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GMA aware of husband's misdeeds, says US cable

By Pia Lee-Brago
The Philippine Star
September 05, 2011

MANILA, Philippines -  Former President Gloria Macapagal-Arroyo was aware of her husband’s misdeeds and alleged involvement in illegal gambling activities and connections with major smuggling syndicates, according to a diplomatic cable released yesterday by the whistle-blowing website WikiLeaks.

A diplomatic cable classified “Confidential” by then US embassy economic counselor Robert Ludan said Arroyo was unwilling to curb her husband’s illegal activities.

The involvement of then first gentleman Jose Miguel “Mike” Arroyo was raised during a discussion between influential members of the Manila business community with officials of the US embassy in 2005.

Ludan sent the diplomatic cable to then US chargé d’affaires Joseph Mussomeli.  It also revealed the concerns of the business community about how corruption was undermining the Philippine economic outlook.

The cable referred to long-time embassy contact Washington Sycip, who is widely respected as among the top economic observers in the country.

Sycip reportedly described corruption to be at its worst ever and that it made it impossible for democracy to work in the Philippines.

Arroyo’s husband, Sycip alleged, was one of the worst offenders, with a reputation for corruption seeping down to all levels of society and eroding the president’s political standing.


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“President Arroyo is more concerned about her ability to stay in office than developing a strategic approach to policy making,” he said.

Sycip noted that “it is not impossible that PGMA (Arroyo) will be forced out in the next couple of years,” the cable said.

In response to complaints about corruption, Arroyo agreed to form an advisory group, of which Sycip was a member.

The group advised the government to abandon taxes on earnings and shift to taxing evidence of wealth because taxing expenditures “better suits” the Filipino character and will ensure better collection.

The group also advised the Department of Finance to publicize the amount of value added tax (VAT) that retailers collect and turn them over to the government to dissuade underreporting.

“Sycip nonetheless has lamented that the GRP (the government) and PGMA, in particular, seem rarely to follow the advice of the group,” the cable said.

Guillermo Luz, then the executive director of the Makati Business Club (MBC), was also cited in the cable as optimistically noting that he saw more people jumping into the fray to battle corruption.

The MBC, which gathers the Philippines’ most prominent business leaders, spearheads an anti-corruption business coalition that, according to Luz, was gaining traction.

Luz warned, however, that the stakes were getting higher every day.

He said people should watch the rumors swirling around the Arroyos carefully.

“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,” the cable said.

“Although the President (Arroyo) may be able to steer clear of any implications of personal wrongdoing, Luz said that there had been no previous instance in which a spouse’s scandal did not damage or bring down his or her partner.”

“Clearly, serious minds are increasingly questioning the Arroyo administration’s ability to lead the Philippines out of its difficulties. The irony is that, as they note, the government is doing more to combat corruption, but the problem is getting worse,” the cable said.

The cable noted that such assessments alarm potential foreign investors and may foreshadow serious growth problems down the road, as the Philippine government failed to attract outside investment and finds it unable to adequately invest in the country’s future.


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