Corruption : Manila Under Fire for Its Deals on Marcos Assets

Vowing “no favors, no excuses,” President Corazon Aquino’s first official act in office in February, 1986, was to create a commission to chase at least $10 billion in assets and cash allegedly looted from the impoverished nation by deposed dictator Ferdinand E. Marcos and his cronies.

Today, nearly five years later, critics say that the Presidential Commission on Good Government has little to show for those high hopes except excuses.

Despite its ambitious aims, the commission has recovered only about $125 million. And scandals appear endemic: Several former members, including the Philippines’ present ambassador to Canada, Ramon Diaz, have been charged with graft, while 70% of the commission’s field workers have been fired or reassigned because of corruption.

Moreover, the commission now is making deals with two top beneficiaries of Marcos’ corrupt regime: his widow, Imelda, and sugar czar Roberto Benedicto. A third key Marcos crony, Eduardo Cojuangco Jr., celebrated last week when Aquino’s anti-graft court ordered the release of more than $1 billion in sequestered stock because commission lawyers had not filed proper papers. The government is appealing.

All three cases have focused new disapproval on a watchdog group increasingly seen as a symbol for the inefficiency and corruption in Aquino’s administration.

“The ultimate lesson is if you’re going to steal in the Philippines, steal big,” said Guy Sacerdoti, editor of the Philippine Economic Newsletter.

In Imelda Marcos’ case, a federal judge in Los Angeles has scheduled a Dec. 10 hearing on a proposed settlement of a $5 billion lawsuit filed by the Philippine government. The agreement would give the Philippines an estimated $250 million, the results of a 60-40 split from seven Marcos-held bank accounts in Hong Kong.

In exchange, the Aquino government would drop the suit and agree to seek dismissal of civil cases pending in several other U.S. courts, as well as abroad. She was acquitted of criminal racketeering in New York last July.

“The Imelda deal is not as bad as it looks,” said Horacio Paredes, an Aquino spokesman. “I know we’re talking $5 billion and settling for $250 million. . . . But it’s practical. Making a deal with Imelda makes more sense than chasing her forever. Even if we win in court, how do we know we’ll get $250 million?”

The case doesn’t affect up to $2 billion believed hidden in Marcos’ 50 Swiss bank accounts. But Swiss officials have told the government that no money will be released unless Imelda Marcos is successfully prosecuted in the Philippines. That won’t happen as long as Aquino continues to bar Marcos from returning home to stand trial.

“We’re content to let the accounts stay frozen,” Paredes said.

The Benedicto deal, secretly signed in Singapore on Nov. 3, is drawing even more fire. Under the accord, the government agreed to provide absolute immunity from prosecution in exchange for $16 million from Swiss bank accounts, $15 million in deposits at the California Overseas Bank and about $35 million in property and stocks.

Benedicto will be granted immunity in criminal cases, given a passport, and allowed to keep at least $35 million in stock in 22 companies, as well as haciendas, planes, farmland and other assets.

“It’s clear Benedicto is the winner,” said political scientist Alex Magno. “The government gets companies that are losing money. Benedicto gets companies that are making money. In addition, the government recognizes his ownership of companies he was only fronting for. That means companies that were not legally his are now legally his.”

“It means crime pays,” complained Tito T. Guingona, majority floor leader in the Senate. “It’s illegal, unjust and inequitable.”

Even the commission’s lawyer, solicitor general Frank Chavez, complained that Benedicto is returning “at most 10%” of Swiss bank holdings. The former Marcos crony “again put one over on the government,” Chavez wrote in a public letter to commission chairman David M. Castro.

Castro defends the deals as a way to avoid costly and lengthy litigation, as well as to raise badly needed foreign exchange for a government facing financial disaster from the gulf crisis and a ballooning trade deficit.