Ferdinand Marcos’s daughter tied to offshore trust in the Caribbean
April 10, 2013 at 12:44
Philippine Center for Investigative Journalism
MARIA IMELDA Marcos Manotoc, the Princeton-educated eldest child of the late Philippine dictator Ferdinand Marcos and now a senior political figure in her own right, is beneficiary of a secret offshore trust.
The hardworking and popular provincial governor — widely known as Imee Marcos — is one of the beneficiaries of the Sintra Trust, which financial records uncovered by the International Consortium of Investigative Journalists show to have been formed in June 2002 in the British Virgin Islands. Other beneficiaries are Imee Marcos’ adult sons with estranged husband Tomas Manotoc: Ferdinand Richard Michael Marcos Manotoc, Matthew Joseph Marcos Manotoc, and Fernando Martin Marcos Manotoc.
Scores of documents, the most recent dated 2010, show that Imee Marcos was also a financial advisor for the Sintra Trust as well as a company in which the Sintra Trust was a beneficial shareholder called ComCentre Corporation, formed in January 2002 in the BVI and still in operation; and a “master client” for the M Trust, formed July 1997 in Labuan, Malaysia, and closed July 2009.
Philippine law requires government officials to disclose their assets no matter where they’re held, and Imee Marcos’s disclosure statements do not list the three offshore entities. It is not known what assets they hold, but one Sintra Trust document refers to a bank account with United Overseas Bank Limited, a financial institution headquartered in Singapore. Another record related to ComCentre refers to an account at HSBC.
The Philippines’ Presidential Commission on Good Government (PCGG) is eager to find out if the entities connected to Imee Marcos might contain some of the estimated $5 billion that her father allegedly amassed through corruption. He too held offshore accounts, which the Philippine government has sought to freeze.
Why send stash abroad?
Ferdinand Marcos fled the Philippines with his family and their close associates when a revolution toppled his 21-year rule in February 1986. He had been accused of large-scale human rights violations as well as widespread corruption.
After Marcos died in exile in 1989 at age 72, his wife, the flamboyant Imelda Marcos, returned to the Philippines with their three grown children to rebuild political careers and to contest the government’s seizure of their assets and properties.
Though many cases are still in the courts almost 25 years on, the government has scored a few major victories, including a Supreme Court ruling forfeiting to the state $356 million of the Marcos couple’s secret Swiss deposits after declaring the funds to be “ill-gotten.”
Imee Marcos’s role in the offshore entities uncovered by the ICIJ data raises questions on why a public official has need for offshore trusts and corporations in tax havens.
Philippine law requires public officials to list all assets in annual Statements of Assets, Liabilities and Net Worth. This statement must include business interests and financial connections, including those located in other countries.
In addition, the Philippine Constitution requires that “members of the Senate and the House of Representatives shall, upon assumption of office, make a full disclosure of their financial and business interests.”
But the Sintra Trust and the two other offshore companies linked to Imee Marcos were not listed in the asset disclosure statements that she filed as lawmaker and provincial governor and which were examined by the Philippine Center for Investigative Journalism.
Imee won’t comment
PCIJ sent an email and a fax to Imee Marcos asking her to comment on the ICIJ findings, but she did not respond to the detailed questions. The day after the PCIJ sent the questions to the governor a person who claimed to be a long-time friend of Imee Marcos called the journalists to inquire about the story. The PCIJ requested that she ask Imee Marcos to respond to the questions or agree to be interviewed. The person called twice more later to say that she would visit the PCIJ office but did not show up at all.
A Civil Service Commission expert who helped draft the latest guidelines on asset disclosures said the law requires public officials to disclose all their assets and properties whether in the Philippines or elsewhere. “If it’s yours, you should declare it,” said Ariel Ronquillo of the commission’s legal affairs office.
Officers of the PCGG, tasked to recover the billions believed to have been stashed away by the Marcoses, are now keen to find out if funds being managed by the Sintra Trust and the two other offshore entities came from the former dictator’s allegedly ill-gotten wealth. “We are duty bound to investigate, and then pursue or discount the matter depending on informed findings,” said Maita Chan-Gonzaga, a commissioner of the PCGG. “If funds came from the pre-1986 Marcos secret deposits that were the subject of freeze orders, then those responsible for moving the funds around could be committing money laundering.”
Former and current government officials shown some of the documents gathered by ICIJ said they were reminiscent of the methods Ferdinand and Imelda Marcos used in the 1970s when they created secret offshore accounts and foundations.
“Fruit never falls far from the tree. Like parents, like daughter,” said former Sen. Rene Saguisag, a human rights lawyer during the Marcos dictatorship and a spokesman for President Corazon Aquino, who succeeded Marcos in 1986.
Saguisag said that the discovery of any assets linked to Imee Marcos may help in the enforcement of a $4.2 million judgment made by a U.S. court against her in 1991 for the 1977 death of a Filipino student activist who publicly questioned her about her government appointments and who was kidnapped and tortured by state security forces under her control. In 1993, the mother of the victim initiated court proceedings in the Philippines to enforce the U.S. judgment, but the Supreme Court rejected the claim in 2006 saying Imee Marcos had not been properly notified.
Didn’t show in SALN
Imee Marcos’s offshore assets are unknown, but the statements she’s filed show wealth that’s significant by Philippines standards but less so in the context of the international elite. PCIJ examined 12 of the 15 such statements that she filed from 1998 to 2007 when she was a member of Congress and then in 2010 and 2011 when she was provincial governor.
The statements showed that her assets, consisting mostly of inherited jewelry, paintings and artifacts, as well as vehicles, rose in value from about $170,000 (P6.72 million) in December 1998 to about $640,000 (P27.9 million) in December 2011. Almost half of the overall increase came from the higher value of jewelry, and the value of her paintings and artifacts more than doubled.
Most Marcos statements that ICIJ examined were less than specific in listing her business connections and financial interests. “Share of various corporations currently under litigation; estate of Ferdinand E. Marcos,” one reported. In 2010 and 2011, she listed about $2,300 worth of stocks among her assets.
The ICIJ investigation also found more than 500 other Philippine residents who have links with offshore trusts, corporations and other entities. Only about half the names have public profiles, of varying prominence. Most are business people, professionals or people who work for foreign companies in the Philippines. But some are owned by public officials.
Resurrected careers
The Marcoses have staged a remarkable comeback in Philippine politics. In 2010, Ferdinand Marcos Jr., known as Bongbong, won a Senate seat. He is now being touted as a possible presidential candidate in 2016.
Imee’s and Ferdinand Jr.’s mother is now a member of Congress, where she is seeking a second three-year term.
Imee Marcos ran and won as member of the House of Representatives representing her father’s political bailiwick in Ilocos Norte from 1998 to 2007. In 2010, she made a successful run as governor of Ilocos Norte province, defeating the incumbent, who is her first cousin.
One of Marcos’s biggest achievements as provincial governor is developing Ilocos Norte as a major tourism draw for both local and foreign tourists.
She says she has set new standards for transparency in local government, calling it “open governance.” The provincial government celebrates the province’s foundation day by opening up the capitol to the people, literally. “Students see how government works and how departments process papers,” she boasted to the Philippine Daily Inquirer early this year. “We even opened a provincial safe to show tax collections, how they process the money and bring them to the bank.”
In a sign of her popularity in the province, she is running unopposed for a second term as provincial governor in a May election.
Offshore accounts details
The Sintra Trust was created in June 2002 with the help of a Singapore-based offshore service firm called Portcullis TrustNet.
The documents indicate that in her role of financial advisor, Imee Marcos had powers to direct the investment of trust assets held by banks and other financial institutions.
The so-called “settlor,” “trust protector,” and “master client” listed in the documents is Mark Chua, a Singapore-based businessman. Imee’s sister-in-law Liza Araneta-Marcos, in newspaper reports published in May 2007, had named Chua as Imee’s boyfriend. The settlor refers to the person who creates the trust by transferring a certain asset that he or she owns to the trustee, who then assumes legal ownership of the assets on behalf of the beneficiaries.
Chua has not replied to PCIJ’s questions on his role in Sintra Trust.
In June 2005, Imee was named investment adviser of the Sintra Trust, according to a document uncovered by ICIJ. As investment adviser, she can direct any financial institution in the purchase, sale, liquidation, and investment of the trust assets. Chua also became an investment advisor for the trust in 2006.
Although the Sintra Trust is located in the British Virgin Islands, another PCGG official said he does not find it surprising that its servicing company, Portcullis TrustNet, is based in Singapore, which has one of the toughest financial secrecy regulations in the world. It ranked No. 6 in the 2011 Financial Secrecy Index of the Tax Justice Network, a London-based group, which campaigns against tax havens.
“We’ve had a hard time getting cooperation from Singapore in our requests for international mutual assistance on criminal matters,” said the PCGG official, who asked not to be identified because of the confidential nature of his work for the agency.
Parallels with Dad’s foundations
Despite being formed in 2002, thirteen years after the death of Ferdinand Marcos, Sintra Trust has parallels with the Marcos foundations set up in the early 1970s in Liechtenstein. Then as now, the offshore entities were established in well-known tax havens that guaranteed secrecy. Before, the beneficiaries were the Marcos couple and their children. Now, it is Imee and her children. Both the BVI trust and Liechtenstein foundations were set up with the help of foreign lawyers and other professionals whose job is ensuring the real owners and beneficiaries are well hidden.
Some of the documents that the Marcoses left behind at the Malacañang presidential palace as they were rushing to board U.S. military helicopters to take them to safety on February 25, 1986, show that the former president instructed one of his foreign agents, Marcus Geel of Zurich in Switzerland, to set up the Xandy Foundation in Vaduz, Liechtenstein in March 1970. Marcos and Imelda were named first beneficiaries, the surviving spouse the second beneficiary, and the three Marcos children were named as equal third beneficiaries.
A few months later, Marcos instructed his foreign agents to transfer funds from four secret Swiss bank accounts that Marcos and Imelda opened in 1968, just two years after he became president, to the Xandy Foundation. The couple hid their identities, using the false names “William Saunders” and “Jane Ryan” when they opened the Swiss bank accounts. Among the documents the Marcoses left behind at the presidential residence were accomplished “declaration/specimen signatures” forms where Ferdinand signed with their real names as well as pseudonyms.
In August 1970, Imelda also instructed Geel to set up the Trinidad Foundation in Vaduz, Liechtenstein, with C.W. Fessler, E. Scheller of Swiss Credit Bank, and Otto Tondury as directors. Imelda was named first beneficiary while her three children were named second beneficiaries.
The secret Swiss deposits, which include funds held in the name of the Xandy and Trinidad foundations and other secret entities, were part of the Marcos monies frozen by the Swiss authorities in 1986 and eventually forfeited in favor of the government by the Philippine Supreme Court in 2003.
Investigating the remnants of the famed Marcos billions has become more difficult and costly in recent years because the money trail has gone cold. Many of the offshore financial centers where the funds are deposited are reluctant to help for fear it will undermine their attractiveness to investors, according to PCGG officials.
As a result, public and government interest in the Philippines in recovering the alleged ill-gotten wealth of the Marcoses and their associates seem to be waning. Last year, the head of the PCGG spoke of the possibility of the agency folding up and its functions parceled out to the Department of Justice and other government agencies. An outcry from Marcos-era victims of human right violations forced the government to keep the commission going, at least for now. — Mar Cabra of the International Consortium of Investigative Journalists contributed to this story, PCIJ, April 2013
Source: Roel Landingin and Karol Ilagan, Philippine Center for Investigative Journalism. 4 April 2013.
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What Imee disclosed and didn’t
SIDEBAR
IN TEN out of the 13 Statements of Assets, Liabilities, and Net Worth (SALN) that she filed as member of Congress from June 1998 to June 2007, Ma. Imelda ‘Imee’ R. Marcos, eldest daughter of the late strongman Ferdinand E. Marcos and incumbent Ilocos Norte Rep. Imelda R. Marcos, had reported fairly moderate gains in her wealth.
This all changed in 2011, a year after she was elected governor of Ilocos Norte: Imee Marcos began disclosing more details, including a P17.2-million increase that almost tripled her net worth from P10.7 million in 2010 to P27.9 million as of 2011.
According to her 2011 SALN, Imee has six properties in Ilocos Norte worth P922,935.16, an inchoate share of her father’s estate under litigation, and P26.9 million in personal assets, bulk of which consists of jewelry, paintings, and artifacts. Her liabilities remained undetermined but were noted as still referring to “unpaid lawyer’s fee; claims and tax liabilities currently under litigation.”
As a member of Congress, Imee had not specified the total values of her real property and liability, and the details of her business interest in her asset declarations that PCIJ was able to secure from the House of Representatives. The statements she filed were inexact to begin with, reporting “indeterminate” amounts due to properties, claims and tax liabilities, and shares in various corporations that are all “under litigation.” Her net worth, which is supposed to cover both real and personal assets less liabilities, had only mirrored that amount she reported as personal.
Just the same, the rise in Imee’s wealth is due mainly to personal assets growing by 151 percent — from P10.7 million in 2010 to P26.9 million in 2011. Her jewelry increased in value from P2.5 million to P12.5 million, and paintings and artifacts from P2.5 million to P6.3 million in just one year. She also reported a P1-million increase in “cash on hand/bank accounts/time deposits” and P1.5-million increase in “furniture, antiques.”
As in 2010, her personal assets in 2011 also include two vehicles worth P3.1 million and stocks worth P100,625, which is noted as well as an inchoate share of her father’s estate that is under litigation.
PCIJ sent queries by fax and email to Imee asking her to explain the rise in her net worth from 2010 to 2011. She has not responded to the letter as of this writing.
In 2011, Imee also started filling out the business interests and financial connections section of her SALN. Previously, these items had not been spelled out in her SALN because of shares in various corporations under litigation.
But in her 2011 SALN, Imee declared four entities where she sits as “Officer-President”: The Imelda R. Marcos Collection, Inc., IPROD, Inc., Creative Media and Film Society of the Philippines, Inc., and the Marcos Presidential Center, Inc. All four companies are located in San Juan City. The Marcos Presidential Center was acquired in 2002, while the rest were acquired in 2007.
Records at the Securities and Exchange Commission (SEC) also reveal two more entities that appear to have once been connected to Imee Marcos: Friends of the National Museum Inc. and Sirib ni Ilocano Foundation Inc.
A 2000 Sirib document, however, says that Imee has already resigned from the foundation while Friends of the National Museum registration has been revoked.
Imee’s 2011 SALN also reveals seven relatives in government, among them her mother Ilocos Norte Rep. Imelda R. Marcos, her brother Senator Ferdinand ‘Bongbong’ R. Marcos Jr., and cousins Navotas Rep. Tobias ‘Toby’ M. Tiangco, Leyte Rep. Ferdinand Martin G. Romualdez, Ilocos Norte Vice Governor Angelo M. Barba, Tacloban City Mayor Alfred S. Romualdez, and Sangguniang Panlalawigan member Mariano ‘Nonong’ V. Marcos II. — PCIJ, April 2013
Source: Karol Ilagan, Philippine Center for Investigative Journalism. 4 April 2013.
