VZCZCXRO5359
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #2965/01 2430841
ZNR UUUUU ZZH
O 310841Z AUG 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8083
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RUEAIIA/CIA WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE

UNCLAS SECTION 01 OF 02 MANILA 002965 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP 
 
E.O. 12958: N/A 
TAGS: PGOV KCOR PINR RP
SUBJECT: PREPARING FOR THE ESTRADA VERDICT 
 
 
¶1.  (SBU) Summary:  Former President Estrada's long-running 
corruption trial may soon be over.  The anti-graft court 
could hand down its verdict on the charges of plunder and 
perjury at any time within the next few weeks.  While the 
verdict in the case -- combined with the arrest in the 
Netherlands on murder charges of communist leader Joma Sison 
and the resurrection of the "Hello Garci" vote-rigging 
scandal -- could create some political unrest, it comes at a 
time when the Arroyo Administration enjoys relative political 
strength and stability.  A not-guilty verdict, however, could 
be seen as a victory for the opposition and could resurrect 
questions over the legitimacy of Arroyo's presidency.  In any 
case, the police and military are preparing for any possible 
unrest, including putting on alert 6,000 police and military 
forces.  End Summary. 
 
--------------------------------------------- 
The Case Against Estrada: Plunder and Perjury 
--------------------------------------------- 
 
¶2.  (U) Former President Joseph Estrada was ousted from power 
in January 2001, after an unsuccessful impeachment trial and 
weeks of popular demonstrations protesting his alleged 
corruption.  The Supreme Court ruled that Estrada had 
effectively resigned from his post when he abandoned the 
Presidential Palace in the face of the "People Power" 
demonstrations.  With the Presidency vacant, then-Vice 
President Gloria Macapagal Arroyo succeeded Estrada as 
president.  In April 2001, the Department of Justice levied 
criminal charges against Estrada for plunder for allegedly 
accepting millions of dollars in bribe money from illegal 
gambling operations, diverting millions of dollars of excise 
taxes to his personal accounts, depositing his proceeds into 
alias name bank accounts, and profiting in commissions from 
stock manipulation.  The Department of Justice separately 
charged Estrada with perjury for failing to disclose a number 
of businesses in a 1998 statement of assets, which all 
government officials are required to file annually. 
 
¶3.  (U) Estrada was immediately arrested, but due to failing 
health, the court allowed Estrada to be placed under house 
arrest from April 2001 to the present.  The two cases against 
him have dragged in the Sandiganbayan (the anti-graft court) 
for more than six years.  According to Sandiganbayan 
executive clerk Theresa Pabulayan, both the plunder and 
perjury cases were submitted to the three-judge panel for 
resolution in mid-June of this year, following closing 
arguments.  If the court adheres to the prescribed 90-day 
period to issue a decision, the verdict could be handed down 
within two weeks.  While the verdict could be handed down at 
any time, Pabulayan noted that the court could extend the 
90-day period because of the complexity of the case. 
 
-------------------- 
After the Verdict... 
-------------------- 
 
¶4.  (SBU) While the Philippines has enjoyed relative 
political stability the last two years, a guilty verdict 
could spark some unrest.  Estrada "supporters," most of whom 
are mobilized for a fee, could again take to the streets, as 
they did during the violent May 2001 siege of Malacanang.  In 
addition, the political left, incensed by the recent arrest 
of Communist Party founding chairman Joma Sison in the 
Netherlands, could exploit the issue to retaliate, providing 
bodies to increase and agitate the crowd.  However, it is 
more likely that a guilty verdict would be calmly accepted by 
the general public who - perceiving a certain independence 
and fairness in the court - would welcome the closure of this 
six-year distraction. 
 
¶5.  (SBU) Conversely, a not-guilty verdict could be seen as a 
victory for the opposition and could pose political problems 
for President Arroyo.  Estrada supporters would likely ramp 
up their destabilization efforts against Arroyo and resurrect 
questions over the legitimacy of her presidency.  A 
not-guilty verdict would also rankle civil society groups, 
anti-corruption advocates, and some members of the middle 
class, who could peacefully take to the streets and express 
their indignation over the verdict, the precedent it sets, 
and its implied message that the rich and powerful are above 
the law. 
 
¶6.  (U) Estrada, now 70, has denied knowledge of any 
opposition destabilization plans, stressing he has been 
detained and isolated.  Appealing for calm among his 
supporters, he declared that he would be cleared "based on 
 
MANILA 00002965  002 OF 002 
 
 
the merits" of the case and would leave his fate "in the 
hands of God and in the hands of the people." 
 
-------------------- 
Opposition Rumblings 
-------------------- 
 
¶7. (U) Meanwhile, there have been unconfirmed reports that 
the opposition -- following Philippine conventional wisdom 
that any successful attempt to destabilize the government 
requires the support of the military -- is actively 
recruiting members of the military into their ranks.  To 
counter these rumors, National Capital Region Command Chief 
Gen. Ben Dolorfino maintained that the military "remains 
solid behind the chain of command" and that destabilizers 
would fail in luring soldiers to engage in military 
"adventurism."  For his part, Presidential Management Staff 
chief Cerge Remonde said the administration is "firmly in 
control -- it has faced all sorts of crisis and will prevail." 
 
¶8. (U) Amid these rumors, opposition Senator Panfilo Lacson 
has initiated the reopening of the investigation of alleged 
vote rigging involved in President Arroyo's tainted 2004 
election victory, a move to sustain the opposition's 
anti-Arroyo propaganda as well as give Lacson some media 
mileage for his presidential bid in 2010.  However, the 
opposition itself appears divided, with Senator Gregorio 
Honasan, a retired military colonel who faced rebellion 
charges after allegedly leading coup attempts against 
Presidents Aquino and Arroyo, breaking with Lacson and others 
on this issue. Honasan continues to command significant 
respect and following in military circles and his break with 
the opposition will likely send a signal to other officers. 
 
------------------------- 
Preparing for the Verdict 
------------------------- 
 
¶9.  (U) Whatever the outcome of the court decision, the Armed 
Forces of the Philippines (AFP) and the Philippine National 
Police (PNP) believe the decision will likely be divisive and 
lead to demonstrations, whether by Estrada supporters if the 
Sandiganbayan finds him guilty, or by civil society and 
anti-corruption advocates should the Sandiganbayan find him 
not guilty.  To prepare for the verdict, the AFP and PNP have 
developed a plan to place some 6,000 policemen and military 
troops at strategic locations, including the Sandiganbayan 
and Malacanang, on the day the decision is handed down. 
 
------- 
Comment 
------- 
 
¶10. (SBU) While the verdict in the Estrada case -- combined 
with the arrest of Sison and the resurrection of the "Hello 
Garci" vote-rigging scandal -- could create some political 
unrest, it comes at a time when the Arroyo Administration 
enjoys relative political strength and stability and the 
economy is humming along at a healthy pace, making it 
improbable that the verdict will have much of an impact on 
the Administration.  Moreover, President Arroyo continues to 
maintain the support of the military leadership -- both 
through the Administration's strong commitment to the 
Philippine Defense Reform Program and support of military 
operations, and her personal commitment to the troops (she 
has visited wounded soldiers several times) -- further 
ensuring stability.  Estrada's corruption case has dragged on 
for more than six years, during which his political influence 
has waned, making it difficult to build support.  In any 
event, the military and police, which are following these 
events closely, appear to have learned a hard lesson from 
past popular demonstrations and are well prepared to avert 
violent demonstrations. 
 
KENNEY