From Malaya:
‘Mr. X’ wanted piece of the action
Final control by Smartmatic Corp., the foreign partner in the election computerization project of the Commission on Elections, of how the contracted P7.2 billion cost of the project will be spent is the reason Total Information Management, the Filipino partner, decided to dump the partnership.
TIM rejected the proposal of Smartmatic, saying this was contrary to the nature of a joint venture and “would expose it to possible violations of Philippine laws.”
TIM’s fear of exposure to “possible violation of Philippine laws,” sources familiar with the deal said, was prompted by the entry of a person with the highest political connections into the deal as a “carried” partner.”
A “carried partner,” the sources said, means one who wants to get a piece of the action without contributing a single centavo.
The fear of TIM president Jose Mari Antunez that he and his company might get entangled with the law was triggered when an associate saw the “powerful person” huddled with a Smartmatic principal and a member of a prominent business family from Cebu at the coffee shop of a Makati hotel last week, a source said.
Days later, Antunez got a call from the Cebu businessman warning that TIM should cooperate or else “offend very powerful people,” the source said.
Rep. Teodoro “Teddy Boy” Locsin Jr. (PDP-Laban), however, had a different take on the “irreconcilable differences” that sank the Smartmatic-TIM partnership.
He said Antunez demanded P500 million when he met with Smartmatic lawyers at a Makati hotel a few days ago.
“This caused Smartmatic to pull out,” he said. “The demand was ridiculous and the lawyers thought it was tantamount to extortion.”
Locsin, chair of the House committee on suffrage and electoral reforms, said Smartmatic had repeatedly bent over backwards to accommodate TIM as the 60 percent partner.
Locsin said TIM and Smartmatic could not agree on the exercise of “unilateral power” on when and how money would be spent, but did not elaborate.
An exchange of letters between Antunez and Armando Yanes, the highest Filipino official as chief financial officer of the Barbados-registered Smartmatic, provides a background for the rift.
In a letter dated June 25, Antunez said: “We are likewise ready, willing and able to form the JVC (joint venture corporation) with you under the express terms of our Joint Venture Agreement of April 23, 2009 and the discussion we had at our meeting last night. In this connection, we cannot agree that the Chairman be given authority to sign checks singly in case of issues or disagreements. This is contrary to the nature of a joint venture and would expose us to possible liabilities for violations of existing Philippine laws. We hope we have made our position clear on this matter.”
On the following day, Yanes wrote Antunez back, threatening to sue TIM for its alleged failure to comply with contractual obligations under the April 23 JVA.
In the letter, Yanes did not mention Antunez’ allegation that Smartmatic wanted “unilateral power” to spend. There was also no reference to alleged demand from Antunez for money.
‘Not giving up’
Despite the breakup of the TIM-Smartmatic joint venture, the Commission on Elections is not about to give up on automating the 2010 elections.
Commissioner Rene Sarmiento said the Comelec decided to adopt a pro-active stance to salvage the automated election by inviting representatives of Smartmatic and TIM to a dialogue yesterday for the two parties to thresh out their differences.
“They (Smartmatic and TIM) are given until July 3… So why not between today and July 3, make the most of it?” he said.
TIM legal counsel Boy de Borja confirmed their decision to pull out stemmed from differences with Smartmatic over decision-making.
He said the move was not a total surprise.
De Borja said they will not allow themselves to be “dominated” by their foreign partner.
Locsin said the Comelec should not be blamed for the fiasco since it fought for automation.
Locsin lambasted senators questioning the automation deal, particularly Francis Escudero who he said tried to block the deal by launching an investigation. He said this makes it appear that the senator “wants cheating to continue in 2010.”
“He’s a hypocrite,” Locsin said. “Please don’t add insult to injury by making it appear that you are unhappy that we’re going back to manual counting.”
Also a culprit
Justice Secretary Agnes Devanadera said Smartmatic will also be sued even if it was TIM that backed out of the contract.
“It’s got to be the entire consortium, because I’m sure the award (of the project) was given to the entire consortium, not just to the Filipino company. The backing out of the Filipino partner cannot be made as an excuse by the consortium,” she told reporters.
Devanadera declined comment on the suggestion of Comelec chairman Jose Melo that the poll body undertake the automation project with Smartmatic, similar to the Department of Foreign Affairs’ agreement with a foreign-owned company in the manufacture of machine-readable passports.
Sen. Richard Gordon will convene the Blue Ribbon Committee to investigate the withdrawal of TIM either Friday or Monday.
Gordon said the committee can hold a joint hearing with Escudero’s committee on constitutional amendments, which initiated an investigation into the awarding of the poll project to Smartmatic-TIM. – Gerard Naval, Wendell Vigilia, Jocelyn Montemayor, Evangeline de Vera and JP Lopez
Related Inquirer stories:
TM- Smartmatic has too much power
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