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URGENT Appeals Panel Rules Against Aquino Government

June 5, 1987

SAN FRANCISCO (AP) _ A federal appeals court on Thursday overturned a ruling freezing assets of Ferdinand and Imelda Marcos, saying the Philippine government had little chance of regaining $1.5 billion it claims the couple stole.

By a 2-1 vote, a 9th U.S. Circuit Court of Appeals panel said the contention by the government of Corazon Aquino that the U.S. investments were bought with proceeds of Marcos’ looting of the Philippines during his reign raised political and foreign-policy questions that went beyond this nation’s courts.

Thursday’s ruling, if it stands, would lift an order issued in June by U.S. District Judge Mariana Pfaelzer in Los Angeles freezing all of the Marcoses’ assets worldwide, with a value estimated by the Aquino government at $1.55 billion.

The decision appeared to conflict with a ruling in November by the 2nd U.S. Circuit Court of Appeals in New York that upheld a freeze on Marcos’ purported holdings in New York and declared that U.S. courts could judge such a case. The Supreme Court could decide to resolve the conflict.

Thursday’s majority opinion by Judge Alex Kozinski said that even if Marcos seized dictatorial power in violation of Philippine law and used it to fill his pockets, as the Aquino government claims, a U.S. court would have no standards by which to judge his actions.

″Offensive as such absolute government may be to our sense of justice, no legal restraints can prevail against dictatorial power,″ Kozinski said.

″A dictator can do whatever he can get away with. A court in this country simply cannot second-guess how that power is exercised.″

In addition, said Kozinski, court action in the case could embarrass U.S. foreign policy - for example, if the court ruled that the Marcoses acted legally, or if power in the Philippines changed hands.

Judge Dorothy Nelson dissented sharply, saying the court appeared to be placing foreign dictators above judicial review and was ignoring the desires of both the U.S. and the Philippine governments to take jurisdiction over the case.

John Bartko, a lawyer for the Marcoses, said the ruling conformed with their view that the suit raised political questions ″best adjudicated in the courts of the Philippines,″ where Marcos is willing to return.

Bartko said Marcos congratulated his lawyers when informed of the ruling, and told them ″he’s always had confidence in the American judicial system.″

Representatives of the Philippine government who filed the suit did not immediately return telephone calls seeking their reaction to the ruling.

Marcos, who said he had not seen the ruling but had received a call from his attorney, said the ruling ″justifies my belief in the American system of justice.″

″It seems to conclude that they (Philippine officials) have not substantiated the allegations of ill-gotten wealth. That seems to be the point.″

According to the suit, $1.5 billion is in Swiss bank accounts, $4 million was used to buy a Beverly Hills home owned by a corporation with ties to Marcos, $800,000 is in two Los Angeles bank accounts owned by Mrs. Marcos, and $7 million is in cash, jewelry and other property seized when the couple fled to Hawaii in February 1986.

The suit, filed under federal racketeering laws, seeks at least $1.5 billion in damages, which would be tripled, and $50 billion in punitive damages.

In seeking a freeze order, the Aquino government said the Marcoses had hidden their property in the past and may do so again if not restrained while the suit is pending.

Bartko called that fear ″ill-founded,″ saying the Marcoses ″aren’t going anywhere.″

The suit contends Marcos used his office to defraud the Philippine people by diverting public and private property to himself and entities he controlled, the use of government monopolies, privileges and other acts of corruption; and that he then transported the stolen property to the United States and used it for investments, in violation of U.S. law.

As evidence of fraud, the suit said Marcos had a net worth of $60,000 in 1966, a year after taking office, reported salary of $337,000 over the next 20 years, and wound up with a net worth of over $1.5 billion.

Kozinski said a judgment on Marcos’ actions as president of the Philippines would violate the ″act of state″ doctrine, which says courts of one nation should not judge the sovereign acts of another.

″Once the acts in question are established as governmental in character, our courts have uniformly refused to question the integrity or nobility of the reasons underlying them,″ Kozinski said.

Nelson contended the suit concerned Marcos’ alleged actions as a private citizen, which courts can judge like any other private acts.

″I cannot adhere to the position that the alleged acts of receiving bribes, plundering the treasury, and extortion are the result of complex political and policy choices,″ she said.

″... Just because Marcos was in a position to commit these acts when he was president does not render these acts ’official.‴

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