After closing the Philippines' crime-ridden casinos with his 1972 declaration of martial law, President Ferdinand Marcos has, step by step, revived public gambling reportedly as a thriving source of income for his friends and relatives.
Four casinos and a jai alai stadium now operate under presidential license in four cities. In Manila alone, the gambling industry grosses at least $220 million a year, with about $110 million of that going back to the gamblers as winnings and about $30 million going to the government for public works projects.
What happens to the remainging $80 million is a mystery, and perhaps a growing source of tension in Marcos' martial law government.
According to sources close to the casino operators, much of the casino revenue appears to be under the control of Roberto Benedicto. He is a sugar magnate and Marcos' fraternity brother who also appears to be active in the foundation that holds a substantial portion of the president's personal assets.
Alfredo Romualdez, younger brother of Marcos' wife Imelda, also appears to be engaged in the gambling industry. Both men have turned down repeated requests for interviews, but have denied through spokesman that they exercise any control over gambling revenues.
The casinos offer a lucrative source of easily hidden revenue that could be used to shore up political support for Marcos' one-man rule, as well as attract tourists and keep the criminal element usually associated with gambling under control.
As with other profitable ventures involving both the presidential Malacanang palace and its business allies, however, Marcos does not appear to entirely trust his friends. He seems to harbor some feeling that they may be getting rich at the expense of his reputation for putting some limits on traditional Philippine corruption.
According to members of the Manila floating casino's security force, Marcos has had his chief of intelligence and head bodyguard, Maj. Gen. Fabian Ver, station his own agents on the vessel to monitor the flow of revenue.
Teodoro Valencia, prominent columnist for the Philippines Daily Express, who appears to have unusual access to Marco's thinking, often de bunks foreign press reports of corruption in the palace.
But in a recent column he said: "If the foreign press is bent on saying that the president is cornering all business for himself, it is the fault of his 'friends' who use his name to amass wealth and corporations. The rumors that hurt the president are not fabrications of his enemies but the direct effects of the doings of his so-called friends who attributed to him the things that they are doing - for their own good. Rather than take the blame, they'd rather that the president took the rap for their own indiscretions."
Imelda Marcos, now minister of human settlements and second only to her husband in political influence here, has publily denounced gambling. In 1976, after she and her husband formally opened the Manila casino, she said, "We will legalize virtue, we will not legalize vice."
Many took this to be just a way to warn off competitors.
Her younger brother Romualdez, appears quite active in the administration of the floating casino here, as well as the casinos in Cebu and Gaguio. Insurance on the gambling ship is provided by Cotuntry Bankers Insurance Corp., which is in turn controlled by the Rual Bankers Assoc. Romualdez maintains an office at hte association and is said by industry sources to operate as its key executive.
Romualdez also maintains close ties to Eduardo Marcelo, the chief executive officer of Manila Bay Enterprises, which essentially operates the casino and collects its revenues. A Marcelo assocaate said Romualdez acts as the casino's agent in the president palace.
Marcelo, who operates a company building pleasure craft and Philippine navy patrol boats, assists in a Romauldez shipyard business - Bataan Shipyard and Engineering Co.
Imelda Marcos has appeared extremely sensitive to any public discussion of involvement by Marcos' friends and relatives in the gambling.
In May The Washington Post had scheduled interviews with Marcelo and another official connected with Manila Bay Enterprises. Shortly after, the first lady called in public relations agent Carlos Weber, who represented some of the parties involved, and told him to do something about the Post inquiry. All the scheduled interviews were abruptly canceled.
Marcelo, Benedicto, Romualdez and other individuals involved in the gambling industry were not responsive to requests for information this month.
The casinos in the Pines Hotel at Baguio and on ships in Manila Bay and Cebu Harbor are clean, brightly lit and attractively laid out.
The original 5,000-ton Manila vessel, dubbed the "Philippine Tourist," was purchased in late 1975 in Oslo for about $4 million. It has 68 gaming tables including roulette, blackjack and baccarat, plus 110 slot machines.
Of the estimated 2,200 gamblers who have boarded the ship daily, about 600 have been tourists and the rest Filipinos, many of Chinese ancestry. Regular customers have paid $400 for an annual pass to board the vessel, or $700 if they wish special VIP privileges. The tables have usually been jammed and gamblers often have to wait for vacancies.
Recently, the Manila Bay vessel was moved to Cebu Harbor and replaced by a 10,000-ton-vessel purchased by Northern Lines Inc. This is a shipping firm controlled by Benedicto that is an adjunct to Peninsula Tourist and Shipping Co., the initial purchaser of the ship now in Cebu. The new, larger Manila gambling vessel has 80 gaming tables and 150 slot machines.
The estimated gross revenues of the Manila casino operation last year came to about $165 million, of which about $82 million was paid back in winnings to customers and about $16 million to the government for public works projects.
There has been no public accounting of the revenues retained by Manila Bay Enterprises. Officials have refused to discuss them and, according to an official of the Philippine Security and Exchange Commission, the company has never filed a financial statement required by Philippine law.
The company's revenue are held by the Traders Royal Bank, which company sources say is controlled by Benedicto. The Manila ship has also been crewed by Benedicto employees detached from his Northern Lines Inc. Another Benedicto firm provides janitorial services.
Trinidad Enriquez, a prominent Manila restaurateur and a friend of Imelda Marcos, said in an interview that she set up the restaurant facilities on the ship at the invitation of Benedicto.
Four launches purchased at $350,000 each to ferry passengers to and from the gambling ship also service Northern Lines ships in Manila Bay. The Casino has had no need for the launches lately, however, as the ship has been tied to a pier and has not ventured out into the harbor.
Although Benedicto's name does not appear on any publicly available corporate documents of Manila Bay Enterprises, he is a member of the company's board of directors, according to a Marcelo Associate. The original Manila Bay vessel underwent a complicated leasing arrangement that appeared designed to transfer the burden of serving the debt on the original purchase to the government.
A source close to Marcelo said the Peninsula Tourist and Shipping Co., the original purchaser, leased the $4 million ship to the government for $3.2 million a year, and the government in turn leased it to Manila Bay Enterprises. A Marcos aide, Juan Tuvera, who arranged the lease, declined to be interview.
Marcelo handles security, property and administration at the Manila, Cebu and Baguio casinos as Romauldez's agent, According to company sources. The gambling operations have designed by Stanley Ho, the gambling czar of Macao, who has an office in Hong Kong. He specializes in casinos that cater to Chinese patrons.
Marcelo himself has remained close to the Marcos family. He presented one of his boat building firm's runabouts to Imelda Marcos a few years ago. She shipped it to Prince Charles of England as a gift. Marcelo gave the president two armor-plated automobiles.
A casino now set up in hotel in Zamboanga, in Mindanao, is controlled by Anos Fonacier, an entrepreneur from Marcos' hometown in northern Luzon. Fonacier is close to Marcos' secretary of tourism, Jose Aspiras. Fonacier declined to be interviewed, but one of his associatessaid the Zamboanga casino franchise was granted by Marcos.
Manila's Jai Alai Fronton, which grosses about $57 million a year, falls under the influence of Imelda Marcos, who also serves as governor of greater Manila, and her brother Romualdez.
Preisdent Marcos awarded the Jai Alai franchise to the Philippine Jai Alai and Amusement Corp. in 1975 after the former owners, the Madrigal family, were removed. The government agency responsible for supervising jai alai is the Games and Amusements Board, chaired by Imelda Marcos' associate Luis Tabuena.
In 1977 the jaialai company paid back about $28.5 million to gamblers and $13 million to the government. This left $15 million in company hands that has not been publicly accounted for and that the principal[TEXT OMITTED FROM SOURCE].