Marcos’ bank accounts
to remain frozen

The government of the Philippines
lacks the standing to issue
an appeal to the ruling

A U.S. appeals court has upheld a lower court's ruling freezing assets of the late Philippine President Ferdinand Marcos that are being held in the Philippines and other banks around the world.

In a decision issued yesterday, the 9th U.S. Circuit Court of Appeals in San Francisco ruled the Philippine government lacked the standing to challenge the freeze order.

The order was first issued in 1986 and reaffirmed in September 2003 by U.S. District Judge Manuel Real, who is presiding over a class-action lawsuit filed by 9,539 Filipinos who won a $2 billion judgment against the Marcos estate in 1995.

The award has grown to $3.7 billion with interest, but none of the victims has received any money.

"It's a nice victory for the victims," said Jon Van Dyke, an attorney representing the class-action plaintiffs. "The Republic of the Philippines has been trying to block the victims every time they make any attempt to collect on their judgment."

Ownership of the funds has been disputed since they were discovered in 1986, soon after Marcos was forced from power and fled to Hawaii. At the time the deposits totaled about $356 million, but have almost doubled from interest and later investments.

Since then, more funds believed to belong to Marcos have been found in banks elsewhere.

In 1997, a Swiss tribunal ruled that the funds frozen in 1986 were ill-gotten and approved their transfer from banks in Switzerland, Singapore and elsewhere to an escrow account at the Philippine National Bank.

The Philippine Supreme Court decided in July 2003 to forfeit the Marcos deposits in favor of the Philippine government after ruling that the Marcos family "failed to justify the lawful nature of their acquisition."

Real reviewed the court's ruling and said there was no evidence to support whether the Marcoses were the rightful owners of the assets. In his September 2003 order, Real said any transfer of the funds in escrow would violate the freeze order and banks would be held in contempt of court.

The Philippine government appealed. In its ruling yesterday, a three-judge panel of the 9th Circuit ruled that the government is not "a person or banking institution" that is threatened with contempt under Real's order, and thus lacks standing to challenge the order.

The Philippine National Bank, which holds the escrow account, also challenged Real's September 2003 order. A decision on that appeal is pending.

Meanwhile, arguments are scheduled before the 9th Circuit in March on the ownership of an additional $40 million in Marcos assets.

Real in July ordered that those assets be used to start paying the judgment awarded to the class action by a Honolulu jury in 1995 after it found Marcos responsible for summary executions, disappearances and torture during his 14-year reign under martial law.

Attorneys for Arelma Corp., a Panamanian financial company set up by Marcos that originally held the $40 million, appealed that ruling.

Marcos and his family fled to Hawaii after he was toppled in a "people power" revolt in February 1986, ending his 20-year rule. He died in Honolulu in 1989 without admitting any wrongdoing.