Martelly denies kickback in construction firm scandal

Dominican Republic authorities are investigating corruption allegations involving several construction companies with ties to a powerful senator after the firms won no-bid contracts following the 2010 earthquake in neighbouring Haiti, a senior official said Monday.

Attorney General Radhames Jimenez said in a news conference that the government's anti-corruption department will be looking into alleged irregularities involving the companies of Senator Felix Bautista, a close friend of President Leonel Fernandez.

Bautista couldn't be reached for comment Monday but denied any wrongdoing last week as he met with prosecutors in an effort to clear his name.

The investigation comes two days after Dominican journalist Nuria Piera aired a story called "Path of Millions" in which she claimed to have combed through bank statements and property records belonging to Bautista.

She says she found that one of the companies owned by Bautista, HADOM Construction, was awarded a US$350 million contract to do reconstruction work in Haiti after the earthquake.

Big donations

She also noted that Bautista has properties valued for at least US$10.4 million, but an affidavit of his said in 2010 that he only had properties worth US$410,000. Baustista's companies have also been donating millions of dollars to Fernandez's political party, she reported.

One of the biggest revelations she found was that HADOM allegedly paid more than US$2.5 million as a kickback to Haiti's President Michel Martelly.

In a press statement Monday evening, the Martelly government rejected the "fanciful accusations brought unjustly" against the leader.

"This media lynching of President of the Republic is part of a larger campaign to poison public opinion to sully the image of President Martelly and undermine (his) integrity," the statement said.

The Dominican contracts came to light several weeks ago after outgoing Prime Minister Garry Conille announced that he was conducting an audit of US$500 million in construction contracts signed in the frantic months after the quake by his predecessor, Jean-Max Bellerive.

Sudden resignation

Before officially releasing the audit, Conille suddenly resigned last month after only four months on the job. A few weeks later a leaked version of the "preliminary audit" was published in the Haitian newspaper, Le Matin.

The document showed that some of the contracts were given to firms that didn't meet certain procurement requirements, one of them being HADOM, which was described as Haitian. It received a US$33.7 million contract to rebuild Parliament, which collapsed in the quake, and did not meet the criteria of five years experience required under law.

Bellerive, Haiti's prime minister during the earthquake and now an adviser to his cousin Martelly, said in a public statement that he was the victim of a smear campaign and that the government needed to respond quickly to the disaster.

Dominican firms were well-poised to do so because of their proximity to Haiti, he wrote.

- AP