Jury Clears Marcos and Khashoggi of All Charges
NEW YORK (AP) _ A jury Monday cleared Imelda Marcos of charges that she looted $222 million from the Philippines and hid the money by buying art and real estate with the help of Saudi financier Adnan Khashoggi.
The U.S. District Court verdict - on Mrs. Marcos’ 61st birthday - reduced the former Philippines first lady to tears and sent her supporters into jubilant celebration.
The jury also acquitted Khashoggi, the jet-setter once known as the world’s richest man, of charges that he helped Mrs. Marcos and her late husband conceal ownership of four New York buildings.
″This is the best birthday present I ever had,″ said a beaming Mrs. Marcos as she left the courtroom.
″I am in great awe and respect for the jury system that symbolizes the soul of the American people,″ she said.
Mrs. Marcos went directly to St. Patrick’s Cathedral, where she walked on her knees down the aisle to the altar, then bowed her head to the floor and prayed.
From St. Patrick’s she went to the Manhattan apartment she has been staying during the trial, where friends and supporters celebrated with her into the evening.
She emerged from the apartment shortly before 10 p.m. Asked about her plans for the future, she said, ″Home.″
Mrs. Marcos then got into a van with several friends. They were reportedly headed to a party at a Manhattan restaurant, with Khashoggi as host.
Khashoggi, 54, also praised the American jury system.
″I feel very happy for myself and my family and for the United States,″ he said earlier. A Moslem, he said he planned to leave New York to make a pilgrimage to Mecca, Islam’s holiest city.
As was his habit during the trial, Khashoggi returned to his posh midtown apartment via subway, posing with strangers and signing autographs. Once above ground, he and his wife used a cellular phone to call friends in France, England and California with the news.
If convicted on all charges, Mrs. Marcos could have been sentenced to 50 years in prison and fined $1 million. Khashoggi could have drawn a sentence of 10 years and a $500,000 fine.
The jury announced its verdict in the fifth day of deliberations after a three-month trial. Prosecutors called 95 witnesses. The defense, led by Marcos attorney Gerry Spence, called none.
″It was a poorly prepared case,″ forewoman Katherine Balton said later in a telephone interview. ″There was nothing to convince any of them that there was a case.″
When Balton read the first innocent verdict in court, Marcos supporters cried out, ignoring Judge John F. Keenan’s warning against outbursts.
Mrs. Marcos was in tears. She smiled and hugged her lawyers.
The prosecutors sat facing the judge, eyes downcast.
In a terse statement, the office of U.S. Attorney Otto Obermaier praised the work of the trial prosecutors and said: ″The jury has rendered its verdict. Our system of justice has spoken.″
The jury acquitted both defendants of all charges - racketeering, racketeering conspiracy, mail fraud and obstruction of justice against Mrs. Marcos, and mail fraud and obstruction of justice against Khashoggi.
Carmen Pedrosa, a spokesman for the Philippines government, said in a hastily written statement issued here that even though Mrs. Marcos was acquitted, the trial showed that Marcos’ regime was rife with ″unbridled corruption and total abuse of power.″
A government spokesman in Manila said Mrs. Marcos was still banned from returning home.
Estimates on how much the case cost the U.S. government were not available, Obermaier’s office said.
Mrs. Marcos had been accused of conspiring with her husband to buy art, jewelry and four Manhattan commercial buildings with $222 million stolen from their country.
Ferdinand Marcos was indicted with his wife in October 1988, 2 1/2 years after the president and first lady fled the Philippines. He died in Hawaii last September.
During the trial, the judge had called the case ″an unprecedented prosecution″ because it involved world figures, including a former head of state who was a major U.S. ally.
Authorities charged that much of the tens of millions of dollars used for investments in the United States came in kickbacks Marcos collected from government contractors while he was Philippines president.
Witnesses said the money was funneled to the United States through numbered bank accounts in Switzerland, Hong Kong, Manila and Los Angeles and was used to secretly buy the buildings for the Marcoses through associates and offshore corporations.
The central issue the jury had to decide was how much Mrs. Marcos knew about her husband’s alleged corrupt practices.
Spence, of Jackson, Wyo., said during closing arguments that Mrs. Marcos was a ″world class shopper.″ But he said she did not know the source of her husband’s wealth. The defense attorney said she was guilty only of loving and supporting her husband.
The prosecution argued that even though its evidence was heavily circumstantial, it proved that Mrs. Marcos, as a cabinet minister and mayor of Manila, knew the millions of dollars they invested was accumulated illegally.
The alleged offenses took place in the latter part of Marcos’ two decades as Philippines president. Marcos was deposed in February 1986 by a ″people’s revolution″ led by Corazon Aquino, widow of a murdered Marcos opponent. She became Philippine president as the Marcoses fled to exile in Hawaii.
The testimony was highlighted by witnesses’ accounts of Mrs. Marcos’ shopping habits, including spending sprees at Bloomingdale’s and numerous New York jewelry stores. Witnesses also said she used close friends and a secretary to handle purchases and deliveries of large amounts of cash for her expenses.
The basic allegation of the racketeering charges was that Mrs. Marcos violated U.S. laws against wire fraud and the transfer of stolen money into the United States.
The racketeering charges also included underlying allegations that she defrauded American banks of millions of dollars in financing the New York properties, and obstructed justice in a civil lawsuit brought by the Aquino government to recover the buildings.
The mail fraud and obstruction of justice charges against Mrs. Marcos and Khashoggi stemmed from his alleged efforts to help the Marcoses conceal their ownership of the New York buildings and some paintings after a court order in the Philippine lawsuit froze the Marcoses’ assets.
Khashoggi is a financier and arms dealer who divides his time between homes in New York, France, Saudi Arabia and other locales. He played a middleman role in the Iran-Contra affair, in which U.S. arms were secretly sold to Iran by officials of the Reagan administration and the profits diverted to the U.S.-backed Contra rebels in Nicaragua.
The properties at the heart of the case were three office buildings - the Crown Building on Fifth Avenue, 40 Wall St. and 200 Madison Ave., and a vertical shopping center called Herald Center.
The Aquino government’s claim on the real estate has not yet been decided because the civil lawsuit is pending.
The trial was clearly an ordeal for Mrs. Marcos, who wore black dresses to court every day in observance of mourning for her husband.
The trial was interrupted three times because Mrs. Marcos fell ill with stress-related ailments. She was hospitalized for four days after collapsing in the courtroom with a stomach problem and was treated for high blood pressure.