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The Journal Gazette

Tuesday, April 10, 2012 10:36 pm

Philippine ex-leader pleads not guilty in 2nd case

By HRVOJE HRANJSKIAssociated Press

Former Philippine President Gloria Macapagal Arroyo and her husband pleaded not guilty Wednesday to corruption charges related to an overpriced deal with a Chinese telecommunications company in a second criminal case against her.

Arroyo was arrested last year on a separate charge of electoral fraud and has been since indicted in connection with a $330 million government contract with Chinese telecommunications giant ZTE Corp.

A congressional probe found the 2007 contract overpriced and ridden with problems, including allegations that Arroyo's husband, Jose Miguel "Mike" Arroyo, accepted bribes to push through the contract with his wife's approval.

Under public pressure, Arroyo canceled the deal the same year. She left office in 2010 and faced a wide-ranging prosecution as part of a promise by her popular successor, President Benigno Aquino III, to uproot corruption.

Arroyo and her husband entered their pleas at a special anti-graft court called Sandiganbayan. Arroyo was escorted by heavily armed police from a government-run hospital, where she has been detained on the fraud charge - from which she cannot be bailed out - while undergoing treatment for a spinal ailment. Mike Arroyo last month posted bail at the anti-graft court to avoid detention.

Arroyo's lawyer, Laurence Arroyo, said his client was also diagnosed with shingles and went to the court against her doctor's advice. "She wanted to face squarely already the charges against her and get the trial going," he said.

A former elections chief, Benjamin Abalos, also pleaded not guilty Wednesday.

At the 2007 congressional hearing investigating the anomalous contract, former Economic Planning Secretary Romulo Neri testified that Abalos offered him a bribe to approve the ZTE contract. Jose de Venecia III, a losing bidder with connections to the Arroyos' inner circle, testified that the ex-president's husband was promised a $70 million commission.

Arroyo then prevented top officials, including Neri, from continuing to testify in the probe and the issue was never properly investigated.

After Aquino took power, the Philippine 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.

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 pursuing a political vendetta.

The ZTE case also 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.

ZTE has denied paying any kickbacks.


Associated Press writer Teresa Cerojano contributed to this report.