Two New York real estate agents told a House panel yesterday that they arranged multimillion-dollar purchases of prime Manhattan property for deposed Philippine president Ferdinand Marcos and his wife Imelda, disguising the Marcoses' involvement behind a fog of Panamanian front companies.
Facing possible criminal charges for their earlier refusal to respond to congressional investigators, the two brothers, Joseph and Ralph Bernstein, gave the House subcommittee on Asian and Pacific affairs the first direct and detailed testimony linking the Marcoses to a financial real estate empire in New York and New Jersey.
Documents and previous testimony had strongly pointed to Marcos family involvement in the real estate, but the Bernsteins' testimony yesterday proved to be the decisive "smoking gun" evidence, congressional and Philippine investigators said.
Joseph Bernstein decribed being flown by helicopter from Malacanang Palace in Manila to a public resort at Puerto Azul, where Marcos took him alone out onto a veranda to discuss "the international tax aspects" of securing a loan from Paribas Suisse, a Swiss bank, to one of his front companies headquartered in the Netherlands Antilles, which was used to buy the Crown building on New York's Fifth Avenue.
Bernstein said he and Marcos held a final, unusual meeting on an airport runway as Bernstein was leaving the Philippines. He said the president boarded to bid good-bye to Imelda, who was on the same flight, and then motioned Bernstein to the front of the plane. There, in the doorway of a commercial jetliner, with "all of Manila" watching, Marcos quietly reminded Bernstein to draw up a trust agreement.
The Bernsteins, who own the New York Land Co., said they met most frequently with Imelda Marcos in New York -- at least three or four times each year from 1981 to 1985 -- to discuss the development of the properties. Their descriptions of the meetings provided glimpses into the Marcoses financial dealings, the obsession with secrecy, the flaunting of the wealth, and a deep mistrust of the two brothers that eventually led to a rupturing of their relationship.
At one such meeting, during a 1981 Christmas party at a Manhattan restaurant, Joseph Bernstein recalled how Imelda bragged about having $120 million in a Swiss bank account and waved a bank statement in the faces of her guests to prove it.
Bernstein also recounted a midnight drive with Imelda to a building she was purchasing at 40 Wall St. -- one of the tallest buildings in lower Manhattan -- and how she stared up at it for at least 10 minutes. "She was kind of proud of it," Bernstein said. After the Wall Street purchase, and the purchase of another building on Madison Avenue, Bernstein said Imelda remarked how "they were well-diversified, because now there was East Side, West Side, uptown, downtown."
Joseph Bernstein said Imelda would frequently turn away from him in meetings and speak to her aides in Tagalog, the Philippine national language -- unaware that he understands Tagalog. On one such occasion, Bernstein said, he suggested Imelda Marcos consider selling the 40 Wall St. property to cover debts on other buildings, to which she quipped to an adviser in Tagalog that Bernstein merely wanted to buy it himself.
Imelda told Bernstein in 1984 that she wanted to use the Wall Street property to generate $70 million to pay for Marcos' 1987 reelection campaign.
Joseph Bernstein said most of his discussions were with Glyceria Tantoco, a close friend of Imelda's whom he assumed was acting as her agent. He said Imelda told him to do whatever Tantoco ordered.
He said he spoke often with Rolando C. Gapud, president of the Security Bank of the Philippines and believed to be the man who handled Ferdinand Marcos' personal finances.
The four Manhattan properties were owned by foreign corporations. Each foreign corporation was in turn held by three Panamanian corporations, which carried a one-third interest. The use of Pana- manian firms shielded the Marcoses from New York state's gains taxes, which apply when someone owns more than 50 percent of an asset. Bernstein also indicated that the use of three Panamanian firms was intended to distribute ownership among three Marcos children.
Yesterday's testimony centered primarily on the four New York office towers, although the Bernsteins said they had less direct evidence that the Marcoses owned property in suburban New Jersey and an estate in Long Island. All the properties are the subject of complex legal proceedings brought by the new Philippine government of President Corazon Aquino.
Joseph Bernstein also said that he and firms he controls made tens of thousands of dollars in campaign contributions to New York state and local candidates, but said none were made with Philippine money. The Bernsteins, through two firms, donated $10,000 to Mayor Edward I. Koch, $25,000 to city comptroller Harrison Goldin, and $25,000 to Gov. Mario M. Cuomo (D). Cuomo returned the money immediately. Spokesmen for Koch and Goldin said they would not return it since there was no obvious connection to Marcos.
The Bernsteins, through their New York Music Co., also provided half the $400,000 cost for the theatrical production "Mayor," based on Koch's autobiography. Koch's spokesman said that because the mayor sold the rights to the play, he could not control who invested in it.
Meanwhile, Philippine Finance Minister Jaime Ongpin, meeting this week with U.S. and international finance officials, yesterday said it was important that Marcos stay in the United States to facilitate the new government's efforts to recover his "ill-gotten" wealth.
"If he leaves the confines of the U.S. legal system, we will have a hard time getting at the hidden wealth," Ongpin said in a meeting with Washington Post editors and reporters.