MANILA, SEPTEMBER 17, 2007 (STAR) By Paolo Romero - President Arroyo and Speaker Jose de Venecia Jr. could be headed for a collision course over the controversial $330-million broadband contract with China’s ZTE Corp. involving the Speaker’s son, several Cabinet officials and the “mystery man” closely identified with Malacañang.

The identity of the mystery man is expected to be revealed tomorrow by Jose de Venecia III, co-founder of the Amsterdam Holdings Inc. (AHI) that lost to ZTE in the National Broadband Network (NBN) project.

The younger De Venecia is expected to name the mystery man when the Senate holds its first investigation tomorrow on the controversies surrounding the contract.

De Venecia III said the mystery man tried to pressure him to withdraw his proposal for the NBN with Commission on Elections (Comelec) Chairman Benjamin Abalos present during one of the meetings at the Wack Wack Golf and Country Club earlier this year.

Abalos is facing investigation at the Office of the Ombudsman and in the House of Representatives for allegedly lobbying for ZTE in exchange for golf and sex.

In his sworn statement, De Venecia III accused Abalos of trying to bribe him with $10 million to withdraw AHI’s proposal.

Senior administration officials, on the other hand, revealed Malacañang is trying to prevent a possible rift between Mrs. Arroyo and Speaker De Venecia.

“The political fallout on Malacañang is being shielded by senior officials who meet weekly because of this ZTE controversy, also to prevent possible rifts in political alliances,” a top administration official who spoke on condition of anonymity said.

Another official claimed “friction” occurring between the two leaders stemming from the ZTE deal, and if not handled well, a split could eventually ensue.

“The way I see it she would try to protect herself and (Speaker) JDV would try to protect himself,” the official said.

The same official revealed some the political forces identified with Mrs. Arroyo funded the campaign of De Venecia’s opponent in the last congressional elections in Pangasinan and were the same groups that tried to prevent his return as Speaker of the House of Representatives in June.

De Venecia admitted to having “honest differences in opinion” with Mrs. Arroyo even as he urged her to renegotiate the deal with ZTE that would no longer require the government to borrow $330 million from China to finance the NBN.

“We would like to keep in our political and economic relations with China a matter of national priority. We have excellent political and economic relations with China and she and I agree on that,” De Venecia told The STAR.

“However, on this ZTE contract, if it can be modified that the country does not have to incur any debt, any loan and be converted into a BOT (Build-Operate-Transfer), I think this would turn out well for the country,” he said.

De Venecia pointed out that if his son’s firm could undertake the NBN on a BOT basis or without a government guarantee, much less a loan, then ZTE could do it also.

ZTE, De Venecia pointed out, is a global telecommunications giant “but this (renegotiation) has to be done diplomatically so that it won’t create any damage to Philippine-China relations.”

De Venecia said he relayed his proposal to Mrs. Arroyo while she was in Sydney two weeks ago attending the leaders’ meeting of the Asia-Pacific Economic Cooperation (APEC) and met Chinese President Hu Jintao at the sidelines of the summit.

“I think my proposal is precisely to honor the agreements with China but if we could improve the terms,” he said.

De Venecia, however, stressed that even if the government would renegotiate with ZTE for a BOT contract, his son would no longer participate.

“Some people might think, we’re pushing for a renegotiation so that AHI would be able to join, but no, that’s not the case,” De Venecia said.

“The President has been supportive of me all these years and these are just honest differences in opinion,” he said.

The Speaker noted Mrs. Arroyo was actually in agreement with him on the issue of BOT based on the minutes of the Cabinet meeting last year.

“We were in full agreement all along,” De Venecia claimed.

De Venecia III, on the other hand, said he is trying to determine who were among those present in some of his meetings with Abalos.

He claimed it was between Edgar Dula Torres or Quirino Dela Torre, both of whom are retired police officials.

Dula Torres earlier denied that he was present in the meetings where Abalos reportedly tried to persuade to De Venecia III to back off.

Dela Torre, on the other hand, held several posts at the Philippine National Police (PNP), including chief of the PNP computer center, under then Director General Leandro Mendoza, now Transportation and Communications (DOTC) Secretary pushing for the ZTE contract.

De Venecia III admitted recalling the surname Dula Torre when he was introduced to the person since it was not common.

“I didn’t ask for IDs, but I would have make amends with him, if it was not him,” he said of the retired police general whom he named in his affidavit before the Supreme Court.

If it was Dela Torre, it could show that Mendoza was aware of the alleged bribery attempts.

De Venecia III earlier accused Mendoza of trying to threaten him and Abalos for eavesdropping on his telephone conversations.

He said he has not been answering calls on his mobile phone as he believes some of them could be from the Palace or its allies for him soften his attacks against the deal.

Meanwhile, a top Malacañang official revealed Trade Secretary Peter Favila has begun talks with his Chinese counterpart, Minister of Commerce Bo Xilai in trying to resolve the controversy.

The move was following the agreement between Mrs. Arroyo and Hu to let concerned ministers to come up with their recommendation.

Favila, the official said, was inclined to recommend the petition be allowed to take its course before the SC.

The SC earlier issued a temporary restraining order on the NBN project.

‘All right, sir’

The Senate has scheduled tomorrow its inquiry over the controversy surrounding the broadband deal.

Sen. Panfilo Lacson said he is in favor of postponing the Senate hearing in support of Mendoza invoking the subjudice rule in deferring to answer any questions regarding the contract pending a court ruling.

“This time I agree, in deference and out of respect to the Supreme Court, the Senate should defer its investigation over the ZTE since there is a pending case before the Supreme Court,” Lacson said.

The joint Senate committees have invited Mendoza and other DOTC officials to appear before the inquiry.

The Senate also invited De Venecia III; Iloilo Vice Gov. Rolex Suplico, Commission on Higher Education acting Chairman Romulo Neri, ZTE vice president Yu Yong and The STAR columnist Jarius Bondoc.

On Thursday, Abalos is slated to appear before the joint Senate hearing.

Mendoza had invoked subjudice in pointing out the questions on the legislative investigations are also included in a pending petition before the SC.

Mendoza sought the SC permission to allow him to answer queries before the Senate regarding the ZTE deal.

But in the company of young idealistic cadets of the Philippine Military Academy (PMA), Mendoza spoke up on the ZTE deal.

Mendoza addressed PMA alumni in a testimonial parade at the Fort del Pilar grandstand in Baguio City which was held in his honor as an outstanding graduate of the academy.

“All right, Sir,” Mendoza said to describe the controversial project. The expression is reportedly a phrase used among cadets to mean that no rules and regulations were violated under the sacred PMA Code of Honor.

In his address, Mendoza assured the cadets that public interest will always be the primary consideration in all the programs and projects the DOTC is implementing or has implemented, including the NBN project.

Mendoza also discussed the DOTC’s infrastructure projects being implemented under the Super Region development strategy of President Arroyo.

“It will be a government network that will be purely for government use only,” Mendoza said.

“The broadband (project) is a highway, an imaginary cyber highway, that caters to the movement of data, voice and video,” he said.

Mendoza explained he is evading the Senate inquiry regarding the deal. He said a case has been filed before the SC and the Ombudsman by Suplico which requires him, as one of the respondents, to defer issuing any public statement regarding the issue until the SC hands down its decision. -With Christina Mendez, Rainier Allan Ronda

Chief News Editor: Sol Jose Vanzi

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