PCGG hails US ruling on $35-M Arelma deposits

Chairman Andres Bautista of the Presidential Commission on Good Government (PCGG) hailed the New York Court of Appeals decision dismissing the appeal of a group of human rights victims on their claim over the $35-million Arelma deposits.

“It is plain that the New York Court took note of our High Court declaration that these were sovereign assets,” he said.

The dean of the Far Eastern University Institute of Law said the latest US court ruling was another welcome piece of news after the Philippine Supreme Court affirmed a 2009 Sandiganbayan decision ordering the forfeiture of the Arelma deposit in favor of the Philippine government last month.

“These assets were improperly obtained by Marcos through gross misuse of public office and in grave betrayal of the public trust and therefore forfeited from the moment of misappropriation,” he said.

Bautista hopes the Republic will now be able to enforce the decision and return the money to the Philippines to be used for the Comprehensive Agrarian Reform Program (CARP) and the Human Rights Victims’ compensation bill.

The government was not against the compensation of human rights victims of martial law, he added.

Bautista said they supported the compensation of human rights victims, but that payment of compensation should go through the proper legislative process.

“This is why the commission fully supports the passage of the Human Rights Compensation Act by Congress which will pave the way to compensate the human rights victims,” said.

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

The money was deposited with Merrill Lynch Securities in New York in 1972, and had already grown to about $35 million when discovered by the PCGG in 2000.

In June of 2011, the New York Supreme Court’s Appellate Division dismissed a petition of a class of human rights violation victims seeking the $35- million Arelma fund to partially satisfy the $2 billion in indemnity awarded them by a jury in 1995.

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 proceedings.

The court sad that by virtue of its sovereign immunity, the Philippine government has the right to refuse to be made a party in the suit.

Under 1987 Philippine Constitution, all recovered ill-gotten wealth of Marcos and his cronies should go to the 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, Filipino-Chinese 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 Marcos’s Swiss dollar accounts.

The account was put in the name of Arelma, Inc., a Panamanian company formed by Sunier to hide the real ownership.

In 1987, a New York federal court, ruling in favor of the Philippine government petition, froze the Arelma account at Merrill Lynch.

The Swiss Federal Supreme Court has twice held that Marcos controlled Arelma and that the deposed dictator 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.

It sold itself to Bank of America middle of September 2008 for $50 billion.