Press Release
October 11, 2007

PALACE'S PLAN TO PURSUE BROADBAND PROJECT
LENDS CREDENCE TO PAYOFF ALLEGATION -- PIMENTEL

Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today said the plan of Malacañang to pursue the National Broadband Network (NBN) project after supposedly cancelling the contract with China's ZTE Corporation tends to bolster the allegation that some influential personalities have already received kickback or commission from the contractor.

Pimentel expressed outrage over the statement of Executive Secretary Eduardo Ermita that the administration plans to revive the NBN project at some future time or after the controversy has died down despite President Gloria Macapagal-Arroyo's decision to cancel the deal.

He advised the Palace not to turn around from its decision to scrap the NBN deal, in the face of credible evidence that it is overpriced, and the findings of University of the Philippines economic professors Raul Fabella and Emmanuel de Dios that such telecommunications project is not necessary and a sheer waste of taxpayers' money.

"The message that the Palace is trying to put across on the issue is very confusing. Maybe because it's difficult to return the money allegedly already advanced," Pimentel said.

In his testimony before the Senate investigating committees, Jose de Venecia III, principal stockholder of the losing bidder, Amsterdam Holdings Inc. (AHI), claimed that during a meeting between former Commission on Elections chairman Benjamin Abalos and ZTE top executives in China, the Comelec chief was demanding certain payment purportedly for his services in brokering the broadband contract. But one of the company officials allegedly reminded Abalos about the advances that he had already received.

The young De Venecia, in his own testimony before the Senate committees, claimed he was an eyewitness to this incident as he accompanied De Venecia during the China trip.

"They want to make it appear that the broadband deal is already dead, but actually the whole package is still there," Pimentel said.

At the same time, the minority leader said he received a report that the original copy of the broadband contract had not been stolen shortly after it was signed - contrary to the claim of Malacañang and transportation authorities.

Pimentel said he was told that President Arroyo not only witnessed the signing of the $329 million NBN contract awarded the ZTE Corp. in Boao, Hainan, China on April 21, 2007 but also actually signed the document as a witness. The agreement was signed by Transportation and Communications Secretary Leandro Mendoza and ZTE Corp. Vice President Yu Yong.

"I received information that the contract was not really stolen. It was just kept out of reach by the public because according to my information, President Arroyo was not only present at the signing. She also signed as a witness to the signing of the contract," he said.

Pimentel said it was made to appear that the document had been stolen or lost "because they were trying to sanitize it for the reason that her signature should not appear supposedly on that contract."

According to Secretary Mendoza, the contract was reconstituted from the "control copy" stored in the computer. But he said the reconstitution was done only on May 24 because they waited first for the results of the probe conducted by the National Bureau of Investigation on the alleged theft.

The contract was allegedly stolen by still unidentified persons from commercial attach Emmanuel Ang who was entrusted with the custody of the document.

The government kept the purported theft under wraps until Transportation and Communications Undersecretary Lorenzo Formoso revealed it for the first time during a public forum at the Ateneo University in Quezon City on June 21.

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