NBN-ZTE Plunder complaint vs. Arroyo, et. al

8/3/2019 NBN-ZTE Plunder complaint vs. Arroyo, et. al.

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Republic of the PhilippinesOFFICE OF THE OMBUDSMAN

Quezon City

BAYAN MUNA REP. TEDDY CASIO,in his personal capacity as a taxpayerand as representative of Bayan MunaParty-list, LIZA MAZA, in her personalcapacity as a taxpayer, and MARIACAROLINA PAGADUAN-ARAULLO inher capacity as taxpayer andchairperson of BAGONG ALYANSANGMAKABAYAN (BAYAN)

Complainants,

- versus -

REP. GLORIA MACAPAGAL-ARROYO, JOSE MIGUEL ARROYO,BENJAMIN ABALOS SR andLEANDRO MENDOZA,

Respondents.x-------------------------------------------------x

JOINT COMPLAINT-AFFIDAVITAGAINST GLORIA MACAPAGAL-ARROYO,

JOSE MIGUEL ARROYO, BENJAMIN ABALOS SR,AND LEANDRO MENDOZA

___________________________________________

We, REP. TEDDY CASIO, LIZA MAZA, and MARIA CAROLINAPAGADUAN-ARAULLO, all of legal age, Filipino, taxpayers, state under oath:

THE PARTIES

Complainants:

1. The following are the Complainants in this case:

a. BAYAN MUNA REP. TEDDY CASIO is filing this case in hispersonal capacity as a Filipino taxpayer and as representative of Bayan MunaParty-list. He may be served with processes by this Honorable Office at No. 45K-7th West Kamias, Quezon City. The copy of the Board Resolution authorizingRep. Casio to file this complaint in behalf of Bayan Muna is hereto attached asAnnex A.

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b. LIZA MAZA, a former representative of Gabriela Womens Party, isfiling this case in her personal capacity as a Filipino taxpayer. She may be servedwith processes by this Honorable Office at No. 8 Aramismis St. Veterans Village,Proj. 7, Quezon City.

c. MARIA CAROLINA PAGADUAN-ARAULLO, the Chairperson ofBagong Alyansang Makabayan (BAYAN), is filing this case for and in behalf andin representation of BAYAN. She may be served with processes by thisHonorable Office at No. 1 Maaralin St. Brgy. Central, Quezon City. For thispurpose, the copy of the Board Resolution authorizing Ms. Araullo to file thiscomplaint in behalf of BAYAN is hereto attached as Annex B.

Respondents:

2. Bayan Muna Rep. Casio, Maza and Araullo are filing this criminalcomplaint against the following Respondents:

a. GLORIA MACAPAGAL-ARROYO, a Filipino citizen, of legal ageand with office and postal address at the House of Representatives, BatasanQuezon City, where she may be served with subpoena and other processes bythis Honorable Office. She was the President of the Republic of the Philippineson the dates that are material to this complaint. She is currently a member of theHouse of Representatives representing the Second District of Pampanga.

b. JOSE MIGUEL ARROYO, a Filipino citizen, of legal age and withoffice and postal address at 8th Floor LTA Building, 118 Perea Street, SalcedoVillage, Makati City, where he may be served with subpoena and other processesby this Honorable Office. He is the husband of then President Gloria Macapagal-Arroyo and therefore, was the First Gentleman on the dates that are material tothis complaint.

c. BENJAMIN ABALOS SR, a Filipino citizen, of legal age and withpostal address at No. 19 Kanlaon St. Brgy Highway Hills, Mandaluyong City,where he may be served with subpoena and other processes of this HonorableOffice. He was the Chairman of the Commission on Election (COMELEC) on thedates that are material to this complaint.

d. LEANDRO MENDOZA, a Filipino citizen, of legal age and withoffice and postal address at Lot 19 JP Marcelo St. BF Homes Paranaque City,where subpoena and other processes of this Honorable Office may be servedupon him. He was the Secretary of the Department of Transportation andCommunication (DOTC) on the dates that are material to this complaint.

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PRELIMINARY STATEMENT________________________

3. On 1 July 2010, Complainants Rep. Teddy Casino and Bayan Muna

Party-list first filed a Complaint with the Department of Justice (DOJ) againstGloria Macapagal-Arroyo for violation of Republic Act 3019 or the Anti-Graft andCorrupt Practices Act, RA 6713 or the Code of Conduct and Ethical Standards forPublic Officials, and the Revised Penal Code committed in the course of theanomalous National Broadband Network-ZTE Corporation project in 2006-2007.

4. On 30 July 2010, President Benigno Aquino III ordered the creationof a Truth Commission to be headed by former Chief Justice Hilario Davide. ThisTruth Commission was created for the purpose of investigating the allegations ofcorruption, poll fraud and human rights violations of former President Gloria

Macapagal-Arroyo. As such, the Department of Justice, through the Office ofSecretary Leila De Lima, deferred action on our Complaint against GloriaMacapagal-Arroyo and transferred the same to the Truth Commission.

5. However, certain groups challenged the constitutionality of thecreation of this Truth Commission before the Supreme Court, preventing from thestart the accomplishment of its supposed duties and performance of its functions.

6. On 26 July 2011 or after one year of the creation of the Truth

Commission, the Supreme Court ruled with finality that the Truth Commission isunconstitutional.

7. During his State of the Nation Address (SONA) on 25 July 2011,President Aquino appointed Conchita Carpio-Morales, who is a former Justice ofthe Supreme Court, as the new Ombudsman. Ombudsman Carpio-Morales tookher oath of office on 27 July 2011.

8. Complainants recently decided to withdraw their Letter Complaint

with the DOJ considering that the DOJ has not officially taken cognizance of thesaid letter complaint as it had transmitted the same to the defunct TruthCommission, and to instead file this present Joint Complaint-Affidavit with thenew Ombudsman, with the inclusion of additional complainants and respondentsabove-named. A copy of Complainants Motion to Withdraw Complaint filedbefore the DOJ is hereto attached as Annex C.

8.1 The accusations in this complaint are based mainly on thefacts gathered by the Senates Committee on Accountability of PublicOfficers and Investigations (Blue Ribbon Committee) during itsinvestigation of the highly anomalous National Broadband Network-ZTECorporation project, which facts were contained in its Senate CommitteeReport No. 743 (ANNEX D), and other authentic records that can beverified using existing records and further investigation.

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9. Complainants hope that with the appointment of the newOmbudsman, this particular complaint, among other complaints filed against theofficials of the former administration for their involvement in graft and corruption,election fraud and human rights abuses, will be seriously and genuinely

investigated and the perpetrators of such a large scale fraud will be expeditiouslyand seriously prosecuted. Impunity must end. It must end now.

RELEVANT FACTS PERTAINING TOTHE ILLEGAL ACTS OF RESPONDENTS AND LEADING

TO THE ANOMALOUS AND GRAFT-LADEN NBN-ZTE DEAL__________________________________________________

10. The controversy regarding the National Broadband Network (NBN)project, which is an endeavor to inter-connect all government offices throughoutthe Philippines, may be deemed to have started with a 12 July 2006Memorandum of Understanding (MOU) between the Philippines and Zhong XingTelecommunications Equipment (ZTE) International Investment Limited (ZTE).1

10.1 The Philippines signed the MOU, through then Secretary ofthe Department of Trade and Industry (DTI), Peter Favila, while ZTEsigned it, through its President, Yu Yong.

10.2 The MOU has the effect of awarding to ZTE, without therequired public bidding, the right to invest in a Nationwide GovernmentBroadband Communication Infrastructure Project, among others.

10.3 Under the MOU, the capital and operating costs for thedevelopment and implementation of these projects totaled US$4 billionand to be funded and fully provided for by ZTE.

11. On 7 August 2006, ZTE submitted with the Commission onInformation and Communications Technology (CICT), which is the operating armof the DOTC, their proposal for the NBN Project.2

11.1 Jose De Venecia III (hereafter referred to as JDV III)testified that the actual cost of ZTEs proposal is only US$130 Million butwas overpriced to US$262 Million and would only cover 30% of thecountry.3

11.2 JDV IIIs testimony regarding the overpricing was supportedby Dante Madriaga during the Senate investigation. According toMadriaga, who claims to be the specific designer / consultant of the ZTE

1 Page 16, ANNEX D2 Page 17, ibid3 Please see par. 19, JDV IIIs Affidavit, a copy of which is hereto attached as Annex E.

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proposal4 and therefore, has personal knowledge regarding the NBNproject:

2.11.2 The cost of their project at first was

US$130 million. But when they were about to start, the groupcould not survive on US$130 million alone. The splitting ofthe money was to be made as follows: US$40 million for theFilipino group and another US$40 million for ZTE. Mr.Madriaga said: So, in the very beginning, mayroon ngpatong iyan. Dalawang patong yan. Patong ng Pilipino,patong ng Chinese.

2.11.3 In the original US$130 million cost, thecommission was 80 million U.S. dollars. In short, the realcost of the project was only US$50 million.

2.11.5 When Assistant Secretary Formosa saidthat the cost of the project was increased from US$130million to US$329 million, there was an assumption that thecommission would also increase. Mr. Madriaga said: Kasi,Senator, pagka sa 130 mayroon ka ng patong, pagdating mosa 329, iyong patong mo exponential, tataas din.5

12. Not surprisingly, with much haste, on 8 September 2006, Export-Import Bank of China (China EXIMBANK) already wrote to National EconomicDevelopment Authority (NEDA) informing them that they are ready to exchangeopinions and explore cooperation opportunities after China EXIMBANK and ZTEheld discussions resulting in the conclusion that they may be available fortransactions on the NBN Project.6

13. On 10 October 2006, Armsterdam Holdings, Inc. (AHI), through itsprivate proponent, JDV III, who is the Chairperson of the BandilaCommunications Holdings, Inc. in partnership with private Chinese enterprisesand institutions, submitted its unsolicited Build-Own-Operate (BOO) proposal toNEDA. NEDA passed on the proposal to DOTC. DOTC Assistant SecretarySoneja told JDV III to submit the final version of his proposal not later than 26February 2007.

13.1 According to JDV III, based from ZTEs evaluation, AHIsproposal would cost US$240 Million for the broadband facilities andequipment and would cover about 80% of the country.7

14. On 23 October 2006, CICT formally endorsed to NEDA for furtherevaluation and action the NBN Communications Infrastructure Project proposal

4 Page 66, Annex D5 Pages 68-69, ibid6 Page 18, ibid7 Please see par. 19, Annex E.

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of ZTE Corporation.8

15. A few days after or on 28 October 2006, CICT officially endorsed to

NEDA the National Broadband Network Project (NBN) as a government projectand not as a Build-Operate-and-Transfer (BOT) project.

16. On 29 October 2006 and while the NBN Project was pendingconsideration by NEDA, spouses Gloria and Jose Miguel Arroyo went to HongKong.

17. On 30 October 2006, former Commission on Election (COMELEC)Chairman Benjamin Abalos also went to Hong Kong.

18. On 2 November 2006 and upon the invitation of certain ZTEofficials, spouses Gloria and Jose Miguel Arroyo, together with then HouseSpeaker Jose de Venecia and Benjamin Abalos, played golf and had lunch withZTE officials at the ZTE Headquarters in Shenzhen, China.9

18.1 This was admitted by JDV III during the 24 November 2008investigation before the Justice Committee of the House ofRepresentatives wherein he said that on 2 November 2006, spousesGloria and Mike Arroyo, together with Abalos, played golf sponsored byZTE at Shenzhen, China.10 He also presented pictures during the saidinvestigation to support his allegations and stated:

Mike Arroyo said yesterday when leaving the hospitalthat I am lying. Well, let me say to you, my colleagues in theHouse of Representatives, that pictures do not lie. Repeat,pictures do not lie. Ang litrato po hindi nagsisinungaling. Veryclear. There, al the talking was done mostly by ChairmanAbalos, the President was quiet. In fairness to Mike Arroyo,he was quiet.

And then when we arrived in Hongkong, before wedisembarked, Mike Arroyo said Perhaps it is best that thisproject be done on a government to government basis, thatthis project be undertaken by the Philippine government for329 million dollars at the governments own risk, at thegovernments expense, with11

18.2 During the said investigation, the testimony of JDV III wasalso confirmed by his father, former Speaker Jose de Venecia, Jr., thus:

expecting the Chairman of the Commission on

8 Page 20, Annex D9 Page 76, ibid10 Pages 44 and 45, ibid11 Page 45, ibid

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Elections, who is supposed to be managing the elections ofthe nation and in a few months the election shall be held,waiting for us there at Shenzhen. And so he was there withsome ZTE executives. We changed to golfing attire, and

then after breakfast we proceeded to play golf. And after onehour we joined by Chairman Abalos because the firstthreesome was the President, Mike Arroyo and myself, thenwe were joined by Chairman Abalos who said MadamPresident, Mr. Speaker, please join us because we will havelunch at the headquarters of ZTE and they are preparing agrand luncheon for us with Shanghai crabs which are inseason at the board room of ZTE. And this is very clear inmy book, the picture of this meeting in this book which waswritten by Brett Becker of the Wall Street Journal, formereditor of the Wall Street Journal, published in Washington,

D.C., shows the picture of President Arroyo, Mike Arroyo,Chairman Abalos, myself and a Chinese official there at thegolf course in Shenzhen.12

19. On 21 November 2006, Presidential Chief of Staff Michael (Mike)Defensor wrote a letter to Chinas Minister of Commerce Bo Xilai inquiring ifChina was interested in arranging the financial facility and technical support ofthe NBN Project.13

19.1 Clearly Gloria Arroyo, as Defensors principal, wanted a loanto finance the Project, despite initial favorable recommendations that theNBN project should be undertaken through a BOT scheme.

20. On 2 December 2006 Chinas Ambassador to the Philippines, LiJinjun, informed the Philippine government, through Mike Defensor, that Chinawould provide a Preferential Buyer's Credit financing support through China EximBank.14 China also designated ZTE Corporation as the prime contractor.

21. On 5 December 2006, AHI, through JDV III, submitted to the DOTCan unsolicited proposal to undertake the NBN project.15

22. It was also in December 2006 when Benjamin Abalos, havingpecuniary interest in the consummation of the NBN project, offered bribe moneyto different persons just so the NBN Project would already take off.

22.1 In his Affidavit and sworn testimony before the Senate BlueRibbon Committee, JDV III said that Abalos tried to bribe him by offeringhim US$10 million, in exchange for AHIs backing off and withdrawingcompletely from the NBN project.16

12 Pages 75 and 76, ibid13 Page 22, ibid14 Page 23, ibid15 ibid16 Please see par. 11, Annex E.

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22.2 On 26 December 2006, JDV III accompanied BenjaminAbalos, to Shenzhen, China where Abalos demanded from ZTE the

balance of the latters commission from the project, as well as the share ofSpeaker Jose De Venecia and Gloria Macapagal-Arroyo.17

23. Secretary Neri also asserted under oath during the Senateinvestigation that in January 2007, Abalos offered him, in the course of a golfgame, a bribe ofTwo HundredMillion Pesos (P200,000,000.00). According toSecretary Neri, Abalos exact words to him were: Sec., may two hundred kadito, in an unmistakable reference to the ZTE supply contract for the NBNproject.18

23.1 Although he admitted that no specific denomination wasmentioned by Abalos, Neri presumed that the 200 meant 200 millionpesos, considering the magnitude of the NBN-ZTE project, which theywere discussing while playing golf.19

23.2 Neri also testified that Gloria Arroyo knew about the attemptof Abalos to bribe him since he informed her about it during one of hisphone conversations with her wherein he specifically told her: Chairman

Abalos offered me 200 million for this.20

23.3 When Neri informed her about the offer of Abalos, GloriaArroyo knew that it was a bribe since she even told Neri not to accept thebribe.21

24. On 13 February 2007, Gloria Arroyo showed undue interest in theapproval of the NBN-ZTE contract when she issued EO 603 reverting thesupervision and control of the Telecommunications Office (TELOF) and theoperating units of the DOTC from CICT to DOTC.22 The significance of which isthat the implementing arm of the broadband project would be DOTC-TELOF. Thisact officially places every aspect of the contract directly and clearly within thecontrol of Gloria Macapagal-Arroyo and subject to her approval.

25. On 1 March 2007, DOTC Secretary Leandro Mendoza and CICTSecretary Ramon Sales as alter egos of then President Gloria Arroyo wrote aletter to NEDA endorsing the approval of the ZTE Project and incredibly attachingto said letter Resolution No. ICT 07-0002 dated 6 March 2007 of the Bids andAwards Committee (BAC) for Information and Communication Technology(ICT).23 Under said Resolution, BAC for ICT recommended the awarding of theNBN project to ZTE.

17 Page 24, Annex D18 ibid19 Page 37, ibid20 Page 37, ibid21 ibid22 Page 25, ibid23 Page 26, ibid

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25.1 This is certainly incredible! Even the Senate Blue RibbonCommittee is wondering how DOTC Secretary Mendoza and CICT

Secretary Sales were able to attach in their letter dated 1 March 2007 theBAC for ICT Resolution, which was issued only on 6 March 2006, thus:

It is to say the least, incredible how DOTC SecretaryMendoza and CICT Chairman Sales can attach said BACResolution to their March 1, 2007 letter to NEDA SecretaryNeri when the BAC for ICT only came out with its findings onMarch 6, 2007. Further, Assistant Secretary Soneja's Memoof March 1, 2007 was stamped received by the Office of theDOTC Secretary only on March 7, 2007. Clearly, this showsthat there is an unbelievably hyper-efficient government at

work or a fast and speedy express to ensure thecommissions. (Emphasis added)

26. Sometime in the middle of March 2007, Mike Arroyo also showedhis pecuniary interest over the consummation of the project when he orderedJDV III to back off from the NBN Project.24

26.1 Abalos admitted during the Senate investigation that ZTEofficials requested him to arrange them a meeting with Secretary Mendozaat the Wack Wack Golf and Country Club (Wack Wack for brevity) andsince he is a member of that club, he agreed to the ZTE officials requestby sponsoring and hosting the dinner meeting.25

26.2 During the Senate investigation on 20 September 2007, thenSecretary of Finance, Margarito Teves, confirmed the admission of Abalosabout the dinner meeting at Wack Wack and even admitted that What Idid recall was my meeting with Chairman Abalos and Secretary Mendozain Wack Wack and thats what I did recall that the meeting was onBroadband.26

26.2 JDV III admitted during the Senate investigation that he andMike Arroyo were also present during the said meeting and that MikeArroyo ordered him to back off from the NBN project.27

27. On 29 March 2007, NEDA approved the NBN-ZTE project.28

28. In the evening of 20 April 2007, Gloria Arroyo granted DOTCSecretary Mendoza full powers to sign the NBN project contract with ZTECorporation, although there was no DOJ opinion yet as to whether or not the

24 Pages 25 and 44, ibid25 Page 39, ibid26 Page 40, ibid27 Page 42, ibid28 Page 24, ibid

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contract with ZTE was exempted from the application of Republic Act (RA) 9184or the Philippine Procurement Law.

28.1 It must be noted that even before 20 April 2007, theGovernment Procurement Policy Board (GPPB) already advised DOTC tosecure the DOJ Opinion as to whether or not the contract with ZTE wasexempted from the application of Republic Act (RA) 9184 or the PhilippineProcurement Law.29

29. Gloria Arroyos corrupt motive in seeking the hasty approval of theZTE Project becomes even more glaring because on 20 April 2007, she alreadyknew of the serious irregularities that are attributed to the NBN-ZTE deal.30 Sheeven admitted having knowledge of said irregularities during her interview before

the radio station DZRH on 23 February 2008, wherein she unequivocally statedthat she first learned of the irregularities in the US$329.48 millionbroadband contract with ZTE Corporation on the eve of the signing of theSupply Contract in China on 21 April 2007 .31 This is further supported by thecopy of the media report dated 23 February 2008, which is hereto attached asANNEX F.

29.2 However, despite Gloria Arroyos knowledge of saidirregularities, she still granted DOTC Secretary Mendoza the full powers tosign the NBN project contract with ZTE Corporation.

30. On 21 April 2007, the DOTC, through Secretary Leandro R.Mendoza, and ZTE, through its Vice President Yu Yong, executed in Boao,China, a Contract for the Supply of Equipment and Services for the NationalBroadband Network Project worth US$329,481,290.00 (approximately Php16Billion). Malacaang even bragged about this in its Official News Release(Release No. 5) issued by the Presidential News Desk/Office of the PressSecretary on 21 April 2007. A copy of said News Release is hereto attached asANNEX G.

31. The signing was witnessed and attended no less by Gloria Arroyo,who took time out from her multifarious duties to ensure the signing of what sheknew to be a contract attended by bribery attempts and irregularities. 32 It isunfortunate that Complainants cannot present the copy of the actual contractsince Commercial Attach Emmanuel Ang allegedly and inexplicably lost theoriginal copy of the same.33 In this regard, Complainants pray that this HonorableOffice subpoena said document during its investigation.

32. But why would the President be so interested in the signing of theNBN-ZTE contract? This was answered by Dante Madriaga, who testified duringthe Senate investigation that:29 Page 29, ibid30 Page 30, ibid31 ibid32 ibid33 ibid

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2.11.8. The Chinese will not give out any more moneyunless the President of the Philippines would show up during thecontract signing, which was the reason why President Arroyo went

to Boao, China.34

2.11.12 When asked if Fan Yang of ZTE confirmed tohim the remittance or the delivery of the US$30 million afterPresident Arroyo went to Boao, China, Mr. Madriaga said: After thePresident went to Boao, about two weeks later bumalik siya, sheconfirmed at saka nalaman ko rin na Kagaya nung mga anonaming, lunch. She said hopefully everything will be smooth nowbecause its all done.35

32.1 According to Madriaga, the entire US$30 million amountwas allocated for the 2007 senatorial and local election.36

33. In the course of the Senate investigation on the NBN-ZTEcontroversy, it was also discovered that even before the signing of the ZTEcontract, spouses Gloria and Mike Arroyo already received kickbacks from ZTEin the form of advances. As testified by Dante Madriaga:

Mr. Madriaga further testified that:

2.11.1 The Filipino group was composed of ChairmanAbalos, Mr. Reyes, General De La Torre and Mr. San Miguel.Included also in the Filipino group were President Arroyo and FirstGentleman Mike Arroyo. As Mr. Madriaga said: Eh, from the verybeginning alam ko na iyan, eh, dahil sinasabi sa akin noong akingmga amo, eh, na protected tayo rito. Walang haharang sa atin.

2.11.6 The Filipino group made some advances fromZTE worth US$41 million. It was Mr. San Miguel who informed Mr.Madriaga about these advances.

2.11.11. The distribution or division of the advancesfrom ZTE were as follows:

34 Page 70, ibid35 Page 71, ibid36 ibid

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As regards the US$10 million tranche, half of that amount wasintended for the first couple while the other half was intended forvarious government officers, particularly the Secretaries.37

34. Aside from spouses Arroyo, Madriaga revealed that the other half ofthe US$10 Million tranche was intended for various government officers,

particularly the Secretariesand that in the sharing, Malaki yung kay ChairmanAbalos.38 In addition to that, Madriaga attested that ZTE also advanced US$1Million as commission, which Abalos and Ruben Reyes divided amongthemselves.39

35. On 28 May 2007, DOTC asked the Department of Finance (DOF) tofacilitate the release of the NBN-ZTE Project loan proceeds.40 This is despite the

fact that the DOJ has yet to come out with its legal opinion on whether the NBNProject is exempted from the requirements of the Government ReformProcurement Act.

36. Events on the NBN-ZTE Project became too hot to handle. Hence,on 18 September 2007, the Senate began its investigation on the anomalous andirregular NBN-ZTE project. Engineer Rodolfo Jun Lozada, who initially avoidedtestifying before the Senate investigation, returned to the Philippines and latertestified that he was kidnapped in order to prevent him from testifying on theillegal acts committed in the NBN ZTE transaction.

37. On 22 September 2007, Gloria Arroyo was constrained to suspendthe implementation of the NBN-ZTE contract.41

38. On 2 October 2007, Gloria Arroyo was constrained to cancel theNBN-ZTE Project while on State Visit to China. Interestingly but not surprisinglyhowever, she never conducted any serious investigation on the anomalous NBN-ZTE project, despite the grave legal implications, which her cancellation of thesaid project may have. And the fact that this supposed investigation was azarzuela, there was no report of who were responsible of said irregularities,which was so massive and scandalous that it forced respondent Arroyo to cancela contract with a favored company of a powerful country.

CRIMES COMMITTED BY RESPONDENTS____________________________________

37 Pages 68-70, ibid38 Page 71, ibid39 ibid40 Page 31, ibid41 Page 32, ibid

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39. As can be gleaned from the foregoing facts, Respondents were inconspiracy with one another and therefore, should be prosecuted for the crimesdiscussed herein below.

Crimes of GLORIA MACAPAGAL-ARROYO:________________________________

40. GLORIA MACAPAGAL-ARROYO should be prosecuted for thecrime ofplunderunder Section 2 of R.A. 7080, which provides that:

Sec. 2. Definition of the Crime of Plunder; Penalties. -Any public officer who, by himself or in connivance with members of

his family, relatives by affinity or consanguinity, businessassociates, subordinates or other persons, amasses, accumulatesor acquires ill-gotten wealth through a combination or series ofovert criminal acts as described in Section 1 (d) hereof in theaggregate amount or total value of at least Fifty million pesos(P50,000,000.00) shall be guilty of the crime of plunder and shall bepunished by reclusion perpetua to death.

40.1 Ill-gotten wealth under Section 1 (d) of R.A. 7080 meansany asset, property, business enterprise or material possession of anyperson within the purview of Section two (2) hereof, acquired by himdirectly or indirectly through dummies, nominees, agents, subordinatesand/or business associates by any combination or series of the followingmeans or similar schemes:

(2) By receiving, directly or indirectly, anycommission, gift, share, percentage, kickbacks or any otherform of pecuniary benefit from any person and/or entity inconnection with any government contract or project or byreason of the office or position of the public officerconcerned;

(6) By taking undue advantage of official position,authority, relationship, connection or influence to unjustlyenrich himself or themselves at the expense and to thedamage and prejudice of the Filipino people and theRepublic of the Philippines.

41. As public officer, being then the President of the Republic of thePhilippines, Gloria Arroyo, by herself, and in connivance with her husband, MikeArroyo, and the other Respondents in this case, who were public officers also,amassed, accumulated and acquired ill-gotten wealth in the aggregate amount ortotal value ofmore than Fifty million pesos (P50,000,000.00) or in this case, at

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least US$35 Million or at least P1.4 Billion, which she received as commissionor kickbacks from ZTE.

41.1 As attested to by Madriaga during the Senate investigation,spouses Gloria and Mike Arroyo initially received US$5 Million from ZTE,which was half of the US$10 Million tranche, thus:

2.11.11. The distribution or division of theadvances from ZTE were as follows:

As regards the US$10 million tranche, half ofthat amount was intended for the first couplewhile the other half was intended for variousgovernment officers, particularly the Secretaries.42

41.2 Thereafter or during the signing of the NBN-ZTE contract inBoao, China, Gloria Arroyo again received US$30 Million from ZTE, thus:

2.11.8. The Chinese will not give out any moremoney unless the President of the Philippines would showup during the contract signing, which was the reason whyPresident Arroyo went to Boao, China.43

2.11.12 When asked if Fan Yang of ZTEconfirmed to him the remittance or the delivery of the US$30million after President Arroyo went to Boao, China, Mr.Madriaga said: After the President went to Boao, about twoweeks later bumalik siya, she confirmed at saka nalaman korin na Kagaya nung mga ano naming lunch. She saidhopefully everything will be smooth now because its alldone.44

41.3 According to Madriaga, the entire US$30 million amountwas allocated for the 2007 senatorial and local election.45

42. In receiving the said amount, Gloria Arroyo definitely tookadvantage of her position as then President of the Republic of the Philippinesand consequently, the Chairman of NEDA, which is the government agencytasked to evaluate and approve ZTEs proposal for the NBN project.

43. It is also very clear from the testimony of Madriaga that GloriaArroyo received the said amount of US$35 Million from ZTE as commission orkickback in connection with the anomalous NBN-ZTE contract.

42 Pages 68-70, ibid43 Page 70, ibid44 Page 71, ibid45 ibid

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43.1 Gloria Arroyo cannot deny the existence of the NBN-ZTEcontract because she was the one who granted DOTC Secretary

Mendoza full powers to sign the same with ZTE Corporation. Malacaangeven bragged about the signing of said contract in its Official NewsRelease (Release No. 5) issued by the Presidential News Desk/Office ofthe Press Secretary on 21 April 2007. Gloria Arroyo also personallywitnessed and attended the signing of said contract at Boao, China.

43.2 The fact that Gloria Arroyo allegedly suspended theimplementation of the contract and eventually cancelled the same is of nomoment since the said contract was already perfected from the timeDOTC Secretary Mendoza signed it in behalf of the President.

44. With the receipt of said amount US$35 Million or at least P1.4Billion, Gloria Arroyo surely enriched herself at the expense and to the damageand prejudice of the Filipino people and the Republic of the Philippines. Thus,she should be charged and prosecuted for the crime of plunder.

45. GLORIA MACAPAGAL-ARROYO should also be charged and beheld liable for violating Section 3 (g) of R.A. 3019 or the Anti-Graft andCorrupt Practices Act, which provides:

Section 3. Corrupt practices of public officers. In additionto acts or omissions of public officers already penalized by existinglaw, the following shall constitute corrupt practices of any publicofficer and are hereby declared to be unlawful:

(g) Entering, on behalf of the Government, into anycontract or transaction manifestly and grossly disadvantageous tothe same, whether or not the public officer profited or will profitthereby.

46. As attested by JDV III, the actual cost of ZTEs proposal for theNBN project is only US$130 Million but was later on overpriced to US$262Million and would only cover 30% of the country,46 as compared to AHIsproposal, which would only cost US$240 Million and would already cover about80% of the country.47 JDVIIIs testimony regarding the overpricing was alsocorroborated by Dante Madriaga during the Senate investigation, wherein heeven revealed that from the original cost of ZTEs proposal, which is US$130million, the Filipino group and the Chinese group already had commissions orpatong in the total amount of US$80 million and therefore, the real cost of the

project was only US$50 million.48 Madriaga further revealed under oath thatwhen ZTEs proposal was increased from US$130 million to US$329, there was

46 Please see par. 19, Annex E47 ibid.48 Pages 68-69, Annex D

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an assumption that the commission would also increase because pagka sa130 mayroon ka ng patong, pagdating mo sa 329, iyong patong mo, exponential,tataas din.49 Clearly, ZTEs project proposal was grossly overpriced andtherefore, grossly disadvantageous to the government.

46.1 Moreover, AHIs proposal packaged a BOT scheme, whichmay be said to be advantageous to the Government, whereas ZTEsproposal was for a loan-funded project, which is definitely grosslydisadvantageous to the Government.

47. Clearly, ZTEs proposal is grossly disadvantageous to theGovernment and should no longer be considered or entertained. However,instead of throwing out ZTEs proposal, Gloria Arroyo, through Leandro

Mendoza, still considered said proposal and worse, even entered into a US$329Million supply contract with ZTE for the NBN project.

47.1 As heretofore discussed, in evening of 20 April 2007, GloriaArroyo granted DOTC Secretary Leandro Mendoza full powers to sign theNBN project contract with ZTE Corporation.

47.2 Not only that, Gloria Arroyo even personally attended andwitnessed the signing of the NBN-ZTE contract.

48. Notably, Gloria Arroyo, through Leandro Mendoza, entered into acontract with ZTE for the NBN project without the benefit of a public bidding. Hada public bidding been conducted for the NBN project, the Government could havesecured a contract that is advantageous to it. Unfortunately, Gloria Arroyoentered into a contract and awarded the project to ZTE without any publicbidding, bringing about a contract for the NBN project, which is grosslydisadvantageous to the Government.

48.1 Complainants humbly submit that the NBN project is not oneof those exempted from public bidding under R.A. 9184, otherwise knownas the Government Procurement Reform Act, and therefore, there shouldbe a public bidding for the NBN project.

49. Aside from that, Gloria Arroyo is also very much aware of theirregularities leading to the signing of the anomalous NBN-ZTE contract. Asheretofore discussed, then NEDA Secretary Romulo Neri told Gloria Arroyo thatAbalos attempted to bribe him in connection with the ZTE supply proposal for theNBN project by offering him P200 Million.

49.1 Respondents might try to argue that Abalos did not actuallymention any specific denomination when he attempted to bribe Neri. In

49 Page 69, ibid

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fact, Neri admitted during the Senate investigation that Abalos did notmention any specific denomination when he made the offer to him.

49.2 However, it is important to note that when Neri informedGloria Arroyo about the bribe attempt of Abalos, he presumed thatthe 200 being offered by Abalos means 200 million pesos becauseof the magnitude of the NBN-ZTE project, which Abalos and Neri werediscussing while playing golf. That is why when he spoke with GloriaArroyo over the phone, he did not say that Chairman Abalos offered me200 for this. Instead, what he actually told Gloria Arroyo was that:Chairman Abalos offered me 200 million for this.50

49.3 Complainants also submit that whatever the 200 means -

whether it means P200.00 or P200 Million or even 200 pieces of paper - isno longer important. What is important is that Abalos attempted tobribe Neri of something in connection with the NBN project, regardlessof what the bribe is, and he informed Gloria Arroyo about it.

49.4 Thus, at that time, it is not enough for Gloria Arroyo to simplytell Neri not to accept the bribe. Instead, Gloria Arroyo should havealready directed the responsible agencies of the Government under hercontrol to stop entertaining ZTEs proposal and should have alreadydirected an urgent and thorough investigation on Neris revelation.

50. However, Gloria Arroyo did not do anything and worse, evenentered into a grossly disadvantageous contract with ZTE, despite being awareof the irregularities surrounding the same.

51. The element of profit has been previously established againstGloria Arroyo. As attested to by Madriaga during the Senate investigation,spouses Gloria and Mike Arroyo initially received US$5 Million from ZTE, whichwas half of the US$10 Million tranche.51 Thereafter or during the signing of theNBN-ZTE contract in Boao, China, Gloria Arroyo again received US$30 Millionfrom ZTE.52

52. Undoubtedly, Gloria Arroyo With the receipt of said amount US$35Million or at least P1.4 Billion, Gloria Arroyo entered, on behalf of theGovernment, into a contract that is manifestly and grossly disadvantageous tothe government, and surely enriched herself at the expense and to the damageand prejudice of the Filipino people and the Republic of the Philippines, andtherefore should be prosecuted and be held liable for violation of Section 3 (g) ofR.A. 3019.

53. Moreover, GLORIA MACAPAGAL-ARROYO should be chargedand be held liable for violating Section 3 (i) of R.A. 3019, which provides:

50 Page 37, Annex D51

Pages 68-70, ibid52 Page 70, ibid

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Section 3. Corrupt practices of public officers. In additionto acts or omissions of public officers already penalized by existinglaw, the following shall constitute corrupt practices of any public

officer and are hereby declared to be unlawful:

(i) Directly or indirectly becoming interested, for personalgain, or having a material interest in any transaction or act requiringthe approval of a board, panel or group of which he is a member,and which exercises discretion in such approval, even if he votesagainst the same or does not participate in the action of the board,committee, panel or group.

Interest for personal gain shall be presumed against thosepublic officers responsible for the approval of manifestly unlawful,inequitable, or irregular transactions or acts by the board, panel orgroup to which they belong.

54. As heretofore exhaustively discussed, the ZTEs proposal ismanifestly unlawful, inequitable and irregular since it is grossly disadvantageousto the Government. Consequently, interest for personal gain shall be presumedagainst those public officers who will approve the ZTE proposal.

55. In this case, NEDA is the government agency tasked to evaluateand approve ZTEs proposal for the NBN project and as President of theRepublic of the Philippines, Gloria Arroyo is the Chairman of NEDA.

56. However, despite the unlawfulness, inequity and irregularitysurrounding the ZTE proposal, NEDA, with its Chairman Gloria Arroyo, stillapproved the same on 29 March 2007.

57. Thus, Gloria Arroyos interest for personal gain could already bepresumed when NEDA approved the ZTE proposal and she should now becharged for violating Section 3 (i) of R.A. 3019.

58. GLORIA MACAPAGAL-ARROYO also acted in bad faith when sheallowed the approval of the ZTE proposal and later on, gave full powers toLeandro Mendoza to enter into a contract with ZTE, despite having knowledge ofthe irregularity surrounding the contract. The said unlawful act of Gloria Arroyocertainly caused undue injury to the Government and therefore, she should alsobe charged and prosecuted for violating Section 3 (e) of R.A. 3019, whichprovides:

Section 3. Corrupt practices of public officers. In additionto acts or omissions of public officers already penalized by existinglaw, the following shall constitute corrupt practices of any publicofficer and are hereby declared to be unlawful:

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(e) Causing any undue injury to any party, including the

Government, or giving any private party any unwarranted benefits,advantage or preference in the discharge of his officialadministrative or judicial functions through manifest partiality,evident bad faith or gross inexcusable negligence. This provisionshall apply to officers and employees of offices or governmentcorporations charged with the grant of licenses or permits or otherconcessions.

59. There is also evidence that GLORIA MACAPAGAL ARROYOviolated Section 3 (b) of R.A. 3019 when she received bribe money from ZTEwhich, according to Dante Madriaga during the Senate investigation, is in thetotal amount of US$35 Million or at least P1.4 Billion.

60. In this regard, Gloria Macapagal Arroyoshould also be prosecutedfor violating Section 3 (b) of R.A. 3019, which declares the following acts asunlawful:

(b) Directly or indirectly requesting or receiving any gift,present, share, or benefit, for himself or for any other person, inconnection with any contract or transaction between theGovernment and any other party, wherein the public officer in hisofficial capacity has to intervene under the law.

61. This is without prejudice to the prosecution of Gloria Arroyo forviolating other appropriate provisions of the Revised Penal Code on bribery.

62. GLORIA MACAPAGAL-ARROYO should likewise be charged andbe held liable for violating Section 7 (d) of R.A. 6713, otherwise known as theCode of Conduct and Ethical Standards for Public Officials and Employees,which provides:

Section 7.Prohibited Acts and Transactions. - In addition toacts and omissions of public officials and employees nowprescribed in the Constitution and existing laws, the following shallconstitute prohibited acts and transactions of any public official andemployee and are hereby declared to be unlawful:

(d) Solicitation or acceptance of gifts. - Public officials andemployees shall not solicit or accept, directly or indirectly, any gift,gratuity, favor, entertainment, loan or anything of monetary valuefrom any person in the course of their official duties or in connection

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with any operation being regulated by, or any transaction whichmay be affected by the functions of their office.

62.1 Gift under Section 3 (c) of R.A. 6713 is defined as:

(c) "Gift" refers to a thing or a right to dispose ofgratuitously, or any act or liberality, in favor of another whoaccepts it, and shall include a simulated sale or anostensibly onerous disposition thereof.

63. Gloria Arroyo was then very much aware that ZTE had a pending

transaction with the Government relating to its NBN project since ZTE submitteda proposal for said project with the CICT on 7 August 2006.

64. ZTEs transaction may be affected by the function of Gloria Arroyosoffice since all the government agencies involved in the NBN project are underthe control of the President, more specifically NEDA and DOTC. In fact, asPresident, Gloria Arroyo is the Chairman of NEDA at that time.

65. For this reason, it is obviously unethical for Gloria Arroyo to acceptany act of liberality from ZTE, more particularly, to accept the invitation of ZTE toplay golf and have lunch with ZTE officials at the ZTE headquarters in Shenzhen,China. Thus, for accepting said invitation, Gloria Arroyo should be prosecutedand be held liable for violation of Section 3 (c) of R.A. 6713.

Crimes of MIKE ARROYO:______________________

66. As regards MIKE ARROYO, the factual circumstances of this casewould show that he acted in conspiracy with his spouse, Gloria Arroyo, inperforming the unlawful acts performed by Gloria Arroyo, which constituteplunder and violation of the several provisions under Section 3 of RA 3019. Onestrong indication of said conspiracy is the fact that as a couple, both of themaccepted bribe money from ZTE in the amount of US$35 Million.53 Anotherindication of said conspiracy is when he took advantage of his being the husbandof the President in trying to force JDV III to back off from the NBN project. Thus,he should also be charged of crimes similar to those for which Gloria Arroyoshould be charged.

67. In addition, the factual circumstances of this case also warrant thefiling of criminal cases against MIKE ARROYO for violating Sections 4 and 5 ofRA 3019, thus:

Section 4. Prohibition on private individuals. (a) It shallbe unlawful for any person having family or close personal relation

53 Page 71, ibid

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with any public official to capitalize or exploit or take advantage ofsuch family or close personal relation by directly or indirectlyrequesting or receiving any present, gift or material or pecuniaryadvantage from any other person having some business,

transaction, application, request or contract with the government, inwhich such public official has to intervene. Family relation shallinclude the spouse or relatives by consanguinity or affinity in thethird civil degree. The word "close personal relation" shall includeclose personal friendship, social and fraternal connections, andprofessional employment all giving rise to intimacy which assuresfree access to such public officer.

Section 5. Prohibition on certain relatives. It shall beunlawful for the spouse or for any relative, by consanguinity or

affinity, within the third civil degree, of the President of thePhilippines, the Vice-President of the Philippines, the President ofthe Senate, or the Speaker of the House of Representatives, tointervene, directly or indirectly, in any business, transaction,contract or application with the Government.

xxx

Crimes of BENJAMIN ABALOS SR:__________________________

68. BENJAMIN ABALOS SR should also be prosecuted for plundertogether with Gloria Arroyo.

69. Gloria Arroyos act would show that she and Abalos were inconspiracy in committing the crime of plunder. In fact, Gloria Arroyo tolerated andin effect, could be said to have supported Abalos act of trying to bribe Neri by notdirecting any serious investigation on Neris revelation that Abalos tried to bribehim with P200 Million. Abalos was also seen with Gloria Arroyo playing golf andhaving lunch with ZTE officials at ZTE headquarters in Shenzhen, China. JDVIIIalso testified that on 26 December 2006, Abalos went to Shenzhen, China anddemanded from ZTE the balance of the latters commission from the NBNproject, as well as the share of Speaker Jose De Venecia and Gloria Macapagal-Arroyo.

70. Individually, Abalos was the one desperately lobbying and doingeverything just so the NBN-ZTE contract would materialize. In his testimonyduring the Senate investigation, JDVIII revealed that it was Chairman Abaloswho was pushing for the ZTE proposal and who stood to receive for himselfkickbacks from the colossal overpricing of the NBN project.54

71. Abalos indeed received kickbacks from ZTE. Notably, aside fromspouses Arroyo, Madriaga revealed that the other half of the US$10 Million

54 Page 39, Annex D

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tranche was intended for various government officers, particularly theSecretaries and that in the sharing, Malaki yung kay Chairman Abalos. Buteven prior thereto, Madriaga confirmed that ZTE already advanced US$1 Millionas commission, which Abalos and Ruben Reyes divided among themselves.

72. Abalos never denied his close ties with the ZTE officials.55 In fact,he was the one who, on several occasions, arranged and sometimes, evensponsored and hosted the meetings between certain ZTE officials and some ofthe government officials interested with the NBN project, which include LeandroMendoza, among others. Chairman Abalos even admitted that the dinnermeeting between certain ZTE officials and Leandro Mendoza at Wack Wack Golfand Country Club was upon the request of ZTE officials.56

72.1 He even went to the extent of trying to bribe JDVIII byoffering him US$10 Million in exchange for AHIs backing off andwithdrawing completely from the NBN project. He also tried to bribe Neriby telling him: Sec, may 200 ka dito.

73. Thus, the foregoing facts warrant the filing of a plunder case againstBenjamin Abalos, which he, by himself and in conspiracy with Gloria Arroyo,evidently committed.

Crimes of LEANDRO MENDOZA:____________________________

74. As for LEANDRO MENDOZA, he was the one who actually signedthe anomalous and unlawful ZTE contract in behalf of Gloria Arroyo andtherefore, like Mike Arroyo, he acted in conspiracy with Gloria Arroyo in enteringinto a contract grossly disadvantageous to the government. In this regard, likeMike Arroyo, he should also be charged of crimes similar to those for whichGloria Arroyo should be charged.

75. Aside from the foregoing, Complainants are respectfully urging thisHonorable Office to further conduct a thorough investigation on the anomalousNBN-ZTE contract and other related instances of corruption, aimed at criminallyand administratively prosecuting GLORIA MACAPAGAL-ARROYO, JOSEMIGUEL ARROYO and LEANDRO MENDOZA for the afore-mentioned crimesand for such other crimes for which they may be held liable for. Complainants arefurther respectfully praying that other individuals who may be criminally liable forthe NBN ZTE anomalies and cover up, including Lorenzo Formoso, ElmerSoneja, Romulo Neri, ZTE officials such as Yu Yong and Fan Yan and other JohnDoes, should likewise be thoroughly investigated and appropriate criminalcharges should be filed against them for any violation of the law, which they maybe found to have committed.

55 ibid56 ibid

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76. Complainants are executing this Joint Complaint- Affidavit to attestto the truth of the foregoing and for whatever legal purpose it may serve.

IN WITNESS HEREOF, we have hereunto set our hand this 8TH

day ofSeptember 2011 in Quezon City.

Rep. TEDDY CASIOfor and in his behalf and as

representative ofBAYAN MUNA PARTYLIST

LIZA MAZA

MARIA CAROLINA PAGADUAN-ARAULLOfor and in her behalf and as representative of

BAGONG ALYANSANG MAKABAYAN (BAYAN)

SUBSCRIBED AND SWORN to before me, this 8th of September 2011 atQuezon City. I certify that I have personally examined the affiants and that I amsatisfied that they voluntarily executed and understood the contents of their Joint-Complaint Affidavit

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VERIFICATION ANDCERTIFICATION OF NON-FORUM SHOPPING

WE, REP. TEDDY CASIO, LIZA MAZA, and MARIA CAROLINA

PAGADUAN-ARAULLO, all of legal age, married, Filipino, after having been dulysworn to depose and say:

1. We are the Complainants in the above-entitled case.

2. I, Rep. Teddy Casino, in my personal capacity and asrepresentative of Bayan Muna Party-list; I, Liza Maza in my personal capacity;and I, Maria Carolina Pagaduan-Araullo, in my personal capacity and aschairperson of Bagong Alyansang Makabayan (BAYAN), have caused thepreparation and filing of this Complaint against GLORIA MACAPAGAL-ARROYO, JOSE MIGUEL ARROYO, LEANDRO MENDOZA and BENJAMIN

ABALOS SR.3. All the allegations contained therein are true and correct of our own

knowledge and as per records.

4. We certify that we have not commenced any other action orproceeding involving the issues raised in the Joint Complaint, in the SupremeCourt, the Court of Appeals or different divisions thereof or any tribunal oragency. To the best of our knowledge, no such action or proceedings is pendingin the Supreme Court, the Court of Appeals, or any division thereof or any othertribunal or agency. The letter complaint filed before the Department of Justice hasnot been officially acted upon as it was referred to the defunct Truth Commissionand we have informed the DOJ of our intention to file a complaint on the NBNZTE deal with the Honorable Ombudsman.

5. If we should thereafter learn that a similar action or proceeding hasbeen filed or is pending before the Supreme Court, the Court of Appeals ordifferent divisions thereof or any other tribunal or agency, we undertake to reportthe fact within five (5) days therefrom to this Honorable Office and shall causethe dismissal of said action or proceeding.

IN WITNESS HEREOF, we have hereunto set our hand this 8th day ofSeptember 2011 in Quezon City.

REP. TEDDY CASINOAffiant

LIZA MAZAAffiant

MARIA CAROLINA PAGADUAN-ARAULLO

Affiant

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SUBSCRIBED AND SWORN to before me, in Quezon City, this 8th

September 2011 the affiants exhibiting their valid IDs

REP. TEDDY CASINO Drivers License F07880015090(expiring on 15 Nov. 2012)LIZA MAZA Passport No. XX1808767 (issued on 14

Aug. 2008)MARIA CAROLINA PAGADUAN-ARAULLO

Passport No. XX1198788 (issued on 17May 2008; expiring on 16 May 2013)

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Documents

NBN-ZTE Plunder complaint vs. Arroyo, et. al