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(UPDATE 7) Lozada links First Gentleman, Abalos to NBN deal

He names officials in abduction

By Veronica Uy
First Posted 10:18:00 02/08/2008

MANILA, Philippines -- Rodolfo Lozada Jr., the key witness in the Senate inquiry into the national broadband network (NBN) deal, has linked First Gentleman Jose Miguel Arroyo and former Commissions on Elections chairman Benjamin Abalos Sr. to the controversy.

In his seven-hour testimony Friday before the Senate, Lozada said former socioeconomic planning secretary Romulo Neri had instructed him not to involve the First Gentleman in the issue.

Lozada said the order was relayed to him by Malacañang functionary Medy Poblador while he was in Hong Kong, where government authorities had sent him because “they couldn’t find a legal remedy to stop the Senate” from requiring him to appear before its inquiry on the $329-million NBN contract with China’s ZTE Corp., scrapped because of allegations of corruption.

Lozada, technical consultant for the NBN project, had revealed that he met with the First Gentleman during a dinner with ZTE officials, along with Abalos and Neri.

Lozada said that ZTE officials revealed to him that they had advanced money to Abalos who, in turn, had told the witness that he would advance Neri's supposed share from the agreement.

“Wag kang mag-alala, hindi ako tulad ng iba, i-a-advance ko na [Don’t worry, I’m not like the others. I will advance it already],” Lozada quoted Abalos as saying.

Asked if the commission was for him, Lozada said it was for Neri.

“Siguro makikibalato lang ako. Ang alam niya [Abalos] alalay lang ako [Maybe I will just get a windfall. What he knew was I am just the assistant],” he said.

In his own earlier testimony before the Senate, Neri said Abalos had offered him P200 million for his favorable endorsement of the NBN project.

Lozada said the whole problem started when Abalos wanted $130 million for the project that would have connected all government agencies via a broadband network.

“I told him the $130 million was too much and too difficult to cover. Maybe, if it was only $65 [that would be acceptable].”

Lozada described that a 20 percent overprice in a contract of such magnitude would usually be acceptable.

“It looks like that’s the norm in government,” said Lozada, citing as an example the $1.3-billion Southrail project to improve railway links to and from the capital. Some of the funding has come from China.

Lozada said the cost of linking government departments in a broadband network should only have cost $132 million.

Lozada recalled how Abalos insisted on a loan package for the project instead of a build-operate-transfer scheme, which the former consultant said he and Neri had recommended.

Lozada said that when he refused to accede to Abalos’ proposal, the former poll chief repeatedly threatened him.

Lozada said the last straw was on January 18 when, on his way to Dumaguete City as part of his work as president of the state-run Philippine Forest Corp, Abalos called him again and told him that he had contacts in the military and police.

Lozada alleged that after this, Abalos let loose invectives, of which he said he had had enough.

He said it was at this point that he decided to resign from his post because “this was not something worth risking my life for.”

He said following his resignation, the NBN contract was signed in February.

An official from the Chinese embassy expressed concern over the allegations, saying that they "painted an unfair picture about how we transact business."

Earlier Friday, Lozada named several government officials, including those from the police and military, allegedly involved in his abduction.

Lozada identified, among others, Colonel Paul Mascariñas, who allegedly accompanied him as he was driven around to avoid Senate security officials who wanted to serve the arrest warrant against him; Environment Secretary Jose "Lito" Atienza, his boss; Neri, and Philippine National Police Director General Avelino Razon.

He also said former environment secretary Mike Defensor, whom he described as a friend, came to him to convince him to tell the public that he was not abducted.

Lozada said his travel request and other documents were antedated so that he could be sent to the former British colony to sit out the hearing on the telecommunications contract and wait until the hearing was closed.

Lozada said he agreed because he believed that while he was in government, “I will toe the government line.”

On his flight to Hong Kong, Lozada said an affidavit on the ZTE was prepared for Malacañang's “comfort.”

Lozada also said he was forced to sign antedated documents that were supposed to indicate that he sought police security when he returned from Hong Kong.

He repeated that he was afraid for his life when he was fetched from the airport.

Lozada admitted that he was taken to La Salle Greenhills in Mandaluyong City but was not free because his guards were with him.

He said Atienza asked him to calm his wife down when he disappeared Tuesday night.

“She has to see me...Praning ang pamilya ko [My family is paranoid] because my brother was killed in 2001 as a result of mistaken identity,” he said.

Lozada said even his sister was forced to sign an antedated affidavit.

“Sabi ng ate ko, 'Hindi ako umabot ng 60 anyos para sirain pangalan ko.' Pero sabi ko sa kanya, sige na para makaalis [My sister said, ‘I did not get to 60 years to destroy my name.’ But I told her to go ahead so that we can leave],” he said.

Lozada cried before the start of the inquiry as he was overcome by emotion.

Senator Manuel Roxas II applauded him for his willingness to come out with what he knew about the ZTE deal.

“We're glad you're safe. All across the nation we were worried about your well-being. This is not an inquisition. Just relax. We sympathize with your predicament over the last weeks, months,” he said.

Roxas also noted that this Friday, February 8, was Constitution Day.

“Today, the truth will set you free. Today, it is difficult to do the right thing. We applaud you for doing the right thing,” he said.

Lozada will resume his testimony at 10:30 a.m. at the Senate on Monday.

Although deeply unpopular due to a steady stream of corruption allegations, President Gloria Macapagal-Arroyo's position is not expected to be threatened by the latest revelations.

The Philippine middle class, instrumental in the overthrow of two former presidents, is fed up with political turbulence and wants stability, political analysts say.

Arroyo, whose final term ends in 2010, has survived three impeachment bids and would-be opponents are more concerned with preparing themselves for elections in 2010.

Read the Running Account of Lozada's testimony.

With reports from Reuters, AFP

Copyright 2008 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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