Fraport slams GMA-Pancho extort try before WB body
GLORIA GOV�T WANTED CHENGS OUT, PRESIDENTIAL CRONIES IN ON PROJECT
By Angie M. Rosales
Wednesday, 10 15, 2003
The complaint lodged by Fraport AG Frankfurt Airport Services Worldwide (Fraport) before the Word Bank arbitration body in Washington DC served to confirm the "tens of millions" extortion attempt made on the German investor by presidential aides, Gloria Tan-Climaco, presidential adviser on Strategic Projects; Presidential legal counsel Avelino "Nonong" Cruz; and his former partner and President Arroyo's personal lawyer, F. Arthur Pancho Villaraza.
Pressure was being brought to bear on Fraport by the presidential aides to kick out its Philippine partner in the Philipppine International Air Terminal Co. Inc. (Piatco) Terminal 3 project, the Cheng family, to ensure the takeover of the Cheng's shares by the presidential cronies of the project.
The German investor in the controversial multibillion-Piatco Ninoy Aquino International Airport Terminal 3 confirmed the alleged extortion try by personal lawyer and aides of President Arroyo, whom it also charged of committing "unlawful acts."
The earlier reports on the Villaraza-Climaco-Cruz $70-million extortion try is the subject of numerous libel charges leveled against Tribune publisher and editor-in-chief Ninez Cacho-Olivares who wrote a series of articles on allegations involving at least three Palace personalities namely former Presidential Adviser on Strategic projects Gloria Tan-Climaco, presidential legal counsel Avelino "Nonong" Cruz and Mrs. Arroyo's personal lawyer F. Arthur "Pancho" Villaraza.
The reports were based on a taped conversation of Fraport officials and lawyers where millions of dollars were mentioned as the deal being brokered by Villaraza and others to Fraport, to ensure that the airport project, under certain conditions, one of which was the ouster of the majority shareholder and Filipino partners, the Cheng family, would not be messed around with by the Arroyo presidency.
The complaint from the German investors confirms the extortion attempt made by Vilaraza and the presidential aides.
In a copy of a request of arbitration filed by Fraport Ag Frankfurt Airport Services Worldwide (Fraport) before the World Bank's International Center for Settlement of Investment Disputes (ICSID) last Sept. 13 against the government, it cited as among the issues in dispute the allegations against Villaraza.
In their request complaint, Fraport cited among the issues the "government's insistence on the involvement of a politically well-connected lawyer," referring to Villaraza, without whom the project would not push through.
Fraport charged Climaco in its complaint, saying she had "stated over and over again that the government wanted Fraport to engage the services of the politically well-connected Manila lawyer Arthur L. 'Pancho' Villaraza."
Fraport noted that Villaraza is a presidential confidant and top fundraiser while Climaco played a prominent role in the alleged ouster of the Chengs with the intention to replace the Chengs with presidential cronies and the government-favored interests coming into the project.
"When Fraport first met with Villaraza... he stated he could work for Fraport only 'in the background' through other law firms without known ties with him," the complaint narrated.
"He also stated this requirement for representing Fraport likely would include that payments be made offshore to a bank account not in his law firm's name. When Fraport reported to Climaco it was not willing to engage Villaraza on such terms, she continued to insist that Fraport work with Villaraza.
"Climaco also made expressly clear to Fraport that the successful commercial operation of Naia Terminal 3 would not be allowed to occur unless Fraport engaged Mr. Villaraza," they said.
"Climaco continued to insist that Villaraza be hired. For example, she stressed during discussions with Fraport in early 2003 that Villaraza should be engaged to facilitate the ouster of the Cheng family from the Naia Terminal 3 investment. Villaraza told Fraport that he would be able to achieve this result upon payment for unspecified purposes of several tens of millions of US dollars," they added.
This issue, they said, started sometime late 2001 when the government told Fraport to look for dirt on the Chengs to kick them out of the project.
"The government's message to Fraport was clear, repeated and unlawful: Fraport was to facilitate by any means the ouster of the Cheng family with the goal that other government-favored interests would come into the project. The alternative was that Piatco would be prevented from operating the terminal, with the result that Fraport's investment would be destroyed," they said.
"In numerous oral communications, Climaco and (Nonong) Cruz made clear to Fraport that the government would not permit the Naia Terminal 3 investment to be successful as long as the Cheng family played a central role. She strongly suggested that the Cheng family should be forced to agree to a substantial reduction of its role in Piatco or to be totally replaced by other business interests," they said.
Fraport pinned Climaco, saying she even told them she had reason to believe that the Cheng family supposedly had been involved in high-level wrongdoing with another then member of the Cabinet regarding the clearing of the site for the project as well as other improper conduct.
"She pressed Fraport to provide the Philippines information damaging to the Cheng family," they said.
"Climaco also unlawfully demanded that Fraport take steps to pressure the Cheng family..at another point, she told Fraport to immediately commence civil legal proceedings against Piatco in connection with certain loan repayment obligations," the complaint said.
In return, Fraport said it was given repeated assurance that the "government would show its gratitude if Fraport assisted against the Cheng family and they were be rewarded for such assistance."
Among these alleged rewards was protection against exposure of the country's anti-dummy laws resulting from the corporate structure of Piatco.
"At other points, Climaco threatened that Fraport might find itself facing anti-dummy law problems if the Cheng family was not ousted," the complaint stated.
"When the government failed to achieve the ouster of the Cheng family or agreement to changes in the concession agreement, the administration responded by denouncing the project and by taking the position in the Philippine Supreme Court proceedings that the concession agreement should be declared null and void.
"The nullification of the concession agreement and the refusal to compensate Fraport are, in effect, Fraport's ultimate punishment for failing to abide the government's unlawful demands," they said in their complaint before the ICSID.
This formed part of the privilege speech delivered by opposition Sen. Panfilo Lacson last Monday.
The complaint carried more stinging accusations of corruption and dirty political play that Fraport said was exercised only under the presidency of Gloria Arroyo, stressing that none of these "unlawful acts" was performed in the previous administration of President Joseph Estrada.
"The reasons that an essentially complete, state of the art (airport) terminal has sat empty and idle for more than eight months are wholly political," the complaint said, adding the "Philippines' unlawful acts regarding Fraport's NAIA Terminal 3 investment did not begin until Fraport had, in reliance upon the Concession Agreement and the Philippine Government's Treaty undertaking to provide fair treatment to German investors, made essentially all its investments."
Fraport, in its complaint stated that "officials of the Macapagal-Arroyo adminsitration began insisting that Fraport take steps to assist with the ouster of the Cheng family, so that (the Arroyo) government-favored interests could participate instead."
It also stated that "when the government failed to achieve the ouster of the Cheng family or agreement to changes in the concession Agreement, the administration responded by denouncing the project and by taking the position in the Philippine Supreme Court proceedings that (the contract) should be declared null and void. The nullification of the Concession Agreement and the refusal to compensate Fraport, are in effect, Fraport's ultmate punishment for failing to abide by the (Arroyo) government's unlawful demands."