Mexico threatens suit against Rivada Networks, which cites deposition in alleging Red Compartida improprieties

Mexican government officials yesterday threatened to sue Rivada Networks for allegations made after the company secured a consultant’s deposition that outlined several questionable actions in the development of the Red Compartida procurement, as well as a statement that the winning Altan consortium bid is “essentially a photocopy” of a supposedly confidential business plan created for the Mexican government.

Mexico’s Secretary of Communications and Transportation (SCT) reportedly hired the U.S.-based law firm of Jones Day to “defend the honor and reputation of Mexican institutions” against allegations by Rivada Networks and Rivada Networks co-CEO Declan Ganley that there were improprieties in the Red Compartida procurement process.

During an interview with IWCE’s Urgent Communications, Rivada Networks spokesman Brian Carney acknowledged the media reports regarding the SCT’s threatened legal action but said the company has not been served with a lawsuit as of publication time. Rivada Networks has not learned of the SCT’s specific complaint or cause of action, but media reports indicate that the litigation would be filed in the U.S., Carney said.

Mexican government officials hired the Jones Day law firm after Rivada Networks this week released a statement citing the deposition of Brett Haan, a principal at Deloitte Consulting—a firm that was paid $5.2 million to serve as an advisor to the SCT during the development stages of the Red Compartida procurement. Rivada Networks’ issued a statement—in Spanish—that Haan’s deposition confirmed that some aspects of the procurement were “illegal.”

Red Compartida is an unprecedented wireless broadband initiative established by President Enrique Pena that is designed to provide broadband service to at least 85% of Mexico’s population by providing the winning bidder with 90 MHz of 700 MHz spectrum.

SCT officials did not consider the Rivada Networks proposal, because it lacked a $55 million bond at the time of submittal. The Altan consortium was the only remaining bidder and declared the winner last month.

In statements and tweets yesterday, Mexican government officials noted that all of the allegations levied by Rivada Networks do not change the fact that the company did not include a bond with its bid submission. Rivada Networks claims it provided other guarantees at the time of the bid, and secured the bond a week after the deadline. Whether those actions should have been enough for SCT to consider the Rivada Networks’ bid is the subject of a court proceeding in Mexico’s judicial system.

Separately—at least for the moment—Rivada Networks is going through the U.S. court system to gather evidence by securing depositions from key people with knowledge of the Red Compartida procurement. One of those people is Haan, who is perhaps best known in the U.S. LMR industry as the program director for the Transition Administrator overseeing the 800 MHz rebanding effort.

In his deposition, Haan highlighted a conversation that he had with SCT Vice Minister Monica Aspe and SCT official Mario Gongora before Deloitte Consulting was hired in an advisory role.