On the trail of the missing Marcos billions

In May, two days before Ferdinand “Bongbong” Marcos Jr sought to become vice president in the Philippine elections, British newspaper the Guardian published “The $10bn question: what happened to the Marcos millions?”

Journalist Nick Davies interviewed a wide-ranging cast of characters, read the reports, checked the customs record for what the Marcos family carried to Hawaii and examined the records of the Presidential Commission on Good Government (PCGG).

His findings are as follows. 

The Marcoses fled to Hawaii, compliments of the United States, on a C-141 transport plane loaded with possessions amassed during Ferdinand’s strongman rule of the Philippines.

The official customs record ran to 23 pages, which list 12 suitcases, 413 pieces of jewellery, 24 gold bricks inscribed “To my husband, on our 24th anniversary” and more than 27 million pesos in freshly printed notes with a total value of $15 million.

Now, why should the United States rescue a man who defrauded his people in what the PCGG described as the biggest theft in history? 

The answer lies in the fact that, in foreign relationships, there are no permanent friends, only permanent interests.

The United States stood by and kept mum while Marcos was running the country under martial law and ruining its economy.

His rise to power through the House of Representatives and the Senate had been paved by wealthy backers and the Central Intelligence Agency. At this time his theft was small-time, amounting to selling his influence for a mere 10 per cent.

 

‘William Saunders’

Not for long. By March 1968, Marcos and Imelda deposited $950,000 in four Credit Suisse accounts, using the false names William Saunders (Marcos) and Jane Ryan (Imelda). 

But this was pocket change compared with what was to follow. On September 21, 1972 Marcos declared martial law. He shut down Congress. He arrested and imprisoned his opponents. He took control of the media and courts and suspended civil rights.

An estimated 34,000 trade unionists, student leaders, writers and politicians were tortured with electric shock, heated irons and rape. Some 3,200 men and women were killed and dumped where they could be seen by the public. A total of 398 people just disappeared.

The idea of power and wealth had turned Marcos’ head. He stole even whole companies, like Manila Electric Co (Meralco), using what Davies describes as “the tactics of a gangster”. The owner of Meralco was made an offer he couldn’t refuse, selling a company worth $400 million to Marcos for $220.

“To have gunmen is a gangster’s requirement. To have gunmen in uniforms, with all the power of the state behind them, is a gangster’s dream,” wrote Davies.

When the dream became reality, there was no stopping Marcos. 

He made coconut farmers give part of the profits earned from their harvest to a crony, thus covering his money trail. He set up his own companies, but not in his own name.

He stole international aid money, gold from the central bank, loans from international banks and military aid. 

The booty aboard the C-141 plane to Hawaii was only a small slice of Marcos’s wealth, much of which was hidden elsewhere in offshore accounts like the one held is daughter Imee’s name and revealed in the recent Panama Papers leak.

There was more. Marcos acquired “multiple houses for the extended family, a $5.5-million yacht, private planes and helicopters, and dozens of Mercedes-Benz”. When daughter Irene was married in 1983, a new runway and hotel were built, a 200-year-old church was renovated, and nearby houses were demolished and rebuilt in traditional style. A carriage from Austria and horses from Morocco were ordered. No expense was spared.

Anger in the ranks of the PCGG rises each day as its reveals more theft by Marcos. Five Swiss bank accounts have been uncovered and frozen after a lengthy battle with the bank.

The PCGG also knew about the priceless art collection acquired by Imelda during her husband’s rule. But Michelangelo’s “Madonna and Child” could not be found among paintings hanging in the Palace. And neither could the “Marquesa de Santa Cruz” by Goya, a couple of Monets, a Pissarro and a Manet. 

Papers found in various homes revealed the Marcos family had acquired at least 304 valuable paintings, bought with the Filipino people’s money. 

Interesting details of the family’s hasty exit come courtesy of a witness on the night. Entering the family’s private quarters in the Palace, a young civil servant named Chito Roque found signs of a hasty departure: food still warm on the table, empty boxes and papers scattered about, a shredding machine stuffed with paper. Opening a safe using the combination number on the door, he found records of bank accounts in Switzerland and Canada, certificates of shares and letters signed by Marcos. The papers are now with the PCGG. More documents found in the Palace attest to Marcos’ ownership of 50 or so properties scattered across the Philippines as well as homes and offices in the United States.

Even more unforgivable is the fact that Marcos exploited the poorest and hardest-working Filipinos. Forcing impoverished coconut farmers to pay a levy to “improve” the industry, he stole $216 million from the resulting fund.

Marcos soon faced the problem of how to handle all the money flowing into his coffers. The solution was to ask his cronies to buy private banks and control the state banks, masking his activities and securing his wealth.

After PCGG investigations, the former manager of the New York branch of the Philippine National Bank revealed that he created accounts for two fictitious companies to conceal the Marcos millions. Meanwhile the paintings seem to have ended up in the hands of Saudi arms dealer Adnan Khashoggi.

Khashoggi was arrested in Switzerland and extradited to New York to be indicted together with Marcos, Imelda and others under antiracketeering laws. Marcos died in September 1989 before the trial began. With the White House pressuring the prosecutors to apply the brakes because of the embarrassment it would cause the five US presidents who turned a blind eye to what Marcos was doing, the court eventually declared all defendants “not guilty” in 1990. The Marcoses had got away unscathed – for now.

 

Partners in theft

The PCGG is frustrated with the United States for its refusal to hand over all the papers seized from Marcos. The PCGG believes Washington is concealing information on transactions with US organisations that were partners in theft.

But in 1994, a Hawaii court’s verdict that Marcos was guilty of abusing the human rights of thousands tortured and killed under his rule resulted in an order for $2 billion in compensation to be drawn from his estate. So far, less than 1 per cent has been paid.

When Imelda returned to Manila in 1993, she was sentenced to 18 years in prison for defrauding the state in a land deal during Marcos’ presidency. She filed an appeal and the Supreme Court controversially threw out her conviction on technical grounds.

So far, the PCGG has recovered $3.7 billion – less than half of what Marcos is estimated to have taken from the people. Meanwhile the former strongman’s family and its associates have re-established their political power and continue to live lives of luxury. The wheels of justice grind very slowly, according to the former head of the PCGG, Richard Amurao, who impressed journalist Davies as a decent man.

 

Helen N Mendoza, PhD, is a retired University of the Philippines professor, who studied in the United States, Norway, Germany and England.