Estrada pushed officials to help cronies, ex-finance chief says

Estrada pushed officials to help cronies, ex-finance chief says

MANILA (AP): A former Cabinet member told President Joseph Estrada's impeachment trial on Friday that Estrada pressured officials to help his business cronies and to grant a questionable loan to the gaming company at the heart of a stock scandal.

Former finance secretary Edgardo Espiritu testified that he may have angered Estrada when he questioned a proposal by business tycoon Lucio Tan -- one of Estrada's election campaign financiers -- to merge the former partly state-owned Philippine National Bank with Tan's Allied Bank.

Estrada faces charges of bribery, corruption, betrayal of public trust and violation of the constitution in the impeachment court.

Estrada's impeachment trial -- the first in the Philippines -- began Dec. 7. A conviction on any charge by two-thirds of the 22- member Senate would force him from office.

Espiritu, a former PNB president, said that in November 1999 he argued with Tan over the manner of privatizing the PNB. "I was angry and we raised our voices because the commitment I made to the president is (that) I will help Lucio Tan, but (the PNB privatization) must go through public auction ... but (Tan) wanted a merger," Espiritu said.

"I was called by the president and he told me, 'Ed, whatever Lucio wants, give it to him,"' he said. "Because of that I made up my mind to resign."

Two months later, Espiritu resigned over allegations of corruption in the administration.

Espiritu also said that Estrada influenced the PNB directors' decision to lend 600 million peso ($12 million) in July 1999 to BW Resources Corp. The company later became the center of a stock price-rigging scandal.

The loan was given despite failure by BW, a gaming concern whose controlling shareholder was Dante Tan, another Estrada crony, to comply with the bank's collateral requirements, Espiritu said. He said the company was running at a loss at the time.

In testimony on Thursday, Espiritu said Estrada secretly owned BW stocks and profited hugely from a dramatic surge in its share price.

Espiritu said he found out Estrada owned BW shares when he talked to Estrada alone in the president's office in mid-1999. He said he was surprised at Estrada's reaction when they discussed the rapid gain of BW shares and later when share prices collapsed.

"In the excitement of the president in regard to the upsurge in BW shares, he told me, 'I am now making a lot of money in BW shares,"' Espiritu said.

Also in the session on Friday, Senator Renato Cayetano held up a bullet to the court, saying he received it along with a death threat in his office.

"I really do not mind receiving death threats," he said. "I only hope that they do not involve my family because they did nothing wrong."

He said the letter accompanying the bullet said he has been tried and "sentenced to death." The note writer claimed to represent a breakaway faction of the communist rebel New People's Army.

Several other senators and the court's presiding officer, Chief Justice Hilario Davide, have also told the court they've received death threats since the trial began Dec. 7.

Estrada's role in the BW scandal has dominated the trial this week, with two stock exchange regulators claiming the president tried to get Dante Tan cleared in their investigations into price-fixing.

In continuing his testimony on Friday, Espiritu said that he also prevented Estrada from approving at least 50 other irregular business transactions but did not specify them.

Espiritu was among the first business executives to publicly support the candidacy of Estrada, a former actor. He was also among the first Cabinet members appointed after Estrada was elected in the May 1998 election on a platform of helping the poor.

"When I joined the team of the president, I believed he was sincere in his objective to help the poor," said Espiritu. "I feel that as months went on he failed."

Allegations of corruption first surfaced in October. Ilocos Sur provincial Gov. Luis Singson, a former drinking buddy of Estrada and a reputed illegal gambling boss, accused him of pocketing more than 400 million pesos in bribes from illegal gambling lords and 130 million pesos in tobacco tax kickbacks.