First family accused of undue riches
Last April 25, a short item appeared in the Manila Daily Express stating that the Philippine Securities and Exchange Commission would thereafter withhold certain financial information on corporations. The SEC cited national security, disclosure of trade secrets, and unique manufacturing processes or business methods as justification for the break with established open-disclosure practices.
But to Tommy de Leon, a young university instructor now living in the United States, it was evidence of the embarrassment of the Marcos government over a report he and two others have compiled. The study shows, he says, that President Ferdinand E. Marcos and his wife, Imelda Romualdez, have enormously enriched themselves, their relatives, and political "cronies" during the past eight years of martial law. Some opposition figures say the Marcos family has acquired one of the largest personal fortunes in the world.
Among the report's findings:
* The "first couple," their immediate family, and friends together own or control, or both, at least 900 Philippine corporations.
"This thesis," Mr. de Leon says, "is submitted either on the basis of their own claims as reflected in official SEC documents or on successful documented investigation of fronts and cronies." This member of the Movement for a Free Philippines adds that considerable information came as well from officials inside the Department of Industry and the Department of Trade, as well as from the cautious Philippine press and foreign publications.
This powerful economic clan organized and registered new companies roughly at the rate of at least two a week in the past eight years.
* This 900 number could possibly reach 1,100 if corporations owned or controlled, or both, by their political allies and medium- level "corrupt government officials" are included.
* Pacifico Marcos, the younger brother of the president, has 50 corporations.
* Brothers and cousins of Mrs. Marcos (especially Benjamin [Kokoy] Romualdez, a brother) own or control 90 corporations.
* Roberto S. Benedicto, a close friend and former law school classmate of Mr. Marcos, has about 30 corporations.
* Juan Ponce-Enrile, the minister of defense and a backer of Mr. Marcos in his election to president in 1965, has about 20 corporations, with interests extending from banking and motorcycle manufacturing to logging and coconut products.
* Several high-ranking generals, one commodore, and several important colonels own or control corporations.
* Two real estate corporations with a paid-up capitalization of 25 million pesos ($3.3 million) each were registered last April under the name of Imelda Romualdez Marcos. Mr. de Leon admits he has no proof, but he suspects these firms were incorporated to take advantage of an urban land reform proclaimed three weeks later by President Marcos.
The Philippines has had a long history of mixing political power and personal wealth. Moreover, the nation's business structure has long been controlled by a relatively small group of well-to-do families, much of the wealth stemming from huge estates created during the Spanish colonial period. In the term of economists, the business system has been "oligopolistic."
Before martial law, however, the government was changed by elections every four years. One group of families controlling political power was regularly replaced by an opposition group. This system, the critics say, meant that the time available for those in power to favor their own enterprises through government actions was limited. Indeed, the new government would tend to handicap or otherwise harm the businesses of the old group.
President Marcos, however, has been in power now since 1965. This has meant, according to Mr. de Leon, that the Philippine economic elite has taken a new shape. One group includes old wealthy families that support Mr. Marcos actively. A second group includes old wealth that has managed to stay politically neutral and wealthy, such as the Ayala family, active in Manila real estate. A third group, he says, is the "nouveau riche" who came to political power with Mr. Marcos and have used government positions or influence to build or enhance business empires.
Possibly a fourth group would be young entrepreneurs who have "made it on their own."
Some other business families that opposed Mr. Marcos have lost most of their fortunes due to government action or purposeful inaction, according to Mr. de Leon.
For instance, Benigno S. Aquino, the nation's leading opposition figure, tells how his wife's family, one wing of the wealthy Cojuangco family, had, prior to martial law, the nation's largest land transportation company and other enterprises -- 14 companies in all. The government, by preventing any increase in bus fares or other rate fare hikes in the regulated business, forced the company deep into the red. "We had to cut losses," said Mr. Aquino. "But nobody would touch us with a 10-foot pole." The businesses were eventually sold to Kokoy Romualdez. And fare increases materialized.
Similarly, the Lopezes, another opposition family, was forced out of business. They controlled the $400 million Manila Electric Company (Marelco), the utility for Metro Manila. It got inadequate rate increases, and as a result , its plant was going to seed. Another inducement to sell was the imprisonment of a son, Eugenio Lopez Jr. Mr. de Leon says that the Lopez family got $1,500 for its $20 million of shares in the company, plus the freedom of the son, when it sold out to a "front" for Kokoy Romualdez. Subsequently, Marelco sold its antiquated power plants to the nationalized Philippine National Power Corporation and kept a more profitable distribution system -- with much higher power rates.
The Lopez family also lost the Manila Chronicle and television and radio stations to interests more sympathetic to the Marcos government.
The original study of the business empires of the Marcos group, done last year, was entitled "Some Are Smarter Than Others." This is a quotation from Mrs. Marcos's reply when a Fortune magazine writer asked her about relatives and friends who had enriched themselves during martial law. The study was inserted in the Congressional Record.
The new study, about to be published, has even more detail, says Mr. de Leon. (Some of its findings have been noted above.) Yet he figures his research and that of his colleagues have uncovered perhaps only 80 percent of the business interests of the Marcos family and their friends.