Saturday, February 14, 2009

Ties that bind a string of scandals

By Cyril Bonabente
Philippine Daily Inquirer
First Posted 02:24:00 02/12/2009

Filed Under: Graft & Corruption, People, World bank road mess, NBN deal, Hello Garci

MANILA, Philippines—First Gentleman Jose Miguel “Mike” Arroyo has been implicated in corruption scandals since his wife became President in January 2001.

Just six months after Gloria Macapagal-Arroyo assumed the presidency, her former correspondence secretary, Veronica Rodrigo, accused Mike Arroyo and his friends of receiving a P40-million bribe to help recall a presidential veto on two congressional bills.

One bill sought to give Philippine Communication Clearing-house a franchise to operate a clearinghouse through which telecommunication firms could interconnect for a fee. The other bill sought to grant APC Wireless Interface Network a franchise to build a nationwide wireless telecommunication system.

Rodrigo later admitted to the Senate blue ribbon committee that she had no direct knowledge of the alleged bribery.

Alleged misuse of PCSO funds

In October 2001, Sen. Panfilo Lacson accused Mike Arroyo of urging the Philippine Charity Sweepstakes Office (PCSO) to release P250 million in advertising funds, and of using the money to finance the campaign of four administration candidates in the May 2001 senatorial election.

Lacson identified his informant as Robert Rivero, former media consultant of the PCSO.

The Office of the Ombudsman conducted an investigation but suspended its probe after Rivero reportedly failed to substantiate his charges.

Jose Pidal accounts

Lacson struck again in August 2003, this time saying that Mike Arroyo had amassed more than P200 million from contributions to his wife’s vice presidential campaign in 1998 and had deposited the money in secret bank accounts, one of which was under the name Jose Pidal.

In the Senate inquiry that followed, Mike Arroyo’s brother, Ignacio Arroyo Jr., claimed ownership of the Jose Pidal account and repeatedly invoked his right to privacy. He had not yet been elected congressman.


Two confessed “jueteng” bagmen testified in the Senate in June 2005 that the President’s husband was involved in the lucrative illegal numbers game.

But in August that year, Demosthenes Abraham Riva, who testified that Mike Arroyo had given Mario Espinosa, former presidential assistant for Bicol affairs, blessings to operate jueteng in the region, apologized to the President and said: “The First Family had nothing to do with jueteng.”

The other bagman, Richard Garcia, also apologized to Ms Arroyo in a televised news conference but said he was not retracting his earlier statement.

Hello Garci

Brig. Gen. Francisco Gudani, one of four generals mentioned in the wiretapped “Hello Garci” conversations, told the Senate in September 2005 that Mike Arroyo had flown twice to Mindanao in a private helicopter a couple of days before the 2004 presidential election to deliver boxes containing about P500 million.

It was in Mindanao where massive electoral fraud was allegedly committed to ensure the victory of Ms Arroyo.

Mike Arroyo cried foul after then House Deputy Minority Leader Alan Peter Cayetano hinted in August 2006 that a member of the First Family had a multimillion-dollar bank account at the HypoVereins Bank in Germany.

HypoVereins later issued a certification that no member of the Arroyo family had accounts in, or made transactions with, the bank in the past 10 years.

NBN-ZTE deal

In September 2007, Jose de Venecia III testified in the Senate that in March that year, Mike Arroyo thrust a finger inches away from his face and barked at him to “back off” from the National Broadband Network (NBN) project. A company co-founded by De Venecia, Amsterdam Holdings Inc., was then seeking to undertake the project.

In April 2007, the Philippine government signed a $329-million NBN contract with Chinese firm ZTE Corp. De Venecia claimed the contract was overpriced by about $130 million to cover kickbacks, and that $70 million of this would go to the President’s husband.

Mike Arroyo denied the allegation, saying he had only reminded De Venecia that it was inappropriate for the son of the then House Speaker to get involved in government contracts.

Early this month, Lacson released excerpts of a World Bank report indicating that Mike Arroyo, some politicians and public works officials had taken bribes from contractors to ensure that they would bag projects funded by the World Bank under the National Roads Improvement and Management Program.

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