Oct 042014


Reference ID Created Released Classification Origin
07MANILA15 2007-01-03 09:35 2011-08-30 01:44 CONFIDENTIAL Embassy Manila
DE RUEHML #0015/01 0030935
O 030935Z JAN 07
C O N F I D E N T I A L SECTION 01 OF 02 MANILA 000015



E.O. 12958: DECL: 01/03/2017

REF: 06 MANILA 5109

Classified By: A/DCM Scott Bellard, reasons 1.4 (b) and (d)

¶1. (C) Summary. Facing intense criticism, President Arroyo
publicly defended the government’s transfer of custody of
Lance Corporal Smith as in the Philippines’ strategic
interest in its “alliance with the United States to fight
terror and poverty.” Media commentary roundly condemned the
President, and some opposition leaders renewed calls for her
impeachment. The chief of the Armed Forces and senior
government officials privately requested full resumption of
Balikatan 07, while expressing understanding that it may be
too late to reinstate certain elements. The Court of Appeals
decided LCpl. Smith’s motion on the custody issue was “moot”
in light of the government action, but the private prosecutor
will likely now take the issue of Smith’s custody to the
Supreme Court. Given the political risk the government has
undertaken to restore compliance with the Visiting Forces
Agreement, Embassy recommends restoration of as much as
possible of Balikatan 07. End Summary.

¶2. (SBU) Following the December 29 transfer of custody of
Lance Corporal Daniel J. Smith to the U.S. Embassy (reftel),
President Gloria Macapagal Arroyo publicly stated on January
2 that the Philippine Government had taken necessary action
“to forestall the further deterioration in our strategic
relationship with the U.S., which has been rapidly eroded by
our non-compliance with the Visiting Forces Agreement.” She
stressed that the move was a “difficult decision . . . taken
with only the best interest of the Philippines in mind,” but
would not “impede justice and the rule of law.” She called
on Filipinos to “stand behind our alliance with the United
States to fight terror and poverty.”

¶3. (U) In response to questions, the Embassy confirmed that
the 2007 Balikatan exercises would push forward, following
the transfer of custody to the U.S. Embassy, under the
framework of the Visiting Forces Agreement. This news
dominated media reports on January 2 and 3. Malacanang Press
Secretary Ignacio Bunye noted subsequently that cancellation

of Balikatan would have adversely affected the operational
capability of the Armed Forces of the Philippines and would
negatively impact on the campaign against terror and poverty.
Executive Secretary Ermita and Undersecretary of Foreign
Affairs Seguis vigorously defended the government’s decision
to transfer custody absent a court order in a lively press
conference on January 3.

¶4. (C) Ermita privately told Ambassador on January 2 that
the transfer of custody “was our decision and it was the
right one.” Acknowledging that the Administration would have
to face consequences for taking action where the judicial
branch had balked, Ermita added that “the court made its
decision and the Executive Branch made its decision.”
Ambassador assured Ermita that Smith was not “free” but
merely confined in a different place, while jurisdiction
remains with the Philippines. Separately, AFP Chief of Staff
General Esperon asked the Ambassador to ensure that the U.S.
finds a way to put all components of Balikatan 07 back on,
claiming it was “critical” to the AFP and urging that the USG
not “penalize” the AFP.

¶5. (U) The private prosecutor in the case on January 2 filed
petitions with the Court of Appeals to hold several
government officials — including Ermita, Interior and Local
Government Secretary Puno, Presidential Legal Counsel
Apostol, and Justice Secretary Gonzalez — in contempt of
court, and is also seeking disbarment for those who are
lawyers. She asked the Court to issue an arrest warrant for
LCpl. Smith, calling him a “fugitive.”

¶6. (U) Media commentary of the Philippine Government’s
decision has been almost uniformly negative, ranging from
“despicable” to “surreptitious” to “a colossal mess” to
“highly irregular and extraordinary” to “controversial and
divisive.” A group of Filipino lawyers publicly criticized
the decision, stating that the transfer of custody was
unwarranted and would cause a constitutional crisis. Some
politicians characterized the transfer as another example of
the U.S. “bullying” or “blackmailing” the Philippines into
submission, while some called for the President’s impeachment
for failure to defend the Philippine Constitution.

¶7. (U) For the second time since LCpl. Smith’s transfer to
U.S. custody, a group of approximately 50 people demonstrated
near the Embassy. The protesters on January 2 burned several
home-made U.S. flags but were dispersed by the police without
further incident. A demonstration scheduled for January 3

MANILA 00000015 002.3 OF 002

garnered only 20 people.

¶8. (U) A per an agreement between Ambassador Kenney and
oreign Secretary Romulo providing access to LCpl. mith with
prior notice to the U.S. Embassy, a fiv-member Inspection
and Monitoring Team (IMT) visted LCpl. Smith January 2, led
by Department of Interior and Local Government U/S Marius
Corpus. The visit was without incident, and was prominently
covered in the media. Corpus’ public comments subsequently
assured the public that Smith is confined on U.S. Embassy
grounds, despite media speculation that Smith may have
already been spirited out of the country.

¶9. (U) The Court of Appeals 16th Division ruled on January 2
that the appeal on custody by LCpl. Smith was “moot” in light
of the transfer by Philippine authorities, and admitted that
the government should “do as it sees fit,” especially since
“courts may not directly intervene in the exercise of
diplomacy.” The reasoning of the 38 page decision made
clear, however, that “‘jurisdiction’ necessarily includes
custody,” and even claimed that the “basic concept that
custody is an essential part of jurisdiction permeates
article V of the VFA.” It found that the lower court judge
had not committed any “grave abuse of discretion” in ordering
LCpl. Smith’s temporary detention.

¶10. (SBU) Comment: The President and her Cabinet are
demonstrating political courage in their vigorous defense of
the Visiting Forces Agreement and the strategic alliance with
the U.S. We believe it is in our mutual interests to restore
as much of the Balikatan exercise as possible. Our public
messages about Balikatan should emphasize the positive, and
not dwell on what parts of Balikatan may not be reinstated.
End comment.

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