PRESIDENT ARROYO DEFENDS TRANSFER OF LCPL. SMITH

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 000015 SIPDIS SIPDIS E.O. 12958: DECL: 01/03/2017 TAGS: PREL MARR CASC KCRM RP SUBJECT: PRESIDENT ARROYO DEFENDS TRANSFER OF LCPL. SMITH REF: 06 MANILA 5109 Classified By: A/DCM Scott Bellard, reasons 1.4 (b) and (d) ¶1. (C) Summary. Facing intense criticism, President Arroyo publicly defended the government's transfer of custody of Lance Corporal Smith as in the Philippines' strategic interest in its "alliance with the United States to fight terror and poverty." Media commentary roundly condemned the President, and some opposition leaders renewed calls for her impeachment. The chief of the Armed Forces and senior government officials privately requested full resumption of Balikatan 07, while expressing understanding that it may be too late to reinstate certain elements. The Court of Appeals decided LCpl. Smith's motion on the custody issue was "moot" in light of the government action, but the private prosecutor will likely now take the issue of Smith's custody to the Supreme Court. Given the political risk the government has undertaken to restore compliance with the Visiting Forces Agreement, Embassy recommends restoration of as much as possible of Balikatan 07. End Summary. ¶2. (SBU) Following the December 29 transfer of custody of Lance Corporal Daniel J. Smith to the U.S. Embassy (reftel), President Gloria Macapagal Arroyo publicly stated on January 2 that the Philippine Government had taken necessary action "to forestall the further deterioration in our strategic relationship with the U.S., which has been rapidly eroded by our non-compliance with the Visiting Forces Agreement." She stressed that the move was a "difficult decision . . . taken with only the best interest of the Philippines in mind," but would not "impede justice and the rule of law." She called on Filipinos to "stand behind our alliance with the United States to fight terror and poverty." ¶3. (U) In response to questions, the Embassy confirmed that the 2007 Balikatan exercises would push forward, following the transfer of custody to the U.S. Embassy, under the framework of the Visiting Forces Agreement. This news dominated media reports on January 2 and 3. Malacanang Press Secretary Ignacio Bunye noted subsequently that cancellation SIPDIS of Balikatan would have adversely affected the operational capability of the Armed Forces of the Philippines and would negatively impact on the campaign against terror and poverty. Executive Secretary Ermita and Undersecretary of Foreign Affairs Seguis vigorously defended the government's decision to transfer custody absent a court order in a lively press conference on January 3. ¶4. (C) Ermita privately told Ambassador on January 2 that the transfer of custody "was our decision and it was the right one." Acknowledging that the Administration would have to face consequences for taking action where the judicial branch had balked, Ermita added that "the court made its decision and the Executive Branch made its decision." Ambassador assured Ermita that Smith was not "free" but merely confined in a different place, while jurisdiction remains with the Philippines. Separately, AFP Chief of Staff General Esperon asked the Ambassador to ensure that the U.S. finds a way to put all components of Balikatan 07 back on, claiming it was "critical" to the AFP and urging that the USG not "penalize" the AFP. ¶5. (U) The private prosecutor in the case on January 2 filed petitions with the Court of Appeals to hold several government officials -- including Ermita, Interior and Local Government Secretary Puno, Presidential Legal Counsel Apostol, and Justice Secretary Gonzalez -- in contempt of court, and is also seeking disbarment for those who are lawyers. She asked the Court to issue an arrest warrant for LCpl. Smith, calling him a "fugitive." ¶6. (U) Media commentary of the Philippine Government's decision has been almost uniformly negative, ranging from "despicable" to "surreptitious" to "a colossal mess" to "highly irregular and extraordinary" to "controversial and divisive." A group of Filipino lawyers publicly criticized the decision, stating that the transfer of custody was unwarranted and would cause a constitutional crisis. Some politicians characterized the transfer as another example of the U.S. "bullying" or "blackmailing" the Philippines into submission, while some called for the President's impeachment for failure to defend the Philippine Constitution. ¶7. (U) For the second time since LCpl. Smith's transfer to U.S. custody, a group of approximately 50 people demonstrated near the Embassy. The protesters on January 2 burned several home-made U.S. flags but were dispersed by the police without further incident. A demonstration scheduled for January 3 MANILA 00000015 002.3 OF 002 garnered only 20 people. ¶8. (U) A per an agreement between Ambassador Kenney and oreign Secretary Romulo providing access to LCpl. mith with prior notice to the U.S. Embassy, a fiv-member Inspection and Monitoring Team (IMT) visted LCpl. Smith January 2, led by Department of Interior and Local Government U/S Marius Corpus. The visit was without incident, and was prominently covered in the media. Corpus' public comments subsequently assured the public that Smith is confined on U.S. Embassy grounds, despite media speculation that Smith may have already been spirited out of the country. ¶9. (U) The Court of Appeals 16th Division ruled on January 2 that the appeal on custody by LCpl. Smith was "moot" in light of the transfer by Philippine authorities, and admitted that the government should "do as it sees fit," especially since "courts may not directly intervene in the exercise of diplomacy." The reasoning of the 38 page decision made clear, however, that "'jurisdiction' necessarily includes custody," and even claimed that the "basic concept that custody is an essential part of jurisdiction permeates article V of the VFA." It found that the lower court judge had not committed any "grave abuse of discretion" in ordering LCpl. Smith's temporary detention. ¶10. (SBU) Comment: The President and her Cabinet are demonstrating political courage in their vigorous defense of the Visiting Forces Agreement and the strategic alliance with the U.S. We believe it is in our mutual interests to restore as much of the Balikatan exercise as possible. Our public messages about Balikatan should emphasize the positive, and not dwell on what parts of Balikatan may not be reinstated. End comment. Visit Embassy Manila's Classified SIPRNET website: http://www.state.sgov.gov/p/eap/manila/index. cfm You can also access this site through the State Department's Classified SIPRNET website: http:// www.state.sgov.gov/ Jones