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Diokno sacked, key witness murdered

/ 12:36 AM September 20, 2013

(Last of four parts, continued from Sept. 13)

CANBERRA—Menhart Spielman, general manager of Harry Stonehill’s US Tobacco Corp. (USTC), walked into the US Embassy on Dec. 9, 1961, with a face badly bruised after coming from a meeting with Stonehill and his business associate Robert P. Brooks, on the 10th floor of Carmen Apartments on Dewey Boulevard. He told the embassy he was prepared to reveal to Philippine authorities “various illegal acts, of which he had evidence, perpetrated by the company.”

According to Lewis Gleeck’s book on the Philippine government crackdown on Stonehill’s business empire, Spielman asked for a 10-percent share of USTC and said he would quit if the demand was denied. Enraged by the demand, Stonehill assaulted Spielman, inflicting “a bloody nose, black eye and other contusions.” Subsequently, Spielman filed with the Manila city fiscal an attempted murder complaint against Stonehill and Brooks. Having turned over his documents to the embassy and the National Bureau of Investigation (NBI), Spielman had reached the point of no return. He became the sole witness of the government in the deportation case it was building against Stonehill, on the basis of documents seized by the NBI in its raids on March 2, 1962, on 27 Stonehill enterprises.


Spielman was put under NBI’s security protection. The witness protection program failed to ensure his safety. He started giving evidence to the Deportation Board in the first week of April, the last time he was seen.

For a backgrounder on Spielman, NBI dossiers told us that Spielman was a Czech Jew. He was born on Oct. 23, 1923, in Czechoslovakia, and he was a Holocaust survivor. As a refugee, he went to the United States after World War II and became an American citizen. He later showed up in Manila where he introduced himself to NBI Director Jose Lukban as general manager of Stonehill’s USTC.

The US government’s main interest in the documents Spielman gave to the embassy and to the NBI on Dec. 9, 1961, after the mauling incident at Carmen Apartments, was Stonehill’s tax liabilities, which the US Internal Revenue Service was investigating. However, the embassy had other concerns. Some of its staff believed that “American national interest required Stonehill’s elimination from the Philippines,” according to Gleeck’s book. In a report to the IRS, Robert Chandler, the service’s representative in the embassy, wrote: “In the opinion of  the embassy, it is imperative for American interests in the Philippines that some ways be found  to get Stonehill out of the Philippines and break his stranglehold here…. Stonehill has had corrupt influence on the Philippine government in the past and has now indicated that he will manipulate the new administration (of President Diosdado Macapagal).”

On May 20, 1962, just three months after the raids, Macapagal sacked Diokno from the Cabinet. The abrupt dismissal  whipped up a storm of controversy and fueled suspicions a whitewash of the Stonehill case was under way. The administration said the dismissal had nothing to do with the case.

On May 19, a Friday, Macapagal sent a letter to Diokno informing him of his dismissal and congratulating him for the unanimous confirmation of his appointment by the Commission on Appointments.

“It (came) while I was in the middle of a fight,” Diokno said. The letter made it appear that the president had ceded to Diokno’s “desire … to go back ” to his private law practice. The president was making up a story. Diokno never offered to resign.

Macapagal promptly appointed the undersecretary of justice, Juan Liwag, a Liberal, to replace Diokno. After the sacking, I wrote in the Bulletin: “A number of high administration officials are allegedly involved in corruption in the Stonehill papers. With Diokno as secretary of justice, these officials are also in danger of being prosecuted or at least exposed in the deportation trial.”

There were rumors that Macapagal was kept in the dark about the raids planned by Diokno and Lukban. According to the Philippines Free Press, told about the projected raids before they were carried out, “the president was put on the spot; he could not stop the raids.”


On April 26, Spielman failed to show up at the resumption of the deportation trial. In May, newspapers reported that Spielman had been murdered by four Muslims in Siasi, Jolo, as he reportedly tried to escape from the Philippines. The government eventually determined he was killed on April 22. On Aug. 3, before prosecutors could complete the presentation of massive evidence, President Macapagal ordered the “immediate deportation” of Stonehill and Brooks.

In his memoirs, Macapagal said he felt that continued detention “would prolong his (Stonehill’s) stay in the country, to the detriment of the public interest.” On Aug. 4, Defense Secretary Macario Peralta, with 200 Rangers armed with machine guns, took Stonehill from Camp Crame to the airport, where he took a flight to Sydney, Australia, en route to Switzerland.

In spite the tons of evidence, the government didn’t initiate any criminal prosecution against any official, including President Macapagal, who were named in the Stonehill files to have received bribes from him.

Most of the secrets of Stonehill’s “web of corruption” are sealed in one of the biggest corruption cover-ups in Philippine criminal history.

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TAGS: Czechoslovakia, Harry Stonehill, Holocaust survivor, Jose Lukban, Menhart Spielman, Philippine criminal history, Robert Chandler, Robert P. Brooks, us embassy, US Tobacco Corp.
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