate the DoF had imposed as a means to guarantee government's payment of the loan.In questioning the DoF officials, Enrile also made mention of a certain Hong Kong-based William Go, whom De Venecia allegedly used as a broker to ensure that the contractor, China National Machinery and Equipment Corp. (CNMEG), secures the contract.Heatedly, Enrile charged: “You are plundering the people! The mere fact that you are doing this without notifying us of this, is already a crime.”He added: What kind of bankers are you that you drain the blood of the country? This scam is being talked about in coffeeshops-and the word is out that very high government officials are involved in this scam. Even the name of De Venecia has been linked to this.“And who is this William Go from Hong Kong? He (allegedly) has a commission in this (deal) and the public will be made to pay for it. Even other politicians being involved in this are (allegedly receiving) commissions...they are 'commissioners,'” Enrile said, in berating the DoF officials.It was learned that Enrile was made aware of the fact that the DoF had imposed a 1 percent interest on top of the three percent.“The cost of this is going to be four percent instead of three percent...and the people who tell me this are themselves in the board of this railways (North Luzon Railways Corp. (NLRC) project. They have told me that they are being exacted another one percent by the DoF in addition to the (one percent interest rate of) $503 million.“The finance department is passing this on to the railways corporation...in effect an additional 25 percent of the cost of money... that will be passed on to the riding public...if this is true, we are bargaining off the nation and the people with 25 percent,” he said.DoF officials confirmed the one percent interest, saying it is in the draft subsidiary loan of the agreement to cover the cost of managing of the relending of the loan.Based on their explanation, it would appear that the additional interest rate was made to ensure the Chinese foreign bank of the Arroyo government's payment of the loan in case there would be a default in obligation.“For God's sake why are you doing this kind of thing? Managing a loan? You are being paid to handle the finances of the government and you are going to act as if you were a corporation, a bank to exact money from the people like this...that's $5 million,” Enrile said.The senator was assured, however, that the subsidiary agreement is yet to be signed but the opposition lawmaker would not hear of it as he still required the officials to submit in the next hearing their explanation on the matter along with the necessary documents and the signed contracts.In view of this information, Biazon, during the hearing, moved that the ongoing investigation be turned over to the committee on accountability of public officers and investigations or the blue ribbon committee chaired by Sen. Joker Arroyo.Biazon's decision was immediately supported by panel members, Enrile and Sen. Juan Flavier.Minority Leader Aquilino Pimentel Jr. who paved the way for the conduct of the probe after he delivered a privilege speech earlier this month questioning the project said the matter is proving to be messy as the public was given the impression the North Rail project would be built at no cost to the government after President Arroyo claimed she had managed to secure a loan package from the Chinese government when she made her state visit to China.The project has been awarded to CNMEG and is funded by a $503 million loan, of which $421 million comes from China's Export-Import Bank. This was the arrangement designated by the People's Republic of China when its officials agreed to grant Mrs. Arroyo the loan agreement, which was formally executed in a memorandum of understanding.
29 September 2007 15:17
AdB said...
The DoTC is the largest govt agency in government.It has control of air, land and sea and everything that links the islands, all the objects that roll, fly or float in the country.It is one of the agencies that's so important to any sitting president because it is a piggy bank. I'm not surprised Gloria put one cop after the other at it's head - someone like Lastimoso and Mendoza who have the tong mentality!
https://collator.peedee.yahoo.co.ukm/

Senate set to reopen Northrail inquiry.
11/21/2007 Daily Tribune
Formally asked the Senate to resume its inquiry – in aid of legislation – into the Northrail issue.
Pimentel urged the upper chamber to direct the appropriate Senate committee to undertake the probe and to recommend measures to ensure compliance with the government’s procurement process.
Official documents show that the government borrowed $400 million from China’s Export-Import Bank to finance the rehabilitation and modernization of the first phase of the Northrail project – the 32-kilometer stretch from Caloocan City to Malolos City. The government has provided a $103-million counterpart for the project.
On Feb. 26, 2004, then Finance Secretary Juanita Amatong signed a “Buyer Credit Loan Agreement” with China’s Eximbank, after it was cleared by Asst. Government
In filing Resolution 210, Pimentel formally asked the Senate to resume its inquiry — in aid of legislation — into the Northrail issue.
Pimentel urged the chamber to direct the appropriate Senate committee to undertake the probe and to recommend measures to ensure compliance with the government’s procurement process.
Official documents show that the government borrowed $400 million from China’s Export-Import Bank to finance the rehabilitation and modernization of the first phase of the Northrail project – the 32-kilometer stretch from Caloocan City to Malolos City. The government has provided a $103-million counterpart for the project.
On Feb. 26, 2004, then Finance Secretary Juanita Amatong signed a “Buyer Credit Loan Agreement” with China’s Eximbank, after it was cleared by Assistant Government Corporate Counsel Efren Gonzales and approved by then National Economic and Development Authority Director General Romulo Neri.
Pimentel cited reports that the amount of $125.75 million (P6.5 billion) has already been advanced out of the $503-million funding, and yet the project, scheduled to be completed in May this year, appears to be heading nowhere.
The loan was allegedly contracted without the approval of the Monetary Board as required by section 20, Article 7 of the 1987 Constitution.
“The contract for the project is not only overpriced, but is also ridden with onerous conditions especially in case of default in the payment of the loan,” Pimentel said.
In another onerous provision of the loan agreement, the Philippine government will waive its immunity from suit over its sovereign and patrimonial assets, placing under China’s laws and jurisdiction any suit or judgment that might arise from the contract and granted Eximbank unilateral authority to determine payment schedules and the right to impose penalties for any delay in the project.
Pimentel also questioned why the loan agreement between the Philippines and Eximbank designated the China National Machinery and Equipment Corp. as the contractor for the Northrail project in flagrant violation of the Government Procurement Reform Act (Republic Act 9184) requiring that projects like this should be subjected to competitive public bidding.
He said the Senate inquiry should also determine whether there was prior appropriation of public funds and certification of availability of funds by proper authorities before the railway project was awarded and implemented.
Senate President Manuel Villar Jr. said the reopening of the probe would likely be taken up, but that the Senate could not force De Venecia to face the inquiry due to the so-called parliamentary courtesy.
“We can’t summon the Speaker here, but we can call other officials who are allegedly involved in the deal to the probe,” Villar said in Filipino.
Malacañang, meanwhile, has reportedly told De Venecia not to drag President Arroyo into the Northrail mess while urging him to appear in the Senate investigation to explain his side in the issue.
Chief presidential legal counsel Sergio Apostol stressed that Mrs. Arroyo had nothing to explain over the matter since Enrile only pointed to De Venecia as the alleged “godfather” of the Northrail project.
“Why would he (De Venecia) involve Malacañang in the Northrail project? We have nothing to do with it. It is Senator Enrile who wanted to investigate Northrail. Why would he (De Venecia) drag us into it? He is the subject of a Senate investigation and as a consequence, he should be the one to explain over it,” Apostol told reporters during a phone interview.
Moreover, Apostol also said he could not blame Enrile for being irked at reports that Malacañang was using him to pin down De Venecia on the Northrail controversy.
“These are baseless rumors and speculations. This could be the reason Senator Enrile is already irritated because his intention to probe the matter is being attributed to us (Malacañang) as the mastermind. But its not Malacañang that wants him (De Venecia) grilled over the matter, it is the Senate,” he stressed.
Supporters of De Venecia in the House of Representatives have claimed that he is being probed on the Northrail issue due to his son and namesake, Jose “Joey” de Venecia III’s exposé before the Senate recently, linking First Gentleman Jose Miguel “Mike” Arroyo in the government’s approval of the controversial $329-million National Broadband Network deal forged with China’s ZTE Corp.
Aside from naming Mr. Arroyo, the younger De Venecia tagged former Commission on Elections Chairman Benjamin Abalos Sr. as one of the proponents of the ZTE project, which he said is laced with millions of dollars worth of kickbacks.
Apostol, however, maintained that Mrs. Arroyo’s relationship with De Venecia remains cordial.
This early, though, Apostol said the President may not allow members of her Cabinet to attend the Senate inquiry into the Northrail issue.
“We will invoke the Senate vs. Ermita case, (a Supreme Court decision that gave Mrs. Arroyo authority to decide whether she would allow members of her Cabinet to attend any congressional investigation). They (Senate) could invite underling officials to their inquiry, but not a member of the Cabinet. We will oppose that,” he said.
By Angie M. Rosales and Sherwin C. Olaes

collator.peedee@yahoo.co.uk