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The Marcos Verdict; Marcos

Is Cleared of All Charges In
Racketeering and Fraud Case

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By Craig Wolff
July 3, 1990

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Imelda Marcos, the widow of the former

Philippine President, was acquitted yesterday
of charges that she raided the country's
treasury and invested the money in the United
States.

Mrs. Marcos, her lips trembling, looked to the

ceiling as the jury forewoman announced,
''Not guilty,'' four times. With that, Mrs.
Marcos wept and a gallery filled with
supporters from her homeland cried out and
cheered in triumph.

The jurors said they were not convinced that

Mrs. Marcos knew about any wrongdoing, and
questioned why the case was tried in the
United States. On their very first ballot, in the
first moments of deliberations, they voted 10
to 2 to acquit her.

End of a Four-Year Case

The verdict ended a case that began more

than four years ago, almost immediately after
Mrs. Marcos's husband, Ferdinand, fled the
Philippines and after the new Philippine
Government tried to seize the Marcoses' vast
worldwide wealth. The case endured even
after Mr. Marcos died last September. It
culminated in a three-month trial that tested a
novel concept in American jurisprudence:
whether the wife of a foreign head of state
should face a criminal trial in a United States
court.

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The case also engulfed Adnan M. Khashoggi,

the wealthy Saudi businessman, a co-
defendant who was acquitted on charges that
he helped Mrs. Marcos conceal her
involvement in the investments.

The Marcoses were charged with racketeering

and fraud in stealing more than $200 million
from the Philippine treasury and investing
most of it in jewels, art and four pieces of
prime Manhattan real estate.

Mrs. Marcos, who had described the trial as a

personal ordeal and a political persecution,
was found not guilty of racketeering,
conspiracy, obstruction of justice and mail
fraud.

The verdict, read just minutes before 1 o'clock

yesterday afternoon, unleashed an exultant
demonstration and even a spontaneous
birthday celebration for Mrs. Marcos on the
steps of the United States Court House on
Foley Square. The former First Lady turned
61 yesterday and as she emerged from the
courthouse, scores of her supporters sang
''Happy Birthday'' and ''God Bless America.''

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''I thank the almighty God for the

vindication,'' said Mrs. Marcos, ''and I am in
great awe for the jury system that symbolizes
the soul of the American people.''

Then Mrs. Marcos, accompanied by friends,

lawyers, her son, Ferdinand Jr., and a
daughter, Irene, went to St. Patrick's
Cathedral, where she walked on her knees
down the center aisle in thankfulness and
prayer.

Mr. Khashoggi, who was cleared on charges

that he helped the Marcoses conceal their
ownership of four skyscrapers in Manhattan
by backdating bank documents, said he felt
''more than vindicated.''

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''I have more faith in America and the jury

system,'' he said. ''I'm going to go to my
country, to visit my God and Mecca.''

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Late last night, Mr. Khashoggi and Mrs.

Marcos celebrated at a party he had arranged
at the Nile restaurant on West 44th Street.
More than 100 guests dined on lamb and
watched a belly dancer perform.

For Mrs. Marcos, who has been parodied and

reviled for her ostentatious life style, the trial
comfirmed her reputation as a ''world-class
shopper,'' in the words of her own defense
team. But clearly the jurors never grasped
why the case had been brought to an
American courtroom and certainly they did
not see her as a thief. The crimes may have
been committed by Mr. Marcos, many of them
said, but through five days of deliberation,
they did not believe that any of the evidence
struck at Mrs. Marcos.

''Just because she was married to him doesn't

make her guilty,'' said the jury forewoman,
Catherine Balton. ''There was no evidence.
There was nothing to convince any of us that
there was a case.''

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Another juror, Thomas O'Rourke, said: ''It

was on the wrong side of the ocean. It was a
totally silly case. We are not big brothers to
the people overseas.''

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While Mrs. Marcos vowed after the verdict to

bring the body of her husband from Honolulu
for burial in the Philippines, Carmen N.
Pedrosa, a spokeswoman for the
administration of President Corazon Aquino,
said Mrs. Aquino would seek a criminal trial
there ''in the future.''

''She might have won the battle, but we won

the war,'' Mrs. Pedrosa said. ''What this trial
has established before the world is what the
Marcos regime was all about - unbridled
corruption and a total abuse of power.''

In the end, the jury remained unconvinced by

thousands of pages of documents that had
been entered into evidence. These included
bank checks and private letters and cryptic
notebooks filled with scribbled dollar ledgers.
Their very appearance suggested a shadowy
Government run by scheming leaders. But it
was not always clear which way the money
was flowing -into Marcos accounts or out of
them -or whether Mrs. Marcos even knew
how the fortune had been gained.

The Power of a Single Juror

The trial could not escape broader political

questions. The defense team, led by Gerry
Spence, argued that it was hypocritical for the
United States, which supported Mr. Marcos
during his 20 years in power and gave him
refuge in Hawaii in 1986, to indict Mr. and Mrs.
Marcos and then pursue charges against her
after his death.

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Even Judge John F. Keenan said recently:

''Mrs. Aquino can enforce her own laws. I
don't want to be enforcing her laws here.''

After the verdict, Mr. Spence said, ''This just

proves that a single juror has more power
than the United States Government itself.''

At times, the Filipino style of governing

seemed to be on trial. Her lawyers said that
Mrs. Marcos's lavish buying was part of the
culture, including her infamous collection of
thousands of pairs of shoes. Her lawyers even
explained the testimony about kickbacks and
''commissions'' that went to President Marcos
as a natural component of the Philippine
system.

But prosecutors kept insisting that it is simply

illegal to take stolen money and invest it in the
United States. Regardless of the bigger
questions, the Marcoses defrauded two
American banks, they said, by concealing
their identities as the buildings' owners while
acquiring loans.

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A Surreal Trial

Issues aside, there was a surreal quality to the

trial that never diminished. Daily, Mrs.
Marcos sat at a table surrounded by four
lawyers. Always, she wore black mourning
dress. In the gallery sat her sister, a nun, and
many of her supporters and opponents, who
often competed for space on the courthouse
steps with protest banners.

Twice, under the strain of the trial, Mrs.

Marcos broke down in tears and on one
occasion, she collapsed and had to be
hospitalized.

At the end yesterday, as the courtroom grew

hushed, the former First Lady, holding rosary
beads and quivering, faced the jury
forewoman, a retired office worker. After the
verdict, Mr. Spence raised his hands over his
head and applauded.

He had been relentless in his portrayal of Mrs.

Marcos as ''a small, fragile widow,'' who knew
little about big-time investments, even in the
face of much testimony that suggested
otherwise. He was challenged by a thin line
that had him defending the legacy of Mr.
Marcos and at the same time, separating his
wife from his deeds.

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''Mrs. Marcos committed no crime except the

crime of loving a man for 35 years, of raising
his children, of being his First Lady, of being
his ardent supporter, of taking his lavish gifts,''
Mr. Spence said.

The prosecution team, led by the assistant

United States attorneys Charles G. LaBella
and Debra A. Livingston, stuck to a more
traditional approach, placing the emphasis on
flowcharts that showed the path that Marcos
money took from Manila to Hong Kong,
Switzerland, Italy and ultimately, New York.

Ninety-five Government witnesses -including

former Marcos officials, Aquino officials, real-
estate executives and bankers - described how
Ferdinand Marcos accepted huge kickbacks
on everything from Japanese World War II
reparations to Government contracts for road
building.

The money poured into accounts at the

Security Bank and Trust Company in Manila.
According to testimony, at least $83 million
was deposited between 1982 and 1986 into
what was known as the 7700 account. Much of
this money was then traced to Swiss accounts
in the name of Stephane Cattaui, whom the
prosecutors identified as the Marcoses's
personal banker.

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Still, the testimony that dealt with the stealing

of money centered on President Marcos.
Oscar Carino, the former president of the New
York branch of the Philippine National Bank,
said that in 1981 Mrs. Marcos had personally
inquired about buying the Crown Building at
730 Fifth Avenue and that she had pleaded
with her husband to buy it. The defense said
that the Marcoses bought the building and
three other buildings - Herald Center at 1
Herald Square, 40 Wall Street and 200
Madison Avenue near 35th Street -in a three-
way arrangement that included the Philippine
Government and a wealthy friend, Gliceria
Tantoco. The prosecution said Mrs. Tantoco
was merely a front, as was Mr. Khashoggi.
Mrs. Marcos's role remained fuzzy, a point
that the jurors made over and over following
their verdict.

''We thought the Government did a terrible,

terrible job,'' said Thomas O'Rourke, a Transit
Authority construction worker who lives in
the Bronx. ''They had half-truths and not the
right witnesses. It was a terrible case.''

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