US court: FM victims entitled to $35-million deposits

MANILA, Philippines – A New York State Supreme Court justice has ruled that the 10,000 human rights victims during the 20-year rule of the late President Ferdinand Marcos can lay claim to the $35-million Arelma deposits to partially satisfy the $2-billion indemnity awarded to them by a jury in 1995.

Failed New York securities firm Merrill Lynch held the funds for Arelma.

New York State Supreme Court Justice Charles Ramos said a US high court ruling issued two years ago, which upheld the Philippine government’s sovereign immunity and right to claim all confiscated ill-gotten wealth of the Marcoses, was merely “informative” and does not bind the New York State Supreme Court.

“The Supreme Court’s interpretation of federal procedure, while informative, is not binding on New York courts,” Ramos said in his ruling dated Nov. 9.

Ramos explained that Marcos human rights victims could forge ahead with their claim pending before his court and seek the turnover to them of the funds being held by Merrill Lynch, even though they have failed to join the action by the Philippine government, which has a competing claim on the deposits.

In his order, Ramos set a pre-trial conference for a hearing on Dec. 15.

The Philippine government and its Presidential Commission on Good Government have refused to come into the court as a party, invoking sovereign immunity upheld by the US Supreme Court in a landmark ruling two years ago.

Ramos, however, said that the court could proceed with hearing the case despite the Philippine government’s refusal to participate, explaining that New York’s joinder statutes had permitted the case to go without them.

Loretta Rosales, a former party-list lawmaker and member of the 10,000 human rights victims, hailed the New York State Supreme Court’s ruling.

“This is good news for us. This means we can now make our case before the New York State Supreme Court and move that the $35-million Arelma deposit is forfeited in our favor to settle part of the $2-billion compensation awarded to us,” Rosales told The STAR.      

The late deposed president Marcos, with the assistance of crony Filipino-Chinese businessman Jose Yao Campos and Swiss banker Jean Luis Sunier, set up the Merrill Lynch account in September 1972.

The $2-million initial deposit Marcos posted to create the account was said to have been taken from one of his Swiss dollar accounts.

It was put in the name of Arelma Inc., a Panamanian company formed by Sunier to hide the real ownership of the account.

In 1987, a New York federal court, ruling in favor of the Philippine government petition, froze the Arelma account at Merrill Lynch.

The Swiss Federal Supreme Court has twice held that Marcos controlled Arelma and that he had the disposition over the company.

Merrill Lynch, founded in 1914 and the largest US brokerage firm before its merger with Bank of America, was one of the Wall Street financial institutions hardest hit by the credit crisis caused by the sub-prime housing mortgage mess.

It sold itself to the Bank of America in mid-September 2008 for $50 billion.

Winners of a class suit involving 9,539 victims of human rights during the 20-year Marcos regime have been trying to have US courts forfeit the account to settle part of the $2-billion dollar award given them by US District Court of Hawaii Judge Manuel Real.