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ZTE Broadband Deal: Another multi-million racket of the Arroyo family

A Primer on the ZTE Broadband Deal Controversy

"...illegal, grossly disadvantageous to the government and unjustly burdensome to the Filipino people because of the ridiculous overpricing of this project and the huge kickbacks anticipated by those who brokered this anomalous deal," - Joey De Venecia, Senate Hearing on the ZTE deal

What is the ZTE broadband deal?

The Zhong Xing Telecommunications Equipment Limited (ZTE) National Broadband Network Deal is a highly controversial, $329 million contract signed by the Philippine and Chinese governments, witnessed personally by President Arroyo, last April 2007 in China.

The NBN project was a proposal of the Dept of Transportations and Communications (DoTC), a plan which started way back in 2005, aiming to establish a internet broadband connection to local government units and government agencies nationwide.

Contract was lost

DoTC Sec. Leandro Mendoza signed the contract which was later reported "lost." The National Bureau of Investigation suspected that it was stolen. The DoTC then "reconstituted" the contract, which ZTE and Mendoza signed late May 2007.

Supreme Court TRO

The Supreme Court has already issued a Temporary Restraining Order on the implementation of the contract last Sept 11, acting on a petition by Iloilo Vice Governor Rolex Suplico saying that the contract violated existing laws requiring proper bidding and transparency.

Why is the deal controversial? What is the involvement of First Gentleman Mike Arroyo and the Arroyo family?

Jose "Joey" De Venecia III, son of House Speaker Jose De Venecia Jr., which is a known ally of the administration, divulged his knowledge of the huge overpricing and kickbacks involved in the deal in an affidavit, and afterwards, in a Senate inquiry. Joey De Venecia is the owner of Amsterdam Holdings Inc. (AHI), which lost the bid for the NBN project to ZTE.

Among other things, his testimony and other reports divulge the following:

Project hugely overpriced

The project was overpriced by about $130M (P6 B) in its first proposal and the current contract for implementation by about $89M (P4 B), which will be loaned by the RP gov't to China with interest.

"Powerful person" Abalos was the broker

COMELEC Chairman Benjamin Abalos brokered the deal as he was "golfing buddies" with some ZTE officials, something he did not deny. In return, he and "his cabal" was to get $130 M in kickback. Abalos also reportedly went to China several times, enjoying escapades paid for by the ZTE officials. He admitted having several trips to China.

Former NEDA Director Romulo Neri, was also bribed P200M by Abalos to endorse the contract, causing the former to reverse his earlier recommendations questioning the deal.

FGMA and gang terrorizes JDV3, tells him to "back off!"

As De Venecia further asserted on the merits of his proposal, he gets "terrorized" in a "reconciliatory" meeting by Abalos, Mendoza, four other men and First Gentleman Mike Arroyo.

De Venecia said that FG Mike Arroyo, whom he initially called the "mystery man", approached him in this meeting, and with a finger that was about “two inches from his nose,” told him to “back off.” Arroyo wanted De Venecia to leave the deal and stop meddling.

FGMA fled the country a day before the Senate hearing, raising suspicion that he was avoiding the scandal.

While JDV3 consistently asserts that the President had no hand in the deal, the Senate hearing established that President Arroyo knew of the deal and its onerous character but did not stop it and instead pushed for its implementation.

The ZTE NBN deal is only the latest among the many corruption and malpractice scandals involving President Arroyo and her family.

Other controversies:
  • IMPSA (Industrias Metalurgicas Pescarmona Sociedad Anonima) Hydro-electric Power Plant $14 M kickback, divulged by Mark Jimenez
  • Jose Pidal Bank Account P321 M election money laundering
  • Hidden Wealth in San Francisco worth $7.1 M
  • Mikey Arroyo's imported horses worth millions
  • President Diosdado Macapagal Boulevard P536M overpricing
  • NAIA 3/PIATCo contract anomaly worth $100M in kickbacks
  • PAGCOR cash cow expose
  • Jancom Encironment Contract anomaly and overpricing
  • Agri Fund worth P728 M in Ginintuang Masaganang Ani used for election campaign funds
  • PHILHEALTH cards used for campaign
  • Manny Pacquiao Las Vegas Suite worth $20,000 per night used by Mike Arroyo
  • Jueteng operations via Bong Pineda
  • Venable Contract Norberto Gonzales
  • JocJoc Bolante fertilizer scam
  • Comelec Automated Counting Machine scandal
  • Rigging of elections 2004 and 2006 Maguindanao Hello Garci
  • Extrajudicial Killings
JDV3's Senate Testimony: http://www.pcij.org/blog/?p=1970
Inquirer special report: http://www.inquirer.net/specialreports/nbndeal/index.php
A brief history of the project and the process of approval : http://newsinfo.inquirer.net/breakingnews/infotech/view_article.php?article_id=76276
ZTE cast of characters: http://www.gmanews.tv/story/61057/The-ZTE-cast-of-characters-Loser-husband-political-foes-and-deputies

“ZTE Broadband Deal: Another multi-million racket of the Arroyo family”

  1. Blogger Renegade Eye Says:

    Do you believe capitalism was restored in China? Now you can be both a capitalist, and a party member.

  2. Blogger rose ann Says:

    please explain to me briefly about the ZTE-NBN deal scandal.I do not understand what is the connection of Neri yo the case and how is he connected to the scandal?