EMBASSY ANTI-CORRUPTION EFFORTS -- LAW ENFORCEMENT

UNCLAS SECTION 01 OF 03 MANILA 002821

SIPDIS

STATE FOR EAP/PMBS, EB, INR/EAP, INR/B
TREASURY FOR OTA
JUSTICE FOR CRIMINAL DIVISION DEPUTY ASSISTANT AG BSWARTZ
JUSTICE ALSO FOR OIA CHIEF MWARLOW
DHS FOR ICE/OIA

E.O. 12958: N/A
TAGS: PGOV PREL PINR KCOR CVIS ECON RP
SUBJECT: EMBASSY ANTI-CORRUPTION EFFORTS -- LAW ENFORCEMENT

REF: A. MANILA 2712

B. MANILA 2578

C. MANILA 1641

D. MANILA 0388

E. 04 MANILA 5262


1. (SBU) Summary: Over the past year, Mission has stepped
up law enforcement anti-corruption efforts. Mission played a
key role in major anti-corruption cases, particularly the
case against former Comptroller of the Armed Forces of the
Philippines (AFP) General Carlos Garcia. We are now actively
investigating specific GRP officials suspected of corruption.
We continue to explore ways to integrate the visa function
with anti-corruption efforts by use of databases and
interviewing techniques. We have established an Embassy
anti-corruption working group (ACWG) as well as a bilateral
anti-corruption working group. Our efforts have helped
invigorate the GRP anti-corruption program and also have
helped the GRP pinpoint where it, as a Millennium Challenge
Threshold Country candidate, could use MCC funding to bolster
its own anti-corruption efforts. End Summary.

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DHS/ICE
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2. (SBU) Immigration and Customs Enforcement (DHS/ICE)
Manila has been working closely with Philippine law
enforcement agencies on corruption cases. In the Garcia
case, DHS/ICE officials at San Francisco International
Airport confiscated approximately $100,000 in cash from
General Garcia's sons as they attempted to bring the
undeclared money into the US (ref E). The subsequent
investigation uncovered Garcia's possession of millions of
dollars in unexplained funds and assets in the US. The sworn
statement of General Garcia's wife to US authorities, in
which she admitted corruption on her husband's part, was a
central piece of evidence in the case. DHS/ICE and DOJ, in
close cooperation with the GRP's Anti-Money Laundering
Council (AMLC) and Office of the Ombudsman, have seized
assets of Garcia in the US, including a Trump Tower
condominium in Manhattan, and are looking into forfeiture and
money-laundering cases against him in the US. The DHS/ICE
Attache testified in Garcia's court-martial trial regarding
Garcia's US permanent resident status. As part of its probe
into corruption-related money laundering of Politically
Exposed Persons (PEP),DHS/ICE Manila, working closely with
the GRP Ombudsman, is investigating additional senior
military officials in the AFP, former senior GRP Bureau of
Customs officials, and certain other senior GRP officials,
all of whom appear to have substantial assets in the US.


3. (SBU) DHS/ICE Manila is also working to tighten the net
around corrupt GRP officials laundering money in the US by
heightening its scrutiny of false currency declarations
(CMRIs) emanating from the Philippines. DHS/ICE Manila is
working with its headquarters to ensure that it is promptly
advised of every such CMRI violation. If, after further
inquiry, DHS/ICE Manila has reason to believe that the
improperly declared funds constitute ill-gotten gains of
corrupt GRP officials, it will open a criminal investigation,
in possible coordination with the GRP Ombudsman. In
addition, DHS/ICE Manila is exploring the feasibility of
establishing a system whereby it would be notified anytime a
Filipino, or someone whose point of embarkation was the
Philippines, comes into the US with $50,000 or more in cash,
irrespective of whether the money was properly declared.
(Note: In addition to the improperly declared funds Garcia
brought into the US, he also, through his wife and sons,
brought in large sums of properly declared currency. Had
DHS/ICE Manila been aware of this fact earlier, it might have
been able to uncover his illegal activity even in the absence
of the fortuitous discovery of the undeclared monies. End
Note.) As with false CMRIs, DHS/ICE Manila would then
determine whether the monies likely constitute unexplained
wealth warranting a criminal investigation. However,
targeting CMRIs in this fashion would require programming
changes in the national database that houses CMRI
information, requiring additional budgetary resources.

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DOJ
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4. (SBU) In the Garcia case, the DOJ Attache coordinated
the efforts of US law enforcement agencies within the
Embassy, with prosecutors in San Francisco and in New York,
and with DHS/ICE to ensure the seizure of Garcia's US assets.
In addition, the DOJ Attache is assisting the GRP prepare
more effective Mutual Legal Assistance Treaty (MLAT) requests
relating to pending corruption cases and coordinating with
stateside DOJ colleagues to ensure prompt action on such
requests. As part of this effort, he arranged for a
representative from the DOJ's Office of International Affairs
to come to the Philippines to conduct a week-long seminar for
the Ombudsman's office, AMLC, and the Solicitor General's
office on how to draft more effective MLATs. He has also
played a supportive role in the GRP's prosecution of former
President Estrada for "plunder" by preparing briefs and
arguing in the Federal District Court in Nevada for the
extradition of Estrada co-defendant Charlie Atong Ang. The
decision by the US District Court to allow Ang's extradition
to the Philippines, as well as the opinion of the court that
certain testimony against the former president is credible,
have bolstered the GRP's case against Estrada.

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Consular
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5. (SBU) Visa Applications: We are exploring ways to
utilize the financial information provided to the Consular
Section in the visa application process, including sharing
such information with GRP law enforcement agencies such as
the Ombudsman's office, to help the Philippines in its
anti-corruption efforts. (Note: INA Section 222(f) provides
for the confidentiality of visa records but allows sharing of
information for law enforcement purposes. End Note.) The
ACWG (see para 7) is also working to identify those GRP
officials about whom suspicion of corruption is sufficient to
warrant adding their names to Consular's CLASS lookout
system.


6. (SBU) Visa Denials: Under Presidential Proclamation No.
7750, Embassy is working with CA to test the limits of the
use of 212(f). We have requested an advisory opinion on one
visa applicant, an AFP colonel, and the ACWG will work with
the Consular Section to put forth additional candidates. In
addition, we continue to use the more traditional bases for
visa denial in the anti-corruption campaign. In the case of
General Garcia, the Consular Section revoked his visa under
Section 214(b) of the INA, on the grounds he was unlikely to
return to the Philippines for fear of prosecution locally.
We will also look to deny visas to suspected corrupt GRP
officials, where appropriate, under Section 212(a)(2),which
makes ineligible those convicted of or who admit to Crimes of
Moral Turpitude.

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Embassy's Anti-Corruption Working Group (ACWG)
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7. (SBU) In November 2004, Embassy formed the ACWG, a
sub-group of the Embassy-wide Law Enforcement Working Group
(LEWG). DOJ chairs the ACWG, which also includes FBI,
DHS/ICE, CON, USAID, POL, and ECON. The ACWG provides an
interagency mechanism to identify candidates for FBI or
DHS/ICE corruption investigations. In one case involving a
high-ranking GRP politician who may have laundered money in
the US, the FBI's review of the evidence uncovered activity
that may lead to a US grand jury investigation. The ACWG has
also created a central database, maintained by the Consular
Section's Fraud Prevention Unit (FPU),and established
collection procedures for all corruption-related information
encountered by Embassy officials, regardless of their section
or agency. The ACWG has encouraged all sections/agencies
within the Embassy to report information on possible
corruption to the ACWG, which can sift and compare it with
other corroborating evidence to determine whether to open a
case and/or whether to relay such information to the GRP's
Office of the Ombudsman.

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Bilateral Anti-Corruption Working Group
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8. (SBU) Mission established a joint US-RP anti-corruption
working group (US-RP ACWG) in January. To date, the GRP has
been represented by the Ombudsman, Simeon Marcelo, and the
AMLC head, Vic Aquino. Presidential Legal Counsel Mercedes
Gutierrez will join the working group. We have included
multiple GRP agencies to increase transparency, and improve
the likelihood the GRP will take action on any corruption
evidence we provide. At the first US-RP ACWG meeting in
January, we underscored the Mission's desire to assist
wherever possible and to press forward on certain important
corruption cases such as the Garcia case. The Ombudsman
reported that he had recommended to the Supreme Court that
the Sandiganbayan (the special court handling all corruption
cases) begin trying, on a contiguous basis, 40 priority cases
(as opposed to the 2,000 cases the court is currently
handling on a non-contiguous basis).

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US Treasury Advisor at AMLC
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9. (SBU) The Mission has also approved the establishment of
an NSDD-38 position for a US Treasury Law Enforcement Advisor
position at the AMLC for a two year period. The first
Advisor is working directly with AMLC to ensure a prompt and
thorough response to MLAT requests from the US, including
those MLAT requests relating to ongoing corruption
investigations by US law enforcement agencies. This new
position will also help ensure long-term cooperation and a
steady exchange of expertise on anti-money laundering
technologies and innovations.

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Manila Airport: Currency Declaration
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10. (SBU) In response to input from the Embassy, GRP
authorities have posted signs at Manila's Ninoy Aquino
International Airport indicating that anyone carrying over
$10,000 out of the country must declare it. More vigorous
implementation by GRP enforcement agencies of their own laws
on currency declaration should lead to the collection and
sharing of more corruption-related data.

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Millennium Challenge Account
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11. (SBU) The GRP's candidacy as a Millennium Challenge
Threshold Country offers important new opportunities for USG
resources aimed at complementing GRP programs to fight
corruption, a key barrier to fiscal reform. The initial
draft of the GRP's MCC concept paper proposed programs aimed
at bolstering the Ombudsman's anti-corruption capacity, and
introducing reforms within the Bureau of Internal Revenue.
BELLARD