Thursday, July 2, 2009

Smartmatic-TIM scandal and The Arroyo Connection

True---the Antunez clan is not close with the family of the Arroyos. Yet, what it failed to disclose is, their closeness with the Aboitizes, their business associate and close family friends. But, does this really matter? Yes, because that'll be the key in unlocking the links of the First family into this deal.

We all know how close the Aboitizes are with First Gentleman Mike Arroyo and of Mr. Winston Garcia. These personalities have histories of business deals, one of which is the billion-peso GSIS card contract. GSIS, a government corporation, hired TIM for its GSIS cards. TIM was the technical supplier, while UnionBank, the bank owned by the Aboitiz clan, served as the banking services provider. They all have close personal ties.

Now, is this wrong? No, definitely, it is not. Legally speaking, there's nothing wrong with this except that its morally wrong to monopolize all government contracts under the same clans and personalities belonging to just one group, and a group with strong and very close personal ties with the First Family. This is simply a lopsided business environment.

More than this, why involve close associates of the First Family with a very sensitive issue such as poll automation? Everybody expects the poll automation to provide us with a clean rendering of electoral results come 2010.

Of course, there's no law prohibiting close business associates of the First Gentleman to make profits out of this. But, this is simply too much that even the very mechanisms that allow our voices to be heard are being manipulated, controlled and monopolized by these personalities close to the powers-that-be.

Again, going back to the initial theme of this entry---what went wrong? Where is the First Gentleman in all of these? Who served as his de-facto representatives in the deal?

After getting so much flak before, surely, the First Golfer's Group would want to cover its tracks. Surely, it needs some layers. And one of the layer is simply Smartmatic-Sahi.

If you research on Smartmatic International, it's a multinational company specializing in the design and end-to-end deployment of complex purpose-specific technology solutions. It was involved in the Venezuelan elections and some states in the US. Sure, it has technical muscle.

Now, it says that its contact in the Philippines is Global Contact Philippines. However, for the 2010 elections, Smartmatic International teamed up with Smartmatic Sahi. In August 2008, Smartmatic-Sahi managed the ARMM automated elections. Antonio Murgica, Smartmatic International's Chief Executive Officer even visited the Philippines for this.

As you already know, Smartmatic Sahi is controlled by Cezar Quiambao, Jorge Yulo and the Villas. Sixty percent of this company is controlled by Stratdec, a real and personal property firm. Stratdec has been involved in numerous government contracts, one of which is the LTO computerization. Quiambao, as earlier pointed out, is part of the ABC group of Alderito Yujuico and Bonifacio Sambilla. Now, what is the connection of the ABC group with the First Golfer Group?

Quiambao is not just a golfing buddy of the First Gentleman Mike Arroyo at Wack-Wack Golf and Country Club. He is also the biggest contractor in the Philippines, whom Mrs. Arroyo credited of having "realized the dreams of government to construct roads." Nothing wrong with just being a golf buddy of the First Gentleman, since, FG is a private citizen, no law bars him from fraternalizing with a big-time contractor involved in numerous government deals. Yet, you would agree with me that this is immoral.

So, if you look at the Smartmatic-TIM consortium, you'll find that the Arroyos are involved in both groups--through the Aboitiz clan with TIM and Smartmatic-Sahi with Quiambao. Now, what was the deal breaker if these groups pala share the same connections?

To understand this, let me go back to that meeting when a lawyer of TIM saw a powerful man conferring with an Aboitiz and principals of Smartmatic International. If you read my previous entry, sources identified the man as GSIS President Winston Garcia.

Now, you ask, there's nothing wrong with Garcia being seen with the Aboitizes since they're both from Cebu and their families are very close to each other. And again, there's nothing wrong with Garcia even talking with the principals of Smartmatic since, for all intents and purposes, he's a Filipino and his PR handlers would just simply say that he's quite interested in helping these two companies resolve their differences. Nothing wrong. And I agree.

Yet, the timing is really off. For months, critics of the administration have been accusing Mrs. Arroyo of trying to undermine the electoral process and here comes a very close Palace associate, the head of a government agency, again involved in what is turning out to be a very serious scandal.

What is Garcia doing there, playing counsel for the Aboitizes? Are the Aboitizes part of the consortium? It is not. And what is the meeting for? Reports say the Aboitizes were involved because its freight forwarding company 2GO will be the ones who'll handle the 82,000 counting machines. True. They're suppliers. Are the Aboitizes just concerned with how they'll be paid, since, in the joint venture agreement between Smartmatic and TIM, it's clear that all checks are to go thru TIM. Are you saying that the Aboitizes have an issue with Jose Mari Antunez inspite of being a relative and all?

It's true that the Antunez family and the Aboitizes have close ties. In fact, Julio Antunez works as one of the Aboitiz officials. And who'll bankroll the initial funds for the automation? Is it not Unionbank, a bank which the Aboitizes are involved?

Simply put, Garcia, as some high-profiled businessmen privy to this say, wants to get a piece of the action, although I am wont to believe this. Why? Because that would be too obvious.

Was Garcia there as a rep of the FG group and that meeting, which involved the Aboitizes, was a last ditch effort to persuade TIM to "toe the official line"? Why the meeting to assure? Read on...

The most critical thing of all of these is who financed the performance security bond of 350 million for the project? Is it not TIM through Unionbank? Is it not thru the combined monies of Antunez, Aboitiz and the Quiambaos? And of course, E. Villareal, who's participation in this scandal remains top secret.

So, TIM has the money, the legitimate papers and the technical wherewithal for this project. And the chance to rake in billions from this deal, why withdraw from it?

Answer---because TIM does not want to get entangled later on with the shady characters lurking and trying to get a fast buck in this scandalous marriage of convenience.

Jose Mari Antunez may have been forced to withdraw their involvement shortly after the Senate hearings. He may have thought that its not worth the trouble. If the Senate this early is trying to poke its nose to this uncanny marriage of convenience, better to drop out early rather than face the wrath of the people should anything bad happens in the elections.

Antunez, some sources say, was quite afraid when the Senate probe exposed that even Smartmatic International has dubious corporate papers. Jose Mari, says a close staff, decided unilaterally on behalf of TIM to break the deal. Besides, it was only during the Senate hearings that Antunez learned that Smartmatic International pala was registered in Barbados, a known haven of "dubious companies."

More than this, what made this worst is the suggestion made by Smartmatic to fully control the project, especially the technical work. Atty. Boy de Borja of TIM expressed this much in an interview. If trouble breaks out during the elections, TIM would be dragged into a very costly and very serious battle which, Antunez is really not ready and willing to be engaged in.

That said, it would only be a miracle if this consortium would still push thru. Why? Because the public, especially the Senate, has started its probe and that would simply drag certain powerful people again in the project.

So, the deal breaker was not money---it was the fear of these men of getting entangled with a very public controversy. TIM has so much to lose if people drag it into a messy scandal with its Aboitiz links.