Investigators Focus on Marcos’ Rich ‘Cronies’ : Probe Agents Who Handled Investments
They worked in a shadowy world of secret codes and legalistic legerdemain, of shielded bank accounts in Switzerland and Singapore and a labyrinth of offshore corporations.
They are the “cronies,” the small group of wealthy Filipinos who allegedly acted as key front men and business agents for former Philippine President Ferdinand E. Marcos and his wife, Imelda. They helped funnel hundreds of millions of dollars into a hidden U.S. financial and real estate empire stretching from a small Texas motel to a San Francisco bank, from a glitzy Manhattan shopping mall to a block of apartment buildings in downtown Seattle.
Lawyers and investigators for the Philippine government commission formed to investigate Marcos’ holdings now are focusing on more than a dozen of the Marcoses’ chief agents in this country, including both the Filipino cronies and the Americans they have hired.
The investigators also are tracing a trail of records leading from the United States to the Netherlands Antilles, then to Panama, Hong Kong and back to Manila.
Jovito R. Salonga, head of the Philippine Commission on Good Government, testified Thursday in federal court in New York that Joseph and Ralph Bernstein, two New York real estate agents, had bought and managed New York properties on the Marcoses’ behalf. The commission was established to investigate the alleged corruption during Marcos’ 20-year rule.
Salonga also submitted a handwritten trust agreement signed by Joseph Bernstein and dated April 4, 1982, in which Bernstein pledged to act “for the benefit of President Ferdinand E. Marcos” in dealings with the Lastura Corp., N.V., a now-defunct Netherlands Antilles company that purchased the Crown Building, an office building on Manhattan’s Fifth Avenue, in 1981 for $51 million.
In the lawsuit, the Philippine government seeks to regain control of five properties in New York purportedly owned by the Marcoses.
Deny Being Agents
The Bernsteins have repeatedly denied working as Marcos’ agents in New York. A spokesman for their company, New York Land Co., said Thursday night that they are scheduled to give depositions Tuesday. “They intend to fully comply with any discovery orders of the court,” the spokesman said.
In a separate $1.5-billion lawsuit filed Thursday in U.S. District Court in Houston, lawyers for the government of President Corazon Aquino argued that “an elaborate network of secret corporations” representing Marcos’ interests purchased at least $50 million worth of buildings and thousands of acres of land near Corpus Christi, Fort Worth, San Antonio, Dallas and Houston.
The 21 corporations named in the suit are registered in Texas, but are incorporated in the Netherlands Antilles, where bank secrecy laws are much stricter. The 21 companies are “owned in turn by one or more Panamanian companies,” Michael Tigar, an Austin attorney who filed the suit, said in a telephone interview Thursday.
Tigar said the corporate registration records in Texas have addresses both in Vancouver and Manila, and wire transfers of funds can be tracked from the companies to banks in Manila.
Traced to Panama
Bonifacio H. Gillego, a Philippine government investigator in New York, said several Netherlands Antilles corporations owning Manhattan office towers and a Long Island estate also have been traced to holding companies in Panama. He said investigators are tracing corporate records in a trail from Panama to Hong Kong, and ultimately back to a Manila bank.
“That’s the way we think they’re doing it,” he said.
The Texas lawsuit, filed under the Racketeer-Influence and Corrupt Organizations act, called RICO, asks for $500 million in actual damages and $1 billion in punitive damages. In addition to the Marcoses, the suit names eight defendants, including Jose Y. Campos, his wife Betty, their son Jeffrey, and a brother-in-law, Simeon Dee.
Filipino investigators in New York and Washington say Jose Campos, 63, head of United Laboratories, Inc., one of Asia’s largest pharmaceutical firms and largest distributor of drugs to government health clinics and hospitals, is among the top Marcos front men in the United States and Canada. He has a residence in Vancouver and applied for immigrant status in Canada last week, officials said. He could not be reached for comment on the suit.
“He seems to be hiding,” Gillego said.
In California, the Philippine government investigators are focusing on Rolando C. Gapud, a Manila banker who acted as Marcos’ personal financial adviser. A lawyer by training, Gapud ran the Marcos Foundation, a quasi-governmental foundation that absorbed funds from corporations taken over by the Marcos government after martial law was declared in the Philippines in 1972.
Gapud is president of Security Bank and Trust in Manila, and a former director of the Redwood Bank of San Francisco. He resigned from the Redwood Bank because “the publicity and alleged ties to Marcos were presenting a problem for the bank,” said John B. Molinari, another director of the Redwood Bank. Gapud’s whereabouts could not be learned.
Gapud’s role was revealed after another expatriate Filipino financier, Dewey Dee, applied for asylum in Canada last year and told immigration authorities in Vancouver that Marcos secretly owned the San Francisco bank, in violation of Philippine and U.S. banking laws. Dee said he was recruited by Gapud to be Marcos’ “front” in buying the bank in 1980, according to Dee’s lawyer, Gerald Goldstein.
In New York, the Philippine government has named several Filipinos as nominees and agents of Imelda Marcos in their lawsuit to take control of three office towers in Manhattan and a 14-acre estate on Long Island, reputedly owned by the Marcoses. The properties were reported to be worth more than $300 million.
Imelda’s Aide, Confidant
One of the nominees, investigators say, is Vilma Bautista, 47, a former first secretary in the Philippine Mission to the United Nations. A woman who used to earn extra money by sewing curtains, Bautista ultimately emerged as Imelda Marcos’ chief aide and confidant in New York.
The Philippine government has canceled Bautista’s diplomatic passport and alerted U.S. immigration and customs officials.
Bautista lived in a modest rent-stabilized apartment, but she acted as purchasing agent for four $1-million apartments in Olympic Tower, across from St. Patrick’s Cathedral on New York’s Fifth Avenue. Her name also turned up on a $1.43-million bill for emeralds, rubies and diamonds from the jeweler, Bulgari, and public records show that she paid property taxes on Lindenmere, a 14-acre estate used by Imelda Marcos in Center Moriches, Long Island.
The New York suit also names as a defendant Antonio O. Floirendo, a longtime friend of Marcos who became known as the banana baron for his vast plantations employing convict labor in Davao, on the southern island of Mindanao. Floirendo, a frequent traveling companion of Imelda Marcos, is a director of Ancor Holdings N.V., based in Curacao, which is listed as the owner of Lindenmere.
Store Owner Sought
The investigators also are searching for Glyceria Tantoco, owner of a Philippine department store and retailing chain. Her husband, Bienvenido Tantoco, is the former Philippine ambassador to the Vatican.
Glyceria Tantoco initially acted as the ostensible owner of the four Manhattan buildings, according to testimony before a House subcommittee in January. But Barry Knox, a bank officer who acted as her adviser, testified before the Asia and Pacific affairs subcommittee of the House Foreign Affairs Committee that “on several occasions, Mrs. Tantoco mentioned to me” that Imelda Marcos owned the four buildings.
In keeping with their secret roles, the agents sometimes used code to communicate with the Marcoses in telexes and letters.
Glyceria Tantoco was “Saturn,” while Knox was “the Superintendent,” the subcommittee was told. The Crown Building was code-named “Ferragamo,” the Herald Center shopping mall was “Lafayette,” another office building at 200 Madison Ave. was “Midtown Cement,” and 40 Wall Street was “Bridgetown.” Joseph Bernstein was “Esquire.”
Investigators said they are finding new details each day revealing the Marcos’ ties to their U.S. agents, and their multimillion-dollar holdings.
“Marcos is a lawyer,” said Severina Rivera, a Philippine government investigator in Washington. “I think his legalistic training made it impossible to throw away any paper. And it will be his downfall.”
Times staff writer Mark Stein in San Francisco and researcher Joanne Harrison in Houston also contributed to this story.