Aquino: Banks Will Suffer If Linked To Alleged Bribes for Power Plant
MANILA -- President Corazon Aquino said the Philippines would suspend payments on debt for an atomic power plant if there is any evidence linking bank lenders to bribes allegedly paid to win the $2.1 billion contract.
But she said there is no evidence yet that the banks were involved in any wrongdoing.
The lead bank in the disputed Bataan plant contract was Citicorp International Ltd., which has exposure of $225 million, according to the Philippine central bank. Westinghouse Electric Corp. was the contractor.
Payment Suspension Urged
Senate Majority Leader Teofisto Guingona on Monday urged President Aquino to immediatley suspend payments of almost $300,000 a day to service debt for the mothballed power plant built by ousted President Ferdinand Marcos.
The Philippines last Friday won the first round in a court case against Westinghouse and engineers Burns and Roe Enterprises, accusing them of bribery to win the contract for the 600-megawatt Bataan plant.
A New Jersey court judge found sufficient evidence for the trial to go ahead next February, and denied the petition of Westinghouse to dismiss the case.
The Philippine government is claiming punitive damages against Westinghouse and Burns and Roe, alleging they bribed Marcos to win the contract and built a plant that was unsafe to operate. Both companies have denied any wrongdoing.
President Aquino said the "finding of a probable bribery by the New Jersey court will allow us to seek a judgment against Westinghouse and its agents."
But in response to a question on whether she would allow Guingona's advice to suspend payments, she said "there is no finding, however, that there was anything felonious in the manner in which the bank loan was contracted."
"Should there surface any evidence [that a bank] conspired with Westinghouse, not only would payments be withheld, we would also hold the bank liable."
Sen. Guingona said banks "ought to have known" the plant's price was inflated.