ZTE refutes role in Philippine broadband scandal

China's network equipment maker ZTE, finally breaks its silence to deny any involvement in the bribery scandal that implicates political figures in the Philippines.
Written by Joel D. Pinaroc, Contributor

PHILIPPINES--After months of silence, Chinese network equipment giant ZTE has finally released a formal statement denying any role in a massive bribery scandal involving the country's political figures.

An Associated Press report Friday quoted ZTE spokesperson Howard Xue as saying that "ZTE has neither done anything wrong, nor has it bribed anyone to get this project". Xue added that the company "cannot allow itself to be dragged into any political circus."

The local government in April 2007 awarded ZTE a US$330 million-deal to build a national broadband network to connect all government agencies and offices across the Philippines. However, the contract was later scrapped after allegations emerged that the deal had yielded benefits for high-ranking officials through kickbacks and commissions.

The Philippine Senate resumed the probe after a witness surfaced and testified last week charging that the country's former elections chief Benjamin Abalos, and the president's husband Jose Miguel Arroyo, demanded kickbacks of up to US$130 million from the project.

Rodolfo Lozada Jr., who was one of the technical consultants involved in the broadband project, testified at the Philippine Senate's anticorruption hearing that he discussed the deal with ZTE officials but failed to "moderate the greed" of brokers including Abalos.

In its statement, however, ZTE denied any connection with Lozada. The Chinese vendor also ruled out any plans to make an appearance at the ongoing Senate probe.

According to Lozada, Abalos threatened to kill him if he did not secure a kickback for him. The former consultant added that he was illegally held by government agents to prevent him from "talking".

Lozada's testimony augmented an earlier testimony of former Philippine Socioeconomic Planning Secretary Romulo Neri, who said Abalos offered him a bribe to approve the ZTE proposal which he refused. Lozada previously worked as a consultant for Neri.

The alleged bribery was brought up last year after a Filipino businessman who lost to ZTE in the project tender, claimed government officials illegally accepted the overpriced broadband deal to get kickbacks. Philippine President Gloria Macapagal Arroyo, facing mounting pressure, eventually cancelled the project and ordered an immediate probe.

Joel D. Pinaroc is a freelance IT writer based in the Philippines.

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