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REPUBLIC OF THE PHILIPPINES)

MAKATI CITY ) SS.

JOINT COMPLAINT-AFFIDAVIT

WE, TEOFISTO T. GUINGONA JR., , H. HARRY L. ROQUE, JR., MA.


DOMINGA “MINGGITA” B. PADILLA M.D., ROEL GARCIA, BEBU
BULCHAND, FR. JOSE P. DIZON et al., Filipino citizens and of legal age,
subscribing under oath, hereby depose and state that:

Prefatory Statement

This suit against Mrs. Gloria Macapagal-Arroyo, among other public officers and
personalities, argues against an archaic claim to immunity from suit that is only used as a
convenient excuse for the cavalier, if arrogant, ways in which she has made a mockery of
her oath of office;

It is now time to discard this colonial jurisprudential legacy shielding the highest official
of the land from suits even in the face of her clear disregard of her constitutional duties
for a functional approach that recognizes that where impunity in any form is perpetuated
by those who occupy a high office, immunity must give way to responsibility;

The colonialistic doctrinal force of Forbes v. Chuoco Tiaco,1 reiterated most recently in
David v. Gloria Macapagal-Arroyo2, must be re-examined in the light of the
“universalist design”3 of the Constitution; that is, its over-all intent to promote
accountability in public office:

[It] is time for the courts to rethink the flat rule exempting the President
from all types of civil and criminal suit[s] on the simplistic reason that she
is the President and move towards a model of attribution that focuses on
the effects of the suit in relation to the public officer’s function, looking
beyond the mere fact that she occupies a powerful public office. It is
precisely because the powers conferred on the chief executive by the
Constitution are both broad and deep that courts should exercise greater
scrutiny over claims of immunity, fully knowledgeable of the fact that the
history of the Philippine presidency is a testament to the multiple failures
of its office holders to uphold public trust.4

Of relevance then are the following questions: “what are the reasons why,
notwithstanding the powers of the state that are at the President’s immediate disposal, we
are experiencing this culture of impunity? What effective measures did she undertake that
could have been thwarted by forces outside her control?”5

1
16 Phil. 534 (1910). This case was decided by the Philippine Supreme Court under the American colonial
government. Here, the High Court barred a suit for damages against the Governor-General, saying that the
Chief Executive is “protected from personal liability for damages not only when he acts within his
authority, but also when he is without authority, provided he actually used discretion and judgment, that is,
judicial faculty, in determining whether he had authority to act or not.” Id at 649.
2
G.R. No. 171396, May 3, 2006, 489 SCRA 160 (2006). Here the Supreme Court said: “the President,
during his tenure of office or actual incumbency, may not be sued in any civil or criminal case, and there is
no need to provide for it in the Constitution or law.”
3
Prof. Florin Hilbay, The President as Tortfeasor-in-Chief: Establishing Civil Liability for Constitutional
Negligence (unpublished paper, University of the Philippines College of Law, 2007).
4
Id. at 37.
5
Id.
1. Complainants are concerned citizens of the Philippines, taxpayers, and active
members of various civil society groups, who may be served with legal process,
for this case only, through their counsel at Roque & Butuyan Law Offices, Unit
1904 Antel Corporate Center, 121 Valero Street, Salcedo Village;

2. Respondent Mrs. Gloria Macapagal-Arroyo occupies the office of the President of


the Philippines. She may be served with legal process at Malacañang, Manila;

3. Respondent First Gentleman Mr. Jose Miguel “Mike” Arroyo is of legal age,
Filipino and the spouse of Mrs. Gloria Macapagal-Arroyo. He may be served with
legal processes at Malacañang Palace, J.P. Laurel Street, San Miguel, Manila;

4. Respondent Benjamin Abalos, Sr. is of legal age, a Filipino, and the former
Chairman of the Commission on Elections (Comelec). Respondent Abalos
resigned as Chairman of the Comelec on October 1, 2007 or four (4) days after
the filing of the impeachment case against him before the House of
Representatives. He may be served with legal processes at the Abalos Residence,
Kanlaon Street, Mandaluyong City;

5. Respondent Romulo L. Neri is of legal age, Filipino, and the former Director
General of the National Economic and Development Authority (NEDA).
Respondent Neri is now Chairman of the Commission on Higher Education and
may be served with legal processes at the commission’s office address at 5th
Floor DAP Bldg., San Miguel Avenue, Ortigas Center, Pasig City, Philippines;

6. Complainants charge Respondents with violating Republic Act No. 3019


otherwise known as the Anti-Graft and Corrupt Practices Act (RA 3019) as well
as provisions of the Revised Penal Code (RPC);

7. The violations arose out of the Respondents’ involvement –directly and/or


indirectly – in negotiations for the Philippine Government’s contract with ZTE
Corporation (ZTE), a publicly-listed telecommunications equipment supplier in
Hong Kong and China, to put up the controversial National Broadband Network
(NBN) project. The NBN project purports to establish a nation-wide public
telecommunications infrastructure that would deliver voice, data, video, and
internet services linking all government agencies and offices;

8. Until recently, allegations of graft and corruption in the NBN project have flown
thick and fast, but largely only in the media. Media accounts of the controversy
indicate that sometime in September 2006, ZTE submitted a proposal for the
establishment of the NBN to the Commission on Information and
Communications Technology (CICT). ZTE’s proposal required a government-to-
government loan between China and the Philippines to fund the construction and
implementation of the NBN, which, when completed, will be turned over to the
Department of Transportation and Communication (DOTC) for operations and
maintenance;

9. A second proponent, Amsterdam Holdings, Inc. (AHI), a domestic corporation


organized under Philippine laws to engage in telecommunications infrastructure
and other related services, submitted a proposal that would not require any fund
appropriation or guaranty from the national government;

10. The DOTC, without public tender, awarded the contract to ZTE;

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11. In fact, on April 21, 2007, through the Official News Release (Release No. 5)
issued by the Presidential News Desk/Office of the Press Secretary, the national
government announced the signing of five (5) economic agreements between the
Philippines and China, including a US dollar THREE HUNDRED TWENTY-
NINE MILLION FIVE HUNDRED THOUSAND (US$329,500,000.00) supply
contract for the NBN between DOTC and ZTE, with Mendoza and Formoso for
DOTC and Yu Yong for ZTE as signatories. The signing was witnessed by Mrs.
Gloria Macapagal-Arroyo herself. A copy of the April 21, 2007 Official News
Release (Release No. 5) issued by the Presidential News Desk/Office of the Press
Secretary is attached as ANNEX A;6

12. In sum, the DOTC’s decision to award the NBN contract to ZTE was highly
questionable, considering that the Chinese firm’s proposal presented a project cost
of over US$329 Million which the government will pay through a 15-year loan
agreement. Contrast this with AHI’s proposal for the establishment of the NBN,
which only carries a tag price of US$240 Million, which will all be shouldered by
the project private proponent;

13. On August 27, 2007, the Philippine Star carried a banner headline reporting the
signing by the Philippine Government of a US$ 1.8 Billion loan with the China
Export-Import Bank to fund the ZTE-NBN project, among other initiatives.7 In
the same issue, Star columnist Mr. Jairus Bondoc also wrote in his column an
account of the alleged “sexcapades” of an unnamed Comelec official in China and
the active hand he played in the approval of the NBN contract.8 Copies of the two
articles are attached as ANNEXES B and C respectively;

14. The identity of the said Comelec official was revealed by Rep. Carlos Padilla of
Nueva Vizcaya in a privilege speech on August 29, 2007 before the House of
Representatives. In his speech, he named Respondent Abalos as having influenced
the award of the NBN contract by the DOTC to ZTE. Rep. Padilla also referred in
his speech to reports that Respondent Abalos to China on numerous occasions to
play golf with ZTE officials. In these unofficial trips, ZTE supposedly paid for
his expenses. A copy of the privilege speech is attached as ANNEX D;

15. On September 3, 2007, a news article in the Philippine Star revealed that
Respondent Abalos even tried to bribe ZTE rivals into backing out from the NBN
project. A newspaper source who was privy to the supposed bribery attempt said
that Respondent Abalos offered US$10 Million to Jose “Joey” Mr. De Venecia III
of AHI to withdraw their proposal to undertake the NBN project. This was
supported by a news report from the Philippine Daily Inquirer indicating that a
businessman is willing to testify on the attempt by Secretary Abalos to bribe the
businessman. The businessman also claimed that the latter even bragged to him
that he is the “most powerful man in the Philippines” whenever the election
period comes around;9

Copies of the above-mentioned articles are attached as Annexes E and F


respectively;

16. Respondent Abalos himself admitted that he and some of the ZTE officials were
golfing buddies and confirmed that ZTE top officials financed his trips to China.
He also disclosed that his daughter, Girlie, received assistance from a ZTE official
regarding her importation business. Respondent Abalos also said that he was the

6
A copy of the release is also available in the official website of the PND at
http://www.news.ops.gov.ph/archives2007/apr21.htm#So%20much
7
available at http://philstar.com/index.php?p=60&type=2&sec=24&act=view&aid=20070826135.
8
available at http://philstar.com/index.php?p=60&type=2&sec=24&act=view&aid=20070826167.
9
available at http://services.inquirer.net/print/print.php?article_id=86453

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one who introduced the ZTE officials to Finance Secretary Margarito Teves
knowing fully well that the latter’s discretion and functions would be
indispensable in the implementation of the NBN project.10 It should not pass
notice that Respondent Abalos has the authority to grant exemptions to public
projects being undertaken during the election period. Evidently, Secretary
Abalos was not only using his being a public official to broker the NBN project
for ZTE, he also was influence peddling with government officials indispensable
in its funding and implementation;

A copy of a news article published on the website of the Philippine Daily


Inquirer that reported these admissions by Respondent Abalos is attached as
ANNEX G;

17. For his part, Secretary Teves has confirmed reports that he was introduced to the
ZTE officials by Respondent Abalos. He also disclosed that, sometime last year,
he attended a meeting with the Respondent, the ZTE officials, and Secretary
Mendoza of the DOTC, where they discussed the NBN project;11

A copy of the news article published on the website of the Philippine Daily
Inquirer reporting the declarations of Secretary Teves is attached as ANNEX H;

18. Secretaries Mendoza and Teves, and Respondent Abalos are the government
officers that would have worked together in the implementation of the ZTE-NBN
deal. The NBN project is under the jurisdiction of the DOTC headed by Secretary
Mendoza. The Department of Finance headed by Secretary Teves is the agency
responsible for discussing the terms of a loan for any government project.
Moreover, by his own admission, Respondent Abalos has the authority to exempt
government transactions from the ban imposed on all public works projects
during the election period;

19. But matters came to a head after the Senate opened a joint inquiry in aid of
legislation on allegations of hanky-panky in the NBN contract through the
Committees on Accountability of Public Officers and Investigations (Blue
Ribbon), Trade and Commerce and National Defense and Security on what is now
known as the “ZTE-FG Broadband Scandal.” The inquiry is based on P.S. Res.
No. 129, authored by Senator Panfilo Lacson, P.S. Re. No. 136 authored by
Senator Miriam Defensor-Santiago and the privilege speech entitled “Legacy of
Corruption” delivered by Sen. Lacson;

20. In that hearing, Respondents Abalos and Neri, among other resource persons gave
testimony under oath concerning the controversy – testimony that constitute
sufficient basis for holding them, along with Respondent Mr. Arroyo, liable for
violations of RA 3019, particularly Sections 3 pars. (a) and (h) and Title VII,
Chapter II, Section 2 of the Revised Penal Code, particularly Arts. 211 and 212;

21. Also pertinent is the testimony of Jose “Joey” Mr. De Venecia III, the man who
started it all, outlined in his opening statement and his affidavit submitted to the
joint committee hearings at its opening on Sept. 18, 2007. From his testimony,
this much we know:

22. Sometime shortly after AHI submitted an unsolicited proposal to the DOTC,
Respondent Abalos got in touch with Mr. De Venecia III through his father,
House Speaker Jose de Venecia, Jr. Mr. De Venecia III did not know Respondent
Abalos personally and did not know the reason why Respondent Abalos wanted to
10
available at: http://services.inquirer.net/print/print.php?article_id=85686
11
available at: http://services.inquirer.net/print/print.php?article_id=85939

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talk with him. As he was out of the country at that time, Mr. De Venecia III could
not meet with the former;

23. On Mr. De Venecia III’s return to the Philippines, the House Speaker arranged a
breakfast meeting between the two at his residence;

24. There, Mr. De Venecia III learned that Respondent Abalos wanted to work with
AHI on building the NBN network, even broaching a proposal that supposedly
covered lower-class municipalities, and augmented the Orion Network which was
being proposed by AHI;

25. A second meeting thereafter took place, at the Wack Wack Golf and Country
Club and this time, upon invitation by Respondent Abalos. At that meeting, the
Respondent Abalos, Mr. De Venecia III, Ruben Reyes, Leo San Miguel, Jimmy
Paz, and Retired Police General Quirino dela Torre were present. In the same
meeting, Respondent Abalos told Mr. De Venecia III: “Joey, I want to do
something when I retire, I want to pursue something in the telecommunications
industry.” However, in the course of the meeting, it became apparent to Mr. De
Venecia III that Respondent Abalos supported ZTE’s proposal and not AHI’s;

26. Respondent Abalos subsequently offered Mr. De Venecia III TEN MILLION
UNITED STATES DOLLARS (US$10,000,000.00), in exchange for AHI’s
withdrawal from the NBN project, saying that De Venecia should give way to
Respondent Abalos’ wishes, as the NBN project would be his “last hurrah”;

27. But Mr. De Venecia III could not accede to Respondent Abalos’ demands,
inasmuch as he does not have full control of AHI, it being a firm with both
foreign and local partners. Instead, he offered Respondent Abalos a stake in AHI,
for the latter to be a Director or its Chairman. Respondent Abalos however,
refused the offer;

28. Respondent Abalos would prove persistent. Respondent Abalos again invited Mr.
De Venecia III to his office at the COMELEC. In this particular meeting,
Respondent Abalos introduced to Mr. De Venecia III DOTC Assistant Secretary
Lorenzo Formoso III with these words: “you see, Joey is here, as my partner [in
the NBN project]”;

29. Since Mr. De Venecia III was unwilling to withdraw from the NBN project,
Respondent Abalos tried to strike a middle ground by proposing a partnership
between AHI and ZTE instead. Mr. De Venecia III decided to keep an open mind
and did not expressly reject it, considering the Respondent Abalos’s “stature in
the upcoming mid-term elections”;

30. In the latter half of December 2006, Respondent Abalos met with De Venecia five
or six times to convince the latter to either drop the NBN project or join the ZTE
as a partner in it;

31. One such meeting happened in Shenzen, China. On Respondent Abalos’s


persistent representations, Mr. De Venecia III agreed to meet with ZTE officials
there, although initially, he tried to beg off from the meeting, saying that he was
acquainted with ZTE officials from previous dealings with the company when he
was still Chairman of Broadband Philippines;

32. Thus, on December 27, 2006, Respondent, Mr. De Venecia III, and the ZTE
officials met at the Kempinski Hotel in Shenzen, China;

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33. Before the meeting however, Respondent Abalos showed to Mr. De Venecia III a
copy of ZTE’s proposal for the NBN project that carried a tag price of TWO
HUNDRED SIXTY-TWO MILLION DOLLARS ($262,000,000.00) and under
which the network would cover thirty percent (30%) of the country;

34. Mr. De Venecia III faxed a copy of this “Abalos Proposal” to the technical
personnel of AHI and technical country representative of ZTE in Manila. Mr. De
Venecia III then realized that the proposal was overpriced by ONE HUNDRED
THIRTY-TWO MILLION DOLLARS ($132,000,000.00), after noting that the
value of the equipment is only One Hundred Thirty Million Dollars
($130,000,000.00). Mr. De Venecia III told Respondent Abalos of his
reservations about the project, saying that it “simply cannot be,” and that
Respondent Abalos “cannot expect to book an asset at $262 million when its
actual value is only half of that”;

35. Mr. De Venecia III thus asked that an evaluation be made of the Abalos Proposal
before meeting with ZTE officials at the Kempinski Hotel. ZTE President Yu
Yung, Director Fan Yang, and other officials, as well as members of Respondent
Abalos’s core group, namely Ruben Reyes, Leo San Miguel, General Dela Torre,
and Jimmy Paz were present;

36. At the meeting, Respondent Abalos introduced Mr. De Venecia III as his partner
to the ZTE officials. Respondent Abalos demanded from the Chinese the money
promised him, claiming that “the President and the Speaker” were expecting it.
Upon hearing this, Mr. De Venecia III asked to confer with him in private. Mr. De
Venecia III told Respondent Abalos that “it was highly inappropriate and wrong
to name drop Mrs. Arroyo and his father as they are well-respected in China,
adding that Respondent Abalos’s representations to the ZTE officials were
“simply unacceptable.” De Venecia then asked Respondent Abalos not to drag
“my president and my father into this”;

37. When the meeting resumed, Respondent Abalos again asked the ZTE officials to
give him the promised money. ZTE officials however refused to accede to his
demands, declaring that they would only release the money after the “loan
documents” were finalized;

38. On hearing this, Respondent Abalos started banging his fists on the table and
shouting at the ZTE officials. He bragged about his position as the “most
powerful man in the Philippines” beginning January 15 (2007), being the
Chairman of the COMELEC, and considering that the then approaching May 14,
2007 elections was approaching;

39. To this ZTE Director Fan Yang respondent with a question – “What about the
money we already advanced, Mr. Chairman?”;

40. Respondent Abalos could only stare back at the ZTE official in silence;

41. That ended the meeting. Later, the party repaired to another venue, this time, the
nearby Ocean Pearl Restaurant, where they found Chairman Ho of ZTE waiting
for them;

42. Sometime in January 2007, a persistent Respondent Abalos again asked Mr. De
Venecia III for a meeting with ZTE officials at the Diamond Hotel in Manila.
There, Respondent Abalos insisted that the contract for the project be signed in
the presence of then visiting Chinese Premier Wen Jiabao;

6
43. Sometime in February 2007, Respondent Abalos again called Mr. De Venecia
III to a meeting at the Wack Wack Golf and Country Club. Mr. De Venecia III
was accompanied to the meeting by AHI’s technical resource personnel, Richard
Pratte. At the meeting, attended also by DOTC Assistant Secretary Elmer Soñeja,
Respondent Abalos declared: “you see, Asec. Soñeja, Joey and I are partners
now.” Mr. De Venecia III did not correct Respondent Abalos, in view of a
possible compromise deal between ZTE and AHI;

44. However, a few days after the meeting, the deal fell apart. Respondent Abalos,
called up Mr. De Venecia III and started hurling invectives at him. This we learn
from Mr. De Venecia III’s account of the incident:

…Chairman Abalos called me up and started


screaming[,] shouting invectives at me. He said,
“Salbahe kang bata ka. Putang ina mo, kung alam
lang ng tatay mo ang ginagawa mo, putang ina mo.” I
was bewildered where all of this was coming from,
until in the middle of his ranting, he said that “I tapped
your telephone.” I responded, “Isn’t that illegal” He
said, “gusto mo ng transcript?” and I said I certainly
would like to have a copy. Apparently, he got angry at
me because he found out from my phone calls that I
had mentioned to several AHI personnel, as well as
AHI’s partners, that we were having difficulty with the
NBN contract because he [Respondent Abalos] wanted
a $130 million dollar kickback from the project. While
this was extant from Chairman Abalos’ foul language
while we talked, I never received a copy of the alleged
transcript of the conversation which Chairman Abalos
said he would send.

45. In mid-March 2007, Mr. De Venecia III visited his father at the latter’s
residence, where he happened upon DOTC Secretary Leandro Mendoza. At that
time, Secretary Mendoza was soliciting the support of the House Speaker for his
son, who was was running for an elective position in Batangas. Mr. De Venecia
III took it as an opportunity to inquire from Secretary Mendoza about the AHI’s
unsolicited proposal. To this Secretary Mendoza replied: “your project, Joey, is a
big problem as Chairman Abalos is so angry at you and wants the NBN project
for himself” ;

46. Secretary Mendoza implored Mr. De Venecia III to patch things up with
Respondent Abalos and even offered to broker a reconciliation meeting between
them;

47. The reconciliation meeting pushed through but ended without a meeting of minds
between the two parties;

48. Mr. De Venecia III affirmed his declarations in his affidavit before the joint
hearings and made the following additional relevant allegations:

49. Respondent Mr. Arroyo was present in the “reconciliation” meeting, a fact not
declared in his affidavit. Mr. De Venecia III believed that the Respondent Mr.
Arroyo was brought in by Respondent Abalos to bully him into agreeing to the
latter’s demands that AHI pull out of the NBN project. Mr. De Venecia III
charged that Respondent Mr. Arroyo spoke two words – “BACK OFF” – in a

7
threatening manner to him, and poked an index finger barely two (2) inches away
from Mr. De Venecia III’s face;

50. Respondent Abalos and Respondent Mr. Arroyo are close friends and golfing
buddies.

51. Mrs. Gloria Macapagal-Arroyo, who was then with Speaker De Venecia, Jr., met
with Abalos, Sr., who was with a ZTE official at an unnamed golf course in
China. There, Mrs. Arroyo asked Abalos, Sr. to instead follow Mr. De Venecia
III’s (or AHI’s) proposal, which did not require a sovereign guarantee. A
newspaper account of the testimony is attached as ANNEX I. 12

52. Respondent Abalos threatened to kill Mr. De Venecia III and Philippine Star
columnist Jarius Bondoc, who was also invited as a resource speaker to the
hearing. .Respondent Abalos, following the disclosures made by Mr. De Venecia
III in media about the NBN contract, rushed into the residence of Speaker De
Venecia, Jr. and there declared, “I will kill Jarius, I will kill Joey.”

53. The House Speaker, holding his peace, suggested to Respondent to consider
shelving the NBN contract. Respondent Abalos however replied: “But that would
make Joey the winner.”

54. Further, on September 20, 2007, some members of the Cabinet testified under
oath before the joint hearing. Finance Secretary Teves, DOTC Secretary Mendoza
and DOTC Asec. Formoso all confirmed that they attended meetings with ZTE
representatives along with Respondent Abalos, thus belying the latter’s claims
that he did not know anything about the NBN project.

55. Copies of De Venecia’s opening statement and his affidavit are attached as
ANNEXES J and K, respectively;

56. On September 26, 2007, Respondent Neri, as well as Respondent Abalos himself,
appeared and testified under oath at Senate hearing. It was in that hearing where
Respondent Neri dropped a bombshell of a testimony, charging under oath that
that Respondent Abalos offered him as they were playing golf a bribe of TWO
HUNDRED MILLION PESOS (P200,000,000.00). According to Secretary
Neri, Abalos, Sr.’s exact words to him were: “Sec., may two hundred ka dito,” in
apparent allusion to the ZTE supply contract for the NBN project;

57. Under questioning by Senator Lacson, Respondent Neri elaborated on this


incident in the following exchange:

SEN. LACSON: May 200 ka rito. Ano ang context noong “may 200 ka
rito?” Ano iyong pinag-usapan ninyo? Saan nanggaling iyong proposal?

MR. NERI: I guess the topic we were discussing, you know.

SEN. LACSON: NBN.

MR. NERI: Basically was NBN.

12
. A news report of this revelation is available a
http://newsinfo.inquirer.net/breakingnews/nation/view_article.php?article_id=89222. Complainants
undertake to provide the Hon. Ombudsman with certified true copies of the transcripts of the joint
committee hearings containing allegations made in paras. 49-54 as soon as practicable.

8
SEN. LACSON: So how did it occur to you, ano ang dating sa inyo noon
[nag-uusap] kayo ng NBN project, may ibubulong sa inyo iyong chairman
[na kalaro] ninyo ng golf, “Sec, may 200 ka rito.” Anong pumasok sa isip
ninyo noon?

MR. NERI: I was surprised.

SEN. LACSON: You were shocked, you said.

MR. NERI: Yeah, I guess, I guess.

SEN. LACSON: Bakit kayo na-shock?

MR. NERI: Well, I [am] not used to being offered.

SEN. LACSON: In other words, at that point it was clear to you that you
were being offered money in the amount of 200 million, kasi malaki sabi
ninyo?

MR. NERI: I said no amount was put, that I guess was given the
magnitude of the project, siguro naman hindi P200 or 200,000 so…

58. Respondent Neri subsequently confirmed what he thought to be a P200-million


bribe offer from Respondent Abalos in his later testimony under questioning by
Senator Richard Gordon [Committee Transcript, Sarmiento IX-5, Sept. 26, 2007,
8:40 p.m. p. 3-4, copy attached as ANNEX L].

59. Respondent Abalos in his own testimony, also admitted to the following facts:

(a) that he was “close” to ZTE people. [Committee Transcript, Cdriz, 1-4,
Sept. 26, 2007, 5:20 p.m., p.5, copy attached as ANNEX M ];

(b) that he was friends with ZTE officials.[Committee Transcript, PE


Gutierrez VIII-3, Sept. 26, 2007, attached as ANNEX N];

(c) that he “reciprocated” the generosity of ZTE officials by “hosting


them” on visits to the Philippines. [Committee Transcript, Amador X-
1, Sept. 26, 2007, attached as ANNEX O];

60. In fact, under questioning by Senator Gordon, we find him make more
admissions:

SEN. GORDON: …by the way, sino ho ang nagbayad ng biyahe n’yo pag
naggo-golf kayo?

MR. ABALOS: Ako po ang nagbabayad ng fare ko.

SEN. GORDON: ‘Di ho ba sinabi n’yo noong isang araw, [ang] nagbayad
ZTE?

MR. ABALOS: Ako po ang nagbababayad ng fare ko. Ang sinasabi ko


po, ‘yong pagdating ho doon, they return my gesture of being a host here.

9
SEN. GORDON: Kaya nga, nagbabayad ho sila. [Committee Transcript,
Guinhawa III-4, Sept. 26, 2007, 5:40 p.m. p. 1-2; copy attached as
ANNEX P].

61. At the same hearing, Neri disclosed an even more damning information: that he
told Respondent Mrs. Arroyo about the bribe offer from Respondent Abalos.

62. Yet, as a news account of the hearing reported, “what Romulo Neri did not, or
could not, say at Wednesday’s Senate hearing constituted a point of intrigue for
the senators and guests: Why did President Gloria Macapagal-Arroyo continue to
favor ZTE Corp.’s proposal despite the bribe allegedly offered to him?”

63. Respondent Neri parried questions about Ms Arroyo’s decision on NBN


broadband contract by invoking “executive privilege.”

64. When asked by Sen. Pia Cayetano whether the President had said “don’t accept,
next topic” or “that’s a nice project, but why are they doing that?,” Respondent
Neri could only reply: “Beyond what I said your honor I invoke the right of
executive privilege.”13 A copy of the news article reporting on this aspect of
Respondent Neri’s testimony is attached as ANNEX Q.

65. What is clear is that Respondent Mrs. Arroyo, despite having been told about the
alleged bribe offer made by a member of her Cabinet – no less than the chief of
the Comelec – did not do anything about it;

66. She continued to favor the ZTE’s proposal to undertake the NBN project under
highly onerous conditions; At the very least, the bribe offer reported to her by her
economic adviser should have led to an investigation about the culpability of
Respondent Abalos, and also considering that the ZTE proposal contained
provisions highly disadvantageous to the government;

67. With the bribe offer, ZTE proposal now had all the tell-tale signs of an anomalous
transaction;

68. But the truth is that Respondent Mrs. Arroyo did not lift a finger to have
Respondent Abalos investigated; in fact, she even flew to China to witness the
signing of five (5) economic agreements between the Philippines and China,
including a US dollar THREE HUNDRED TWENTY-NINE MILLION FIVE
HUNDRED THOUSAND (US$329,500,000.00) supply contract for the NBN
between DOTC and ZTE;

69. What do we have here then? – the highest official of the land, Respondent Mrs.
Arroyo doing nothing about a bribe offer made by a member of her cabinet to
another member of her cabinet in relation to the ZTE broadband proposal, this,
despite her having been told about it; her very own husband, Respondent Mr.
Arroyo telling the businessman who first exposed the anomaly in the NBN
broadband project to “back off” and leave the project to the ZTE; and top of it all,
Respondent Mrs. Arroyo herself pushing for the project, as clearly indicated by
her presence in the singing of the NBN contract between the DOTC and the ZTE
over the same anomaly of a project;

13
See the Philippine Daily Inquirer report on this segment of Respondent Neri’s testimony at
http://newsinfo.inquirer.net/breakingnews/nation/view_article.php?article_id=90971. Complainants
undertake to provide the Hon. Ombudsman with certified true copies of the transcripts of the joint
committee hearings containing allegations made in paras. 61-64 as soon as practicable.

10
70. The foregoing acts committed by Respondents are declared unlawful and made
punishable under RA 3019 as well as under the relevant provisions of the RPC
and special laws.

The pertinent provisions of RA 3019 apply:

Section 3. Corrupt practices of public officers. - In addition


to acts or omissions of public officers already penalized by
existing law, the following shall constitute corrupt practices
of any public officer and are hereby declared to be
unlawful:

(a) Persuading, inducing or influencing another public


officer to perform an act constituting a violation of rules
and regulations duly promulgated by competent authority
or an offense in connection with the official duties of the
latter, or allowing himself to be persuaded, induced, or
influenced to commit such violation or offense.

(b) Directly or indirectly requesting or receiving any gift,


present, share, percentage, or benefit, for himself or for
any other person, in connection with any contract or
transaction between the Government and any other part,
wherein the public officer in his official capacity has to
intervene under the law.

xxxxxxxxxxxxxxxxxxx

(e) Causing any undue injury to any party, including the


Government, or giving any private party any unwarranted
benefits, advantage or preference in the discharge of his
official, administrative or judicial functions through
manifest partiality, evident bad faith, or gross inexcusable
negligence…..

xxxxxxxxxxxxxxxxxxxxxx
(h) Directly or indirectly having financial or pecuniary
interest in any business, contract or transaction in
connection with which he intervenes or takes part in his
official capacity, or in which he is prohibited by the
Constitution or by any law from having any interest.

xxxxxxxxxxxxxxxxxxx

Section 5. Prohibition on certain relatives. It shall be


unlawful for the spouse or for any relative, by
consanguinity or affinity, within the third civil degree, of
the President of the Philippines, the Vice-President of the
Philippines, the President of the Senate, or the Speaker of
the House of Representatives, to intervene, directly or
indirectly, in any business, transaction, contract or
application with the Government: Provided, That this

11
section shall not apply to any person who, prior to the
assumption of office of any of the above officials to whom
he is related, has been already dealing with the Government
along the same line of business, nor to any transaction,
contract or application already existing or pending at the
time of such assumption of public office, nor to any
application filed by him the approval of which is not
discretionary on the part of the official or officials
concerned but depends upon compliance with requisites
provided by law, or rules or regulations issued pursuant to
law, nor to any act lawfully performed in an official
capacity or in the exercise of a profession. (Emphasis
supplied)

The following pertinent provision of P.D. 1829 also applies:

§ 1. The penalty of prision correctional in its maximum


period, or a fine ranging from 1,000 to 6,000 pesos, or both,
shall be imposed upon any person who knowingly or
willfully obstructs, impedes, frustrates or delays the
apprehension of suspects and the investigation and
prosecution of criminal cases by committing any of the
following acts:

(a) Preventing witnesses from testifying in any criminal


proceeding or reporting the commission of any offense
or the identity of any offender/s by means of bribery,
misrepresentation, deceit, intimidation, force or threats;

xxxxxxxxxxxxxxxxxxx

The following articles of the RPC are also relevant:

Art. 210. Direct bribery. — Any public officer who shall


agree to perform an act constituting a crime, in
connection with the performance of this official duties, in
consideration of any offer, promise, gift or present
received by such officer, personally or through the
mediation of another, shall suffer the penalty of prision
mayor in its medium and maximum periods and a fine [of
not less than the value of the gift and] not less than three
times the value of the gift in addition to the penalty
corresponding to the crime agreed upon, if the same shall
have been committed.

If the gift was accepted by the officer in consideration of


the execution of an act which does not constitute a crime,
and the officer executed said act, he shall suffer the same
penalty provided in the preceding paragraph; and if said act
shall not have been accomplished, the officer shall suffer
the penalties of prision correccional, in its medium period
and a fine of not less than twice the value of such gift.

12
If the object for which the gift was received or promised
was to make the public officer refrain from doing
something which it was his official duty to do, he shall
suffer the penalties of prision correccional in its maximum
period and a fine [of not less than the value of the gift and]
not less than three times the value of such gift.

In addition to the penalties provided in the preceding


paragraphs, the culprit shall suffer the penalty of special
temporary disqualification.

The provisions contained in the preceding paragraphs shall


be made applicable to assessors, arbitrators, appraisal and
claim commissioners, experts or any other persons
performing public duties. (As amended by Batas Pambansa
Blg. 872, June 10, 1985).

Art. 211. Indirect bribery. — The penalties of prision


correccional in its medium and maximum periods, and
public censure shall be imposed upon any public officer
who shall accept gifts offered to him by reason of his
office. (As amended by Batas Pambansa Blg. 872, June 10,
1985).

Art. 212. Corruption of public officials. — The same


penalties imposed upon the officer corrupted, except those
of disqualification and suspension, shall be imposed upon
any person who shall have made the offers or promises or
given the gifts or presents as described in the preceding
articles.

xxxxxxxxxxxxxxxxxxxxxxxx

Art. 208. Prosecution of offenses; negligence and


tolerance. — The penalty of prision correccional in its
minimum period and suspension shall be imposed upon
any public officer, or officer of the law, who, in
dereliction of the duties of his office, shall maliciously
refrain from instituting prosecution for the punishment
of violators of the law, or shall tolerate the commission of
offenses. (Italics supplied)

As to Respondent Mrs. Arroyo

71. Respondent Mrs. Arroyo is guilty of abetting or tolerating the commission of a


crime when she did nothing despite her having been told by Respondent Neri
about a bribe offer from Respondent Abalos. Her omission violates Art. 208 of
the Revised Penal Code, which provides for a penalty of prision correccional
upon a public official who in dereliction of his or her duties, “shall maliciously
refrain from instituting prosecution or the punishment of violators of the law or
shall tolerate the commission of offenses.”

72. Moreover, she also violated § 1 (a) of PD 1829, which provides that “[a] penalty
of prision correccional in its maximum period shall be imposed upon any person

13
who knowingly and willfully obstructs, impedes or delays the apprehension of
suspects and the investigation of criminal cases by… (a) preventing witnesses
from reporting the commission of any offense.”

73. Despite her having been told about the bribe offer, Respondent Mrs. Arroyo
obstructed the apprehension of Respondent Abalos and the investigation of the
same offense by (a) not acting on it and (b) her active support for the ZTE
proposal to undertake the NBN project, as indicated by her presence in the Sept.
21, 2007 signing of an agreement between her agents and ZTE officials in China;
and (c) her express invocation of “executive privilege” through her alter ego14 –no
less than Respondent Neri himself – when pressed to shed light on the anomalous
deal by members of the Senate in their exercise of the power of the Upper House
to inquire in aid of legislation about deals such as the NBN project;

74. In fact, considering all these circumstances, there is a strong ground to charge
Respondent Mrs. Arroyo with violation of § 3 (e) of RA 3019, for “[c]ausing any
undue injury to any party, including the Government, or giving any private party
any unwarranted benefits, advantage or preference in the discharge of his official,
administrative or judicial functions through manifest partiality, evident bad faith,
or gross inexcusable negligence.”

75. She knew about the bribe offer; she knew about the onerous nature of the ZTE
proposal; she knew that there were better offers than that of ZTE (as she herself
acknowledged to Mr. De Venecia III); she must have known that it was
overpriced by at least Tow Hundred Million Pesos (P200,000,000.00) which is the
amount offered as a bribe to Respondent Neri; yet in evident bad faith, or at least,
gross inexcusable negligence, she presided over the signing of a deal between her
own agents and officials of the ZTE – an act that effectively sealed her approval
of a highly anomalous deal disadvantageous both to the government and to other
private parties interested in the NBN project; With the involvement of her very
own husband, Respondent Mr. Arroyo in the same controversy as described
below, it can well be said that she is in fact, part and parcel of the same
conspiracy to grant ZTE the NBN contract in violation of pertinent criminal
statutes and to the disadvantage of the government and third parties, even
assuming that she did not benefit in any pecuniary way in the same onerous
transaction;

76. We argue that Mrs. Arroyo cannot hide under the cloak of immunity. The ruling
of the Supreme Court in Estrada v. Desierto, although addressed in particular on
the issue of the scope of immunity a non-sitting President can claim for himself,

14
This is known as the Qualified Political Agency doctrine, best explained by Justice Laurel in this wise:
“After serious reflection, we have decided to sustain the contention of the government in this case on the
broad proposition, albeit not suggested, that under the presidential type of government which we have
adopted and considering the departmental organization established and continued in force by paragraph 1,
section 12, Article VII, of our Constitution, all executive and administrative organizations are adjuncts of
the Executive Department, the heads of the various executive departments are assistants and agents of
the Chief Executive, and except in cases where the Chief Executive is required by the Constitution or the
law to act in person or the exigencies of the situation demand that he act personally, the multifarious
executive and administrative functions of the Chief Executive are performed by and through the
executive departments, and the acts of the secretaries of such departments, performed and promulgated
in the regular course of business, are, unless disapproved or reprobated by the Chief Executive,
presumptively the acts of the Chief Executive.” Cited in the concurring opinion of Justice Fernando in
Lacson-Magallanes Co. v. Jose Pano, G.R. No. L-27811, November 17, 1967; Justice Laurel, it should be
noted, had cited Runkle vs. United States 122 U.S.543 (1887). [emphasis supplied]. It is clear that the
invocation of “executive privilege” by Respondent Neri was never invalidated by Respondent Mrs. Arroyo.
This clearly indicates her active support of the acts of her alter ego; indeed Respondent Neri’s act was her
own act.

14
actually recognizes a “judicial disinclination to expand the privilege especially
when it impedes the search for truth or impairs the vindication of a right.”15

77. In effect, the Supreme Court here is saying that the crucial consideration in any
claim for Presidential immunity is not really whether the President is a non-sitting
one but whether the acts and omissions in question are unlawful. As it thus held:

It will be anomalous to hold that immunity is an inoculation from


liability for unlawful acts and omissions. The rule is that unlawful acts
of public officials are not acts of the State and the officer who acts
illegally is not acting as such but stands in the same footing as any other
trespasser. Indeed, a critical reading of current literature on executive
immunity will reveal a judicial disinclination to expand the privilege
especially when it impedes the search for truth or impairs the
vindication of a right [emphasis in the original].16

78. In fact, the Supreme Court cited favorably the US case of Clinton v. Jones,
which held that the US President’s immunity from suits for money
damages arising out of their official acts is inapplicable to unofficial
conduct; 17

79. More than that, the Supreme Court said that there is another overriding
reason to narrow the avenues for presidential immunity, and it is the fact
that “one of the great themes of the 1987 Constitution is that a public
office is a public trust.” 18

80. As a constitutional law scholar notes:

Claims of exemption, either from liability or suability, are constitutionally


suspect especially where….the immunity that will be sought is meant to
preclude a judicial inquiry into an accusation of egregious constitutional
negligence. The burden is on the President to justify her immunity.19

81. For this reason, we hold Mrs. Arroyo liable for her unlawful acts and
omissions in connection with the anomalous ZTE broadband deal.

As to Respondent Abalos

82. Respondent Abalos, violated Section 3(b) of RA 3019 when he received perks
and privileges from the ZTE in connection with its proposal to undertake the
NBN project. Indeed, he can be indicted for graft and corruption on his
admission that ZTE financed his trips to China, “three or four” times;

83. Respondent Abalos has the authority to intervene in the ZTE-NBN transaction by
reason of his office since the contract was entered into during the election ban; by
his own admission, the Comelec-en-Banc had given him the authority to grant

15
G.R. No. 146710-15, Mar. 2, 2001, 353 SCRA 452 (2001).
16
G.R. No. 146710-15, Mar. 2, 2001, 353 SCRA 452 (2001).
17
520 U.S. 681 (1997).
18
G.R. No. 146710-15, Mar. 2, 2001, 353 SCRA 452 (2001), citing (1987) CONST. art. XI, §1.
19
Hilbay, supra note 3 at 44.

15
exemptions on the ban on public projects during an election period. Respondent
violated the law when he received gifts and benefits from ZTE and tried to
influence or influenced other government officials in connection with the NBN
project;

84. Respondent Abalos is also criminally liable for violations of RA 3019 on account
of his admission that his daughter received assistance from ZTE officials on her
import business. Section 3(b) of RA 3019 penalizes public officers who receive
benefits “for himself or for any other person”. Respondent Abalos is prohibited
from receiving any benefit from the NBN proponents as he is authorized by law to
intervene in said project in his official capacity as Comelec chairman;

85. Respondent Abalos, also violated Section 3(h) of RA 3019 as it is clear that he
had financial and pecuniary interest in the NBN project – one public project
where he is authorized to intervene in his official capacity but in which he is
prohibited to have any personal interest;

86. As Mr. De Venecia III testified, Respondent Abalos took the ZTE-NBN deal for
his own, calling it his “last hurrah”. On the latter’s insistence, the price of the
NBN contract was marked up to US$ 329 Million from the original price of US$
262 Million. Respondent Abalos even offered a large amount of money to
government officials like Secretary Neri and other NBN proponents (Mr. De
Venecia III) to ensure that the contract would be awarded to his “friends” at the
ZTE who sponsored his golfing trips to China. It is plain and evident that
Respondent Abalos influenced or tried to influence other government officials to
approve ZTE’s proposal in exchange for monetary benefits and other “privileges”
from its top officials;

87. Respondent Abalos also violated Section 3(a) of RA 3019 when he tried to
persuade and induce Respondent Neri, another public officer, to approve the NBN
project despite knowing that the ZTE proposal was grossly overpriced and clearly
disadvantageous to the government. His act constitutes a crime punishable under
RA 3019 Respondent Neri himself testified under oath during the joint hearing at
the Senate on Sept. 26, 2007, that Respondent Abalos offered him a bribe of
TWO HUNDRED MILLION PESOS (P200,000,000.00) to approve the NBN
contract and certify its viability. Had Respondent Neri acquiesced to Respondent
Abalos’s wishes, he would have violated several laws, including RA 3019;

88. Respondent Abalos should also be held liable for violating Arts. 210 (Direct
Bribery), 211 (Indirect Bribery) and 212 (Corruption of Public Officials) of the
RPC. The elements of the crime of direct bribery are:20

a. The offender is a public officer;


b. The offender accepts an offer or a promise or receives a gift or present
by himself or through another;
c. Such offer or promise be accepted, or gift or present received by the
public officer –

(1) With a view to committing some crime; or


(2) In consideration of the execution of an act which does not
constitute a crime, but the act must be unjust; or
(3) To refrain from doing something which it is his official duty
to do.

20
LUIS B. REYES, THE REVISED PENAL CODE: CRIMINAL LAW PART TWO 358-359 (15th ed. 2001)

16
d. The act which the offender agrees to perform or which he executes be
connected with the performance of his official duties.

33. All the elements of the crime of direct bribery under the second mode is present
here, where the gift is received in consideration of the execution of an act which
does not constitute a crime.

a. He is a public officer;21
b. He accepted and received benefits (China trips) and money from ZTE
officials;
c. He received such benefits and money in exchange for his efforts to
steer responsible government officials to awarding the NBN contract
to ZTE. Although this, per se is not a crime under Philippine law, it is
nevertheless an unjust act, considering that ZTE was unduly favored,
to the detriment of other qualified proponents whose proposals were
not even considered;

d. The act which he agreed to do in consideration of the gifts given


includes the performance of an act in the course of his official duties –
namely, the granting of exemption to the prohibition on execution of
contracts for public works during the forty-five days leading to the
elections;

34. In addition Respondent Abalos may also be held liable for indirect bribery, the
elements of which are:22

a. The offender is a public officer.


b. He accepts gifts.
c. Such gifts are offered to him by reason of his office.

35. At the very least, Respondent Abalos should be held liable for indirect bribery,
considering that he presented himself before ZTE officials as a person with
sufficient authority or influence to steer the award of the NBN contract to ZTE,
and considering further that the monetary consideration was offered to him by
reason of his position as Comelec chairperson. That he admitted that ZTE also
paid for his trips to China, “three or four” times, is more than sufficient to prove
his acceptance of benefits by reason of his office and to serve as a basis for his
indictment for indirect bribery. But whether or not Respondent Abalos’s acts
constitute direct or indirect bribery, or both, it cannot be denied that bribery
took place in this case;

36. Moreover, Respondent Abalos committed the crime punished by Art. 212 of
the RPC, Corruption of Public Officials, which states:

Art. 212. Corruption of Public Officials. -- The


same penalties imposed upon the officer corrupted, except
those of disqualification and suspension, shall be imposed
upon any person who shall have made the offers or
promises or given the gifts or presents as described in the
preceding articles.

21
Art. 203 of the RPC defines public officers as who “by direct provision of law, popular election or
appointment by competent authority, shall take part in the performance of public functions in the
Government of the Philippine Islands, or shall perform in said Government or in any of its branches public
duties as an employee, agent, or subordinate official, of any rank or class.”
22
REYES, supra note 19 at 365.

17
37. Respondent Abalos offered a bribe worth TWO HUNDRED MILLION
PESOS (P200,000,000.00), to Respondent Neri so that the latter would give a
favorable recommendation or endorsement of the ZTE proposal for the NBN
project; this despite knowing that the ZTE contract is grossly disadvantageous
to the government. Mere “offer or promise” is already a criminal act punishable
under this provision of the RPC;

As to Respondent Mr. Arroyo

38. Meanwhile, Respondent Mr. Arroyo violated Sec. 5 of RA 3019 when he


threatened and tried to coerce Mr. De Venecia III into withdrawing from the
NBN project. Being the spouse of the current occupant of the Office of the
President of the Philippines, he is prohibited by law to intervene, directly or
indirectly, in any business transaction or contract with the government;

39. Respondent Mr. Arroyo’s actuations during the meeting between Respondent
Abalos and Mr. De Venecia III unmistakably show not only his bias for the ZTE
proposal but also his pecuniary interest in it, not to mention the conspiracy
hatched between him and Respondent Abalos to make sure that ZTE and not
any other proponent bag the NBN contract; His presence there was meant to
impress upon anyone – to Mr. De Venecia III in particular – that he carried
with him the color of the authority of the office occupied by his wife and that
he is in the position to influence government officials on such matters as public
contracts;

40. His presence in that meeting is tantamount to using whatever perceived and
projected influence he has as husband to the occupant of the highest office in
the land to interfere with a government contract. This of course, is punishable
under the pertinent provisions of RA 3019;

As to Respondent Neri

41. Respondent Neri should be held responsible under Art. 208 of the RPC which
penalizes public officers who, in dereliction of the duties of his office,
maliciously refrains from instituting prosecution for the punishment of violators
of the law, or shall tolerate the commission of offenses;

42. As a government official, it is his bounden duty to prosecute violators of the


law, not to mention one who tried to bribe him into violating the law. Instead,
he attempted to conceal the criminal acts of other government officials involved
in the ZTE controversy, maliciously and deliberately using “executive
privilege” during the joint hearings at the Senate to do so;

43. This in fact, indicates the malicious and criminal intention on his part to
tolerate the commission of the crimes that he has personal knowledge of;

44. Moreover, the approval of the ZTE proposal/contract by the ICC and NEDA, in
which Respondent Neri is the Chairperson, despite him having been offered
what he considered a bribe in the amount of Two Hundred Million Pesos
(P200,000,000.00) and considering that such approval by the ICC and NEDA is
an indispensable requirement for the signing and conclusion of the ZTE
contract, paved the way for the conclusion and signing of the ZTE contract that

18
is clearly disadvantageous and caused undue damage and injury to the interest
of the government, all in violation of R.A. No. 3019.

45. At the very least, Respondent Neri’s facilitation and approval of the ZTE
Contract make him an accessory to the criminal acts perpetrated by Respondents
Mrs. Arroyo, Abalos and Mr. Arroyo;

46. We therefore jointly execute this complaint-affidavit to attest to the truth of the
foregoing and to cause the prosecution of Respondents Mrs. Arroyo, Mr.
Arroyo, Mr. Abalos and Mr. Neri for violations of the above-mentioned
provisions of various criminal statutes.

Affiants further sayeth naught.

19