Friday, March 07, 2008

Joey de Venecia at Ateneo de Davao

Just came from the Ateneo de Davao's forum with Joey de Venecia. The forum was well-attended, mostly by Ateneo students and a smattering of faculty and outsiders.

He did not, in essence, say anything new with regard to his testimony concerning Abalos. Thus far, the narrative is consistent, the most salient part being the meeting in Shenzhen.

What was new to me was his announcement of his new advocacy of reducing debt in the Philippines. I wish him well on that, but I can't help but think that others will take it with a more cynical view. Along that line, Joey mentioned the Jubilee Bill of Rep. Maxine Waters in the United States.

The Jubilee Bill, in a nutshell, is a proposal for the American government to forgive loans misdirected to corrupt projects. One qualification is if debt service is more than 30% of the country's budget (the Philippines, according to Joey, uses 80% for debt service.) There are 47 countries in the list, including the Philippines.

Of greater interest to me were the reactions of the people around me. The fence-sitters were quite apparent: the student beside me quite confidently told her friend that she saw no point in having discussions like this, that it was better to move on; someone raised a question with a similar tack.

There were also those in the beh! buti nga! camp. One faculty member raised the long association between his father and Arroyo, and asked quite rudely whether he believed in karma.

And then, there were the defeatists, disappointingly including the university registrar. In essence: what is the point of changing the head if the person replacing her will be just as bad?

Finally, the most disappointing question: "if Abalos had offered you $20-M instead of $10-M, would you have accepted?"

I took notes of Joey's talk which I am posting below. (I've used the first-person as I was simply following along his narration.) Standard disclaimer on any errors on the transcription; best-effort is all I can offer; and besides, I was typing on the cramped keyboard of my EeePC. Apologies, too, as it becomes fragmentary towards the end.

"We need more Ateneans in government...except for the first gentleman."

Opening remarks: "You're very brave for inviting me...I'm not welcome in most of the schools in the Philippines."

I got involved in BOT proposal in order to set up infrastructure. In this case, I was asked to make a proposal by my Eastern and Western partners to do a development project in the Philippines. My friends in Shanghai and San Francisco asked me what developmental project I could do in the Philippines. Initially, I was involved in corn, but then they asked me if they wanted me to do a project in telecoms. I've run telecoms companies in the past, and continue to do so. I'm involved in telecoms projects in Indonesia and West Africa.

Why am I here today? When I made the proposal, developmental in nature, at no cost to the government, I was welcomed by Sec. Neri to put the proposal. Our president welcomed the proposal. She was very succinct to say that the BOT project should be under the private sector, under national policy.

In December 5, I formally submitted my proposal. On December 15, I was invited by Abalos to his office in Wack Wack. He told me: "I'm COMELEC chairman now, and next year I'm retiring. I want to do something beyond government. I want to be in telecoms."

"That good, sir, but the problem is: broadband used to be very sexy until the late 1990s and 2000s, but when the bubble burst, the sexiness isn't there anymore. It's like selling soap.

I was surprised that, after saying that, he put his hands on my knees and told me: "I will give you $10-M to withdraw your proposal." I was shocked because I was being bribed by a high government official; and second, because of the amount. Why was a government official asking me to back out, even paying me to back out?

After a week, he asked me to meet with him in Shenzhen. This was a little bit after Christmas 2006. We were to meet with ZTE. I told him I was already familiar with the people in ZTE, having bought equipment from them in the past.

I didn't want to go to Shenzhen. Then, Neri, a friend of mine, he had asked Jun Lozada, his IT consultant to work with me. I asked Jun if he would be going. Jun said he would.

When I got to Shenzhen, I met with Chairman Abalos and his cabal: Ruben Reyes, former PMA graduate, also an operator for the palace; Leo San Miguel, who used to own part of Home Cable... I met with Abalos. He showed me a piece of paper, ZTE's proposal.

ZTE's proposal was to put a broadband network for $262-M. I told him I would study it. I sent this document to ZTE in Manila who was working with my team in Broadband Philippines. The value of the proposal only amounted to $135-M. I said this was strange.

When I met with Abalos again, I told him ZTE seemed to be asking a lot. I suspected an overprice of $130-M. He looked surprised. He said: "Di naman pwede yan. Parang ginagago tayo dito."

Jun Lozada did not show up. I was left to fend for myself.

During the meeting, Abalos said, by June 2006, he would be the most powerful man in the Philippines. Then he jumped to the topic of the commissions due to him, and were being expected by the President, and other officials to be given to him. This commission was $130-M. The commission was 100% of the total project cost.

I was shocked. "Mr. Chairman, I am not privy to your discussions. I am here because you asked me to be here. I am not following a government agenda." I felt it was a very awkward situation.

Abalos went back to the room and continued to demand for his commission. Fan Yang asked: "What about the advances we have already given you for this project?" There was silence in the room.

"You better solve this issue because I'll be very busy soon."

"Our chairman is next door..."

We ended up having dinner with chairman of ZTE. Just small talk. The next day, I went back to Manila.

I called up Jun. I told him I was surprised at the overprice. Jun laughed. "Don't worry about it; iyan ang ina-ayos ko."

I was called by Abalos. He used this cuss word on me. Then he said, "Joey, ano ba itong pinagsasabi mo tungkol sa commission? Alam kong pinag-uusapan ninyo ni Jun Lozada."

"Isn't that against the law?"

"Never mind that. If you want, I'll give you the transcript."

I called up Jun. I told him about our conversation. Jun said he also got a call from Abalos.

I bumped into Mendoza and asked him about the proposal. In his words: "May problema ang project na iyan. Galit ang matanda sa iyo."

Mendoza said: "I want to arrange a reconciliation meeting between you and Abalos." I took all that in stride.

During that reconciliatory meeting, Mendoza, Abalos, and the GOF were there. And Mike Arroyo. Before I was about to speak, Mike Arroyo pointed a finger at me and told me to back off from the project. I was shocked.

In any case, I told him, my proposal is in line with government policy. The telecoms projects are best left to the private sector because technology changes every 6 months. Then he just stood up and left.

What is the difference between what I am proposing and what Abalos was proposing, aside from the commission?

Abalos/FG's proposal was that we borrow $329-M from the Chinese government to put up a national broadband network. This runs counter to the President's instructions. (As a private sector proponent, it would be subject to bidding.)

Around April, Romy Neri told me that Abalos had told him something in the golf course: "Sec, may 200 ka dito." Romy called the President; she told him not to take the money, but to approve the project anyway. Neri told me he was about to resign.

After that, Mike Arroyo had a heart attack. While he was about to die, the Chinese became very, very nervous. Abalos' boss is the First Gentleman. ZTE had informed Abalos to tell the President to witness the signing of the contract in Boao. $40-M changed hands that night. There was no other Chinese official there.

Finally, I told myself this was a government-to-government issue. Maybe I should forget about the bribes.

Jun told me recently Abalos received $2-M to show my face to ZTE.

Senate hearings followed.

It's not that I'm sourgraping because I lost the bidding. There was no bidding to begin with?

I stopped talking in November. People asked me why I left them hanging. I told them I had said everything I wanted to say.

Marami akong napala sa pagbubulgar:

1) Pinaparusahan ako. Siniraan nila ang pagkatao ko. Pinagbantaan nila ang buhay ko at ang buhay ng ama ko.

2) Di pa sila nasiyahan na napalsik nila ang tatay ko. Pinagsasaksak pa siya at tuloy-tuloyang sinira ang kanyang career.

3) Ano ang nararamdaman ko? Marunong pala akong umiyak. Di ko lang pinapalabas.

Sinisisi ko ang sarili ko at tumigil dahil sa aking ama.

* * *

Madriaga former engineer of ZTE. He met ZTE 20 times in different meetings. How much was already advanced to this group? $41-M was already advanced to the GoF+2.

Charter change issue? Will it continue without JdV? GMA is aggressively pursuing charter change to change certain provisions. Her goal is to extend her term beyond 2010.

Current method of corruption: Borrow money from another country, put some money into your pocket and some into the project. There is a law that says that all foreign loans have to be paid. 80% of budget goes to debt repayments.

ZTE is only one transaction.

Advocacy: reduce the debt of the Philippines.

World Bank meeting. Citing Poverty Index.

Jubilee Bill: American government that has lent money to the Philippines, directly or through its institutions, can forgive "corrupt" loans. 47 countries all in all, including Philippines. If debt service is more than 30% of your budget. We can also repudiate our debts.

Meeting with Maxine Waters and Sam Casey, sponsors of the bill.

Example: Bataan Nuclear Power Plant.

Why meet with Abalos? Out of deference, JdV up for re-election.

JdV association with GMA - architect of Charter Change - "do you believe in karma?"


  1. I was there too and I am one of those who think that his talk was quite useless. He said nothing new about the issue and was just reiterating what has been previously narrated and discussed in the Senate.

    I'm also on the side of those people searching for the truth and asking for transparency, but his talk did nothing to make me more interested in the issue.

    Some people I know even believe that the real reason that he went thrashing around the ZTE-NBN deal was not about his proposal ending up in the trash. They think Joey de Venecia felt that the $10 million bribe was too small for him to back-off in the bidding.

    If he had presented us with more evidences directly associating those people he mentioned in the case, his speech might have sold better.

  2. Reduce debt? Well, they could just let the peso move up and the debt would be reduced significantly. Already, analysts are betting that the peso will go up further this year, the most optimistic of which is 36-38.

    At least, somebody's worried about paying debts. The other ppl in the government are not. They keep selling Government Bonds almost every god**** month!!! (By the way, we are not the only ones doing this. The US is heavily indebted too.)

    The ratings agencies are quite worried for the long term. The country cannot hit target tax revenues for a long time. Why is this??? (Corruption is one answer.)

    By the way, if you ask a hi-school student what the consequence would be if ever we get a "downgrade" from an international ratings agency, chances are they have no idea, even the grown-ups.

    As for Philippine Students:
    I think the curriculum of Philippine Schools should be overhauled. Maybe more social studies, more finance awareness, more global perspective. Of course science and tech wouldn't be bad.

    The problem is too many under-educated people. This greatly erodes our competitiveness.

  3. Talagang iba kapag "live" ang coverage dahil mafi-feel mo ang tunay na atmosphere.