Ex-President Arroyo Faces Renewed Plunder Charges in Philippines

Former Philippines President Gloria Arroyo faces renewed charges that she skimmed $35 million from a 2007 contract given to a Chinese telecommunication company in the latest move against her family since she stepped down last year.

Arroyo, her husband and two associates acquired $35 million in “ill-gotten wealth” from the $329 million deal she awarded to ZTE Corp. (000063), according to a plunder complaint filed yesterday with the nation’s top anti-graft body by a group including a current lawmaker. “Gloria Arroyo surely enriched herself at the expense and to the damage and prejudice of the Filipino people and the Republic of the Philippines,” the complaint said.

Arroyo, 64, joins predecessors Joseph Estrada and Ferdinand Marcos who faced graft accusations after leaving office. President Benigno Aquino, whose mother helped oust Marcos in 1986, won the election to replace Arroyo with “If There’s No Corruption, There’s No Poverty” as his campaign slogan.

The former president defeated three impeachment attempts during her tenure and was cleared of graft charges over the ZTE contract in 2009 because of presidential immunity. Arroyo is currently a member of the House of Representatives.

The Arroyos have already been cleared and the latest complaint has no substance, GMA News reported, citing a statement from husband Jose Miguel Arroyo. The couple made no personal gain from the deal, the report cited him as saying. Arroyo canceled the ZTE deal after lawmakers opened a probe into the allegations.

Helicopter Sale

Last week, police filed a plunder complaint with the top anti-graft body, the Office of the Ombudsman, against Jose Miguel Arroyo and more than 20 other people for the alleged irregular sale of several helicopters.

Former ombudsman Merceditas Gutierrez, an Arroyo appointee, quit in April to preempt an impeachment trial by Congress for her failure to pursue charges against Arroyo. Her seven year term was to end 2012.

Aquino denies his efforts to pursue Arroyo are a vendetta.

“It’s true, doing what’s right is personal,” he said July 25. “What is wrong remains wrong, regardless of how long it has been allowed to persist. If we ignore the crimes of the past, they will continue to haunt us.”

Since taking office, the president has filed more than 120 complaints against suspected smugglers, corrupt officials and tax evaders. He hasn’t secured any convictions yet in a country that was ranked 134 out of 178 on Berlin-based Transparency International’s corruption perception index in 2010.

Tough on Graft

Aquino “would like to be known as the president who seriously went against graft and corruption in government,” Earl Parreno, a fellow at the Institute for Political and Electoral Reform in Manila, said by phone. “Corruption during the time of Arroyo was quite strong so this can’t be viewed simply as a political prosecution.”

Aquino touted his efforts to clean up government to Chinese investors in a state visit to the country last month.

“The biggest change between the Philippines under my administration and under the previous government is a change in mindset,” Aquino told businessmen in Beijing on Aug. 31. “We will not take shortcuts in order to close deals; we will follow the correct procedures.”

The president has ordered his guards to protect officials hunting tax evaders in an anti-corruption drive aimed at drawing investors to the country, he said in an Aug. 18 interview. From 1970 to 2009, the Philippines lured less foreign direct investment than its Southeast Asian neighbors, according to the United Nations Conference on Trade and Development.

To contact the reporters on this story: Ian Sayson in Manila at isayson@bloomberg.net; Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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