TRANSCRIPT OF SENATE MEDIA INTERVIEW WITH SEN. MIRIAM DEFENSOR SANTIAGO

On the conflict of interest in the Transco sale

The crux here is that the president of the government agency which is in charge of selling the National Transmission Corporation (Transco), a billion-peso company, is suffering from a prohibited conflict of interest, in the sense that he is an officer of several corporations owned by one of the part owners of a bidder for the government agency. But we must put this charge in context. That is the reason why I, as chair of the Senate panel, and Rep. Juan Miguel Arroyo, as chair of the House panel, of the Joint Congressional Power Commission, which has the power of
control and supervision over the sale of these electric power assets of the government, are first
asking these government officials to explain if they have violated the law. There is a violation of law when the person who is supposed to sign or approve the contract is himself, or through a board, group, or a panel of the government, might have a financial, material, or pecuniary interest [in the contract]. In this case, the allegation is that the president of PSALM, a government agency, was a former member of the board of directors of several companies owned by Mr. Enrique Razon, who is part owner of a company which is one of the qualified bidders. So there is a defense on the part of Mr. Ibazeta if he can show that pursuant to law he divested himself of any interest in the Razon corporations, then there is no violation of law. The fact that he used to be an officer of any of those corporations does not make it illegal if after his appointment he resigned from the position or he sold his shares of stock within the period provided by law, 30 days for resignation and 60 days for divestment of interest.

Furthermore, we have to put it into context that the complaint is being filed by disgruntled bidders who did not make it in the cut. When there’s a public bidding, there is a prequalification process. You weed out those who are qualified and those who are not. And these two objectors, who belong to the failed bidders, are not exactly strangers to the power game in Manila. One is the brother of a congressman, Mr. Zamora. The other one, Mr. Ocampo, used to be a public official. Although there is no presumption of innocence in this case because the law expressly provides that there is a presumption of prohibited interest, the person is given a chance to prove that there is no such conflict because he either resigned or he divested himself. We have to wait for his reply in the name of fairness and justice before we make any serious charges. Senators Pimentel and Madrigal are expressing concern over the alleged conflict of interest. This is what has prompted the JCPC, of which I am co-chair, to require the written explanation from Mr. Ibazeta.

On the schedule of the JCPC hearing on the Transco sale

Now we are entering budget week. Under Senate rules, we cannot hold committee or any other hearing when Session is in order. Since we have sessions morning and afternoon, we are prohibited from holding public hearings this week. The budget hearings may even be extended next week. I have to go from December 1 to 7 to Europe as part of the delegation for the President’s state visit there. The earliest we can set the hearing [on the Transco sale] is on December 13. We shall then be anticipating the presence of two public officials who are now in the hot seat. The first one is Finance Secretary Teves, as chair of the privatization council which approved the sale of the Energy Development Corporation without notice to the JCPC. The Epira law provides that to privatize our government corporation in this particular case, we should sell the generating plants packaged to the steam sales agreement. That this methodology prescribed by the law. Now we hear that the privatization council has approved of the sale by a means other than that provided by law. We had asked Secretary Teves to make an urgent appearance and give an explanation. The second one is Mr. Ibazeta because of the charge of conflict of interest. There are two hot officials who will have to come to the Senate on December 13.

The bidding is on December 12. It will not necessarily be the declared a failure just because there might be conflict of interest on the part of the president of PSALM. Assuming for the sake of argument that that is the case, the bidding will not necessarily result to a failed bid. Remember that we in the JCPC are very anxious that this bidding procedure should now be concluded because in the past we spent a lot of time going over three bidding processes, all of which were declared failures, mostly for the reason that there was only one successful pre-qualified bidder. Pursuant to the philosophy of Epira, which is to sell all assets concerning the power industry to private owners, we want to sell at a good market price the Transco. But we want to make sure that the sale is pursuant to the Epira.

On Sen. Mar Roxas’ election as president of the Liberal Party

It is no secret that Sen. Roxas was elected president of the Liberal Party today in anticipation of his presidential candidacy as official standard-bearer of LP for 2010. By Wednesday, his major rival in the presidency as of the moment, Senate President Manny Villar, is also holding his own show of power, to mark the 100th anniversary of the Nacionalista Party, which is the oldest political party in our country, also in anticipation of his own presidential candidacy. For a while there it looks like a Villar-Roxas race. But now, former President Estrada tour within Metro Manila, where he is reportedly getting crowds of the masses, has prompted media titillation with his public entertainment of the possibility that he might run for president. Then it might become a three-cornered fight. In that case, all bets will be off. It will be three multibillionaires fighting each other and all the rest will have the capacity of ants in the presence of three elephants.

On Sen. Loren Legarda and Vice President Noli de Castro running for President in 2010

They are ants. (Laughter.) When the elephants sneeze, the ants will catch pneumonia. Because it is now a given that you cannot run for president unless you have at least P1 billion, and your chances increase in multiples of tens of billions. The surveys will not count for very much apart from the usual cynicism among the public about the accuracy of those surveys.

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