NY court hearing on $41M for Marcos victims

If things go right in the US District Court for the Southern District of New York, the almost 7,000 recognized claimants in the Hawaii class suit against the Marcos estate would again be awarded compensation from recovered funds belonging to the Marcoses. This time, the reparation would be much bigger ($41 million) than the three previous tranches distributed in 2011, 2014 and 2019.

The claimants had been awarded $2 billion in exemplary and statutory damages by a Hawaii court in 1995, but these came in trickles or have not yet been fully satisfied owing to the complexities in tracking down the so-called ill-gotten and hidden wealth of the Marcoses stashed away in different parts of the world. Well, not to mention blocks thrown in the way, among them coming from a competing claimant, the Philippine government. Or from the Marcoses themselves.

On July 15 (shortly after the third tranche was distributed), the US District Court for the District of Columbia issued an order for the “enforcement of Philippine forfeiture judgment against all assets of Arelma, S.A., formerly held at Merrill Lynch, Pierce, Fenner & Smith, Incorporated, including but not limited to, Account Number 165-07312, and all interest, income or benefits accruing or traceable thereto.”

This was on the petition of Jose Duran, a member of the class suit filed by human rights violations victims who had been awarded the $2-billion judgment in Hawaii.

Robert Swift, counsel for the claimants who had suffered under the Marcos dictatorship (1972-1986), said that after three years of inactivity, the case involving the so-called Arelma funds would now be heard in New York. US District Court Judge Richard J. Leon entered a decision on July 15 granting two of Swift’s motions transferring the case from Washington to a federal court in New York. Swift predicts a final decision in a year.

The change of venue would spell the difference because the funds are, in the words of Leon, “in the custody of the State of New York, held pursuant to New York state law…”

A backgrounder: Former US justice of the Supreme Court Anthony Kennedy had given a history of the Arelma funds at issue: “In 1972, Ferdinand Marcos, then President of the Republic of the Philippines, incorporated Arelma, S.A. under Panamanian law. Around the same time, Arelma opened a brokerage account with Merrill Lynch, Pierce, Fenner & Smith in New York, in which it deposited $2 million. As of the year 2000, the account had grown to approximately $35 million. (Approximately $41 million by now.—CPD)

“Alleged crimes and misfeasance by Marcos during his presidency became the subject of worldwide attention and protest … After Marcos fled the Philippines in 1986… the [Presidential Commission on Good Government (PCGG)] asked the Swiss Government for assistance in recovering assets—including shares in Arelma—that Marcos had moved to Switzerland. In compliance, the Swiss Government froze certain assets and, in 1990, that freeze was upheld by the Swiss Federal Supreme Court…

“The Swiss assets were transferred to an escrow account set up by the [PCGG] at the Philippine National Banc (PNB) pending the Sandiganbayan’s decision as to its rightful owner. The Republic [of the Philippines] and the [PCGG] requested that Merrill Lynch follow the same course and transfer the Arelma assets to an escrow account at PNB. Merrill Lynch did not do so. Facing claims from various Marcos creditors… Merrill Lynch instead filed an interpleader action….”

An interpleader action is initiated when a plaintiff that holds property on behalf of another does not know to whom the property should be transferred.

“Poppycock!” Judge Leon said of the Philippine government’s claims, and he states why in his memorandum opinion.

And so, folks, who said there are no hidden, ill-gotten wealth out there that have yet to be retrieved? Who said that the tens of thousands who suffered under the Marcos dictatorship are a mere figment of the imagination?

I hope for a speedy decision so that the victim-survivors, especially those in their twilight years, the next of kin of those who perished during the dark night of martial rule, would again be compensated, partially at least.

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