MANILA, Philippines - A Supreme Court (SC) decision affirming a 2009 Sandiganbayan ruling for the forfeiture of the $40- million Arelma funds in the United States will pave the way for the Bank of America to remit the money to the National Treasury, the government said yesterday.
Chairman Andres Bautista of the Presidential Commission on Good Government (PCGG) said the decision shows that the long arm of the law will catch up with those who betray the people.
“These assets were improperly obtained through gross misuse of his public office and in grave betrayal of the public trust,” he said.
The SC decision will help the government recover other ill-gotten Marcos wealth abroad, Bautista said.
The Arelma assets now estimated at $40 million is the subject of a case before the New York Court of Appeals between a group of human rights victims, Arelma, and the Philippine National Bank (which holds the Arelma certificates as escrow agent).
Bautista, dean of the Far Eastern University Institute of Law, said the republic owns the Arelma assets, not the Marcos heirs or estate.
“Armed with this Supreme Court decision, we are better placed to assert our sovereign claim and proprietary rights over Arelma,” he said.
Bautista said the Philippines has resisted attempts to make it a party in the New York litigation on the basis of sovereign immunity.
“This is money which the PCGG would like to return to the Philippine Treasury before the end of the year,” he said.
In June last year, the Appellate Division of the New York Supreme Court, which is a trial court, dismissed a petition of a class of human rights victims to award them the $40-million Arelma deposit previously with the fallen New York securities firm Merrill Lynch to partially satisfy the $2-billion indemnity that a jury awarded them in 1995.
In a decision last June 16, the New York Supreme Court Appellate Division, First Department ruled that the claim of the human rights victims should be dismissed in view of the Philippine government’s failure to submit itself to the proceedings.
The appellate court said by virtue of its sovereign immunity, the Philippine government has the right to refuse to be made a party in the suit.
Under the Philippine Constitution, all recovered ill-gotten wealth of Marcos and his cronies should go to the Comprehensive Agrarian Reform Program (CARP).
In November 2009, the New York State Supreme Court ruled that the rights victims can make a claim to the Arelma deposit, since a US Supreme Court ruled in 2007 that the Philippine government’s sovereignty immunity and right to claim all confiscated Marcos ill-gotten wealth was merely “informative” and does not bind the New York Supreme Court.
The Arelma account is said to be a securities trading account in Merrill Lynch that President Ferdinand Marcos set up with the assistance of his close business associate, Jose Yao Campos and a Swiss banker named Jean Luis Sunier in September 1972.
The $2-million initial deposit he posted to create the account was said to have been taken from one of his Swiss dollar accounts.
The account was put in the name of Arelma Inc., a Panamanian company that Sunier formed to hide the real ownership of the account.
In 1987, a New York federal court, ruling in favor of the Philippine government petition, froze the Arelma account at Merrill Lynch.
The Swiss Federal Supreme Court has twice held that Marcos controlled Arelma, and that Marcos had the power of disposition over Arelma.
Merrill Lynch, founded in 1914 and the largest US brokerage firm before merging with Bank of America, was reportedly one of the Wall Street financial institutions hardest hit by the credit crisis caused by the sub-prime housing mortgage mess with the financial contagion now spreading globally.
Merrill Lynch sold itself to Bank of America middle of September 2008 for $50 billion.