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Republic of the Philippines OFFICE OF THE OMBUDSMAN Quezon City BAYAN MUNA REP.

TEDDY CASIO, in his personal capacity as a taxpayer and as representative of Bayan Muna Party-list , LIZA MAZA, in her personal capacity as a taxpayer, and MARIA CAROLINA PAGADUAN-ARAULLO in her capacity as taxpayer and chairperson of BAGONG ALYANSANG MAKABAYAN (BAYAN) Complainants, - versus REP. GLORIA MACAPAGALARROYO, JOSE MIGUEL ARROYO, BENJAMIN ABALOS SR and LEANDRO MENDOZA, Respondents. x-------------------------------------------------x

JOINT COMPLAINT-AFFIDAVIT AGAINST GLORIA MACAPAGAL-ARROYO, JOSE MIGUEL ARROYO, BENJAMIN ABALOS SR, AND LEANDRO MENDOZA
___________________________________________ We, REP. TEDDY CASIO, LIZA MAZA, and MARIA CAROLINA PAGADUAN-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 his personal capacity as a Filipino taxpayer and as representative of Bayan Muna Party-list. He may be served with processes by this Honorable Office at No. 45 K-7th West Kamias, Quezon City. The copy of the Board Resolution authorizing Rep. Casio to file this complaint in behalf of Bayan Muna is hereto attached as Annex A.
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b. LIZA MAZA, a former representative of Gabriela Womens Party, is filing this case in her personal capacity as a Filipino taxpayer. She may be served with processes by this Honorable Office at No. 8 Aramismis St. Veterans Village, Proj. 7, Quezon City. c. MARIA CAROLINA PAGADUAN-ARAULLO, the Chairperson of Bagong Alyansang Makabayan (BAYAN), is filing this case for and in behalf and in representation of BAYAN. She may be served with processes by this Honorable Office at No. 1 Maaralin St. Brgy. Central, Quezon City. For this purpose, the copy of the Board Resolution authorizing Ms. Araullo to file this complaint in behalf of BAYAN is hereto attached as Annex B.

Respondents: 2. Bayan Muna Rep. Casio, Maza and Araullo are filing this criminal complaint against the following Respondents: a. GLORIA MACAPAGAL-ARROYO, a Filipino citizen, of legal age and with office and postal address at the House of Representatives, Batasan Quezon City, where she may be served with subpoena and other processes by this Honorable Office. She was the President of the Republic of the Philippines on the dates that are material to this complaint. She is currently a member of the House of Representatives representing the Second District of Pampanga. b. JOSE MIGUEL ARROYO, a Filipino citizen, of legal age and with office and postal address at 8th Floor LTA Building, 118 Perea Street, Salcedo Village, Makati City, where he may be served with subpoena and other processes by this Honorable Office. He is the husband of then President Gloria MacapagalArroyo and therefore, was the First Gentleman on the dates that are material to this complaint. c. BENJAMIN ABALOS SR, a Filipino citizen, of legal age and with postal address at No. 19 Kanlaon St. Brgy Highway Hills, Mandaluyong City, where he may be served with subpoena and other processes of this Honorable Office. He was the Chairman of the Commission on Election (COMELEC) on the dates that are material to this complaint. d. LEANDRO MENDOZA, a Filipino citizen, of legal age and with office and postal address at Lot 19 JP Marcelo St. BF Homes Paranaque City, where subpoena and other processes of this Honorable Office may be served upon him. He was the Secretary of the Department of Transportation and Communication (DOTC) on the dates that are material to this complaint.

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) against Gloria Macapagal-Arroyo for violation of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act, RA 6713 or the Code of Conduct and Ethical Standards for Public Officials, and the Revised Penal Code committed in the course of the anomalous National Broadband Network-ZTE Corporation project in 2006-2007. 4. On 30 July 2010, President Benigno Aquino III ordered the creation of a Truth Commission to be headed by former Chief Justice Hilario Davide. This Truth Commission was created for the purpose of investigating the allegations of corruption, poll fraud and human rights violations of former President Gloria Macapagal-Arroyo. As such, the Department of Justice, through the Office of Secretary Leila De Lima, deferred action on our Complaint against Gloria Macapagal-Arroyo and transferred the same to the Truth Commission. 5. However, certain groups challenged the constitutionality of the creation of this Truth Commission before the Supreme Court, preventing from the start 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 is unconstitutional. 7. During his State of the Nation Address (SONA) on 25 July 2011, President Aquino appointed Conchita Carpio-Morales, who is a former Justice of the Supreme Court, as the new Ombudsman. Ombudsman Carpio-Morales took her 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 the said letter complaint as it had transmitted the same to the defunct Truth Commission, and to instead file this present Joint Complaint-Affidavit with the new Ombudsman, with the inclusion of additional complainants and respondents above-named. A copy of Complainants Motion to Withdraw Complaint filed before the DOJ is hereto attached as Annex C. 8.1 The accusations in this complaint are based mainly on the facts gathered by the Senates Committee on Accountability of Public Officers and Investigations (Blue Ribbon Committee) during its investigation of the highly anomalous National Broadband Network-ZTE Corporation project, which facts were contained in its Senate Committee Report No. 743 (ANNEX D), and other authentic records that can be verified using existing records and further investigation.

9. Complainants hope that with the appointment of the new Ombudsman, this particular complaint, among other complaints filed against the officials 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 expeditiously and seriously prosecuted. Impunity must end. It must end now.

RELEVANT FACTS PERTAINING TO THE 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 throughout the Philippines, may be deemed to have started with a 12 July 2006 Memorandum of Understanding (MOU) between the Philippines and Zhong Xing Telecommunications Equipment (ZTE) International Investment Limited (ZTE).1 10.1 The Philippines signed the MOU, through then Secretary of the Department of Trade and Industry (DTI), Peter Favila, while ZTE signed it, through its President, Yu Yong. 10.2 The MOU has the effect of awarding to ZTE, without the required public bidding, the right to invest in a Nationwide Government Broadband Communication Infrastructure Project, among others. 10.3 Under the MOU, the capital and operating costs for the development and implementation of these projects totaled US$4 billion and to be funded and fully provided for by ZTE. 11. On 7 August 2006, ZTE submitted with the Commission on Information and Communications Technology (CICT), which is the operating arm of 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 but was overpriced to US$262 Million and would only cover 30% of the country.3 11.2 JDV IIIs testimony regarding the overpricing was supported by Dante Madriaga during the Senate investigation. According to Madriaga, who claims to be the specific designer / consultant of the ZTE
1 2 3

Page 16, ANNEX D Page 17, ibid Please see par. 19, JDV IIIs Affidavit, a copy of which is hereto attached as Annex E. 4

proposal4 and therefore, has personal knowledge regarding the NBN project: 2.11.2 The cost of their project at first was US$130 million. But when they were about to start, the group could not survive on US$130 million alone. The splitting of the money was to be made as follows: US$40 million for the Filipino group and another US$40 million for ZTE. Mr. Madriaga said: So, in the very beginning, mayroon ng patong iyan. Dalawang patong yan. Patong ng Pilipino, patong ng Chinese. 2.11.3 In the original US$130 million cost, the commission was 80 million U.S. dollars. In short, the real cost of the project was only US$50 million. 2.11.5 When Assistant Secretary Formosa said that the cost of the project was increased from US$130 million to US$329 million, there was an assumption that the commission would also increase. Mr. Madriaga said: Kasi, Senator, pagka sa 130 mayroon ka ng patong, pagdating mo sa 329, iyong patong mo exponential, tataas din.5 12. Not surprisingly, with much haste, on 8 September 2006, ExportImport Bank of China (China EXIMBANK) already wrote to National Economic Development Authority (NEDA) informing them that they are ready to exchange opinions and explore cooperation opportunities after China EXIMBANK and ZTE held discussions resulting in the conclusion that they may be available for transactions on the NBN Project.6 13. On 10 October 2006, Armsterdam Holdings, Inc. (AHI), through its private proponent, JDV III, who is the Chairperson of the Bandila Communications Holdings, Inc. in partnership with private Chinese enterprises and institutions, submitted its unsolicited Build-Own-Operate (BOO) proposal to NEDA. NEDA passed on the proposal to DOTC. DOTC Assistant Secretary Soneja told JDV III to submit the final version of his proposal not later than 26 February 2007. 13.1 According to JDV III, based from ZTEs evaluation, AHIs proposal would cost US$240 Million for the broadband facilities and equipment and would cover about 80% of the country.7 14. On 23 October 2006, CICT formally endorsed to NEDA for further evaluation and action the NBN Communications Infrastructure Project proposal
4 5

Page 66, Annex D Pages 68-69, ibid 6 Page 18, ibid 7 Please see par. 19, Annex E. 5

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 project and not as a Build-Operate-and-Transfer (BOT) project. 16. On 29 October 2006 and while the NBN Project was pending consideration by NEDA, spouses Gloria and Jose Miguel Arroyo went to Hong Kong. 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 ZTE officials, spouses Gloria and Jose Miguel Arroyo, together with then House Speaker Jose de Venecia and Benjamin Abalos, played golf and had lunch with ZTE officials at the ZTE Headquarters in Shenzhen, China.9 18.1 This was admitted by JDV III during the 24 November 2008 investigation before the Justice Committee of the House of Representatives wherein he said that on 2 November 2006, spouses Gloria and Mike Arroyo, together with Abalos, played golf sponsored by ZTE at Shenzhen, China.10 He also presented pictures during the said investigation to support his allegations and stated: Mike Arroyo said yesterday when leaving the hospital that I am lying. Well, let me say to you, my colleagues in the House of Representatives, that pictures do not lie. Repeat, pictures do not lie. Ang litrato po hindi nagsisinungaling. Very clear. There, al the talking was done mostly by Chairman Abalos, the President was quiet. In fairness to Mike Arroyo, he was quiet. And then when we arrived in Hongkong, before we disembarked, Mike Arroyo said Perhaps it is best that this project be done on a government to government basis, that this project be undertaken by the Philippine government for 329 million dollars at the governments own risk, at the governments expense, with11 18.2 During the said investigation, the testimony of JDV III was also confirmed by his father, former Speaker Jose de Venecia, Jr., thus: expecting the Chairman of the Commission on
8 9 10 11

Page 20, Annex D Page 76, ibid Pages 44 and 45, ibid Page 45, ibid 6

Elections, who is supposed to be managing the elections of the nation and in a few months the election shall be held, waiting for us there at Shenzhen. And so he was there with some ZTE executives. We changed to golfing attire, and then after breakfast we proceeded to play golf. And after one hour we joined by Chairman Abalos because the first threesome was the President, Mike Arroyo and myself, then we were joined by Chairman Abalos who said Madam President, Mr. Speaker, please join us because we will have lunch at the headquarters of ZTE and they are preparing a grand luncheon for us with Shanghai crabs which are in season at the board room of ZTE. And this is very clear in my book, the picture of this meeting in this book which was written by Brett Becker of the Wall Street Journal, former editor 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 the golf 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 if China was interested in arranging the financial facility and technical support of the NBN Project.13 19.1 Clearly Gloria Arroyo, as Defensors principal, wanted a loan to finance the Project, despite initial favorable recommendations that the NBN project should be undertaken through a BOT scheme. 20. On 2 December 2006 Chinas Ambassador to the Philippines, Li Jinjun, informed the Philippine government, through Mike Defensor, that China would provide a Preferential Buyer's Credit financing support through China Exim Bank.14 China also designated ZTE Corporation as the prime contractor. 21. On 5 December 2006, AHI, through JDV III, submitted to the DOTC an unsolicited proposal to undertake the NBN project.15 22. It was also in December 2006 when Benjamin Abalos, having pecuniary interest in the consummation of the NBN project, offered bribe money to different persons just so the NBN Project would already take off. 22.1 In his Affidavit and sworn testimony before the Senate Blue Ribbon Committee, JDV III said that Abalos tried to bribe him by offering him US$10 million, in exchange for AHIs backing off and withdrawing completely from the NBN project.16
12 13 14 15 16

Pages 75 and 76, ibid Page 22, ibid Page 23, ibid ibid Please see par. 11, Annex E. 7

22.2 On 26 December 2006, JDV III accompanied Benjamin Abalos, to Shenzhen, China where Abalos demanded from ZTE the balance of the latters commission from the project, as well as the share of Speaker Jose De Venecia and Gloria Macapagal-Arroyo.17 23. Secretary Neri also asserted under oath during the Senate investigation that in January 2007, Abalos offered him, in the course of a golf game, a bribe of Two Hundred Million Pesos (P200,000,000.00). According to Secretary Neri, Abalos exact words to him were: Sec., may two hundred ka dito, in an unmistakable reference to the ZTE supply contract for the NBN project.18 23.1 Although he admitted that no specific denomination was mentioned by Abalos, Neri presumed that the 200 meant 200 million pesos, considering the magnitude of the NBN-ZTE project, which they were discussing while playing golf.19 23.2 Neri also testified that Gloria Arroyo knew about the attempt of Abalos to bribe him since he informed her about it during one of his phone 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, Gloria Arroyo knew that it was a bribe since she even told Neri not to accept the bribe.21 24. On 13 February 2007, Gloria Arroyo showed undue interest in the approval of the NBN-ZTE contract when she issued EO 603 reverting the supervision and control of the Telecommunications Office (TELOF) and the operating units of the DOTC from CICT to DOTC.22 The significance of which is that the implementing arm of the broadband project would be DOTC-TELOF. This act officially places every aspect of the contract directly and clearly within the control of Gloria Macapagal-Arroyo and subject to her approval. 25. On 1 March 2007, DOTC Secretary Leandro Mendoza and CICT Secretary Ramon Sales as alter egos of then President Gloria Arroyo wrote a letter to NEDA endorsing the approval of the ZTE Project and incredibly attaching to said letter Resolution No. ICT 07-0002 dated 6 March 2007 of the Bids and Awards Committee (BAC) for Information and Communication Technology (ICT).23 Under said Resolution, BAC for ICT recommended the awarding of the NBN project to ZTE.
17 18 19 20 21 22 23

Page 24, Annex D ibid Page 37, ibid Page 37, ibid ibid Page 25, ibid Page 26, ibid 8

25.1 This is certainly incredible! Even the Senate Blue Ribbon Committee is wondering how DOTC Secretary Mendoza and CICT Secretary Sales were able to attach in their letter dated 1 March 2007 the BAC for ICT Resolution, which was issued only on 6 March 2006, thus: It is to say the least, incredible how DOTC Secretary Mendoza and CICT Chairman Sales can attach said BAC Resolution to their March 1, 2007 letter to NEDA Secretary Neri when the BAC for ICT only came out with its findings on March 6, 2007. Further, Assistant Secretary Soneja's Memo of March 1, 2007 was stamped received by the Office of the DOTC Secretary only on March 7, 2007. Clearly, this shows that there is an unbelievably hyper-efficient government at work or a fast and speedy express to ensure the commissions. (Emphasis added) 26. Sometime in the middle of March 2007, Mike Arroyo also showed his pecuniary interest over the consummation of the project when he ordered JDV III to back off from the NBN Project.24 26.1 Abalos admitted during the Senate investigation that ZTE officials requested him to arrange them a meeting with Secretary Mendoza at the Wack Wack Golf and Country Club (Wack Wack for brevity) and since he is a member of that club, he agreed to the ZTE officials request by sponsoring and hosting the dinner meeting.25 26.2 During the Senate investigation on 20 September 2007, then Secretary of Finance, Margarito Teves, confirmed the admission of Abalos about the dinner meeting at Wack Wack and even admitted that What I did recall was my meeting with Chairman Abalos and Secretary Mendoza in Wack Wack and thats what I did recall that the meeting was on Broadband.26 26.2 JDV III admitted during the Senate investigation that he and Mike Arroyo were also present during the said meeting and that Mike Arroyo 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 DOTC Secretary Mendoza full powers to sign the NBN project contract with ZTE Corporation, although there was no DOJ opinion yet as to whether or not the
24 25 26 27 28

Pages 25 and 44, ibid Page 39, ibid Page 40, ibid Page 42, ibid Page 24, ibid 9

contract with ZTE was exempted from the application of Republic Act (RA) 9184 or the Philippine Procurement Law. 28.1 It must be noted that even before 20 April 2007, the Government Procurement Policy Board (GPPB) already advised DOTC to secure the DOJ Opinion as to whether or not the contract with ZTE was exempted from the application of Republic Act (RA) 9184 or the Philippine Procurement Law.29 29. Gloria Arroyos corrupt motive in seeking the hasty approval of the ZTE Project becomes even more glaring because on 20 April 2007, she already knew of the serious irregularities that are attributed to the NBN-ZTE deal.30 She even admitted having knowledge of said irregularities during her interview before the radio station DZRH on 23 February 2008, wherein she unequivocally stated that she first learned of the irregularities in the US$329.48 million broadband contract with ZTE Corporation on the eve of the signing of the Supply Contract in China on 21 April 2007.31 This is further supported by the copy of the media report dated 23 February 2008, which is hereto attached as ANNEX F. 29.2 However, despite Gloria Arroyos knowledge of said irregularities, she still granted DOTC Secretary Mendoza the full powers to sign 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 National Broadband Network Project worth US$329,481,290.00 (approximately Php16 Billion). Malacaang even bragged about this in its Official News Release (Release No. 5) issued by the Presidential News Desk/Office of the Press Secretary on 21 April 2007. A copy of said News Release is hereto attached as ANNEX 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 she knew to be a contract attended by bribery attempts and irregularities.32 It is unfortunate that Complainants cannot present the copy of the actual contract since Commercial Attach Emmanuel Ang allegedly and inexplicably lost the original copy of the same.33 In this regard, Complainants pray that this Honorable Office subpoena said document during its investigation. 32. But why would the President be so interested in the signing of the NBN-ZTE contract? This was answered by Dante Madriaga, who testified during the Senate investigation that:
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Page 29, ibid Page 30, ibid ibid ibid ibid 10

2.11.8. The Chinese will not give out any more money unless the President of the Philippines would show up during the contract signing, which was the reason why President Arroyo went to Boao, China.34 2.11.12 When asked if Fan Yang of ZTE confirmed to him the remittance or the delivery of the US$30 million after President Arroyo went to Boao, China, Mr. Madriaga said: After the President went to Boao, about two weeks later bumalik siya, she confirmed at saka nalaman ko rin na Kagaya nung mga ano naming, lunch. She said hopefully everything will be smooth now because its all done.35 32.1 According to Madriaga, the entire US$30 million amount was allocated for the 2007 senatorial and local election.36 33. In the course of the Senate investigation on the NBN-ZTE controversy, it was also discovered that even before the signing of the ZTE contract, spouses Gloria and Mike Arroyo already received kickbacks from ZTE in the form of advances. As testified by Dante Madriaga: Mr. Madriaga further testified that: 2.11.1 The Filipino group was composed of Chairman Abalos, Mr. Reyes, General De La Torre and Mr. San Miguel. Included also in the Filipino group were President Arroyo and First Gentleman Mike Arroyo. As Mr. Madriaga said: Eh, from the very beginning alam ko na iyan, eh, dahil sinasabi sa akin noong aking mga amo, eh, na protected tayo rito. Walang haharang sa atin. 2.11.6 The Filipino group made some advances from ZTE 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 advances from ZTE were as follows:

34 35 36

Page 70, ibid Page 71, ibid ibid 11

As regards the US$10 million tranche, half of that amount was intended for the first couple while the other half was intended for various government officers, particularly the Secretaries.37 34. Aside from spouses Arroyo, Madriaga revealed that the other half of the US$10 Million tranche was intended for various government officers, particularly the Secretaries and that in the sharing, Malaki yung kay Chairman Abalos.38 In addition to that, Madriaga attested that ZTE also advanced US$1 Million as commission, which Abalos and Ruben Reyes divided among themselves.39 35. On 28 May 2007, DOTC asked the Department of Finance (DOF) to facilitate 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 NBN Project is exempted from the requirements of the Government Reform Procurement 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 and irregular NBN-ZTE project. Engineer Rodolfo Jun Lozada, who initially avoided testifying before the Senate investigation, returned to the Philippines and later testified that he was kidnapped in order to prevent him from testifying on the illegal acts committed in the NBN ZTE transaction. 37. On 22 September 2007, Gloria Arroyo was constrained to suspend the implementation of the NBN-ZTE contract.41 38. On 2 October 2007, Gloria Arroyo was constrained to cancel the NBN-ZTE Project while on State Visit to China. Interestingly but not surprisingly however, she never conducted any serious investigation on the anomalous NBNZTE project, despite the grave legal implications, which her cancellation of the said project may have. And the fact that this supposed investigation was a zarzuela, there was no report of who were responsible of said irregularities, which was so massive and scandalous that it forced respondent Arroyo to cancel a contract with a favored company of a powerful country.

CRIMES COMMITTED BY RESPONDENTS ____________________________________

37 38 39 40 41

Pages 68-70, ibid Page 71, ibid ibid Page 31, ibid Page 32, ibid 12

39. As can be gleaned from the foregoing facts, Respondents were in conspiracy with one another and therefore, should be prosecuted for the crimes discussed herein below. Crimes of GLORIA MACAPAGALARROYO: ________________________________ 40. GLORIA MACAPAGAL-ARROYO should be prosecuted for the crime of plunder under 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, business associates, subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination or series of overt criminal acts as described in Section 1 (d) hereof in the aggregate amount or total value of at least Fifty million pesos (P50,000,000.00) shall be guilty of the crime of plunder and shall be punished by reclusion perpetua to death. 40.1 Ill-gotten wealth under Section 1 (d) of R.A. 7080 means any asset, property, business enterprise or material possession of any person within the purview of Section two (2) hereof, acquired by him directly or indirectly through dummies, nominees, agents, subordinates and/or business associates by any combination or series of the following means or similar schemes: (2) By receiving, directly or indirectly, any commission, gift, share, percentage, kickbacks or any other form of pecuniary benefit from any person and/or entity in connection with any government contract or project or by reason of the office or position of the public officer concerned; (6) By taking undue advantage of official position, authority, relationship, connection or influence to unjustly enrich himself or themselves at the expense and to the damage and prejudice of the Filipino people and the Republic of the Philippines. 41. As public officer, being then the President of the Republic of the Philippines, Gloria Arroyo, by herself, and in connivance with her husband, Mike Arroyo, and the other Respondents in this case, who were public officers also, amassed, accumulated and acquired ill-gotten wealth in the aggregate amount or total value of more 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 commission or 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 advances from ZTE were as follows: or division of the

As regards the US$10 million tranche, half of that amount was intended for the first couple while the other half was intended for various government officers, particularly the Secretaries.42 41.2 Thereafter or during the signing of the NBN-ZTE contract in Boao, China, Gloria Arroyo again received US$30 Million from ZTE, thus: 2.11.8. The Chinese will not give out any more money unless the President of the Philippines would show up during the contract signing, which was the reason why President Arroyo went to Boao, China.43 2.11.12 When asked if Fan Yang of ZTE confirmed to him the remittance or the delivery of the US$30 million after President Arroyo went to Boao, China, Mr. Madriaga said: After the President went to Boao, about two weeks later bumalik siya, she confirmed at saka nalaman ko rin na Kagaya nung mga ano naming lunch. She said hopefully everything will be smooth now because its all done.44 41.3 According to Madriaga, the entire US$30 million amount was allocated for the 2007 senatorial and local election.45 42. In receiving the said amount, Gloria Arroyo definitely took advantage of her position as then President of the Republic of the Philippines and consequently, the Chairman of NEDA, which is the government agency tasked to evaluate and approve ZTEs proposal for the NBN project. 43. It is also very clear from the testimony of Madriaga that Gloria Arroyo received the said amount of US$35 Million from ZTE as commission or kickback in connection with the anomalous NBN-ZTE contract.
42 43 44 45

Pages 68-70, ibid Page 70, ibid Page 71, ibid ibid 14

43.1 Gloria Arroyo cannot deny the existence of the NBN-ZTE contract because she was the one who granted DOTC Secretary Mendoza full powers to sign the same with ZTE Corporation. Malacaang even bragged about the signing of said contract in its Official News Release (Release No. 5) issued by the Presidential News Desk/Office of the Press Secretary on 21 April 2007. Gloria Arroyo also personally witnessed and attended the signing of said contract at Boao, China. 43.2 The fact that Gloria Arroyo allegedly suspended the implementation of the contract and eventually cancelled the same is of no moment since the said contract was already perfected from the time DOTC Secretary Mendoza signed it in behalf of the President. 44. With the receipt of said amount US$35 Million or at least P1.4 Billion, Gloria Arroyo surely enriched herself at the expense and to the damage and 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 be held liable for violating Section 3 (g) of R.A. 3019 or the Anti-Graft and Corrupt Practices Act, which provides: Section 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: (g) Entering, on behalf of the Government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby. 46. As attested by JDV III, the actual cost of ZTEs proposal for the NBN project is only US$130 Million but was later on overpriced to US$262 Million and would only cover 30% of the country,46 as compared to AHIs proposal, which would only cost US$240 Million and would already cover about 80% of the country.47 JDVIIIs testimony regarding the overpricing was also corroborated by Dante Madriaga during the Senate investigation, wherein he even revealed that from the original cost of ZTEs proposal, which is US$130 million, the Filipino group and the Chinese group already had commissions or patong 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 that when ZTEs proposal was increased from US$130 million to US$329, there was
46 47

Please see par. 19, Annex E ibid. 48 Pages 68-69, Annex D 15

an assumption that the commission would also increase because pagka sa 130 mayroon ka ng patong, pagdating mo sa 329, iyong patong mo, exponential, tataas din.49 Clearly, ZTEs project proposal was grossly overpriced and therefore, grossly disadvantageous to the government. 46.1 Moreover, AHIs proposal packaged a BOT scheme, which may be said to be advantageous to the Government, whereas ZTEs proposal was for a loan-funded project, which is definitely grossly disadvantageous to the Government. 47. Clearly, ZTEs proposal is grossly disadvantageous to the Government 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$329 Million supply contract with ZTE for the NBN project. 47.1 As heretofore discussed, in evening of 20 April 2007, Gloria Arroyo granted DOTC Secretary Leandro Mendoza full powers to sign the NBN project contract with ZTE Corporation. 47.2 Not only that, Gloria Arroyo even personally attended and witnessed the signing of the NBN-ZTE contract. 48. Notably, Gloria Arroyo, through Leandro Mendoza, entered into a contract with ZTE for the NBN project without the benefit of a public bidding. Had a public bidding been conducted for the NBN project, the Government could have secured a contract that is advantageous to it. Unfortunately, Gloria Arroyo entered into a contract and awarded the project to ZTE without any public bidding, bringing about a contract for the NBN project, which is grossly disadvantageous to the Government. 48.1 Complainants humbly submit that the NBN project is not one of those exempted from public bidding under R.A. 9184, otherwise known as the Government Procurement Reform Act, and therefore, there should be a public bidding for the NBN project. 49. Aside from that, Gloria Arroyo is also very much aware of the irregularities leading to the signing of the anomalous NBN-ZTE contract. As heretofore discussed, then NEDA Secretary Romulo Neri told Gloria Arroyo that Abalos attempted to bribe him in connection with the ZTE supply proposal for the NBN project by offering him P200 Million. 49.1 Respondents might try to argue that Abalos did not actually mention any specific denomination when he attempted to bribe Neri. In
49

Page 69, ibid 16

fact, Neri admitted during the Senate investigation that Abalos did not mention any specific denomination when he made the offer to him. 49.2 However, it is important to note that when Neri informed Gloria Arroyo about the bribe attempt of Abalos, he presumed that the 200 being offered by Abalos means 200 million pesos because of the magnitude of the NBN-ZTE project, which Abalos and Neri were discussing while playing golf. That is why when he spoke with Gloria Arroyo over the phone, he did not say that Chairman Abalos offered me 200 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 - is no longer important. What is important is that Abalos attempted to bribe Neri of something in connection with the NBN project, regardless of 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 simply tell Neri not to accept the bribe. Instead, Gloria Arroyo should have already directed the responsible agencies of the Government under her control to stop entertaining ZTEs proposal and should have already directed an urgent and thorough investigation on Neris revelation. 50. However, Gloria Arroyo did not do anything and worse, even entered into a grossly disadvantageous contract with ZTE, despite being aware of the irregularities surrounding the same. 51. The element of profit has been previously established against Gloria Arroyo. 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.51 Thereafter or during the signing of the NBN-ZTE contract in Boao, China, Gloria Arroyo again received US$30 Million from ZTE.52 52. Undoubtedly, Gloria Arroyo With the receipt of said amount US$35 Million or at least P1.4 Billion, Gloria Arroyo entered, on behalf of the Government, into a contract that is manifestly and grossly disadvantageous to the government, and surely enriched herself at the expense and to the damage and prejudice of the Filipino people and the Republic of the Philippines, and therefore should be prosecuted and be held liable for violation of Section 3 (g) of R.A. 3019. 53. Moreover, GLORIA MACAPAGAL-ARROYO should be charged and be held liable for violating Section 3 (i) of R.A. 3019, which provides:
50

Page 37, Annex D Pages 68-70, ibid 52 Page 70, ibid


51

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Section 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: (i) Directly or indirectly becoming interested, for personal gain, or having a material interest in any transaction or act requiring the approval of a board, panel or group of which he is a member, and which exercises discretion in such approval, even if he votes against the same or does not participate in the action of the board, committee, panel or group. Interest for personal gain shall be presumed against those public officers responsible for the approval of manifestly unlawful, inequitable, or irregular transactions or acts by the board, panel or group to which they belong. 54. As heretofore exhaustively discussed, the ZTEs proposal is manifestly unlawful, inequitable and irregular since it is grossly disadvantageous to the Government. Consequently, interest for personal gain shall be presumed against those public officers who will approve the ZTE proposal. 55. In this case, NEDA is the government agency tasked to evaluate and approve ZTEs proposal for the NBN project and as President of the Republic of the Philippines, Gloria Arroyo is the Chairman of NEDA. 56. However, despite the unlawfulness, inequity and irregularity surrounding the ZTE proposal, NEDA, with its Chairman Gloria Arroyo, still approved the same on 29 March 2007. 57. Thus, Gloria Arroyos interest for personal gain could already be presumed when NEDA approved the ZTE proposal and she should now be charged for violating Section 3 (i) of R.A. 3019. 58. GLORIA MACAPAGAL-ARROYO also acted in bad faith when she allowed the approval of the ZTE proposal and later on, gave full powers to Leandro Mendoza to enter into a contract with ZTE, despite having knowledge of the irregularity surrounding the contract. The said unlawful act of Gloria Arroyo certainly caused undue injury to the Government and therefore, she should also be charged and prosecuted for violating Section 3 (e) of R.A. 3019, which provides: Section 3. Corrupt practices of public officers. In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer 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 official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions. 59. There is also evidence that GLORIA MACAPAGAL ARROYO violated Section 3 (b) of R.A. 3019 when she received bribe money from ZTE which, according to Dante Madriaga during the Senate investigation, is in the total amount of US$35 Million or at least P1.4 Billion. 60. In this regard, Gloria Macapagal Arroyo should also be prosecuted for violating Section 3 (b) of R.A. 3019, which declares the following acts as unlawful: (b) Directly or indirectly requesting or receiving any gift, present, share, or benefit, for himself or for any other person, in connection with any contract or transaction between the Government and any other party, wherein the public officer in his official capacity has to intervene under the law. 61. This is without prejudice to the prosecution of Gloria Arroyo for violating other appropriate provisions of the Revised Penal Code on bribery. 62. GLORIA MACAPAGAL-ARROYO should likewise be charged and be held liable for violating Section 7 (d) of R.A. 6713, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees, which provides: Section 7. Prohibited Acts and Transactions. - In addition to acts and omissions of public officials and employees now prescribed in the Constitution and existing laws, the following shall constitute prohibited acts and transactions of any public official and employee and are hereby declared to be unlawful: (d) Solicitation or acceptance of gifts. - Public officials and employees shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from 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 which may 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 of gratuitously, or any act or liberality, in favor of another who accepts it, and shall include a simulated sale or an ostensibly 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 submitted a proposal for said project with the CICT on 7 August 2006. 64. ZTEs transaction may be affected by the function of Gloria Arroyos office since all the government agencies involved in the NBN project are under the control of the President, more specifically NEDA and DOTC. In fact, as President, Gloria Arroyo is the Chairman of NEDA at that time. 65. For this reason, it is obviously unethical for Gloria Arroyo to accept any act of liberality from ZTE, more particularly, to accept the invitation of ZTE to play golf and have lunch with ZTE officials at the ZTE headquarters in Shenzhen, China. Thus, for accepting said invitation, Gloria Arroyo should be prosecuted and 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 case would show that he acted in conspiracy with his spouse, Gloria Arroyo, in performing the unlawful acts performed by Gloria Arroyo, which constitute plunder and violation of the several provisions under Section 3 of RA 3019. One strong indication of said conspiracy is the fact that as a couple, both of them accepted bribe money from ZTE in the amount of US$35 Million.53 Another indication of said conspiracy is when he took advantage of his being the husband of 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 Arroyo should be charged. 67. In addition, the factual circumstances of this case also warrant the filing of criminal cases against MIKE ARROYO for violating Sections 4 and 5 of RA 3019, thus: Section 4. Prohibition on private individuals. (a) It shall be unlawful for any person having family or close personal relation
53

Page 71, ibid 20

with any public official to capitalize or exploit or take advantage of such family or close personal relation by directly or indirectly requesting or receiving any present, gift or material or pecuniary advantage from any other person having some business, transaction, application, request or contract with the government, in which such public official has to intervene. Family relation shall include the spouse or relatives by consanguinity or affinity in the third civil degree. The word "close personal relation" shall include close personal friendship, social and fraternal connections, and professional employment all giving rise to intimacy which assures free access to such public officer. Section 5. Prohibition on certain relatives. It shall be unlawful for the spouse or for any relative, by consanguinity or affinity, within the third civil degree, of the President of the Philippines, the Vice-President of the Philippines, the President of the Senate, or the Speaker of the House of Representatives, to intervene, 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 plunder together with Gloria Arroyo. 69. Gloria Arroyos act would show that she and Abalos were in conspiracy in committing the crime of plunder. In fact, Gloria Arroyo tolerated and in effect, could be said to have supported Abalos act of trying to bribe Neri by not directing any serious investigation on Neris revelation that Abalos tried to bribe him with P200 Million. Abalos was also seen with Gloria Arroyo playing golf and having lunch with ZTE officials at ZTE headquarters in Shenzhen, China. JDVIII also testified that on 26 December 2006, Abalos went to Shenzhen, China and demanded from ZTE the balance of the latters commission from the NBN project, as well as the share of Speaker Jose De Venecia and Gloria MacapagalArroyo. 70. Individually, Abalos was the one desperately lobbying and doing everything just so the NBN-ZTE contract would materialize. In his testimony during the Senate investigation, JDVIII revealed that it was Chairman Abalos who was pushing for the ZTE proposal and who stood to receive for himself kickbacks from the colossal overpricing of the NBN project.54 71. Abalos indeed received kickbacks from ZTE. Notably, aside from spouses Arroyo, Madriaga revealed that the other half of the US$10 Million
54

Page 39, Annex D 21

tranche was intended for various government officers, particularly the Secretaries and that in the sharing, Malaki yung kay Chairman Abalos. But even prior thereto, Madriaga confirmed that ZTE already advanced US$1 Million as 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, even sponsored and hosted the meetings between certain ZTE officials and some of the government officials interested with the NBN project, which include Leandro Mendoza, among others. Chairman Abalos even admitted that the dinner meeting between certain ZTE officials and Leandro Mendoza at Wack Wack Golf and Country Club was upon the request of ZTE officials.56 72.1 He even went to the extent of trying to bribe JDVIII by offering him US$10 Million in exchange for AHIs backing off and withdrawing completely from the NBN project. He also tried to bribe Neri by telling him: Sec, may 200 ka dito. 73. Thus, the foregoing facts warrant the filing of a plunder case against Benjamin 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 signed the anomalous and unlawful ZTE contract in behalf of Gloria Arroyo and therefore, like Mike Arroyo, he acted in conspiracy with Gloria Arroyo in entering into a contract grossly disadvantageous to the government. In this regard, like Mike Arroyo, he should also be charged of crimes similar to those for which Gloria Arroyo should be charged. 75. Aside from the foregoing, Complainants are respectfully urging this Honorable Office to further conduct a thorough investigation on the anomalous NBN-ZTE contract and other related instances of corruption, aimed at criminally and administratively prosecuting GLORIA MACAPAGAL-ARROYO, JOSE MIGUEL ARROYO and LEANDRO MENDOZA for the afore-mentioned crimes and for such other crimes for which they may be held liable for. Complainants are further respectfully praying that other individuals who may be criminally liable for the NBN ZTE anomalies and cover up, including Lorenzo Formoso, Elmer Soneja, Romulo Neri, ZTE officials such as Yu Yong and Fan Yan and other John Does, should likewise be thoroughly investigated and appropriate criminal charges should be filed against them for any violation of the law, which they may be found to have committed.

55 56

ibid ibid 22

76. Complainants are executing this Joint Complaint- Affidavit to attest to 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 of September 2011 in Quezon City.

Rep. TEDDY CASIO for and in his behalf and as representative of BAYAN MUNA PARTYLIST

LIZA MAZA

MARIA CAROLINA PAGADUAN-ARAULLO for and in her behalf and as representative of BAGONG ALYANSANG MAKABAYAN (BAYAN)

SUBSCRIBED AND SWORN to before me, this 8th of September 2011 at Quezon City. I certify that I have personally examined the affiants and that I am satisfied that they voluntarily executed and understood the contents of their JointComplaint Affidavit

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VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING WE, REP. TEDDY CASIO, LIZA MAZA, and MARIA CAROLINA PAGADUAN-ARAULLO, all of legal age, married, Filipino, after having been duly sworn to depose and say: 1. We are the Complainants in the above-entitled case.

2. I, Rep. Teddy Casino, in my personal capacity and as representative of Bayan Muna Party-list; I, Liza Maza in my personal capacity; and I, Maria Carolina Pagaduan-Araullo, in my personal capacity and as chairperson of Bagong Alyansang Makabayan (BAYAN), have caused the preparation and filing of this Complaint against GLORIA MACAPAGALARROYO, 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 or proceeding involving the issues raised in the Joint Complaint, in the Supreme Court, the Court of Appeals or different divisions thereof or any tribunal or agency. To the best of our knowledge, no such action or proceedings is pending in the Supreme Court, the Court of Appeals, or any division thereof or any other tribunal or agency. The letter complaint filed before the Department of Justice has not been officially acted upon as it was referred to the defunct Truth Commission and we have informed the DOJ of our intention to file a complaint on the NBN ZTE deal with the Honorable Ombudsman. 5. If we should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals or different divisions thereof or any other tribunal or agency, we undertake to report the fact within five (5) days therefrom to this Honorable Office and shall cause the dismissal of said action or proceeding. IN WITNESS HEREOF, we have hereunto set our hand this 8th day of September 2011 in Quezon City.

REP. TEDDY CASINO Affiant

LIZA MAZA Affiant

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 LIZA MAZA MARIA CAROLINA ARAULLO Drivers License F07880015090 (expiring on 15 Nov. 2012) Passport No. XX1808767 (issued on 14 Aug. 2008) PAGADUAN- Passport No. XX1198788 (issued on 17 May 2008; expiring on 16 May 2013)

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