$5-Billion 'Solution' a Bitter Embarrassment : How Marcos' Bid Unfolded, Failed

Times Staff Writers

On the morning of June 23, a delegation of Philippine legislative leaders gathered over breakfast at Washington's elegant Madison Hotel with the Philippine ambassador to the United States and their host, historian Allen Weinstein of the Center for Democracy.

The Manila congressmen were there to talk about major issues confronting the U.S. and Philippine governments: military base negotiations, prospective U.S. financial assistance for its struggling ally and Communist insurgency threats against the government of President Corazon Aquino.

But the most significant development to emerge from the session was not on the agenda. It concerned the predicament of ousted President Ferdinand E. Marcos, and before the breakfast dishes were cleared, an extended conversation laid the groundwork for what would later be called Marcos' "$5-billion solution"--a secret bid to trade a large share of his wealth for permission to return to his homeland.

The Marcos offer to pay handsomely to go home, first disclosed by The Times on Tuesday, would be made formally on July 11 in two signed letters: one, a three-page letter to Aquino, and the other a shorter message to Weinstein.

Those letters have not been made public, but a partial text of the Weinstein letter was made available to reporters Wednesday. In it, Marcos writes that he "would provide the (Philippine) government with $5 billion of my present assets."

Philippine Ambassador Emmanuel Pelaez said the proposal was rejected by Aquino, who he said "closed the door" on any negotiations with Marcos. In a response to news reports of the Marcos plan, Aquino laughingly told reporters Wednesday, "Send the $5 billion first, and then we will talk."

For Marcos, anxious about a pending federal grand jury investigation in New York into allegations of fraud and conspiracy against him and his wife, Imelda, the apparent rejection of his $5-billion offer could rule out any chance for him to leave the United States before an indictment decision is reached here. A New York prosecutor's recommendation to indict the Marcoses is being reviewed by the Justice Department.

And what in June looked like a "$5-billion solution" to the legal siege he feared has, instead, become a bitter political embarrassment in July.

Based on interviews with numerous sources familiar with the secret Marcos offer, the following account emerges of the complex plan by Marcos and his supporters to overcome the enormous obstacles blocking his return to the Philippines.

The six Philippine congressmen who came to the breakfast at the Madison represented a mix of Aquino and Marcos supporters. Head of the delegation was Francisco Sumulong, an Aquino uncle as well as a prominent legislator. But it was Roque Ablan, a congressional Marcos supporter, who told Weinstein that Marcos might be ready to seek a settlement with the Aquino government. Weinstein, an avowed friend of the Aquino government whose "most treasured" possession is an Aquino-autographed copy of the Philippine constitution, agreed to act as an intermediary if Marcos cared to make a formal proposal.

After the breakfast, Ablan went immediately to the Philippine Embassy and called Marcos in Honolulu, where he has lived since his ouster in February, 1986. The process was launched. Marcos, after talking to Weinstein, said he would send a personal representative to Washington.

Exactly a week later at another breakfast, Weinstein received the first Marcos settlement proposal. The messengers were Jay Hoffman, a Tarzana, Calif., public relations executive acting as Marcos' representative, and UC Berkeley professor A. James Gregor, a Philippine expert and consultant to Hoffman.

They said Marcos was concerned about his family. He wanted to go home for the burial of his mother, who died May 4. And the ailing former president wanted to die in his native country.

Across the breakfast table they passed a typed list of "agreement points." Marcos would return to write his memoirs, free of any threats of criminal prosecution and free to travel on a Philippine passport. In return, he would agree to support the Aquino government and take no part in Philippine politics.

And Marcos would provide $5 billion to the Philippine government.

By afternoon Weinstein had sent a copy of the agreement points to Ambassador Pelaez.

'Sense of Revulsion'

The next day at the embassy, Hoffman and Gregor got a response, but not the one they wanted. Pelaez objected to the offer. He would say later that "from a moral standpoint, I felt a sense of revulsion." He felt it would be wrong for the Philippine government to negotiate with the former dictator. Let Marcos confess to wrongdoing, Pelaez said. Let him show real contrition and then return some of the money the Aquino government says he stole from the Philippines.

The Marcos emissaries, irritated by the session, left immediately to catch a plane back to California.

Later, Pelaez sent a diplomatic cable to Aquino via the Philippine president's executive secretary, Catalino Macaraig Jr., in Manila, describing Marcos' terms and Pelaez's personal opposition to them.

2 Documents

Marcos' next move would come on July 13. Hoffman went to breakfast at the Madison straight from Dulles International Airport in Washington. He had flown all night from Hawaii via Los Angeles. He handed Weinstein two documents dated the previous Monday: a letter addressed to Aquino expressing his willingness to participate in "national reconciliation" and a one-page letter to Weinstein expressing his willingness to provide $5 billion to the Philippines if the settlement could be arranged.

Back in his office, Weinstein called the Philippine Embassy and read the letters to Pelaez. The still-skeptical ambassador suggested that Marcos, if serious, should put up $500 million in an escrow account. However, without some sort of favorable response from Manila, Marcos was reluctant to take any additional steps. Nor would he disclose the nature or whereabouts of his $5 billion in assets.

Waited a Month

Ten days later, there still had been no response from Aquino to the ambassador's communique. However, with Aquino's brother, Jose (Peping) Cojuangco back home from a trip to Australia, Weinstein sent telefaxed copies of the Marcos letters to him. He could hand-carry the proposal to Aquino. It is not known whether that occurred.

A month after the first breakfast discussions and the first phone conversations, Marcos and his intermediaries were still waiting for Aquino's decision. Then the news accounts broke, and the Philippine government announced its rejection of the offer.

Despite subsequent public criticism of the Marcos proposal by the Philippine ambassador and Aquino's rebuke, there lingers some hope among the intermediaries that a settlement can still be reached once the public spotlight is dimmed.

Said one of those close to the discussions: "Who knows if this is best for the Philippines? Unfortunately, now it can't even be explored. With all this attention, the time isn't right. But maybe later. Maybe."

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