US embassy cable - 05MANILA464

C O N F I D E N T I A L SECTION 01 OF 03 MANILA 000464 
 
SIPDIS 
 
DEPT FOR EAP, EAP/PMBS, EB, INR/EAP, INR/B 
NSC FOR GREEN 
 
E.O. 12958: DECL: 01/28/2015 
TAGS: PGOV, KCOR, PREL, MARR, ECON, PINR, RP 
SUBJECT: ANTI-CORRUPTION DRIVE PICKS UP STEAM 
 
REF: A. MANILA 0084 
     B. MANILA 0042 
     C. 04 MANILA 05834 
     D. 04 MANILA 5262 
     E. 04 MANILA 5549 
 
Classified By: Political Officer Andrew McClearn for 
Reasons 1.4 (b) and (d) 
 
1.  (C) Summary:  Mission is actively working with GRP 
counterparts to help them develop legal cases against 
Philippine officials who have allegedly been engaged in graft 
and other forms of corruption.  GRP officials have recently 
advanced numerous new corruption-related cases against 
prominent military and civilian officials.  The proliferation 
of cases is a clear sign that the Philippine government is 
ramping up its anti-corruption drive.  The Ombudsman and his 
office, in particular, deserve commendation for their 
professionalism and energy in moving forward on so many 
fronts, despite serious resource constraints.  End Summary. 
 
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Mission Assistance to GRP 
------------------------- 
 
2.  (C) Mission is working with GRP counterparts to develop 
legal cases against Philippine officials who have allegedly 
been engaged in graft and other forms of corruption.  On 
January 20, Emboffs from DOJ, LEGATT, and DHS met with GRP 
Ombudsman Simeon Marcelo and Director Victor Aquino from the 
Anti-Money Laundering Council (AMLC) to discuss in detail 
several of the anti-corruption cases currently underway in 
the anti-graft court, the Sandiganbayan.  GRP officials 
agreed in principle to continue regular meetings of this 
first joint US-RP anti-corruption working group in order to 
exchange detailed information on pending anti-graft cases 
involving citizens of both countries and their possible 
ill-gotten assets.   DHS, LEGATT, and JUSMAG officials have 
also stepped up coordination with GRP officials in the 
investigation of five open cases involving prominent GRP 
officials accused of corruption, and development work is 
underway on several other cases.  As a result of this 
cooperation, GRP officials have been able to strengthen 
several high-visibility cases with access to the ownership 
records of US assets by GRP officials who are under scrutiny. 
 
 
3.  (C) In addition, LEGATT is assisting the Office of the 
Ombudsman as it develops a personnel management system 
constructed to manage more effectively the burgeoning number 
of Ombudsman officials (now over 200) involved in an 
increasing array of investigations.  Emboffs also met 
recently with Secretary-designate of Finance Cesar Purisima, 
who strongly supported continued DHS assistance to ongoing 
investigations conducted by the Department of Finance's (DOF) 
Revenue Integrity Protection unit.  (Note:  DOF's internal 
audit and investigative arm also has regulatory 
responsibility over the Bureau of Customs and the Bureau of 
Internal Revenue. end note)  Separately, a joint USG-GRP 
initiative, led by DHS/TSA, at Manila's International Airport 
recently resulted in the placement of visible signs at both 
arrival and departure terminals notifying passengers of the 
Philippine legal requirement to declare possession of cash 
amounts greater than USD 10,000.  TSA, US Treasury 
contractors, and GRP officials are working on a related 
initiative that would insert similar language on customs 
declaration forms submitted by arriving passengers.  Mission 
is also pursuing DOJ-sponsored training for GRP counterparts 
that would build capacity in the judicial system to deal with 
an expected spike this year in the number of money laundering 
cases moving through the court system. 
 
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AFP Cases 
--------- 
 
4.  (C) Investigators continued to advance cases against 
prominent AFP officers allegedly involved in graft.  On 
January 25, the Supreme Court dismissed a petition by Major 
General Carlos Garcia that had questioned the Sandiganbayan's 
jurisdiction over the perjury charges filed against him. 
(Note:  Garcia faces prosecution in both the Sandiganbayan 
and in a military court martial -- reftels.  end note) 
Separately, Special Prosecutor Dennis Villa Ignacio told 
Emboffs that the Ombudsman's Office was compiling additional 
evidence against Garcia that could result in the filing of 
additional, more serious charges (i.e., "plunder") against 
him in the Sandiganbayan.  In the ongoing court martial, the 
finance officer of the Armed Forces Police Savings and Loans 
Association (AFPSLAI) recently testified that an account at 
AFPSLAI owned by Garcia had earned over USD 100,000 in 
dividends alone from June 2000 to December 2003. 
 
5.  (U) Additional developments involving other AFP officers 
include: 
 
-- In a January 26 hearing, retired Lt. General Jacinto Ligot 
faced questions before the House Committee on National 
Defense.  Ligot, who was Garcia's predecessor as AFP 
Comptroller from 1999 to 2001, featured prominently in a 
December 2004 article in "Newsbreak," a local magazine, that 
questioned Ligot's ownership of assets worth over USD 1 
million, including two homes in California.  Representatives 
conducting the hearings were reportedly exasperated with 
Ligot, who claimed his "right against self-incrimination" at 
least 21 times.  The Chair of the Committee, Rep. Roilo 
Golez, told reporters that Ligot's case was similar to that 
of Garcia; "One is the immediate successor or predecessor of 
the other.  It's like the technology was transferred," he 
said; 
 
-- On January 20, the Office of the Deputy Ombudsman for 
Military and other Law Enforcement Offices (OMB-MOLEO) filed 
charges in the Quezon City Regional Trial Court against Lt. 
Col. George Rabusa for allegedly unlawfully acquiring 
properties worth nearly USD 800,000.  Rabusa worked for 
Garcia when the latter was AFP Comptroller from 2001 to 2004. 
 OMB-MOLEO filed three counts of perjury against Rabusa for 
failing to explain adequately his accumulation of assets, 
which, according to the OMB-MOLEO's investigation, were 
"grossly disproportionate to his and his wife's income." 
Rabusa's wife and father-in-law were also charged with 
conspiracy in the corruption charges. 
 
--------------------- 
New Cases Proliferate 
--------------------- 
 
6.  (U) The volume of anti-corruption cases involving 
civilian officials has mushroomed in recent weeks.  A list of 
investigations and charges involving several agencies 
follows: 
 
-- On January 17, the Office of the Ombudsman dismissed from 
service Manila's Port District Manager Leopoldo Bungubung 
after an investigation showed that he routinely demanded 
bribes as he managed contracting processes at the Port.  The 
Ombudsman approved the filing of charges in the Sandiganbayan 
against Bungubung for violating the Anti-Graft and Corrupt 
Practices Act; 
 
-- On January 24, the Office of the Ombudsman ordered 
presidential adviser and former foreign secretary Roberto 
Romulo to submit a counter-affidavit in order to refute a 
complaint filed earlier by former Solicitor General Francisco 
Chavez.  Chavez accused Romulo of several conflicts of 
interest arising from Romulo's executive role at multiple 
private sector positions which, Chavez alleged, presented 
serious conflicts with his current public position as Senior 
Adviser on International Competitiveness to President Arroyo; 
 
 
-- On January 24, Ombudsman Simeon Marcelo ordered the firing 
of two officials at the Bureau of Customs.  Division Chief 
Flor Aguilar and Operations Officer Honore Hernandez were 
removed after investigations revealed that both officials 
possessed multiple automobiles and properties for which they 
were unable to account.  Marcelo publicly commented that the 
investigations had showed that both officials "manifestly 
violated the law and flagrantly disregarded established 
rules;" 
 
-- In the aftermath of the December 2004 typhoon disaster in 
eastern Luzon, a NGO has filed a complaint with the Ombudsman 
accusing 22 current and former public officials, including 
Congressman Junie Cua and former Budget Secretary Salvador 
Enriquez, with graft associated with illegal logging 
activities in Quirino province northeast of Manila.  The 
complaint, made public for the first time January 27, alleged 
that the 22 officials conspired to pocket nearly USD 3 
million of mining and forestry tax collection funds in 1995, 
and that extensive illegal logging operations in the 
mountains of Quirino and Aurora contributed to the severity 
of the recent disaster.  Congressman Cua has asserted that 
the accusations were politically-motivated.  No formal 
charges have been filed; 
 
-- On January 24, the Philippine National Police (PNP) began 
an investigation into allegations that two PNP officers in 
the province of Aklan purportedly attempted to bribe fellow 
officer Jonathan Moreno to recant his earlier testimony in a 
case against a narcotics trafficking suspect.  The PNP 
officers also allegedly tried to place other forms of 
pressure on Moreno.  On January 26 during a local festival, 
Moreno -- who apparently had become mentally unhinged, 
perhaps due to this pressure -- went on a shooting rampage 
that killed eight people, including five PNP officials; 
 
-- On January 25, Pampanga province Vice Governor Joseller 
Guiao made public an appeal to President Arroyo to begin an 
investigation into corrupt practices allegedly committed by 
Governor Mark Lapid, and his father, Senator Manuel "Lito" 
Lapid.  Guiao accused the Lapids of illegally skimming 
revenues from the local government-owned Natural Resources 
Development Corporation, a lucrative local quarry in 
Pampanga, President Arroyo's home province just north of 
Metro Manila.  GRP officials are investigating the charges. 
 
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Comment 
------- 
 
7.  (C) The proliferation of cases involving graft and other 
forms of corruption is a clear sign that the GRP is further 
ramping up its anti-corruption drive.  The Ombudsman and his 
office, in particular, deserve commendation for their 
professionalism and energy in moving forward on so many 
fronts, despite serious resource constraints.  The Arroyo 
administration also deserves commendation in this effort, as 
it continues to highlight in public the importance to the 
country's political system and economy of combating 
corruption to the full extent possible.  Mission -- which is 
working closely with the GRP -- will continue to support the 
GRP's anti-corruption effort in every way possible. 
 
 
 
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Ricciardone