Hearing OKd on Freeze of Marcos Assets

A federal appeals court agreed Tuesday to reconsider the Philippine government’s move to freeze an estimated $1.5 billion in assets around the world allegedly looted by deposed President Ferdinand Marcos from the government treasury.

In a brief order, the U.S. 9th Circuit Court of Appeals said a majority of the court’s 26 active judges have voted to reconsider a June 4 ruling by a three-member panel of the court lifting a freeze on Marcos’ property.

The ruling, which will allow 11 judges of the court to hear the case anew, could strengthen the new Philippine government’s efforts to recover the billions of dollars the government claims Marcos plundered before fleeing to the United States last year.

Question of Authority

It could also mean that a significant number of the court’s judges take issue with the earlier ruling, written by new conservative appointee Alex Kozinski, which held that U.S. courts have no authority to rule on Marcos’ actions as Philippine president.

In that ruling, Kozinski concluded that “a dictator can do whatever he can get away with.”

“We’re very pleased,” said Richard Kendall, an attorney for the Philippine government. “The ruling means the injunction freezing the worldwide assets remains in effect and will continue in effect until the 9th Circuit hears the case en banc .”

“One of the grounds for granting an en banc review is an exceptional case, and it’s very hard to describe a lawsuit brought by a government against a former head of state as not being an exceptional one,” Marcos’ attorney John Bartko said.

U.S. Laws Cited

U.S. District Judge Mariana R. Pfaelzer granted the initial freeze in June of 1986, after the government of Corazon Aquino filed suit in Los Angeles, claiming that Marcos had violated U.S. racketeering laws when he allegedly stashed away up to $5 billion in government assets as president and fled the country with money rightfully belonging to the Filipino people.

In the order lifting the freeze, Kozinski said the lawsuit is “at least in part a political dispute between the Philippines’ current government and its former ruler” and concluded that the “act of state” doctrine, under which courts of one country do not judge the sovereign acts of another, precludes intervention by U.S. courts.

“It could well embarrass the United States for the court to hold, as plaintiff would have us do, that a foreign government that the United States recognized and considered its ally for many years . . . was actually a criminal enterprise under our law,” Kozinski added in his written opinion.

In a strong dissent, Judge Dorothy Nelson called that argument “particularly disturbing” and said speculation about foreign policy consequences of the court’s decision is “entirely inappropriate.”

Weighing Embarrassments

“It is not clear why the majority believes that such potential embarrassment would outweigh the certain, immediate embarrassment in our relations with the current Philippine government if the courts were to shut the door to the Philippines’ request for adjudication of the claims,” Nelson wrote.

“We cannot ignore the substantial allegations of private, unofficial acts of common theft, misappropriation, fraud and concealment merely because Marcos was serving as the Philippines’ president when he allegedly committed these crimes,” she said.

Kendall said the Philippine government, in requesting a rehearing, argued that the “act of state” doctrine does not apply because Marcos was not acting in his official capacity when he allegedly took the assets.

Bartko said, “Our position from the beginning is that these are issues that are best resolved by the Philippine courts, and the courts of the U.S. ought not to hear them.”