CORRUPTION UPDATE: PLUNDER CHARGES (AT LAST)

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 001641

SIPDIS

STATE FOR EAP/PMBS, EB, INR/EAP
USAID FOR CDOWNEY

E.O. 12958: DECL: 04/08/2010
TAGS: PGOV KCOR PREL MARR ECON RP
SUBJECT: CORRUPTION UPDATE: PLUNDER CHARGES (AT LAST)

REF: A. MANILA 1506

B. MANILA 740

C. MANILA 464

D. 04 MANILA 5262

Classified By: Political Officer Andrew McClearn for
reasons 1.4 (b) and (d)


1. (C) Summary: The Ombudsman filed plunder charges on
April 6 against Major General Carlos Garcia and his immediate
family members, while his court martial continues. Neither
case is expected to conclude soon, however. The GRP has also
filed new charges against 21 officials in the Department of
Public Works and Highways. Civil society is increasingly
involved in anti-corruption activities, most notably with a
planned "Philippine Integrity Fund" to assist with
prosecutions and the Office of the Ombudsman. End Summary.

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Plunder!
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2. (C) Chief Special Prosecutor of the Ombudsman's Office
Dennis Villa-Ignacio confirmed to told poloff that his office
had filed formal charges of plunder on April 6 in the
anti-graft court (Sandiganbayan) against Major General Carlos
Garcia (former Comptroller of the Armed Forces of the
Philippines),his wife Clarita, and sons Ian, Juan, and
Timothy. The filing of plunder charges capped a six-month
investigation by the GRP into the Garcia case (refs b-d). In
a supplemental notice accompanying the charge sheet, the
Ombudsman stated that Garcia had "accumulated, amassed, and
acquired ill-gotten wealth by himself and in connivance with
the members of his family." According to Villa-Ignacio, the
five-member Garcia clan has been accused of violating R.A.
7080, known as "The Plunder Act," by illegally accumulating
303 million pesos (approximately USD six million) during MG
Garcia's years of service in the AFP. Villa-Ignacio related
that a panel of investigators from the Ombudsman's Office had
discovered ample evidence of unexplained wealth in the form
of landholdings, luxury motor vehicles, and significant
assets in various accounts under the names of Garcia family
members. Garcia also faces four minor charges of perjury.


3. (SBU) According to press accounts, Clarita Garcia has
now returned to the Philippines from the U.S., and the Bureau
of Immigration has issued a hold-departure order to prevent
her from leaving the country. In the charge sheet, the GRP
recommended that the Garcia family members be detained and
held without bail, noting the seriousness of the charges,
i.e. the allowable punishment under the plunder act is life
imprisonment or even the death penalty. As of COB April 8,
police have apparently not yet detained Mrs. Garcia. It is
not clear whether the sons are in the Philippines or the U.S

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Court Martial
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4. (SBU) Military court proceedings continue against Garcia
in parallel with the criminal trial. On April 4, DHS Attache
testified to the court martial panel that Garcia is currently
a legal holder of a U.S. Alien Registration card. (Note:
Under the Philippine Constitution's Article XI Section 18,
public officials who seek to change citizenship or to acquire
immigrant status in a foreign country shall be "dealt with by
law." end note) The prosecution has vowed to wrap up its
case by April 22, after which Garcia's defense will begin.
The maximum penalty is dishonorable discharge from the AFP
and a forfeiture of AFP retirement benefits.

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Other Developments
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5. (C) Other significant public and private sector
developments in the ongoing effort to reduce corruption since
Mission's last summary in Ref B are:

-- The House Committee on Natural Resources on March 16
created an oversight group to probe questionable local
government management of the lucrative quarry operations in
Pampanga Province, located northwest of Manila. Vice
Governor Joseller Guiao earlier had accused current governor
Mark Lapid and his predecessor (and father) -- now Senator
Manuel Lapid -- of skimming close to USD seven million from
the quarry operations from 1999 to 2004;

-- Secretary Angelo Reyes of the Department of the Interior
and Local Government (DILG) asked the Ombudsman to file
criminal charges against two Bureau of Customs officials
allegedly involved in smuggling at the Batangas International
Container Port. Reyes, who also heads the National
Anti-Smuggling Task Force (NASTAF),accused Customs
collectors Napoleon Morales and Marius Anderson of violating
the Anti-Graft and Corrupt Practices Act;

-- The Ombudsman's Office on March 8 filed graft charges
against 21 officials of the Department of Public Works and
Highways, accusing the group of participation in a USD
750,000 vehicle repair scam in 2001. This new set of charges
came shortly after the Sandiganbayan dismissed earlier, more
serious, charges of "plunder" against the same 21 officials;

-- The Makati Business Club and the Philippine Bar
Association announced on April 6 that they would launch the
"Philippine Integrity Fund" on May 5. This fund's aim is to
provide a "donation mechanism" for private law firms and
businesses to channel monetary contributions and volunteers
into the public sector, especially to the Ombudsman's Office.
Several private lawyers are already providing pro bono work
to support prosecutors in this office on high-profile cases.



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