Manila, Jan. 22, 2003 - (Tribune)-  President Arroyo’s aides appear to be leaving resigned Justice Secretary Hernando Perez to defend himself in the controversial $470-million Industrias Metalurgicas Pescarmona Sociedad Anonima (Impsa) power contract deal's sovereign guarantee.

Former Finance Secretary and incumbent Executive Secrtary Alberto Romulo told the Senate panel headed by Sen. John Osmeña that he was left out of the Impsa transaction, intimating that it was Perez who sealed the deal on the Impsa guarantee.

Facing Osmeña's committee on government corporations and public enterprises, Romulo denied having any participation in the negotiations of the contract while he was still Finance secretary of the current administration.

Osmeña said Perez may have to face criminal charges as it appears that he had expedited the issuance of a legal opinion.

What made matters worse for Perez, Osmeña said, was the committee's discovery that the legal opinion rendered by the former DoJ chief was addressed to Impsa's lenders "which says that a responsible official of the government has agreed or consented to the government's liability to that account."

"Now, whether or not this will hold water in the future will be a matter of litigation. But I agree with Perez that he did not have authority to do what he did, which is why in this case, proper criminal charges should be brought against him," he told reporters in an interview after the hearing.

When asked what possible charges could be leveled against Perez, Osmeña said it would be up to the courts or the Office of the Ombudsman to determine the criminal liability of Perez.

Perez's dilemma on the matter worsened after Romulo practically washed hands on any perceived culpability, saying the DoJ's legal opinion was never coursed through his office.

Such claim was further bolstered by a letter to former Sen. Rene Saguisag by Finance Secretary Jose Isidro Camacho dated Jan. 15, 2003 regarding the required documentation relative to the Impsa-Caliraya-Botokan-Kalayaan (CBK) hydroelectric power plant project in Laguna where the current DoF chief confirmed Romulo's claim.

"We therefore wish to inform you that no document was signed or would have been signed as explained above by Secretary Alberto Romulo on 'financial closure, effective date and turnover date' nor was any document signed by President Arroyo," Camacho said in the last portion of his two-page letter to Saguisag that was submitted to the committee.

In the previous hearings where ousted President Joseph Estrada, former Finance Secretary Jose Pardo and former Justice Secretary Artemio Tuquero appeared, it was stated that even after the rendering of the DoJ opinion on the matter in the case they had failed to act on the procedure calls for the opinion and contract to be submitted to the DoF.

Estrada, in testifying before the committee last Jan. 14 and upon query by Sen. Rodolfo Biazon, said Perez should have routed back to the DoF documents on Impsa specially when the so-called Government Acknowledgment and Consent Agreement or the second accession to the Impsa undertaking was to be expanded.

He was referring to the clause in the GACA supposedly penned and inserted by Perez that read as follows: "The Republic of the Philippines has validly and effectively consented to the transfer and assignment to the lenders of all of CBK's rights under the government undertaking" to be presumed as government guarantee clause in the contract."

"You should not expand the GACA without the (accession) of the Secretary of Finance," Estrada said in his testimony before Senate probers.

Romulo was prompted to yield the Camacho letter to Saguisag to the panel in an apparent bid to extricate himself from the mess and prove he took no action on this particular transaction even as previous claims made by Pardo showed that he had been briefed on the matter.

Serving for only a few months in the DoF or shortly after President Arroyo assumed power only to be named Executive Secretary, he confessed though that he may have received memorandums on the Impsa contract.

Romulo, however, insisted that he did not act on it.

"I receive many letters and memorandums in my office, but getting such letter does not mean I agree with it," he said.

Previous officials said it was the Arroyo administration, barely a week in power, that approved the deal after Perez issued a legal opinion.

When asked by Sen. Sergio Osmeña III if he had at least been informed of the Impsa deal since it involves contingent liabilities, Romulo conceded the point but said he would have to check the records.

When further pressed by Osmeña III if he had issued direct or indirect government guarantees during his four months as Finance chief, he replied: "I must have had but I cannot recall."

Osmeña then was prompted to inquire if Romulo, based on the circumstances that he gave them, if he was left out of the negotiations. Romulo passed this on to Perez. "Let Perez answer why I was not given a copy. The DoJ will explain if it has direct guarantee...To my recollection, Pardo mentioned it (Impsa deal) to me but I never acted on this issue," he said.

When cornered by reporters, Romulo made the same claims, and insisted that he had no participation at all in the Impsa deal.

"I never acted on any of these issues...I did not sign anything," Romulo said.

Romulo added it is up to resigned Justice Secretary Perez to explain why he issued the controversial DoJ opinion that "gave financial closure to the Impsa deal" when Perez appears before the Osmeña committee.

DoJ Undersecretary Merciditas Gutierrez attempted to defend Perez saying it had never been a standard operating procedure of the department to route back to the DoF each legal opinion, adding there were no deviations from the normal practice that the agency made in dealing with Impsa contract.

But Tuquero contradicted this, saying contracts of this nature should be coursed through again to the DoF and other concerned agencies such as the National Power Corp. (Napocor).

Osmeña said he would have to summon the so-called lenders in the subsequent hearings.

"We will invite the banks and we will subpoena the documents here," he said, adding the legal opinion of Perez was directed actually to the banks, an issue that bolsters allegations on the existence of government guarantee.

"The direct damage to this is that we are pinned down. It becomes direct guarantee which means that in any eventuality or if something goes wrong with Impsa or the Napocor, all of their liabilities would be addressed to the DoF or to the National Treasury," Osmeña said.

He added the grant of direct government guarantee to the Argentine firm Impsa to undertake the CBK project constitutes a violation of the Build-Operate-Transfer Law.

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