Senate probe could unmask monopolist

Senators differ in their reasons for pursuing the inquiry on the ZTE deal. Some want Romy Neri to sing “ABZTEFG”, that is, to make the former economic chief talk of coercion to approve the overpriced telecom supply. Others aim to review the process of approving contracts, and the need for an exclusive government broadband setup to begin with. The first is why the Blue Ribbon committee is involved; it is the Senate body that examines scam in government transacting. The second is why the committees on trade and on national defense were tasked to join; new laws may be needed to toughen the National Economic Development Authority or curb spying on internal state communications, plus more.

To date, Senate hearings have elicited testimonies of fraud. Neri and Joey de Venecia accused Comelec chief Benjamin Abalos of brokering and bribery, prompting the latter to resign and prepare for countermoves. Joey also has exposed meddling by presidential spouse Mike Arroyo, and it is yet unsure if he will refute him under oath. Cabinet officials tried in vain to justify the $330-million deal and even showed uncertainty if it was a supply contract or government-to-government agreement, while experts debunked the supposed benefits of the project.

There is still need to redefine “executive agreements”, especially since this is between a government agency and a private firm. Begging legislation too are covers for loopholes in the new Procurement Reform Act that allow agencies to evade public bidding. Up for determination too is whether an agency may keep public contracts secret, despite the Code of Conduct on Public Officials and the Anti-Red Tape Law.

Meanwhile, if Neri talks freely in coming hearings, he might get to push his long-running fight against monopolies. He already started talking about it in relation to seaport operations. Fellow-professors at the Asian Institute of Management fondly recall Neri’s passionate stance against “booty capitalists” who wangle monopolies by sucking up to high officials. And one such influential monopolist reportedly was responsible for having him yanked down from NEDA chief to higher-education commissioner.

Problem, though, is that Neri is torn between disclosing to senators the monopolists who unconstitutionally restrain trade, and concealing what the President told him about ZTE Corp. backers.

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A battle rages between two sets of directors for control of Batangas II Electric Cooperative, the country’s biggest. If unresolved, Batelec’s monthly income of P340 million might dwindle, and its 200,000 customer-owners in two-thirds of the province would be the losers.

On one side are eight former board members whom the National Electrification Administration has dismissed from office. They reportedly signed two anomalous contracts that the NEA nixed, but have managed to stay put through Supreme Court order. On the other side is a new board that is begging for court recognition of its authority to represent the home customers who also are co-op shareholders.

For a P75-million computerization project, the old board allegedly contracted a company that was incorporated only on the same day in 2004 with P62,500 paid-in capital. It also bought for P6.1 million ten used trucks worth only half the amount. On complaint of some shareholders, the NEA in Oct. 2006 barred the eight directors from further mismanaging the cooperative.

The old directors fought back thrice in the Court of Appeals, but lost. In Dec., though, they got the Supreme Court to order a status quo. At that point, the newly elected board had nowhere to sit.

To bolster their case, the latter in Aug. 2007 filed cases of syndicated fraud and falsifying public documents respectively in Lipa and Tanauan cities where the predecessors allegedly committed these offenses. To their surprise, ailing Justice Secretary Raul Gonzalez barred the cities’ fiscals from taking on the lawsuits. Instead, prosecutors from Manila were assigned to study the cases’ merits.

The old board insinuates that the local fiscals are biased against them, although this was never mentioned in Gonzalez’s replacement order. The new board in turn cries that Gonzalez is favoring a retired newsman who had covered the judiciary beat for decades before chairing the old board.

Whichever side wins in the end will have to contend with employees and supervisors whose loyalties have been torn and morale pulled down. Professionalism needs to be restored, lest Batelec go the way of others in electricity retail. Of the country’s 119 rural electric co-ops, the World Bank found only 22 to be commercially viable.

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The scrapping of the ZTE deal saved Filipinos from more debt. Had the government pursued the telecom purchase, it would have borrowed the $330-million cost from China, at 3 percent interest over 20 years. Three generations of Filipinos would have been burdened with paying for the project whose need is even hazy.

The public sector debt is now at P3.9 trillion. Congressmen studying the national budget say that each of the 88 million citizens already is in hock by P44,000. Only recently did Filipinos finish paying $2 billion for 25 years for the Bataan Nuclear Power Plant that was useless but overpriced.

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