Wed, Mar 14, 2012 - Page 5 News List

Court orders arrest of Arroyo’s husband

DIRTY DEALS?The Philippines’ former elections chief and transport minister were also ordered arrested yesterday over alleged graft in a government contract with China


A Philippine court yesterday ordered the arrest of former Philippine president Gloria Macapagal Arroyo’s husband for allegedly receiving millions of dollars in bribes from a Chinese telecommunications company for a contract that was later found to be overpriced.

Jose Miguel “Mike” Arroyo’s lawyer, Ferdinand Topacio, said that his client planned to turn himself in and post bail.

Mike Arroyo, a lawyer who was seen as a backroom operator during his wife’s troubled nine-year presidency, is accused of accepting money to push through a US$330 million government contract with China’s ZTE Corp to set up a nationwide broadband network in 2007. The contract was originally priced at US$130 million.

Gloria Arroyo approved the deal, but later backtracked under public pressure and a congressional investigation.

Jose Arroyo has denied wrongdoing and says the graft charges are flawed because the former president canceled the deal.

The former president, who left office in 2010, faces the same charges as her husband, and more. She is already under arrest in a military hospital on electoral fraud accusations and has pleaded innocent.

Former elections chief Benjamin Abalos and former transportation secretary Leandro Mendoza were also charged over the ZTE contract and ordered arrested yesterday. They previously testified in a Senate hearing and denied receiving millions of dollars in kickbacks.

Former economic planning secretary Romulo Neri had testified that Abalos offered him a bribe to approve the contract. Jose de Venecia III, a losing bidder with connections to the Arroyos’ inner circle, testified that the former president’s husband was promised a US$70 million commission.

Gloria Arroyo had prevented top officials, including Neri, from continuing to testify in the congressional probe. Under her successor, Philippine President Benigno Aquino III, the Philippines’ ombudsman investigated and filed charges at the anti-graft court, which issued the arrest warrants. If convicted, they face a maximum sentence of 10 years in prison.

The issue was never properly investigated because Gloria Arroyo had barred top officials, including Neri, from disclosing further details that might have implicated her.

Aquino blames his predecessor for corruption and says he wants to clean up the government, starting with the prosecution of the Arroyos and their allies.

The former first couple accuse Aquino of a political vendetta.

The ZTE case has tested the Philippines’ relations with China, which Arroyo aggressively pursued. Aquino appears more lukewarm to Beijing amid a resurgence in territorial tensions over disputed islands in the South China Sea.

When the scandal broke, ZTE denied paying any kickbacks and there were concerns that the contract’s cancellation would adversely affect China’s investments in the Philippines. Aquino’s administration has also put on hold another flagship China’s investment, a railway project in the northern Philippines, on suspicion it too was overpriced because of kickbacks.

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