Premise
Just as in any soap opera, the story starts with
a single idea: What if we build a national broadband
network to connect all government offices in the
Philippines to make transactions easier and more
efficient?
(See p.10, Representative Teddy Casiño’s
Sa Banda Rito column for more information about
the NBN project.)
Cast of Characters
ZTE. Zhong Xing Telecommunication Equipment Co.
Limited, a Chinese firm providing telecom equipment
and network solutions to clients all over the world.
AHI. Amsterdam Holdings Inc., a Filipino company
co-founded by Joey de Venecia III.
Jose “Joey” de Venecia III. One of
the firsts to expose former Comelec Commissioner
Benjamin Abalos’ involvement with the NBN-ZTE
deal. He is the son of ousted House Speaker Jose
de Venecia and a co-founder of AHI.
Benjamin Abalos, Sr. The alleged broker for ZTE;
currently the center of controversy, Abalos resigned
from his post as chair of the Commission on Elections
in October 2007 in order to, according to him, defend
himself without bringing his office down.
Romulo Neri. Former National Economic Development
Authority Secretary who was later demoted to head
the Commission on Higher Education. He was tasked
to review the NBN project and to make recommendations
to President Gloria Arroyo.
Rodolfo “Jun” Lozada, Jr. Whistleblower
and former President of the Philippine Forest Corporation,
he was asked by Neri to assist him in evaluating
the NBN project.
Jose Miguel “Mike” Arroyo. The First
Gentleman, the alleged padrino of Abalos in pushing
for ZTE to win the NBN project. It was alleged that
FG was set to receive up to $70M in kickbacks from
the total of $130M commission allegedly asked by
Abalos.
Timeline
2006. The idea of having a national broadband network
was proposed, with ZTE being eyed as the main proponent.
September 2006. Lozada was introduced by Neri to
Chairman Abalos, ZTE President Yu Yong, Chinese
Commercial Attaché Fan Yang, and to Leo San
Miguel and Ruben Reyes. According to Lozada, they
had lunch at Wack Wack wherein they talked about
the feasibility of the project.
October 2006. ZTE submitted a proposal to NEDA.
Neri asked Lozada to review the proposal; Lozada
told Leo San Miguel to fix their proposal as it
is lacking in content.
November 2006. Upon receiving endorsement of the
project from Neri and Ramon Sales, former Chairman
of the Commission on Information and Communications
Technology (CICT), President Arroyo declared that
the project be implemented under the BOT scheme.
December 2006. AHI, headed by Joey de Venecia,
submitted an unsolicited proposal for the NBN project
for $240 million under the BOT scheme.
• Neri asked Lozada to reconcile the proposals
of AHI and ZTE. Since GMA wanted the project to
be under the BOT scheme, Lozada came up with this
proposal: AHI to handle the project through BOT
and ZTE to act as supplier.
• According to Lozada, Abalos told him that
ZTE is amiable to the reconciled proposal but that
he must “protect” $130 million as commission;
De Venecia objected.
• To reconcile both camp’s differences,
Lozada, Abalos, de Venecia, and some other people
met with the First Gentleman over dinner at the
Makati Shangri-La
• According to Joey de Venecia, Abalos approached
him and asked AHI to partner with ZTE; they went
to China to discuss the partnership with ZTE officials
January 2007. Abalos’ group, Lozada, Neri,
some ZTE officials, and Chinese commercial attaché
Fan Yang met at the Shangri-La Makati over lunch;
According to Lozada, Abalos wanted it to appear
that NEDA has already approved the ZTE proposal
under a loan agreement; Neri insisted that the project
should be done under BOT, resulting to a heated
argument between Abalos and the ZTE officials.
• Abalos, according to Lozada, threatened
to have him killed; According to de Venecia, Abalos
bugged his cellphone and recorded conversations
he had had with his AHI partners.
February 2007. ZTE submitted a separate proposal
for $300 million.
• The NBN project was transferred from CICT
to the Department of Transportation and Communications
(DOTC).
March 18, 2007. AHI sent a letter to the DOTC complaining
of bias for ZTE.
March 29, 2007. NEDA and its Investment Coordinating
Council (composed of Cabinet members) approved the
NBN project.
April 21, 2007. President Arroyo flew to Boao,
China to witness the ZTE-NBN contract signing; DOTC
Secretary Leandro Mendoza signed in behalf of the
Philippine government; the contract was signed at
US$329 million.
June 20, 2007. The two “sovereign”
copies of the ZTE contract had gone missing; the
contract was reconstituted from previous copies.
July 27, 2007. Neri is transferred from NEDA to
CHED.
July 30, 2007. The Department of Justice validated
the ZTE-NBN contract.
July – August. Reports about the irregularities
in the ZTE-NBN deal started to surface; Abalos’
name linked to the ZTE deal; Columnist Jarius Bondoc
wrote in his column about the sexual exploits of
a high-ranking Comelec commissioner who made several
trips to Hong Kong and China between September 2006
and February 2007; Cong. Carlos Padilla named Abalos
as the official being referred to in Bondoc’s
column; Finance Secretary Gary Teves revealed that
it was Abalos who had introduced him to ZTE officials.
September 3, 2007. Malacañang issued a gag
order to Cabinet officials.
September. Joey de Venecia exposed Abalos’
and Mike Arroyo’s involvement in the ZTE deal;
the Senate Blue Ribbon Committee started its investigation
on the NBN project.
September 23, 2007. President Arroyo suspended
the ZTE-NBN contract.
September 26, 2007. At the Senate Blue Ribbon Committee,
Neri implicated Abalos and admitted that Abalos
tried to bribe him with P200 million; Neri admitted
to the Senate that he had informed President Arroyo
about the bribery attempt; He invoked the EO 464
when asked why the President went ahead with the
project despite the bribery attempts.
October 1, 2007. Abalos resigned as Comelec chair.
October 3, 2007. President Arroyo scrapped the
ZTE contract.
January 30, 2008. Jun Lozada flew to Hong Kong
a few hours before the start of the Senate inquiry;
Neri went into hiding; the Senate issued a warrant
for their arrest.
February 5, 2008. Lozada arrived from Hong Kong
but was allegedly “taken against his will”
by airport and police officials; he was driven around
Metro Manila and up to Laguna; he was made to sign
antedated documents that would prove he had asked
for security upon his arrival in Manila; He was
later surrendered to his family who were waiting
at the La Salle Greenhills.
February 6, 2008. The Philippine National Police
denied any knowledge about Lozada’s whereabouts;
Lozada’s family filed for writ of habeas corpus;
In the evening, former Presidential Chief of Staff
Mike Defensor visited Lozada at the La Salle Greenhills,
he told Lozada to come out to the press and deny
that he was kidnapped; Defensor gave Lozada P50,000.
February 7, 2008. At 2 a.m., Lozada, together with
some nuns and the La Salle brothers, held a press
conference at the La Salle Greenhills, linked Abalos
and the First Gentleman to the ZTE-NBN deal, and
surrendered himself to the Senate Sergeant-at-Arms.
February 8, 2008. Lozada testified at the Senate
Blue Ribbon Committee hearing.
