3 Ex-Marcos Associates Aiding Probe on Finances

Barely one month after former Philippine President Ferdinand E. Marcos fled Manila, three of his closest former business associates and financial advisers have begun providing investigators crucial information on Marcos’ tangled financial empire at home and abroad.

Philippine investigators interviewed former Manila energy czar Geronimo Z. Velasco for the first time Saturday afternoon in a ninth-floor suite at the Hilton Hotel in Sherman Oaks.

Velasco was minister of energy for eight years and was chairman of the government-owned oil company under the Marcos regime. Investigators said Velasco became one of the nation’s wealthiest men while in the Marcos Cabinet.

The Philippine Commission on Good Government, which is investigating Marcos’ estimated $5 billion in foreign investments and bank accounts, also has obtained detailed statements from two of Marcos’ closest financial advisers, industrialist Jose Y. Campos and banker Rolando C. Gapud.

Campos, in particular, said that he operated as a front man for Marcos between 1965 and 1981 in setting up and running 34 shell corporations “for and on behalf” of Marcos, according to a copy of his eight-page sworn affidavit provided to The Times on Saturday.

Campos, often regarded as one of Marcos’ closest and oldest friends, swore the affidavit on March 21 before Philippine commissioner Ramon A. Diaz at the U.S. Consulate in Vancouver, British Columbia, where Campos now lives. On Thursday, Campos also gave Diaz a sheaf of about 200 deeds and titles for properties that he said Marcos owned in Greater Manila.

“Marcos was buying properties all along the highways before they were being built,” Diaz said in a telephone interview Saturday night. Diaz said many of the Marcos properties were along Manila South Road, a major highway. He said said at least two of the properties were along Ortigas Avenue and were worth $5 million to $7 million.

“It’s one of the most expensive areas in Manila,” Diaz said.

Campos, 63, is founder and head of United Laboratories Inc., one of the largest pharmaceutical companies in Asia. Under contracts with the Marcos government, the company provided more than half the drugs used by the government Ministry of Health in hospitals and clinics.

Secretly Ran Businesses

Campos’s affidavit shows that Marcos purportedly directed him to set up and secretly run for him at least 34 corporations in the Philippines, Hong Kong, Panama and the Netherlands Antilles in the Caribbean.

The businesses included ventures in foreign securities, real estate, timber production and even silk manufacturing.

In the document, Campos said his relationship with Marcos dates back to when Marcos was first elected to the Philippine Congress in 1949 and continued after Marcos was elected president.

“Thereafter, I assisted in the organization and acquisition of some business ventures for the former president (Marcos),” Campos stated. “Following his directive, I instructed my lawyers and requested the assistance of my other business associates and officers . . . to organize, establish and manage these business ventures for and on behalf of the president.”

Delivered Deeds to Marcos

In each business venture, Campos said, he executed a deed of trust with “an unnamed beneficiary” listed upon it. Then, he said, he delivered the deed to Marcos.

“It is, in fact, my policy and procedure that we disclaim completely any interest in any of such businesses and make it clear to (Marcos) that we hold such interests in his behalf,” Campos said.

The 34 businesses allegedly run for Marcos carried such names as Performance Investment Corp., Mid-Pasig Land Development Corp., Anchor Estate Inc. Oesco Timber Inc., Universal Silk Corp. Gainful Holdings Corp. San Mariano Mining Corp. Gainful Holdings Corp, Hubbard Agri-Venture Corp., Tropical Resources Corp., and Foreign Securities Co. Ltd.

Little could be learned Saturday about the companies’ specific activities. Jovito R. Salonga, head of the commission tracing Marcos’ holdings, said that 28 of the firms were believed to be based in the Philippines and two each in Hong Kong, Panama and the Netherlands Antilles.

‘Subject to Inquiry’

Salonga, who has been in Los Angeles since Thursday and is preparing to return to Manila on Monday, said the list of businesses would be “subject to inquiry”--along with others provided by Campos. Those other lists include dozens of companies of which Marcos had no part, Campos contends.

“We are not saying that we believe this affidavit or anything he has told us,” Salonga said. “Everything he told us will be subject to inquiry.”

Diaz said Campos told him he had decided to “make a clean breast of things” after Marcos’ regime collapsed. Diaz noted, however, that Campos made his declaration after the government froze his bank accounts and assets.

“He wants to save his own businesses,” Diaz said. “At United Laboratories, he has 3,000 employees. No one will give him credit to order supplies. . . . With his assets frozen, it’s not easy to run a business.”

Velasco Declined Comment

Velasco, 58, arrived at the Saturday meeting in Sherman Oaks wearing a blue pinstripe suit and dark sunglasses. Declining afterward to comment on his 45-minute talk with Salonga, Velasco climbed into a red compact car and was driven away by relatives.

Velasco left the Philippines for Singapore on a private jet Feb. 25, the day Marcos fled Manila on a U.S. Air Force jet for Hawaii. Velasco later joined Marcos there, U.S. officials said, before flying to Geneva.

Salonga’s investigators previously have said they wanted to question Velasco about allegations that a little-known Manila company called Gervil siphoned off millions of dollars in illegal kickbacks and rebates from the Philippines National Oil Co., which Velasco headed.

Marcos set up the government-owned oil company in 1973 and specifically exempted it from outside auditing. The company currently is undergoing an audit, government officials said in Manila.

“He’s the man who kept insisting that the price of oil go up here when it was going down all over the world,” said Mary Bautista, a commissioner in Manila. “We could never understand why the board of the national oil company would grant price increases.”

Dealings Detailed

Investment banker Rolando C. Gapud, another close financial adviser and alleged “front man” for Marcos, also has begun detailing his dealings with Marcos to the commission in Manila.

“He has sent feelers to me through friends and relatives,” said Salonga.

Gapud also wrote a four-page letter to Salonga’s commission last week saying he performed “firefighting tasks” in financial dealings involving alleged Marcos interests in four New York buildings and a Silicon Valley semiconductor operation called ARCI.

Gapud’s statement broadly covers his financial dealings since 1967. In his statement, Gapud refers to himself as “subject” and to Marcos as “M.”

The banker wrote that in 1974 he was “introduced to M. by Mr. Campos as one of his trusted people who can be asked to perform professional services.” In his affidavit, Campos referred to Gapud as “my financial consultant.”

Audit Team Was Formed

From 1974 to 1980, Gapud wrote, he formed a team to audit companies owned by six Filipino businessmen who investigators believe to be Marcos fronts. Gapud said he dealt only with the six businessmen and “was never directly involved in the relationship between these people and M. Their relationship was with him directly.”

Gapud said he is preparing a list of Marcos’ companies as well as information on Marcos’ hidden trust accounts at the Security Bank and Trust Co. in Manila. Gapud resigned as chairman and president of Security Bank shortly after Marcos fled.

Gapud said he would deposit checks and cash for Marcos at the bank and “disbursement instructions would be verbally given. The accounts were run on a very confidential basis, and except for the subject, no one else in the bank knows to whom it belongs or where the disbursement goes.”

Gapud said he acted “purely on a professional basis” and violated no laws. A copy of the undated statement was obtained by the Center for Constitutional Rights in New York and made available to The Times.

Not Enough Details

“He has started to talk but not really with the details that would satisfy us,” Diaz said.

Gapud’s passport has been revoked, and he apparently remains in hiding in the Philippines.

Both Campos and Gapud are named on documents seized during a raid by Salonga’s investigators on a Manila office used by Marcos’ daughter Imee last month. Copies of five bank receipts, for example, show transfers and deposits of about $2.5 million to Campos in Hong Kong banks in 1972. Another barely legible page is titled “Campos, Gapud Receipts.”

Campos also has come under legal pressure. A $1.5-billion lawsuit filed on March 20 in Federal District Court in Houston alleges that Campos, his wife and eight other defendants ran a network of 21 offshore corporations on Marcos’ behalf to purchase more than $50 million worth of Texas real estate prior to 1981. The companies are all incorporated in the Netherlands Antilles and owned by holding companies in Panama.

Some Did Not Involve Marcos

In his affidavit, however, Campos contended that the companies owning land in Texas did not involve Marcos. In addition to the Texas land, Campos has claimed ownership of 25 companies incorporated in the Netherlands Antilles and 17 companies in the Philippines with 19 subsidiaries.

In Seattle, three of the companies named in the Texas lawsuit purchased more than $15.2 million worth of downtown real estate in 1983 and 1984, according to Seattle attorney Michael Fox, who has begun investigating Campos’ holdings there.

In a separate lawsuit, a company that sold more than $9.1 million in downtown Seattle real estate to Compos’ UNAM Investment Corp. N.V. in March, 1983, sued in King County, Wash., Superior Court last week to guarantee payment of a $550,000 promissory note still due on the property.

Noting the freeze on Campos’ Philippine bank accounts, the suit by Daon-Highfield Partnership alleges that UNAM “fraudulently failed to reveal that payments of sums under such sale might be conditioned on the cooperation of a foreign government.”

No Payments Missed

But Brian Nordwall, a lawyer and registered agent for UNAM in Seattle, said the company has not missed any payments so far. He added that Campos purchased the properties in 1983-84, or two years after Campos said he ceased representing Marcos.

“Logically, these were not done as a front for Marcos,” Nordwall said of the Seattle properties.

Campos would not meet reporters last week after giving the affidavit. A housekeeper at his house--a low-slung, modern glass-and-brick structure hidden behind tall hedges and electric gates on a wooded point overlooking Vancouver’s Strait of Georgia--said Campos and his family were not at home and could not be reached.

“Sometimes they call,” said the housekeeper, who declined to identify herself. “I don’t know where they are.”

Al Thiessen, acting manager for Canadian Immigration in Vancouver, said Campos “is in Canada legally” but said he could not discuss Campos’ immigration status due to privacy laws. Campos’ Vancouver lawyer, William J. Wright, did not respond to repeated requests at his office and home for an interview.

Salonga said additional Marcos associates also had approached the commission about providing information. He declined to identify them, however.

“Marcos was not operating through one or two men alone,” Salonga said. “But many of these people do not want their names bandied around as squealing on Marcos.”

Bob Drogin reported from Seattle and Vancouver. David Freed reported in Los Angeles.