VIRGIL KIT AUGUSTIN H.

ABANILLA LAW 4
EVIDENCE

G.R. No. 180643

March 25, 2008

EN BANC DECISION
ROMULO L. NERI, petitioner,
vs.
SENATE COMMITTEE ON ACCOUNTABILITY OF PUBLIC OFFICERS AND
INVESTIGATIONS,
SENATE COMMITTEE ON TRADE AND COMMERCE, AND
SENATE COMMITTEE ON NATIONAL DEFENSE AND SECURITY, respondents.

FACTS:

 At bar is a petition for certiorari under Rule 65 of the Rules of Court – charging
the respondents - with grave abuse of discretion amounting to lack or excess of
jurisdiction assailing the show cause Letter and contempt Order concurrently
issued by respondent Senate Committees on Accountability of Public Officers
and Investigations, Trade and Commerce, and National Defense and Security
against petitioner Romulo L. Neri, former Director General of the National
Economic and Development Authority (NEDA).

 The case is predicated on the infamous NBN – ZTE Project dated way back on
April, 2007, where the Department of Transportation and Communication
(DOTC) entered into a contract with Zhong Xing Telecommunications Equipment
(ZTE) for the supply of equipment and services for the National Broadband
Network (NBN) Project in the amount of approximately P16 Billion Pesos. The
Project was to be financed by the People's Republic of China.

 In connection with this NBN Project, various Resolutions were introduced in the
Senate, some are the following:

1. P.S. Res. No. 127, entitled RESOLUTION DIRECTING THE BLUE RIBBON
COMMITTEE AND THE COMMITTEE ON TRADE AND INDUSTRY TO
INVESTIGATE, IN AID OF LEGISLATION, THE CIRCUMSTANCES
LEADING TO THE APPROVAL OF THE BROADBAND CONTRACT WITH
ZTE AND THE ROLE PLAYED BY THE OFFICIALS CONCERNED IN
GETTING IT CONSUMMATED AND TO MAKE RECOMMENDATIONS TO
HALE TO THE COURTS OF LAW THE PERSONS RESPONSIBLE FOR
ANY ANOMALY IN CONNECTION THEREWITH AND TO PLUG THE
LOOPHOLES, IF ANY IN THE BOT LAW AND OTHER PERTINENT
LEGISLATIONS.

2. P.S. Res. No. 144, entitled Á RESOLUTION URGING PRESIDENT GLORIA

MACAPAGAL ARROYO TO DIRECT THE CANCELLATION OF THE ZTE
CONTRACT.

Page 1 of 8
VIRGIL KIT AUGUSTIN H. ABANILLA LAW 4
EVIDENCE

3. Among others are - P.S. Res. No. 129, P.S. Res. No. 136, 1. Senate Bill No.
1793.

 Respondent Committees initiated the investigation by sending invitations to

certain personalities and cabinet officials involved in the NBN Project. And,
petitioner was among those invited.

 On September 26, 2007, petitioner testified before respondent Committees for

eleven (11) hours. He disclosed that then Commission on Elections
(COMELEC) Chairman Benjamin Abalos offered him P200 Million in exchange
for his approval of the NBN Project. He further narrated that he informed
President Arroyo about the bribery attempt and that she instructed him not
to accept the bribe. However, when probed further on what they discussed
about the NBN Project, petitioner refused to answer, invoking "executive
privilege". In particular, he refused to answer the questions on

(a) whether or not President Arroyo followed up the NBN Project,

(b) whether or not she directed him to prioritize it, and
(c) whether or not she directed him to approve.

 Persistent, respondent Committees issued a Subpoena Ad Testificandum to

petitioner, requiring him to appear and testify on November 20, 2007.

 However, in the Letter dated November 15, 2007, Executive Secretary Eduardo
R. Ermita requested respondent Committees to dispense with petitioner's
testimony on the ground of executive privilege. The letter seeks, when petitioner
asked to elaborate further on his conversation with the President, for time to
consult with his superiors in line with the ruling of the Supreme Court in Senate v.
Ermita, 488 SCRA 1 (2006) on the possible invocation of executive privilege on
the question earlier mentioned.

 Came November 20, 2007, petitioner did not appear before respondent
Committees. Thus, on November 22, 2007, the latter issued the show cause
Letter requiring him to explain why he should not be cited in contempt.

 Few days after, petitioner replied to respondent Committees, manifesting that it

was not his intention to ignore the Senate hearing and that he thought the only
remaining questions were those he claimed to be covered by executive privilege.

 Additionally, petitioner expressed that “Be that as it may, should there be new
matters that were not yet taken up during the 26 September 2007 hearing, may I
be furnished in advance as to what else I need to clarify, so that as a resource
person, I may adequately prepare myself.”

Page 2 of 8
VIRGIL KIT AUGUSTIN H. ABANILLA LAW 4
EVIDENCE

 Consequently, petitioner submitted a letter prepared by his counsel, Atty. Antonio

R. Bautista, stating, among others that:
1) petitioner’s non-appearance was upon the order of the President; and

2) his conversation with President Arroyo dealt with delicate and sensitive
national security and diplomatic matters relating to the impact of the bribery
scandal involving high government officials and the possible loss of confidence of
foreign investors and lenders in the Philippines.

 In the interim, on December, 2007, petitioner filed with this Court the present
petition for certiorari assailing the show cause Letter.

 Respondent Committees found petitioner's explanations unsatisfactory. Without

responding to his request for advance notice of the matters that he should still
clarify, they issued the Order dated January, 2008, citing him in contempt of
respondent Committees and ordering his arrest and detention at the Office of the
Senate until such time that he would appear and give his testimony.

 On the same date, petitioner moved for the reconsideration of the above Order.

 In view of respondent Committees' issuance of the contempt Order, petitioner

filed on February 1, 2008 a Supplemental Petition for Certiorari (With Urgent
Application for TRO/Preliminary Injunction), seeking to restrain the
implementation of the said contempt Order.

 Petitioner contends that respondent Committees' show cause Letter and

contempt Order were issued with grave abuse of discretion amounting to lack or
excess of jurisdiction. He stresses that his conversations with President Arroyo
are

"candid discussions meant to explore options in making policy decisions."

According to him, these discussions "dwelt on the impact of the bribery
scandal involving high government officials on the country's diplomatic
relations and economic and military affairs and the possible loss of
confidence of foreign investors and lenders in the Philippines."
He also emphasizes that his claim of executive privilege is upon the order of the
President and within the parameters laid down in Senate v. Ermita.

 Respondent Committees assert the contrary. They argue that

1. petitioner's testimony is material and pertinent in the investigation

conducted in aid of legislation; and

2. there is no valid justification for petitioner to claim executive privilege;

Page 3 of 8
VIRGIL KIT AUGUSTIN H. ABANILLA LAW 4
EVIDENCE

Issues:

After the oral arguments and the grant of the Office of the Solicitor’s General
motion for leave to intervene, the following are the core issues or controversies of
this case:

First, are the communications elicited by the subject three (3) questions covered
by executive privilege?

Second, what is the proper procedure to be followed in invoking executive

privilege?

Third, did respondent Committees commit grave abuse of discretion in issuing

the contempt Order?

Ruling:

 On the First Issue:

Are the communications elicited by the subject three (3) questions covered by
executive privilege?

The rich jurisprudence on this issue (Nixon, In Re Sealed Case and Judicial
Watch) somehow provides the elements of presidential communications
privilege, to wit:

1) The protected communication must relate to a "quintessential and non-

delegable presidential power."

2) The communication must be authored or "solicited and received" by a close

advisor of the President or the President himself. The judicial test is that an
advisor must be in "operational proximity" with the President.

3) The presidential communications privilege remains a qualified privilege

that may be overcome by a showing of adequate need, such that the information
sought "likely contains important evidence" and by the unavailability of the
information elsewhere by an appropriate investigating authority.

 Using the above elements, the Supreme Court is convinced that, indeed, the
communications elicited by the three (3) questions are covered by
the presidential communications privilege.

On the first element, the communications relate to a "quintessential and non-

delegable power" of the President, such the power to enter into an executive
agreement with other countries which applies to the present NBN Project with the

Page 4 of 8
VIRGIL KIT AUGUSTIN H. ABANILLA LAW 4
EVIDENCE

Zhong Xing Telecommunications Equipment which shall be financed by People’s

Republic of China. This authority of the President to enter into executive
agreements without the concurrence of the Legislature has traditionally been
recognized in Philippine jurisprudence.

With respect to the second element, the communications are "received" by a

close advisor of the President. Under the "operational proximity" test, petitioner
can be considered a close advisor, being a member of President Arroyo's
cabinet.

And third, there is no adequate showing of a compelling need that would justify
the limitation of the privilege and of the unavailability of the information
elsewhere by an appropriate investigating authority.

On this third element, it was held that presidential communications are

presumptively privileged and that the presumption can be overcome only by
mere showing of public need by the branch seeking access to conversations
such as when it is invoked against a possible disclosure of a crime or
wrongdoing, as cited in the case of United States v. Nixon.

However, the present case's distinction with the Nixon case is very evident.
In Nixon, there is a pending criminal proceeding where the information is
requested and it is the demands of due process of law and the fair administration
of criminal justice that the information be disclosed.

 While respondent Committees further contend that the grant of petitioner's claim
of executive privilege violates the constitutional provisions on the right of the
people to information on matters of public concern, it is subject to limitation.
Section 7 of Article III provides:

The right of the people to information on matters of public concern shall be

recognized. Access to official records, and to documents, and papers pertaining
to official acts, transactions, or decisions, as well as to government research data
used as basis for policy development, shall be afforded the citizen, subject to
such limitations as may be provided by law.

The provision itself expressly provides the limitation, i.e. as may be provided by
law. Some of these laws are Section 7 of Republic Act (R.A.) No. 6713, Article
229 of the Revised Penal Code, Section 3 (k) of R.A. No. 3019, and Section
24(e) of Rule 130 of the Rules of Court. These are in addition to what our body of
jurisprudence classifies as confidential and what our Constitution considers as
belonging to the larger concept of executive privilege. Clearly, there is a
recognized public interest in the confidentiality of certain information. We find the
information subject of this case belonging to such kind.

Page 5 of 8
VIRGIL KIT AUGUSTIN H. ABANILLA LAW 4
EVIDENCE

 Therefore, with all the foregoing, the court ruled that the The Communications
elicited by the Three (3) Questions are Covered by Executive Privilege

Further, the Senate draws in bold strokes the distinction between the legislative
and oversight powers of the Congress, as embodied under Sections 21 and 22,
respectively, of Article VI of the Constitution.

Section 21 relates to the power to conduct inquiries in aid of legislation. Its aim
is to elicit information that may be used for legislation. On the other hand, Section
22 pertains to the power to conduct a question hour, the objective of which is to
obtain information in pursuit of Congress' oversight function.

This distinction gives birth to another distinction with regard to the use of
compulsory process. Unlike in Section 21, Congress cannot compel the
appearance of executive officials under Section 22.

The Court's pronouncement in Senate v. Ermita is clear. Section 22, in keeping

with the separation of powers, states that Congress may only request their
appearance. Nonetheless, when the inquiry in which Congress requires their
appearance is 'in aid of legislation' under Section 21, the appearance
is mandatory.

The Court held that, on the argument of the Senate that the power of Congress
to conduct inquiries in aid of legislation is a mandatory compulsory process,
however broad, has limitations.

To be valid, it is imperative that

1. it is done in accordance with the Senate or House duly published rules of
procedure and
2. that the rights of the persons appearing in or affected by such inquiries be
respected.

On the Second issue:

What is the proper procedure to be followed in invoking executive privilege?

Jurisprudence teaches that for the claim to be properly invoked, there must be a
formal claim of privilege, lodged by the head of the department which has control
over the matter. The Letter dated November 17, 2007 of Executive Secretary
Ermita satisfies the requirement. A formal and proper claim of executive privilege
requires a "precise and certain reason" for preserving their confidentiality. It
serves as the formal claim of privilege.

Page 6 of 8
VIRGIL KIT AUGUSTIN H. ABANILLA LAW 4
EVIDENCE

The context in which executive privilege is being invoked is that the information
sought to be disclosed might impair our diplomatic as well as economic relations
with the People's Republic of China. Given the confidential nature in which these
information were conveyed to the President, he cannot provide the Committee
any further details of these conversations, without disclosing the very thing the
privilege is designed to protect.

At any rate, as held further in Senate v. Ermita, the Congress must not require
the executive to state the reasons for the claim with such particularity as to
compel disclosure of the information which the privilege is meant to protect. This
is a matter of respect to a coordinate and co-equal department.

 On the last issue, whether or not respondent Committees Committed Grave

Abuse of Discretion in Issuing the Contempt Order

The Court ruled the respondent Committees committed grave abuse of discretion
in issuing the contempt Order in view of five (5) reasons

1. There being a legitimate claim of executive privilege, the issuance of the

contempt Order suffers from constitutional infirmity.

2. Respondent Committees did not comply with the requirement laid down
in Senate v. Ermita that the invitations should contain the "possible needed
statute which prompted the need for the inquiry," along with "the usual
indication of the subject of inquiry and the questions relative to and in
furtherance thereof."

3. A reading of the transcript of respondent Committees' January 30, 2008

proceeding reveals that only a minority of the members of the Senate Blue
Ribbon Committee was present during the deliberation. 61 Section 18 of
the Rules of Procedure Governing Inquiries in Aid of Legislation provides that:

"The Committee, by a vote of majority of all its members, may punish for
contempt any witness before it who disobeys any order of the Committee or
refuses to be sworn or to testify or to answer proper questions by the
Committee or any of its members."

4. We find merit in the argument of the OSG that respondent Committees

likewise violated Section 21 of Article VI of the Constitution, requiring that the
inquiry be in accordance with the "duly published rules of procedure.
Not having published its Rules of Procedure, the subject hearings in aid
of legislation conducted by the 14th Senate, are therefore, procedurally
infirm.

Page 7 of 8
VIRGIL KIT AUGUSTIN H. ABANILLA LAW 4
EVIDENCE

5. Respondent Committees' issuance of the contempt Order is arbitrary. It must

be pointed out that respondent Committees did not first pass upon the claim
of executive privilege and inform petitioner of their ruling. Instead, they curtly
dismissed his explanation as "unsatisfactory" and simultaneously issued the
Order citing him in contempt and ordering his immediate arrest and detention.

Finally, the subject Order dated January,2008, citing petitioner Romulo L.

Neri in contempt of the Senate Committees and directing his arrest and
detention, is hereby nullified. Hence, the petition has been granted.

Page 8 of 8