PRIMER: NBN-ZTE CASE

1.                           NBN ZTE (Case filed despite cancellation of contract)
 
What is it about –
 
The National Broadband Network was aimed at building a fully integrated single platform nationwide wireless broadband network and bundled with interactive distant learning and selected e-Government application modules that will allow for a seamless connectivity among all government agencies for Voice, Data, Internet and Video Conferencing complemented with state-of-the-art central Information Center (IDC) for hosting multiple government application.
On 7 August 2006, ZTE Corporation submitted its unsolicited proposal to the Commission on Information Technology and Communication (CICT) headed by Chairman Ramon Sales for a national broadband project.
Thereafter, the China Export-Import Bank wrote the NEDA endorsing the project.
On 5 October 2006, another proponent for the project, Jose De Venecia, through Bandila Communications, Inc. submitted its proposal to the Neda.
On 23 October 2006, the CICT endorsed the ZTE proposal to Neda for further evaluation. On 5 December 2006, Amsterdam Holdings Inc, whose beneficial owner is Jose De VeneciaIII submitted its Orion Proposal to the DOTC headed by Secretary Leandro Mendoza.
Sales then wrote Romulo Neri of Neda on 8 December 2006 that CICT cannot make a definite finding on the capability of Amsterdam Holdings Inc. because of lack of verifiable indicators of comparison.
On 4 January 2007, AHI submitted a draft MOA to the DOTC then making a formal presentation of its proposal at the Edsa Shangri La on 8 January 2007.
On 26 February 2007, the DOTC Bids and Awards Committee asked the proponents of the NBN to submit their final version not later than 27 February 2007. Only ZTE and AHI submitted proposals.
A comparison of the two proposals was made
AHI
1.                           A BOT mode proposal;
2.                           Will not cover 3rd to 6th class municipalities where most public schools are
located;
3.                           AHI is non-enfranchised and has no telecommunications track record; and
4.                           Will reduce government communication expense by 25 percent.
ZTE
1.                           Government to government (G2G) undertaking with sovereign loan;
2.                           Cost of operating system will be borne by government;
3.                           Will serve 2,295 major government agencies and regional offices and 23,549
barangay offices for seamless connectivity to enhance delivery of basic government services;
4.                           Establishes a single broadband network exclusively for government.
The DOTC TWG-ICT then recommended that a single broadband network be established. The same was endorsed to Neda. Thereafter, Sec. Mendoza, adopting the recommendation of the TWG-ICT, endorsed the ZTE proposal to Neda as it “was found to be capable of catering to the needs of government in VOIP, eGovernance and eEducation.” Further the letter also stated that it has verified the financial and technical capability of ZTE.
On 29 March 2007, it was recommended by Dir. Ruben Reinoso Jr of the DOTC Infrastructure Staff that an executive order is issued to implement the project.  Thereafter Neri indorsed the project and thereafter approved at US343M.
During GMA’s visit to China on 21 April 2007, the Philippine government through the DOTC signed a Contract for the Supply of Equipment and Services for the NBN project with ZTE Corp.
After the signing of the contract, De Venecia started hurling accusations of bribery and overpricing mostly in the media. A Senate inquiry was thereafter conducted.
Subsequently, lawyer Ernesto Francisco filed a complaint before the Ombudsman against FG Mike Arroyo and Benjamin Abalos.
In September 2007, GMA suspended the project. In October 2007, she cancelled the project altogether.
 
Despite the cancellation, critics of FPGMA did not allow a let-up of the issue as they pursued an investigation on the project. Cases of plunder and graft were filed before the Office of the Ombudsman against FPGMA and then First Gentleman Mike Arroyo.
 
Thereafter, the Office of the Ombudsman in a Joint Resolution dated 21 April 2009 dismissed the cases filed against FPGMA and Atty. Mike Arroyo saying the Office has not found any “convincing and solid evidence directly or indirectly linking” them in the project. “Suffice it to state that only surmises and conjectures have been presented to this panel for assessment. To be certain, these presumptions cannot be given any weight”, the resolution stated.
 
The Office of the Ombudsman also stated that since the contract had already been cancelled, an important element (existence of a contract) of the crime of graft is missing.
 
No Plunder
 
However, under the Aquino administration, the case against FPGMA and Atty. Arroyo was refiled. In a resolution in December 2011, the Office of the Ombudsman made a turnaround and filed graft charges against the former President and her husband. The Office of the Ombudsman however dismissed the plunder case against them saying it did not find probable cause. It said “(c)ontrary to the claim of the complainants, the sworn statement of Dante Madriaga cannot by itself establish all the elements of the crime of Plunder alleged to have been committed by former President Arroyo in conspiracy with her husband Jose Miguel Arroyo, along with Mr. Abalos and Mr. Mendoza. Such a charge cannot rest solely on a verbal allegation but must be substantiated by further proof of direct participation,”
 
STATUS:  PENDING BEFORE THE SANDIGANBAYAN

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