Federal Agents Probing Possible Funds Diversion by Philippine Official
WASHINGTON (AP) _ The U.S. Justice Department is investigating whether Philippines Defense Minister Juan Ponce Enrile and his wife diverted American aid funds to their personal use, federal law enforement officials said today.
The officials, who spoke on condition they not be further identified, also said federal agents were tracking down ″money that may have been laundered″ in San Francisco by Enrile or his wife when he served as defense minister under Philippine President Ferdinand Marcos.
A Justice Department spokesman, Patrick Korten, confirmed that ″there is an active investigation by the U.S. attorney’s office in San Francisco, but I am not at liberty to characterize it″ except that involves the Philippines.
Korten denied a report in the San Jose Mercury News that senior Justice Department officials had told the U.S. Attorney for San Francisco, Joseph Russoniello, to hold off the probe until this week.
The department is known to be conducting three investigations of officials from the Marcos government, which was ousted last February. Besides the San Francisco probe, federal grand juries have heard testimony in Alexandria, Va., and Pittsburgh about alleged corruption under Marcos.
″The department has not directed that any of these investigations be concluded for any reason,″ Korten said. ″Any investigation that may have been launched at the time of the Philippines revolution or since remains active.″
Russoniello, reached at home late Friday by The Associated Press, said he would not comment on ″an active investigation.″
″I can say that there was never any attempt to prevent any investigation from going forward,″ Russoniello said. ″But that’s not to say there was no diplomatic interplay.″
In recent weeks, Enrile has increased his criticism of Philippine President Corazon Aquino, prompting speculation he is trying to destabilize her government or advance his own presidential ambitions. This week, the White House issued a strongly worded statement of support for Aquino.
The Mercury News reported that Russoniello in a March letter questioned a complex series of San Francisco real estate transactions involving the purchase and sale of two condominiums by Enrile’s wife, Christina.
The letter was sent to the Justice Department, and an accompanying memo was sent to Richard W. Held, special agent in charge of the FBI’s San Francisco office, the newspaper said.
The Mercury News said that according to Russoniello’s letter, Mrs. Enrile paid $280,000 in cash for a condominium in San Francisco in 1977 and $750,000 for another there in 1979.
On Nov. 17, 1982, she sold them to a dummy corporation called Renatsac Inc., which in turn sold them to an individual who then conveyed them to an off-shore corporation for $1.8 million, the newspaper reported.
The San Francisco attorney who handled the deal told FBI agents the complicated transactions were designed to reduce the Enriles’ tax liability, the Mercury News said.
Although the letters give no direct evidence of wrongdoing by Enrile, Russoniello expressed concern in his letter ″that this exercise was not just for the purpose of evading taxes but was really a device that permitted the Ponce Enriles to conceal money taken out of the Philippines,″ the Mercury News said.
Russoniello said the transaction raises the question ″whether these monies were ... U.S. aid funds diverted to his personal use,″ the report said.
Russoniello emphasized in his letter to Associate Deputy U.S. Attorney General Greg Walden that it was important for the Justice Department to ″move forward without delay″ in probing the transactions.
Walden said in an interview Thursday with the Mercury News that he had not ″squelched″ the Enrile investigation or any other investigation. He added, ″But that doesn’t tell you the pace of the investigation or how much resources have been committed to it.″
The 93 U.S. attorneys are appointed by the president and normally have autonomy to conduct such investigations without approval from Washington.
However, the Justice Department sent out a directive in March insisting that they inform the Justice Department of all litigation and investigations concerning officials of the Philippines.