READERS will recall that on July 7, 2005 (“Virtual Sword of Damocles”) I described Wei Jincheng ‘s article, “Information War: A New Form of People’s War” which appeared in the Liberation Army Daily of the People’s Republic of China in 1996. In June of this year, a computer hacking incident, which led to the shutdown of a Pentagon computer system serving the office of the US defense secretary, and which led, in turn, to the Pentagon shutting down its network for more than a week, was blamed on the People’s Liberation Army. American officials even suggested the PLA had managed to penetrate the networks of US defense companies and think tanks. Chinese officials heatedly denied it. Earlier this month, British officials denounced an attempt to hack government computer networks, including that of the Foreign Office. This followed at the heels of a hacking attempt last year that shut down part of the House of Commons computer system.
Around the same time that the hacking into British official computer systems was revealed, the Germans said that a similar effort had been targeted at their computer networks. German authorities said computers in the chancellery and the foreign, economic, and research ministries had even been infected with Chinese spyware software, and the officials bluntly said they believed the hackers were linked to China’s People’s Liberation Army.
More recently, the Dalai Lama has added his voice to those supporting the renewed round of pro-democracy protests in Myanmar, where the ruling junta has had to hold back on crushing protests because China doesn’t want a brutal crackdown to spoil the upcoming Beijing Olympics. So here we have a curious interplay of commerce, military strategy involving the Internet, the behavior of client states like Myanmar, and China’s commercial, military, and prestige interests all making for a messy series of intertwined issues.
Need I add that now, the Philippines has entered the picture?
Dresdner Kleinwort analyst Per Lindberg. in a research note issued at the beginning of the month, wrote that “The ability of Huawei and ZTE to participate in, let alone win, telecom infrastructure tenders in the Western hemisphere may have lessened considerably following last week’s shock report [on Germany].”. He added that “It could trigger a return to national security clearance when it comes to procurement of telecom networks... It could stifle China’s telecom export push, trigger urgent replacement of ‘unwanted’ equipment, and put an end to price dumping tactics.”
National security, as an issue, has been raised even by Philippine President Gloria Macapagal Arroyo’s allies in the Senate, which is currently investigating a proposed National Broadband Network which was awarded to China’s ZTE. For months, allegations that the contract was awarded under corrupt circumstances have been simmering, but then began to boil over when Jose de Venecia III, son of the Speaker of the House and a failed bidder for the project, started implicating the chairman of the Commission on Elections in influence-peddling and the over-pricing surrounding the deal.
The night before Joey de Venecia III was due to testify before the Senate, President Arroyo’s husband suddenly left for parts unknown. Up to that point, De Venecia had been threatening to reveal that a very important person was a participant in meetings where the Elections chairman, Benjamin Abalos, had been meeting with De Venecia and the Philippine secretary of transportation and communications, Leandro Mendoza. During his testimony, De Venecia revealed that the VIP was the president’s husband — and that he screamed at De Venecia to “back off.”
While the spokesmen of the president’s husband insisted his rushed departure had been scheduled some time back (an assertion belied by Mr. Arroyo’s doctor, who said he’d only secured his doctor’s permission to go several days prior to the departure), public opinion swiftly concluded that Arroyo’s leaving was connected to what De Venecia was going to reveal. Since then, public attention has shifted to Romulo Neri, formerly head of the government’s economic planning authority, who’d reportedly opposed the deal and approved it under presidential duress.
Today, Neri, after two postponements, will finally face the Senate. Manila has been swirling with rumors that Neri had personally informed President Arroyo that he (Neri) had been offered a bribe to approve the NBN-ZTE deal. The president is then supposed to have told Neri not to accept the bribe, but to approve the deal, anyway. Then two days later, Neri was unceremoniously demoted to the chairmanship of the commission for higher education. There are counter-allegations that Neri has long been identified with the camp of Speaker De Venecia, and was thus perhaps not inclined to approve a deal unfavorable to De Venecia’s son.
Among the many curious circumstances surrounding the deal is that even as her husband was still struggling for his life, in the wake of an operation for an aneurysm, President Arroyo flew to China where she personally witnessed the signing of the ZTE contract. Then, when the first criticisms of the deal surfaced (among other things, signing contracts during an election campaign period is prohibited by law), the government announced the contract had been stolen in China. Things have only gotten worse, since, with subsequent allegations of kickbacks, payoffs, the participation of an election official, Abalos, who has no business negotiating government deals, and now, allegations of political interventions by the president and her husband.
Last Friday, Neri suggested he’d tell all. The next day, Cabinet officials held a press conference announcing the president had suspended the deal, even though the Supreme Court had already done so weeks earlier, because of a lawsuit. The clumsy gambit only intensified public interest.
It now remains to be seen if Neri has been browbeaten into silence, or whether he will pursue his vow, as he supposedly said to the Cabinet, not to commit perjury. China’s ZTE faces another PR disaster.
