Arroyo knew husband involved in syndicates

Arroyo knew husband involved in syndicates, US cable says
by Jojo Malig, abs-cbnNEWS.com

MANILA, Philippines – Pampanga Rep. Gloria Macapagal-Arroyo knew of her husband's "heavy involvement" in smuggling and illegal gambling syndicates but refused to stop him because he got her elected as President, a US embassy cable published Friday by whistleblower group WikiLeaks alleges.

Some of the Philippines' top business leaders raised the issue before American government officials in 2005 as they feared for the worst for the country, according to cable 05MANILA2670, classified "Confidential" by US embassy Economic Counselor Robert Ludan and sent by then US Chargé d'Affaires Joseph Mussomeli.

Washington Sycip, a founding partner of accounting giant SGV, told US officials that then First Gentleman Jose Miguel "Mike" Arroyo "is heavily involved in the illegal gambling or 'jueteng' networks and closely connected with major smuggling syndicates," according to the embassy memo.

"President Arroyo, according to Sycip, is aware of her husband's misdeeds, but she is unwilling to do anything to curb his activities because he was instrumental in marshaling campaign donations and is now keeping those supporters in line to help her maintain her grip on power," it added.

Cabinet officials were also caught in a bind. Many of their subordinates--Arroyo loyalists who were placed in key government positions--reported directly to the First Gentleman, bypassing chains of command, the cable revealed.

The memo also cited reports claiming that the President's son, Congressman Juan Miguel "Mikey" Arroyo, "is involved in jueteng racketeering."

Sycip, described as a "long-time US embassy contact," saw the former First Gentleman "as one of the worst offenders, with a reputation for corruption seeping down to all levels of society and eroding PGMA's political standing," the cable said.

The memo, again quoting Sycip, said Mike Arroyo's behavior damaged the credibility of the government and affected his wife's ability to crack down on corruption.

The SGV founding partner became "increasingly pessimistic, claiming privately that corruption [under the Arroyo administration was] at its worst, surpassing even the Marcos era."

Sycip said the President also rarely followed the advice given by a special group, of which he was a member, regarding complaints about corruption in her administration.

"President Arroyo is more concerned about her ability to stay in office than developing a strategic approach to policy making, he critiqued," the cable added.

No confidence in Arroyo government

Federation of Filipino-Chinese Chambers of Commerce and Industry (FFCCCI) President Francis Chua echoed Sycip's allegations of the then First Gentleman's involvement in syndicates, according to the June 9, 2005 memo.

Chua described Mike Arroyo as "a major problem with respect to corruption, pointing to his links to 'jueteng' and the many politicians and local officials involved in the illegal gambling racket."

Chua added that the Chinese-Filipino community was losing confidence in the government, in particular the courts.

"The FFCCCI maintains an internal settlement process to resolve disputes among member companies because members have so little trust in the court system. This process is being used more frequently now as an increasing number of FFCCCI members see the courts as unreliable and unpredictable because of corruption," the cable said.

"According to [Chua], the Chinese-Filipino business community encounters corruption on a regular basis in the tax bureau, customs, and other government functions... Corruption, he said, is increasingly undermining the ability of companies to operate efficiently in the RP...According to Chua, almost no business people believe the GRP's claims that its efforts are achieving results," it added.

"Chua said this corruption ... does make it more and more difficult to sustain economic growth," the cable said. "Capital flight is not yet a problem... [but] many of their investments are scaled back, however, from what they would be in a clean market."

US embassy officials also heard similar complaints from then Makati Business Club Director Bill Luz.

"Luz said that people should watch the rumors swirling around the first family carefully," the cable said.

"Regarding Mike Arroyo's involvement, Luz said he senses that the allegations will continue and sooner or later someone will come forward with clear evidence of wrongdoing," it added.

Another cable, 05MANILA2359, had also linked the husband and son of Arroyo to illegal gambling syndicates.

The memo, dated May 23, 2005, said all that it would take then to oust Arroyo from power then was "for one credible witness--like Governor Chavit Singsong [sic] in the Estrada case--to go public."

"However, there is little enthusiasm for a new impeachment process that could constitutionally bump up Vice President Noli De Castro as President, despite a fairly widespread belief in elite circles that the Arroyos are indeed directly linked to jueteng payoffs," it added.

"The likelihood either of stamping out or legalizing jueteng remains low; too many powerful people benefit," said the embassy cable also sent Mussomeli.

In earlier statements to media, the former First Gentleman and his son, Mikey, have denied all allegations of wrongdoing during the previous administration.

Business leaders quoted by the embassy cables, meanwhile, have yet to confirm the confidential statements made public by WikiLeaks.