Marcos Returns to Court, Hears Damaging Testimony

Imelda Marcos returned to federal court Tuesday with her physician and portable oxygen equipment on standby and weathered another day of damaging testimony linking her to allegedly illegal property transactions in Manhattan.

It was the former Philippine first lady’s first appearance in court since she was carried out on a stretcher May 31 after coughing up blood and collapsing at the defense table. Doctors diagnosed her ailment as erosive gastritis, bleeding of the stomach lining, and her trial was suspended for more than a week.

“I feel fine,” she told reporters as she arrived at the courthouse steps.

In court, Mrs. Marcos showed no signs of stress during the day-long proceedings. However, her attorneys found themselves battling particularly harmful testimony about her connections to the four major New York buildings that prosecutors say were secretly bought by the Marcoses with millions of dollars stolen from the Philippine treasury.

Timothy Khan, a former associate of co-defendant Adnan Khashoggi, told jurors he talked frequently with Mrs. Marcos about schemes to secretly transfer ownership of the property to the Saudi Arabian financier in alleged violation of a U.S. federal court order.

He said Mrs. Marcos insisted that whenever he contacted her, Khan was to refer to her only by her code name: “Mrs. Mark.”

The conversations began after the late President Ferdinand E. Marcos and his wife had fled to exile in Hawaii early in 1986, Khan said, and continued months after a court imposed a freeze on the couple’s assets.

Prosecutors contend that ownerhip of the property ultimately was transferred illegally to Khashoggi, but defense attorneys have argued that details of the transaction were carried out by Khashoggi aides and that the financier was personally unaware of a court injunction.

Khan’s testimony struck at the heart of that argument, however, suggesting that Khashoggi was a willing participant in a Marcos scheme to divest of the properties secretly. He said Khashoggi, who was in financial distress at the time, intended to sell the buildings and take a commission for his middleman role.

Khan testified also that an aide to Mrs. Marcos told him Khashoggi was selected to help with the deal because “the world perceived (him) as the richest man in the world” and therefore no one would question his involvement in a $200-million deal.

“Everyone desired” to conceal the true ownership of the buildings to protect the assets from seizure, Khan said. The court order freezing the Marcoses’ assets had been imposed after the new Philippine government filed suit claiming ownership of property and art bought with Philippine funds.