Pacific News Minute: Report: China’s ZTE Bribed PNG Prime Minister to Win Phone Contract

Jun 6, 2018

Credit ZTE Com, Ltd / Wikimedia Commons

As you’ve probably heard over the last few weeks, Chinese phone giant ZTE is caught up in controversial negotiations as part of President Trump’s on-again off-again trade war with China. This week, an Australian news agency reports that ZTE bribed the Prime Minister of Papua New Guinea to win a contract back in 2010.

Fairfax Media reports that ZTE paid Sir Michael Somare 780,000 dollars to clear the way for a 36 million dollar phone contract.

According to the report, he was identified but not charged in a bribery investigation in Singapore. Court documents show that ZTE used a 35 million dollar loan from the Export-Import Bank of China to set up a slush fund for bribe. The money was laundered through an account in the British Virgin Islands, routed back to Singapore, where part of it was paid into Sir Michael’s account.

Fairfax quotes Thomas Doehrman, an American currently serving five years and ten months for his part in the scheme, “The money to be paid to the PM of PNG was a form of a gift to him by the ZTE corporation so that the operations of the contract would be smooth.”

Michael Somare in 2014
Credit Humans of Vanuatu / Wikimedia Commons

Fairfax said that this story bolsters earlier reporting of institutionalized bribery by ZTE in 18 different countries as part of what it called a drive by China to corrupt and control small nations in the region. 

Sir Michael Somare disputed the allegations.

Fairfax said that an investigation by an anti-corruption squad in PNG stalled when the Clean Sweep Unit was disbanded by Somare’s successor, the current Prime Minister Peter O’Neill. Somare is revered as the Father of Independence in Papua New Guinea, he served a total of 17 years as Prime Minster and retired last year after 49 years in politics.