Some of California Firm’s Spending From Marcos Military Funds Was Legitimate

A 1982 document seized from Ferdinand E. Marcos, which states that a California firm funneled more than $700,000 in Philippine military money into U.S. political campaigns and “security missions,” includes many non-political spending entries that have proven genuine despite charges that the paper was faked, The Times has learned.

The document, a “statement of expenses” for the San Francisco-based Mabuhay Corp., also includes cryptic entries from 1981 and 1982 that parallel publicity and diplomatic initiatives in the United States and Mexico by the former Philippine president.

The factual support for those expense items that could be checked contrasts with assertions by politicians and Mabuhay officials that the document is a fraud.

Much of the one-page sheet purports to recount spending of Philippine military intelligence money in the United States as approved by Fabian C. Ver and Irwin Ver, former leaders of the Philippines’ military and security forces.

Political Contributions

Among other items, it lists $175,200 in contributions to 10 U.S. politicians, including former President Jimmy Carter and President Reagan, and $506,683 in unidentified “special security” spending.

Sen. Alan Cranston (D-Calif.), another of those politicians, branded the sheet “somebody’s fake expense account.” Investigators for the new Philippine government of President Corazon Aquino also voiced doubts about its authenticity.

And Leonilo Malabed, a wealthy friend of Marcos who founded Mabuhay with five other Filipino-Americans in 1978, told The Times that he was “shocked” by news that the document was among Marcos’ private papers. He denied that any political or intelligence activity took place within the company.

Nevertheless, no one has yet explained why the document, faked or otherwise, was included in the 2,300 pages of private papers carried by Marcos’ aides when he fled the Philippines last month.

And two days of cross-checking produced both circumstantial and physical evidence suggesting that parts of the $762,478 listed on the seized document were indeed related to Mabuhay, a firm created by Malabed to buy a San Francisco jazz-oriented radio station.

Purchase Fell Through

Federal Communications Commission records show that plans to purchase station KJAZ-FM fell through in October, 1979. A listing on the seized document of about $51,000 in legal fees, good-faith deposits and other purchase-related expenses was checked and found to correspond with information in FCC records and with the general recollections of attorneys involved in the purchase and whose names appear on the statement.

Daniel Reidy, a former attorney for Mabuhay, recalls earning fees of about $14,000 in the failed effort to buy KJAZ-FM but says “it could have been more.” The Marcos document indicates that he was paid $16,650. Attorney Stephen Farrand’s firm is listed as receiving $1,582 from Mabuhay, a sum he said was an FCC filing fee paid by the law firm.

Reidy, who stopped representing Mabuhay in late 1979, says he never saw the firm’s books and could not explain any of the document’s purported political donations or other expense entries, which extend from February, 1979, to March, 1982.

However, public records trace a parallel between politicians on the list and donations by Mabuhay, Malabed or its five other directors.

Reagan, Carter Mentioned

The document lists $50,000 donations to Reagan, Carter and to Larry Asera, a former Solano County supervisor who ran for the California State Assembly. Lesser amounts were listed for seven others, including Cranston, San Francisco Mayor Dianne Feinstein, California Lt. Gov. Leo McCarthy and even two school board candidates.

All but Reagan and San Francisco Community College board member Judy Tang since have reported legal donations from Mabuhay or its six principals. Tang had not fully checked election records by Friday.

Malabed and three company directors gave $8,750 to the Carter reelection race or the Democratic National Committee in 1979 and 1980, federal records state. Malabed bought a $1,500 table at a 1979 fund-raising dinner for Feinstein and later gave $750 to her reelection committee. He also guaranteed a $30,000 loan to Asera, which he later paid off when Asera lost his Assembly race to incumbent Don A. Sebastiani (R-Sonoma) in 1980, state records show.

Most in One Check

San Francisco political consultant Jack Davis, who advised Asera, said Malabed delivered the bulk of the money in a single check.

“I went to the branch manager of the bank it was drawn on . . . to make sure there was no difficulty with it,” Davis said, and the manager replied, “If there was another zero, I still would not have to verify that this is a good check.

“It was real clear to me from the first time we met that Dr. Malabed was pro-Marcos,” he said. Davis recalled that Malabed boasted that the white Rolls-Royce he drove was a personal gift from Marcos.

Besides political activities, more obscure entries on the Mabuhay document--both large and small--coincide with events in the United States and Mexico clearly linked to Marcos’ Philippines rule:

--A Sept. 25, 1981, entry of $20,000 under “Special Security Projects,” labeled “Cancun, Mexico,” occurs roughly a month before Marcos attended an economic summit of rich and poor nations in Cancun, where he met briefly with Reagan. Filipino expatriates say a second $40,783 entry, titled “Pulong-Pulong, USA” appears to refer to an effort by Marcos officials to rouse Filipino-American support for an October, 1982, state visit by Marcos.

--Handwritten entries of $10,000 and $200, labelled “3-11-82 Camellia Festival,” appear to refer to the annual Camellia Festival in Sacramento, which in March, 1982, paid tribute to the Philippines.

Times staff writers Dan Morain and Mark Stein in San Francisco and Carl Ingram and Stephanie O’Neill in Sacramento contributed to this story.