US embassy cable - 05MANILA4693

UNCLAS SECTION 01 OF 02 MANILA 004693 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EAP/MTS, EAP/MLS, INR/EAP, INR/B, EB 
 
E.O. 12958:  N/A 
TAGS: PGOV, PREL, KCOR, ECON, RP 
SUBJECT:  KEY FIGURE IN GRP FIGHT AGAINST CORRUPTION 
ANNOUNCES RESIGNATION 
 
REF: A. MANILA 0740 
 
     B. MANILA 0234 
     C. 04 MANILA 4019 
 
1.  (U) This message is Sensitive But Unclassified -- Please 
handle accordingly. 
 
2.  (SBU) Summary:  On September 30, GRP Ombudsman Simeon 
Marcelo announced that he would resign effective November 30 
due to health reasons.  Marcelo is widely respected as a 
highly effective anti-corruption crusader and Malacanang 
will be hard-pressed to find a worthy successor.  A high- 
powered lawyer and a judge have emerged as possible 
successors.  Marcelo has worked very closely with the USG 
and his presence will be missed.  End Summary. 
 
3.  (U) Ombudsman to Leave Post:  Philippine Government 
Ombudsman Simeon Marcelo announced on September 30 that he 
would resign his post, effective November 30.  (Note:  The 
Office of the Ombudsman is an independent government body 
charged with ensuring the integrity of government functions. 
End Note.)  He stated that the seven-day workweek he had 
sustained since assuming the post in 2002 had left him 
"physically and mentally exhausted."  The 51-year-old 
Marcelo reportedly suffers from ulcers, hypertension, and 
insomnia.  At the time his resignation is slated to take 
effect, Marcelo will be three years into his seven-year 
term, which was supposed to run until October 2009.  Marcelo 
is widely respected as a man of integrity and as a highly 
effective anti-corruption crusader.  Malacanang reluctantly 
accepted the resignation "with profound regret."  Several 
senators and press commentators also lamented his departure, 
calling him a selfless, honorable public servant. 
 
4.  (SBU) Successor Mulled Over:  Speculation about 
Marcelo's successor centers on two candidates reportedly 
backed by powerful factions within Malacanang.  Some 
observers have suggested that Raul Angangco, a name partner 
at the Villaraza & Angangco law firm, may be next in line 
for the Ombudsman's office.  The law office, known as "The 
Firm," has long enjoyed a close relationship with the Arroyo 
family (see ref c).  (Note:  Secretary of Defense Avelino 
Cruz was formerly a partner with this firm.  Marcelo also 
had served as a senior partner at Villaraza & Angangco 
before joining the GRP.  End Note.)  Another possible 
candidate for the job is Sandiganbayan (Anti-Graft Court) 
Associate Justice Diosdado Peralto, who is reportedly backed 
by Carlos and Erlinda de Leon.  Carlos de Leon is a former 
Quezon City prosecutor who now serves as a presidential 
assistant.  His wife, Erlinda de Leon, a cousin of President 
Arroyo's, is also a personal assistant to the President. 
Despite speculation that Peralto or Angangco may succeed 
him, Marcelo has indicated that he favors his protege, 
Deputy Ombudsman for Luzon Vic Fernandez, as a possible 
successor.  Fernandez, however, is not considered the most 
likely candidate to emerge from the jockeying. 
 
5.  (U) Background on Marcelo:  After graduating in the top 
ten in his class at the University of the Philippines School 
of Law in 1979, Marcelo entered private practice.  He worked 
his way up to senior partner at the law firm Villaraza & 
Cruz (later Villaraza & Angangco), where he specialized in 
intra-corporate disputes, bank fraud, corporate 
restructuring and election law.  Marcelo gained national 
notoriety when he presented star witness Ilocos Sur Governor 
Luis "Chavit" Singson at the impeachment trial of then- 
President Joseph Estrada.  In February 2001, he was 
appointed Solicitor General, where he vigorously pursued 
plunder cases against cronies of former president Ferdinand 
Marcos.  In October 2002, President Arroyo appointed Marcelo 
to the post of Ombudsman.  During his three years in the 
post, he has overhauled the Ombudsman's office and oversaw a 
threefold increase in the conviction rate of corrupt 
officials.  He also fought hard to increase funding for the 
Office of the Ombudsman (ref a). 
 
6.  (SBU) Comment:  The USG has worked with Marcelo on a 
wide variety of anti-corruption projects and his presence 
will be missed.  Some observers have publicly asserted that 
Marcelo's resignation stemmed from disagreements with other 
GRP officials or from being fed up with official corruption 
in the government.  However, we have no reason to doubt his 
claims that the job has taken a toll on his health.  Marcelo 
mentioned his declining health during several previous 
meetings with emboffs and his work schedule (seven days a 
week and 13-plus hours a day) was, indeed, severe.  In any 
case, Marcelo's departure is widely seen as a blow to the 
Arroyo administration, one which its opponents may seek to 
capitalize on by claiming that anti-graft efforts are 
flagging.  Arroyo's challenge will be to find a worthy 
successor.