EDITORIAL — A flawed deal

How much did President Arroyo know, and when did she know it? These questions have been raised since the start of the corruption scandal over the national broadband network deal between the government and ZTE Corp. The other day the President answered the questions: she was told that the deal was flawed, she said, but she gave it the green light anyway, leaving her husband’s sickbed in April last year to witness the signing in Boao, China between ZTE representatives and Transportation Secretary Leandro Mendoza.

The answers, given belatedly, raised more questions. What was the flaw in the deal, and who warned her about it? Was it Romulo Neri, at the time secretary-general of the National Economic and Development Authority? Neri testified at the Senate that he had alerted the President about a P200-million bribe offer from Benjamin Abalos, at the time chairman of the Commission on Elections, for the approval of the deal.

If the deal was flawed but it was too late to back out because, as the President claimed, it would strain bilateral relations with China, was she misled about the deal? Who misled her, and would they be punished?

Is overpricing on a scale so massive it would warrant an indictment for plunder to be tolerated simply to preserve diplomatic relations? Does Beijing even specify projects to be financed by its loans, and does it tolerate corruption? Do diplomatic commitments justify breaking Philippine laws?

Philippine and Chinese officials have pointed out that there wasn’t even any specific financing for the broadband deal. This was one of the explanations of the administration in insisting that the ZTE contract was not yet a done deal. How could backing out of the deal endanger bilateral relations? The nation does not even know exactly what was signed in Boao, since up to now the government insists the original document disappeared before it could leave China. Has anyone been punished for infidelity in the custody of such a precious document?

The President said she canceled the deal upon learning that it was flawed. She should have pointed out that she canceled it only after the stink from the Senate inquiry became too great, several months after the signing. The cancellation showed she could risk endangering diplomatic relations after all. Such inconsistencies brought the administration to its current quagmire, and it will sink deeper with every new question raised.