Human Rights Victims Want $5M Accounting From Judge Real
Lawyers battling over funds seized for human rights victims of the late Philippine dictator Ferdinand Marcos have asked an appeals court to force a controversial federal judge to account for $5 million disbursed from an account controlled by the court while its ownership was being contested.
The appeal, filed March 20, claims that Los Angeles-based U.S. District Judge Manuel L. Real—the subject of complaints and investigations in other cases over the years—“refused to order a meaningful accounting” for the funds, “or to determine to whom and for what purpose(s) a substantial portion of the assets apparently were disbursed while in the custody of the district court.”
The accounting Real provided the parties was a half-page chart that includes a listing of $4,944,268 for “other disbursements” and $63,398 for “trustee fees.”
Lawyers involved in the complex case are not alleging improprieties by Real. But several are confused by the vaguely described disbursements, which do not appear to be mentioned in any of the judge’s orders.
The appeal is focused on an order, signed and entered by Real on Feb. 19, transferring approximately $35 million from court control to an account owned by Merrill Lynch. The order clears the way for Marcos’ victims and their families to file suit in New York State court to seek return of the funds.
The Marcos case Real is handling, which was filed and litigated in Hawaii, is part of a decades-long attempt to recover some of the Marcos fortune spread around the world, and give it to his victims—who were tortured and murdered—and their families. Judge Real has overseen the Marcos cases as a visiting judge since the early 1990s. In a 1995 bench trial, Judge Real awarded $2 billion to 9,539 claimants in the class action against Marcos and his regime. Having won the right to the money, the victims now are seeking pools of money to pay the judgment.
The $35 million is part of $2 billion Marcos put into a Panamanian shell corporation, Arelma S.A., in 1972. He created it to invest funds with Merrill Lynch, then a stock brokerage firm and more recently a bank subsidiary. In 1987, a federal court in New York froze the funds at the request of the Philippine government, which still claims them.
Last summer, it was the U.S. Supreme Court that ordered Real to dismiss the Arelma case—forcing the transfer of funds to Merrill Lynch—because of his refusal to allow the Philippine government’s claim.
In a letter to Real in October, Arelma attorney Carol Eblen questioned not only whether Real’s accounting of the Arelma assets was accurate, but whether they refer to the Arelma case at all. The letter notes that in September 2000, Real had ordered that there be no trading—whether buying or selling—of Arelma assets. Yet Real’s account summary shows “security buys” of more than $98 million and “security sales” of $26 million.
“I think the accounting has been made, and that, I think, is the only ruling that has to be made by the court,” Real said during a brief hearing Feb. 19, according to the court transcript. “In terms of that, I believe the accounting was made by the bank, and that takes care of the matter.”
The 85-year-old Real has repeatedly been criticized and investigated by the San Francisco-based 9th U.S. Circuit Court of Appeals and the Judicial Conference of the United States for failing to provide specific reasoning for his decisions.
In 2006, Real was censured by the 9th Circuit regarding his intervention in a case involving a woman on probation in his court—a case that had come under congressional scrutiny. Asked to justify a decision that prevented her landlord from collecting $35,000 in unpaid rent, he replied: “Because I said it.”
Last year, the Judicial Conference’s Conduct Committee ordered the matter back to the circuit’s council, telling it to look into 89 specific cases and determine whether Judge Real has a willful pattern and practice of not giving reasons for his decisions when required.
In December, the Circuit Council dismissed those misconduct complaints, finding Real’s failure to state the reasons for his rulings was not willful.
