This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 MANILA 002578 
 
SIPDIS 
 
DEPARTMENT FOR EAP/PMBS, INR/EAP, INR/B 
 
E.O. 12958: DECL: 06/02/2015 
TAGS: PGOV PREL PINR KCOR ECON RP
SUBJECT: CORRUPTION UPDATE: "JUETENG"; GARCIA; ESTRADA 
 
REF: A. MANILA 2475 
     ¶B. MANILA 2359 
     ¶C. MANILA 2142 
     ¶D. MANILA 1641 
     ¶E. MANILA 464 
 
Classified By: Political Officer Andrew McClearn for 
Reasons 1.4 (b) and (d). 
 
¶1.  (C) Summary:  Amid a recent swirl of allegations 
involving the first family, a witness at a May 30 Senate 
investigation of "jueteng" (illegal lottery games) accused 
the President's son, Congressman "Mikey" Arroyo, of receiving 
profits from the game.  President Arroyo dismissed the 
accusations outright, but said she supported a full 
investigation.  Meanwhile, a significant shift in the case 
against Carlos Garcia, a former general and military 
comptroller accused of corruption, occurred when authorities 
moved him from a military to a civilian jail.  In other 
corruption-related news, witnesses in former president Joseph 
Estrada's defense case tried to cast doubt on the validity of 
the central charge that Estrada was involved in jueteng 
profiteering.  The allegations against Arroyo family members 
remain sketchy, but they are politically problematic for the 
President and her Administration.  End Summary. 
 
------------------- 
Jueteng Allegations 
------------------- 
 
¶2.  (SBU) Amid a recent swirl of allegations involving the 
first family (see Reftels), a witness at a May 30 Senate 
investigation of jueteng accused the President's son, 
Congressman Juan Miguel "Mikey" Arroyo, of receiving profits 
from the game.  Before a joint Senate committee hearing, a 
self-confessed "jueteng operator" claimed that Mikey Arroyo 
had received large payoffs of protection money during his 
(Mikey's) tenure as vice governor of Pampanga Province from 
2001 to 2004 (Pampanga is located northwest of Manila). 
Wilfredo "Boy" Mayor, a low-level politician brought before 
the committee on the recommendation of Archbishop Oscar Cruz, 
a Roman Catholic prelate who has publicly made charges about 
jueteng (Ref C), testified that he gave over 10,000 USD each 
month in 2001 and 2002 as protection money to close 
associates of Arroyo.  He alleged that these "bagmen" in turn 
paid off Mikey Arroyo in order to secure Mayor's ability to 
run the numbers game in Pampanga and neighboring provinces. 
(Note:  Pampanga and the area near it is known as the center 
of jueteng operations in the Philippines.  It is also 
President Arroyo's home province.)  Mayor admitted that he 
never personally met Arroyo.  Mayor also averred that 
Philippine National Police (PNP) Director General Arturo 
Lomibao and Rep. Jose "Joey" Salceda were involved in related 
illegal activities. 
 
¶3.  (SBU) Mayor was the first of eight witnesses recommended 
by Archbishop Cruz and scheduled to testify before the 
just-commenced joint Senate committee hearing (Ref C).  A 
counterpart House committee (Public Order and Security), 
headed by Rep. Amado Espino, began hearings earlier this year 
and is scheduled to re-commence hearings next week. 
 
¶4.  (SBU) President Arroyo dismissed Mayor's accusations 
outright, as well as previous accusations that her husband, 
Mike Arroyo, was involved in jueteng.  She noted, however, 
that she supported a full investigation of the charges, 
announcing on May 30: "I am taking the allegations seriously 
and have asked for an intense investigation and will let the 
chips fall where they may."  Presidential Spokesman Ignacio 
Bunye criticized what he said was hearsay evidence in Mayor's 
testimony and reiterated that Malacanang supported a national 
crackdown on jueteng (Ref B).  Secretary of Justice Raul 
Gonzalez publicly reminded jueteng "whistleblowers" that they 
may face criminal charges if their claims prove unfounded. 
In addition, several of Mikey Arroyo's associates, who were 
implicated by Mayor, promptly filed libel charges against him 
for slander.  Mikey Arroyo also canceled a planned trip to 
the U.S. reportedly in order to refute the charges against 
him in person.  The PNP's Lomibao and Rep. Salceda also 
publicly denied accusations of involvement in jueteng. 
(Note:  For further details on jueteng, please see Ref B, 
which reviews how the game operates, and Ref A, which reviews 
economic aspects of the game, including the legalization 
debate.) 
 
-------------------------------- 
Garcia Now Under Civil Detention 
-------------------------------- 
 
¶5.  (SBU) Meanwhile, a significant shift in the corruption 
case against former Armed Forces of the Philippines (AFP) 
Major General Carlos Garcia occurred when authorities moved 
him from a military to a civilian jail in late May.  For 
months observers had speculated that the AFP might be 
shielding Garcia from more difficult jail and trial 
conditions in the civilian system.  Rep. Roilo Golez, a 
high-level congressman involved in the jueteng hearings, had 
publicly urged the AFP to yield Garcia, arguing April 7 that 
the civilian court "should have jurisdiction and custody" of 
him.  Finally on May 31, AFP officials at the Camp Aguinaldo 
facility where Garcia had been detained turned him over to 
the Sandiganbayan (the Philippine graft court) Sheriff's 
Office.  The transfer occurred without incident.  Garcia is 
now being held without bail at the PNP Camp Crame detention 
center while the civilian court processes multiple cases 
against him, including for perjury, forfeiture, and plunder 
-- the latter a capital offense.  Last May 25, the 
Sandiganbayan denied Garcia's petition to consolidate the 
forfeiture and plunder cases against him, declaring that this 
would lead to unnecessary delays.  The military court-martial 
against Garcia for conduct unbecoming an officer and other 
charges is slated to continue (Ref D). 
 
¶6.  (C) Ombudsman-AFP Coordination:  The Ombudsman's Office 
continues to play a key role in making the legal case against 
Garcia and it is working with the military to develop 
additional corruption cases.  Deputy Ombudsman for Military 
and Other Law Enforcement Agencies (OMB-MOLEO) Orlando 
Casimiro told poloff May 13 that officials in his unit 
conduct fact-finding and preliminary investigations regarding 
accusations of corruption in the AFP, as well as the PNP and 
other law enforcement agencies.  Most of his office's 
investigations involve PNP personnel, although he said that 
investigations involving the military seem to get most of the 
publicity.  To begin an investigation, his office often 
relies on recommendations from internal auditors in the 
military and law enforcement agencies.  Corruption complaints 
regarding the AFP are often referred to OMB-MOLEO by the 
AFP's Office of Ethical Standards and Public Accountability 
(OESPA), for example.  Casimiro said relations between OESPA 
and OMB-MOLEO were cordial.  Casimiro cited successful 
examples of civil-military coordination and team-building, 
including a program sponsored by the Ombudsman's Office that 
sends key officials to study at the National Defense College 
of the Philippines.  Although Casimiro painted a positive 
portrait of his office's activities, many observers believe 
that OMB-MOLEO needs to improve cooperation and collaboration 
with the AFP and PNP in order to be more effective. 
 
------------------------- 
Latest on Estrada's Trial 
------------------------- 
 
¶7.  (SBU) In other corruption-related news, witnesses in 
former president Joseph Estrada's defense case tried to cast 
doubt on the validity of the central charge that Estrada was 
involved in jueteng profiteering.  Former Supreme Court Chief 
Justice Andres Narvasa (1991-1998) testified that President 
Arroyo offered Estrada several exile options during a series 
of meetings immediately following her assumption of the 
presidency on Jan. 20, 2001.  Estrada's defense lawyers 
argued that these purported offers prior to the filing of 
criminal charges proved that the plunder charges were 
"concocted" and were "political" in nature.  Senate Minority 
Leader Aquilino Pimentel testified on May 30 that Estrada was 
not linked to a bank account into which jueteng proceeds 
allegedly flowed despite prosecution claims to the contrary. 
Senator Edgardo Angara testified June 1 that he had advised 
Estrada in 2000 that jueteng involvement was grounds for 
impeachment, but that Estrada had fiercely denied his 
involvement in the game.  Prosecutors asserted that the 
witnesses were all biased towards Estrada and denied that the 
testimony disproved any earlier evidence accumulated against 
the ex-president.  Independent observers commented that the 
defense's efforts were not very convincing.  Estrada's 
defense team is reportedly in the process of calling many 
more witnesses. 
 
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Comment 
------- 
 
¶8.  (C) The allegations against Arroyo family members remain 
sketchy, but they are politically problematic for the 
President and her Administration.  Already, the allegations 
-- thanks to the high-level of publicity that they have 
generated -- are the talk of the town.  Moreover, given the 
rank cynicism that Philippine politics breeds, the 
accusations are believed by many in the public.  Any imminent 
risk of impeachment for the president is low for now, but 
this could change if substantive evidence emerges that family 
members -- or the president herself -- are raking in jueteng 
profits.  The positive aspect of the Estrada and Garcia cases 
is that they are moving forward.  The Estrada case, in 
particular, has now gone on for over four years, trying the 
public's attention span as well as patience for the painfully 
slow Filipino judicial system. 
 
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MUSSOMELI