Chavit: Erap went to Argentina to ask for IMPSA kickback

Deposed President Joseph Estrada went to Argentina during his short-lived presidency to negotiate a $14-million kickback in exchange for his approval on a contract for a power plant with an Argentine firm, Ilocos Sur Gov. Luis "Chavit" Singson claimed yesterday.

Singson was disputing Estrada’s testimony last Wednesday at his corruption trial that the former movie star had once rejected an offer of $14 million or about P700 million by a broker in exchange for a grant of a sovereign guarantee to Argentine power firm Industrias Metalurgicas Pescarmona Sociedad Anonima (IMPSA).

Singson acknowledged he was not directly aware of any kickback that Estrada received from IMPSA but pointed out the grant of a sovereign guarantee from Estrada.

"Kung talagang hindi siya interesado sa IMPSA, bakit siya pumunta sa Mendoza sa Argentina para kausapin ang may-ari na si chairman Fritz Carmona? Hindi lang natapos ang papeles kaya hindi niya napirmahan at napatalsik na siya sa pwesto (If he really wasn’t interested in IMPSA, why did he go to Mendoza, Argentina for talks with IMPSA chief executive Fritz Carmona? He wasn’t able to sign the papers because he was ousted before the paperwork could be completed)," Singson claimed.

"Papunta na rin iyon doon. Hindi lang umabot kasi nga natanggal siya. Pero pinirmahan niya na iyon (It was headed that way. It didn’t reach that point because he was toppled, but he had already signed it)," he said.

Taking the witness stand last Wednesday for the first time in his corruption trial, Estrada disputed accusations that he took huge kickbacks and claimed he was framed. Estrada denied pocketing P130 million of the P200 million in tobacco excise taxes for Ilocos Sur farmers as alleged by Singson, the main prosecution witness.

Singson had testified in 2002 that Estrada had asked for a 10-percent cut of the P200-million tobacco excise tax that he had released.

Estrada denied taking a cut and told defense lawyers that he had once rejected a much bigger payoff in connection with the IMPSA contract.

The build-rehabilitate-operate-transfer contract concluded with state-run National Power Corp. (Napocor) called for IMPSA to rehabilitate a hydroelectric plant in Laguna. It also called for the creation of a CBK Power Corp. that would be tasked to run the plant.

In December 2002, the Department of Justice (DOJ) produced documents that, according to the government, showed Estrada had "full knowledge" of the contract and that it was a "done deal."

The DOJ produced the documents ahead of Estrada’s scheduled appearance at a Senate inquiry on the contract.

Estrada then maintained he did not approve the contract and that it was concluded during the administration of his immediate predecessor, Fidel Ramos.

He also claimed he did not sign anything connected with the contract.

Estrada was to testify on claims made by Sen. Panfilo Lacson that then justice secretary Hernando Perez received $2 million in bribe money to endorse the IMPSA contract.

Lacson said the money was part of a $14-million payoff dangled before Estrada to sign the contract. He claimed Estrada turned down the offer and did not approve the contract.

One of the documents showed that five months after he assumed office, on Nov. 6, 1998, Estrada signed the contract as a witness. It was concluded between then Napocor president Federico Puno and IMPSA representative Francisco Valenti.

The deal’s final approval depended on the finalization of a government undertaking to address Napocor’s obligations under the agreement, the DOJ said.

"More specifically, it would define government’s obligations to assume IMPSA’s investments if the agreement is prematurely terminated. The undertaking would likewise cover IMPSA’s investments in the event of (Napocor’s) bankruptcy, privatization or dissolution," the DOJ said in a statement.

To address that, Estrada issued a two-page memo on June 17, 1999, authorizing then finance secretary Edgardo Espiritu to "sign, execute and deliver" on behalf of the government "any deed or document of whatsoever kind and nature which (would) be necessary or proper to implement such government undertaking."

On Feb. 10, 2000, Estrada extended the same authorization to then Napocor president Puno to "make, execute, endorse and deliver any deed supplement, or other documents of whatsoever kind and nature such as the Accession Undertaking which may be necessary for the purpose of executing and implementing" the IMPSA contract.

On Sept. 25, 2000, Puno requested a government acknowledgment and consent agreement, which the DOJ said was a guarantee that the government would assume Napocor’s obligations under its contract with IMPSA in case debt-saddled Napocor went bankrupt or was privatized or dissolved.

Almost a month later, on Oct. 20, Estrada authorized then finance secretary Jose Pardo to "conclude, sign and deliver, for and on behalf of the Republic of the Philippines, the acknowledgment and consent of the Republic to the security and other arrangements agreed to by CBK Power Co. Ltd. to secure the payment of its obligations to lenders providing financing for the project."

The government acknowledgment and consent agreement was issued by the Department of Finance on Dec. 18, 2000.

Estrada was toppled in a military-backed massive protest last year on charges he plundered up to P4 billion during his 31 months in office.

Estrada denies the charges and claims that the trial was rigged. He maintains he was illegally ousted from the presidency and is, therefore, immune from suit.