Fired Aide Takes Over Company : Manila Using Volunteers in Tracing Marcos Funds

Late last Friday afternoon, Carlos Farrales almost single-handedly took control of the 12-story office building where he used to work--the headquarters of the high-technology Philippine private company that runs the nation’s communications satellite, Earth station and underseas cable network.

Farrales walked up to his former colleague, Fred Africa Jr., senior vice president of Philippines Overseas Communications Satellite Inc. (Philcomsat), and served official papers on him.

“Fred, we’re taking over,” Farrales said.

While executives and secretaries looked on in amazement, Farrales, accompanied by three volunteer aides and four soldiers, commandeered a conference room and began demanding documents and keys to file cabinets.

On Monday, when Philcomsat officials returned to work, they found that Farrales’ approval was required for all checks issued in excess of 1,000 pesos, about $50.

Farrales, who was fired in 1978 as Philcomsat’s vice president for administration, is now working for President Corazon Aquino’s new Commission on Good Government, the agency responsible for recovering money from the family and associates of deposed President Ferdinand E. Marcos. The chairman of Philcomsat is Marcos’ son, Ferdinand E. Marcos Jr., who is known as Bong Bong.

The raid on Philcomsat, which a Los Angeles Times reporter was permitted to observe, illustrated the makeshift nature of the Aquino regime’s pursuit of “ill-gotten wealth.”

Over the last two weeks, the government’s efforts have succeeded in attracting headlines around the world. They have also managed to rivet the eyes of the Filipinos on the corruption of the Marcos regime, thus perhaps deflecting attention from the immediate economic and organizational difficulties confronting Aquino and her government.

Amateur Investigators

Yet, the commission in charge of this campaign is operating with little money or staff and is being forced to rely largely on the help of people who are amateurs. Task forces of volunteers--working for motives of love, glory or perhaps revenge--are looking into the tangled records of sophisticated and professional corruption.

Already, the commission’s work style is beginning to raise eyebrows here. In a front-page editorial last week, the Manila Bulletin warned about abuses of rights by the commission. Noting that extensive publicity is being given to the names of persons whose bank accounts are frozen or who are barred from leaving the country, the paper said, “It may turn out that such individuals are innocent.”

Over the weekend, a wealthy Philippine businessman, Emilio Yap, issued a statement asserting that he does not hold any property for Marcos or his family, that he seldom met Marcos and that he has not received any government loans or guarantees for the last 40 years. Yap said that everything he and his family own comes from their own labor. He said they are determined to spend the rest of their lives in the Philippines.

At a meeting of the Commission on Good Government, Commissioner Raul Daza said Sunday that local newspaper reports saying Yap has been officially barred from leaving the country are wrong.

2 Newspapers Taken Over

The questions about the Aquino regime’s campaign for hidden wealth also extend beyond the commission. Over the weekend, the new government announced that the Information Ministry will sequester the assets of two Manila newspapers, the Daily Express, owned by sugar baron Roberto Benedicto, and the Times Journal, reportedly owned by Imelda Marcos’ brother Benjamin Romualdez.

Aquino’s executive secretary, Joker Arroyo, said the newspaper takeovers--along with the previous takeovers of three television stations reportedly owned by Marcos’ daughter Imee Marcos Manotoc--are aimed at dispersing ownership of media properties. The Information Ministry plans to sell the assets of these companies soon and does not intend to monopolize the news media, Arroyo said.

Nevertheless, the Express charged in an editorial Monday that “freedom of the press is being abridged.”

The commission was originally to have a budget of 50 million pesos, about $2.5 million. But the new government has found itself in serious financial straits and has told the commission that it can have only 5 million pesos ($250,000).

“We only got 10% of what we thought was necessary to be operational,” Daza said last week. “We’re going to have to start with a staff of 30, where we should really have hundreds.”

The commission also has no money to hire lawyers overseas who might help the Philippines recover assets sent abroad. Its work in the United States is being handled by the Center for Constitutional Rights, a public-interest law firm based in New York that has long been active in left-wing political causes.

The Philippine volunteers working for the commission receive no pay, only gasoline and money for food. Since the commission has no office space for them, they conduct their investigations, in part, out of their homes.

Some have signed up because they feel they have special knowledge, or at least suspicions, about corruption within Philippine companies for which they used to work. The communications task force includes a former employee of Eastern Telecommunications, Inc., a private company that operates a microwave system.

“It’s a labor of love for everyone,” said Daza, a former Los Angeles attorney who is one of five members on the commission.

The raid on Philcomsat began Friday afternoon, when another commissioner, Ramon Diaz, signed an order empowering Farrales to seize and inspect the records of Philcomsat, Eastern Telecommunications, the Philippines Long Distance Telephone Co. and Domestic Satellite of the Philippines, Inc. All were suspected of financial improprieties under the control of Marcos’ associates.

Military Protection

The idea was to occupy the offices of these companies at the end of the business day and spend the weekend examining the records. Farrales and his squad of volunteers were authorized to bring military escorts with them to secure the offices.

Their first task was to find some troops. That job took most of the afternoon. Farrales and his men set out for the office of Gen. Fidel V. Ramos, the armed forces chief of staff, but they went to the wrong military base in search of him. Eventually, they located his office at Camp Aguinaldo, where they were referred to Col. Ismael Villareal.

Villareal was not sure that he could come up with troops so quickly.

“What about your special strike force?” Farrales asked.

“They are being--uh--reoriented,” Villareal replied.

Finally, he sent them to another base where, after further delays, soldiers were dispatched--not the 30 Farrales had requested, but two cars with seven armed men.

Doing Their Aerobics

By the time the assembled team reached Philcomsat headquarters, it was nearly 5:30 p.m. Many of the company’s employees had already left for home, and others were attending end-of-day aerobics classes in the building.

In the carpeted executive suite, a few vice presidents and secretaries were cleaning off their desks. Farrales approached them and demanded organizational charts, financial records and other help.

“Who’s your comptroller, your finance person, your treasurer?” he asked. “I want a blackout (of mobile phones). No calls coming in or out of here except for operations calls.”

The executives were stunned that it was Farrales who was conducting the raid. By Farrales’ own account, he was fired from Philcomsat by the company’s president, Manuel H. Nieto Jr., a Marcos ally and former ambassador to Spain, who continues to head the firm.

“The reasons were both personal and political,” Farrales said of his dismissal. “I stepped on the toes of some people.”

He said he originally hired a lawyer to challenge the firing, but eventually reached a compromise settlement with the company.

“All this is known to the commission,” he said. “I told them, ‘I can tell you where the skeletons are hidden’ (at Philcomsat).”

During the raid, Farrales asked Reynoso Ildefonso, the current vice president for administration, “Are you willing to cooperate with us?” Ildefonso shrugged and told Farrales: “As far as I’m concerned, I worked for you before, so why not?”

Another Philcomsat executive, assistant vice president Romeo B. Valencia, told a reporter, “Let’s just say I think he (Farrales) has an ax to grind.”

The commission investigators soon began coming up with tidbits of information. They found a list of 43 company cars assigned to individuals. Nieto himself had three company cars--a red Mercedes-Benz, a blue Mercedes and a white Opel. The investigators found that Philcomsat also assigns one 1983 Mercedes to Philippine Defense Minister Juan Ponce Enrile, a director of the company and the man whose turn against Marcos helped propel President Aquino to power.

In general, however, they found the Philcomsat investigation to be arduous.

“It’s been a mess. We’re finally beginning to get some semblance of organization,” one investigator said.

Strike Negotiations

Farrales’ team also took over the offices of the long distance telephone company. That process required him to become involved in some delicate labor negotiations.

The long distance company has 10,000 workers on strike. Farrales contacted union leaders to assure them that seizure of the company was not directed at the union. In fact, he said, the commission’s study of the books could determine whether the company could afford to meet their demands.

Asked Sunday who is running Philcomsat now, Farrales told The Times, “I’m the OIC, the officer in charge.”

On Monday, Philcomsat officials said they objected to a Farrales request to see individual personnel records.

“They’re looking for records that are not covered by the commission’s order,” Valencia complained.

Nevertheless, company officials said they hope to cooperate with Farrales and the commission. “We have nothing to hide,” Africa, the vice president, said. “Our books are open. Some people didn’t come to work today, but all the executives are here. Mr. Farrales told us it would be business as usual.”