Marcos Bids $5 Billion to Go Home : Offer for Return to Philippines Said to Bar Prosecution

Former Philippine President Ferdinand E. Marcos has offered to give back $5 billion to the Philippines and to support the government of President Corazon Aquino if he is permitted to return there and be exempted from criminal prosecution, according to participants in the negotiations.

Marcos’ representatives are now making a last-ditch effort to avert his indictment in the United States by promising American officials that he will, for the first time, promote “national reconciliation” in the Philippines if he is not charged.

“If there is no indictment, he will support the government of the Philippines. There will be national reconciliation,” Col. Arturo Aruiza, an aide to Marcos at his current home in Honolulu, told The Times.

Special Scrutiny

Meanwhile, Acting Associate Attorney General Francis A. Keating disclosed Monday that the Justice Department recently set up a new policy to give special scrutiny to federal criminal investigations involving former chiefs of state, such as Marcos, or current national leaders, such as Panamanian strongman Manuel A. Noriega.

Keating said that whenever a U.S. attorney recommends an indictment against such a foreign leader, there will be first a special review within the Justice Department and then a separate review involving other U.S. agencies. “This would include getting advice from the intelligence community or the State Department on what impact this (proposed indictment) would have on national security,” Keating said.

According to a UC Berkeley political science professor, A. James Gregor, representatives of Marcos have entered into talks with Philippine officials--including Aquino’s brother Jose (Peping) Cojuangco and Philippine Ambassador to the United States Emmanuel Pelaez--seeking a deal in which Marcos would pay $5 billion in exchange for the right to return to his home province of Ilocos Norte.

Role for Son Sought

Gregor, who has been in direct contact with both the Marcos camp in Honolulu and U.S. officials in Washington, said that Marcos has agreed to stay out of political life, to keep out of Manila and to support Aquino. However, the former Philippine president has asked that his son, Ferdinand (Bong-Bong) Marcos Jr., be permitted to run for political office, perhaps as governor of Ilocos Norte.

Marcos’ offer of $5 billion--an amount so large it would rival the “mini-Marshall” plan of foreign aid the United States has proposed for the Philippines--was first proposed in early June. Although Ambassador Pelaez personally opposed accepting the offer, he passed on the message from Washington to Manila.

Asked Monday by a Times reporter about the $5-billion offer, Pelaez replied: “You have long ears. . . . I’m not sure that I can reply to you. I’m not certain whether I can talk about it or not. I’d rather you didn’t ask me.”

In the past, estimates of the amount of money that Marcos and his associates diverted from the Philippines have ranged from $1 billion to $10 billion. Marcos’ offer of $5 billion in exchange for the right to return home was so high that it took Philippine officials by surprise.

“That’s why the negotiations haven’t been easy,” Gregor said. “Everyone (in the Philippines) is saying, ‘If he’s got $5 billion, maybe he’s got $40 billion.’ ”

‘Carry Messages’

Gregor, a conservative academic and the author of several books on the Philippines and Southeast Asia, has ties to both the Marcos camp in Honolulu and to U.S. policy-makers in Washington. He said that he has not been a direct party to the negotiations over Marcos’ future, but explained that “I sometimes carry messages back and forth.”

“The former president doesn’t want anyone to think he’s buying his freedom,” said another source close to Marcos who has taken part in the recent negotiations. “It’s his love for the Philippines, his desire to go home. He wants to help restore the Philippine economy, and if his personal resources can do that, he wants to do that.”

This source, who called Marcos “a very dignified and sensitive man” too proud to be seen as “buying his freedom,” said that Marcos representatives also have been careful to characterize their financial offers in terms that do not “admit or imply guilt” about the origins of Marcos’ wealth.

Another source familiar with the negotiations said the Philippine government has to decide whether the risk of having Marcos operating from inside the country is worth the advantage of having $5 billion to deal with immediate and serious domestic problems.

‘$5-Billion Kitty’

“It wouldn’t hurt for them to have a $5-billion kitty to deal with development needs, land reform, to help its military and to reduce foreign debt,” the source said. “But only one person can make that choice: the president of the Philippines.”

It was not clear what effect, if any, a Marcos agreement with the Philippine government would have on the indictment decision in the United States. However, one Marcos representative who asked not to be identified said it is the ex-president’s hope that American authorities “will stall the indictment until they see what’s happening” between Marcos and the Aquino administration.

Another source who asked not to be named said public disclosure of the “incredibly delicate” talks are likely to force Aquino to decide immediately whether to accept the Marcos offer.

In recent weeks, representatives for Marcos have been carrying on negotiations with two governments, the United States and the Philippines, in an effort to settle his future, avoid criminal prosecution and, if possible, secure his return to his homeland.

Indictment Recommended

In the United States, federal prosecutors in New York City have recommended that Marcos be indicted on fraud and conspiracy allegations stemming from his alleged use of Philippine government funds to buy art and American real estate while concealing their ownership. In the Philippines, meanwhile, he faces both fraud charges and an intensive effort by the Aquino government to recover money he took from the Philippines.

In the two years since the revolution that resulted in Marcos’ flight to Honolulu, Aquino has said repeatedly that he could not return to the Philippines. Recently, however, she changed her position slightly and said Marcos might be permitted to return to his homeland if he were willing to stand trial there.

If Marcos were allowed to return, he would apparently be free of worries that he might be forced to stand trial in this country. There is no extradition treaty between the United States and the Philippines.

When Secretary of State George P. Shultz visited Manila two weeks ago, he was greeted by more than a thousand pro-Marcos demonstrators carrying signs such as “U.S. Bring Back Marcos” and “President Marcos, Man of the Masses.”

According to Gregor, the negotiations over Marcos’ return and the huge cash payment began in early June, when representatives of Marcos first approached the office of Rep. Stephen J. Solarz (D-N.Y.), chairman of the House Foreign Affairs Committee’s subcommittee on Asia, to sound him out on the idea. Gregor said Solarz’s office rebuffed the overture.

Skeptical Reaction

A Solarz aide said he told a Marcos representative, public relations executive Jay Hoffman of Tarzana, Calif., that he should make his offer through official channels of the Philippine government. The Solarz aide said he was skeptical of the entire effort. “Does Marcos really have $5 billion in liquid amounts?” he asked.

Marcos’ representatives then approached others, including Allen Weinstein of the Center for Democracy in Washington and, eventually, Ambassador Pelaez and Deputy Chief of Mission Raul Rabe of the Philippine Embassy in Washington. According to Gregor and another source, in at least some cases the specific amount of $5 billion was mentioned.

“I can’t confirm or deny anything,” Weinstein told The Times on Monday.

Gregor said the Philippine ambassador was personally opposed to the idea. “He felt it would be like selling a principle for cash,” Gregor said. Nevertheless, Gregor said, Marcos’ offer of $5 billion “was conveyed by Ambassador Pelaez to the Philippines by diplomatic wire.”

Recovering Wealth

In recent months, Aquino has been making intensive new efforts to recover some of Marcos’ wealth and bring it back to her impoverished country. A few weeks ago, she traveled to Switzerland to discuss with banking officials there the possibility of obtaining funds from Swiss bank accounts controlled by Marcos and his wife, Imelda.

Marcos’ offer to turn over $5 billion would give the Philippine government a chance to get back a huge amount of money quickly and with little effort. It was apparently taken seriously enough in Manila to prompt detailed talks concerning the proposal, and Gregor said Cojuangco, the president’s brother, was authorized to come to Honolulu for further talks.

It could not be ascertained whether Cojuangco ever came to the United States. While refusing to confirm or deny the $5-billion offer, Ambassador Pelaez said Monday night that there had been “no negotiations” concerning Marcos’ return to the Philippines.

According to Gregor, the Aquino government proposed putting the $5-billion payment into an escrow account. “He (Marcos) wouldn’t go for an escrow account,” Gregor said. “He said it would take the money out of his control.” The discussions then switched to a possibility of Marcos making a $50-million “down payment” on the $5-billion offer.

Church Role Suggested

The negotiators also discussed the tricky problem of to whom the $5 billion would be paid and how it might be distributed. Gregor said Marcos’ representatives proposed distributing the money through the Roman Catholic Church.

“He (Marcos) is a shrewd politician,” said Gregor. “As soon as Marcos gets the Catholic church involved, the Aquino government has no direct control over it.”

The Berkeley professor said that despite Marcos’ promises to stay out of politics, Philippine officials fear what may happen if he returns to Ilocos Norte, particularly with the kind of wealth he may still possess. “He’ll have so many sycophants, he’ll have a population the size of New York City up there within 24 hours,” Gregor said.

Gregor said he is strongly opposed to any federal prosecution of Marcos in the United States, arguing that it does not serve U.S. interests to bring him to trial here. He also suggested that any prosecution of Marcos in the United States could turn into a “public scandal” that might unsettle the Reagan Administration.

Friendly Letters

“Marcos has got all these friendly letters from President Reagan, saying, ‘Please do come to the United States.’ That could embarrass this Administration,” he said.

Keating, the third-ranking official in the Justice Department, told The Times on Monday that the new policy for reviewing criminal investigations against current or former heads of state was recently put into effect to counteract some of the problems raised in Panama by the indictment of Noriega.

In January, Noriega was indicted by two federal grand juries in Florida on drug-trafficking charges. Reagan Administration officials later complained that the indictments were not well thought out and were not submitted to the President or then-White House Chief of Staff Howard H. Baker Jr. for their approval. The charges made it more difficult for American officials to persuade Noriega to give up power and leave Panama, since he feared that he would be brought to the United States for trial.

According to Keating, under the Justice Department’s new policy, any proposed indictment of a current or former chief of state will be sent first to the assistant attorney general in charge of the Justice Department’s criminal division for approval and then to Keating, the associate attorney general.

New Policy

If these Justice Department officials approve the indictment, it then goes to the interagency review, which would include representatives of the State Department and U.S. intelligence agencies, Keating told The Times on Monday.

According to U.S. sources, federal prosecutors in New York City have recommended an indictment of Marcos, and the case is now being reviewed by Justice Department officials. The sources said the case has not reached the stage of an inter-agency review.

Gregor said he last saw Marcos in Honolulu between three and four months ago. “He’s very ill,” the professor said. “He can’t go from bed to bathroom without help. He just wants to go home.”

Times staff writer Ronald J. Ostrow contributed to this story.