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.
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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

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