By Ted McDonnell
EAST Timorese Prime Minister Xanana Gusmao has been convinced to stay in office despite a letter linking him to the hospital-bed scandal that has rocked his government after his Finance Minister was indicted.
Mr Gusmao fended off speculation he would resign at the CNRT party’s conference at the weekend and is now expected to retire in the coming months with two years left in his second term.
Mr Gusmao was convinced by fellow CNRT members not to resign immediately and he told the conference he would see through his plans to reshuffle his coalition cabinet and set in place a transition for his retirement.
It was unclear whether Finance Minister Emilia Pires would be part of Mr Gusmao’s new cabinet. Late last week, she and former vice-minister of health Madalena Hanjam were indicted by East Timor’s Public Prosecutor on allegations of abuse of power and corruption.
Ms Pires has been under investigation over allegations she awarded her husband’s company the $2.04 million contract to supply beds to Guido Valadares National Hospital.
She has denied involvement in the deal but did sign off on it on behalf of Mr Gusmao.
A letter obtained by The Australian, dated February 8, 2012, from Ms Pires to Ms Hanjam states: “Your request for funds under the contingency funds to purchase equipment has been approved by the Prime Minister.” The letter was signed by “Emilia Pires, Minister”.
Supporters of Ms Pires and Ms Hanjam claim the letter either proves their innocence or implicates Mr Gusmao.
Mr Gusmao, who personally appointed Ms Pires as Finance Minister, has constantly stated that the Anti-Corruption Commission (KAK) is wrong in its pursuit of graft allegations against his ministers.
Ms Pires’s husband, Warren Macleod, owner of Melbourne-based Mac’s Metalcraft and recipient of the hospital beds contract, has strongly defended his wife and his dealings with the East Timor government.
“The investigators are not as impartial in this case as they should be,” he told The Australian yesterday. He said he believed KAK was being used as a political weapon against Ms Pires and the government.
“There is a syndicate of corruption in the country,” he said, adding that the Prime Minister’s office was “infested with rats”.
Mr Macleod said that if he were called as a witness he would “absolutely” travel to East Timor to defend his wife and the hospital contract. “My wife has done nothing wrong and she is being targeted for her honesty. All the funds have been cleared by the PM for this contract,” he said.
It is likely parliament will soon lift immunity protection on Ms Pires and Ms Hanjam to allow a trial to proceed.