KEY FIGURE IN ALLEGED CAMPAIGN FUND DIVERSION

C O N F I D E N T I A L MANILA 002455

STATE FOR EAP/MTS

E.O. 12958: DECL: 10/29/2018
TAGS: PINS PREL PGOV RP
SUBJECT: KEY FIGURE IN ALLEGED CAMPAIGN FUND DIVERSION
RETURNS

REF: MANILA 404

Classified By: Ambassador Kristie A. Kenney, for reasons 1.4 (b) & (d)


1. (C) SUMMARY: The debate over President Arroyo's 2004
election win was revived again with the return to Manila
October 28 of a former Philippine government official accused
of diverting more than $15 million in Philippine agricultural
subsidies to President Arroyo's political war chest and over
150 of her political allies. Jocelyn "Joc-Joc" Bolante, a
former agriculture official who fled to the United States in
2006 to avoid testifying before the Philippine Senate, was
taken into custody on arrival in Manila by Senate authorities
after he was deported from the U.S. for an immigration
violation. Bolante's return spawned massive TV news coverage
and front-page headlines, and resuscitated dormant inquiries
by the Senate and the corruption ombudsman's office.
However, the immediate furor is not a reliable barometer of
the outcome of the probes. The Senate has a decidedly poor
track record in investigating other controversies, the
Ombudsman's office will take months to complete its inquiry,
and both will run up against the public's evident weariness
of incessant political infighting in Manila. Post will
continue to monitor the issue, both for its possible
political impact and because Bolante sought asylum in the
U.S. based on fear of possible mistreatment in Philippine
custody. The Ambassador and other Embassy officers engaged
senior Philippine officials before Bolante's arrival,
emphasizing the need to ensure Bolante's well-being. We
choreographed the U.S. handover and our media interactions to
keep the U.S. out of this domestic political controversy.
Public attention is now focused on the investigations and
Bolante, who is undergoing tests in a Manila hospital. End
Summary.

ASYLUM PLEA DENIED
--------------


2. (C) President Arroyo's 2004 presidential election
victory spawned numerous allegations of fraud and
manipulation. In October 2005, the Philippine Senate began
an inquiry into claims Agriculture Undersecretary Jocelyn
"Joc-Joc" Bolante diverted 728 million Philippine pesos --
over $15 million -- earmarked to subsidize fertilizer and
pesticides for farmers to help finance the 2004 election
campaigns of President Arroyo and over 150 of her allies
running for Congressional, gubernatorial and mayoral posts.
By December 2005, Bolante had ignored four Senate subpoenas
to testify, and when a Senate arrest warrant was issued, he
fled to Hong Kong, South Korea and eventually the United
States, where he was detained in July 2006 by immigration
authorities for attempting to enter the U.S. using a canceled
visa. Bolante fought for two years to gain asylum in the
U.S., arguing his life would be in danger if he returned to
the Philippines. In the end a federal appeals court denied
Bolante's petition, reasoning that Bolante might indeed be a
pawn in the Philippine opposition's efforts to oust President
Arroyo, but that if Bolante had acted to "divert funds to a
political campaign activity that would certainly be illegal
under our own laws -- then facing prosecution for his acts
would not be ground for asylum."

RESUSCITATING DORMANT INQUIRIES
--------------


3. (C) The prospect of Bolante's deportation from the U.S.
revived opposition hopes of carrying out several lines of
investigation previously stymied by Bolante's flight from the
Philippines. Bolante's lawyer claimed the original Senate
arrest order from December 2005 was no longer valid, and his
view even won support from a handful of Senators. But other
leading members of the upper chamber, including Senate
president and likely presidential hopeful Manny Villar,
pressed for Bolante's arrest, as well as reopening the
hearings regarding the diverting of government funds.
Similarly, the Office of the Ombudsman, responsible for
probing official corruption and fraud, ordered Bolante to
answer charges filed against him earlier. While Bolante has
not spoken in public, his lawyer released a statement saying
the former official was ready to testify "at the proper
forum." For its part, Malacanang Palace maintained a studied
calm about the entire affair, saying that Bolante was a
private citizen and it would not stand in the way of the
investigations.

MEDIA FRENZY
--------------


4. (C) Bolante's return to Manila October 28 on a U.S.
commercial carrier set off a media frenzy. Acting on a
Philippine Senate arrest warrant, Philippine National Bureau
of Investigation agents took a weary-looking Bolante into
custody at planeside, placed him in a wheelchair and pushed
through a gauntlet of cameras and reporters to an ambulance,
which took him to a local hospital for a medical examination
of reported chest pains. We successfully choreographed the
presence of two U.S. immigration and customs enforcement
officers who had escorted Bolante on the flight from the U.S.
to avoid media attention completely and depart the airport by
an alternate route. Post commends the excellent coordination
among Department of Homeland Security Immigration and Customs
Enforcement officials both here in Manila and in the U.S.,
who skillfully managed Bolante's return in a high-pressure
environment and kept U.S. involvement out of the media glare.

INSURING AGAINST ACCIDENTS
--------------


5. (C) In light of Bolante's claimed fears of possible
mistreatment upon returning to Manila, the Ambassador and
other Mission members alerted senior Philippine officials to
Bolante's expected return, and underscored the importance of
ensuring his well-being. At the moment, Bolante remains out
of the public eye in a local hospital, in the custody of the
Senate and under the watch of National Bureau of
Investigation agents.



6. (C) COMMENT: Malacanang has good reason to maintain an
air of calm amid the tumult of Bolante's return. Even if
Bolante has ground truths to reveal about corruption in the
much-disputed 2004 election, experience indicates it could
take years -- if ever -- to come to light. The Senate has a
poor track record investigating malfeasance. High-profile
Senate hearings last year into alleged graft involving a
proposed national broadband network were remarkable for the
lack of preparation or evidence gathering on the part of
Senators, descending quickly into political grandstanding
that deflated public expectations. The ombudsman's
investigation is likely to drag on for months, and a contact
at the ombudsman's office told us that the case prepared
against Bolante in 2005 was misguided and would have to be
prepared anew. Perhaps most important, President Arroyo
maintains a massive majority in the House of Representatives,
where any impeachment bill would have to originate. And if
it is true that Bolante spread fertilizer cash to over 100
congressmen, those left in the House will have additional
incentives to quash action. Post will continue to keep close
watch on the Bolante case, both for its possible political
implications and because of Bolante's claim during his U.S.
asylum case that he feared potential harm in Philippine
custody. Currently, Bolante remains in a private hospital
under his personal doctor's care for blood pressure and
weight loss. END COMMENT.


KENNEY