WB witnesses link FG to bid rigging

By Aries C. Rufo, abs-cbnnews.com/Newsbreak

Posted at Feb 03 2009 11:20 AM | Updated as of Feb 04 2009 09:52 AM

It was a rude baptism of fire for the Japanese contractor. Right before him, “(They) first discussed bribes. They had a rough approach.” From that meeting, it was impressed on him that “(bribe) money was important to do business in the Philippines.”

This was how the Japanese contractor described his meeting with First Gentleman Miguel “Mike” Arroyo and a former senator to World Bank
investigators who looked into alleged collusion and rigging in the Bank's funded road projects.

On another occasion, the Japanese executive met the former senator and “it had been made clear to him that there would be no business in the Philippines without paying money,” the WB report, as prepared by its Integrity Vice Presidency (INT) unit, noted. He was also told “that money would have to be paid as high up as the president, senior government officials and politicians in order to do any further business in the country."

The Japanese contractor, however, had no direct contact with the President.

The report further added: “To win a contract, it would also be necessary to pay the head of the bureau and politicians several million yen.”

We obtained parts of the World Bank report but we are not disclosing the name of the Japanese contractor and other witnesses. The Japanese contractor has since left the country.

The Japanese contractor was among those interviewed by the INT in connection with its probe on bid rigging. His firm purportedly participated in two bid packages, which were later confirmed to be false. In fact, the company denied placing any bid and that the signatures of the company president were forged.

It was the only direct testimony in the WB inquiry alluding to the First Gentleman’s possible link to bid rigging controversy that has led to the blacklisting of seven firms and one individual for alleged collusion in WB funded road projects worth $33 million. Three other interviewees gave testimonial evidence that indirectly linked Mr. Arroyo to bid manipulation.

Other witnesses

One of them, a local contractor, said Mr. Arroyo was “behind” Eduardo de Luna, owner and proprietor of E.C. de Luna Construction Corp, one of the blacklisted firms. De Luna, the local contractor said, acts as the intermediary between contractors and politicians for the bid fixing.

This bolsters the allegations of Senator Panfilo Lacson that de Luna had close ties with Mr. Arroyo, as evidenced by de Luna’s frequent visits to the LTA building in Makati where the First Gentleman holds office.

Based on Mr. Arroyo’s appointments book for 2002, which Lacson produced during a Senate inquiry, de Luna met with Mr. Arroyo 17 times. We checked this out (Newsbreak has a copy of the First Gentleman's 2002 journal) to be accurate.

De Luna said he can only recall meeting the First Gentleman three times.  Palace officials have downplayed the allegations as baseless.

Another interviewee, a foreign contractor, said he was told “to form a relationship” with de Luna if he is to bag any project. De Luna, the interviewee was told, has “connections” to Mr. Arroyo.

The interviewee said his predecessor had admitted engaging in “arrangements” with high-ranking government officials and government contractors in bid fixing. “(He) said he is unwilling to participate in such arrangement, and therefore (the firm) has no hope of winning Bank funded contracts,” the WB report noted.

Still, another interviewee, a former government official with personal knowledge of the bidding process in the Department of Public Works and Highways, said de Luna, described as  one of the primary “facilitators” in bid manipulation, is “close” to Mr. Arroyo and is known to be his “go-between” in foreign-assisted projects.

In the WB report, the interviewees did not say if Mr. Arroyo received any kickbacks from the rigged projects. Yet, it appeared clear to them that de Luna had the First Gentleman’s backing. It was not clear if the WB sought Mr. Arroyo’s side.

For his part, de Luna said in a statement prepared by his counsel, Libra Law, that the World Bank "denied him the right to a formal hearing."

Other officials, too

The interviewees also tagged government officials and lawmakers who are on the take but the WB withheld their names in its findings. Aside from E.C de Luna Corp, which was debarred indefinitely, other firms sanctioned were China Road and Bridge Corp (debarred for eight years); China State Construction Corp and China Wu Yi Corp (both debarred for six years); China Geo-Engineering Corp (debarred for five years) and Cavite Ideal International Construction and Development Corp. and CM Pancho Construction Inc (debarred for four years).

Mr. Arroyo has been linked before to alleged anomalous government deals and projects, the last controversy of which was the botched $329 million broadband deal with China’s ZTE.

Mr. Arroyo supposedly demanded kickbacks from the project, which was eventually dropped by the government.