Mike Arroyo is mystery man

Mike Arroyo is mystery man

‘He tried to bully me to back off NBN-ZTE deal’

By Dona Pazzibugan, Gil C. Cabacungan Jr.
Last updated 04:03am (Mla time) 09/19/2007

View the NBN contract and related documents


MANILA, Philippines — Businessman Jose “Joey” de Venecia III Tuesday named Jose Miguel “Mike” Arroyo as the “mystery man” who supported the controversial $329-million broadband deal with China, thrust his finger inches away from his face and barked at him to “back off” from the deal.


On live television, De Venecia demonstrated at a Senate inquiry how the husband of President Gloria Macapagal-Arroyo supposedly tried to browbeat him during a meeting at a golf clubhouse attended by Commission on Elections Chair Benjamin Abalos Sr., the alleged broker of the China project.


“He asked me to back off [from the National Broadband Network project],” De Venecia, head of a rival firm, told the senators, recounting the meeting at the Wack Wack Golf and Country Club in Mandaluyong City in mid-March.


De Venecia is the founder of Amsterdam Holdings Inc. (AHI), which lost the contract for the NBN project to ZTE Corp.


De Venecia also recounted how Abalos, in a separate meeting with officials of China’s ZTE Corp., which he attended, allegedly demanded advance commissions and claimed Ms Arroyo and his father, Speaker Jose de Venecia Jr., were expecting the money.


The younger De Venecia said he was shocked by Abalos’ attempt to drag the names of Ms Arroyo and of his father, and he pulled Abalos aside “to warn him against the gratuitous namedropping.” But when the meeting resumed, he said Abalos continued with his demands.


Heavy heart


In his opening statement, De Venecia said: “It is with a heavy heart that I cannot deny that it was First Gentleman Mike Arroyo at the reconciliatory meeting.”


“I do, however, want to make clear that it was his presence alone that I observed and I have no other indication of his participation in the NBN project or the deal with ZTE,” he said.


The Senate and House of Representatives are investigating the ZTE contract amid calls that it be rescinded because it was allegedly overpriced by $130 million and attended by corruption. Two economists claimed that the NBN project was unnecessary because the private sector already had two broadband networks.


Last week, the Supreme Court ordered a temporary stop to the NBN contract, which was signed in April in Boao, China, by Communications Secretary Leandro Mendoza and ZTE vice president Yu Yong in ceremonies witnessed by President Arroyo.


Reconciliatory meeting


The young De Venecia was referring to the “reconciliatory meeting” in a function room of Wack Wack, where De Venecia said Arroyo tried to bully him to get him to withdraw AHI’s unsolicited proposal for the NBN project.


“Sinindak niya po ako (He threatened me),” he said in reply to Sen. Francis Pangilinan’s question.


Pangilinan said the act of the President’s husband, who left the country for Hong Kong on the eve of the Senate inquiry, was more like a “pangduduro (browbeating).”


The “reconciliation” meeting was called by Mendoza to patch up differences between De Venecia and Abalos, who allegedly brokered the ZTE deal in exchange for a kickback.


Golf buddies


“I believe Abalos and the First Gentleman and Mendoza are very close friends. They play a lot of golf. They’re buddies,” he said.


Other persons at the meeting, according to De Venecia, were Abalos’ chief of staff Jimmy Paz, Abalos security staffer Quirino de la Torre, Ruben Reyes and Leo San Miguel. (De Venecia apologized to Edgar Dula Torres, a retired police official, whom he had mistakenly identified as being part of Abalos’ group when he was actually referring to De la Torre).


Heavier person


“My impression is that Chairman Abalos had asked him (Arroyo) to convince me to withdraw [my bid]. It’s like in a fight where you will ask a heavier person to back you up,” De Venecia said.


De Venecia said Mendoza spoke first: “Joey (De Venecia), the chairman is here. The First Gentleman is here.”


Abalos supposedly told him: “Joey, I forgive you for your sins.”


(Abalos was apparently referring to De Venecia’s claim that the Comelec chair had gotten mad at him for telling ZTE officials that he [Abalos] wanted an advance commission.)


De Venecia said he did not reply and asked instead if Abalos’ proposal for “cooperation” between ZTE and his own firm, Amsterdam Holdings Inc., was still on.


Before Abalos could reply, Arroyo cut De Venecia off and told him to “back off.”


“Back off is, iwanan mo na itong proyekto (leave this project). Huwag na akong sumali dahil may ibang kasali diyan (I shouldn’t join the project because someone else was already involved),” De Venecia told the senators.


After being told to back off, De Venecia said he tried to explain to Arroyo the advantages of AHI’s proposal.


“But he (Arroyo) refused to listen. He went to the other side of the room. He just stood up and left,” the businessman said.


“I ended up talking to nobody,” De Venecia said.




Sen. Jinggoy Estrada said one of the waiters at Wack Wack witnessed the meeting. De Venecia, however, could not recall the exact date but that it was held about middle of last March.


When questioned, De Venecia recalled that both Arroyo and Mendoza were in white barong Tagalog while Abalos came in a “very nice” polo barong with the Comelec pin.


De Venecia said earlier in March that he came across Mendoza at his father’s home.


“You know Joey, your proposal is difficult because the old man [Abalos] is mad at you,” he quoted Mendoza as telling him.


De Venecia told the Senate inquiry that the ZTE contract was overpriced by at least $130 million.


He said he was offered $10 million to join the Chinese firm in the deal while on a visit to China last December.


“It was there that I found out that the ZTE proposal was, as early as then, overpriced by … $130 million” ostensibly to accommodate kickbacks, he said.


After he refused to form a partnership with ZTE, De Venecia said Abalos threatened him and Star columnist Jarius Bondoc, who had written about the deal.


“It was also him (Abalos) that threatened to have Jarius Bondoc and I killed for informing the public of his wrongdoing,” De Venecia told the senators.


Sen. Francis Escudero pointed out that both De Venecia and Arroyo were liable for violation of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019) because relatives of the president, vice president, Senate president and House Speaker up to the 4th degree of consanguinity are barred from involvement in government contracts.

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