Westinghouse bribery case goes to trial in N.J.

March 16, 1993|By Bloomberg Business News

NEWARK, N.J. -- Jury selection began yesterday in the Philippine government's bribery suit against Westinghouse Electric Corp. over a canceled $2.1 billion nuclear power plant.

The case goes to trial in U.S. District Court after months of talks seeking an out-of-court settlement broke down last December. Opening arguments are expected to begin tomorrow.

The Philippine government, in its 1988 suit, accused Westinghouse of paying former President Ferdinand Marcos $17 million to win a contract to build a 605-megawatt nuclear power plant northwest of the capital, Manila. The suit also names Burns and Roe Enterprises Inc. of Oradell, N.J., which engineered the plant.

Although the plant was completed in 1985, the government claimed defects, including its proximity to a volcano and earthquake fault, made it too unsafe to operate.

Westinghouse and Burns and Roe have denied the allegations and said studies showed the plant could be operated safely. The companies said the $17 million in payments were fees paid to a Philippine trade representative, a common practice when doing business abroad.

In March a year ago, Westinghouse and Philippine officials reached a tentative agreement to settle the suit. The Philippine government agreed to pay Westinghouse $400 million to bring the plant on line and more than $40 million a year to operate it.

Philippine President Fidel Ramos, who took office in June after the settlement was reached, didn't like the terms of the 1992 agreement, and in December, the Philippine government halted negotiations.

The Philippine government said Westinghouse's offer to operate the plant wouldn't provide cheaper electricity for the country than existing coal-powered plants.

The stage was set for a trial last month, when Judge Dickinson R. Debevoise dismissed Westinghouse's claim that Philippine officials were negotiating in bad faith. Westinghouse then offered an unspecified settlement, which was rejected.

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