Palace: Senate hearing a circus

An amusing circus and a great waste of time and money.

This was how Malacañang described yesterday’s Senate hearing on the controversial $450-million Caliraya-Botocan-Kalayaan (CBK) power deal between the National Power Corp. (Napocor) and the Argentine firm Industrias Metalurgicas Pescarmona Sociedad Anonima (Impsa).

The hearing, whose main witness was deposed President Joseph Estrada, was supposed to shed light on a host of controversial issues involving bribery and other alleged anomalies surrounding the contract.

In a press briefing at Malacañang, Presidential Spokesman Ignacio Bunye said Estrada apparently did not know what he was talking about during the hearing. Energy Secretary Vincent Perez also said Estrada might have been given the wrong information or advice about the Impsa deal.

"The President (Mrs. Arroyo) said she will not be distracted by this circus," Bunye said.

"She will just concentrate on whatever needs to be done. As a matter of fact, even as the circus was going on, she was presiding over the LEDAC meeting where they outlined the bills that have to be tackled during the next 18 months," Bunye said, referring to the Legislative-Executive Development Advisory Council (LEDAC) held simultaneously at Malacañang.

Asked whether it was Mrs. Arroyo who used the word circus, he said: "Well, I speak for the President."

Bunye and Sen. Manuel Villar, however, dismissed allegations from the opposition that the LEDAC meeting was held to coincide with the Senate hearing to prevent administration senators from attending the probe.

Bunye said the LEDAC was scheduled long before and was announced by Mrs. Arroyo last week. He said it would just not be possible for Malacañang to re-arrange its schedule, which would result in the delay in the implementation of vital activities.

Villar said the lawmakers present chose to attend the LEDAC meeting over the Impsa hearing because of the need to discuss vital reform bills that would spur the economy forward.

He said he felt that he should attend because one of the main issues to be discussed was the national budget.

Bunye narrated that he "watched with amusement the ramblings of Estrada" at the Impsa hearing and chose to discontinue viewing and return to the LEDAC meeting.

Among other things, Bunye and Acting Justice Secretary Merceditas Gutierrez denied Estrada’s allegation that the Arroyo administration issued a sovereign guarantee to Impsa’s creditors; that it rushed in issuing a favorable legal opinion from the Department of Justice (DOJ); and that the contract he approved was conditional.

Gutierrez said that nowhere in all of the documents of the contract, which were all perfected during the Estrada administration, was a sovereign guarantee given.

She stressed that even the alleged insertions made by former justice secretary Hernando Perez on direct guarantees were but verbatim provision from the Government Acknowledgment and Consent Agreement (GACA) drawn up during the presidency of Estrada.

Bunye added that it was expressly stated in the documents that none of its provisions should be interpreted as leading to a sovereign guarantee.

He said the Department of Finance, not Perez or the DOJ, is authorized to issue a sovereign guarantee.

"The guarantee follows a standard form, standard language, and nowhere does the standard language or form appear in the DOJ opinion," Bunye said. "The Impsa which is a party to the contract says there is no guarantee."

Gutierrez disclosed, however, that there is a government undertaking included in the contract where the obligations of Napocor under the agreement carry the full faith and credit of the Philippine government.

She explained that the government would only see to it that Napocor would comply with its obligations when these fall due.

Gutierrez also belied Estrada’s claim that the Impsa contract was conditional because he had intended to implement it as evidenced by his issuance of at least two full powers letters to Napocor and finance officials.

Estrada, she said, is just trying to make it appear that the Arroyo administration rushed the implementation of the contract by issuing a favorable legal opinion two days after she assumed power.

Perez, she clarified, was given a draft opinion prepared much earlier by DOJ lawyers dated Jan. 24, 2001. But the legal opinion was released on Feb. 1 because Perez ordered a review and consulted his staff on the matter.

In a statement yesterday, Perez reiterated his role in the Impsa deal was merely "ministerial" and that there was no sovereign guarantee issued by this or the past government.

"Neither Estrada nor President Arroyo has issued a sovereign guarantee. There is no sovereign guarantee up to the present time," he told reporters in an interview at the Pan Pacific Hotel. "A mere DOJ legal opinion cannot provide for a guarantee."

He denied inserting his opinion in the Jan. 24, 2001 draft, saying he was just "reiterating" what was already contained in Estrada’s Justice Secretary Artemio Tuquero’s draft.

"Perhaps the confusion arises because of misunderstanding," he added, pointing out that should there be any sovereign guarantee, "it should be express and should be in writing." — With Delon Porcalla