Marcos Blackmailed Company in $30 Million Loan Scam, Businessman Claims
SAN FRANCISCO, Calif. (AP) _ A businessman in Manila has alleged that former Philippines President Ferdinand Marcos blackmailed him into laundering a $30 million government loan and used the money to buy a New York office building, two newspapers reported.
The allegations were reported in the San Jose Mercury News on Monday and the San Francisco Examiner on Sunday.
Enrique Razon, founder of Razon International Stevedoring Corp., was quoted as saying Marcos personally approved the loan for equipment the company did not need or buy.
The money was then routed to New York through Manila and Los Angeles banks owned by a close Marcos associate and used to pay for the 26-story Crown Building in New York City, Razon claimed.
″Marcos forced me to sign the application for the loan,″ Razon told the Examiner. ″He said he needed an extra $30 million. My company never saw any of the money. Marcos just used us as a conduit. I presumed the money went for the building in New York.″
The Crown Building at 730 Fifth Ave., was sold for $51 million in September 1981 to a Curacao corporation alleged to be owned by Imelda Marcos, former first lady of the Philippines.
The building is one of four Manhattan properties, worth a total of about $350 million, tentatively connected to the Marcoses in hearings this year before the House subcommittee on Asian and Pacific affairs.
The Mercury News said that if the allegations are true, both Philippine banking laws and International Monetary Fund regulations controlling overseas purchases by Philippine businesses would have been violated. The IMF, which loans money to the Philippines, imposes regulations to help ensure repayment of the loans.
Enrique Razon Jr., son of the founder and executive vice president of the company, told the Mercury News he was warned that if he didn’t apply for the $30 million loan, his firm wouldn’t get a government performance bond on a $93 million contract with the government of Saudi Arabia.
He said the loan application letter fraudulently claimed the company needed the money to buy dock equipment for its contract to unload ships at the Saudi port of Jiddah and was written on Marcos’ instructions.
″No equipment was bought,″ he said.
After the letter was submitted to the Central Bank, Razon Jr. said, Philippine banker Roland Gapud, president of Security Bank and Trust Co. of Manila, ″was the one who looked after it,″ Razon Jr. said. ″He made the arrangements.″
Gapud was identified as a personal financial adviser to the Marcos family at the congressional hearings.
Razon Jr. said the company did not need to buy equipment because the firm had only a services contract with the Saudi government, which supplied all the equipment needed.
He said Marcos wrote a note supporting the loan request in the margin of the letter, which was signed by Razon Sr., once a close friend of Marcos. The two men often went water-skiing and boating together and reportedly were involved in other joint business ventures, including Philippine casinos and sports operations.
When the Central Bank pressed the company for an accounting of how it spent the money, the younger Razon said, the company lied, claiming all invoices, bills of lading and other documentation had been lost in the April 1985 sinking of his father’s yacht between Hong Kong and Manila.
″It is true my father’s cabin cruiser sank in the South China Sea,″ he said, ″but believe me, there were no documents on it.″
He said the company is now ″willing to be investigated by anybody. Our conscience is clear.″
He added, ″Believe me, we were jumping in the streets″ when Marcos fled the country. ″We are no friends of the Marcoses. Marcos took three companies away from us. That’s why we went to Saudi Arabia to do business. We were being used. They forced us to do this.″