Government investigators confirmed today that Defense Minister Juan Ponce Enrile has revealed secret holdings by Ferdinand Marcos in the Philippines' telecommunications monopoly, prompting the company to hand over the estimated $20 million in stock.
The development gave an unexpected boost to the government's continuing search on several fronts for the secret wealth of the deposed president.
Enrile, also listed as a stockholder in the formerly state-owned company, Philippine Overseas Telecommunications Corp., astonished investigators with his announcement, last Friday, and raised their hopes that other revelations from Marcos' former associates would help their search. The incident also underlined Enrile's critical and ambiguous position in the post-Marcos power structure.
Enrile told a meeting of the company's board of directors that about 40 percent of the company's stock, listed in the name of two Manila firms, was really owned by Marcos.
A report submitted to the government last week and cited in the press and by government investigators listed Enrile as a stockholder. The report, by a company official, showed that most of his 6.5 percent ownership was held through the Jaka Investment Corp. The government had frozen trade in the company's stock last week as it opened an investigation into how the company had slipped into the hands of private investors close to Marcos.
The Philippine Overseas Telecommunications Corp. has about 15 subsidiaries, one of which, Philippine Communications Satellite, was chaired by Ferdinand E. Marcos Jr., the former president's son.
Nearly a month after Marcos fled a popular uprising against his rule, the task of documenting his wealth and how it was attained seems to be virtually choking the two government commissions leading the investigation.
"We have an overload of information, not only from documents but from informants who are now cooperating with us," said Steve Salonga, a lawyer on the staff of the Commission on Good Government, headed by his father, Sen. Jovito Salonga. The younger Salonga said the commission may have to stop seeking new information "just to follow up the leads we have already."
The Commission on Good Government and the Commission on Audit face other difficulties, such as missing documents and what some investigators say is resistance to their probes by fearful employes within some of the government agencies and state-owned companies being examined for corruption.
"The Enrile disclosure has saved us time," said Mary Bautista, a member of the Commission on Good Government, "I hope it will lead to others; that would make our work very much easier."
Bautista said she could understand why Enrile had waited several weeks before making the disclosure. "With the revolution, the law-and-order problem and his own policy decisions, he has had a lot to do," she said.
But some observers suggested that Enrile's delay in announcing what he knew would renew doubts by many government supporters about Enrile's loyalties. As Marcos' longtime defense minister, Enrile has been criticized for human rights abuses committed during his leadership of the military and accused of enriching himself through his office.
In a search through mountains of records, investigators here are fitting together a tableau of activities by Marcos and his close friends, referred to here as "the cronies," that gives credence to longstanding allegations against Marcos. But the picture remains hazy.
The composite picture of Marcos drawn by the Philippine investigators is of a man who began his political career in traditional Philippine ways, helping friends and building alliances with a politician's favors. Several businessmen and one former Cabinet minister suggested in interviews that, while previous Philippine presidents had built their own oligarchies of wealthy families to support them and run the economy, Marcos seemed to want to dominate the economy himself.
Several investigators charged, as did lawyer Heherson Alvarez, that Marcos in his first years as president was skimming money from government institutions but limited his operation to that.
In the early 1970s, however, two developments vastly broadened the scale of Marcos' enrichment, Alvarez and others charged. Marcos declared martial law, taking virtually unchallenged control of the country, and the oil crisis poured Arab petrodollars into U.S. and European banks -- which sought to reinvest it in the Philippines, among other countries.
Loans from foreign banks flowed in, raising its external debt to $25 billion from $2 billion -- a twelvefold increase in as many years. As in other countries, banks sought the protection of government guarantees when making the loans. Here, the government was Marcos.
Alvarez, who fled to U.S. exile in 1973 to begin researching Marcos' accumulation of wealth overseas, said Marcos simply sold his willingness to facilitate such loans, demanding in exchange that as much as 15 percent of the loans' value be kept overseas, to be funneled to accounts held by him or his family.
Other investigators charge that Marcos and his associates followed a traditional Philippine pattern in trying to move their assets overseas. "Carrying cash out of the country in suitcases would be not only risky but a bit tedious -- so people have moved their wealth abroad by getting into trade," said Omar Cruz, an economist at the independent Center for Research and Communication here.
Using his power to legislate by decree, which he retained even after ending martial law, Marcos awarded his friends virtual monopolies to handle the country's traditional income-earning exports, such as coconuts, sugar and bananas.
According to Cruz, exporters would underreport the amounts of goods shipped abroad and then invest overseas the proceeds from selling the unrecorded exports. He said his organization had documented this phenomenon by surveying the Philippines' basic commodity trade in oil, sugar, coconuts, logs and lumber in the years 1965-85.
Cruz said they had compared the amounts of trade reported in official statistics to the amounts for the same sectors reported by their trading partners. On the value of Philippine trade that went unreported here during those 20 years, Cruz said, "the ballpark we're in is from $10 billion to $30 billion."
Two of the most lucrative and politically important sectors for what businessmen have dubbed "crony capitalism" were coconuts and sugar. In each area, Marcos awarded, by decree, governmental regulatory powers to private companies controlled by his friends.
For coconuts, Marcos decreed that all of the country's coconut oil -- produced by more than 25 separate refineries -- be exported through Unicom, a coconut refining and exporting company owned by Eduardo Cojuangco.
Unicom and its sugar industry counterpart, owned by Marcos' associate Roberto Benedicto, had "the authority to set prices for the commodities they bought and could determine the market share to be permitted the different Philippine producers," said an American businessman in Manila. "They controlled everything," he said.
Manila businessmen who asked not to be identified, said some American firms had won exemptions from Marcos' decrees in favor of "cronies," usually with the help of the U.S. Embassy. An embassy spokesman said the U.S. mission "did cooperate with U.S. businessmen who asked the embassy to contact appropriate Philippine officials to obtain relief from discriminatory policies."
With those rare exceptions, according to Eduardo Sanchez, a banker working with the government Commission on Audit, Marcos' system "tried to monopolize, and profit from, the coconut industry all the way from the tree to the exports."
Cojuangco's Unicom set the price for buying raw coconuts, controlled their processing and export, and in some cases, sold coconut products at low prices to its own subsidiaries overseas, allowing the subsidiary to reap large profits.
Moreover, when the government collected taxes on coconut sales, it deposited the revenues in Cojuangco's United Coconut Planters' Bank, in an interest-free account, permitting the bank to enlarge its profits. The account and others holding similar tax receipts were not audited, according to the new government's Commission on Audit chairman, Teofisto Guingona.
Last year, the government tried to expand the Cojuangco coconut empire by creating what coconut businessmen said was an economically impractical, coconut-related chemical industry. In two decrees, Marcos ordered manufacturers to use coconut-based chemicals, instead of cheaper petrochemicals, to make soaps and detergents.
Marcos then gave a virtual monopoly to Cojuangco for the manufacture and supply of the chemicals, ignoring protests from soap-makers that the more expensive Cojuangco-produced products would drive many of them out of business and raise soap prices to Filipinos by as much as 50 percent.
Such schemes for industrial projects controlled by associates were common, and often financed by Marcos' pressure on a state-run bank to lend them money, investigators charge, adding that the money now will have to be written off as bad debt.
Cruz and others charge that the monopolies also served Marcos as political machines, helping to keep him in power. "Coconuts and sugar together govern the lives of more than half the population," said Cruz.
For example, Filipinos and foreigners in the coconut business confirmed that just before Marcos announced last month's presidential election, his government pressured businesses that buy copra, the dried white meat of the coconut, to raise their prices to farmers as a way to win farm votes.
The difficulties facing investigators as they sift through vaults of documents in government ministries and the 300 or so state-owned companies were evident last week in the office of one auditor assigned to locate and channel key documents from a major state corporation to the audit commission.
Camped in an office at the corporation's headquarters, he telephoned his requests for documents to various department managers on other floors. Already, his desk was crowded with files waiting to be sent to the commission.
The corporation's director, who has fled the country, is widely thought to have been skimming funds from its operations. "We know he did it, and he couldn't have done it alone," the auditor said.
Echoing the fears of some other investigators, he added, "I'm not sure I'm getting full cooperation from all the people who work here. They seem to be having trouble finding all the papers we want."
"Of course, it will be weeks before the audit commission can get around to the papers we've already sent them," he said.