Transcript of interview with Senator Mar Roxas during NBN hearing lunch break

On Leo San Miguel’s testimony:

MAR: I’d like to know what he has to say about the allegations of Madriaga. Basically Mr. San Miguel was invited here because Mr. Madriaga mentioned him 20, 30 times in the course of his testimony. According to Mr. Madriaga, Leo San Miguel this, Leo San Miguel that, so we deemed it proper to invite Leo San Miguel to find out exactly what his role was. Now it appears Mr. San Miguel is refuting what Mr. Madriaga said, so it would be a ‘he-said she-said,’ and we’ll try to find out now what Mr. Madriaga has to say, does he have proof or not, and then we take things as they are. Para sa akin, may sinabi si Mr. San Miguel na mukhang okey, pero marami rin siyang sinabi na hindi kapani-paniwala. Halimbawa, sinabi niya na anim, walong beses sila nagkita ni Chairman Abalos na wala namang pinag-usapan, parang hindi kapani-paniwala iyan. Sinabi niya na nasa teknikal lang siya, wala siyang alam, pero sa lahat ng mga biyahe sa China, kasama naman siya.

Q: Mr. San Miguel claims it isn’t his signature in documents presented by Madriaga.

MAR: That’s why it will be a ‘he-said she-said.’ There is forensic technology to find out if a signature was lifted by photocopy and transferred to another document, or whether in fact it was part of the original document. So I’m sure that for all of these things, the Senate will pursue to their logical conclusions.

Q: From Mr. San Miguel’s testimony, it appears that ZTE was trying to keep this transaction off books.

MAR: Well it is quite unusual. Mr. San Miguel said he was working as a consultant for ZTE. It’s a publicly listed corporation, it’s unusual for corporations such as this to be transacting in cash, particularly for a project as large and as important as the ZTE contract, $330 million. Second, Mr. San Miguel said that he would be receiving a success percentage if the transaction went through, but this is normally embodied in some sort of agreement, which Mr. San Miguel said does not exist, there is no such agreement. So parang nagiging free agent-entrepreneur si Mr. San Miguel, Mr. Madriaga, lahat nakapaligid dito sa kontratang ito, at either through balato, commission or ‘tong-pats’ ay makakabahagi sila kung maisakatuparan nga itong kontratang ito. It’s very unusual to have success fees, fees that are paid out on a regular basis without any kind of documentation.

Q: What would make a company want to keep this off-book?

MAR: Maybe it’s because they have not figured out what to do, these are all speculative. Maybe this will not fare well if their auditors looked into this, we must remember that ZTE is a publicly-listed company, and today, if you were a shareholder of ZTE, you can actually file an inquiry in Hong Kong with the anti-graft body there, which is quite strong, to say, ‘look at this company, it’s publicly listed here in the Hong Kong exchange, and they seem to have off-books cash transactions with entities that are not registered, have not paid any tax, have not paid any kind of documentation from government agencies and the like, and that would already be a cause for complaint in Hong Kong.

Q: Share prices of ZTE don’t seem to be particularly affected by the controversy. Are you saying this is because of no similar inquiry in Hong Kong?

MAR: Not necessarily. All I’m saying is that ZTE, with respect to the Philippines, whether going through with it or not, may not have been factored into the stock price of ZTE in Hong Kong. What would be important is if we were really serious in anti-graft and anti-corruption, we could, through the Hong Kong anti-corruption body, be able to file an inquiry. Why is ZTE in fact engaging in these practices here in our country? Did Mr. San Miguel pay VAT on this P150,000 per month? Did he file any kind of income tax return, or any kind of government papers relative to this? What about the 2 ½ percent that he was talking about as a success fee? Is this something that ZTE acknowledges on its side or not? So all of these questions are what makes his testimony contradictory. Parang hindi kapani-paniwala dahilan sa, on one hand, may mga sinasabi siyang kasama siya sa transaksyon, pero on the other hand, wala siyang kinalaman. So it does not smell good. Binasa na, kung in fact na kasama ba siya, kasabwat ba siya o hinde. You can not have it both ways.

Q: But would this actually affect ZTE’s stock prices?

MAR: I don’t know. I don’t know the size of ZTE’s business, what its total revenues were. $330 million might look like a lot, but in the larger context of things, it might not actually be too much. Maybe the market has already discounted or already factored in the fact that the contract was discontinued or canceled, so there would not be much impact on earnings and so therefore on prices.

Q: Would the Senate have the personality to file suit in Hong Kong?

MAR: This really goes to the heart of the issue, which is, how serious is the executive branch in getting to the bottom of this. On one hand the executive says they want the truth, they want disclosure relative to this, they have nothing to hide, and then on the other hand, they’re withholding information, not allowing witnesses to show up, or not actively engaging in ferreting out the truth, doing things to obstruct, impede or otherwise not allow the truth to come out. So what is it really? And this is at the heart of the issue – the credibility or the lack of credibility problem of the current administration.

On Neri not appearing in today’s Senate hearing:

MAR: For the record, naniniwala ako na dapat tinanggap namin ang proposal ng Supreme Court. Ang sinasabi ko ngayon ay hindi nag-iiba doon sa last week. Noong gabi sa Supreme Court oral arguments, hanggang sa Senate caucus, hanggang after the caucus, nanindigan ako, at malinaw... Imbes na itong circus na ito, si Neri na dapat ang tinatanungan natin. Bakit, tatlo lang ba yung maitatanong natin? Ako, isanlibo ang pwede kong itanong e. At lahat ng ini-invoke niyang executive privilege ay pwede isama sa pagdedesisyunan ng Supreme Court.