The case of the Filipino who fell from the sky

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THE memorial tribute of the Philippine Ambassadors Foundation Inc. for the recently deceased former Ambassador Eusebio Abaquin brought back memories of our pleasant and eventful collaboration when he was the Ambassador to Indonesia and I was under his supervision as Consul General in Manado, the northernmost city of that country. Standing out among these memories is the case of a Filipino geologist, Michael de Guzman, probably the most interesting and difficult I handled in my career. Not only was it filled with intrigue and mystery, it illustrates the kind of challenges – to his physical and mental stamina and professionalism – a Filipino diplomat is called on to face in the course of his duties to protect Filipino nationals abroad whoever or whatever they are, come what may.

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In was a most turbulent time in Indonesia. The 1997-98 financial crisis in Asia hit that country the hardest. There were violent demonstrations against the Suharto regime in Jakarta and other parts of the country. President Suharto was in fact losing his grip on power. The air in Indonesia was rife with get-rich schemes taking advantage of the falling rupiah and hedging against the growing instability of the country.

I first knew about De Guzman through articles in Time and Newsweek hailing him for his geological achievement of finding massive gold reserves in Busang, Indonesia that would dwarf all existing gold mines in the world. Reading about his feat filled me with pride as a Filipino. But this soon turned into embarrassment.

De Guzman was in the employ of Bre-X Minerals, a penny-a-stock Canadian mining company operating from the owner’s house in Calgary when it acquired the Busang site in 1993. Reports of De Guzman’s find trickled to the stock market resulting in the Bre-X value rising from seven pennies a stock in 1993 to US $280 by 1997, making Bre-X a US$ 6 billon company. The geologist supposedly earned $4 million from the proceeds of his stock options.

De Guzman was the toast of the Prospectors and Developers Association Conference in Toronto when he received an urgent summons to report immediately to Busang from officials of the US mining giant Freeport-Melon Copper and Gold, which was conducting a due-diligence investigation prior to signing a partnership agreement with Bre-X. On the way to Busang, on 19 March 1997, the geologist reportedly jumped to his death from an Alouette helicopter.

I immediately flew to Balikpapan, the capital city of the province of East Kalimantan, to monitor the police search and rescue operation and assist in the body’s identification.. Because of the thick jungle terrain, it took the police five days to recover the body. It was already bloated and rendered beyond recognition probably by wild boars or other animals of the jungle.

The moment the news of De Guzman’s jump was flashed around the world, the value of Bre-X stocks plummeted. It was presumed that he was avoiding being confronted with the finding that his sensational discovery was but a scam.

A suicide note he wrote addressed to his wife in Manila was found in his hotel room. The Indonesian police ruled De Guzman’s death a suicide. A group of private investigators, Forensic Investigative Associates,commissioned by Bre-X Minerals and Freeport concluded that De Guzman was primarily responsible for the gold scam and that in fact he was dead.

While his family in Manila and Bre-X co-employees always agreed with the police conclusion, doubts whether the body found by the Indonesian authorities and buried in Manila was that of Michael de Guzman have lingered till now.

In Indonesia, the bloated and mangled body was identified only by the pair of pants it was wearing by an assistant of De Guzman. The night before after carousing with friends at a girlie bar, De Guzman still fully clothed passed out in his Balikpapan hotel bathtub. The following morning, since he did not have another pair of pants, a new pair was bought for him by his assistant.

Moreover, a fingerprint taken during the autopsy of the body in Indonesia was not a positive match to fingerprints in the files of the National Bureau of Investigation in Manila, possibly because of the poor condition of the sample. At that time DNA was not yet widely used as a forensic tool.

De Guzman had several wives. Although the family in Manila claimed never to have seen a trace of the $4 million he supposedly earned from his stock options, a wife in Indonesia mentioned that she received a mysterious deposit of US100,000 to her bank account in 2002, five years after his death. The latter also said she received a call from him in 2005 on his birthday falling on Valentine’s Day and telling him to expect another amount of $ 25,000 to be deposited to her account. Although she claimed that the bank transfer was from Brazil, she could not show proof of the transaction.

Even the late Ambassador Abaquin believed that the body that was buried was not De Guzman’s based on his own interviews with relatives and the Filipino geologists working with Bre-X. When I chanced upon him in a golf course in Manila shortly before his death, Amb. Abaquin said he was planning to write a book about his theory.

Did Michael de Guzman, exposed as a scam artist, fake his death?

After the body was buried in Manila, I thought that the case was already behind me. But a few weeks afterwards, I got an urgent call from Amb. Abaquin telling me about a developing hostage situation involving the remaining Filipino staff of Bre-X camp in Samarinda.

Bre-X could no longer afford to run the company with investors scrambling to recover their money.The Indonesian employees in Samarinda were agitated because they were not receiving their salaries. They blamed the Filipinos for their plight and prevented the latter from leaving the camp to force Bre-X to settle their obligations to them.

With just a police escort and an interpreter, I went to the Bre-X camp. At the very start, I felt threatened because the Indonesians closed the gate upon my entry and the police escort was told to remain outside. I thought I might end up another hostage.

Leading the Indonesians was a general’s son. He settled my nerves somewhat when he allowed me to talk with the Filipinos who told me that apart from not being allowed to get out of the camp, they were treated civilly.

My negotiation with the Indonesians was a long drawn out affair, taking all the diplomatic and military skills in my arsenal and all arguments I could think of. I told the Indonesians that if they insisted on detaining the Filipinos they might be facing criminal liability afterwards. I told the general’s son that he might be risking the career of his father.

In the end reason prevailed. They agreed to taking the Filipinos to the police station and leaving the police to handle them. I secretly heaved a sigh of relief because I had been told earlier by the Embassy that the local police had been instructed by their national headquarters to send the Filipinos to Jakarta immediately once in their custody.

Doubtful that the anger of the Indonesians had been assuaged, I asked to be driven out of Samarinda that night and back to Balikpapan. I might have had second thoughts had I realized it was a dangerous three-hour drive across uninhabited jungle with no road lights at night and only the loud and eerie sounds of forest creatures could be heard inside the car. There was only me and my driver on the road.

But such things happen to diplomats: it’s not unusual they are torn and must choose between sets of unknowns, of likely risks and dangers. The life of a diplomat is commonly perceived to be one of pomp and glamor ; less known is that it is often about dealing with the dark, even, sordid sides of the world’s realities.

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