Notes on William Saunders, Ferdinand E. Marcos, and Harry Stonehill: The Name That Binds

 

My column today is William Saunders: A name that binds.

This is the third time I’ve written in connection with Harry S. Stonehill (1918-2002). The first was my column, Stonehill, Diokno, Marcos – and Stan Lee, and the second, an ABS-CBNNews commentary, The complex edifice Madame built — or how the CCP’s DNA will always be Imeldific. The first generally discussed the remarkable rise and fall of Harry Stonehill, which implicated then-Senator Ferdinand E. Marcos.

The second focused on the reclaimed area in Manila Bay as a scheme that united Harry Stonehill’s buccaneering ways, with those of Ferdinand E. Marcos:

For our purposes, what’s relevant to our tale is one of the last schemes Stonehill embarked upon: to create money, literally, out of nothing, by engaging in an ambitious reclamation project along Manila Bay, which was then still the most desirable address in town. If property along Roxas Boulevard was swanky (or at least commercially-desirable — everything from mansions of the old and new rich to hotels and nightclubs dotted its stretch), why not create new bayside vistas and make a killing? But then Stonehill, as we earlier saw, ended up deported, and while he would continue to contest his deportation and try to reclaim his corporations for decades, that was the end of his being the moving force for reclamation schemes in Manila Bay.

Madame Marcos enters the picture at this point, her husband’s political career only momentarily having been inconvenienced by Stonehill-related publicity. Macapagal’s other Stonehill-related act (aside from ordering Stonehill’s deportation) had been to fire the Secretary of Justice bold enough to go after Stonehill in the first place: by this I refer to Jose W. Diokno, who lost his job but not his reputation for rectitude, while Macapagal ended up taking the heat. With, of course, the convenient outcome (for Marcos) of Marcos beating Macapagal in the 1965 presidential elections.

My latest article came about because of an article Peter J. Reilly wrote,  US V Harry Stonehill – America’s Jarndyce V Jarndyce. He’d contacted me on his research (Reilly’s article, above, was preceded by this article from 2011: Harry S. Stonehill is Dead but Tax Litigation on 1962 Raid Lives On) and when his article came out on February 20, 2022, I was struck by a detail: one of the persons Reilly contacted for his story replied,

Stonehill’s lawyer William Saunders, who initially represented Stonehill after the raids, was an informant who cooperated with the government.

Then came the story by The Guardian, which broke on February 20, 2022 (but which, if memory serves, began to circulate here the next day), Revealed: Credit Suisse leak unmasks criminals, fraudsters and corrupt politicians, included this detail:

One of the most notorious cases in Credit Suisse’s history involved the corrupt Philippine dictator Ferdinand Marcos and his wife, Imelda. The couple are estimated to have siphoned as much as $10bn from the Philippines during the three terms Ferdinand was president, which ended in 1986.

It has long been known that Credit Suisse was one of the first banks to help the Marcoses ravage their own country and in one infamous episode even helped them open Swiss accounts under the fake names “William Saunders” and “Jane Ryan”. In 1995, a Zurich court ordered Credit Suisse and another bank to return $500m of stolen funds to the Philippines.

The leaked data contains an account that belonged to Helen Rivilla, an attorney convicted in 1992 for helping launder money on behalf of Ferdinand Marcos. Despite this, she was able to open a Swiss account in 2000, as was her husband, Antonio, who faced similar charges that were subsequently dropped.

Appendix 5.1 of  Vol 27, No 1-2-Vol 28, No 1-2 (2012-2013): Marcos Pa Rin! The Legacy and the Curse of the Marcos Regime in the Philippine Journal of Third World Studies contains more information and actual facsimiles of of Marcos’s use of “William Saunders.”

[embeddoc url=”https://www.quezon.ph/wp-content/uploads/2022/02/5933-16769-1-PB-3.pdf”]

This leaves us with two facts: Marcos used “William Saunders” as a psuedonym for banking purposes, and Harry S. Stonehill had a lawyer named William Saunders.

I didn’t go into it in my column, but Raissa Robles in a 2016 article, Dear Armed Forces, you just honored a ‘soldier’ who used his guerrilla name to hide loot in Swiss banks, pieced the supposed origins of the pseudonym as follows:

When I first wrote about Marcos’ Swiss bank accounts I did not know why he had chosen the alias “William Saunders”.

It was only a year ago when I stumbled on an online post by Charlie Avila, saying that William Saunders was the name Marcos had used as an intelligence officer during World War II. Beyond that, I could not verify what Charlie Avila had written.

This summer when I was doing research for my book, I finally stumbled on the evidence to verify what Charlie Avila had written.

And the EVIDENCE CAME FROM MARCOS HIMSELF! 

On page 289 of his authorized official biography by Hartzell Spence, is the phrase in the first full paragraph saying –

“Marcos, then operating under the nom de guerre Major Saunders, happened to enter the headquarters and, with apologies, released the victims.”

Originally titled For Every Tear, A Victory and later, Marcos of the Philippines, the Spence biography of Marcos was written for the 1965 presidential campaign –incidentally, after the whole Stonehill scandal. But yes, before his having opened his Credit Suisse account: yet we know Saunders had been the

In a book about Marcos an unnamed associate said Marcos liked to see how far he could away with things. It would seem the most insider of jokes to have your official campaign biography list your so-called intelligence code name and give it the name of the lawyer of your one-time practical associate, Harry Stonehill.

Further Reading:

Harry S. Stonehill saga

See The Harry Stonehill Story by Francis Yumul. For contemporary accounts, see Smoke in Manila in Time, August 10, 1962, the Filipino Herald of Hawaii, September 13, 1962 (p. 5: “Who Is This Man Harry Stonehill?”) and Letter from Manila by Robert Shaplen in The New Yorker, May 31, 1963.

Dapen Liang, in his book, Philippine Parties and Politics: A Historical Study of National Experience in Democracy:

The first that stunned the whole country was what was called “No. 2 Versus No. 1,” a war declared by Vice President Pelaez on Malacañang late in July, 1963. As reported, it was the former Justice Secretary Jose W. Diokno, the then Nacionalista nominee for senator, who in his campaign radio speech charged the three top LP leaders, Cornelio Villareal, Ferdinand Marcos and Diosdado Macapagal (while vice president) with active complicity in the infamous “Harry Stonehill Affair.” Only a week later Justice Secretary Salvador Marino was authorized to make a TV speech revealing from the files of Stonehill the names of Pelaez, Marcos and a number of others who were said to have each received a separate sum of money from Stonehill. Of course, Pelaez and Marcos were ablaze with indignation over the intra-party intrigue. It was Pelaez who lashed at Malacañang’s tendency to trifle with the good reputation of innocent people. He strongly demanded that Marino produce evidence of his accusation. In this connection, Executive Secretary Rufino Hechanova explained why Pelaez and Marcos as persons of solid integrity were included in the Marino exposé. It was, according to the executive secretary, just a part of the party strategy to discredit the Diokno expose of the Ira Blaustein letter that implicated President Macapagal in the Stonehill affair. The executive secretary was reported to have remarked that when the president’s dignity and integrity were being assailed, all good partymen should be ready to make sacrifices for the party. (p. 382)

Lew Gleeck, in The Third Philippine Republic 1946-1972:

As a result of the Stonehill affair, Macapagal fired nearly a score of government officials for “unethical dealings,” but the unhappiest sequel was a brief outburst of xenophobia throughout the country. Foreigners were suddenly suspect. The President deported Peter Lim, a high official of the Federation of Chinese Chambers of Commerce and moved to deport more than a hundred Filipino Chinese, some of them rich men like Ernesto Ting and Francisco Cokeng, “who,” said the President, simply “have no right to be one of us.” Macapagal considered deporting Bob Stewart, an American who owned a TV and radio chain, charging violation of electoral laws in which aliens are not allowed to play any part, but Filipino children who formed a large part of Stewart’s audience were so distressed, their parents pleaded successfully for Stewart to stay. It did not last long, but the American community in the Philippines was for a time so nervous wondering where the blow would fall next, that they nicknamed the President “Mac the Knife.” (p. 278)

Julius C. Willis, Jr., who knew him, penned a blog entry reminiscing about him:

I remember Harry S. Stonehill. In his final months as a powerful and sometimes feared businessman in the Philippines, I would meet with him at his Magsaysay Building office in Ermita where we plotted PR campaigns aimed at curbing the wave of bad press that threatened his very being. Then-Manila-mayor Arsenio H. Lacson complained to me at one time that Stonehill was “crowding me out of the front pages.”

…

Stonehill’s empire consisted of about a dozen enterprises that included cigarettes, glass, cement, oil, textile, housing, and the huge and controversial Manila Bay reclamation project. He was the talk of the town. He lived in the exclusive Forbes Park district in Makati. But Harry had a bad side and associated himself with some pretty shady people.

Harry Stonehill was a tough man to work with. While his front office was staffed by the prettiest, most cordial and best-dressed young ladies you could find in Manila, the Stonehill back offices were “knock-down, drag-out” dens where wheeling and dealing took place – and where one could often hear his voice raised in anger, spewing invectives. Harry was pretty mean with his executive staff.

Harry sometimes listened to his staff and their ideas, but he mostly dictated. One of his dictates was the importation of 10 million kilos of high-grade Virginia tobacco. That deal gave him a monopoly of the raw tobacco supply in the country – every other cigarette maker, including top US brands, had to buy tobacco from him. He had all his competition by their “short and curlies” he would brag…

A sad footnote to Harry’s legacy is that he visited the Philippines in 1987 – he wanted to recover properties that had been taken over by (in his words) “a horde of opportunistic people” that included some of his former executives.

His PR campaign fell flat. That is how I remember Harry.

A column by Emil Jurado recalled Stonehill in his heyday and during his brief return to the Philippines after Marcos:

Word went around, however, that it was the American Tobacco Monopoly with the help of the Central Intelligence Agency that brought down Stonehill from his pedestal. Soon enough, Stonehill was charged with economic sabotage. This led to his deportation. However, there were those who said that Stonehill was also a victim of the crab mentality of the Filipinos.

I knew Stonehill on a personal basis. I admired and respected him. Thus, when after years in exile and through the efforts of the late Jaime Cardinal Sin, he was allowed to come back, I met him again. He said to me: “You know Emil, I had wanted to die in the Philippines, a country I had learned to love.”

Stonehill’s reclamation project in Manila Bay changed the landscape of Roxas Boulevard. These are now where Sofitel Hotel, PICC, Philippine Trade Center, Cultural Center of the Philippines, World Trade Center, and the Pagcor Entertainment City of Solaire, and City of Dreams now stand.

Veteran journalist Amando Doronila wrote a four-part column series on the Stonehill case in 2013:

1. Stonehill and pork: Prelude to farce?

2. The inside story of the raids on Stonehill firms

3. The curse of Stonehill’s ‘blue book’

4. Diokno sacked, key witness murdered

Much earlier, an 11-part series appeared in the column of Larry Henares, who’d served in the Macapagal administration. It’s a far spicier version (so, caveat emptor!) than Doronila’s, and includes Stonehill’s attempt at a comeback after the ouster of Marcos: 

Part 1 & 2: Harry Stonehill was the PACMAN of his time & The Web of Corruption

Part 3 & 4: Tom, Dick and Dirty Harry & Of Captains and Kings

Part 5 & 6: CIA Agent Spielman & Diokno and Bobby Kennedy

Part 7 & 8: American Agents Take Over & The Devouring Monster

Part 9: & 10: Saboteur and Squaw Man & Not Wild About Harry

Part 11: From an American with Love

Read President Diosdado Macapagal’s Administrative Order No. 19, s. 1962, his deportation order against Stonehill, and the reasons for doing so.

An intriguing postscript: The whistle-blower in the Harry Stonehill case, by Sylvia Europa-Pinca. Another is Filipino film director agrees to take on the story of my father’s life, by Sam Stonehill, a son.

Marcos as “William Saunders”

Rappler summarizes the findings of the Feb. 20, Guardian article here: Marcos dummy for money laundering held 8 million francs in Swiss bank until 2006.

The Guardian has one of the best overviews of the cases against the Marcoses: The $10bn question: what happened to the Marcos millions?:

As far as the records show, he and Imelda took their first steps to real secrecy on 20 March 1968, when they used false names to deposit $950,000 in four accounts with Credit Suisse, he as William Saunders (he practised his new signature on the headed paper), she as Jane Ryan. By February 1970, the Swiss accounts were so loaded, the couple added an extra layer of concealment, transferring their ownership to foundations registered in Liechtenstein. Then Marcos started to get really clever.

Walter Wright, writing in The Washington Post (Data Show How Marcos Reached Hidden Money) on August 22, 1986, was one of the first to mention what has become one of the most notorious pseudonyms in criminal/banking history, “William Saunders”:

The documents indicate that if the Marcoses wanted money out of secret accounts opened with the Swiss Credit Bank beginning in 1968, they would use the pseudonyms “William Saunders” and “Jane Ryan.”

The documents include a copy of a note on presidential stationery at Malacanang Palace in Manila on which someone repeatedly practiced the signature of “William Saunders.”

There was a more elaborate code to assure that Marcos’ communications with the Swiss bank were authentic, the documents indicate. The first cable was to be numbered “one” followed by the word “sugar.” Successive cables, numbered in order, were to begin with the words “copra,” “plywood,” “copper,” “chromite” and “nickel,” in rotation.

In addition, the name of the sender of the cable would have to change every two months. If it was July or August, for example, the sender’s name would be “Andrew Warner.”

The papers included contracts, trust agreements, analyses, receipts, instructions and other financial records involving institutions in the United States, Hong Kong, the Caribbean and Europe.

They were found hours after Marcos and his entourage fled Malacanang Palace in the face of a military rebellion, according to Potenciano A. Roque, who said in an affidavit accompanying the documents that he was sent to the palace by Aquino.

At about 2 a.m. Feb. 26, four hours after Marcos fled, Roque said he was brought to Marcos’ presidential living quarters by military personnel and was left in charge of the palace.

“I then entered the presidential bedroom, and upon entering found a file safe located near the doorway,” Roque said in the affidavit. He said he found the combination to the safe posted inside a door.

“I proceeded to open the safe and found sheafs of documents which, upon closer inspection, turned out to be documents regarding Mr. Marcos’ papers and bank accounts with Swiss banks, some papers regarding an Netherlands Antilles corporation, and other papers referring to various financial transactions.”

The report mentioned the freezing of Marcos’s account, a story told in rather exciting detail in an academic article, “Swiss Bank Secrecy and the Marcos Affair,” by Hoets, Pieter J. and Zwart, Sara G. (1988) NYLS Journal of International and Comparative Law: Vol. 9 : No. 1 , Article 4.

On March 24, 1986, at a state dinner for the Finnish President Mauno Koivisto, the Swiss Council of Ministers (Bundesrat), the country’s seven member executive cabinet, convened for an impromptu emergency meeting. Huddled in a corner of the ballroom, the Bundesrat announced a decision which stunned Swiss bankers and foreign clients around the globe. The Swiss finance ministry had been alerted by officers of Credit Suisse in Zurich, when the State dinner was about to begin, that agents of recently deposed President Ferdinand Marcos were attempting to transfer hundreds of millions of dollars out of Switzerland. Appreciating the urgency of the matter and the need for immediate action, the Federal Council, under Article 102.8 of the Swiss Constitution, ordered an emergency freeze on all assets held in Switzerland by Ferdinand Edralin Marcos, his family, and by persons or organizations close to him. An official request by the Philippine government to continue the freeze followed on April 7, 1986.

The same article also distills the Marcosian modus operandi as follows:

During his years in office Marcos probably orchestrated one of the greatest thefts in history.  Documents found in his bedroom safe in the abandoned Malacanang Palace and in his confiscated luggage upon arrival in the United States irrefutably established that the Marcoses smuggled vast amounts of money and other assets into Switzerland. The first accounts (for which the Marcoses used pseudonyms)  were probably those they established with Credit Suisse in Zurich on March 20, 1968, less than thirty months after Marcos assumed the Presidency. Subsequent accounts were opened with Swiss banks in the cantons of Zurich, Geneva, Fribourg, Lucerne and Lausanne. In addition, several Liechtenstein foundations were created. 

As President, Ferdinand Marcos created government monopolies for practically every commercial activity in the Philippines. There was the sugar monopoly, the coconut monopoly, the energy monopoly, the banana monopoly and many others. Trusted associates were put in  charge, and in return they paid commissions to President Marcos. No sugar, coconuts, bananas or other products could be bought or sold without the trustees’ permission. The same system was used for the granting of import, export and construction licenses. Furthermore, evidence found in Palace Malacanang shows that similar arrangements were made in connection with the huge Japanese war reparations.

There are also instances of direct transfers from the Philippine treasury of money earmarked for official purposes, such as the Intelligence Fund, to Marcos’s personal secret bank accounts in Switzerland.  There were even gold transports made directly from the Philippines to Switzerland. Some of these may even have continued after the Marcoses’ downfall, causing the Swiss Banking Commission to be especially cautious of unusual transactions. Finally, there were other ways the Marcoses enlarged their secret accounts. Questions still remain, however, as to how much money was transferred and deposited by Marcos and his associates in Swiss banks, how much has since been taken out and to where, and how much money is still there. 

PhilStar’s 2017 Newslab piece by Patricia Lourdes Viray, Money Trail: The Marcos Billions, points out the short lifespan of the William Saunders account and the ultimate fate of the deposits:

PCGG Commissioner Jaime Bautista recalls that the William Saunders-Jane Ryan accounts were closed by 1970 but its balances were transferred to the Xandy Foundation, which was later transferred to Fides Trust Co. and then to Avertina Foundation. This is only one of several foreign foundations that the Marcoses established as supposed cover-up for their money deposited in the Swiss banking system.

The Swiss Federal Supreme Court ruled that the secret Marcos account hidden in Swiss banks had criminal provenance. The high court ordered its transfer to the Republic of the Philippines and placed it under escrow with the Philippine National Bank. In 1998, Switzerland turned over to the Philippines bank deposits worth $627 million in accordance with the Swiss Federal Supreme Court.

The Marcos foundations appealed to prevent the transfer of bank deposits to the Philippines but the Swiss Federal Supreme Court ruled that the foundations were mere creations of Marcos and that they had participated in his bad faith.

There are ongoing efforts to downplay thirty years of such stories, by promoting patently false ones instead. An instance thoroughly dissected is by Vera Files in Video with multiple FALSE claims on Marcos’ Swiss bank accounts back online. Additional context can be found in the Martial Law Museum, see Edifice Complex: Building on the Backs of the Filipino People.

The late Buddy Gomez, who was. thorn in Marcos’ side as the Philippine Consul-General in Hawaii under the Aquino administration, recalled that Marcos died under a pseudonym, see his April, 2019 article, Ferdinand E. Marcos alias William Saunders alias Tony Bundoc:

Every time Ferdie had need for hospitalization, Meldy made doubly sure that all media were in on the event, as if to invite commiseration and who knows, perhaps sufficient public pressure. The whole world was informed that St. Francis Medical Center is where the patient was confined on multiple occasions of hospitalizations. It was there that media converged and camped out, awaiting the ‘latest’ on patient Ferdie Marcos. In fact, that is where the disgraced tin-pot caudillo finally kicked the bucket. It was at St. Francis where Bongbong Marcos announced to the world the demise of his father.

Would you then not find it crazily incredible that there is no official record in St. Francis Medical Center that a patient by the name of one Ferdinand E. Marcos was ever confined there? Whose harebrained idea was it and why did the hospital administration consent to admitting the world known patient Ferdinand E. Marcos under a false identity? Ferdie died using an alias!

The only patient on record who died in that hospital on September 28, 1989 was a “Tony Bundoc!” The extant medical records of Ferdinand E. Marcos are in the name of a certain “Tony Bundoc.” His residential address was listed in care of the attending physician, Livingston Wong, MD. who incidentally is also listed as Tony Bundoc’s “next of kin.”

It is not only ridiculous and bizarre. It is downright asinine! That means ‘extremely stupid!’ How else can one better characterize it? Fraud up to the moment of death? How very Ferdie! How Meldy! Ought I not also say “how so Bongbong,” “how so Imee?”

Funny enough, I found two lapses in what they may have thought to have been a well laid out Marcosian charade. The registration record of Tony Bundoc’s admission on “12/09/88 13:00” also identified him, towards the bottom of the hospital form, as: “SOCIAL HISTORY: Married, former President of the Philippines.” 

And in the other instance, a “V. DEQUATTRO, MD,” physician on special consultation for “progressive dyspnea, cough, wheezing” (dyspnea is ‘labored breathing’) done on “1/15/89” in Tony Bundoc’s assigned “Room No. 379,” identified the patient (in a document labelled ‘Consultation Record’) in his own handwriting, as “Marcos, Ferdinand.”

Marcos-Stonehill, Antecedents

Three interesting asides:

I. An insight into how the Stonehill case was what we might call an existential crisis for Marcos (and others) can be gleaned from this contemporary article, Ferdinand E. Marcos, Man of the Year, 1965:

Not once in his entire career as parliamentarian in both chambers of Congress, one now recalls, was Marcos ever caught unprepared in a debate or in a floor maneuver during the periodic power struggles. In a TV debate with the country’s sharpest debater, Arturo Tolentino, on Harry Stonehill’s deportation—a topic heavily loaded in favor of the opposition then—Marcos, as president of the LP, ably held his ground, turned expected disaster into a creditable defense of the LP’s precarious position—thanks to a cool intellect, eloquence, and intensive research and preparation.

II. Marcos, as President, exonerated a low-ranking official, declaring the Stonehill “Blue Book” as “mere hearsay evidence.” See Administrative Order No. 131, s. 1968:

After a careful consideration and evaluation of the records, this Office is inclined to believe that the evidence submitted to support the charges does not meet the standard required for a finding of guilt. The entries in the “blue book”, standing alone as they do, cannot sustain the conclusion that is indicated therein is true.

Moreover, the probative value of said entries is obviously doubtful, partaking as they do of hearsay evidence. Scribblings, notes and other alleged writings of Stonehill, taken together with some PVTA records such as resolutions of the Board, are not enough from which to infer that respondent acted to the prejudice of the Government…

In fine, the evidence against the respondent cannot serve as sufficient basis for conviction, the same being; essentially conjectural and speculative, not to mention of doubtful competency.

III. Marcos’ familiarity with the Stonehill enterprises. He appeared as counsel in the case, G.R. No. L-15509, March 31, 1962.

Stonehill-related cases:

In the United States, The FOIA Project contains an extended entry on Stonehill v. Federal Bureau of Investigation, detailing the progress of a case filed on June 6, 2020 and still ongoing:

Pauline Stonehill, the co-executor of the estate of Harry Stonehill, submitted three FOIA requests to the FBI for records concerning the participation of the Philippine National Bureau of Investigation in an investigation of Harry Stonehill that were located in response to a request from investigative journalist Bethany McLean. The agency acknowledged receipt of the requests but after hearing nothing further from the agency pertaining to any of her requests, Stonehill filed suit.

There are, in addition:

United States v. Stonehill, 274 F. Supp. 420 (S.D. Cal. 1967); Harry S. Stonehill and Robert P. Brooks, Appellants, v. United States of America, Appellee, 405 F.2d 738 (9th Cir. 1969).

See this case 702 F.2d 1288, decided on April 3, 1983. It includes a summary of Stonehill’s career and the legal cases he faced. See also Civil Action No. 06-0599 (JDB), decided on January 10, 2008. See another case, No. 08-5060, decided on March 6, 2009.

In the Philippines, a Supreme Court decision is G.R. No. 103882 November 25, 1998. The separate opinion of Justice Romero contains a more digestible summary of the long, complicated case, than the main decision has.

Another interesting and related document (officially online copy not available) is G.R. No. 134677, June 19, 2001, by the Supreme Court of the Philippines, involving libel. This arose from commentaries on a Stonehill company, Republic Real Estate Corporation, and cases it had filed.

A book, Our Rights, Our Victories: Landmark Cases in the Supreme Court by Marites Dañguilan Vitug and Criselda Yabes, includes a case from the Stonehill era, as an important landmark in Philippine jurisprudence:

The book opens with the case that Jose Diokno as Secretary of Justice lost, the raids—which he had directed the National Bureau of Investigation to conduct in his attempt to pin down Harry Stonehill, who bought off numerous government officials—declared illegal and the incriminating evidence deemed inadmissible in court. It was a monumental decision that enshrined the right against illegal searches despite Stonehill’s unsavory character.