VZCZCXRO5359
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #2965/01 2430841
ZNR UUUUU ZZH
O 310841Z AUG 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8083
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUEAIIA/CIA WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
UNCLAS SECTION 01 OF 02 MANILA 002965
SIPDIS
SENSITIVE
SIPDIS
STATE FOR EAP
E.O. 12958: N/A
TAGS: PGOV KCOR PINR RP
SUBJECT: PREPARING FOR THE ESTRADA VERDICT
1. (SBU) Summary: Former President Estrada's long-running
corruption trial may soon be over. The anti-graft court
could hand down its verdict on the charges of plunder and
perjury at any time within the next few weeks. While the
verdict in the case -- combined with the arrest in the
Netherlands on murder charges of communist leader Joma Sison
and the resurrection of the "Hello Garci" vote-rigging
scandal -- could create some political unrest, it comes at a
time when the Arroyo Administration enjoys relative political
strength and stability. A not-guilty verdict, however, could
be seen as a victory for the opposition and could resurrect
questions over the legitimacy of Arroyo's presidency. In any
case, the police and military are preparing for any possible
unrest, including putting on alert 6,000 police and military
forces. End Summary.
---------------------------------------------
The Case Against Estrada: Plunder and Perjury
---------------------------------------------
2. (U) Former President Joseph Estrada was ousted from power
in January 2001, after an unsuccessful impeachment trial and
weeks of popular demonstrations protesting his alleged
corruption. The Supreme Court ruled that Estrada had
effectively resigned from his post when he abandoned the
Presidential Palace in the face of the "People Power"
demonstrations. With the Presidency vacant, then-Vice
President Gloria Macapagal Arroyo succeeded Estrada as
president. In April 2001, the Department of Justice levied
criminal charges against Estrada for plunder for allegedly
accepting millions of dollars in bribe money from illegal
gambling operations, diverting millions of dollars of excise
taxes to his personal accounts, depositing his proceeds into
alias name bank accounts, and profiting in commissions from
stock manipulation. The Department of Justice separately
charged Estrada with perjury for failing to disclose a number
of businesses in a 1998 statement of assets, which all
government officials are required to file annually.
3. (U) Estrada was immediately arrested, but due to failing
health, the court allowed Estrada to be placed under house
arrest from April 2001 to the present. The two cases against
him have dragged in the Sandiganbayan (the anti-graft court)
for more than six years. According to Sandiganbayan
executive clerk Theresa Pabulayan, both the plunder and
perjury cases were submitted to the three-judge panel for
resolution in mid-June of this year, following closing
arguments. If the court adheres to the prescribed 90-day
period to issue a decision, the verdict could be handed down
within two weeks. While the verdict could be handed down at
any time, Pabulayan noted that the court could extend the
90-day period because of the complexity of the case.
--------------------
After the Verdict...
--------------------
4. (SBU) While the Philippines has enjoyed relative
political stability the last two years, a guilty verdict
could spark some unrest. Estrada "supporters," most of whom
are mobilized for a fee, could again take to the streets, as
they did during the violent May 2001 siege of Malacanang. In
addition, the political left, incensed by the recent arrest
of Communist Party founding chairman Joma Sison in the
Netherlands, could exploit the issue to retaliate, providing
bodies to increase and agitate the crowd. However, it is
more likely that a guilty verdict would be calmly accepted by
the general public who - perceiving a certain independence
and fairness in the court - would welcome the closure of this
six-year distraction.
5. (SBU) Conversely, a not-guilty verdict could be seen as a
victory for the opposition and could pose political problems
for President Arroyo. Estrada supporters would likely ramp
up their destabilization efforts against Arroyo and resurrect
questions over the legitimacy of her presidency. A
not-guilty verdict would also rankle civil society groups,
anti-corruption advocates, and some members of the middle
class, who could peacefully take to the streets and express
their indignation over the verdict, the precedent it sets,
and its implied message that the rich and powerful are above
the law.
6. (U) Estrada, now 70, has denied knowledge of any
opposition destabilization plans, stressing he has been
detained and isolated. Appealing for calm among his
supporters, he declared that he would be cleared "based on
MANILA 00002965 002 OF 002
the merits" of the case and would leave his fate "in the
hands of God and in the hands of the people."
--------------------
Opposition Rumblings
--------------------
7. (U) Meanwhile, there have been unconfirmed reports that
the opposition -- following Philippine conventional wisdom
that any successful attempt to destabilize the government
requires the support of the military -- is actively
recruiting members of the military into their ranks. To
counter these rumors, National Capital Region Command Chief
Gen. Ben Dolorfino maintained that the military "remains
solid behind the chain of command" and that destabilizers
would fail in luring soldiers to engage in military
"adventurism." For his part, Presidential Management Staff
chief Cerge Remonde said the administration is "firmly in
control -- it has faced all sorts of crisis and will prevail."
8. (U) Amid these rumors, opposition Senator Panfilo Lacson
has initiated the reopening of the investigation of alleged
vote rigging involved in President Arroyo's tainted 2004
election victory, a move to sustain the opposition's
anti-Arroyo propaganda as well as give Lacson some media
mileage for his presidential bid in 2010. However, the
opposition itself appears divided, with Senator Gregorio
Honasan, a retired military colonel who faced rebellion
charges after allegedly leading coup attempts against
Presidents Aquino and Arroyo, breaking with Lacson and others
on this issue. Honasan continues to command significant
respect and following in military circles and his break with
the opposition will likely send a signal to other officers.
-------------------------
Preparing for the Verdict
-------------------------
9. (U) Whatever the outcome of the court decision, the Armed
Forces of the Philippines (AFP) and the Philippine National
Police (PNP) believe the decision will likely be divisive and
lead to demonstrations, whether by Estrada supporters if the
Sandiganbayan finds him guilty, or by civil society and
anti-corruption advocates should the Sandiganbayan find him
not guilty. To prepare for the verdict, the AFP and PNP have
developed a plan to place some 6,000 policemen and military
troops at strategic locations, including the Sandiganbayan
and Malacanang, on the day the decision is handed down.
-------
Comment
-------
10. (SBU) While the verdict in the Estrada case -- combined
with the arrest of Sison and the resurrection of the "Hello
Garci" vote-rigging scandal -- could create some political
unrest, it comes at a time when the Arroyo Administration
enjoys relative political strength and stability and the
economy is humming along at a healthy pace, making it
improbable that the verdict will have much of an impact on
the Administration. Moreover, President Arroyo continues to
maintain the support of the military leadership -- both
through the Administration's strong commitment to the
Philippine Defense Reform Program and support of military
operations, and her personal commitment to the troops (she
has visited wounded soldiers several times) -- further
ensuring stability. Estrada's corruption case has dragged on
for more than six years, during which his political influence
has waned, making it difficult to build support. In any
event, the military and police, which are following these
events closely, appear to have learned a hard lesson from
past popular demonstrations and are well prepared to avert
violent demonstrations.
KENNEY