East Timor President defends PM amid rice contract furor

30 Jun 2009 09:05:27 GMT-0400 Steve Holland and Stephanie March - East Timor President Jose Ramo Horta is defending Prime Minister Xanana Gusmao's approval of a multimillion dollar government contract to a company linked to the PM's daughter.

Mr Gusmao has not been available to respond to revelations he approved a multi-million dollar contract to a company linked to his daughter and three other contracts to companies part-owned by the wife of another minister.

But Mr Ramos-Horta says he fully supports Mr Gusmao.

"Just because someone became president, became prime minister, became a minister, does not mean his family all have to go into unemployment, all have to sell their business and stop," Mr Ramos-Horta said.

Contract Questions
Last week, Radio Australia revealed that Zenilda Gusmao, the prime minister's daughter, is listed in East Timor's 2008 business registry as a shareholder in Prima Food.

Prima Food last year won a government contract to supply rice worth $US3.5 million.

Kathleen Gonsalves, the wife of Minister of Economic Development Joao Goncalves, also has profited from government tenders signed-off by Mr Gusmao.

Mr Ramos-Horta says the prime minister deserves the benefit of the doubt.

"Allegations are allegations until they are proved by investigation and in court. Until such a time I have full confidence," he said

Deputy Prime Minister Mario Carrascalao says the prime minister is required to sign off on all government contracts exceeding $US1 million, but that doesn't Mr Gusmao responsible for the whole process of awarding government contracts.

"So he had to sign it. He doesn't have to look after the process, whether there are some of his relatives is included there or not," Mr Carrascalao said.

Mr Carrascalao says he is looking into the circumstances surrounding Prima Food's multi-million dollar government tender.

The opposition Fretilin Party says it has not yet been able to voice its concerns in Parliament regarding the rice contract scandal. Tuesday's debating period was cancelled.

The Opposition plans to voice its concerns in Parliament on Monday.