US embassy cable - 05MANILA2712

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 002712 
 
SIPDIS 
 
STATE FOR EAP/PMBS, EB, INR/EAP, INR/B 
 
E.O. 12958: DECL: 06/14/2015 
TAGS: PGOV, PREL, PINR, KCOR, ECON, RP 
SUBJECT: SETBACK IN GARCIA GRAFT CASE 
 
REF: A. MANILA 1641 
 
     B. 04 MANILA 5262 
     C. MANILA 2578 
 
Classified By: Economic Officer Daniel Duane for 
Reasons 1.4 (b) and (d). 
 
1.    (C)  Summary: The recent ruling in the corruption trial 
of former comptroller of the Armed Forces of the Philippines 
(AFP) General Garcia that his wife cannot be charged as a 
co-conspirator poses a serious threat to the prosecution's 
case.  Though the prosecutors intend to appeal the ruling, 
all the way to the Supreme Court if necessary, and remain 
hopeful that they will ultimately prevail, this latest 
development represents a setback and could seriously delay, 
if not prevent, a conviction in what the country's top 
corruption prosecutor considers a "must-win" case.  End 
Summary. 
 
2.  (C)  On June 6, Ombudsman Simeon Marcelo told DOJ Attach 
and Econcouns that a recent court ruling in the trial of 
General Carlos Garcia, the former AFP comptroller accused of 
"plunder" (ref A), poses severe challenges to the 
prosecution's case.  The three-judge panel of the 
Sandiganbayan, the Philippines' anti-graft court, which is 
hearing the case against Garcia, ruled that Garcia's wife 
Clarita could not, as the prosecution had requested, be 
charged as a co-conspirator, but only as an 
accessory-after-the-fact, and the court on that basis refused 
to issue an arrest warrant for her as a co-conspirator. 
 
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Dearth of Evidence 
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3.  (C)  Marcelo explained that, despite all of the evidence 
gathered to date showing the magnitude of Garcia's 
unexplained wealth (ref A), the prosecution has had 
difficulty developing evidence proving Garcia's corrupt acts. 
 Virtually all of the deposits to his accounts were made in 
cash, eliminating any paper trail. No witnesses have come 
forward to testify against him.  The prosecution has gathered 
ample evidence that Garcia's unexplained assets are well over 
the 75 million peso (approximately US$1.4 million) threshold 
required to charge him with the capital offense of "plunder." 
 But the only piece of direct evidence the prosecution has 
been able to develop thus far to prove corrupt acts is the 
letter from his wife to US authorities, written in an attempt 
to retrieve the approximately $100,000 in cash seized by 
DHS/ICE officials at the San Francisco international airport 
when his sons failed properly to declare it upon arrival (ref 
B).  In the letter, Mrs. Garcia admitted to the receipt by 
her husband of large "gratuities" paid to him in his capacity 
as AFP comptroller to secure lucrative contracts. 
 
4.  (C)  Under Philippine law, statements made by a 
co-conspirator, even if hearsay, are admissible.  However, if 
the panel's recent ruling that Mrs. Garcia cannot be charged 
as a co-conspirator stands, the letter would be inadmissible 
hearsay. 
 
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Judicial Tampering? 
------------------- 
 
5.  (C)  Marcelo said that the panel clearly erred in ruling 
that Garcia's wife was not a co-conspirator.  Marcelo noted 
that he himself had received death threats by anonymous 
callers warning him that if he pursued the case against 
Garcia's family he would be killed, and implied that one 
explanation for the court's legal error was that the judges 
had been intimidated by similar threats. 
 
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Ombudsman to Appeal 
------------------- 
 
6.  (C)  Marcelo said he intended to appeal the panel's 
ruling.  He noted that as a procedural matter he first 
planned to file with the Sandiganbayan panel, within the 
week, a motion for reconsideration, which he expected the 
panel to deny.  He would then appeal the ruling to the 
Supreme Court, which he was confident would overturn the 
panel. Though he could not predict how long the appeal 
process would take, he noted that a similar appeal in another 
case had taken eight months. 
 
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Garcia Refuses to "Sing" 
------------------------ 
 
7.  (C)  Some within the GRP had expressed optimism when 
Garcia was first arrested that he might, in a bid for 
leniency, implicate other corrupt GRP officials, but this has 
not happened.  Marcelo explained, by way of analogy, how he 
had been told by another AFP officer facing corruption 
charges that, "if I testify against them, they will kill me 
and my family.  If I don't, I may be convicted, but I will 
not be executed, my family will be safe, and they will even 
be provided for while I am in prison."  Marcelo added that 
"they" are "like the Mafia." 
 
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Comment 
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8.  (C)  Failure, and even significant delay, in obtaining a 
conviction in the high-profile case against General Garcia 
would represent a major setback for the Arroyo administration 
in her declared war on corruption.  Such a setback would 
certainly lead to even greater disillusionment among the 
citizenry, many of whom already doubt the sincerity of her 
campaign, particularly in the wake of recent allegations of 
corruption against the first family (ref C).  The Ombudsman's 
suspicions of judicial intimidation, as well as the 
difficulties in developing evidence posed by the "code of 
silence," also illustrate the uphill battle faced by 
prosecutors in the Philippines in obtaining convictions 
against powerful corrupt officials.  The failure of the 
Ombudsman's prosecutors to obtain independent evidence of how 
General Garcia was able to plunder is also disappointing, if 
not surprising.  We will continue to support the GRP's 
efforts to pursue a conviction in the Garcia case. 
MUSSOMELI