KEY FIGURE IN GRP FIGHT AGAINST CORRUPTION

UNCLAS SECTION 01 OF 02 MANILA 004693

SIPDIS

SENSITIVE

DEPT FOR EAP/MTS, EAP/MLS, INR/EAP, INR/B, EB

E.O. 12958: N/A
TAGS: PGOV PREL KCOR ECON RP
SUBJECT: KEY FIGURE IN GRP FIGHT AGAINST CORRUPTION
ANNOUNCES RESIGNATION

REF: A. MANILA 0740


B. MANILA 0234

C. 04 MANILA 4019


1. (U) This message is Sensitive But Unclassified -- Please
handle accordingly.


2. (SBU) Summary: On September 30, GRP Ombudsman Simeon
Marcelo announced that he would resign effective November 30
due to health reasons. Marcelo is widely respected as a
highly effective anti-corruption crusader and Malacanang
will be hard-pressed to find a worthy successor. A high-
powered lawyer and a judge have emerged as possible
successors. Marcelo has worked very closely with the USG
and his presence will be missed. End Summary.


3. (U) Ombudsman to Leave Post: Philippine Government
Ombudsman Simeon Marcelo announced on September 30 that he
would resign his post, effective November 30. (Note: The
Office of the Ombudsman is an independent government body
charged with ensuring the integrity of government functions.
End Note.) He stated that the seven-day workweek he had
sustained since assuming the post in 2002 had left him
"physically and mentally exhausted." The 51-year-old
Marcelo reportedly suffers from ulcers, hypertension, and
insomnia. At the time his resignation is slated to take
effect, Marcelo will be three years into his seven-year
term, which was supposed to run until October 2009. Marcelo
is widely respected as a man of integrity and as a highly
effective anti-corruption crusader. Malacanang reluctantly
accepted the resignation "with profound regret." Several
senators and press commentators also lamented his departure,
calling him a selfless, honorable public servant.


4. (SBU) Successor Mulled Over: Speculation about
Marcelo's successor centers on two candidates reportedly
backed by powerful factions within Malacanang. Some
observers have suggested that Raul Angangco, a name partner
at the Villaraza & Angangco law firm, may be next in line
for the Ombudsman's office. The law office, known as "The
Firm," has long enjoyed a close relationship with the Arroyo
family (see ref c). (Note: Secretary of Defense Avelino
Cruz was formerly a partner with this firm. Marcelo also
had served as a senior partner at Villaraza & Angangco
before joining the GRP. End Note.) Another possible
candidate for the job is Sandiganbayan (Anti-Graft Court)
Associate Justice Diosdado Peralto, who is reportedly backed
by Carlos and Erlinda de Leon. Carlos de Leon is a former
Quezon City prosecutor who now serves as a presidential
assistant. His wife, Erlinda de Leon, a cousin of President
Arroyo's, is also a personal assistant to the President.
Despite speculation that Peralto or Angangco may succeed
him, Marcelo has indicated that he favors his protege,
Deputy Ombudsman for Luzon Vic Fernandez, as a possible
successor. Fernandez, however, is not considered the most
likely candidate to emerge from the jockeying.


5. (U) Background on Marcelo: After graduating in the top
ten in his class at the University of the Philippines School
of Law in 1979, Marcelo entered private practice. He worked
his way up to senior partner at the law firm Villaraza &
Cruz (later Villaraza & Angangco),where he specialized in
intra-corporate disputes, bank fraud, corporate
restructuring and election law. Marcelo gained national
notoriety when he presented star witness Ilocos Sur Governor
Luis "Chavit" Singson at the impeachment trial of then-
President Joseph Estrada. In February 2001, he was
appointed Solicitor General, where he vigorously pursued
plunder cases against cronies of former president Ferdinand
Marcos. In October 2002, President Arroyo appointed Marcelo
to the post of Ombudsman. During his three years in the
post, he has overhauled the Ombudsman's office and oversaw a
threefold increase in the conviction rate of corrupt
officials. He also fought hard to increase funding for the
Office of the Ombudsman (ref a).


6. (SBU) Comment: The USG has worked with Marcelo on a
wide variety of anti-corruption projects and his presence
will be missed. Some observers have publicly asserted that
Marcelo's resignation stemmed from disagreements with other
GRP officials or from being fed up with official corruption
in the government. However, we have no reason to doubt his
claims that the job has taken a toll on his health. Marcelo
mentioned his declining health during several previous
meetings with emboffs and his work schedule (seven days a
week and 13-plus hours a day) was, indeed, severe. In any
case, Marcelo's departure is widely seen as a blow to the
Arroyo administration, one which its opponents may seek to
capitalize on by claiming that anti-graft efforts are
flagging. Arroyo's challenge will be to find a worthy
successor.