Ill-Gotten Wealth Recognized by the Philippine Supreme Court

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On July 15, 2003, the Supreme Court of the Philippines ruled that over 25 billion pesos worth of Marcos assets were considered ill-gotten wealth. This followed a near two-decade legal struggle between the Philippine Government and the Marcos Family over the custody of these assets, kept in various Swiss bank accounts.

On February 28, 1986, just two days after the Marcoses landed in Hawaii, President Corazon Aquino issued her first Executive Order (E.O.), establishing the Philippine Commission on Good Governance (PCGG).[1] Its primary task was to assist in the recovery of government resources that were allegedly amassed by former President Marcos, his immediate family, relatives, and close associates within the Philippines as well as in other countries. Twelve days later, President Aquino’s second E.O prohibited all persons and entities bearing knowledge of possession of said “ill-gotten” assets and properties from obstructing the government’s recovery efforts.[2] Pursuant to E.O. No. 2, the Philippine Republic, through the PCGG, filed with the Swiss Federal Police Department for mutual assistance to freeze the bank deposits of the Marcoses located in Switzerland.[3] Local authorities granted the request, and had the deposits blocked until a proper case could be filed.

Dela Pena, Rolex, PCGG archive of documents in Manila, Digital Image retrieved online from Davies, Nick, “The $10bn question: what happened to the Marcos millions?”, The Guardian, 7 May 2016.

On December 17, 1991, the Republic of the Philippines filed a petition before the Sandiganbayan[4] seeking to declare what originally amounted to roughly 356 million U.S. Dollars in these deposits as Ill-gotten wealth.[5] By the time the Philippine Supreme court decided on the case, the assets in question accrued an aggregate amount of US$627,608,544.95 inclusive of interest. In 1998, the funds were transferred to the Philippine National Bank, and placed under custodia legis[6] upon the request of the Marcos children themselves. The Sandiganbayan initially declared that the Swiss deposits were unlawfully acquired by the Marcoses as ill-gotten wealth.[7] However, this decision in 2002 was reversed following motions for reconsideration from Imelda Marcos and her children.[8]

On July 15, 2003, The Supreme Court of the Philippines reaffirmed the Sandiganbayan’s initial decision, concluding over 25 Billion Pesos worth of Marcos Assets as ill-gotten wealth. In its decision, it reiterated a number of key facts:

  1. Throughout the proceedings of the trial, Imelda and her children had in fact admitted to the existence of said deposits and their ownership thereto. In one instance, Imelda and her children denied clandestinely stashing the country’s wealth in Switzerland, stating that such assets had been legally acquired.[9]
  2. The five foundations imputed into the case were established precisely to hide the money stolen by the Marcos spouses. Imelda did not deny the existence and authenticity of her own signatures on several files proving her ownership over said funds and said foundations. These included documents under the names of “Jane Ryan” and “William Saunders” – which actually referred to herself and her husband Ferdinand, respectively.[10] She had even admitted in 1998 before the Sandiganbayan that she was the sole beneficiary of 90% of the subject matter in controversy with the remaining 10% belonging to the estate of Ferdinand Marcos.
  3. The assets acquired by the Marcoses and kept in these deposits are manifestly disproportionate to their salaries as government officials. The only known lawful income of the Marcos Couple from 1966 to 1985 was determined in the sum of US$304,372.43 – the equivalent of P2,319,583.33 at the time. It is keen to note that neither Ferdinand nor Imelda filed any Statement of Assets and Liabilities (SAL) as required by law, from which their net worth could be determined.[11]
  4.  As public officials, neither Ferdinand nor his wife Imelda were even allowed to engage in the management of foundations. This was held by law under both the 1935 Constitution and the 1973 Constitution which was created under his administration.[12] [13]

Visual References retrieved online from Tiongson-Mayrina, Karen, “The Supreme Court’s rulings on the Marcoses’ ill-gotten wealth”, GMA News Online, 21 September 2017.

 

At the time, the Sandiganbayan raised that the original copies and translations of the authenticated Swiss Court decisions were not submitted to them. This served as one of the arguments leading to the reversal of their decision on the assets in 2000. The Supreme Court, however, noted that this did not diminish all other evidence proving that the funds in question were considered ill-gotten wealth. It was also noted that the Sandiganbayan earlier in 1999 had already obtained and utilized said translations.[14]

In marking this milestone achievement however, #WeRemember that the struggle to recover the entirety of these ill-obtained assets amassed by the Marcoses’ network continues to the present day. In 2018, Imelda Marcos was convicted of 7 counts of Graft by the Sandiganbayan in connection to the management of Swiss foundations and financial interests therein.[15] By the same time, the PCGG had so far recovered over 171 billion pesos worth of assets since its creation after the EDSA Revolution.[16] Perhaps it is ultimately left to future generations of Filipino citizens to take up the plain facts and actualize its lessons to safeguard the present.

[1] Exec. Order No. 1 (1986). Office of the President of the Philippines. (1986). [Executive Order Nos. : 1 – 170]. Manila : Presidential Management Staff. Retrieved online from the Official Gazette.

[2] Exec. Order No. 2 (1986). Office of the President of the Philippines. (1986). [Executive Order Nos. : 1 – 170]. Manila : Presidential Management Staff. Retrieved online from the Official Gazette.

[3] Chaikin, David. “Tracking the Proceeds of Organised Crime: The Marcos Case”. From Australian Institute of Criminology Conference: Transnational Crime, March 9 and 10, 2000, Canberra, Australia.

[4] Executive Order 14-A (1986) gave the Sandiganbayan exclusive and original jurisdiction over civil or criminal cases, to be filed by the PCGG with the assistance of the Office of the Solicitor General.

[5] Republic of the Philippines vs. Sandiganbayan, 15 July 2003, G.R. No. 152154.

The funds were previously held by five account groups connected to the Marcos Family using various foreign foundations in swiss banks. The groups identified in the case were:

(1) Azio-Verso-Vibur Foundation accounts;
(2) Xandy-Wintrop: Charis-Scolari-Valamo-Spinus- Avertina Foundation accounts;
(3) Trinidad-Rayby-Palmy Foundation accounts;
(4) Rosalys-Aguamina Foundation accounts and
(5) Maler Foundation accounts.

[6] Defined in Bagalihog vs. Fernandez, 27 June 1991, G.R. No. 96356.
A thing is in custodia legis when it is subject to the official custody of a judicial executive officer in pursuance of their execution of a legal writ.

[7] Volume III, Rollo, p. 2218.

[8] Volume I, Rollo, pp. 145-146.

[9] Republic vs. Sandiganbayan (2003).

[10] Human Rights Violations Victims’ Memorial Commission, “Essential Truths About Marcos’ Declaration of Martial Law.” Revised first Educator’s Edition, 2019. 18-20.

[11] Republic vs. Sandiganbayan (2003).

[12] Const. (1935), Art. VII, Sec. 10

“The President shall have an official residence and receive a compensation to be ascertained by law which shall be neither increased nor diminished during the period for which he shall have been elected, and he shall not receive within that period any other emolument from the Government or any of its subdivisions or instrumentalities.”

[13] Const. (1973), Art. VII, Sec. 6(1)

“The President shall have an official residence and shall receive a compensation to be fixed by law, which shall not be increased or decreased during his term of office. He shall not receive during his tenure any other emolument from the Government or any other source.”

[14]  Republic vs. Sandiganbayan (2003).
 A portion of the translated swiss documents was extensively quoted by them when they denied the release of US$150,000,000.00 to human rights victims.

[15] Raymundo, Perfecto Jr., “Ex-First Lady guilty of 7 counts of graft: Sandiganbayan”, Philippine News Agency, November 9, 2018.

[16] Bajo, Anna Felicia. “PCGG: More than P171 billion in Marcos family’s ill-gotten wealth recovered”. GMA News and Public Affairs, 21 June 2019.

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