Death threats after E Timor graft claim

Mark Dodd December 18, 2008

The Australian

AN Australian businessman in East Timor says he has received death threats after he questioned an allegedly corrupt $3.1 million government fuel contract.

Jack Salatian, a director and shareholder of Sunshine Petroleum, said he was threatened after questioning the awarding of a fuel contract to a rival bidder offering diesel fuel to the state electricity provider at US6c a litre higher than his bid.

The Pualaka Petroleum company, owned by Americo Lopes, the husband of East Timorese Justice Minister Lucia Lobato, was awarded the contract - a decision that led to widespread corruption concerns in Dili.

Ms Lobato is suing Jose Belo, managing editor of the weekly Tempo Semanal, for defamation after the newspaper ran a story that raised serious questions about the contract.

The row underscores claims of increasing corruption in Southeast Asia's poorest country - much of it allegedly linked to ministers and their spouses.

Mr Belo claims the contract smacks of favouritism. He told The Australian the grounds for awarding the tender were even more questionable, given Mr Lopes lacked funds to purchase the diesel fuel intended for the state electricity provider EDTL.

Instead, he was issued a Treasury letter of credit for $US3.1million, a copy of which has been obtained by The Australian.

Mr Belo accused the Government of covering up corruption by muzzling the country's media.

Mr Salatian has claimed his life was threatened by Pualaka Petroleum executives after he expressed concerns about the contract and demanded the company first settle a $US51,500 ($76,000) debt to Sunshine.

Fretilin opposition MP Jose Teixeira rejected Ms Lobato's claims of innocence and repeated his party's demand for the Government to sack the minister.