MALACANANG-SENATE RELATIONS DETERIORATE

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 004740

SIPDIS

STATE FOR EAP, EAP/MTS, EAP/MLS, INR/EAP

E.O. 12958: DECL: 10/05/2015
TAGS: PGOV PINS PINR ECON EINV PTER CH RP
SUBJECT: MALACANANG-SENATE RELATIONS DETERIORATE

REF: A. MANILA 4662


B. MANILA 4639

C. MANILA 4464

D. MANILA 4140

E. 04 MANILA 4526

Classified By: Acting Pol/C Joseph L. Novak for reasons 1.4
(b) and (d).


1. (C) Summary: After several highly contentious Senate
sessions, a group of Opposition senators led by Senate
President Franklin Drilon continues to press for more
hearings into issues potentially embarrassing to President
Arroyo. Malacanang has reacted angrily and is strictly
controlling access by the Senate or House to testimony by GRP
officials. Malacanang is also trying to undermine Drilon and
replace him with someone who is pro-Arroyo, but at this point
it does not appear that it has the numbers in the Senate to
do so. With tensions between the two branches unlikely to
cool down soon, it is probable that legislation will suffer,
although -- on a positive note -- all sides agree that an
anti-terrorism bill should remain a high priority (see
septel). End Summary.

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Senate Presses Fight with Arroyo
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2. (SBU) A group of Opposition senators led by Senate
President Franklin Drilon continues to press for more
hearings into issues potentially embarrassing to President
Arroyo. Drilon's faction is proposing further hearings into
the controversial May 2004 presidential election,
specifically on whether President Arroyo, her family, and her
advisers paid money for votes or otherwise manipulated the
results. In addition, Drilon wants further hearings into
whether a project to construct an improved railway network
north of Manila (the "North Rail" project) by a Chinese
company (China National Machinery and Equipment Corporation)
was purposely over-priced so that GRP officials could take a
cut of the proceeds. (Note: The USD 503 million North Rail
project was agreed to during President Arroyo's September
2004 visit to China -- see ref e. End Note.)


3. (SBU) This slate of planned hearings comes on top of
recent -- and bitterly contentious -- sessions carried on
live TV in the Senate. One of these sessions, held on
September 28, featured two high-level military officers
asserting that they had evidence that Arroyo family members
and associates had paid for votes in Mindanao during the
timeframe of the May 2004 election. (Note: The two officers
were subsequently removed from their commands and are facing
court martial proceedings for defying a presidential
directive against testifying before the Senate. One of the
officers has since retired, but both remain in military
custody. See ref b. End Note.) Another contentious hearing
involved National Security Adviser Norberto "Bert" Gonzales,
who was grilled unmercifully by senators on September 21
about his knowledge of a contract that he signed with Venable
LLP, a U.S. law firm, for lobbying services (see ref c).
Senators ridiculed his testimony and charged him with
contempt. Gonzales was then detained by the Sergeant at Arms
on order of the Senate and, as of October 5, technically
remains under detention while undergoing hospitalization for
a heart condition (see ref c).

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Malacanang Reacts
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4. (C) Malacanang has reacted with unconcealed fury to the
Senate's moves. In regard to the hearings planned by
Drilon's group, the Palace has indicated that it has no plans
to cooperate unless National Security Adviser Bert Gonzales
is released from "detention." In a September 26 meeting with
Acting Pol/C, Gabriel "Gabby" Claudio, Arroyo's chief
political adviser, asserted that the Senate's continued
detention of Gonzales (even if only technical in nature at
this point) was totally unfair and violated the normal
pattern of relations between the two branches of government.
(Note: Gonzales has filed a case claiming that his detention
is illegal, which the Supreme Court is reviewing. End Note.)
Senators have indicated that there is no plan to release
Gonzales from detention. Senators, in turn, have demanded
that Malacanang cancel Executive Order 464 dated September
28, which prevents government or military officials from
testifying before the Senate or the House without prior
approval of the President's Office. Malacanang has
underscored that it will not do this. Meanwhile, a group of
leftists have challenged E.O. 464 by lodging a petition in
the Supreme Court.

5. (C) Commenting on the deteriorating ties between the two
bodies, Ronaldo Puno, a pro-Arroyo congressman, told Acting
Pol/C during a September 28 meeting that he thought that the
Senate was trying "to hold the equivalent of impeachment
hearings" into President Arroyo's conduct. This, he said,
comes despite the fact that the House had quashed the
Opposition's impeachment complaint in early September (ref
d). Puno remarked that he thought the Senate's actions were
"off base" and fully justified Malacanang's hard-edged
response.

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Trying to Get Rid of Drilon
--------------


6. (C) Malacanang is also trying to undermine Drilon and
replace him with someone who is pro-Arroyo. Even before the
Senate's recent moves, Arroyo was furious with Drilon, who
had crossed over from her camp in July and publicly called
for her resignation. It is not clear who Malacanang's
candidate to replace Drilon is, though the Palace is believed
to favor just about anyone. However, at this point it does
not appear that Malacanang has the numbers to replace Drilon.
While support in the Senate is hard to quantify because the
situation is fluid and some senators seem to lean a different
way every day (the Senate is full of self-described
"mavericks"),Drilon appears to have about 10 senators on his
side in the 23-member chamber (one seat is not occupied).
Drilon's backers include well-known senators such as Aquilino
Pimentel, Rodolfo Biazon, Panfilo Lacson, and Sergio Osmena.


7. (C) Meanwhile, Malacanang ostensibly has approximately 13
senators on its side, which should be enough to oust Drilon
(a majority vote plus one is needed, or 13 votes).
Nonetheless, Malacanang's problem is that much of its support
is lukewarm at best. While Senators Miriam Santiago and Juan
Flavier are strongly on her side, a slew of her nominal
supporters rarely defend her, including Senators Manuel
Villar, Manuel Roxas, Pia Cayetano, and Ramon Magsaysay, etc.
Given this situation, it appears that Drilon will remain in
place for at least some time to come. (Note: A "gentlemen's
agreement" that Drilon had with Villar to split the Senate
Presidency term seems to have been overtaken by events and
Drilon has no apparent plans to leave that office to be
replaced by Villar. End Note.)

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Comment
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8. (C) On a positive note, a group of senators from both
camps came out in public recently for "constructive dialogue"
between Malacanang and Drilon, but it is not clear whether
there will be any follow-up. In any case, the war of words
shows little sign of abating: In October 1 comments that
received much attention in the press, the always combustible
Senator Santiago accused Drilon and former president Corazon
Aquino of planning "a coup" to remove Arroyo. Drilon and
Aquino have heatedly denied the charges. With tensions
between the two branches unlikely to cool down soon, it is
probable that legislation will suffer. For example, the
ability of all branches to work together reasonably
harmoniously on the budget, which needs to be completed by
later this year, and on possible Constitutional changes (ref
a) seems highly questionable at this point. (Note: The
House generally has been watching the Malacanang-Senate
tangle with great bemusement and has not involved itself
directly on either side. End Note.) A definite bit of good
news, however, is the apparent agreement by all sides that
proposed anti-terrorism legislation should not be delayed by
the infighting (see septel).

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