Monday, July 19, 2004

The Six Million Dollar Man

Michelle Malkin links to an article in the Philippines Daily Tribune which reports that the Philippines has paid an Iraqi terrorist gang US$6 million dollars for the release of hostage Angelo de la Cruz.

A ransom of $6 million was offered and paid out to the Iraqi rebels holding Filipino truck driver Angelo de la Cruz hostage, to ensure his release before President Arroyo's scheduled State of the Nation Address (Sona) on July 26, a high level Philippine intelligence officer told the Tribune yesterday. This offer was alleged to have been approved by the President herself, who then tapped Malaysian emissaries for the job, the intelligence officer, who asked for anonymity, said. Of the $6-million payoff, $5 million was shouldered by Malaysia and $1 million by the Landbank of the Philippines, the officer added.

Newspapers in the Philippines are not always reliable but their lies are rarely self-consistent. One way to gauge the plausibility of the Malkin citation is to examine whether it dovetails with past and related events. Let's recall that the initial announcement of the Philippine capitulation was made by Filipino Foreign Affairs Undersecretary Rafael Seguis. He said:

"In response to your request, the Philippines ... will withdraw its humanitarian forces as soon as possible," Seguis said according to the translation of the statement, addressed to the Islamic Army in Iraq group holding 46-year-old de la Cruz. "I hope the statement that I read will touch the heart of this group," said Seguis. "We know that Islam is the religion of peace and mercy."

This is the same Rafael Seguis who is engaged in "peace negotiations" with the branch office of Al Qaeda in the southern island of Mindanao brokered by Malaysian authorities.

The Malaysian advance survey team on the Mindanao peace process will not investigate the alleged existence of Jemaah Islamiyah terrorist training camps in the region although it has been invited to do so. "That's not in their (survey team's) mandate. There will be no probe of JI camps," said Malaysian Ambassador to the Philippines Mohammed Taufik as he led members of the survey team in paying a courtesy call yesterday on Acting Foreign Affairs Secretary Rafael Seguis and members of the Philippine and Moro Islamic Liberation Front peace panels.

There is an established money trail leading directly from contacts which Seguis would have had in the Philippines to international terror. A story attributed to the Philippine Star claims the existence of financial conduits between Islamic groups in the Southern Philippines and Osama Bin Laden's network.

The Abu Sayyaf and other local Islamist terrorist groups appear to be channeling huge sums of money from kidnapping activities to Osama bin Laden’s al-Qaeda terrorist network in Afghanistan, Justice Secretary Hernando Perez disclosed yesterday. Quoting a US Federal Bureau of Investigation (FBI) intelligence report, Perez said Bin Laden has been using "Muslim terrorists" in the Philippines as a source of funds to finance his worldwide terrorist operations.

So the short answer is, 'yes it could have happened'. The Philippine Foreign Affairs Department had enough contacts through Malaysia and their partners in the 'Peace Process' to hand over six million dollars to Angelo de la Cruz's captors in Iraq. When they wanted to negotiate his release the Philippine Government officials knew exactly what intermediaries to use. But this does not mean that de la Cruz's release is necessarily assured. Filipino hostage release negotiations have traditionally been scuppered by the disconcerting tendency of negotiators to pocket part of the ransom money for themselves. Terrorist leader Galib Andang, aka "Commander Robot" bitterly accused Philippine Government officials of cutting themselves too large a slice of the cake. Among those who provided "matching funds", as in the Malkin citation above, were Malaysian intermediaries. This from Gulf News:

Ghalib Andang, the high profile leader of the hostage-taking Abu Sayyaf Group who was arrested on Sunday, claimed that he shared the $21 million ransom payment he received in 2000 with 10 mediators, including a military general. Andang said he received only a "measly P10 million" ($181,818) in ransom, out of which he gave P1 million ($18,181) each to his first and second wife, P2 million ($36,363) to his third wife, P4 million ($72,727) to Abu Sayyaf leader Mujib Susukan. The Malaysian government and representatives of Libyan President Muammar Kaddafi had paid $1million for each of the hostages, or a total of $21 million.

The greatest danger to the Filipino hostage's release now is the possibility that the Philippines Daily Tribune account is false or inflated. The Abu Sayaf used to suspect that they had been shortchanged by negotiators and turned on their captives. While no collusion can be proved at this point in the Angelo de la Cruz case this sort of thing has happened in the past. The Belmont Club has described how the kidnapping of European tourists at Sipadan in Malaysia degenerated into a virtual slave market where even the European journalists sent to cover the story were kidnapped and redeemed in their turn.

Operationally these ransom payments are actually cash infusions into terrorist coffers and the "matching funds" are probably a kind of disguised contribution by certain Malaysian and Libyan sympathizers to the cause. However that may be, the scale of the ransom reported by the Philippines Daily Tribune can be gauged by comparison to the World Trade Center attacks which cost Osama Bin Laden half a million dollars. The "ransom" paid by the Philippine Government is twelve times that amount and will kill dozens of Americans and Iraqis before it is expended. Six million dollars buys a lot of IEDs.

While it is unclear that there is any statutory restraint to a payment of ransom to kidnappers, it may be unlawful to award oneself a commission in tacit collusion with the kidnappers. If the Philippines Daily Tribune report is accurate, the involvement of the Land Bank of the Philippines in providing the payment may also raise issues of corporate wrongdoing and money laundering.

An additional consideration when corporations decide whether or not to pay a ransom may be the corporation's responsibility to its stockholders. Although there may be a perceived moral obligation to take action, a ransom payment may be a violation of the corporation's legal responsibility to its shareholders as set forth in its corporate charter.

It would be interesting to see whether there is any recorded vote by the Philippine Land Bank directors on this matter or what method was used to pay ransom if any. The Philippine Anti-Money Laundering Act provides:

SEC. 4. Money Laundering Offense. -Money laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. It is committed by the following:

(a) Any person knowing that any monetary instrument or property represents. involves, or relates to the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.

(b) Any person-knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above.

(c) Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.

One "unlawful activity" is specifically identified as "Kidnapping for ransom under Article 267 of Act No.3815 ... " -- the very offense concerned. The Philippines passed this act despite domestic opposition when threatened by international sanctions, including denying licenses to Filipino banks to operate in certain international settings. Yet one can lead a horse to water without getting it to drink. The relatives of Americans and Iraqis who may die in coming months would do well to remember that the Philippine government undertook not to provide money to terrorists. It remains to be seen whether they have kept their word.