UNCLAS SECTION 01 OF 02 MANILA 002359

SIPDIS

SENSITIVE

STATE FOR EAP/PMBS, INL/AAE

E.O. 12958: N/A
TAGS: PGOV KCOR KCRM ASEC RP
SUBJECT: ILLEGAL "JUETENG" LOTTERY POTENTIALLY THREATENS
ANOTHER PRESIDENT

REF: A. MANILA 2142


B. MANILA 1506

C. MANILA 0486


1. (SBU) SUMMARY. The illegal lottery known as "jueteng"
played a prominent role in the downfall of former President
Estrada, and a newly brewing scandal related to jueteng could
potentially have a similar impact on the Arroyo
Administration. Despite Malacanang's vows to crack down on
jueteng, and the formation of a special task force to combat
illegal gambling, many view jueteng as a political rather
than a law enforcement problem, best solved through
legalization. The Catholic Church remains adamant against
legalization, however. The opposition will continue to seek
leads of jueteng payoffs directly to the First Family, at
least to embarrass if not topple the government. END SUMMARY.

WHAT IS JUETENG?
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2. (SBU) Jueteng (from the Spanish verb juego "to play") is
an illegal lottery similar to the "policy" and "numbers"
games popular in the United States before the legalization of
state lotteries. Bettors choose a two-number combination
between one and 37, placing wagers with "coriadors"
(collectors/runners), who visit homes, markets, food stalls,
or workplaces. The coriadors return to the jueteng office,
where an examiner or "revisador" enters the bets for the
drawing supervised by a table manager. Inside a bottle or
box-like receptacle called a "tambiolo" are 37 small wooden
balls about 1 centimeter in diameter; the tambiolo is tilted
at one end, and the first ball that rolls out into the table
manager's hand is the first winning number. After the
drawing of the first number, the table manager returns the
wooden ball to the tambiolo to draw the second number.
Drawings may take place two or three times a day. Cheating
can and does occur. According to sources, jueteng bosses
occasionally -- or even frequently -- arrange for number
combinations not heavily bet, or not bet at all.

HISTORY REPEATING ITSELF?
--------------


3. (SBU) Jueteng played a central part in the January 2001
"EDSA II" removal of President Joseph 8Erap8 Estrada, after
credible evidence surfaced linking him to kickbacks from
jueteng operations. Estrada, who was indicted for plunder (a

capital offense), remains under house arrest while his trial
drags on. Recent press reports have connected First
Gentleman Mike Arroyo, son Congressman Mikey Arroyo, and
GMA's brother-in-law Congressman Ignacio "Iggy" Arroyo to
payoffs from jueteng operators as well as PNP officials. The
Filipino press is having a field day reporting on fresh
allegations from Catholic leaders (ref a) and opposition
figures, while editorials have noted that all it will take is
for one credible witness -- like Governor Chavit Singsong in
the Estrada case -- to go public. However, there is little
enthusiasm for a new impeachment process that could
constitutionally bump up Vice President Noli De Castro as
President, despite a fairly widespread belief in elite
circles that the Arroyos are indeed directly linked to
jueteng payoffs.

POLICE & POLITICIANS PART OF THE JUETENG NATION
-------------- --


4. (SBU) According to the "Jueteng Nation" report by the
Philippine Center for Investigative Journalism (PCIJ),
jueteng is intimately intertwined in the dynamics of clan
politics and political patronage. Reportedly as part of the
protection racket, local Philippine National Police (PNP)
officers and politicians pocket 20 to 30 percent of jueteng
profits. The PCIJ report described this pattern of graft as
repeated at the provincial, regional, and national levels.
Recent press reports estimate that jueteng generates at least
30 billion pesos (over US$549 million) a year.


5. (SBU) Based on anecdotal evidence, Mission law
enforcement officials believe widespread corruption from
jueteng permeates the PNP. The large population of rural
poor in the six central Luzon provinces of Region III is a
major source for lucrative jueteng profits. Regional police
officials have estimated that each small town in President
Arroyo's home province in Pampanga could have as many as five
betting stations, with a total daily take of US$30,000 per
town. In recent press reports, unnamed sources have accused
"a relative of a top government official" (widely believed to
be the First Gentlemen) of doling out PNP assignments in
Central Luzon in exchange for 60 percent of the jueteng
protection money paid to Luzon PNP commanders. PNP officers
in these provinces reportedly also use jueteng kickbacks to
lobby for equally lucrative national level commands, such as
the Criminal Investigation and Detective Group (CIDG) and the
Intelligence Group (IG). Many PNP Chiefs have had previous
regional commands in the Central Luzon area, where many
politicians and police enjoy kinship and business ties to
suspected (but never convicted) jueteng bosses. Most
observers believe that jueteng is now nationwide, however,
not just concentrated in Luzon.

THE PREDICTABLE RESPONSE: CREATE A TASK FORCE
--------------


6. (SBU) Malacanang Palace has publicly called for a
comprehensive investigation into jueteng and the recipients
of its illegal largesse, regardless of where investigations
may lead. The PNP announced the formation of yet another
special task force to conduct "aggressive" operations against
illegal gambling. "Task Force Anti-illegal Gambling
Operations," headed by Chief Superintendent Ricardo Dapat
from the Criminal Investigation and Detection Group (CIDG)
and staffed by CIDG personnel, will focus on stamping out
jueteng in central Luzon. PNP Chief Arturo Lomibao has
amended the PNP's existing "three-strike" policy on jueteng
to a "one-strike" version - commanders who have jurisdiction
over areas that have been raided once for jueteng and illegal
gambling activities will lose their assignments. Among
commanders relieved in earlier Arroyo Administration
anti-jueteng campaigns was PNP General Edgar Aglipay, who
nonetheless quickly recovered and was appointed by President
Arroyo as PNP Chief in 2003, serving until his retirement in
March 2005.

PNP PRIVATELY SEES JUETENG AS A POLITICAL PROBLEM
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7. (SBU) Privately, Embassy interlocutors view jueteng not as
a law enforcement but as a political problem. In their view,
jueteng pre-dates the arrival of the Spanish to the
archipelago. The PNP does not want to waste its time,
effort, and manpower in a fruitless effort to suppress
illegal gambling without the genuine support of the GRP's
political leadership. Even the most honest and zealous cops
in the PNP expect that penalties for all but the biggest
jueteng operators would be small. Due to numerous cut-outs,
even a concerted investigation might never catch the people
at the top, they predicted. Despite the Catholic Church's
opposition to jueteng and even more so to its legalization,
PNP contacts have expressed the belief that most political
leaders would oppose jueteng legalization because a honest
game would cut into profits that end up in the hands of
politicians. Many in the PNP see legalization as a means to
provide more revenue to the national and local governments,
which could be used to increase pay and benefits for the PNP.
(Note: Some PNP officers regularly rely on jueteng
protection money to supplement meager base salaries, which
start at $158 a month for the lowest-ranking police officer.
End note). According to press reports, Budget Secretary
Emilia Boncodin also would favor legalization of jueteng,
both as a source of revenue as and as a means of
"entertainment." Executive Secretary Eduardo Ermita,
Secretary of Interior and Local Government Angelo Reyes, and

SIPDIS
Secretary of Public Works and Highways Hermogenes Ebdane (a

SIPDIS
former PNP chief) reportedly also favor legalization.

COMMENT
--------------


8. (SBU) The likelihood either of stamping out or
legalizing jueteng remains low; too many powerful people
benefit. The imminent risk of impeachment of President
Arroyo also remains low for now, but this could change
suddenly -- and with still unpredictable results -- with the
emergence of a "smoking gun" or a high profile, credible
witness claiming direct jueteng payoff links to GMA or her
immediate family members.
MUSSOMELI