Saturday, June 14, 2008

Wayback Machine: Nixing Pancho's $20-M demand led to GMA, SC Piatco voiding

Nixing Pancho's $20-M demand led to GMA, SC Piatco voiding


By Ninez Cacho-Olivares
Editor in-Chief

Monday, 06 09, 2003

A second tape-recorded conversation between officials and lawyers of Frankfurt AG, the German partner with a 30-percent stake in the controversial Philippine International Air Terminals Co. Inc. contract, obtained by the Tribune recently, disclosed that the nullification of the Piatco contract, announced by President Arroyo last Nov. 30, 2002, during her Rizal Day speech, which was upheld by the Supreme Court (SC), following its decision to declare the contract null and void, stemmed from Fraport's �reluctance� to accede to Mrs. Arroyo's personal lawyer, F. Arthur �Pancho� Villaraza's alleged demand of $20 million for his �in the background� legal and governmental services, to be paid offshore to an entity in Hong Kong.

It was also disclosed in the second taped conversation that Fraport officials, including their chairman, Robert Koch, were also dealing directly with Executive Secretary Alberto Romulo, presidential legal counsel and former law partner of Villaraza, Avelino �Nonong� Cruz and Presidential Adviser for Strategic Projects Gloria Tan-Climaco, strongly intimating as well that Mrs. Arroyo was aware of all these nego-tiations between Fra-port representatives and Malaca�ang officials.

Several letters from Koch, the prime minister of Hesse and Fraport chairman of the Supervisory Board, to President Arroyo, confirmed, in a guarded manner, the agreements earlier reached � until the collapse of these agreements due, from the conversation, to Fraport's refusal to give in to due, from the conversation, to Fraport's refusal to give in to Villaraza's demand of $20 million in offshore payment.

Fraport lawyer Dietrich Stiller was recorded as saying, �There are letters from our Prime Minister who is the chairman of the Supervisory Board (Koch) where he several times confirmed in a very cloudy way, 'Thank you very much. I am happy to announce that we now have an agreement. And there are the announcements that we are, more or less, happy with the nullification of the concession and we have to change this direction first before we have any chance to sue anybody in the government, because the government will tell us, we did exactly what you wanted.'�

The Palace offer at the time, was for Fraport to sell out its shares to the Arroyo administration, to effect a government takeover of the Ninoy Aquino International Airport Terminal 3 project, but at the same time, keep the door open to Fraport to operate and manage the terminal, with a side contract.

From the taped conversation, it was made evident that the �official� government representatives made up of the trio in the Arroyo administration and the �unofficial� Arroyo representative, Villaraza, known as Mrs. Arrroyo's �troubleshooter� and �fixer,� that the Malaca�ang representatives were then questioning the contract, �not because somebody really had a problem with the (Piatco) contract or had a problem with the clauses in there� but that it was a good opportunity for the Arroyo government officials to �raise� money and �screw Fraport.�

Fraport representative Peter Henkel was quoted in the tape as saying Fraport �was really convinced that they (Malaca�ang officials) were looking for some possibilities to raise money. They thought it was a good opportunity to screw Fraport and they were looking into the contract under which circumstances they could do it.�

The conversation also touched on Climaco �discovering� 28 allegedly �onerous provisions� in the Piatco contract, then adding 40 more �in order to put pressure on Piatco and on Fraport.�

The Palace panel, which was supposedly ordered by Mrs. Arroyo to review the Piatco contract, based its recommendations solely on the papers submitted by Climaco.

The Senate blue ribbon committee, headed by administration Sen. Joker Arroyo, was said to have relied solely on Climaco's �review of the Piatco contract.�

The SC, in its ruling declaring the Piatco contract null and void, also followed the arguments raised by Climaco, lawyers pointed out.

Some $50-$60 million, apart from the Villaraza demand of $20 million paid offshore to an unnamed entity in Hong Kong, was reportedly offered by presidential cronies to pay off the majority Piatco shareholders, Vic Cheng Yong and his family members, $20 million for his shares, with $40 million going to certain Malaca�ang officials, one of whom was distinctly identified as the presidential legal adviser Cruz, which money would be used to buy off �influential� and �powerful� government officials, to fix up the government, legal and judicial problems as this would effect the �magical disappearance� of the Fraport-Piatco problems.

In the second tape, Henkel went on to say there was already an agreement of sorts with Climaco, Romulo and Cruz that the Arroyo government would compensate Fraport in the event of the Piatco contract being declared null and void.

�I wanted a reconfirmation letter (from the Palace) that we would receive the attendant liabilities or any other compensation. Then when we asked them (Palace officials) about this letter, she (Tan-Climaco) always said, �Okay, we didn't give them (letters promised) because you did not deliver, and 'You did not deliver' refers to Villaraza,� Henkel was quoted in the tape as saying.

A Fraport lawyer, in the same tape cut, is heard saying: �Our response was, she asked us to take this, to hire this thief, to pay $20 million on our contract and when we told her (Tan-Climaco), 'The man's a thief and we won't do it,' she came back and told us again to do it. And then later, when we needed things to be done in order to proceed with the commercial operation of this terminal, she said, 'You didn't deliver! We're not gonna do it 'cause you didn't deliver!'�

Climaco had insisted too many times on Fraport's hiring of Villaraza for $20 million under Mrs. Arroyo's personal lawyers' conditions and was alleged to have threatened the Fraport representatives with a lot of problems if they did not do what she, acting on the authority of Mrs. Arroyo, as her appointment papers as presidential adviser claimed, demanded of Fraport.


GMA "aide" asked Fraport to invent evidence


By Ninez Cacho-Olivares
Editor in-Chief

Tuesday, 06 10, 2003

Presidential aide Gloria Tan-Climaco and President Arroyo's personal lawyer, F. Arthur "Pancho" Villaraza, used threat and intimidation on Frankfurt AG (Fraport) officials, to force the German investors to pay them off and to provide them with the opening to get the "right partners" in to replace the Philippine International Air Terminals Co. Inc. (Piatco) majority stockholder Vic Cheng Yong and son Jeffrey, where the presidential aide could again cash in through more commissions for brokering the deal.

This was disclosed in the second tape of the Fraport conversations obtained recently by the Tribune which also suggested that Mrs. Arroyo was in on the $20 million offshore payment deal.

Fraport officials, the tape disclosed, were threatened by the presidential aides on being charged with violations of the Anti-Dummy Law, claiming this has been breached.

At the same time, Climaco wanted Fraport to manufacture evidence against the Chengs, and against then Transportation Secretary Pantaleon Alvarez, in the form of testimony from Fraport officials on "corrupt" practices that went on between Piatco and Alvarez.

Alvarez earlier stood pat on his claims that the Piatco contract was aboveboard.

Insiders told the Tribune that this stand of Alvarez was a barrier to the plans of Climaco and Villaraza in their scheme to extort money from Fraport through threats and intimidation, and the continued warning of a government takeover of the Terminal 3 project.

The conversation also suggested heavily that Climaco was into corrupt practices while screaming �corruption� publicly.

In a meeting, Villaraza's �opening statement� to Fraport officials was that the Arroyo lawyer never saw such an agreement as �scandalous as the Piatco contract� and that in his view, the Arroyo administration �could take over the project by declaring that Fraport and the other shareholders are in breach of the Anti-Dummy Law.�

Dr. Dietrich Stiller, Fraport lawyer, was quoted as saying: �He (Villaraza) said one possible window for government to take over was to declare the Anti-Dummy Law had been breached. We told him, 'Mr. Villaraza, with all due respect, we have received legal opinions that the structure is in order. I know these (corporate) layered structures from other investments and your good office, for example, represented Deutsche Telekom and I worked day and night with your partner Sylvette Tankiang Ferrer on the Telekon deal' and saying it had a similar structure.�

Stiller went on to say that Villaraza had told him in no uncertain terms that the Piatco �project will never be politically solved. It will always be politically in deep s�t. It will always be challenged but that the damage could be controlled, and the risks are reduced,� adding Villaraza had told him (Stiller) that with the risks controlled, this will �enable Fraport to somehow get through just to survive.�

A Fraport lawyer is heard on tape asking Stiller if it was at this meeting �where he (Villaraza) said 'You have to pay me offshore.'�

Stiller replies: �Yeah.�

Another lawyer says: �There was only one meeting. And he said in this meeting, damage control is the only option we have.�

Still another Fraport lawyer says: �And damage control consists of paying (Villaraza) money,� with yet another lawyer saying, �What he (Villaraza) said basically was 'You pay me offshore and I will work in the background and that's how we'll control the damage.'�

Stiller replies, �Yeah.�

There is also a suggestion that President Arroyo was in on the offshore payment deal with someone in alleging that �the President is a crook.�

Villaraza claimed, in his letter to the Tribune demanding a retraction and apology, that he had never discussed the Piatco project with Stiller and that there was only one meeting, where he claimed that he had to reject Fraport as a client, as he would not want to take on a case that was adverse to the Arroyo government.

The second tape also disclosed that Tan-Climaco wanted the Chengs out because she had �potential replacements� for them.

Stiller is heard to say: �She (Climaco) had certain ideas to bring in a corporation called the NDC (National Development Corporation...which seems to be a government agency.�

It was said on tape that what Climaco essentially wanted was to have the government take the stake in this terminal with Stiller affirming this, saying, �Right. For a certain period until it could be sold out to someone else. Because the problem is, if she had this cascade (corporate layering) and one shareholder, domestic shareholder dropped out, they need another domestic one to come in. They cannot be taken over by a foreigner.�

Climaco, from the taped conversation, really pushed Fraport to the limits, with Climaco always saying, �Well, if all the other issues are solved (evidence against the Chengs and Alvarez, as well as the $20 million payment offshore to an entity in Hong Kong) then, we probably can help you. We can help you here, or we can help you there, but we are not in a position to put this in writing.�

She had presented before Malaca�ang and the Senate blue ribbon committee meeting her review of the Piatco contract, which was the sole basis for Mrs. Arroyo, the Senate and the SC to nullify the contract. The side of Fraport and the Piatco partners was never taken into consideration.

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