MANILA, OCTOBER 16, 2003  (BULLETIN) By Ferdie J. Maglalang & Mario B. Casayuran  - President Gloria Macapagal Arroyo assured yesterday she will not allow any attempt to cover up any investigation into the alleged extort try amounting to some $70 million by some Cabinet officials for the operation and management of the Ninoy Aquino International Airport (NAIA) Terminal 3 project.

The President made the assurance even as she expressed readiness to order an impartial and independent investigation, along with the move by the World Bank (WB) to conduct its own investigation following a request for arbitration made by Frankfurt Airport Service Worldwide (Fraport).

"I welcome any probe by the World Bank and if warranted by developments, we will initiate any impartial and independent investigation of the charges. I want the truth to come out and there will be no coding or cover- ups," she said in an official statement.

Fraport, which has 30 percent shareholding in its partner, Philippine International Air Terminals Corp. (Piatco), has earlier sued the Philippine government before the WB arbitration panel to enable it to honor its contract to operate and manage the long-delayed NAIA 3 facility.

In its arbitration request, Fraport alleged that presidential adviser on strategic projects Gloria Tan Climaco, presidential legal counsel Avelino Cruz, and President Arroyo's lawyer, F. Arthur Pancho Villaraza, attempted to extort some $70 million in exchange of the operations of the NAIA 3 facility.

According to newspaper reports, the President's aides were purportedly pressuring Fraport to help the government duel the Chang family, who owns majority of Piatco, to what the "government favored interests" could participate in the NAIA 3 terminal Operations and management.

The allegedly also asked Fraport officials to hire the service of the Villaraza law firm in setting their row with the government, so that the NAIA 3 passenger terminal construction project will not be messed updating the stint of the Arroyo administration.

Although she has already rescinded the NAIA 3 construction project contract due to legal and technical infirmities, the Chief Executive said she was "as shocked as anyone" by the reported extortion attempt by her aides, but will never tolerate any wrongdoing by her Cabinet officials.

"I am as shocked as anyone by this story and I welcome any investigation, under due process, of these charges. I ask those accused to account for all their actions in this case and I am confident that they can adequately defend themselves," she said.

She, however, said she found it "ridiculous" for both Tan-Climaco and Cruz to be "deeply involved" in the entire controversy since the two government officials have worked hard for the nullification of the contract with Piatco by the Supreme Court the final arbiter of the law.

"This makes the actions imputed against them seem ridiculous," she said.

The Supreme Court had declared null and void the $400-million contract entered into by the government with Piatco for the construction project of the NAIA Passenger Terminal 3, arguing that Piatco has failed to meet the requirements required under the Build-Operate-Transfer (BOT) Law.

It also based its decision on glaring onerous provision contained in the five contracts with PIATCO, one of which constitutes "a direct government guarantee" that is strictly prohibited the BOT Law for which the airport project was carried out.

Blue Ribbon probe

Administration Sen. Joker Arroyo said yesterday his Senate Blue Ribbon committee will open a public hearing on an alleged extortion attempt against a German construction firm by some officials close to Malacaņang on the controversial $500 million Ninoy Aquino International Airport (NAIA) passenger terminal 3 project, saying the lawsuit filed by the firm in Washington, DC, "is very serious and very embarrassing to the country."

Arroyo said his committee would unilaterally verify the filing of the lawsuit and invite officials of the Germany-based Fraport AG Frankfurt Airport Services Worldwide to the public hearing.

He said officials complained of by Fraport such as Ms. Gloria Tan Climaco, presidential adviser, and presidential legal adviser Avelino Cruz, would be invited to hear the allegations to be made by Fraport officials.

Arroyo recalled that Fraport had earlier denied to his committee that its lawyers, through a tape conversion, talked in passing about an alleged extortion attempt by persons close to Malacaņang that they would not permit the project to be successful as long as Fraport's partner, the Philippine International Aviation Terminal Company (Piatco) owned by the Cheng family, played a central role in the project.

He also told Senate reporters that, during the hearings by his committees he refused to contribute with the inquiry if opposition Sen. Edgardo J. Angara, insisted that he would present the taped controversial because this so-called evidence could be considered an illegal wire tap.

"We are ready to hear them. I've been really waiting for this evidence," Arroyo said of the Fraport lawsuit filed before the International Center for Settlement of Investment Disputes ((ICSID).

Arroyo said his committee can now unilaterally call Fraport officials based in Germany to come to the Philippines and testify on the alleged extortion attempt.

The Senate Blue Ribbon committee chaired by Arroyo earlier reported out its recommendation that the Piatco contract was lopsided and onerous.

Fraport, according to opposition Sen. Panfilo Lacson, claimed that President Gloria Macapagal Arroyo's private counsel, F. Arthur Villaraza, had demanded "several tens of million of US dollars" from them to facilitate the expulsion of the Cheng family so that groups close to Malacaņang could take part in the project. Cruz was a former member of the Villaraza law office.

"The allegations in the Fraport's request for arbitration (in the US) impugns the integrity of the administration acting through Ms. Climaco," opposition Sen. Aquilino Q. Pimentel Jr. said.

"The allegation of an attempted bribery is so serious that they cannot just be ignored or swept under the rug by general denials," Pimentel said.

Angara said the investigation of the alleged extortion attempt should be picked up by another Senate committee, like the Senate government corporations committee, because the hearing by Arroyo's committee on the Piatco case has been terminated.

"If it (the alleged extortion try) is proven, that would have a devastating effect on investment sentiments because the allegation there is that the government, disregards contractual commitments and expropriates properties and assets of investors without compensation," Angara said.

"That is the worst thing that can happen to an investor... you make investment here and then government takes over it without compensation. That is essentially the complaint of Fraport," Angara added. (MBC)


Vice President Teofisto Guingona Jr. said yesterday the report that a lawyer of President Arroyo demanded huge amount of money from the German firm Fraport AG to facilitate the ouster of its Filipino partner from the Terminal 3 project in Manila's Ninoy Aquino International Airport was "serious and disturbing" and should be "fully explained".

In a statement issued through spokesman Danilo Venida, Guingona said the parties involved should explain the alleged extortion attempt, as claimed by Philippine International Air Terminals Co. (PIATCo) lawyer Frank Chaves, to the Filipino people in the interest of truth and justice.

"The allegations of the top executives of the German firm Fraport AG in connection with the NAIA Terminal 3 project are serious and deeply disturbing. The parties concerned must, in the interest of the truth and justice, fully explain the matter to the Filipino people," Venida' statement said.

Reported by: Sol Jose Vanzi

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