ShareThisThe widening Philippine senate investigation into systemic corruption in the Philippine military was triggered by events that began on December 18, 2003 when US Customs agents at the San Francisco International Airport seized $100,000 in cash from two young Filipino-Americans who hid the money in their hand-carried luggage.
In their letters to US Customs officials, the two US-born brothers, Juan Carlo and Ian Carl, explained that they did not have “any bad nor malicious intentions on our non-declaration of the money… (and only) brought such amount of money as requested to us by our parents, my father, Carlos F. Garcia, a Filipino and my mother, Clarita D. Garcia, US citizen …to pay the tuition and registration fees of (their brother) Timothy Mark who was accepted this school year at Parsons School, NY and to pay the initial down payment of the condominium he intends to stay.”
Informed that they could recover the money if they could prove that it came from legitimate sources, the two Garcia brothers chose not to pursue their petition. But their mother, Clarita Garcia, could not abide the loss of $100,000 so she decided to pursue the return of their cash by submitting a letter to the US Customs from her husband, Maj. General Carlos Garcia, attesting to his sources of income.
Because the letter failed to convince US Customs to release the funds, Clarita Garcia then arranged to personally meet with a special agent of US Customs, Matthew Van Dyke, to elaborate on the Garcia family’s sources of income.
Based on the interview conducted on April 5, 2004, Van Dyke prepared a sworn statement, which Clarita Garcia signed in his presence the following day.
In the sworn statement, Clarita declared that her husband’s position in the Armed Forces “is one of privilege” and asserted that “the gratitude monies that he receives is common and unsolicited” and came from “Philippine companies that were awarded military contracts to build roads, bridges and houses for the military.”
Clarita Garcia also informed Van Dyke that she had 5 drivers provided by the Armed Forces of the Philippines (AFP) to drive 5 AFP vehicles that were provided to her husband along with a 4,000 gallon monthly gasoline allowance. She added that she even had an AFP cook who played the piano for her “when asked”.
The sworn statement of Clarita Garcia sparked an investigation of the Garcias by the US government. US Immigration and Customs Enforcement (ICE) records revealed that $308,000 was deposited in the Citibank account of Clarita Garcia at the New York branch located at One Park Avenue in January of 2004 and that soon after, Clarita Garcia arrived in San Francisco and declared to US Customs that she had $204,230 in her possession.
The ICE records also disclosed that on May 10, 2003, Clarita Garcia entered the US carrying $48,000 which she declared. On December 17, 2003, she brought in $100,000 which she also declared. The US Department of Homeland Security identified three assets in the US listed under the name of Clarita Garcia— a $765,000 Trump Park Avenue Condominium at 502 Park Avenue, New York; a $750,000
apartment at 222 East 34th Street, also in New York, and a house at 625 Vancouver Drive, Westerville, Ohio.
Those assets could only have been purchased with what Clarita Garcia called “gratitude money” as the highest monthly salary ever drawn by her husband as AFP Comptroller was P37,000 pesos ($950).
Based on the transmittal from US Customs about the dollars brought into the US by Gen. Garcia’s wife and two sons and its own investigation of Garcia’s Statement of Assets, Liabilities and Net worth (SALN), on September 14, 2004, Ombudsman Simeon Marcelo determined the allegations against Gen. Garcia to be “prima facie” and ordered him suspended for six months without pay.
In October, 2004, Gen. Garcia was subpoenaed by a House committee investigating the US Customs transmittal. When Garcia finally appeared at the hearing, after twice failing to appear “for medical reasons”, he invoked his right against self-incrimination at least 50 times.
After the unproductive hearing, Rep. Imee Marcos (now Ilocos Norte governor) revealed that she had “insider information that a group of defense contractors and retired and active military officers were putting together a P50-million fund to stop ongoing inquiries into the ill-gotten wealth of AFP generals.”
On October 12, 2004, the AFP initiated court martial proceedings against Garcia for fraud against the government and for being a green-card holder.
In the same month, the Ombudsman filed before the Sandiganbayan a petition for forfeiture of unlawfully acquired properties under R.A. No. 1379 and for perjury against Garcia for failing to disclose his assets in his SALN for the years 1997-2000.
On May 2005, Gen. Garcia was arrested and charged with plunder before the Sandiganbayan and incarcerated in Camp Crame. Ombudsman Marcelo claimed that Garcia had accumulated P303M pesos in unexplained wealth.
On December 2, 2005, the military court martial convicted Garcia of undeclared wealth, dishonorably dismissed him from the military and sentenced him to two years of hard labor.
On May 22, 2006, the Sandiganbayan Court acquitted Gen. Garcia of one of the perjury charges by finding that Garcia was only required by law to disclose the income of his spouse but not her personal assets. This interpretation of the SALN law opened a legal loophole for corrupt officials to hide their ill-gotten wealth.
More than 5 years of serving his court martial sentence and awaiting the trial of his plunder case in the Sandiganbayan, Gen. Garcia was released on P60,000 pesos ($1300) bail for the otherwise non-bailable offense of plunder after Ombudsman prosecutors allowed him to plead guilty to indirect bribery and violation of the anti-money laundering act. The prosecutors compressed a process that normally takes 3 months into one day. On December 16, 2010, violating the rules of court, a petition for bail was filed, placed on the agenda, and granted on the same day allowing Garcia to be released from his cell.
Informed sources believe that the P50-M ($1.2M) fund that then Rep. Imee Marcos exposed in 2004 was the source of funds that was used to “convince” the prosecutors to enter into this sweetheart plea deal.
Ironically, the sweetheart plea deal backfired and opened a senate investigation that exposed what Garcia’s secret backers precisely hoped to hide.
On January 26, 2011, the Philippine Senate Blue Ribbon Committee conducted a hearing on corruption in the Philippine military with former AFP budget officer Col. George Rabusa appearing as a witness along with former AFP Chiefs of Staff Gen. Angelo Reyes and Gen. Jacinto Ligot.
Rabusa testified that his boss, AFP Comptroller Gen. Garcia, had access to an AFP slush fund that was created from salaries of non-living soldiers and overcharged military equipment. From this fund, Garcia directed him to give P50M pesos to Reyes when he retired as AFP chief in 2001 as his “pabaon” (send-off money). “We had to convert it into dollars because it was bulky,” he said. He testified that other succeeding AFP heads, such as Generals Diomedio Villanueva and Roy Cimatu, also received “pabaon”.
About a week after the senate hearing, CBS News filed this report: “A corruption scandal in which retired Philippine generals and their wives were accused of living lavishly off funds skimmed from one of Asia’s weakest armies took a dramatic turn Tuesday with the apparent suicide of a former military chief.”
“Retired Gen. Angelo Reyes, 65, was pronounced dead on arrival at a Manila hospital from a single gunshot wound to the chest after visiting his mother’s grave, Health Secretary Enrique Ona said. Reyes, a prominent figure, had been accused along with two other former Philippine military chiefs of embezzling at least $1 million from the armed forces.”
The suicide of Reyes has dramatized the gravity of the corruption scandal even more, the investigation of which began more than a decade ago when a suspicious US Customs agent in San Francisco decided to inspect the hand-carried luggage of the two sons of Gen. Garcia.
What ever became of these two sons of Gen. Garcia?
In December 2008, a San Francisco federal grand jury indicted Juan Carlo for carrying $50,000 in envelopes inside a jacket in his carry-on luggage and Ian Carl for hiding envelopes containing another $50,000 inside a pair of shoes in his carry-on bag and in an inside pocket of the luggage.
On September 9, 2010, they each pleaded guilty in federal court before U.S. District Judge Marilyn Patel to a charge of smuggling bulk currency for the purpose of evading reporting requirements.
Under a plea agreement with the US Attorney, the two Garcia sons forfeited the $100,000 to the U.S. government and were sentenced to time already served of 3 months and 10 days in prison and 1 1/2 years on electronic monitoring.
What about Clarita Garcia whose candid admissions about her husband’s life of “privilege”spurred the investigation?
On March 5, 2009, Clarita Garcia and her son, Timothy Mark Garcia, were arrested by ICE agents in New York and Michigan and incarcerated on the basis of an official extradition request received by the US govenment on February 27, 2009. After spending 90 days jail, both were released upon posting $1M bail.
The status of their extradition proceedings will depend on the progress of the plunder case in the Philippines against Gen. Garcia.
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