FVR: Miriam ‘bombshell’ a dud

The supposed bombshell of pro-administration Sen. Miriam Defensor-Santiago on the multibillion-peso Smokey Mountain project is a dud, former President Fidel Ramos said yesterday.

"Nakuryente si Miriam (Miriam got a bum steer), she was fed false information on this project," he said in an interview over radio station dzRH.

Ramos later hopped from one station to another to repeat the same assertion and explain his side on the controversy.

In a related development, Santiago asked the Senate yesterday to expand its planned Smokey Mountain inquiry to include all land reclamation projects in Manila Bay and other parts of the country.

"Following the Supreme Court ruling in the Public Estates Authority-Amari case, all these transactions are void, do not exist and produce no legal effects," she said.

Apart from that ruling, she said the Constitution is clear: "Private corporations or associations may not hold such alienable lands of the public domain, except by lease."

She also cited the Public Land Act, which provides that "the land shall not be alienated or encumbered, except when authorized by Congress."

She said the "principle of retroactive invalidity applies to all these contracts and transactions."

"Hence, the state should rescind these and recover the lands from their present owners or lessees, or allow them to stay provided that Congress passes an enabling law for each transaction," she added.

Santiago even suggested that the cash-strapped Arroyo administration could generate revenues from the reclaimed lands by requiring their occupants to deposit the income they derive from these areas in certain banks in trust for the government.

"All these amounts would presumably run to billions of pesos that could be raised in lieu of new taxes," she said.

It was the Ramos administration that awarded the contract to develop the Smokey Mountain garbage dump in Tondo, Manila and reclaim land in the area to businessman Reghis Romero II’s R-II Builders, though the development plan was initiated by the Aquino administration.

Ramos said it is not true that there was no bidding for the contract and that Romero bagged the deal through negotiation as Santiago alleged.

He added that Romero was not a personal friend and was not a "favored" contractor for the project.

"I only knew him because I inherited him from the previous administration. Of course, we dealt with him as developer during my time but he is not a personal friend. I never knew him before. I never knew him from Adam," Ramos said.

He said a bidding was conducted and that he could remember two participants — R-II Builders and New San Jose Builders.

His recollection jibes with that of Senate President Franklin Drilon, who served in his administration as justice secretary.

Drilon, whose name has been dragged into the controversy, said bidding was conducted for the original contract, though two subsequent revisions were apparently negotiated with the contractor.

Interviewed in one radio station after Ramos, Santiago backtracked on her original claim that no bidding was ever held.

She admitted that the original contract was subjected to public bidding but that its third revised version, which is the prevailing and binding agreement between the government and R-II Builders, never passed through such a process.

The project cost soared from P2.2 billion to P17 billion under the second revised contract to a still unspecified amount under the third and final version.

Ramos said Santiago was wrong on another point: that the government spent P3 billion for the project despite a provision in the contract that Romero would spend his own money.

He admitted that Romero ran out of funds for the huge project, prompting the contract to devise a "novel" financing scheme in which banks and other financial institutions participated.

The scheme called for the sale of asset-backed participation certificates. The buyers included the Social Security System (SSS) and the Overseas Workers’ Welfare Administration (OWWA).

Ramos said the funds sunk by these agencies in Smokey Mountain represented their "equity" in the project and not government spending.

Quoting SSS president Corazon de la Paz, he said as a matter of fact, the SSS has already earned from its investment in the project.

De la Paz confirmed Santiago’s statement that the pension fund she is administering has a P1.039-billion exposure in the Smokey Mountain housing, commercial, industrial and port complex.

She said the original investment was P1.9 billion, and that SSS has already been paid about P900 million when some participation certificates matured.

No Bailout

According to Senate Minority Leader Aquilino Pimentel Jr., OWWA sunk more than P800 million in the Tondo project.

Some of its certificates have already matured but the workers’ fund has not been paid, he said.

Ramos denied ordering these institutions to bail out Romero from his financial troubles as Santiago claimed. He stressed that some agencies, such as OWWA and the SSS, were encouraged to buy certificates for the project.

"They did not spend the money. They invested the money. There was no dictation from Malacañang because this was a commercial transaction based on freedom of choice of these agencies," he said.

Ramos blamed lawmakers for the fresh questions that have been raised about the project, saying had members of Congress done their job, the new controversy would have been obviated.

He recalled that the House good government committee, chaired by then Cagayan congressman Edgar Lara, after a lengthy investigation, recommended the enactment of laws sanctioning joint venture agreements such as the one between his administration and Romero for Smokey Mountain, and the financing scheme Romero invented.

"They did not correct defects in our laws. Kaya kulelat na naman tayo (We are lagging again) in terms of investments and economic growth in our region. In June 1998 (when he was still president) we were the leader, we were in front. Wala silang ginawa, wala, zero (They did nothing)," Ramos said.

He said he is ready to face "any investigation by anybody" but that he would not insist on appearing before the Senate if he is not invited.

He is apparently aware of the fact that Sen. Joker Arroyo, who chairs the Blue Ribbon Committee that would look into Santiago’s exposé, has misgivings about inviting former presidents to Senate inquiries.

Ramos, who defeated Santiago in the 1992 presidential election by just 800,000 votes, also said politics and big business interests could be behind his nemesis’ exposé.

He was apparently supporting Romero’s thesis that competitors of the multi-use Smokey Mountain complex, including its port operation, are behind the latest assault on the project.

Ramos chided Santiago for making it appear that her exposé is new.

"She should have dug up the records of the Senate, which investigated this case years ago," he said.

Unfortunately, the people do not know how the inquiry ended and whether any positive result was achieved, Ramos said.

"There are frequent investigations in aid of legislation, but there is no legislation," he added.

Ramos also denied Santiago’s claim that the ownership of the reclaimed land, which lies next to the North Harbor in Manila, went to R-II Builders.

"I am not defending them. I have nothing to do with them. They were just the developers that government contracted for the project. The National Housing Authority continues to own the land that was reclaimed — about 79 hectares," he said.

Ramos belied Santiago’s claim that the project’s progress was limited to "a few low-cost housing units" and urged her to visit the site.

"I was there as late as Feb. 25, 2004. I was with President Arroyo, to see the progress of the work in some 30 five-story residential buildings that were divided into decent condo units for families," he said.

Ramos said lawmakers looking into the project’s alleged irregularities should talk to Smokey Mountain’s residents and parish priest Father Ben Beltran, who has been ministering to the Catholic faithful in the area for the past 15 years. — With Pia Lee-Brago