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O 030935Z JAN 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4431
INFO RUEHNH/AMCONSUL NAHA IMMEDIATE 0075
RUEKJCS/SECDEF WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RUEKJCS/JOINT STAFF WASHINGTON DC IMMEDIATE
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 000015 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 01/03/2017 
TAGS: PREL MARR CASC KCRM RP
SUBJECT: PRESIDENT ARROYO DEFENDS TRANSFER OF LCPL. SMITH 
 
REF: 06 MANILA 5109 
 
Classified By: A/DCM Scott Bellard, reasons 1.4 (b) and (d) 
 
¶1.  (C) Summary.  Facing intense criticism, President Arroyo 
publicly defended the government's transfer of custody of 
Lance Corporal Smith as in the Philippines' strategic 
interest in its "alliance with the United States to fight 
terror and poverty."  Media commentary roundly condemned the 
President, and some opposition leaders renewed calls for her 
impeachment.  The chief of the Armed Forces and senior 
government officials privately requested full resumption of 
Balikatan 07, while expressing understanding that it may be 
too late to reinstate certain elements.  The Court of Appeals 
decided LCpl. Smith's motion on the custody issue was "moot" 
in light of the government action, but the private prosecutor 
will likely now take the issue of Smith's custody to the 
Supreme Court.  Given the political risk the government has 
undertaken to restore compliance with the Visiting Forces 
Agreement, Embassy recommends restoration of as much as 
possible of Balikatan 07.  End Summary. 
 
¶2.  (SBU)  Following the December 29 transfer of custody of 
Lance Corporal Daniel J. Smith to the U.S. Embassy (reftel), 
President Gloria Macapagal Arroyo publicly stated on January 
2 that the Philippine Government had taken necessary action 
"to forestall the further deterioration in our strategic 
relationship with the U.S., which has been rapidly eroded by 
our non-compliance with the Visiting Forces Agreement."  She 
stressed that the move was a "difficult decision . . . taken 
with only the best interest of the Philippines in mind," but 
would not "impede justice and the rule of law."  She called 
on Filipinos to "stand behind our alliance with the United 
States to fight terror and poverty." 
 
¶3.  (U)  In response to questions, the Embassy confirmed that 
the 2007 Balikatan exercises would push forward, following 
the transfer of custody to the U.S. Embassy, under the 
framework of the Visiting Forces Agreement.  This news 
dominated media reports on January 2 and 3.  Malacanang Press 
Secretary Ignacio Bunye noted subsequently that cancellation 
 
SIPDIS 
of Balikatan would have adversely affected the operational 
capability of the Armed Forces of the Philippines and would 
negatively impact on the campaign against terror and poverty. 
 Executive Secretary Ermita and Undersecretary of Foreign 
Affairs Seguis vigorously defended the government's decision 
to transfer custody absent a court order in a lively press 
conference on January 3. 
 
¶4.  (C) Ermita privately told Ambassador on January 2 that 
the transfer of custody "was our decision and it was the 
right one."  Acknowledging that the Administration would have 
to face consequences for taking action where the judicial 
branch had balked, Ermita added that "the court made its 
decision and the Executive Branch made its decision." 
Ambassador assured Ermita that Smith was not "free" but 
merely confined in a different place, while jurisdiction 
remains with the Philippines.  Separately, AFP Chief of Staff 
General Esperon asked the Ambassador to ensure that the U.S. 
finds a way to put all components of Balikatan 07 back on, 
claiming it was "critical" to the AFP and urging that the USG 
not "penalize" the AFP. 
 
¶5.  (U) The private prosecutor in the case on January 2 filed 
petitions with the Court of Appeals to hold several 
government officials -- including Ermita, Interior and Local 
Government Secretary Puno, Presidential Legal Counsel 
Apostol, and Justice Secretary Gonzalez -- in contempt of 
court, and is also seeking disbarment for those who are 
lawyers.  She asked the Court to issue an arrest warrant for 
LCpl. Smith, calling him a "fugitive." 
 
¶6.  (U)  Media commentary of the Philippine Government's 
decision has been almost uniformly negative, ranging from 
"despicable" to "surreptitious" to "a colossal mess" to 
"highly irregular and extraordinary" to "controversial and 
divisive."  A group of Filipino lawyers publicly criticized 
the decision, stating that the transfer of custody was 
unwarranted and would cause a constitutional crisis.  Some 
politicians characterized the transfer as another example of 
the U.S. "bullying" or "blackmailing" the Philippines into 
submission, while some called for the President's impeachment 
for failure to defend the Philippine Constitution. 
 
¶7.  (U) For the second time since LCpl. Smith's transfer to 
U.S. custody, a group of approximately 50 people demonstrated 
near the Embassy.  The protesters on January 2 burned several 
home-made U.S. flags but were dispersed by the police without 
further incident.  A demonstration scheduled for January 3 
 
MANILA 00000015  002.3 OF 002 
 
 
garnered only 20 people. 
 
¶8.  (U) A per an agreement between Ambassador Kenney and 
oreign Secretary Romulo providing access to LCpl. mith with 
prior notice to the U.S. Embassy, a fiv-member Inspection 
and Monitoring Team (IMT) visted LCpl. Smith January 2, led 
by Department of Interior and Local Government U/S Marius 
Corpus.  The visit was without incident, and was prominently 
covered in the media.  Corpus' public comments subsequently 
assured the public that Smith is confined on U.S. Embassy 
grounds, despite media speculation that Smith may have 
already been spirited out of the country. 
 
¶9.  (U) The Court of Appeals 16th Division ruled on January 2 
that the appeal on custody by LCpl. Smith was "moot" in light 
of the transfer by Philippine authorities, and admitted that 
the government should "do as it sees fit," especially since 
"courts may not directly intervene in the exercise of 
diplomacy."  The reasoning of the 38 page decision made 
clear, however, that "'jurisdiction' necessarily includes 
custody," and even claimed that the "basic concept that 
custody is an essential part of jurisdiction permeates 
article V of the VFA."  It found that the lower court judge 
had not committed any "grave abuse of discretion" in ordering 
LCpl. Smith's temporary detention. 
 
¶10.  (SBU) Comment:  The President and her Cabinet are 
demonstrating political courage in their vigorous defense of 
the Visiting Forces Agreement and the strategic alliance with 
the U.S.  We believe it is in our mutual interests to restore 
as much of the Balikatan exercise as possible.  Our public 
messages about Balikatan should emphasize the positive, and 
not dwell on what parts of Balikatan may not be reinstated. 
End comment. 
 
 
Visit Embassy Manila's Classified SIPRNET website: 
http://www.state.sgov.gov/p/eap/manila/index. cfm 
 
You can also access this site through the State Department's 
Classified SIPRNET website: 
http:// www.state.sgov.gov/ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jones