The hunt for the Marcos's hidden wealth continues

By Jamil Maidan Flores

This is the third of a four-part series. The first two parts describe the pursuit of the Marcos wealth through open and legal means as well as a clandestine operation called "Big Bird" that identified and exposed part of the Marcos deposits in Swiss banks.

MANILA (JP): On July 10, 1989, the Committee on Public Accountability of the Philippine House of Representatives headed by Representative Victorico Chaves opened an inquiry on "Operation Big Bird," the clandestine effort to obtain for the Philippine government an estimated US$20 billion that the Marcoses had deposited in Swiss banks.

After conducting hearings for almost two years, the Committee finally published its findings in May 1991. Essentially, the Committee report blamed Jovito Salonga, the first Chairman of the Presidential Commission on Good Government, the agency tasked to go after the ill-gotten wealth of Marcos and his cronies, for aborting the Operation at a time when it was about to be totally successful.

The political impact of the findings was enormous. When the Committee report came out, Salonga was President of the Philippine Senate and an early favorite among aspirants for the presidency of the Philippines. Elections were less than a year away.

In reply, Salonga published a 17-page narrative debunking the findings of the Committee. In effect he claimed credit for preventing what could well be the greatest sting in the century- Michael de Guzman running away with US$213 million of the Marcos wealth and hoodwinking both the Marcoses and the Philippine government.

He also argued in effect that if he were to be blamed for approving Operation Big Bird, which, he said, he did not, then President Aquino should also be blamed because it was she, actually, who approved it on the recommendation of her brothers Jose and Pedro.

And, Salonga added, if he were to be blamed for aborting the operation, then President Aquino should be blamed as well because it was she who put a stop to it. The Committee stood by its conclusion that it was Salonga who scuttled "Operation Big Bird."

Reacting to those who scoffed at his strictly legal approach, he wrote to a Manila newspaper, "I say the 'legal' means is my way of doing things. It is the only way the government should pursue its claim. If others wish to use methods other than 'legal means,' I would not want to have anything to do with it."

If the legal way is the only way, retorted a columnist, then why do governments maintain intelligence and counter-intelligence agencies that operate clandestinely?

Salonga's arguments and his attempt to shift the blame to President Aquino did not get much sympathy from a Filipino public that had seen millions of dollars spent on lawyers by the PCGG, while Operation Big Bird had not cost the Philippine government a single cent, except the fare and hotel money of a couple of public officials going to Switzerland to carry it out.

Up to this day, many observers find it difficult to understand the way Salonga and the PCGG Commissioners, Solicitor General Sedfrey Ordonez and Executive Secretary Joker Arroyo treated "Big Bird." These gentlemen were grizzled veterans in the fight against Marcos and would not give any quarters, let alone favors, to the Marcoses.

Did their distrust of de Guzman, a man who betrayed his friends to be on their side, diminish their judgment? In view of two previous attempts by de Guzman to withdraw the deposits all by himself, this distrust is understandable. There was also the suspicion that de Guzman was working for the Marcoses all along. But did that make "Operation Big Bird" unfeasible? In a press conference in May 1981, President Aquino's brother, Jose "Peping" Cojuangco, at that time a member of Congress once again, would point out that if "Operation Big Bird" had any defects, the thing to do was to remove the defects and not to abort the whole operation.

It might have been the case that Salonga did not want the Marcos wealth to be recovered in any other way except his own. It could have been that important for him to get the full credit because he believed that kind of heroics would catapult him to the presidency of the Philippines. But no one can assert that that was the case without claiming to be a mind reader.

Just as baffling to press commentators was the fact that the Philippine government, through then Solicitor General Sedfrey Ordonez, decided to transfer the Marcos deposits to another Swiss bank in Switzerland. If the PCGG did not trust the Vienna bank of de Guzman, they asked, why did it not seek to transfer the deposits to the branch of the Philippine National Bank (PNB) in London where it would be safe, out of Switzerland and the Swiss freeze, and readily transferable to the Philippines?

And why did the PCGG lawyers not use the documents produced by "Operation Big Bird" as evidence in the New York trial of Mrs. Marcos on charges of racketeering? At that time, there was nothing to prevent the government lawyers from making use of these documents as evidence in a court case.

During one of his trips to New York, then PCGG Chairman Salonga lost an attachi case full of documents related to the work of the Commission. What were those documents? Did their loss give any advantage to the Marcoses in the struggle for the Marcos wealth? Those questions were never answered.

When "Big Bird" came to an end, it left behind a trove of documents that became the basis for legal work to retrieve the Marcos deposits through the Swiss courts. Without these documents, it would have been difficult to make significant progress in that legal work.

One result of that legal work was that in February 1991 the Swiss Supreme Court announced that it would release to the Philippine government some $350 million in identified Marcos accounts --if the Philippine government could meet five conditions by Dec. 21 1991:

1. The PCGG must obtain a final judgment against the Marcoses;

2. The PCGG must comply with the provisions of the Swiss Federal Constitution on due process;

3. The PCGG must comply with the European Convention on Human Rights;

4. In obtaining the final judgment the PCGG must not use documents obtained from Switzerland in connection with the Swiss bank cases; and

5. The Swiss government would have the sole discretion to determine whether the Philippine government had complied with the first four conditions.

Needless to say, the Philippine government did not fulfill even just the first condition before the deadline. It could not have done so if the deadline had been extended to the year 2020.

It would take more than half a decade before the Swiss courts and government would soften a bit and allow the repatriation of these deposits to the Philippine National Bank. There they are today held "in escrow."

That means the Philippine National Bank holds them in trust until the Philippine government can get a final judgment against the Marcoses, or Mrs. Marcos decides to yield them to the Philippine government. They earn interest while the bank holds them. In fact, since 1986 they have been earning interests of from eight to ten percent a year so that the original total amount has grown to almost $600 million.

They were reportedly the subject of negotiations between the administration of President Fidel V. Ramos and the Marcoses in the middle 1990s. Ferdinand "Bongbong" Marcos Jr. has claimed that there was actually an agreement for a sharing arrangement where the Marcoses would retain 25 percent of these funds, with the rest going to the Philippine government. Former President Ramos has denied this.

A few weeks ago, Mrs. Marcos was quoted as saying that an agreement on these funds has been reached with the Estrada administration. President Joseph Estrada denied this. It turned out that she was right and that the agreement involved a third party.

A third party to the negotiations on the Marcos wealth emerged during the early part of this decade. In September 1992, a jury in a Honolulu district court decided in favor of the claims for damages by thousands of human rights victims during the Marcos administration. The court awarded them exemplary damages amounting to $1.2 billion to be taken from the Marcos estate.

In late January 1995, the same court ordered the Marcos estate to pay more than 9,000 victims of human rights violation and surviving relatives of persons who had disappeared, compensatory damages amounting to $767 million. That makes a grand total of some $2 billion, more than twice the Marcos deposits that the Swiss banks acknowledge to have been documented as part of the Marcos estate.

These developments were historic: for the first time, victims of human rights violations won a class action suit against a former head of state and government.

But how would they be paid? They might get something if they successfully negotiated with the Philippine government -- and if the government successfully negotiated with the Marcoses.

Such negotiations began several years back. In 1996, Mrs. Marcos, through her lawyers, rejected a deal offered by the government proposing that the former First Lady and her family pay US$50 million to the human rights victims. Her lawyers said it was a trap to get the Marcoses to admit they were guilty of stealing money from the government.

If the Marcoses had acceded, it would have entered into a three-way agreement with the Philippine government and the human rights victims. But only two sides agreed that time.

The agreement was signed on Sep. 13 1996 by Magtanggol Gunigundo, head of the PCGG in the administration of President Ramos, and Robert Swift, the American lead lawyer for the 10,000 human rights victims.

Under the agreement, the Marcos family would pay the victims US$50 million in compensation for the torture, illegal arrests and detentions they suffered during Marcos's martial law rule. The government would pay an additional US$50 million, to be taken from the Marcos assets in Swiss bank accounts discovered by Operation Big Bird, at that time already amounting to some US$500 million.

Apparently in very recent days, the Marcos family finally agreed to such an arrangement. The three sides -- the Marcos family, the human rights victims and the Philippine government -- then went to the Sandiganbayan to secure the "judicial blessing" that would make the agreement legally feasible.

At this writing, the Sandiganbayan, a court specializing on graft cases in the government, has just ruled against any such arrangements. In that decision, Sandiganbayan Justice Francis Garchitorena stressed that if the Marcoses must pay exemplary and compensatory damages to victims of human rights violation, they must do so out of their own pockets. For if the $600 million were ill gotten as the government contends, then logically they have no right to use it for paying their obligations. The Sandiganbayan then added the observation that the Marcoses today are by no means living in poverty.

And all the while, hunters of the Marcos wealth kept raising false hopes (with a lot of help from sensationalist mass media). Now and then reports of a discovery of additional Marcos wealth would grab headlines. In 1997, a man named Rainer Jacobi claimed that he had traced an additional $466 million of the Marcos wealth, but this was simply denied by those he named as having direct knowledge and access to the hoard and the issue has not prospered since then.

On May 10 1999, former Solicitor General Francisco Chavez who in 1991 took a leading role in the legal chase after the Marcos wealth, published an open letter in Manila newspapers asking President Joseph Estrada to investigate an alleged conspiracy to hide a US$13.2 billion Swiss bank account in the name of "I Arenetta." Mrs. Irene Marcos Araneta is the younger of two daughters of the late President.

Chavez was quoted as saying that he had seen proof of the existence of the account and of 1,260 kilograms of gold being hidden at an airport in Switzerland. He spoke of "more than 70 verified and verifiable documents" that prove the existence of the account and the gold. He said Swiss bankers and authorities "deliberately lied" in denying the existence of both.

This week, he is scheduled to make a more concrete revelation of what he has discovered in a date with the Senate Blue Ribbon Committee. Until he does so, he is doing a kind of "tease." He has been reportedly demanding that Senators Juan "Johnny" Ponce Enrile and Francisco "Kit" Tatad inhibit themselves from the Committee hearings because they had served in the Marcos cabinet during martial law. If the two refused to inhibit themselves, would Chavez clam up?

Not too long ago, in December 1998, Mrs. Marcos herself was quoted in an exclusive interview with the Philippines Daily Inquirer that the Marcos family was being deprived of what it rightfully owned. She was not accusing the Philippine Government this time. She was accusing the so-called cronies who, she said, were freely helping themselves to the Marcos hidden wealth. "We practically own the entire Philippines," she was quoted as saying to explain how much they were being deprived of.

This was a far cry from her claims several years earlier that she sympathized with the poor because she was herself a poor widow, among the poorest of the poor. Her oldest child, "Imee", on learning of what her mother had claimed in the Inquirer interview, remarked, "She has gone ballistic."

Summoned to testify before the Blue Ribbon Committee of the Philippine Senate, she was more quick-witted than forthright in answering the probing questions of legislators. Her televised testimony was, in fact, more entertaining than enlightening.

The more the Marcos wealth and the government's efforts to seize them are discussed in public, the blacker gets the reputation of the Swiss banking system. In fact, the Philippine press and officialdom are no more brutal to the Swiss than the international press that had portrayed them as ghoulish partners of rogue rulers in the plunder of countries.

There are many people all over the world who believe that they deserve at least some of that castigation. For nations have tried to recover from Swiss banks the wealth of former rulers in order to rebuild their economies. There have been no known major successes.

Gen. Jose T. Almonte, who suffered a lot of frustration in dealing with Swiss bankers and lawyers, loves to tell this story:

Many of the Jewish victims of Hitler's holocaust were Swiss bank depositors. Much of the wealth stolen from the Jews was also deposited by the Nazis in Swiss banks. The heirs of these victims and the survivors waged an eight-year legal campaign to retrieve some US$32 million from Swiss banks. They lost their case in the courts of law, so they went to the court of international public opinion and waged a public relations campaign against the Swiss banking system. Their public image battered, the Swiss gave in a little and settled -- but only for a minuscule US$2 million.

What Gen. Almonte does not know is that by 1997, in an effort to expunge a blot on its past, Switzerland had allocated more than US$100 million to recompense depositors or their survivors.

In January 1990, this writer published an article in the Philippine Panorama Magazine based on an interview with then Solicitor General Francisco "Frank" Chavez. In that article Chavez was quoted as saying of the Swiss banks and government with regard to the Marcos deposits: "I suspect there is a lot of fooling around here. I don't think these guys are really serious about returning our money."

The Swiss ambassador wrote him a letter that, in friendly tones, sought to get him to say he had been misquoted. Chavez stood by what he said.

Still, there are enlightened individuals and circles within the Swiss banking community and the Swiss government. They can go out of their way to help an aggrieved nation. In spite of the frustrations of Gen. Almonte and former Solicitor General Frank Chavez, the Swiss authorities were generally helpful in the case of the Marcos deposits. But at the same time, they had to be sure they were not damaging a cryptic system that has served them in good stead for almost seven centuries now.

And there is a principle involved here. There is such a thing as a human right to property. It is not as strong as the right to life and the right to physical security but it is related to these rights and must also be protected.

The Swiss banking system is designed to protect that right. And just as a court presumes that a man is innocent until proven otherwise, a bank presumes that a depositor is the honest owner of his deposit until proven otherwise. One of the most effective ways of protecting a man's right to his own property is, of course, secrecy.

And so one imagines the Swiss banker torn between his sense of duty to protect his depositor through secrecy and a sense that he could be protecting a thief through that secrecy. It may still turn out that some Swiss bankers are ghouls and gnomes but the case of the Marcos deposits show that Swiss bankers and Swiss government officials are in general very human beings in a very human quandary.

The Marcoses continue to be protected by the principle of presumption of innocence and regularity. Mrs. Marcos was acquitted by the Supreme Court en banc of the charge of conflict- of-interest. Had she been found finally, irrevocably, in the minds of many there would still be no proof that the Marcos wealth was not the wartime treasure of Japanese General Tomoyuki Yamashita that Marcos claimed to have found and stashed away in his younger days. And, as Gen. Almonte likes to point out, there would be no automatic transfer of funds to the Philippine government. The Swiss authorities would have to review how she was found guilty and make sure, by their own standards, that the trial had been fair and her human rights had not been violated.

Likewise, a district court found Bongbong Marcos guilty of non-filing of income tax -- but that is not a final judgment either and the amount involved is the peso equivalent of less than $50. It says nothing of the Marcos billions.

It has been suggested that effective steps can and should be taken without too much regard for their rights. But would that promote respect for the law? Would that foster love of justice?

The Filipino electorate, if they wanted to, could have punished the Marcoses by voting them out of their present offices and voting them into political oblivion. But Imelda Marcos is a member of congress and so is her daughter Imee while Bongbong Marcos is governor of the Marcos home province. They were freely and fairly elected. True, they could not win any of the national elections in which they ran. But they have loyal district and provincial constituencies that perceive them as the good guys, the victims even. There they remain unbeatable.

As to the public officials who shot down "Big Bird" and threw a smothering cordon sanitaire around President Aquino, one does not find it difficult to attribute to them the best, even idealistic intentions. Certainly, they should be given the benefit of the doubt. The worst that one can say is that they could have done much better.

It is, of course, easy to criticize. In their place, one might have made the same mistakes. We are all prisoners of our imperfect perceptions. And of our own hidden agenda that we may not even be conscious of. (To be concluded)

The writer, a former Manila journalist, wrote this piece in a strictly Philippine context without reference to the situation of any other country. The views expressed here are his personal views.