" Fall of a Dictator " by Ron Centeno

In recent months, some lawmakers want to revisit the dormant nuclear power plant in Bataan. Without question, this mammoth project that never put to work was Marcos’s fattest single contract ever forged and perhaps the most wasted one.

Let us look inside the blueprint of this power plant and its eventual pitfall.

Found in the book, The Marcos Dynasty, by Sterling Seagrave, “The crony who engineered the deal for Ferdinand was Herminio Disini. Disini was part of the royal family, married to Inday Escolin, a first cousin of Imelda Marcos who also served as one of her physicians. Like Eduardo Cojuangco, Disini was twenty years Ferdinand’s junior.”

According to Seagrave, Disini’s biggest break came in early 1970s, when Ferdinand used him to take over the cigarette filter business in the islands-long dominated by a British-American firm called Filtrona Philippines, Inc. Both Disini and Marcos forced Filtrona out of business, leaving the former’s Philippine Tobacco Filters Corporation with a monopoly worth $1 million a month in profits. Disini then cut a deal with Marcos’s friend Lucio Tan, owner of Fortune Tobacco, selling Tan filters so cheap that his cigarettes could undercut rivals and drive competition out of the market. In return, Tan gave Marcos $11 million campaign contributions, plus $2.5 million a year. In the process, Tan got away with $50 million a year in taxes.

Having amassed large sum of money through these deals, Disini built Herdis Group, Inc., a conglomerate of fifty companies with $1 billion in assets. Disini, however, did not want to commit bigger portion of his capital, instead, he borrowed money using Philippine government guarantees that were irresistible to foreign bankers. Interestingly, Disini does not fit the qualification to build a nuclear plant. Moreover, the power plant sits on a jungle bluff in Bataan which is 5 miles from a dormant volcano, and only 25 miles from three geologic faults.

According to Seagrave, “It all began in 1973, when President Marcos ordered National Power to negotiate a deal to buy two 600-megawatt nuclear plants”. Early on, General Electric showed interest and began negotiating with National Power. On the one hand, Westinghouse was rather persuasive to have a piece of the contract by hiring a lobbyist close to Marcos. That lobbyist was Disini.

Quickly, Disini arranged for Westinghouse executives to discuss their proposal in private with Marcos. Westinghouse offered to supply a single plant with two 620-megawatt reactors at a price of $500 million. Additional charges for fuel, power transmission lines, and so forth raised the estimated total to around $650 million.

After the private meeting, Marcos ordered National Power to give the business to Westinghouse despite GE’s better proposal relative to costs and technical details. One official of the administration assembled a team of experts and found nearly every alternative made by GE was cheaper than its winning competitor. According to Seagrave, “whatever deal Ferdinand had struck with Westinghouse pleased him so much that he was not moved by any of these arguments.”

In the process, the reported cost of $500 million was beginning to grow. Soon, Westinghouse claimed that the cost assessment would now be over $1 billion.

According to Seagrave, “By the time a formal contract was signed in February 1976, the deal was hardly recognizable. The power plant would now have not two but only one 626-megawatt reactor. At the prices Westinghouse was now quoting, international banks would not give Manila a loan big enough to finance the second generator. Instead of getting two reactors for $650 million, the Philippines was getting one reactor, with half the power output, for $722 million. It would cost another $387 million for interest and escalation costs, bringing the total price to $1.1 billion.”

It was believed that the ever ballooning price of the project was attributed to Marcos’s demand for huge kickback in order to accommodate Disini and other cronies and anyone queued up.

When all was said and done and the financing has finally been arranged with the U. S. Export-Import Bank, Westinghouse needed a place to build the plant. Because the Marcos and Romualdez families had taken over large part of Bataan, hence, the plant should be built in Bataan as part of Marcos’s condition.

When the National Power, with the help from the U.N.’s International Atomic Energy Agency (IAEA), hired experts to test the safety of the site, they concluded that it was vulnerable to tidal waves and other natural calamities. Despite the unfavorable findings, the head of the Philippine Atomic Energy Commission, Librado Ibe, had to give in and issued the construction permit in April 1979 despite the Three Mile Island accident that occurred a week earlier.

When Marcos assembled his own experts several months later, they found that the design was unsafe and recommended changes to incorporate new safety features after the Three Mile Island. This proved to be rather costly when Westinghouse renegotiated the contract to meet the objections. The price rose to $1.8 billion - $55 million for added safety equipment, $645 million for higher interest costs and inflation, and finally, the eventual cost reached a whopping $2.2 billion. Work on the project was completed in 1984, which was about the same time Disini’s business empire suddenly collapsed.

According to Seagrave, “He (Disini) left the Philippines hastily for Austria, where he had taken the precaution of salting much of his wealth, and where he had purchased a palace outside Vienna.”

What a bastard!

Reference:

The Marcos Dynasty. 1988. Sterling Seagrave. Harper & Row, Publishers, Inc., 10 E 53rd Street, New York, N.Y. 10022

The ill-effects of martial law were Marcos’s consummation of massive loot pawned by his cronies who were equally morphed into being fat with vast fortune. Interestingly, the Americans had blood in their hands, too.

When Marcos declared martial law in 1972, he consulted with no less than Nixon and Kissinger. Their concession, however, was not free and the return of their endorsement was for the benefit of American companies who would acquiesce to Marcos’s imposition of the rule.

Found in the book The Marcos Dynasty by Sterling Seagrave, “America was the chief beneficiary. With thirty-five thousand U. S. servicemen in the islands, American bankers managing a tenth of Manila’s $2.1 billion national debt, $74 million in emergency relief, $75 million in aid, and upward of $2 billion in U. S. investments, America encouraged and condoned the new Marcos dictatorship just by continuing to do business as usual.”

Recall that four weeks before martial law was declared, the Supreme Court announced that it had decided to enforce a law restricting all retail trade in the Philippines. Consequently, U. S. corporations were barred from purchasing and owning private agricultural lands, and all other economic perks they were previously entitled to under the 1946 Parity Amendment. As a result, the American ownership must be reduced to 40 percent.

Marcos, however, without having to scrap the court decision, would use it to enrich himself by applying it selectively. Hence, foreign investors would only come to the Philippines if they were willing to distribute shares to Imelda or to his brother Kokoy Romuladez or to the Marcos cronies. This was confirmed later by Alex Melchor, Marcos’s then executive secretary. Melchor says, “such deals were cooked. Ferdinand was an expert chef, and he was always careful to grease the pan.”

Nonetheless, the promise of martial law as Marcos professed, was to instill discipline “necessary to transform the country from a corrupt feudal society into a new era of modern technology and export-oriented industry.” No less than the International Monetary Fund and the World Bank were duped in appreciation of the Marcos pretension of “discipline.” Quick to believe, “the World Bank secretly named the Philippines a country of concentration, which meant the amount of aid would be higher than average for countries of similar size and income.”

Before the massive aid from IMF and WB would inundate the coffers of the Philippine government, however, Marcos turned to his cronies to act fast. Indeed, the era of consummate kickbacks, bribes and other forms of extortion became the order of the day.

IN PART VII, WE’LL TALK ABOUT HOW THE MARCOS CRONIES ACQUIRE THEIR WEALTH INCLUDING, BENEDICTO, FLOREINDO, COJUANGCO, LUCIO TAN, AND DISINI. KITA KITA TAYO ULIT.

The conjugal partnership between the Marcoses was long and enduring. And because power is intoxicating, the line of succession had been drawn to secure their permanent grip to it. Like any known dictatorship, however, conspiracy from among those within the regime would soon be institutionalized.

In 1975, three years after martial law was declared, the struggle for power began to take form between Imelda Marcos and Defense Minister Juan Ponce Enrile.

By the look of it, Imelda’s “frivolous lifestyle and shallow preoccupation with celebrities” made her pale in comparison with Enrile’s massive academic and corporate credentials.

Juan Ponce Enrile was born in the town of Gonzaga, Cagayan Province, on Valentine’s Day, 1924. Because he was illegitimate, he was baptized Juanito Furruganan by his mother, Petra Furruganan, a peasant woman. Failed to be acknowledged by his father, he grew up poor. Early on, he showed academic acuity and wanted to be a scientist.

At 19, he wanted to confront his father, Alfonso Ponce Enrile, one of Manila’s leading corporate lawyers, a partner in the law firm of DeWitt, Perkins, & Enrile, which handled the affairs of General MacArthur and leading firms such as Benguet Mines.

Juanito Furruganan became Juan Ponce Enrile when Don Alfonso decided to recognize his son. He attended the Jesuit-run Ateneo, graduated at the top of his class in law at the University of the Philippines in 1953, and took master’s in law at Harvard in 1955.

In 1964, Juan Ponce Enrile was recruited by Marcos to handle his personal legal affairs. When Marcos was elected president, he named Enrile to a list of posts, including the minister of defense. Following his set-up assassination which he eventually admitted as hoax, became a final excuse for martial law. To those in the know, Enrile was considered to be the real architect of Marcos’s P.D. 1081, otherwise known as the martial law.

In order for Marcos to level up Imelda with Enrile, he appointed his wife governor of the Metro Manila as a crash-course in administrative leadership for future presidential bid in the event of her husband’s death. One senior military figure was, however, seen on the sideline that was headed to plot the exclusion of Imelda’s ascent to throne in the post-Marcos government. His name is Lieutenant General Fidel Ramos, vice chief-of-staff of the armed forces.

Fidel Ramos was the son of Narciso Ramos, Marcos’s uncle. Marcos was a graduate of West Point, who went to earn a master’s degree in civil engineering from the University of Illinois, then served in the Korean and Vietnam wars as a young officer. Ramos was known to live modestly (said to be one of the few senior officers who were totally clean) and was highly respected because of his self-restraint. Moreover, Ramos was not normally aggressive, lacked charisma, and was not forceful as he might be. And when Marcos was confronted with a question of who would become the next chief-of-staff, General Fabian Ver had all the trimmings of becoming one.

In the hindsight, the characters who played the roles in the 1986 people power revolt, Enrile and Ramos were on the one side of the equation while the Marcoses and Ver were on the other.


MORE TO COME.

Reference:


The Marcos Dynasty. 1988. Sterling Seagrave. Harper & Row, Publishers, Inc., 10 E 53rd Street, New York, N.Y. 10022

Found in the book Waltzing With A Dictator, (1987), by Raymond Bonner, was a claim made by the Cosmopolitan magazine in December 1975 that Imelda Marcos was one of the ten richest women in the world alongside Queen Elizabeth of England, Christina Onassis Andreadis, Barbara Hutton, and Queen Juliana of the Netherlands, among others. Bonner added that the magazine even suggested she might be the “richest woman in the world, bar none.”

The incredible progress of Imelda Marcos was mind-blowing. Her husband’s salary for the past ten years since becoming Philippine president had been less than $5,000 a year.

The Central Intelligence Agency or CIA in Manila conducted a little informal study, Bonner noted. The station determined that Imelda Marcos’s portfolio consisted of three to four dozen companies, including several banks. In total, her net worth was at least $150 million.

Found in the CIA files, under section headed “The Steel Butterfly” the CIA analyst, begins:

”Mrs. Marcos is ambitious and ruthless. Born a poor cousin of landed aristocracy, she has a thirst for wealth, power and public acclaim, and her boundless ego makes her easy prey for flatters. Although she has little formal education, she is cunning.

Her political organization is largely made up of media people and businessmen, plus a scattering of politicians and a few military men. Most are sycophants seeking protection.

Her political advancement has been handled largely by her brother, Benjamin Romualdez, absentee governor of Leyte Province, home of Imelda’s family”

The CIA analyst concluded that the “Marcos marriage was essentially a business and political partnership.” He was head of government; she was head of state. It was a conjugal partnership.

Prior to my writing the Fall of a Dictator, I was more skeptic than eager to dig into the horrible past of the Marcos rule. Part of my skepticism is that the topic is now passé. It has been 23 years now since Marcos fled the country and eventually succumbed to his own sorry death.

What triggered me to finally bring to light the abuse of power by the Marcoses and their cronies, however, is, foremost, to disabuse the lingering belief of some still misguided Filipinos who think we owe things to them. Second, I desire that while history is oftentimes repeats itself, the lessons we can learn from the Marcoses and their cronies would put the break on repeating history.

MORE TO COME.

There is no shortage of links between Manila, (Marcos, 1965 - 1986) and Washington (Lyndon B. Johnson, 1963 – 1969; Richard Nixon, 1969 – 1974; and Ronald Reagan, 1981 - 1989) from 1965 to 1987. The earlier connection between Marcos and Johnson was predicated by the war in Vietnam and was inherited by Nixon at the height of the Cold War that pitted the United States against the former Soviet Union.

America’s fear of “domino effect” (turning Vietnam into a communist state and spreading across Southeast Asia) became a lingering nightmare for U. S. leaders. Second World War was only twenty-years earlier and whatever cost to avert the possibility of a third was priceless. Marcos was quick to capitalize on such ‘fear’ and turned the table to his advantage, economically and politically.

Despite Marcos’ earlier uncommitted posture of sending Filipino troops to Vietnam, he became emboldened to pitch in if the price were right. However, Johnson’s advisers were reluctant to give in to Marcos’ excessive demands for “the very small contribution” he was willing to share. Marcos, they noted, was seeking the money for “political purposes” and had not proposed “effective means of using the large sums.”

Notwithstanding, Marcos prevailed and got what he wanted including, “$45 million in economic assistance; $31 million in settlement of Philippine veterans’ claims; and, finally, from the Special Educational Fund, $3.5 million, which would be for Imelda Marcos’s Cultural Center.” Johnson was not very pleased, however, when Marcos “only modestly supported the Vietnam War while never relenting in his demands for concessions.”

In December 1967 Johnson and Marcos were to attend the funeral of Prime Minister Harold Holt of Australia. Seizing the solemn opportunity to press LBJ for more American aid, Johnson’s aide recalled the U.S. president angry remark, “If you ever bring that man near me again, I’ll have your head.”

Johnson’s dislike for Marcos was overshadowed by his fondness of his wife Imelda. At the White House, when the Marcoses were in for a state visit, the spotlight was piercingly illuminated on Imelda. At thirty-seven, “the former beauty queen was a the head table, on her left the president of the United States, on her right the secretary of state, Dean Rusk.”

Indeed, the Iron Butterfly and the soon-to-be owner of 3,000 pairs of shoes has arrived!


Reference:

Waltzing with a dictator. (1987). Raymond Bonner. Random House, Inc. New York; Random House of Canada Limited, Toronto
TO BE CONTINUED…

On December 30, 1965, Luneta Park would become the bastion of Marcos’ debut as he delivered his inaugural message “A Mandate for Greatness.” Across the grandstand, Rizal must have been turning and tossing from his grave whose revered iconic statue was built to honor his patriotic deeds when the forty-eight-year-old newly elected president Ferdinand Marcos boomed it out before thousands of spectators. Ka Pepe once said, “Ang kabataan ang siyang pag-asa ng bayan.” So it seemed.

Unmindful of the tropical muggy temperature, Marcos, cool in his barong tagalog, “delivered an oration that was a paradigm of hypocrisy. The man who soon had his hand in the public treasury and who within a few years had handed over practically the entire economy to his cronies for plunder on this day condemned public officials who combine with unscrupulous businessmen to defraud the government and the public- with absolute impunity."

Alongside the president was his wife Imelda whose insatiable desire for anything of great value would promise that “Every form of waste-or conspicuous consumption and extravagance, shall be condemned as inimical to public welfare.” Equally, Marcos who would soon plunge his country’s judicial system into irrelevance called “upon all to join hands with me in maintaining the supremacy of the law.". And with that, the applause was loud, interrupting Marcos nineteen times. “It was a tour de force”, indeed.

When all was delivered and done, Marcos stunned his foreign guests, Americans in particular. Captivated, they summed up Marcos oratorical speech as “perfectly timed, ingeniously shaped, in a voice that must tritely be compared only to an organ.” They added, Marcos was “enormously intelligent, he was, tough, and he had guts.”

Fastforward, Marcos and his American patrons would form a friendship that would flourish until the day he would be deposed from power.



References:

Waltzing with a dictator. (1987). Raymond Bonner. Random House, Inc. New York; Random House of Canada Limited, Toronto

TO BE CONTINUED…

This is an attempt to redirect our attention from our country’s hindsight woes to their very source – that is, the Marcos regime.

Finding a way to dig deeper inside Marcos dictatorship is a painful undertaking. The more I learn, the more I abhor the man, who for 21 years of despotic rule, sent our country spiraling into the depth of political and economic chaos. His legacy, to my disgust, further provides the backdrop to other leaders who succeed him. However, I chose to limit my discourse on Marcos and his cohorts for this purpose.

Before his catapult to presidency in 1965, Marcos had created a mythical figure in his own image. In the late 1930s, the young Marcos had faced murder charges in the killing of a political opponent of his father. Convicted in trial court, Marcos appealed to the Supreme Court. Confident of his legal erudition, he conducted his own defense. When he succeeded in having his conviction overturned, a leading newspaper pasted his picture on the front page and declared the handsome twenty-three year old a “public hero.”

Second, much to his own telling, Marcos is a decorated World War II hero. He described his war exploits in Bataan by being captured and subsequently released. He maintained that he “commanded a tough unit of guerillas that made life miserable for the Japanese and aided materially in the liberation of the country. In the process he earned more than a score of decorations, including an American congressional Medal of Honor.”

By and large, Marcos version of his lengthy story was mostly false. “Marcos did win one ribbon during the Bataan campaign, but his claim to guerilla greatness evaporated under historical scrutiny, as did his Medal of Honor and the bulk of the rest of the tale.”

Amazingly, there were those who believed in Marcos, including the then Chief Justice of the Supreme Court, who secured his release from prison despite the weight of the case against him. Ordinary people did not bother to scrutinize his claim twenty years after the war. Despite the fictitious account of his claims, majority of those paying attention were convinced. It paid off. At least to him.

In 1949, as a Liberal, he was elected to the lower house of the Philippine legislature. Ten years later, he ran for the Philippine senate and won. His stint in the Senate became his “forum for building reputations and alliances.” To suit his political needs, “he switched affiliation to the Nacionalistas when the Liberal Macapagal changed his mind about abjuring a second term, and as president of the senate Marcos attacked Macapagal unmercifully.” When he sought to replace Macapagal in 1965 and eventually gained the office he calculatedly aimed for, no one was surprised. The rest is history.



Reference:

Bound to empire. (1992). H. W. Brands. Oxford University Press, Inc. 200 Madison Avenue, New York, New York 10016

TO BE CONTINUED.

History would tell us that the United States and the Philippines have a concocted relationship that goes back a long way under the so-called Spanish –American War. The Philippines had been under the Spanish control for 300 years. After the tumultuous defeat of the Spanish conquestadores, the U. S. forces quickly seized power and in the process, the Filipinos were swept aside and a bloody insurrection ensued resulting to a loss of 250,000 Filipino lives.

Immediately, the U. S. established its colonial relationship and that the Philippines would export raw commodities such as sugar and import manufactured goods. Due to the country’s strategic location along the Pacific coast, the United States built twenty military bases including the Clark Field and Subic Bay.

During the Second World War, the Philippines became an apparent target in similar fashion as the Pearl Harbor in Hawaii. Without question, the war had provided a backdrop for an unintended economic misery in the Philippines.

In 1944, at the height of the war, representatives from 44 countries met at Bretton Woods, New Hampshire, and established two multinational institutions – the International Monetary Fund and the World Bank. The task of the IMF would be to maintain order in the international monetary system and that of the World Bank would be to promote general economic development. Initially, the WB was conceived for the purpose of reconstructing the war-torn economies of Europe by providing low-interest loans. However, the WB was overshadowed in this role by the Marshall Plan wherein the United States would lend money directly to rebuild Europe.

In the 1950s, the Bank turned its attention to begin lending money to the Third World nations. In the 1960s onward, the Philippines became an ardent recipient under the country’s strongman Ferdinand Marcos. In his second term, Marcos secured his presidential power through corrupt and violent election using up the country’s foreign exchange reserves. Without reserves, the Philippine government was engulfed with massive trade deficit and mounting external debt.

With his hands tied, Marcos turned for help to the World Bank. This was without the Bank’s stringent condition of devaluing the peso currency by 60 percent. Currency devaluation was a bitter prescription imposed by the Bank for Third World countries in need of loans. The hope was to bring the trade account into balance through increased foreign exchange earnings from cheaper Philippine goods and a decreased cash outflow for more expensive imports. The unintended consequences, however, wrought havoc to businesses and workers alike. Due to the more expensive imported components for their products, Filipino entrepreneurs were forced into bankruptcy. Unemployment had gone up and wages of urban workers were cut into half.

Without let up, the World Bank whose president is always American, continued to assist Marcos based upon the American fear of domino effect of a bitter struggle between communism and capitalism in the Southeast Asian region. Anecdotal evidences showed that Marcos was emboldened to nurture the insurgency growth in the countryside to create an atmosphere of Communist takeover to ensure more assistance from the World Bank. In the minds of the American policy makers, the Philippines must detour from the Vietnam War failed experience.
It is noteworthy that the World Bank continued to impose conditions for the loans Marcos had sought. One condition is to allow foreign investment in the country through Export Processing Zones (EPZs). The following are the incentives for foreign corporations:

1. Permission for 100 percent foreign ownership
2. Permission to pay a wage lower than Manila’s minimum wage
3. Tax exemptions
4. Low rents for land and low charges for water
5. Government financing of infrastructure and factory building, which could be rented or purchased at a low price
6. Accelerated depreciation of fixed assets

Note that the projects such as in Bataan EPZ alone was worth a whopping $150 million to develop. Indeed, the government spent billions of loaned money on energy, transportation, communications, water, and construction to lure foreign corporations including Texas Instruments, Fairchild, Motorola, and Mattel. While the Philippines was true to its commitment in providing what was in the best interest of these multinationals, the latter were insensitive to the needs of the Filipino workers. The multinationals would pick up and leave when the demand for more realistic wage was raised – and so they did.

In a no-win situation, the Philippines was forced to swallow the pill prescribed by the World Bank of an export –oriented development. This policy proved detrimental to a country whose pressing domestic needs were bypassed by using the borrowed money in support of an export-oriented development. Recall the incentives granted to the multinationals, the country’s labor and raw materials for exports were rapaciously consumed at the expense of the ever growing hungry, unhealthy and ill-educated population. Likewise recall that these multinationals were getting tax holidays and paying low wages to send local governments to near bankruptcy. With about 150 countries competing on this model, each one of them, the Philippines included, could not export its way to solvency.