REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF JUSTICE
OFFICE OF THE SECRETARY
MANILA

TEODORO CASINO, in his

personal capacity as a taxpayer,
and BAYAN MUNA PARTYLIST,
Complainants,
- versus -

GLORIA MACAPAGAL ARROYO,

Respondent.
x----------------------------------------x

COMPLAINT
I, TEODORO CASIÑO, of legal age, Filipino, taxpayer, and with
office address at No. 45 K7 Street, West Kamias, Quezon City, and
BAYAN MUNA PARTY LIST represented by Neri Javier Colmenares, an
accredited political party participating in the party list elections, with
office address at No. 45 K7 Street, West Kamias, Quezon City, state
under oath:

1. We accuse respondent former President Gloria

Macapagal Arroyo of acts in violation of the Revised Penal Code, the
Anti-Graft and Corrupt Practices Act and the Ethical Standards for
Public Officials.

2. Respondent Gloria Macapagal Arroyo is 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
processes and other orders of this Department. 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.

Introduction to the Complaint

"Ang sinumang nagkamali ay kailangang humarap sa hustisya.

Hindi maaaring patuloy ang kalakaran ng walang pananagutan at tuloy
na pang-aapi."
Pres. Benigno S. Aquino III
Inaugural speech June 30, 2010

There were crimes committed but there were no criminals. For

the past nine years, the country has suffered under a shameless,
corrupt and tyrannical regime whose chief executive officer has
escaped accountability due to her immunity from suit, blatant abuse of
her presidential powers and prerogatives, and use of what we deem as
unethical and illegal means to escape impeachment and other
1
transparency and accountability procedures.

The regime of President Gloria Macapagal-Arroyo has ended. But

its crimes live on. Unless justice is rendered on Mrs. Arroyo and those
who conspired with her in robbing the nation, killing innocent civilians
and debasing its institutions, impunity reigns and will continue to reign.

With Mrs. Arroyo’s stepping down from power and lapse of her
immunity from suit, the people now have the opportunity to hold her
accountable for her various crimes & misdemeanors and for justice to
be finally served.

As a first step, we are filing with the Department of Justice a

complaint 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. We believe
that the DOJ's extensive investigative powers can be harnessed to
ensure an impartial and thoroughgoing investigation, leaving no stone
unturned, in order for a successful prosecution to be pursued. Other
complaints will be filed including the Fertilizer scam, the Philhealth
cards vote buying spree, the Hello Garci scandal, Venable contract, and
human rights violations including extra judicial killings and enforced
disappearances. It is hoped that through this first small step, a
breakthrough can be made resulting in the successful investigation,
prosecution, judgment and punishment of Gloria Macapagal-Arroyo and
her cohorts for their many crimes against the nation and the people.

ALLEGATIONS OF FACTS

3. This complaint revolves round the National Broadband

Network (NBN) Project. Some the personalities involved in the NBN
ZTE project, i.e., Benjamin Abalos and Romulo Neri, have already been
charged in court1, a clear evidence and admission by the Ombudsman
that indeed anomalies accompanied the NBN ZTE transactions.
Despite overwhelming evidence of criminal and administrative
culpability, respondent Arroyo was never investigated or summoned
before any investigating body, much less charged, on account of her
alleged immunity from suit.

4. We disagree with the Ombudsman theory that the President

has absolute immunity. This immunity provision which was expressly
provided in the Marcos Constitution but was not retained in the 1987
Constitution, does not grant the President immunity from acts not
related to his or her official functions. The President cannot just shoot
and kill five people tonight and shoot five more the next day and the
entire nation is helpless from charging and arresting the President
during his term.
Furthermore, even if President Arroyo is immune from suit she is
certainly not immune from investigation. The dismissal of the criminal
1
Senate Committee Report No. 743, p. 7.
2
complaint against then president Arroyo by the Ombudsman on the
ground of immunity shows the lack of intention to seriously investigate
Pres. Arroyo and was without legal basis.

Verily even the Senate in its Committee Report No. 743 took
serious note of how the Office of the Ombudsman issued a resolution
but failed to satisfactorily resolve the complaints filed before it on this
project, which according to the Senate was meant to preempt the
Committee Report. Clearly, whatever actions that the Office of the
Ombudsman on the instant matter has been tainted by so much malice
and other extraneous considerations.

Considering that the Secretary of Justice has the power,

obligation and the “marching orders” to investigate criminal acts
committed but unresolved during the Arroyo administration, we feel
that it is best to file herein complaint before her.

The Department of Justice has the all mandate, means and

resources necessary so that the matters narrated below could be
further substantiated and other related anomalies unearthed. It is time
that the DoJ live up to its name by giving justice to the long-suffering
people. The obsolete theory of the former Justice Secretary Raul
Gonzalez that the DOJ, including its state prosecutors, is a passive
institution without any obligation to investigate complaints cannot be
allowed to persist especially in the light of the impunity that took place
during the Arroyo administration. The DOJ like its counterparts in many
countries abroad has the power and duty to conduct its own
investigation and gather evidence to build up its case rather than
placing the burden on ordinary citizens, especially in cases involving
powerful public officials.

5. The accusations in this complaint are based on Senate Report

743 (Attached as annex “A”) and other authentic records that can be
verified using existing records and further investigation.

6. The NBN saga may be deemed to have started with a July 12,
2006 Memorandum of Understanding (MOU) between the Philippines’
Department of Trade and Industry through Secretary Peter Favila and
ZTE International Investment Limited (ZTE).2 The MOU awarded
without any public bidding ZTE the right to invest in these
activities: (1) Nationwide Government Broadband Communication
Infrastructure Project; (2) Establishment of Information Technology
School and Training Center; (3) Exploration, Development and
Operation of Mining Areas in North Davao; (4) Exploration,
Development and Operation of Mining Areas in Diwalwal; and (5)
Establishment of a Special Economic Zone in the Davao area.3 The
capital and operating costs for these projects totaled US$4 billion to be
provided by ZTE4 – of course to be collected from the Filipino people in
whatever form or packaging they are to be provided.
7. On August 7, 2006 ZTE submitted with the Commission on
Information and Communications Technology (CICT) their proposal for
2
Id. at 16.
3
Ibid.
4
Ibid.
3
the NBN Project.5 By September 2006 the National Economic and
Development Authority (NEDA) was already evaluating the NBN
Project.6 Not surprisingly, with much haste, on September 8, 2006,
Export-Import Bank of China (“China Exim Bank”) already wrote to
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.7

8. Meanwhile, On October 10,2006, the unsolicited Build-Own-

Operate (BOO) proposal of AHI was first submitted to NEDA by its
private proponent, Jose de Venecia III as Chairperson of the Bandila
Communications Holdings, Inc. in partnership with private Chinese
enterprises and institutions.8 This project was known as the Orion
Network Project.9

9. On October 23, 2006, CICT formally endorsed to NEDA for

further evaluation and action the NBN Communications Infrastructure
Project proposal of ZTE Corporation.10 On October 28, 2006, the
national broadband network was officially endorsed to NEDA by CICT as
a government project, not as a Build-Operate-and-Transfer (BOT)
project.11

10. While the NBN Project was pending consideration by NEDA,

in violation of the Anti-Graft and Corrupt Practices Act:

(a) On October 29 2006 respondent Arroyo, her husband Jose

Miguel Arroyo and Jose De Venecia went to Hong Kong.

(b) On October 30, 2009 Benjamin Abalos also went to Hong

Kong.

(c) On November 2, 2006 respondent Arroyo, her husband, Jose

De Venecia and Benjamin Abalos played golf and had lunch with ZTE
officials at the ZTE Headquarters in Shenzhen, China.12

(d) Four days before formal talks with ZTE started, respondent
Arroyo even brought the ZTE chairperson to Cotabato City as her
special guest at the joint Cabinet-Regional Development Council
meeting on July 8, 2006.

11. On November 21, 2006 then Presidential Chief of Staff

Michael Defensor, inquired from China’s Minister of Commerce Bo Xilai
if they were interested in arranging the financial facility and technical
support of the NBN Project.13 Clearly respondent Arroyo as
Defensor’s principal wanted a loan to finance the Project
5
Id. at 17.
6
Ibid.
7
Id. at 18.
8
Id. at 19.
9
Id. at 20.
10
Ibid.
11
Ibid.
12
Id. at 21.
13
Id. at 22.
4
despite initial favorable recommendations that the NBN project
be undertaken through a “build-operate-transfer” scheme.
Hence on December 2, 2006 China’s Ambassador to the Philippines Li
Jinjun informed the Philippine government, through then Presidential
Chief of Staff Mike Defensor, that their government would provide a
Preferential Buyer's Credit financing support through China Exim Bank.
China also designated ZTE Corporation as the prime contractor.14

12. Starting in December 2006 Benjamin Abalos offered bribe

money to different persons just so the NBN Project would already take
off.15

a. The amount of US$10 million was offered to Jose De Venecia

III to withdraw his project from competing with the ZTE Project. 16
Indeed in the same month Mr. Jose de Venecia III accompanied
Benjamin Abalos, then Chairperson of the Commission on Elections, to
Shenzhen, China where Chairman Abalos allegedly demanded from
ZTE the balance of the latter’s commission from the project as well as
the share of Jose De Venecia and respondent Arroyo as then
President.17

b. In January 2007 Benjamin Abalos offered P200 million bribe to

Romulo Neri.18

13. Romulo Neri informed respondent Arroyo of the P200 million

bribe to him be Benjamin Abalos.19 Respondent Arroyo merely told
Romulo Neri not to accept the bribe.20 Still and all, in February 2007,
respondent Arroyo’s husband ordered Jose De Venecia III to “back off”
from the NBN Project.21

14. Despite information of a bribe offer relative to the NBN

Project and respondent Arroyo showed undue interest in the approval
of the NBN ZTE contract. On February 13, 2007, respondent Arroyo
Issues EO 603 reverting the supervision and control of the
Telecommunications Office (TELOF) and the operating units of the
Department of Transportation and Communications (DOTC) from CICT
to DOTC.22 The significance of which is that the implementing arm of
the broadband project would be DOTC-TELOF.23 This act officially places
every aspect of the contract directly and clearly within the control of
respondent and subject to her approval.

15. On March 1, 2007 DOTC Secretary Leandro Mendoza and

CICT Secretary Ramon Sales – as alter egos of respondent Arroyo as
then President – endorsed ZTE’s Project to NEDA for approval.24 This
14
Id. at 23.
15
Ibid.
16
Ibid.
17
Id. at 24.
18
Ibid.
19
Ibid.
20
Ibid.
21
Id. at 25.
22
Ibid.
23
Ibid.
24
Id. at 27.
5
was done despite the STRANGE AND UNEXPLAINED fact that the Bids
and Awards Resolution awarding the project to ZTE was made only on
March 6, 2007.25 Said the Senate Committee Report:

It is to say the least, incredible how DOTC

Secretary Mendoza and CICT Chairman Sales can
attach said BACResolution 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.26
(emphasis added)

16. There was undue haste in the other processes for the
approval of the ZTE Project, thus showing that respondent Arroyo used
her powers as then President to rig the essential processes so as to
grant unwarranted benefits to ZTE, to wit:

a. On March 29, 2007, NEDA Director Reynoso Jr. recommends

the implementation of the project provided that an EO be issued
directing government offices to utilize the NBN project and for DOTC to
secure an ECC from DENR.

b. On the very same day, NEDA approves the NBN-ZTE project.

Note that two proposals for this endeavor were offered – one from the
ZTE Corporation and the other from the Amsterdam Holdings, Inc.
(AHI). That from the ZTE was a loan-funded project; on the other hand
AHI packaged a build-operate-transfer scheme. The first was worth
US$329 million while the second was for US$240 million.

c. NEDA-ICC and NEDA Board approved the NBN project on the

basis of its technical and socio-economic merits and with DOTC as the
implementing agency. On April 3, 2007, NEDA Director and Board
Secretary issued a certification that NEDA approved the NBN-ZTE
project on May 29, 2007.

d. On April 20, 2007, the eve of the signing of the Contract,

respondent Arroyo granted DOTC Secretary Mendoza full powers to
sign the NBN project contract with ZTE Corporation even without the
aforestated DOJ Opinion.27

17. Respondent Arroyo’s corrupt motive in seeking the hasty

approval of the ZTE Project becomes even more apparent because on
April 20, 2007, she already knew that there was something wrong with
the NBN-ZTE deal.28

25
Ibid.
26
Ibid.
27
Ibid.
28
Id. at 30.
6
 a. This was admitted by her on February 23, 2008 in her
interview before the radio station DZRH. She said that she first learned
of 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 April 21, 2007.29 ( additionally Attached is a copy of the media
report as as Annex “B” )

b. Nonetheless, on April 21, 2007, the DOTC, through Secretary

Leandro R. Mendoza, and Zhong Xing Telecommunications Equipment
(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 (approx. Php16
Billion).30 (Attached is a copy of the Malacanang press statement
affirming the signing as Annex “C”).

c. The signing was witnessed and attended no less by respondent

Arroyo, who took time out from her multifarious duties and pressing
family crisis: the First Gentleman was in hospital at that time. The ZTE
contract was to be financed through a loan that would be extended by
the PRC, through the Export-Import Bank (EximBank) of China.31

18. Circumstantially proving the corrupt character of the ZTE

contract was the report that its original copy was supposedly lost by
Commercial Attache Emmanuel Ang.32 Due to said loss, complainants
cannot present the copy of the actual contract and prays that the DOJ
subpoena said document during its investigation.

19. In May 2007 DOTC asked the Department of Finance to

facilitate the release of the NBN-ZTE Project loan proceeds – this was
despite the fact that the Department of Justice could come out with its
legal opinion exempting the NBN Project from the requirements of the
Government Reform Procurement Act only on July 26, 2007.33

20. On August 15, 2007, instead of freezing the NBN-ZTE Project

and conducting an investigation thereon, respondent Arroyo
inexplicable transferred Romulo Neri from NEDA to the Commission on
Higher Education.34 If respondent Arroyo was not a participant in the
NBN-ZTE graft-laden contract, she would not be doing this and other
acts to scuttle a thorough inquiry on the circumstances surrounding
the same.

21. Events on the NBN-ZTE Project have become too hot to

handle. Hence: In August 2007 Benjamin Abalos was identified as the
broker for this project. The Senate began its investigation. 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.
29
Ibid.
30
Ibid.
31
Ibid.
32
Ibid.
33
Id. at 31.
34
Id. at 32.
7
 In September 2007 respondent Arroyo suspended the NBN-ZTE
contract due to “irregularities”. No serious investigation was
conducted by respondent despite the grave implications of the
cancellation.

In October 2007 Benjamin Abalos resigned as Chairperson of the

COMELEC. In the same month respondent Arroyo cancelled the NBN-
ZTE Project while on State Visit to China.35 We allege that the ZTE
Corporation, and the DOJ must also investigate this aspect, was
indemnified for the cancellation of contract and public funds or other
favors were given ZTE to offset the contract’s cancellation. This is a
common clause in all contracts. If funds and other favors were ‘paid’
to ZTE, this will entail the filing new and additional criminal cases
against those involved.

22. Without prejudice to other criminal acts and culpabilities,

respondent Arroyo violated the Anti-Graft and Corrupt Practices Act or
RA 3019 (1960) as amended:

Criminal Acts Crimes Committed

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:

(a) She ordered or at the very (a) Persuading, inducing or

least induced Secretary Neri and influencing another public officer
other public officials the approval to perform an act constituting a
of ZTE’s contract for the NBN violation of rules and regulations
project despite the circumstances duly promulgated by competent
of bribery and other irregularities authority or an offense in
affecting it. connection with the official duties
of the latter, or allowing himself to
be persuaded, induced, or
influenced to commit such
violation or offense.

(b) She received material benefits (c) Directly or indirectly

from the ZTE contract when she requesting or receiving any gift,
played golf at the ZTE present or other pecuniary or
headquarters and other material material benefit, for himself or for
considerations. another, from any person for
whom the public officer, in any
manner or capacity, has secured
or obtained, or will secure or
obtain, any Government permit or
35
Ibid.
8
 license, in consideration for the
help given or to be given, without
prejudice to Section thirteen of
this Act.

(c) To the prejudice of the (e) Causing any undue injury to

Government in the form of an any party, including the
onerous and graft-laden contract, Government, or giving any private
she was very partial to ZTE as party any unwarranted benefits,
shown by the grant of privileges to advantage or preference in the
it, the invitation of a ZTE official to discharge of his official
attend a Cabinet meeting, among administrative or judicial functions
others. 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.

(d) She neglected to investigate (f) Neglecting or refusing, after

the irregularities involved in the due demand or request, without
ZTE contract and even pursued it sufficient justification, to act
so it may be consummated. within a reasonable time on any
matter pending before him for the
purpose of obtaining, directly or
indirectly, from any person
interested in the matter some
pecuniary or material benefit or
advantage, or for the purpose of
favoring his own interest or giving
undue advantage in favor of or
discriminating against any other
interested party.
(e) She executed the ZTE contract
despite knowledge that (g) Entering, on behalf of the
overpricing and irregularities Government, into any contract or
attended it. transaction manifestly and grossly
disadvantageous to the same,
whether or not the public officer
profited or will profit thereby.

(h) Directly or indirectly having

(f) We allege that she had interest financing or pecuniary interest in
for personal gain in the NBN any business, contract or
contract since she caused its transaction in connection with
approval and awarding to ZTE which he intervenes or takes part
despite the bribery and other in his official capacity, or in which
irregularities attending its he is prohibited by the
execution. Constitution or by any law from
having any interest.

9
 (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.

(j) Knowingly approving or

granting any license, permit,
privilege or benefit in favor of any
person not qualified for or not
legally entitled to such license,
permit, privilege or advantage, or
of a mere representative or
dummy of one who is not so
qualified or entitled.

23. Respondent Arroyo is also liable for violation of these

statutes:

(i) Art. 211-A, The Revised Penal Code, for Qualified Bribery,
for refraining from arresting or prosecuting all those
involved in the corrupt acts arising from or in connection
with the NBN-ZTE Project, in exchange for some offer,
promise, gift or present.

(ii) Art. 212, The Revised Penal Code, for Corruption of Public
Officials, as a conspirator in Benjamin Abalos’ endeavors to
give bribes.

(iii) Art. 213, The Revised Penal Code, for Frauds against the
Public Treasury, for entering into the NBN-ZTE contract to
defraud the Philippine Government.

(iv) Art. 216, The Revised Penal Code, for Possession of

Prohibited Interest by a Public Officer, for entering into the
NBN-ZTE contract despite her and her husband’s material
interests therein.

10
 (v) Violation of PD 1829 (1981) as amended, “Penalizing
Obstruction of Apprehension and Prosecution of Criminal
Offenders,” particularly for (a) preventing witnesses from
testifying in any criminal proceeding or from reporting the
commission of any offense or the identity of any offender/s
by means of bribery, misrepresentation, deceit,
intimidation, force or threats; and (b) altering, destroying,
suppressing or concealing any paper, record, document, or
object, with intent to impair its verity, authenticity,
legibility, availability, or admissibility as evidence in any
investigation of or official proceedings in, criminal cases, or
to be used in the investigation of, or official proceedings in,
criminal cases – particularly the suppression of Romulo
Neri’s testimony and the loss of the NBN-ZTE contract,
which are both attributable to respondent Arroyo.

(vi) Violation of RA 6713 (1989), The Code of Conduct and

Ethical Standards for Public Officials and Employees,
particularly Sec. 7 (a) on “Financial and material interest –
Public officials and employees shall not, directly or
indirectly, have any financial or material interest in any
transaction requiring the approval of their office,” and Sec.
7 (d) on “(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 with any
operation being regulated by, or any transaction which
may be affected by the functions of their office.”

(vii) Violation of RA 9184 (2003), The Government Procurement

Reform Act, particularly Sec. 65 (3), for exerting undue
pressure on the Bids and Awards Committee to favorably
endorse the NBN-ZTE Project despite irregularities therein.

24. Since the ZTE proposal does not fall under the provisions of
RA 6975 as amended by RA 7718 on unsolicited proposals, it should
be covered by the provisions for bidding under RA 9184.

The approval and signing of the ZTE contract, therefore, is illegal

and constitutes an additional offense for violating the procurement and
bidding provisions of the law.

25. Respondent Arroyo was never investigated, even

summoned, much less prosecuted administratively or criminally for her
involvement in the ZTE contract. Despite the deferential treatment
profusely extended to her, Mrs. Arroyo’s participation in the ZTE deal
must also be dealt with as an administrative case against her. Her
election as a Member of the House of Representatives makes the
imposition of administrative sanctions feasible – in addition to the
withholding of her retirement benefits as once President of this country.
The past elections did not cleanse her of the wrongdoings she had
11
perpetrated especially in the ZTE contract. The electorate was not
duly informed of her involvement in the corrupt practices because at
every turn the people in power surrounded her with all kinds of
immunities, thus preventing a full public debate on her culpabilities.
Besides therefore the criminal penalties that ought to be imposed on
her, she must also be administratively penalized for engaging in graft
and corruption.

WHEREFORE, complainants respectfully pray that the Secretary

of Justice: (a)) conduct the necessary serious investigation for purposes
of gathering additional evidence on the anomalous ZTE contract and
other related instances of corruption, aimed at criminally and
administratively prosecuting respondent Arroyo and other individuals
who may be criminally liable for the NBN ZTE anomalies and cover up
including Miguel Arroyo, Leandro Mendoza, Lorenzo Formoso, Elmer
Soneja, Romulo Neri, ZTE officials such as Yu Yong and Fan Yan and
other John Does ; and (b) prepare the Information/s and administrative
complaint/s against respondent submit the same to the Office of the
Ombudsman with the recommendation for the filing of the proper
information against said respondent.

IN WITNESS HEREOF, I have hereunto set my hand this 1st day

of July 2010 in Manila City.

__________________________
TEODORO CASINO
Affiant

___________________________
Affiant

SUBSCRIBED AND SWORN to before me this 1st day of July

2010. I hereby certify that I have personally examined the affiant and I
am satisfied that he voluntarily executed and understood this Complaint-
Affidavit.

_________________________
Administering Officer

12