ECONOMY

Where Did Marcos Hide His $10 Billion Fortune?

Senator Paul Laxalt was in a classified briefing about political chaos in the Philippines when an assistant interrupted: He had an urgent phone call from Manila. On the other end of the line was Ferdinand Marcos, the country’s president. Marcos wanted to know if it was true that Ronald Reagan wished to see him step down.

It was Feb. 24, 1986, and for the past several days millions of people had swarmed Manila’s streets in protest. The immediate trigger was Marcos’s victory in a seemingly fixed election, but the ire went much deeper. In the 1970s, Marcos had led a military government of uncommon brutality, disbanding Congress, silencing the media, and using the army to torture and kill thousands of citizens.

Marcos partially restored democratic government in 1981, and, in hopes of unseating him, a popular political opponent, Benigno Aquino Jr., decided to return from exile in 1983. But when Aquino arrived, he was assassinated on the tarmac of Manila’s main airport. Amid rising tensions, the country plunged into its worst recession in history.

Through all of this, Marcos and his wife, Imelda, had become exceedingly wealthy by siphoning money from state funds. They amassed dozens of luxury homes whose walls they decorated with pieces—by Cézanne, Manet, Picasso, and Van Gogh—from a museum-worthy art collection. Imelda filled her closets with designer footwear and flaunted extravagant pieces of jewelry, including a 70-carat light-blue diamond worth $5.5 million, at least 400 times her husband’s official annual salary, which never exceeded $13,500.

Meanwhile, regular Filipinos struggled to find work in a country with an unemployment rate that had spiked to an estimated 23% when the recession hit in 1984; import restrictions made basic products, such as ballpoint pens and razor blades, elusive. Finally fed up, they surrounded the presidential palace to demand that Marcos cede power to Benigno Aquino’s widow, Corazon Aquino, whom they believed to be the rightful winner of the election.

“Senator, what should I do?” Marcos asked Laxalt, who was one of Reagan’s closest friends, when the two men spoke that night, according to a briefing Laxalt later gave to reporters.

“Cut and cut cleanly,” the Republican senator from Nevada responded. “The time has come.”

The following day, Marcos and 90 members of his entourage boarded a U.S. Air Force C-141 transport plane and flew to Hawaii. According to reports in the Guardian and the Washington Post, they carried with them some essential belongings, including $7 million in cash and gems (some of which were transported in diaper boxes), 70 pairs of jewel-laden cuff links, and enough clothes to fill 67 racks. There were also 24 bars of solid gold, engraved: “To my husband on our 24th anniversary.” But this represented a mere fraction of their assets.

The brazenness of Ferdinand Marcos’s graft—a haul the Philippine government later estimated at $5 billion to $10 billion—would become legendary, recognized by the Guinness World Records as the “greatest robbery of a government.” It would also would set off what was arguably the most ambitious geopolitical treasure hunt of all time, as investigators and lawyers scrambled to track down the fortune.

Thirty-five years later, that hunt—recounted here based on interviews with victims of abuses under the Marcos regime, their families, and the attorneys who pursued the cash—has taken on political significance. Opponents had hoped Marcos’s exile would marginalize him, but family members have since regained political primacy in the Philippines. They’ve played down human-rights abuses, which are now a distant memory for many Filipinos, and have won governorships, senate seats, and congressional posts. Ferdinand Jr., better known as Bongbong, is performing well in polls for next year’s presidential race. “We knew that it would be a long road,” says Sherry Broder, an American lawyer who has helped lead the effort to recover the stolen funds. “I don’t think I anticipated it would be as difficult as it’s turned out to be.”
 

Broder read of the ousted dictator’s arrival at Hickam Air Force Base on Oahu in February 1986 with a sense of outrage. “Why does Marcos get to come here? Why doesn’t he have to go to Paraguay with Mengele?” she recalls complaining, referring to the Nazi doctor. She’d moved to Hawaii after graduating from law school in the 1970s, serving as an attorney for the state legislature when it redrafted the Hawaiian constitution, and had pursued some personal injury cases in private practice. She’d been interested in human-rights law and had been following the political situation in the Philippines, but the arrival of Marcos awakened something more ambitious in her: a desire to stop a former dictator from enjoying a comfortable retirement abroad.

Her plan centered on the Alien Tort Claims Act, an obscure statute from 1789 that allowed noncitizens to sue over international law violations in U.S. federal courts. It was rarely used until 1980, when a Paraguayan physician successfully sued a former police officer over the torture and murder of his son. On March 20, 1986, three weeks after the Marcoses showed up, Broder and her husband, an international law professor at the University of Hawaii, sued them under the 18th century law. Their plaintiff was Agapita Trajano, a Filipino woman living nearby.

Over several emotional meetings (as would be recounted during legal proceedings and in court documents), Trajano told them how her son Archimedes, then an engineering student, had attended a 1977 forum at which Ferdinand and Imelda’s eldest daughter, Imee, was the speaker. During the event, Archimedes asked Imee, who was head of a youth organization, if she would have received such an appointment if her father weren’t president. Imee’s guards hauled Archimedes away; his bloodied corpse was found on the street in Manila two days later. “Agapita had a few pictures that showed what had happened,” Broder recalls, shuddering. “It was very upsetting. She just wanted justice for her son.”

While Broder developed her case, she read about a similar one, brought by a Philadelphia lawyer named Robert Swift. Instead of suing on behalf of just one person, though, Swift had convened a group of victims to form the first-ever-human-rights class-action case. She called Swift to introduce herself and was impressed. He was meticulous and seemed to have a grasp of even the tiniest legal details. She suggested they join forces since the lawsuits would probably be transferred to Hawaii, where Marcos was living, and Swift would need a local counsel. Swift, who’d served as an Army infantryman in the Vietnam War and later became a Quaker, agreed and took over as the lead attorney.

Even before they had a chance to meet in person, the pair filed their complaint, attempting to serve the former chief of state in his temporary military housing at Hickam. This was no easy task. “He was being babysat by someone at the State Department,” Swift recalls. “So the process server had to give it to the guy at the State Department, and the State Department official served Marcos.” Later, the federal employee told Swift he’d felt a tinge of sympathy for the deposed dictator after seeing how Imelda stormed around yelling at him most days.

While Broder worked on crafting the legal argument they would present in the Hawaii courthouse, Swift traveled to the Philippines repeatedly, working with local lawyers and activists to meet with martial law survivors. Given the Philippines’ history as an American colony, some Filipino human-rights victims viewed Swift and Broder warily.

They were angry the case was being lodged in the U.S., and were suspicious that the American lawyers might be motivated by the chance to win a cut of a large settlement. The case also seemed like an extreme long shot, suntok sa buwan or “shooting the moon,” as activists later described it to academic researcher Nate Ela.

Despite these apprehensions, scores of victims began talking, recounting how military officers had used detainees’ hands to put out cigarettes, forced them to sit naked on ice blocks in front of an air conditioner, and submerged their heads in toilets full of excrement. Swift recalls talking to someone whose fingernails had been pulled out one by one. “I couldn’t fathom how the victims could endure it,” he says. “Some accounts brought tears to my eyes.”
 

Marcos died in 1989 in a Honolulu hospital, but Swift and Broder continued gathering stories from victims. Ultimately, 9,539 would join their case, which went to trial in September 1992. It took a little over two weeks for a Hawaiian jury to find that Marcos had been responsible for presiding over abductions, torture, executions, and “disappearances.” The jury ordered that his estate would need to pay damages, the extent of which would be determined during a separate trial. Swift and Broder allowed themselves a celebratory courtroom hug before quickly getting back to work. Now would come the hard part.

To determine how much victims were owed, Broder and Swift would first need to demonstrate how much Marcos was worth. They had little to go on. Marcos was dead, and Imelda and Bongbong weren’t eager to help. Moreover, Selda, a local nonprofit that was formed to advocate for former political prisoners and had initially helped Swift and Broder put together their case, had soured on the lawyers. Swift was viewed by some Selda members as “a representative of imperialist America,” explains Etta Rosales, an activist and torture victim who left Selda to form a separate victims’ group called Claimants 1081, which was more supportive of Swift’s efforts. “He was seen as an enemy.”

The political situation in the Philippines didn’t make things any easier. The Marcos family had regained some popularity among Filipinos who saw the new reformist government as ineffective, and Imelda had returned in 1991 with her children. Now, loyalists were attempting to subvert the American case.

While Swift was on his way to depose Imelda in a suburban home in Manila in 1993, his chauffeured car was pelted with eggs and tomatoes. When he complained that the demonstrators might disturb the interview, the Marcos family’s lawyer, an American from Oklahoma City named James Linn, shrugged. “You are going to get the Marcos followers wherever you go in the Philippines,” he said, according to a deposition transcript. Later that day the electricity failed, and Imelda had one of her maids fan her with a large palm leaf.

Her testimony was inconsistent. She recounted how, before they married, Ferdinand had taken her to a bank by the Pasig River, where he led her into a vault stacked full of currency and precious metals. “I could feel he was wealthy. I could get anything,” she boasted in the deposition transcript. But in response to a question about her husband’s real estate holdings, Imelda insisted on her ignorance. “I was not at all interested in his finances, his wealth and his assets,” she said.

In the trial to determine damages in 1994, Swift ultimately asked the jury to award the class $1 billion—enough to give each victim $100,000, or more than 100 times the Philippine per capita income at the time. “If you award $10,000 per individual that’s $100 million, if you award $50,000 per individual that would be $500 million. And if you award $100,000 per individual it would be a billion,” he explained to the jury. “Certainly that is not an unreasonable amount to exact from the estate of Ferdinand Marcos, who bears the ultimate responsibility for these abuses.”

It was a big request, and Swift knew it. In response, the Marcos family’s lawyer stood before the jury box and said, with rehearsed incredulity: “Mr. Swift just asked you for $1 billion!” (“I did everything I could to keep a straight face and not blush,” Swift recalls.)

But when the jury foreman passed the verdict to Manuel Real, the silver-haired judge presiding over the case, Swift noticed a wry smile creep across the judge’s face. In the space left blank for exemplary damages, the foreman had scrawled $1.2 billion—$200 million more than Swift had requested. A year later, the jury would add $766 million in compensatory damages, bringing the total settlement to almost $2 billion, the highest judgment of its kind.

Swift was flabbergasted. “I guess I did a better job than I thought,” he recalls thinking. While he hoped the scale of the judgments might facilitate a settlement, Swift knew that what he and Broder had at that point was just number on a piece of paper. Transforming it into cash would be another matter.
 

Even as the Marcos clan turned spending into a sort of performance art—shipping in Moroccan horses for their daughter Irene’s wedding, or buying up the entire inventory at a Sotheby’s auction and then attempting to purchase the apartment where the auction had been held—they were also savvy about protecting their wealth. By the time he left office, Ferdinand had squirreled away money in Swiss bank accounts, Panamanian shell companies, and foundations in Liechtenstein.

In 1986, just after Marcos fled to the U.S., one of his confidants, Jose Yao Campos, submitted a statement to the Philippine government admitting he set up at least 34 shell companies for the despot. According to reporting by the Wall Street Journal at the time, Campos also turned over 2.2 billion shares of stock and a list of real estate holdings he managed for Marcos that filled nine typed pages. Years later, Imelda confessed to a BBC host that Ferdinand had once chided her for renovating their home, because he’d stowed lead-covered gold bars in the drywall. Marcos had been trained as a lawyer, Swift notes, adding, “He also was excellent at accounting work.”

Just locating the Marcoses’ assets would have been difficult enough, but to further complicate matters for Swift and Broder, the Philippine courts didn’t recognize the judgment granted in the U.S., meaning the lawyers wouldn’t be able to target Marcos’s property in the Philippines. On top of that, many of the family’s most obvious assets were quickly seized by a competing effort in Manila, the Presidential Commission on Good Government (PCGG), which had been launched when Marcos went into exile.

Swift says he and Broder have had to be opportunistic, collecting whatever pieces of property they could find. In 1995, for instance, Broder noticed that a Mercedes-Benz sedan had been sitting unused in the driveway of a Hawaii home where the Marcoses had stayed. The lawyers impounded it and sold it for $30,000 to a collector with a thing for vehicles owned by dictators. (The Las Vegas buyer displayed the Marcoses’ car, a bulletproof 500 SEL, alongside vehicles that had been driven by Adolf Hitler and Juan Perón.)

Meanwhile, the pool of rivals fighting over the Marcos fortune continued to expand. In 1996 a jury in Hawaii found that $22 billion was owed to the estate of Rogelio Roxas, a Filipino locksmith who claimed to have stumbled on a trove of gold bars and diamonds that Marcos military officers later stole at gunpoint. After that, when Swift and Broder would begin legal proceedings to seize an asset, the Roxas estate would often argue it should get a cut. “The lawyers watch and see what I’m doing, and then they file on top,” Swift says with a sigh.

Such competition forced Swift and Broder to get creative. Later that year, the lawyers received a $1 million settlement related to a Hawaiian property suspected of belonging to the Marcoses: a stucco house that featured sweeping views of Diamond Head and the Pacific Ocean but also a nasty termite infestation. Business associates of the Marcoses, the Tantoco family, claimed to be the home’s rightful owners and offered to pay Swift and Broder’s class to stop pursuing the property in court, which they had been doing in competition with the Philippine government and the Roxas estate.

“They figured I was going to get the evidence together, and they would just argue they were entitled to a piece of whatever was awarded,” Swift recalls. Instead, he and Broder settled with the Tantocos out of court, leaving the other parties without any evidence to present.

But these were small victories. By 2000, after several failed attempts to settle with the Philippine government and the Marcos estate, Swift says he and Broder had collected only a little more than $1 million. Then he received a call from a Texas oil investor named Alan Meeker, who’d read about Swift’s class action in the newspaper. Meeker had been searching for land that might allow him access to shale oil near Fort Worth. He’d come across several attractive parcels, but says he “couldn’t find the darn owner.”

Meeker remembered a rumor he’d heard years earlier that Marcos had property in Texas. He managed to get Imelda’s phone number in Manila and, when he explained why he was calling, Imelda seemed unexpectedly thrilled. “You’re my savior. You’re sent from heaven to me,” Meeker recalls her saying. “I’ve been looking for these properties since my husband died.”

She explained that Campos, the Marcos confidant, had bought the land on her husband’s behalf and then proceeded to “steal it” when Marcos died.

“I’m sorry Mrs. Marcos, but I don’t understand what you mean,” Meeker told the former first lady. “How do you steal property?”

“Well,” Meeker remembers her saying, “they took all the records. But they’re mine.”

On the phone with Meeker, Swift was polite but was skeptical that the Texas land was relevant to his case. After seeing the documents Meeker had collected during his due diligence, however, he came around. “I get a call once a week from someone saying they found the Marcos gold,” he told Meeker. “Ninety-nine percent are rabbit trails that we don’t want to go down. But I really think you have something here.”

It turned out that several shell corporations in the Dutch Antilles linked to the Marcoses secretly owned 4,500 acres of land in Texas and Colorado, which would lead the Campos family to pay the class a $10 million settlement in 2010. Representatives of the family could not be reached for comment. It was far from the almost $2 billion owed to the human-rights victims, but for the first time it would allow Swift and Broder to distribute money to the class members.

In a newspaper interview at the time, Broder said: “This is a lot less than what we had hoped for, and what the victims really deserved. But I think it is precedent-setting.” She continued: “It’s like we finally broke through the glass ceiling of collection in human-rights cases.”

In February 2011, Swift flew to the Philippines to personally hand a $1,000 check to each human-rights victim registered in the class action. He spent the next six weeks traveling around distribution points scattered throughout the country’s 7,640 islands. “It had been such a struggle to obtain the settlement,” he explains. “I wanted to make sure the money landed in the right hands.”

Upon meeting Swift, some class members lifted their shirts and pant legs to show him their gunshot and amputation wounds. One woman pulled out a photograph depicting a pile of bodies; the military had murdered 11 members of her family and heaped their naked corpses.

Two years later, legal action over the disputed ownership of Le Bassin aux Nymphéas, an iconic Monet painting once purchased by Imelda, allowed Swift and Broder to extract a $10 million settlement from Alan Howard, a British hedge fund billionaire who’d bought the painting thinking it had a clean title. Swift distributed those funds to the human-rights class in 2014. After the sale of a group of Impressionist paintings owned by the Marcoses, he made another trip in July 2019, distributing an additional $10 million.

While Swift was in the Philippines to make the latest distribution, Imelda Marcos held a massive 90th birthday party at a sports arena in Manila. Afterward, more than 260 of her guests were hospitalized for food poisoning.
 

Despite the many accusations against Ferdinand Marcos and three decades of effort by activists to hold his family to account, the Marcoses are more popular than they’ve been in decades. In 2019, after nine years as governor of Ilocos Norte, the home state of Ferdinand Sr., Imee Marcos was elected to the Senate as a member of the Nacionalista Party, the same conservative-leaning party her father belonged to. Bongbong, also a Nacionalista, ran for vice president in 2016, ironically on a platform of fighting corruption and reducing inequality. He lost but is rumored to be considering a 2022 presidential run.

A recent survey by Pulse Research Asia Inc., a public opinion polling body, put him in second behind Sara Duterte, daughter of current Philippine President Rodrigo Duterte, who has previously stated she won’t run. (Presidents in the Philippines are confined to single six-year terms, making Rodrigo Duterte ineligible for reelection.)

Bongbong’s supporters tend to be young people, who weren’t alive to witness martial law, as well as some older people who viewed Marcos’s 21 years in office as a sort of Golden Age, when order reigned and crime was low. President Duterte, who’s been accused of thousands of extrajudicial killings under the guise of combating the drug trade, has also been a loyal supporter of the Marcos family.

Benjamin Tolosa Jr., an associate dean and political science professor at Ateneo de Manila University, says the Marcos family’s wealth, which they’ve managed to preserve despite the efforts of Swift, Broder, and others, helps them retain influence. Political opponents say Bongbong used money stolen by his father to run ads during his 2016 vice presidential campaign. Scenes in The Kingmaker, a 2019 documentary about Imelda, show her swanning around Manila in recent years, handing out cash to the excited mobs that surround her car and to children at a cancer hospital. The estimated $10 billion that the family amassed “is tragically being used to consolidate the Marcoses’ power, prevent them from becoming fully accountable, and is now helping them to fully regain presidential power,” Tolosa says. Bongbong has said he doesn’t know the whereabouts of his dad’s allegedly hidden assets. In a 2017 press conference, he said that if the Filipino government found anything, it would be welcome to it. “Keep in mind that when Ferdinand Marcos was brought to the U.S. all of his records were seized by U.S. authorities and many went missing,” says John Bartko, a lawyer for the Marcos family.

In general, the Marcos children are nonchalant about the accusations of torture and corruption against Ferdinand Sr. “What am I to say sorry about?” Bongbong Marcos said during a 2015 interview on Headstart, a morning TV show, rattling off a list of achievements he attributed to his dad. “Will I say sorry for the agricultural policy that brought us to self-sufficiency in rice? Will I say sorry for the power generation? Will I say sorry for the highest literacy rate in Asia? What am I to say sorry about?” Taking a similar view, in 2018 Imee told Philippine newspapers: “The millennials have moved on, and I think people at my age should also move on as well.”

Rosales, the human-rights victim and activist, says that just before her release from detention while the country was under martial law, during which she was suffocated and electrocuted, she warned a military officer that the Marcos camp would lose in the long run. “I told them: ‘I am going to win, because we are on the side of justice and truth,’ ” she says. Years later things feel murkier. “People don’t know about the torture and Marcos’s cruelty, because there was no free media at that time,” she says. The Marcoses “are popular because people forget.”

Ruben Carranza, a former PCGG commissioner who now works for the International Center for Transitional Justice, a human-rights nonprofit, points out that “the Marcoses were never held directly accountable for the human-rights violations they committed” in any sort of legal proceeding in the Philippines, making it easier for them to whitewash their family’s history. “What Swift and the victims did by filing in Hawaii was a great step, because you want to find justice when you can,” he says. “But you also want to bring it home when you can, and that didn’t happen.”
 

At the moment, Swift and Broder are focused on investment holdings in New York. In 1972, Ferdinand Marcos deposited $2 million in a Merrill Lynch account owned by Arelma Inc., a Panamanian shell company set up on his behalf. “At the same time he was declaring martial law, he was protecting his assets,” Swift says.

The deposit was small by Marcos standards—the rough equivalent of a hundred or so gold bars—and the money sat, appreciating in value, until the PCGG discovered the account in 2000. It’s now worth $41 million.

Swift and Broder first learned about the deposit 20 years ago and have fought the Philippine government to claim it since. The matter has bounced from court to court, plagued by delays and resistance from the U.S., which has sided with the Philippines, as part of an apparent effort to keep the country from drawing any closer to China.

Now, in 2021, the case is again moving forward, if slowly, because of delays related to Covid-19. The waiting is frustrating but familiar at this point; Swift and Broder have been working on the case for 35 years. The possibility of a payout that would help the lawyers recoup some of their costs is a motivating factor. Swift estimates his firm has made a few million dollars in fees from the Marcos cases over the decades—but argues that is far less than what it might command for similarly complex litigation, and a fraction of what he would have made charging his normal hourly rate of $775. He estimates lawyers for the human-rights class have spent 40,000 hours on the Marcos cases.

Still, some martial law victims have complained about payments to Swift, prompting Rosales to defend him: “The financial risks involved have to be considered. Besides, nobody has done this in the way that he has done it. He’s the only one working on it,” she explained at an event in the Philippines in 2019. To the laughter of the crowd, she added: “Look at him now. Bob used to have a lot of hair.”

In his 70s now, Swift says the more powerful reason for his and Broder’s perseverance is also a simpler one: He’s personally met most of the thousands of victims he’s representing—a rarity in such a large class action. He’s been to the Philippines 40 or so times, spending months traveling the country’s many islands to make sure the checks reach the right people. “I’ve shaken hands with them. I’ve heard their stories,” he says. As soon as the country lifts Covid-related travel restrictions, he plans to return. —With Andreo Calonzo
 
Read next: The Inside Story of Pepsi’s Philippines Bottle Contest That Became a Deadly Fiasco

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