Imelda Marcos Plea in Fraud Case: Not Guilty

Imelda Marcos, regally jeweled and dressed in a turquoise scoop-neck, floor-length gown, pleaded not guilty here Monday to federal charges that she and her husband, deposed Philippine President Ferdinand E. Marcos, plundered hundreds of millions of dollars of their government’s funds to buy Manhattan real estate and art.

Federal Judge John F. Keenan forbade her to leave New York to return to her ailing husband in Hawaii for at least 72 hours or until $5 million in bail is raised. That is likely to be a complex task, since virtually all the Marcoses’ assets are being claimed by the Philippine government. They may have to try to raise funds from relatives or friends.

The 59-year-old former first lady was fingerprinted and photographed for mug shots before she pushed her way through a gantlet of 500 cameramen and reporters, spectators and hostile demonstrators to reach her limousine, parked in front of the federal courthouse in Foley Square.

Popular Spectacle

The arraignment was as much a spectacle as a legal procedure.

A hush fell over the packed courtroom when Mrs. Marcos appeared with a dozen friends and advisers. Lawyers, reporters, sketch artists and spectators stared at the dark-haired defendant, who wore a chiffon gown with traditional Filipino butterfly sleeves, accented by pearl earrings, a pearl ring, black pumps and black handbag.

In a firm but soft voice, Mrs. Marcos, who was called the “Steel Butterfly” when her husband ruled the Philippines, waived reading of the indictment and pleaded innocent to charges brought under the Racketeer-Influenced and Corrupt Organizations law.

Later, she fought back tears when Keenan refused to let her return immediately to Hawaii.

“I’m not going to let the lady go back to the Hawaiian Islands until the bail package is set,” Keenan said.

Mrs. Marcos and her 71-year-old husband have lived in Hawaii since February, 1986, when they fled the Philippines. The deposed president, who says he has a heart ailment, was excused from traveling to New York for the arraignment. But arrangements were made for him to undergo a physical examination Monday at a U.S. military hospital in Hawaii. The results will be sent to Keenan, who then will determine whether to require Marcos to come here for arraignment.

The judge ordered Mrs. Marcos to remain in the New York City area and to report by Thursday on her efforts to raise bail, which he said could consist of a mixture of real estate, cash and personal property adding up to $5 million. She is staying in the Waldorf Towers in a suite reportedly costing $1,800 per day. Her advisers said the bill will be paid by friends they would not identify.

“I will permit Mrs. Marcos to leave this courtroom today,” Keenan said. The judge said he would not jail the wife of the highest-ranking former foreign official ever to face criminal charges in the United States because “she came here voluntarily.”

The Marcoses were indicted Oct. 21 with five other defendants and the Los Angeles-based California Overseas Bank. The indictment alleges a complicated scheme involving bribes, kickbacks, secret bank accounts and falsified documents designed to mislead investigators and defraud U.S. financial institutions. The Marcoses are accused of transferring $103 million in stolen funds into the United States to purchase four Manhattan buildings and of defrauding two U.S. banks of $165 million to refinance the properties.

But early during Mrs. Marcos’ arraignment Monday, it became clear that the exact form of bail will be a problem. Prosecutors and defense lawyers could not agree on the mixture of property and cash totaling $5 million.

‘Conflicting Claims’

“There are conflicting claims to the property brought by the Marcoses to the United States,” John S. Bartko, one of Mrs. Marcos’ lawyers, told the court. “The Philippine government claims to own everything the Marcoses own anywhere in the world. The problem we face with any and all assets is there isn’t anything they brought with them (that) the Philippine government did not claim via a lawsuit in Los Angeles.

“The simple fact of the matter is, since arriving in this country, the Marcoses have had to live on borrowed funds, which are subject to a grand jury inquiry in Hawaii.”

Mrs. Marcos arrived at the courthouse in a four-car caravan, guarded by U.S. marshals and FBI agents. Waiting for her were a throng of reporters and a half-dozen anti-Marcos demonstrators holding up hand-lettered signs.

“The Marcos Wealth Is the People’s Misery,” proclaimed one poster.

As Mrs. Marcos left the courthouse, she passed Jane Orendain, who was born in the Philippines. Orendain was dressed as a vampire and held up a sign: “Imelda Vampire Marcos, Bloodsucker of the Filipino People.”