De Venecia son telecom firm owes ZTE $12m

PHILIPPINE NEWS SERVICE — SPEAKER Jose de Venecia’s son, who has accused a top election official of taking bribes to broker a deal with Shenzhen-based ZTE Corp., owes the Chinese company $12 million.

Under a November 2004 contract, Multi-Media Telephony Inc., led by Jose de Venecia III, agreed to pay ZTE $12 million for mobile telecommunications equipment and services.

But documents provided by a lawyer for ZTE said Multi-Media Telephony defaulted on its payments despite the full delivery of goods and services.

Contacted for comment, the younger De Venecia said he had nothing to do with the Multi-Media debt, adding he had sold his shares in the company but was asked to stay on as chairman. He said he could not remember how much he sold his shares for, or how many shares he retained.

After ZTE bagged a $329-million national broadband network project for the Philippine government, both the speaker and his son criticized the plan, with the younger De Venecia charging that Commission on Elections Chairman Benjamin Abalos took bribes to broker the deal.

He also accused government officials of trying to bribe him with $10 million, purportedly to get his company, Amsterdam Holdings Inc., to back out of the bidding for the national broadband network.

Speaker De Venecia demanded that the government nullify its contract with ZTE.

But the ZTE-provided documents said the De Venecias started attacking the broadband project only after the Chinese company sent them demand letters for unpaid obligations under the 2004 contract with Multi-Media Telephony.

The younger De Venecia, the documents said, was a business partner with Huwei Technologies Inc. Co., a direct competitor to ZTE, and a technical partner of Amsterdam Holdings, which had also offered to set up a broadband network for the government.

But sources in the ZTE camp said Amsterdam would have been disqualified outright, because giving the company the contract would violate the Anti-Graft and Corrupt Practices Act and the Code of Ethical Standards and Conduct for Public Officials.

The younger De Venecia yesterday said he had been receiving death threats following his statements on Abalos.

“I’ve tried to confirm the source of these threats but I’ve been unsuccessful,” he told a public forum. “My father has been so concerned. That’s why he has been telling me to limit my statements to the media.”

Amsterdam originally submitted a proposal for the national broadband project, but this was set aside when the Department of Transportation and Communications signed a $329-million deal with ZTE, De Venecia said.

He added that he welcomed Abalos’ threat to sue him for his statements.

“I’m encouraging him to do so, so our testimonies will be recorded in court,” he said. “The court’s decision would clear the air between us.”

On a separate front, De Venecia’s company, Amsterdam Holdings, has filed a petition with the Supreme Court seeking to stop the government’s deal with ZTE, citing the administration’s refusal to produce copies of its agreement with the Chinese company.

But Finance Secretary Margarito Teves and Budget Secretary Rolando Andaya Jr. told a Senate panel yesterday that there was no contract yet pending the preparation of an accompanying loan agreement.

Teves said what the government had signed with ZTE was a supply agreement.

“A supply agreement is more of a contract to enter into a contract,” Andaya said. “That is still unenforceable. That can only happen if there is a loan agreement. Everything hinges on a loan agreement.”

Also yesterday, Malacañang said it would not interfere in the Senate panel’s plan to call Abalos to testify on the ZTE deal.

Chief presidential legal counsel Sergio Apostol said it was proper for the Palace to distance itself from Abalos because he was not part of the executive department.

Earlier, administration critics said the Palace might intervene by invoking an executive order that bars Cabinet officials from testifying before Congress without presidential approval.

But Apostol dismissed this, saying Abalos was not covered by the executive order.