Diokno sacked, key witness murdered


(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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  • Senatongressman

    DIOsdado Macapagal tatay ni Gloria Arroyo parehong MANDARAMBONG KAWATAN NA Pangulo.. Syang puno syang bunga bwisit! Mga DISBLO BUWANG NA MAGAMANG MAGNANAKAW

  • ApoNiLolo

    LOL! The “poor boy from Lubao” got his FORTUNE from a company with the same brand!

  • ala_ehhhh

    That’s a good bit history Mr. Doronila. I have just realized that its history repeating itself. A story of corrupt “Like Father like Daughter” reigning in the Philippines politics.

  • tarikan

    Now, don’t be surprised why the little girl has the same “DNA” as that of her father. Those photos of “simple living” of Kong Dadong were just for show after all. Kong Dadong must have ascribed to this saying: Born poor not your fault, die poor your fault”. He saw to it that it wasn’t his fault. Right, Gloria?

  • FireEngine

    Please put Diokno on the 200 peso bill, instead of the lying, stealing piece of carp who is on it now.

  • Adam_d_langgam

    ang mga timang mukhang naniniwala na ke mang doro …. pag si retard ang tinitira ni mang doro dapat pahinga na daw si tanda. eh ba’t walang mga kulay jaundice na pumupuna ka ka doro?

    basta hindi napapansin si “kulot” aquino, okay lang. ang mga nauuto talaga ni budoy … ngeeee

  • JS Duyaguit

    When I was 10, I`ve read a book called Presidents All and was captivated by the story of Diosdado Macapagal`s rise from deep poverty (anak ng labandera) to the presidency. The Stonehill episode was conveniently omitted. I had no idea about it until Mr. Doronilla wrote on that shameful event in Macapagal`s presidency. Macapagal was no different from the corrupt politicians that have ruled and are ruling our country. Thank you, Mr. Doronilla for opening my eyes.

    • iriga1_city1_boy1

      To JS Duyaguit,
      Pare,Just info here:
      I don’t know if you were born already in 64′ but months before the Presidential
      election,i had seen and read campaign brochure materials and leaflets dropped from airplanes and in them were the most vicious ‘gutter’campaign attacks between them( Marcos and Macapagal).One accusing the other of dirty linens.The “Stonehill Stuff’ was there.Accusations about anything abounded.Dirty,Dirty politics of what you can imagine.And on the ground they gave us “mongol”pencils,band papers and hats.Of course,Us children liked it.Mga bata pa kami.And still continuing with us today at the detriment of the suffering people.Quo Vadis,my Philippines!!

  • batangpaslit

    the late Leo Parungao can tell the whole story…

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