American lawyer of Marcos victims lauds plan to abolish PCGG

MANILA, Philippines - The American lawyer of almost 10,000 martial law human rights victims has applauded plans to abolish the Presidential Commission on Good Government (PCGG).

Robert Swift said the PCGG and the government are the greatest obstacles to their collection of a $2-billion award against the Marcos estate.

“I approached every chairman of the PCGG since its establishment, proposing that we work cooperatively to recover Marcos assets,” he said. “Instead of opposing each other, we could have shared information, resources and costs. But the wisdom of this approach escaped these bright and learned men.”

Another estimated $85 million under foreign court control is being contested between the PCGG and his clients – the so-called Arelma deposits now with the Bank of America and the dollar deposits in West LB Singapore, Swift said.

The Philippines is trying to have West LB release some $23 million, part of the more than $600-million Swiss Marcos deposits forfeited in 2004.

The Singapore branch of West LB AG of Germany holds the remaining $23-million deposit.

In 2003, West LB decided to withhold the amount in deference to the decision of Hawaii Judge Manuel Real that human rights victims of the Marcos regime should also benefit from the recovered funds.

In 2006, the Singapore High Court barred the Philippine government from withdrawing the amount.

The $35-million Arelma deposit began from an original $2 million registered in the name of the Arelma Foundation, a Panamanian firm that Marcos had set up with the help of Swiss banker Jean Louis Sunier.

It was deposited with Merrill Lynch Securities in New York in 1972.

When the PCGG discovered the deposit in 2000, it had already grown to about $35 million.

In June 2011, the New York Supreme Court Appellate Division dismissed a petition of Swift on behalf of his clients to award them the $35-million Arelma account to partially satisfy the $2 billion that the US District Court of Hawaii had awarded them.

In a decision on June 16, 2011, 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 Constitution, all the recovered ill-gotten wealth of Marcos and his cronies should go to the Comprehensive Agrarian Reform Program (CARP).

The Arelma account is said to be a securities trading account in Merrill Lynch that Marcos had set up with the assistance of his close business associate, the late businessman Jose Yao Campos, and Sunier in September 1972.

The $2-million initial deposit 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 formed by Sunier to hide the real ownership of the account.

In 1987, a New York federal court, ruling in favor of the Philippine government, 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 its merger with Bank of America, was one of the Wall Street financial institutions hardest hit by the credit crisis caused by the subprime housing mortgage mess with the financial contagion spreading globally in 2008. It was sold to Bank of America in September 2008 for $50 billion.

Swift said the PCGG had itself admitted having spent more than $10 million in attorney’s fees and costs opposing the class collection efforts, with nothing to show for it except the enmity of human rights victims and the verdict of the United Nations Human Rights Committee in 2006 that the Philippine government violated the international human rights of the class.

Rod Domingo Jr., Swift’s local co-counsel, said that while the PCGG served a valid purpose, “over time it became politicized by some of its members who focused more on their own personal interests, not the best interest of the country.”

“And certainly not the best interest of abused Marcos victims of human rights. Whether the demise of the PCGG will give these victims greater chances to satisfy their hard-earned Hawaiian judgment is uncertain,” Domingo said.

“Only the intervention of President Aquino can put an end to the conflicting interests of the government and the victims of human rights abuses. The recovery of the ill-gotten wealth of the Marcoses must continue, but more intensely,” Domingo said.

PCGG chairman Andres Bautista made the recommendation to President Aquino in December 2010 to abolish the PCGG after winding down its affairs in one or two years’ time.

During that period, pending legal cases will be transferred to the Department of Justice, while recovered assets will be transferred for management and disposal of the Department of Finance.