Posted on: Tuesday, July 13, 2004

Federal court awards Marcos' victims $40 million

By B.J. Reyes
Associated Press

A federal judge has ordered that $40 million belonging to late Philippine dictator Ferdinand Marcos go to thousands of Filipinos who successfully sued his estate for human-rights abuses nearly a decade ago.

U.S. District Judge Manuel L. Real yesterday ordered that the money, now in escrow, be transferred to an account set up by the court in 1995 when a Honolulu jury decided in favor of 9,539 Filipinos in a class-action suit.

The Filipinos were awarded $2 billion after the jury found Marcos responsible for summary executions, disappearances and torture during his 14-year reign under martial law. The award has grown to $3.7 billion with interest, but to date no victims have received any money from the award.

"It would be unjust to prevent the class of persons tortured, summarily executed and disappeared from receiving the proceeds ... to partially satisfy their judgment," Real said in his ruling.

Attorneys for Arelma Corp., a Panamanian financial company set up by Marcos that originally held the $40 million, said an appeal was likely.

Real denied a motion to have the assets frozen immediately pending appeal.

Jay Ziegler, an attorney for Arelma, declined further comment.

Sherry Broder, an attorney representing the Filipinos, said Real's findings and conclusions were so strong that she is confident that the plaintiffs will prevail on appeal.

"I think the delay in justice is very difficult for those people in the Philippines and their families," she said. "I'm hopeful that we're going to see some distributions in the very near future."

In a separate 1999 decision, Real approved a $150 million settlement to clear the way for money to be distributed. But although that accord was signed it was never financed, Broder said. Under that decision, the money held in escrow in the Philippines National Bank was supposed to be transferred to the U.S. federal court, but that's never happened, she said.

The failure of the settlement to materialize prompted the search for hidden assets, leading to Real's order yesterday. However, plaintiffs are unlikely to receive any of that money soon, either.

The assets now will be transferred to the court account. Plaintiffs attorneys would have to file motions before any money is distributed and those motions could be contested, dragging the process out further.

Once Arelma appeals Real's ruling, attorneys could then seek to have the transfer reversed and the assets frozen again until the outcome is decided.

Broder still called the ruling a victory.

"This is very significant because we have been fighting for years," Broder said. "What we're trying to do is make this human-rights case meaningful and the only way it will truly be meaningful is if the victims recover something."

Oral arguments in the non-jury trial were presented to Real in February.

In his 13-page ruling yesterday, Real ruled in favor of plaintiffs' attorneys who said Arelma was established by Marcos in 1972 — the year he declared martial law in the Philippines — with $2 million in illegally obtained money.

The $2 million from Arelma was placed in a New York brokerage firm and through the management of a Swiss financier grew to $40 million by 2000. The financier, Jean-Louis Sunier, testified in a deposition last year that he managed the account for Marcos.

Ziegler had argued there was no definitive evidence linking Marcos to either account.

Real disagreed.

"Arelma was controlled by Ferdinand E. Marcos or his representatives during his lifetime," the judge read from his ruling.

The $40 million in Arelma assets was frozen in 2000, around the time attorneys began going after Marcos money they argued was illegally obtained and stashed in various accounts around the world. The assets have been held in escrow account because of competing claims of ownership by the Marcos estate, the Philippine government and the human-rights victims.

The $40 million is separate from $683 million in frozen Swiss assets that the Philippine Supreme Court awarded to the Philippine government last July.

Marcos and his family fled to Hawai'i after he was toppled in a "people power" revolt in February 1986, ending his 20-year rule. He died in Honolulu in 1989 without admitting any wrongdoing.

Advertiser staff writer Vicki Viotti contributed to this report.