http://spitfirelist.com/for-the-record/ftr-689-interview-with-sterling-and-peggy-seagrave/
MP3 Side 1 | Side 2
Introduction: Highlighting their consummately important book Gold Warriors; the program proudly presents Sterling and Peggy Seagrave.
Pursuing the subject of the fabulous amount of wealth stolen by the Japanese during World War II under Golden Lily (the formal name of the Japanese looting program), this broadcast supplements discussion presented in FTR#’s 428, 446, 451, 501, 509. Having secreted over $100-billion (in 1940’s dollars) worth of precious metals and gems in the Philippines alone, the Japanese postwar economic largess was founded largely on the plunder garnered from their rape of Asia.
The program and the interview begin with the story of one of the more important postwar US intelligence operatives–former OSS and CIA agent Severino Diaz Garcia Santa Romana-nicknamed “Santy.” The discoverer of much of the gold hidden in the Philippines by Prince Chichibu and General Yamashita under “Golden Lily”, Santa Romana worked with General Edward Lansdale to secret the gold into foreign bank accounts. There, it was subsequently utilized for a number of purposes, in particular the financing of postwar US intelligence operations. As the Seagraves explain, a pivotal event in the recovery of the Philippines Golden Lily caches was the torture of General Yamashita’s driver, who eventually yielded the whereabouts of the repositories.
Among other uses, the recovered gold was used to finance covert operations and purchase political allegiance during the Cold War. In addition to being used to resurrect the very militarists, fascists and oligarchs that had prosecuted Japan’s war of aggression, the monies were combined with treasure recovered from the Nazis to create an enormous slush fund called the Black Eagle trust. This huge repository of clandestine wealth was used to stabilize the postwar financial system, finance covert operations, and purchase influence among America’s Cold War allies. Conceived of, and realized, by some of the most powerful American political and financial power brokers, the Black Eagle trust ultimately became a source of enormous corruption, as it became a “Treasure of the Sierra Madre”, luring many individuals and institutions into temptation and, sometimes, death.
A frightening reminder of the insecurity surrounding the centers of great wealth can be found in the chilling stories of Norbert Schlei, W.R. “Cotton” Jones’, Santy’s heirs and Australian broker Peter Johnston who attempted to lawfully negotiate or verify financial instruments influenced by Golden Lily wealth. Terror and death can be the rewards for rectitude. Many of the institutions bailed out by the U.S. Taxpayer in the wake of the financial meltdown in 2008 have vast amounts of stolen gold hidden away from the prying eyes of regulators.
Program Highlights Include: The establishment and operation of the M-Fund—designed to establish and perpetuate the Japanese reactionaries who had engineered Japan’s war of aggression; the Yotsuya Fund—designed to finance the coercion, intimidation and murder of the political opposition in Japan; the Keenan Fund—set up to bribe witnesses in order to whitewash Japanese war criminals; Kodama Yoshio—Japanese admiral, gangster and the CIA’s main man in postwar Japan; the Showa Trust—set up to enrich Emperor Hirohito; the Marcos regime in the Philippines and its attempts at manipulating both the Japanese and American beneficiaries of the Golden Lily; the Reagan administration’s attempts at using Golden Lily loot in the Philippines in order to ease the US back on to the Gold Standard; the careers of Black Eagle trust architects Henry Stimson, John J. McCloy, Robert Lovett and Robert B. Anderson; review of the career and fascist ideology of General Charles Willoughby, MacArthur’s intelligence chief; Richard Nixon’s decision to turn one of the aggregates of Golden Lily over to Japanese war criminal (and later Prime Minister) Kishi Nobosuke. Nixon agreed to turn the M-Fund over to Kishi in exchange for kickbacks to Nixon’s 1960 presidential bid.
1. The program and the interview begin with the story of the more important postwar US intelligence operatives–former OSS and CIA agent Severino Diaz Garcia Santa Romana-nicknamed “Santy.” The discoverer of much of the gold hidden in the Philippines by Prince Chichibu and General Yamashita under “Golden Lily”, Santa Romana worked with General Edward Lansdale to secret the gold into foreign bank accounts. There, it was subsequently utilized for a number of purposes, in particular the financing of postwar US intelligence operations. As the Seagraves explain, a pivotal event in the recovery of the Philippines Golden Lily caches was the torture of General Yamashita’s driver, who eventually yielded the whereabouts of the repositories.
Among other uses, the recovered gold was used to finance covert operations and puchase political allegiance during the Cold War. Among the most important of the vehicles that emerged from the looted wealth was the Black Eagle Trust.
Among the principal coordinating elements assisting Santa Romana and his U.S. associates was the Vatican and the Opus Dei network, in particular.
In addition to its tactical application to covert operations and political influence pending, the Black Eagle Trust established the gilded loot of the Second World War at the foundation of the postwar economic and political order!
2. In this context, the program highlights the use of this wealth to finance covert operations and buy political influence during the Cold War.
3 “Most readers will be as surprised as we were by this information. Some may be deeply troubled by Truman’s strategic decision, which others may heartily endorse. It is not within the scope of this book to examine that decision, or to explore whether it was right or wrong. It might have been a wise decision at the time, which had tragic consequences in the longer term. Ours is only a preliminary report, and in what follows we try to remain politically neutral. The only purpose of this book is to lift the veil of secrecy, and to bring forward and examine the unforeseen consequences, which are many, and troubling.”
(Idem.)
4. The decision to form this vast action fund of Axis treasure looted during World War II (called the Black Eagle trust) had its genesis with the Bretton Woods conference of 1944 and involved some of the key power brokers in the American power elite.
5. These luminaries included Secretary of War Henry Stimson and his aides John J. McCloy, Robert Lovett and Robert B. Anderson, about whom more will be said later on in the program. The reference to “Santy” is to Mr. Santa Romana.
6. Next, the program highlights the machinations of Edward Lansdale, one of the most important US “Black Ops” veterans of the Cold War. Lansdale was at the epicenter of the recovery of the Philippines treasure sites created by the Japanese and opened by Santa Romana. Lansdale briefed the high-ranking government officials (including General Douglas MacArthur) who participated in the cooption of the Philippines treasure sites.
7. Ultimately, the very clandestine nature of the “Black Gold” (including the Black Eagle trust and other off-the-books funds to be discussed later) led to the perversion of the use of these monies (which may have been justified during the early Cold War and the Soviet expansionist period). These clandestine monies became the source of immense and ongoing corruption.
8. “As Japan expert Chalmers Johnson nicely put it, ‘The Cold War is over. Whatever the United States may have believed was necessary to prosecute the Cold War, the Cold War itself can no longer be used to justify ignorance about its costs and unintended consequences. The issue today is not whether Japan might veer toward socialism or neutralism but why the government that evolved from its long period of dependence on the United States is so corrupt, inept and weak.’”
(Idem.)
9a. Returning to the subject of the Santa Romana recoveries in the Philippines at the end of the war, the broadcast fleshes out the operation, involving Santa Romana, MacArthur, Lansdale and Robert B. Anderson.
9b. “From what was seen in these vaults, and also discovered by U.S. Army investigators in Japan, it became evident that over a period of decades Japan had looted billions of dollars’ worth of gold, platinum, diamonds, and other treasure, from all over East and Southeast Asia. Much of this had reached Japan by sea, or overland from China through Korea, but a lot had been hidden in the Philippines.”
(Idem.)
10. As mentioned above, the Santa Romana recoveries and other Japanese loot was combined with Nazi gold recovered at the end of the war in Europe. These bullion treasuries were combined to form the Black Eagle trust. As discussed above, some of the premier member of the U.S. power elite oversaw the creation of Black Eagle.
11. “After the Nazi defeat, the OSS and other Allied intelligence organizations searched Germany and Austria for art treasures and looted gold. Soviet troops and special units did the same in the Russian zone. More is known of what happened to the recovered art than to the recovered gold. When one hundred tons of Nazi gold were recovered from a salt mine near Merkers, Germany, the truck convoy carrying it to Frankfurt vanished; it was said to have been hijacked, but the more likely explanation is that this gold was among the bullion stacked in the convent courtyard.”
(Idem.)
12. “The reason for all this discretion was a top secret project sometimes called Black Eagle, a strategy first suggested to President Roosevelt by Secretary of War Henry L. Stimson and his wartime advisors, John J. McCloy (later head of the World Bank), Robert Lovett (later secretary of Defense), and Robert B. Anderson (later secretary of the Treasury). Stimson proposed using all recovered Axis war loot (Nazi, Fascist, and Japanese) to finance a global political action fund. Because it would be difficult if not impossible to determine who were the rightful owners of all the looted gold, better to keep its recovery quiet and set up a trust to help friendly governments stay in power after the war. This was informally called the Black Eagle trust after the German black eagle, referring to Nazi bullion marked with an eagle and swastika, recovered from underground vaults of the Reichsbank.”
(Ibid.; pp. 96–97.)
13. Apparently, some of the premier families in international finance collaborated with the formation and operation of the Black Eagle trust, as well.
14. Fleshing out information about the architects of the Black Eagle trust, the program sets forth the background of Henry Stimson, and his aides John J. McCloy, Robert Lovett and Robert B. Anderson. The latter three wielded paramount influence in the postwar world of international power politics and business.
15. “McCloy was a troubleshooter and expert fixer. He said his job was ‘to be at all points of the organizational chart where the lines did not quite intersect.’ He made endless trips around the world during the war, solving problems, working with statesmen, bankers and generals. He was intensely involved in backstage strategy and understood, to borrow from Cicero, that ‘the sinew of war is unlimited money.’ Money also was to be the sinew of the Cold War. A wheeler-dealer, McCloy knew all the ins and outs of international finance. After the war he became a partner in the law firm of Milbank Tweed, which handled the affairs of the Rockefeller family and its Chase Bank, became a leader of the Council on Foreign Relations, head of the World Bank, chairman of Chase, and head of the Ford Foundation. He may have been the key player in executing the Black Eagle trust, the one who took Stimson’s idea and turned it into a working reality.”
(Idem.)
16. Discussing Anderson, the broadcast notes his close association with Clark Clifford.
17. “Although Stimson retired from public life in 1945, and McCloy also left government service at that time, they and Anderson continued to be involved in overseeing the Black Eagle trust. According to former CIA deputy director Ray Cline, the gold bullion recovered by Santa Romana was put ‘in 176 bank accounts in 42 countries.’ Anderson apparently traveled all over the world, setting up these black gold accounts, providing money for political action funds throughout the non-communist world. Later, we closely examine several.”
(Ibid.; p. 98.)
18a. One of the uses of the Black Eagle trust gold was to help maintain the stability of the postwar world economy. Note that the authors suspect that the architects of the trust exaggerated the importance of this function in order to serve their own ends.
18b. “Each IMF member country agreed on a value for its currency expressed in terms of the U.S. dollar. Each member country deposited with the IMF an amount of gold and currency as reserves to be used to sustain the value of that currency. The main function of the IMF was to maintain stable values for these currencies by shifting funds temporarily from one to another. While it was a global organization, its most important backer was the U.S. Government. Federal statistics show that at the end of the war the United States held 60 percent of the world’s official gold reserves, which put Washington in the position of being able to manipulate the other nations.”
(Ibid.; p. 99.)
19. “By 1960, however, it was evident to European members of the IMF that they would soon hold dollars far in excess of the official U.S. gold reserves. One solution would have been to devalue the dollar, but Washington blocked this. Instead, in 1961 the U.S. joined with the central banks of Europe, Great Britain and Switzerland to form the London Gold Pool, managed by the Bank of England. The ideas was that the collective official reserves of these countries would give them enough gold to intervene in the private market for gold, to keep the price at $35 an ounce. It worked for a while. But by 1968, France had left the Gold Pool, the British pound had been devalued, and private demand for gold skyrocketed. In a last-ditch attempt to sustain the London Gold Pool, the U.S. Air Force made emergency airlifts of gold from Fort Knox to London. So much gold bullion was moved onto the weighing room floor at the Bank of England that the floor collapsed. It was an omen, for the Gold Pool itself collapsed shortly thereafter.”
(Idem.)
20. The authors note that the Black Eagle trust served to keep the price of gold artificially high, in a manner similar to the operations of the Diamond Cartel associated with the De Beers family and the Gold Cartel identified with the Oppenheimers.
21. “If the recovery of this huge mass of plundered gold was known only to a trusted few, those countries and individuals that had been robbed by the Nazis, the Fascists, or the Japanese, would not sue to recover it. Also, the argument was made that the existence of so much black gold, if it became public knowledge, would cause the fixed price of $35 an ounce to collapse. As so many countries now linked their currencies to the U.S. dollar, and the dollar was linked to gold, currency values throughout the world might then plummet, causing financial disaster. But so long as it was kept secret, gold prices could be kept at $35 an ounce, and currencies pegged to gold would be stable. Meanwhile, the black gold would serve as a reserve asset, bolstering the prime banks in each country, and strengthening the governments of those nations.”
(Ibid.; p. 100.)
22. The “black gold” placed the United States in a position of primacy, as it could use the bullion to exert leverage on governments and financial institutions.
23. Eventually, this “black gold” became a source of tremendous corruption, as banks became addicted to the use of these funds and abused their customers in a most profound way.
24. Turning from discussion of the Black Eagle trust, the program highlights the formation and use of Golden Lily-derived funds in Japan, administered by the US and later the Japanese. The first major fund here is the Marquat or “M-Fund”, used to manipulate and control the postwar Japanese political landscape. In particular, the M-Fund was used to shore up the Japanese oligarchs who had directed and profited from Japan’s brutal war of aggression and to stabilize the postwar Japanese economy.
25. “Three underground funds were controlled by American officials during the occupation—the M-Fund, the Yotsuya Fund and the Keenan Fund. According to Takano Hajime, the M-Fund was named after General William Frederic Marquat, chief of SCAP’s Economic and Scientific Section. In theory, Marquat headed America’s program to punish and reform Japanese businesses that had gorged on war profiteering. In reality, Marquat’s biggest public relations headache was how to help them conceal these obscene profits, which by custom were shared with the imperial family. Historian John Dower explains that Marquat ‘assumed responsibility for nothing less than supervising all developments in finance, economics, labor, and science, including the dissolution of zaibatsu holding companies and the promotion of economic deconcentration. Every major government financial and economic institution reported to his section, including the Ministry of Finance, the Ministry of Commerce and Industry, and the Bank of Japan.’”
(Idem.)
26. “Little has been written about Marquat, who usually is portrayed as an amiable nincompoop, unfit for the job. This hardly comes as a surprise. Like Willoughby and Whitney, Marquat was one of MacArthur’s inner-circle ‘The Bataan Boys,’ whose chief quality was undying loyalty. John Gunther said Marquat ‘pays little attention to the jargon of his present field; once he . . . turned to his first assistant during a heavy conference on economic affairs, saying ‘What is marginal economy, anyway?’”
(Idem.)
27. “Marquat was supposed to dissolve the banks and conglomerates that financed Japan’s war and profited from it. Despite purely cosmetic changes and the break-up and sale of several small conglomerates, the biggest war profiteers were let off without even a slap on the wrist. General Marquat was also in charge of closing down and punishing Japan’s biological and chemical warfare service, Unit 731. Instead, the U.S. Government secretly absorbed Unit 731, moving most of its scientists, personnel, and documents to U.S. military research centers like Fort Dietrick in the Maryland countryside. All information about its activities, including biological warfare atrocities, and horrific experiments on fully conscious victims, was withheld by Washington from the American and Japanese public, and from the Tokyo War Crimes Tribunals. All Unit 731’s records held by the U.S. Government are still top secret.”
(Ibid.; p. 110.)
28. “So while he was supposed to be making Japan more democratic, Marquat was doing the opposite. The M-Fund was created to buy elections for Japanese politicians so far to the right that they were solidly anti-communist. Japan was the most highly industrialized country in Asia; Washington wanted it to be a capitalist bastion against communism, for its economy to thrive so there would be no need for labor unions, leftist organizers, or revolution. This was the view of American conservatives who thought President Roosevelt was a communist, and believed that Britain should have allied itself with Germany and Japan, and gone to war against the USSR. As a consequence of this thinking, plans to reform Japan were truncated or aborted. (One major exception was land reform, successfully completed before it could be halted.)”
(Idem.)
29. Shoring up Japan as an anti-communist bulwark was the initial overall goal of the application of the M-Fund, and the other funds to be discussed below. Again, in order to do this, the very fascists and oligarchs most responsible for Japan’s war of aggression were returned to power and potential opponents and dissidents neutralized, often violently.
30. One of the resources combined with the M-Fund was the enormous cache of war loot acquired by Kodama Yoshio (also known as Yoshio Kodama), a Japanese underworld kingpin who became a primary functionary in the Japanese Empire and the postwar Japanese power political stage. Kodama worked very closely with the CIA and became one of the early prime-movers within the Unification Church.
31. Kodama was on excellent terms with Emperor Hirohito, who assisted with the acquisition of the $13-billion fund Kodama eventually combined with the M-Fund. Kodama was the kingpin of the Japanese drug trade during, and after, World War II. The drug trade was one of the primary sources of Kodama’s largesse.
32. “In the spring of 1945, Kodama made a quick trip to Taiwan to see that its many heroin factories were dismantled for return to Japan, along with remaining stocks of heroin and morphine. On his return, Kodama was assigned to be a special advisor to the emperor’s uncle, Prince Higashikuni, who served as Japan’s prime minister briefly at the start of the U.S. occupation. According to Kodama’s own memoir, immediately after the surrender, Higashikuni had ‘two or three of us councilors arrange a meeting and secretly, unknown to his cabinet ministers, [Higashikuni] visited General MacArthur in Yokohama.’ Kodama provides no details of what transpired at this meeting, or whether he accompanied the prince.”
(Idem.)
33. In the context of Kodama’s profound involvement with the instruments of “Black Finance” it is also worth remembering that Kodama worked very closely with the CIA.
34. “While literally an employee of the U.S. Government, Kodama continued to oversee Japan’s postwar drug trade. Heroin labs were moved back not only from Taiwan, but from North China, Manchuria and Korea. Chinese who had collaborated with Japan in drug processing and distribution, were given sanctuary and began operating from Japanese soil. Two of the three major players in Asian narcotics soon died: Nationalist China’s general Tai Li was assassinated in a 1946 plane crash; Shanghai godfather Tu Yueh-sheng died in Hong Kong of natural causes in 1951. Kodama was left Asia’s top druglord, while on the U.S. payroll. This could have been embarrassing, for Japan’s dominant role in narcotics was widely known and undisputed, but a Cold War hush descended over it like an Arctic whiteout. During the occupation, U.S. propaganda characterized Asia’s drug trade as exclusively the enterprise of leftists and communist agents. In truth it was dominated by Kodama in Japan, and by Generalissimo Chiang through the KMT opium armies based in the Golden Triangle, who were under the direct control of the Generalissimo’s son, Chiang Ching-kuo, the KMT chief of military intelligence at that time. (The two top KMT opium warlords in the Golden Triangle, General Tuan and General Li spoke to us openly of this.)”
(Ibid.; pp. 108–109.)
35. Next, the program turns to discussion of the Yotsuya Fund, used to manipulate the Japanese underworld. A primary goal of this manipulation was to enlist the Japanese criminal element—the deadly yakuza in particular—in order to crush political dissent and opposition. This repression was extremely brutal, involving—among other institutions—the Cannon Agency. The Cannon organization was essentially an assassination consortium created to eliminate dissidents–Japanese, American and British—who opposed the reinstitution of the fascists and oligarchs who had directed Japan’s war of aggression.
Note that, in addition to the aforementioned Kodama, the Yotsuya Fund was controlled by General Charles Willoughby, an admirer of Spanish dictator Francisco Franco and a doctrinaire fascist in his own right. Willoughby oversaw intelligence matters for MacArthur.
36. “Despite being head of G-2, at this late stage in his career Willoughby was involved in dirty tricks rather than intelligence-gathering or counter-espionage. Among other things, his Yotsuya Fund financed a Korean Liaison Office that sent spies into North Korea, Red China and the far eastern USSR.”
(Ibid.; pp. 110–111.)
37a. “Yotsuya, the district for which Willoughby named his underground fund, was a seedy Tokyo tenderloin populated in the postwar years by gangsters, prostitutes, and bottom-feeders, a hub for the blackmarket, awake all night with illegal gambling casinos and attached brothels. (Today Yotsuya has changed, and is famous for bars frequented by university students and company executives.) Kickbacks from postwar dives like the Mandarin Club, a casino and brothel in Yotsuya run by American Ted Lewin, a pal of Kodama, funded the Cannon Agency, Willoughby’s dirtiest and wettest operation in Japan. Named for U.S. Army Colonel J.Y. Cannon, this was a military version of Murder Incorporated, a death squad.”
(Ibid.; p. 111.)
37b. “Jack Cannon arranged the beating and killings of student leaders, liberals, leftists, socialists, labor union organizers, scholars, journalists, and anyone else who got in the way. Cannon worked closely with Machii Hisayuki, Kodama’s Korean lieutenant who headed the ethnic Korean tosei-kai gang of yakuza. Jack Cannon initially worked for the U.S. Army’s Counter-Intelligence Corps, or CIC. His job was to ferret out and to murder dissidents. A Nisei interpreter employed by Willoughby’s ATIS, who once had helped Cannon blow open a safe, recalled that the colonel always behaved like ‘a movie style gangster.’ Once the Cannon Agency was set up, Jack Cannon became something that would have chilled the blood of most Americans. He is thought to have been behind the kidnapping of a prominent left-wing writer, Kaji Wataru. Also attributed to him was the torture, dismemberment, and murder of Shimoyama, the president of Japan’s national railroads whose body was found scattered along the railway tracks. Whenever he needed a hand, Cannon called on Machii’s Korean yakuza. He also was suspected of arranging plane crashes that took the lives of British and American diplomats and military officers who were investigating the links between Willoughby and indicted war criminals like Kodama and Colonel Tsuji Masanobu. When the job was so wet and dirty that it had to be completely divorced from Washington, Willoughby bypassed Cannon and brought in a murder squad called KATOH, the acronym of five Japanese Army officers who did surgical assassinations for money.”
(Idem.)
38. “To be sure, what makes this even more disturbing is that Willoughby was judged by U.S. Army contemporaries to be incompetent, paranoid, and congenitally driven to cover up his misjudgments. As most documents relating to Willoughby’s activities still are kept hidden by the U.S. Government half a century later, we may reasonably suppose that there is yet more disturbing information on his messianic activities.”
(Idem.)
39. Administered by civilian, rather than military, personnel the Keenan fund was used to bribe witnesses in order to exonerate those war criminals and institutions deemed essential for the realization of U.S. anti-communist policy in the postwar period.
40. Keenan (for whom the fund was named) was assisted by General Tanaka Takayoshi, a prominent Japanese war criminal.
41. “It was common gossip among journalists in Tokyo (as it had been in Washington) that Keenan had a severe drinking problem, and ‘liked the ladies’ excessively. General Tanaka took charge of Keenan’s date book, accompanied him to inns and brothels to carry out these assignations and, when Keenan passed out, got him safely home.”
(Idem.)
42. “Unlike the broad mandates of the M-Fund and the Yotsuya Fund, the Keenan Fund had a narrow and specific function. Simply put, it was used to bribe witnesses to falsify their testimony. Unlike the swift punishment meted out to Generals Yamashita and Homma in Manila, the War Crimes Tribunal in Tokyo dragged on for three years, while a lot of horse-trading took place. The Tribunal had been established to try General Tojo and other senior military and civilian leaders for complicity in Japan’s cruel aggression. Although the Tribunal was labeled an international commission, the whole operation was carried out exclusively by MacArthur’s inner circle. In the charter establishing the Tribunal, MacArthur invested himself with broad powers, and the Tribunal was kept under his sole and exclusive authority. As a final touch, the charter (written by MacArthur and Keenan) stated, ‘the Tribunal shall not be bound by technical rules of evidence.’”
(Idem.)
43. “Accordingly, MacArthur’s men were able to control access to the defendants, to suborn whoever they wished, and to arrange omissions of evidence. Money changed hands secretly to assure scapegoats that their families would be cared for. As we documented in The Yamato Dynasty, the private papers of MacArthur’s military secretary Brigadier General Bonner Fellers reveal that he personally suborned witnesses, got them to falsify their testimony, and made sure that Emperor Hirohito was not brought to trial. On January 25, 1946, MacArthur sent a secret telegram to Army Chief of Staff Dwight Eisenhower saying the ‘investigations’ conducted by SCAP could not support any criminal charges against Hirohito: ‘No specific and tangible evidence has been uncovered with regard to [the emperor’s] exact activities which might connect him in varying degree with the political decisions of the Japanese Empire during the last decade . . .’ Documents we found in the MacArthur Memorial in Norfolk, Virginia, show that MacArthur and Bonner Fellers conspired with former president Herbert Hoover to guarantee that Hirohito would escape punishment of any kind, and that General Tojo would falsify his testimony to take all responsibility for the attack on Pearl Harbor. Intermediaries, including Admiral Yonai, were paid large sums from the Keenan Fund to negotiate with Tojo and guarantee his perjury, In his papers, General Fellers proudly describes his meetings with Yonai to set up the false testimony. (During the war, incidentally, Admiral Yonai was the immediate superior of Rear Admiral Kodama.)”
(Idem.)
44. “ A number of key witnesses who resisted subornation died violently, or under suspicious circumstances. Fellers and MacArthur intensely disliked Hirohito’s close adviser and one-time prime minister, Prince Konoe, one of the few statesmen who had tried to talk Hirohito into seeking an early peace. Fellers denounced the prince as ‘a rat who’s quite prepared to sell anyone to save himself [and who had even called] his master the emperor ‘the major war criminal.’’ Konoe was blackballed by MacArthur’s men and hounded to despair by a campaign of backbiting, disinformation, and innuendo. For example, he was falsely informed that his name had been added to the list of war criminals, and that he faced imminent arrest, imprisonment, and hanging. On December 16, 1945, Prince Konoe was found dead in his home under suspicious circumstances. Most sources say he would not submit to the indignity of trial, and the official ruling was suicide, but it appears to have been one of the first postwar episodes of ‘assisted suicide.’ Scholars Meirion and Susie Harries, among others, believe that Prince Konoe was murdered because he represented a danger to the plans of MacArthur to exonerate Hirohito. Other crucial witnesses who died conveniently before the trials began were two of Prince Asaka’s staff who had first-hand knowledge of Asaka’s instructions for the Rape of Nanking. At the end of 1945, both these aides suddenly developed ‘heart trouble’ and died.”
(Ibid.; pp. 112–113).
45. “Bribes from the Keenan Fund also were used to prevent testimony about Japan’s biological and chemical warfare program, and the vast scale of looting carried out by the imperial family’s Golden Lily operation. We now know that the U.S. government and other Allied governments browbeat POW’s when they were liberated from Japanese slave labor camps. They were bullied into signing secrecy oaths before they were allowed to go home, forced to swear that they would not reveal anything they knew about war looting or about the chemical and biological weapons testing of Unit 731. Even men who had been victims of Japanese medical experiments were forced to take this oath. At the time, they were told it was their patriotic duty to remain silent. Today they are realizing that they were victimized by their own governments, which were less interested in justice than in staying in power, and preparing for the coming Cold War.”
(Ibid.; p. 113.)
46. Yet another of these clandestine funds that derived from the Golden Lily loot was the enormous Showa Trust, administered by Emperor Hirohito himself and set up with the assistance of General Douglas MacArthur. In the 1980’s Ferdinand and Imelda Marcos attempted to blackmail the Japanese and American governments in connection with the Showa Trust. They wanted a piece of the action and, as we will see, this led to their ouster later in the decade.
47. The program then highlights Vice President Richard Nixon’s give-away of the M-Fund. Note that Nixon returned the M-Fund not to the nation of Japan but to war criminal Kishi Nobosuke. This transaction was part of a quid pro quo, in which Kishi and the LDP would kick back some of the money to back Nixon’s bid for the presidency.
48. “President Eisenhower was going to Tokyo to conclude revisions to the Mutual Security Treaty, but his trip was canceled after violent protests in Japan. Instead, Prime Minister Kishi Nobosuke flew to Washington, where the Security Treaty negotiations were conducted by the vice president. Nixon was obsessed by his craving to become president, and was willing to turn over control of the M-Fund, and to promise the return of Okinawa, in return for kickbacks to his campaign fund. Kishi, an indicted war criminal, a key figure in the wartime regime and in hard drugs, munitions and slave labor, thereby gained personal control of the M-Fund. According to Takano Hajime and other well-informed sources, Nixon justified the deal with the dubious excuse that Tokyo needed an emergency covert source of money in the event that war broke out in Northeast Asia. In theory, Japan’s post-war constitution prevented it from creating a new army, so Tokyo could not allocate a huge defense budget—at least not publicly. Nixon argued that full LDP control of the M-Fund would accomplish the same thing covertly. In 1960, the M-Fund was said to have an asset base worth 12.3 trillion Yen ($35-billion). It is important to note that Nixon did not turn the M-Fund over to the government of Japan, but to Prime Minister Kishi personally, putting the lie to his grandiose justifications. So a few months later, when Kishi ceased to be prime minister, he and his clique continued to control the M-fund. It goes without saying that they never used it for the designated purpose, instead turning it into a private source of personal enrichment. . . .”
(Idem.)
49. The M-Fund at this point in time included monies from both the Yotsuya and Keenan funds, which had been folded into it.
50. “In 1956, for example, the Eisenhower Administration labored long and hard to install Kishi as head of the newly-merged Liberal-Democratic Party and as Japan’s new prime minister. This was the same Kishi who had been a member of the hard-core ruling clique in Manchuria with General Tojo Hideki and Hoshino Naoki, head of the narcotics monopoly. Kishi had also signed Japan’s Declaration of War against America in December 1941. During World War II, he was vice minister of munitions and minister of commerce and industry, actively involved in slave labor. Along the way, he made a personal fortune in side-deals with the zaibatsu. Following Japan’s surrender, he was one of the most prominent indicted war criminals at Sugamo, where he was a cellmate of Kodama. In 1948, when his release from prison was purchased by Kodama, Kishi began organizing the financial base of the LDP, using Kodama’s black gold and injections of M-Fund cash. For ten years, Kishi was groomed as America’s Boy by Harry Kern, Eugene Dooman, Compton Packenham and other members of Averell Harriman’s group at the America Council for Japan (ACJ). They worked tirelessly to improve Kishi’s mousy image, tutored him in English, and taught him to like Scotch. To them, Kishi was America’s ‘only bet left in Japan.’ All this was done covertly, for if the Japanese public learned that Washington was using the M-Fund to replace one prime minister with another, the democracy fiction would collapse.”
(Ibid.; pp. 121–122.)
51. “During Kishi’s term as prime minister (1957–1960) the LDP received $10-million each year directly from the CIA, chiefly from the M-Fund and many other operations in Japan from 1955 to 1958, said: ‘We financed them,’ because the CIA ‘depended on the LDP for information.’ When the party’s coffers were depleted by the monumental effort to get Kishi named prime minister, Finance Minister Sato Eisaku (Kishi’s brother) appealed to Ambassador Douglas MacArthur II (the general’s nephew) for additional secret funds. In July 1958, Ambassador MacArthur wrote to the Department of State, providing details of this request: ‘Sato asked if it would not be possible for the United States to supply financial funds to aid the conservative forces in this constant struggle against Communism . . . This did not come as a surprise to us, since he suggested the same general idea last year.’”
(Ibid.; p. 122.)
52. “A few months later, when Nixon renegotiated the Mutual Security Treaty in 1959–1960, he not only gave Kishi the M-Fund, he also promised that when he became president he would give Okinawa back to Japan, while retaining military base rights there. According to sources close to former Prime Minister Tanaka, ‘Nixon told Kishi that if Japan would assist him in becoming president, he would see to it that the U.S. withdrew from its role in managing the M-Fund, and upon his being elected, Nixon would return Okinawa to Japan.’ Accordingly, when Nixon and Kishi concluded the revision of the security treaty in 1960, the M-Fund was turned over to Kishi. And in 1973, when Nixon at last was elected president, he returned Okinawa to Japan. . . .”
(Idem.)
53. The Marcoses had recovered many of the Golden Lily treasure sites in the Philippines and that gold was the source of their enormous personal wealth. In yet another episode in which the “black gold” of Golden Lily played an important role in postwar economic maneuvering, the Marcoses failed to cooperate with the Reagan administration’s plan to utilize Marcos Golden Lily gold to help back its “Rainbow Dollars” plan.
54. “So many dollar banknotes were in circulation that if they suddenly became convertible to gold, as was the case before 1933, Washington could be swamped with demands for bullion. The solution was a two-tier system. Rainbow Dollars would replace greenbacks gradually, but ordinary people could not walk in and exchange them for gold. There would be special issues of Rainbow Dollars, convertible to gold when held by central banks.”
(Ibid.; p. 196.)
55. “To make this work, America needed a large stock of gold, enough to manipulate gold prices. If the price fell too low, Washington would buy gold to keep currency values stable. If the price rose too high, and central banks demanded bullion from Washington, the government would release bullion into the market, depressing the price. This was Reagan’s essential plan. The change to Rainbow Dollars also would mean that people hoarding illicit cash, such as heroin and cocaine druglords, would have to exchange their old currency for new, so money would come out of hiding. The result could help reduce the federal deficit.”
(Idem.)
56. “President Reagan privately asked Ferdinand to lend part of his hoard of black gold to back Rainbow dollars. As usual, he could charge a commission for lending his gold to Reagan. Unfortunately for Marcos, he demanded a higher commission than the White House thought fair. According to our sources, including one who was on the White House staff at the time, Reagan was dismayed that his old friend had let him down.”
(Idem.)
57. In combination with Marcos’ attempts to blackmail the Japanese over the Showa Trust, his recalcitrance over the Rainbow Dollars project led to his ouster.
58. “As popular clamor increased in the streets, Casey is said to have flown to Manila with Treasury Secretary Regan, CIA economist Professor Frank Higdon, and attorney Lawrence Kreagar. The purpose of the meeting, according to a Marcos aide, was to convince Ferdinand to turn over 73,000 metric tons of gold. Casey and Regan were giving Marcos a last chance. Regan reportedly told Marcos that he must sign over the gold in return for 80 percent of the value in U.S. debt instruments, 20 percent in cash. Sensing that the end was nigh, Marcos wanted 80 percent in cash, only 20 percent in debt instruments. When haggling proved fruitless, Professor Higdon is said to have told Marcos he would be out of power ‘in
Posted by Dave Emory October 13, 2009 Tweet
Tags Bush Family, CIA, Cover-Up, Disinformation, Drug Trafficking, Dulles, Economic Bailout, FDR, Ford-Gerald, GOP, Harry Truman, Japan, MacArthur, Money Laundering, Nixon, Offshore, Operation Golden Lily, PearlHarbor, Reagan, Sullivan and Cromwell, The M-Fund, UBS, Wall Street
Tags Bush Family, CIA, Cover-Up, Disinformation, Drug Trafficking, Dulles, Economic Bailout, FDR, Ford-Gerald, GOP, Harry Truman, Japan, MacArthur, Money Laundering, Nixon, Offshore, Operation Golden Lily, PearlHarbor, Reagan, Sullivan and Cromwell, The M-Fund, UBS, Wall Street
MP3 Side 1 | Side 2Introduction: Highlighting their consummately important book Gold Warriors; the program proudly presents Sterling and Peggy Seagrave.
Pursuing the subject of the fabulous amount of wealth stolen by the Japanese during World War II under Golden Lily (the formal name of the Japanese looting program), this broadcast supplements discussion presented in FTR#’s 428, 446, 451, 501, 509. Having secreted over $100-billion (in 1940’s dollars) worth of precious metals and gems in the Philippines alone, the Japanese postwar economic largess was founded largely on the plunder garnered from their rape of Asia.
The program and the interview begin with the story of one of the more important postwar US intelligence operatives–former OSS and CIA agent Severino Diaz Garcia Santa Romana-nicknamed “Santy.” The discoverer of much of the gold hidden in the Philippines by Prince Chichibu and General Yamashita under “Golden Lily”, Santa Romana worked with General Edward Lansdale to secret the gold into foreign bank accounts. There, it was subsequently utilized for a number of purposes, in particular the financing of postwar US intelligence operations. As the Seagraves explain, a pivotal event in the recovery of the Philippines Golden Lily caches was the torture of General Yamashita’s driver, who eventually yielded the whereabouts of the repositories.
Among other uses, the recovered gold was used to finance covert operations and purchase political allegiance during the Cold War. In addition to being used to resurrect the very militarists, fascists and oligarchs that had prosecuted Japan’s war of aggression, the monies were combined with treasure recovered from the Nazis to create an enormous slush fund called the Black Eagle trust. This huge repository of clandestine wealth was used to stabilize the postwar financial system, finance covert operations, and purchase influence among America’s Cold War allies. Conceived of, and realized, by some of the most powerful American political and financial power brokers, the Black Eagle trust ultimately became a source of enormous corruption, as it became a “Treasure of the Sierra Madre”, luring many individuals and institutions into temptation and, sometimes, death.
A frightening reminder of the insecurity surrounding the centers of great wealth can be found in the chilling stories of Norbert Schlei, W.R. “Cotton” Jones’, Santy’s heirs and Australian broker Peter Johnston who attempted to lawfully negotiate or verify financial instruments influenced by Golden Lily wealth. Terror and death can be the rewards for rectitude. Many of the institutions bailed out by the U.S. Taxpayer in the wake of the financial meltdown in 2008 have vast amounts of stolen gold hidden away from the prying eyes of regulators.
Program Highlights Include: The establishment and operation of the M-Fund—designed to establish and perpetuate the Japanese reactionaries who had engineered Japan’s war of aggression; the Yotsuya Fund—designed to finance the coercion, intimidation and murder of the political opposition in Japan; the Keenan Fund—set up to bribe witnesses in order to whitewash Japanese war criminals; Kodama Yoshio—Japanese admiral, gangster and the CIA’s main man in postwar Japan; the Showa Trust—set up to enrich Emperor Hirohito; the Marcos regime in the Philippines and its attempts at manipulating both the Japanese and American beneficiaries of the Golden Lily; the Reagan administration’s attempts at using Golden Lily loot in the Philippines in order to ease the US back on to the Gold Standard; the careers of Black Eagle trust architects Henry Stimson, John J. McCloy, Robert Lovett and Robert B. Anderson; review of the career and fascist ideology of General Charles Willoughby, MacArthur’s intelligence chief; Richard Nixon’s decision to turn one of the aggregates of Golden Lily over to Japanese war criminal (and later Prime Minister) Kishi Nobosuke. Nixon agreed to turn the M-Fund over to Kishi in exchange for kickbacks to Nixon’s 1960 presidential bid.
1. The program and the interview begin with the story of the more important postwar US intelligence operatives–former OSS and CIA agent Severino Diaz Garcia Santa Romana-nicknamed “Santy.” The discoverer of much of the gold hidden in the Philippines by Prince Chichibu and General Yamashita under “Golden Lily”, Santa Romana worked with General Edward Lansdale to secret the gold into foreign bank accounts. There, it was subsequently utilized for a number of purposes, in particular the financing of postwar US intelligence operations. As the Seagraves explain, a pivotal event in the recovery of the Philippines Golden Lily caches was the torture of General Yamashita’s driver, who eventually yielded the whereabouts of the repositories.
Among other uses, the recovered gold was used to finance covert operations and puchase political allegiance during the Cold War. Among the most important of the vehicles that emerged from the looted wealth was the Black Eagle Trust.
Among the principal coordinating elements assisting Santa Romana and his U.S. associates was the Vatican and the Opus Dei network, in particular.
In addition to its tactical application to covert operations and political influence pending, the Black Eagle Trust established the gilded loot of the Second World War at the foundation of the postwar economic and political order!
2. In this context, the program highlights the use of this wealth to finance covert operations and buy political influence during the Cold War.
“The treasure—gold, platinum, and barrels of loose gems—was combined with Axis loot recovered in Europe to create a worldwide covert political action fund to fight communism. This ‘black gold’ gave the Truman Administration access to virtually limitless unvouchered funds for covert operations. It also provided an asset base that was used by Washington to reinforce the treasuries of its allies, to bribe political leaders, and to manipulate elections in foreign countries. In the late 1940’s, this agenda was seen as entirely justified, because the Soviet Union was aggressively supporting communist and socialist movements all over the world, putting the survival of the capitalist world in peril.”(Gold Warriors—America’s Secret Recovery of Yamashita’s Gold; by Sterling Seagrave and Peggy Seagrave; p. 3.)
3 “Most readers will be as surprised as we were by this information. Some may be deeply troubled by Truman’s strategic decision, which others may heartily endorse. It is not within the scope of this book to examine that decision, or to explore whether it was right or wrong. It might have been a wise decision at the time, which had tragic consequences in the longer term. Ours is only a preliminary report, and in what follows we try to remain politically neutral. The only purpose of this book is to lift the veil of secrecy, and to bring forward and examine the unforeseen consequences, which are many, and troubling.”
(Idem.)
4. The decision to form this vast action fund of Axis treasure looted during World War II (called the Black Eagle trust) had its genesis with the Bretton Woods conference of 1944 and involved some of the key power brokers in the American power elite.
“It was not Truman’s decision alone. The idea for a global political action fund based on war loot actually originated during the Roosevelt administration, with Secretary of War Henry L. Stimson. During the war, Stimson had a braintrust thinking hard about Axis plunder and how it should be handled when peace came. As the tide turned against the Axis, it was only a matter of time before treasure began to be recovered. Much of this war prize was in the form of gold looted by the Nazis from conquered countries and civilian victims. To eliminate any trace of original ownership, the Nazis had melted it down, and recast it as ingots hallmarked with the swastika and black eagle of the Reichsbank. There were other reasons why the gold was difficult to trace. Many of the original owners had died, and pre-war governments had ceased to exist. Eastern Europe was falling under the control of the Soviet Union, so returning gold looted there was out of the question.”(Ibid.; p. 4.)
5. These luminaries included Secretary of War Henry Stimson and his aides John J. McCloy, Robert Lovett and Robert B. Anderson, about whom more will be said later on in the program. The reference to “Santy” is to Mr. Santa Romana.
“Stimson’s special assistants on this topic were his deputies John J. McCloy and Robert Lovett, and consultant Robert B. Anderson, all clever men with outstanding careers in public service and banking. McCloy later became head of the World Bank, Lovett secretary of Defense, Anderson secretary of the Treasury. Their solution was to set up what is informally called the Black Eagle trust. The idea was first discussed with America’s allies in secret during July 1944, when forty-four nations met at Bretton Woods, New Hampshire, to plan the postwar world economy. (This was confirmed, in documents we obtained, by a number of high-level sources, including a CIA officer based in Manila, and former CIA Deputy Director Ray Cline, who knew of Santy’s recoveries in 1945. As recently as the 1990’s, Cline continued to be involved in attempts to control Japanese war-gold still in the vaults of Citibank.)”(Idem.)
6. Next, the program highlights the machinations of Edward Lansdale, one of the most important US “Black Ops” veterans of the Cold War. Lansdale was at the epicenter of the recovery of the Philippines treasure sites created by the Japanese and opened by Santa Romana. Lansdale briefed the high-ranking government officials (including General Douglas MacArthur) who participated in the cooption of the Philippines treasure sites.
“After briefing President Truman and others in Washington, including McCloy, Lovett, and Stimson, Captain Lansdale returned to Tokyo in November 1945 with Robert B. Anderson. General MacArthur then accompanied Anderson and Lansdale on a covert flight to Manila, where they set out for a tour of the vaults Santy already had opened. In them, we were told, Anderson and MacArthur strolled down ‘row after row of gold bars stacked two meters tall’. From what they saw, it was evident that over a period of years Japan had looted many billions of dollars in treasure from all over Asia. What was seen by Anderson and MacArthur was(Idem.)
only the gold that had not reached Japan. Far from being bankrupted by the war, Japan had been greatly enriched.”
7. Ultimately, the very clandestine nature of the “Black Gold” (including the Black Eagle trust and other off-the-books funds to be discussed later) led to the perversion of the use of these monies (which may have been justified during the early Cold War and the Soviet expansionist period). These clandestine monies became the source of immense and ongoing corruption.
“Because the Black Eagle trust and the political action funds it spawned remained off the books, some of these slush funds fell into the wrong hands, where they remain to this day, bigger than ever. According to reliable sources in Washington and Tokyo, in 1960 Vice President Nixon gave one of the biggest of these funds, the M-Fund, to the leaders of Japan’s Liberal Democratic Party in return for their promise of kickbacks to Nixon’s campaign for the American presidency. This in itself is deeply disturbing. But the M-Fund, then worth $35-billion and now said to be worth upwards of $500-billion, has been controlled ever since by LDP kingmakers who use it to buy elections, to keep Japan a one-party dictatorship, and to block any meaningful reforms. Similar abuses with other secret funds are to be found all over the world. Secrecy is power. Power corrupts. Secret power corrupts secretly.”(Ibid.; p. 6.)
8. “As Japan expert Chalmers Johnson nicely put it, ‘The Cold War is over. Whatever the United States may have believed was necessary to prosecute the Cold War, the Cold War itself can no longer be used to justify ignorance about its costs and unintended consequences. The issue today is not whether Japan might veer toward socialism or neutralism but why the government that evolved from its long period of dependence on the United States is so corrupt, inept and weak.’”
(Idem.)
9a. Returning to the subject of the Santa Romana recoveries in the Philippines at the end of the war, the broadcast fleshes out the operation, involving Santa Romana, MacArthur, Lansdale and Robert B. Anderson.
“What we do know, from two separate high-level sources in the CIA, is that Robert B. Anderson flew back to Tokyo with Lansdale, for discussions with MacArthur. After some days of meetings, MacArthur and Anderson flew secretly to Manila, where they were taken by Lansdale and Santy to some of the sites in the mountains, and to six other sites around Aparri at the northern tip of Luzon. In the intervening weeks, Santy’s men, aided by hand-picked teams from the U.S. Army Corps of Engineers, had successfully opened several of these vaults, where MacArthur and Anderson were able to stroll down row after row of gold bars. Other sites were opened in subsequent months. In all, the recoveries took two years to complete, from late 1945 to early 1947.”(Ibid.; p. 96.)
9b. “From what was seen in these vaults, and also discovered by U.S. Army investigators in Japan, it became evident that over a period of decades Japan had looted billions of dollars’ worth of gold, platinum, diamonds, and other treasure, from all over East and Southeast Asia. Much of this had reached Japan by sea, or overland from China through Korea, but a lot had been hidden in the Philippines.”
(Idem.)
10. As mentioned above, the Santa Romana recoveries and other Japanese loot was combined with Nazi gold recovered at the end of the war in Europe. These bullion treasuries were combined to form the Black Eagle trust. As discussed above, some of the premier member of the U.S. power elite oversaw the creation of Black Eagle.
“Washington’s ‘official’ (public) figure for recovered Nazi gold still is only 550 metric tons. But Anderson knew better. One of his business associates saw photos in Anderson’s office of an American soldier ‘sitting on top of stacks of bullion that Hitler had stolen from Poland, Austria, Belgium and France. It ended up with the Allied high command and no one was allowed to talk about it.’ The same source said he was taken to the courtyard of a convent in Europe where 11,200 metric tons of Nazi looted bullion had been collected.”(Idem.)
11. “After the Nazi defeat, the OSS and other Allied intelligence organizations searched Germany and Austria for art treasures and looted gold. Soviet troops and special units did the same in the Russian zone. More is known of what happened to the recovered art than to the recovered gold. When one hundred tons of Nazi gold were recovered from a salt mine near Merkers, Germany, the truck convoy carrying it to Frankfurt vanished; it was said to have been hijacked, but the more likely explanation is that this gold was among the bullion stacked in the convent courtyard.”
(Idem.)
12. “The reason for all this discretion was a top secret project sometimes called Black Eagle, a strategy first suggested to President Roosevelt by Secretary of War Henry L. Stimson and his wartime advisors, John J. McCloy (later head of the World Bank), Robert Lovett (later secretary of Defense), and Robert B. Anderson (later secretary of the Treasury). Stimson proposed using all recovered Axis war loot (Nazi, Fascist, and Japanese) to finance a global political action fund. Because it would be difficult if not impossible to determine who were the rightful owners of all the looted gold, better to keep its recovery quiet and set up a trust to help friendly governments stay in power after the war. This was informally called the Black Eagle trust after the German black eagle, referring to Nazi bullion marked with an eagle and swastika, recovered from underground vaults of the Reichsbank.”
(Ibid.; pp. 96–97.)
13. Apparently, some of the premier families in international finance collaborated with the formation and operation of the Black Eagle trust, as well.
“According to some sources, the Black Eagle trust could only have been set up with the cooperation of the most powerful banking families in America and Europe, including the Rockefellers, Harrimans, Rothschilds, Oppenheimers, Warburgs, and others.”(Ibid.; p. 97.)
14. Fleshing out information about the architects of the Black Eagle trust, the program sets forth the background of Henry Stimson, and his aides John J. McCloy, Robert Lovett and Robert B. Anderson. The latter three wielded paramount influence in the postwar world of international power politics and business.
“A brilliant Wall Street attorney, Stimson was a man of immense experience who had served in various posts for five presidents—Taft, Coolidge, Hoover, Roosevelt, Truman—but he was nearing the end of his extraordinary career. He knew Manila intimately, having served as governor-general of the Philippines in the 1920’s. President Herbert Hoover had then named him secretary of State. (Like Hoover, Stimson thought highly of MacArthur.) By Pearl Harbor, Stimson was already in his seventies. He managed his vast wartime responsibilities by delegating authority to four assistant secretaries of War: Robert Patterson, a lawyer and former federal judge; Harvey Bundy, Boston lawyer and Yale graduate; and two dynamos Stimson called his Heavenly Twins—John McCloy and Robert Lovett. What they all had in common was their close relationship to the Harrimans and Rockefellers. Lovett’s father had been the right-hand man of railway magnate E.H. Harriman, who once tried to buy the South Manchurian Railway from the Japanese. Following in his father’s footsteps, Robert Lovett worked with Averell Harriman at the Wall Street firm of Brown Brothers Harriman, handling international currency and lending operations. John J. McCloy, by contrast, was a poor boy from Philadelphia who graduated from Harvard Law School, joined the Cravath firm on Wall Street, and gained the admiration of Averell Harriman by helping get $77-million worth of bond issues for the Union Pacific Railroad. (McCloy engineered such deals for everyone from the House of Morgan on down.) Working for Secretary of War Stimson, Lovett and McCloy became midwives at the birth of America’s postwar national security establishment, which was closely interwoven with the financial community.”(Idem.)
15. “McCloy was a troubleshooter and expert fixer. He said his job was ‘to be at all points of the organizational chart where the lines did not quite intersect.’ He made endless trips around the world during the war, solving problems, working with statesmen, bankers and generals. He was intensely involved in backstage strategy and understood, to borrow from Cicero, that ‘the sinew of war is unlimited money.’ Money also was to be the sinew of the Cold War. A wheeler-dealer, McCloy knew all the ins and outs of international finance. After the war he became a partner in the law firm of Milbank Tweed, which handled the affairs of the Rockefeller family and its Chase Bank, became a leader of the Council on Foreign Relations, head of the World Bank, chairman of Chase, and head of the Ford Foundation. He may have been the key player in executing the Black Eagle trust, the one who took Stimson’s idea and turned it into a working reality.”
(Idem.)
16. Discussing Anderson, the broadcast notes his close association with Clark Clifford.
“By comparison, Robert B. Anderson got off to an inauspicious start. Born in Burleson, Texas, on June 4, 1910, he taught high school for a while before studying law at the University of Texas. He was elected to the state legislature and appointed assistant attorney general for Texas in 1933, and state tax commissioner the following year. Then something clicked, and Anderson left government to become an extraordinarily successful financial consultant to very rich people. By the early 1940’s, he was general manager of the enormously wealthy W.T. Waggoner estate, which owned ranch land and oil land all over Texas. Anderson was so deft at money management that President Roosevelt appointed him a special aide to Secretary of War Stimson with responsibility for keeping tabs on Axis looting. Navy Captain Clark Clifford, Truman’s aide for national security matters who was briefed by Captain Lansdale, was Anderson’ protégé and intimate friend. Together, Anderson and Clifford became major power brokers in postwar Washington.”(Ibid.; pp. 97–98.)
17. “Although Stimson retired from public life in 1945, and McCloy also left government service at that time, they and Anderson continued to be involved in overseeing the Black Eagle trust. According to former CIA deputy director Ray Cline, the gold bullion recovered by Santa Romana was put ‘in 176 bank accounts in 42 countries.’ Anderson apparently traveled all over the world, setting up these black gold accounts, providing money for political action funds throughout the non-communist world. Later, we closely examine several.”
(Ibid.; p. 98.)
18a. One of the uses of the Black Eagle trust gold was to help maintain the stability of the postwar world economy. Note that the authors suspect that the architects of the trust exaggerated the importance of this function in order to serve their own ends.
“Battered and bankrupt by their long war in Europe and Asia, America’s allies had no choice but to stand aside as the U.S. Government set about the ‘dollarization’ of the global economy. Economists see the end of World War II as ‘year zero’ for the current system of international finance. Because of widespread suspicion that the Bank of International Settlements (BIS) in Zurich had been laundering Axis loot, Bretton Woods set up a new central financial clearinghouse called the International Monetary Fund (IMF), to act as the world’s future financial clearinghouse and moneychanger. Gold was assigned a dollar value of $35 an ounce, and all other currencies were valued against the dollar. This removed any doubt about the relative position of the dollar and the British pound, for example. Although Britain was a partner in the plan, she was deep in debt to the United States. In 1941, in exchange for a $30-billion war loan, Britain had been obliged to take a backseat in postwar planning.”(Ibid.; pp. 98–99.)
18b. “Each IMF member country agreed on a value for its currency expressed in terms of the U.S. dollar. Each member country deposited with the IMF an amount of gold and currency as reserves to be used to sustain the value of that currency. The main function of the IMF was to maintain stable values for these currencies by shifting funds temporarily from one to another. While it was a global organization, its most important backer was the U.S. Government. Federal statistics show that at the end of the war the United States held 60 percent of the world’s official gold reserves, which put Washington in the position of being able to manipulate the other nations.”
(Ibid.; p. 99.)
19. “By 1960, however, it was evident to European members of the IMF that they would soon hold dollars far in excess of the official U.S. gold reserves. One solution would have been to devalue the dollar, but Washington blocked this. Instead, in 1961 the U.S. joined with the central banks of Europe, Great Britain and Switzerland to form the London Gold Pool, managed by the Bank of England. The ideas was that the collective official reserves of these countries would give them enough gold to intervene in the private market for gold, to keep the price at $35 an ounce. It worked for a while. But by 1968, France had left the Gold Pool, the British pound had been devalued, and private demand for gold skyrocketed. In a last-ditch attempt to sustain the London Gold Pool, the U.S. Air Force made emergency airlifts of gold from Fort Knox to London. So much gold bullion was moved onto the weighing room floor at the Bank of England that the floor collapsed. It was an omen, for the Gold Pool itself collapsed shortly thereafter.”
(Idem.)
20. The authors note that the Black Eagle trust served to keep the price of gold artificially high, in a manner similar to the operations of the Diamond Cartel associated with the De Beers family and the Gold Cartel identified with the Oppenheimers.
“The invisible Black Eagle trust set up by Stimson’s team, beefed up by bullion from the Santa Romana recoveries, created a separate pool of black gold that put an extra floor under the postwar economy, and gave Washington and its allies covert financial leverage. There are certain similarities between this trust and the Diamond Cartel identified with De Beers, or the Gold Cartel identified with the Oppenheimer family of South Africa. According to informed sources, these similarities exist for good reason and on many different planes. The Diamond Cartel was able to amass huge quantities of stones, and yet keep prices artificially high by limiting to a trickle the number of diamonds reaching the market, maintaining the impression of extraordinary rarity. In a similar way, the black gold cartel could hold many thousands of metric tons of gold bullion—far more than the official gold supply—keeping gold prices artificially high while discreetly using derivatives of this gold as a clandestine slush fund.”(Idem.)
21. “If the recovery of this huge mass of plundered gold was known only to a trusted few, those countries and individuals that had been robbed by the Nazis, the Fascists, or the Japanese, would not sue to recover it. Also, the argument was made that the existence of so much black gold, if it became public knowledge, would cause the fixed price of $35 an ounce to collapse. As so many countries now linked their currencies to the U.S. dollar, and the dollar was linked to gold, currency values throughout the world might then plummet, causing financial disaster. But so long as it was kept secret, gold prices could be kept at $35 an ounce, and currencies pegged to gold would be stable. Meanwhile, the black gold would serve as a reserve asset, bolstering the prime banks in each country, and strengthening the governments of those nations.”
(Ibid.; p. 100.)
22. The “black gold” placed the United States in a position of primacy, as it could use the bullion to exert leverage on governments and financial institutions.
“As a safeguard, the black gold placed in those banks was ‘earmarked’ or strictly limited in the uses that could be made it. This enabled Washington to bring pressure, from time to time, on those governments, central banks and prime banks. So long as a country and its leaders cooperated with Washington, and remained allied to it in the Cold War, the sleeping bullion would provide the asset base for patronage. Gold bearer certificates and other derivatives could be given as gifts or bribes, without actually giving away the bullion itself. Beneficial trusts could be set up in behalf of certain statesmen, military leaders, or political figures, or their families. In the hands of clever men like Anderson and McCloy, the possibilities were endless. From time to time, as more bullion was recovered from Golden Lily vaults in the Philippines, quantities of the bullion would be offered in strictest secrecy to central banks, or to consortiums of private buyers.”(Idem.)
23. Eventually, this “black gold” became a source of tremendous corruption, as banks became addicted to the use of these funds and abused their customers in a most profound way.
“In later chapters we will see numerous documented instances when these underground funds surfaced as huge bribes, or were used to buy elections, famously in Italy, Greece, and Japan, but probably in other countries as well. Some internationally famous banks appear to have become addicted to having billions of dollars of black gold in their vaults. So addicted that they refuse to surrender the bullion, and in some cases have stooped to swindling the original owners or their heirs, by denouncing their documents as counterfeit. Indeed, some owners claimed that not only were they told their documents were fake, but were given veiled threats of murder if they pressed their claims. In some cases the banks may have made such heavy use of these black gold reserves that they no longer are in a position to relinquish the bullion without going under.”(Idem.)
24. Turning from discussion of the Black Eagle trust, the program highlights the formation and use of Golden Lily-derived funds in Japan, administered by the US and later the Japanese. The first major fund here is the Marquat or “M-Fund”, used to manipulate and control the postwar Japanese political landscape. In particular, the M-Fund was used to shore up the Japanese oligarchs who had directed and profited from Japan’s brutal war of aggression and to stabilize the postwar Japanese economy.
“In this context of intense corruption and artful misrepresentation, it was inevitable that the political action funds America set up in Japan would be diverted. But the corruption, dishonesty, and moral turpitude cannot be blamed only on the Japanese. Americans were involved in diverting the funds, benefited from their abuse, and may still be benefiting today in a multitude of ways.”(Ibid.; p. 109.)
25. “Three underground funds were controlled by American officials during the occupation—the M-Fund, the Yotsuya Fund and the Keenan Fund. According to Takano Hajime, the M-Fund was named after General William Frederic Marquat, chief of SCAP’s Economic and Scientific Section. In theory, Marquat headed America’s program to punish and reform Japanese businesses that had gorged on war profiteering. In reality, Marquat’s biggest public relations headache was how to help them conceal these obscene profits, which by custom were shared with the imperial family. Historian John Dower explains that Marquat ‘assumed responsibility for nothing less than supervising all developments in finance, economics, labor, and science, including the dissolution of zaibatsu holding companies and the promotion of economic deconcentration. Every major government financial and economic institution reported to his section, including the Ministry of Finance, the Ministry of Commerce and Industry, and the Bank of Japan.’”
(Idem.)
26. “Little has been written about Marquat, who usually is portrayed as an amiable nincompoop, unfit for the job. This hardly comes as a surprise. Like Willoughby and Whitney, Marquat was one of MacArthur’s inner-circle ‘The Bataan Boys,’ whose chief quality was undying loyalty. John Gunther said Marquat ‘pays little attention to the jargon of his present field; once he . . . turned to his first assistant during a heavy conference on economic affairs, saying ‘What is marginal economy, anyway?’”
(Idem.)
27. “Marquat was supposed to dissolve the banks and conglomerates that financed Japan’s war and profited from it. Despite purely cosmetic changes and the break-up and sale of several small conglomerates, the biggest war profiteers were let off without even a slap on the wrist. General Marquat was also in charge of closing down and punishing Japan’s biological and chemical warfare service, Unit 731. Instead, the U.S. Government secretly absorbed Unit 731, moving most of its scientists, personnel, and documents to U.S. military research centers like Fort Dietrick in the Maryland countryside. All information about its activities, including biological warfare atrocities, and horrific experiments on fully conscious victims, was withheld by Washington from the American and Japanese public, and from the Tokyo War Crimes Tribunals. All Unit 731’s records held by the U.S. Government are still top secret.”
(Ibid.; p. 110.)
28. “So while he was supposed to be making Japan more democratic, Marquat was doing the opposite. The M-Fund was created to buy elections for Japanese politicians so far to the right that they were solidly anti-communist. Japan was the most highly industrialized country in Asia; Washington wanted it to be a capitalist bastion against communism, for its economy to thrive so there would be no need for labor unions, leftist organizers, or revolution. This was the view of American conservatives who thought President Roosevelt was a communist, and believed that Britain should have allied itself with Germany and Japan, and gone to war against the USSR. As a consequence of this thinking, plans to reform Japan were truncated or aborted. (One major exception was land reform, successfully completed before it could be halted.)”
(Idem.)
29. Shoring up Japan as an anti-communist bulwark was the initial overall goal of the application of the M-Fund, and the other funds to be discussed below. Again, in order to do this, the very fascists and oligarchs most responsible for Japan’s war of aggression were returned to power and potential opponents and dissidents neutralized, often violently.
“The first big application of the M-Fund was in the late 1940’s when a Socialist government happened to win election in Japan—a development that astonished, panicked, and galvanized SCAP. Immediately, great sums were distributed by SCAP to discredit the Socialist cabinet, and to replace it with a regime more to Washington’s liking. Later, when Tokyo considered establishing relations with the People’s Republic of China, sums again were disbursed to get Japan back on the right track. When Yoshida Shigeru became prime minister, Washington relaxed because Yoshida was trusted, conservative, and personally very rich. During his period as prime minister, the M-Fund was called the Yoshida Fund. (In a conversation in 1987, White House national security advisor Richard Allen said: ‘All my life I’ve heard of a thing called the Yoshida Fund—I think that’s the same thing as the M-Fund.’)”(Idem.)
30. One of the resources combined with the M-Fund was the enormous cache of war loot acquired by Kodama Yoshio (also known as Yoshio Kodama), a Japanese underworld kingpin who became a primary functionary in the Japanese Empire and the postwar Japanese power political stage. Kodama worked very closely with the CIA and became one of the early prime-movers within the Unification Church.
“Another great fortune discovered by U.S. intelligence services in 1946 was $13-billion in war loot amassed by underworld godfather Kodama Yoshio who, as a ‘rear admiral’ in the Imperial Navy working with Golden Lily in China and Southeast Asia, was in charge of plundering the Asian underworld and racketeers. He was also in charge of Japan’s wartime drug trade throughout Asia. After the war to get out of Sugamo Prison and avoid prosecution for war crimes, Kodama gave $100-million to the CIA, which was added to the M-Fund’s coffers. Kodama then personally financed the creation of the two political parties that merged into Japan’s ruling Liberal Democratic Party (LDP), strongly backed to this day by Washington.”(Ibid.; p. 8.)
31. Kodama was on excellent terms with Emperor Hirohito, who assisted with the acquisition of the $13-billion fund Kodama eventually combined with the M-Fund. Kodama was the kingpin of the Japanese drug trade during, and after, World War II. The drug trade was one of the primary sources of Kodama’s largesse.
“Another source of underground funds was Kodama, who was reported to have amassed some $13-billion in war loot for his personal use. This included two truck-loads of diamonds, gold bars, platinum ingots, radium, copper, and other vital materials. In order to curry favor with MacArthur’s men, Skukan Bunshun said at war’s end ‘Kodama had a good portion of [his] valuables transported to the vault of the Imperial Family in the Imperial Palace.’ Despite his lifelong involvement in murder, kidnapping, drugs and extortion, Kodama is said to have been regarded by Emperor Hirohito as a true patriot, possibly because of the great sums he generated for Golden Lily. This may explain why Japan’s top gangster was permitted to hide some of his loot in palace vaults. But it goes deeper to include narcotics.”(Ibid.; p. 108.)
32. “In the spring of 1945, Kodama made a quick trip to Taiwan to see that its many heroin factories were dismantled for return to Japan, along with remaining stocks of heroin and morphine. On his return, Kodama was assigned to be a special advisor to the emperor’s uncle, Prince Higashikuni, who served as Japan’s prime minister briefly at the start of the U.S. occupation. According to Kodama’s own memoir, immediately after the surrender, Higashikuni had ‘two or three of us councilors arrange a meeting and secretly, unknown to his cabinet ministers, [Higashikuni] visited General MacArthur in Yokohama.’ Kodama provides no details of what transpired at this meeting, or whether he accompanied the prince.”
(Idem.)
33. In the context of Kodama’s profound involvement with the instruments of “Black Finance” it is also worth remembering that Kodama worked very closely with the CIA.
“Kodama then spent two years in Sugamo Prison as an indicted war criminal, but was magically released in mid-1948 when he made a deal with General Willoughby to give the CIA $100-million (equal to $1-billion in today’s values.) This payment bought Kodama his freedom from prison and from any prosecution for war crimes. The money was placed in one of the secret slush funds controlled by the CIA station at the U.S. Embassy. Subsequently, Kodama was put directly on the CIA payroll, where he remained for many years, until his death in 1984. Tad Szulc of The New York Times wrote, ‘Kodama had a working relationship with the CIA.’ Chalmers Johnson said Kodama was ‘probably the CIA’s chief asset in Japan.’”(Idem.)
34. “While literally an employee of the U.S. Government, Kodama continued to oversee Japan’s postwar drug trade. Heroin labs were moved back not only from Taiwan, but from North China, Manchuria and Korea. Chinese who had collaborated with Japan in drug processing and distribution, were given sanctuary and began operating from Japanese soil. Two of the three major players in Asian narcotics soon died: Nationalist China’s general Tai Li was assassinated in a 1946 plane crash; Shanghai godfather Tu Yueh-sheng died in Hong Kong of natural causes in 1951. Kodama was left Asia’s top druglord, while on the U.S. payroll. This could have been embarrassing, for Japan’s dominant role in narcotics was widely known and undisputed, but a Cold War hush descended over it like an Arctic whiteout. During the occupation, U.S. propaganda characterized Asia’s drug trade as exclusively the enterprise of leftists and communist agents. In truth it was dominated by Kodama in Japan, and by Generalissimo Chiang through the KMT opium armies based in the Golden Triangle, who were under the direct control of the Generalissimo’s son, Chiang Ching-kuo, the KMT chief of military intelligence at that time. (The two top KMT opium warlords in the Golden Triangle, General Tuan and General Li spoke to us openly of this.)”
(Ibid.; pp. 108–109.)
35. Next, the program turns to discussion of the Yotsuya Fund, used to manipulate the Japanese underworld. A primary goal of this manipulation was to enlist the Japanese criminal element—the deadly yakuza in particular—in order to crush political dissent and opposition. This repression was extremely brutal, involving—among other institutions—the Cannon Agency. The Cannon organization was essentially an assassination consortium created to eliminate dissidents–Japanese, American and British—who opposed the reinstitution of the fascists and oligarchs who had directed Japan’s war of aggression.
Note that, in addition to the aforementioned Kodama, the Yotsuya Fund was controlled by General Charles Willoughby, an admirer of Spanish dictator Francisco Franco and a doctrinaire fascist in his own right. Willoughby oversaw intelligence matters for MacArthur.
“Very different from the M-Fund was the Yotsuya Fund. This was set up to manipulate and steer Japan’s underworld, and to finance ‘wet work’—extortion, kidnapping, and murder. General Willoughby, MacArthur’s ‘lovable fascist’ and head of G-2 at SCAP, controlled the Yotsuya Fund and worked energetically with Kodama and his legions of yakuza to suppress any kind of leftist activity or public protest during the occupation. Because democracy tolerated dissent, the concept of democracy had long been regarded by Japan’s ruling elite as ‘a poisonous idea from the West.’ In Japan, even the mildest kind of dissent was not tolerated. During the McCarthy era in America, the suppression of dissent became synonymous with anti-communism. But the witchhunt in Japan during that epoch was far more severe, and bloody.”(Ibid.; p. 110.)
36. “Despite being head of G-2, at this late stage in his career Willoughby was involved in dirty tricks rather than intelligence-gathering or counter-espionage. Among other things, his Yotsuya Fund financed a Korean Liaison Office that sent spies into North Korea, Red China and the far eastern USSR.”
(Ibid.; pp. 110–111.)
37a. “Yotsuya, the district for which Willoughby named his underground fund, was a seedy Tokyo tenderloin populated in the postwar years by gangsters, prostitutes, and bottom-feeders, a hub for the blackmarket, awake all night with illegal gambling casinos and attached brothels. (Today Yotsuya has changed, and is famous for bars frequented by university students and company executives.) Kickbacks from postwar dives like the Mandarin Club, a casino and brothel in Yotsuya run by American Ted Lewin, a pal of Kodama, funded the Cannon Agency, Willoughby’s dirtiest and wettest operation in Japan. Named for U.S. Army Colonel J.Y. Cannon, this was a military version of Murder Incorporated, a death squad.”
(Ibid.; p. 111.)
37b. “Jack Cannon arranged the beating and killings of student leaders, liberals, leftists, socialists, labor union organizers, scholars, journalists, and anyone else who got in the way. Cannon worked closely with Machii Hisayuki, Kodama’s Korean lieutenant who headed the ethnic Korean tosei-kai gang of yakuza. Jack Cannon initially worked for the U.S. Army’s Counter-Intelligence Corps, or CIC. His job was to ferret out and to murder dissidents. A Nisei interpreter employed by Willoughby’s ATIS, who once had helped Cannon blow open a safe, recalled that the colonel always behaved like ‘a movie style gangster.’ Once the Cannon Agency was set up, Jack Cannon became something that would have chilled the blood of most Americans. He is thought to have been behind the kidnapping of a prominent left-wing writer, Kaji Wataru. Also attributed to him was the torture, dismemberment, and murder of Shimoyama, the president of Japan’s national railroads whose body was found scattered along the railway tracks. Whenever he needed a hand, Cannon called on Machii’s Korean yakuza. He also was suspected of arranging plane crashes that took the lives of British and American diplomats and military officers who were investigating the links between Willoughby and indicted war criminals like Kodama and Colonel Tsuji Masanobu. When the job was so wet and dirty that it had to be completely divorced from Washington, Willoughby bypassed Cannon and brought in a murder squad called KATOH, the acronym of five Japanese Army officers who did surgical assassinations for money.”
(Idem.)
38. “To be sure, what makes this even more disturbing is that Willoughby was judged by U.S. Army contemporaries to be incompetent, paranoid, and congenitally driven to cover up his misjudgments. As most documents relating to Willoughby’s activities still are kept hidden by the U.S. Government half a century later, we may reasonably suppose that there is yet more disturbing information on his messianic activities.”
(Idem.)
39. Administered by civilian, rather than military, personnel the Keenan fund was used to bribe witnesses in order to exonerate those war criminals and institutions deemed essential for the realization of U.S. anti-communist policy in the postwar period.
“The Keenan Fund, by contrast, was controlled by a civilian: Joseph B. Keenan, another MacArthur intimate who was chief prosecutor in the Tokyo war crimes trials. Previously, Keenan had been chief of the U.S. Justice Department’s criminal division, where he acquired a reputation for ‘gang-busting’ and heavy boozing. His appointment as chief war crimes prosecutor in Tokyo was criticized because he was not considered a good enough lawyer, knew nothing of Asia, and was a shameless headline seeker. Many thought Keenan got the job because President Truman disliked him and wanted him out of Washington.”(Idem.)
40. Keenan (for whom the fund was named) was assisted by General Tanaka Takayoshi, a prominent Japanese war criminal.
“In Japan, Keenan’s personal assistant was none less than General Tanaka Takayoshi, the bull-like tariki ronin who was General Doihara’s alter-ego in Manchuria, the cold-blooded manipulator of Pu Yi’s young Empress Elizabeth. Tanaka spent the late 1930’s and early 1940’s in Shanghai with Doihara, running covert operations. Like Doihara, he personally carried out many individual murders. The idea that he was suited to babysit America’s chief war crimes prosecutor in postwar Tokyo is black humor at its best.”(Ibid.; p. 112.)
41. “It was common gossip among journalists in Tokyo (as it had been in Washington) that Keenan had a severe drinking problem, and ‘liked the ladies’ excessively. General Tanaka took charge of Keenan’s date book, accompanied him to inns and brothels to carry out these assignations and, when Keenan passed out, got him safely home.”
(Idem.)
42. “Unlike the broad mandates of the M-Fund and the Yotsuya Fund, the Keenan Fund had a narrow and specific function. Simply put, it was used to bribe witnesses to falsify their testimony. Unlike the swift punishment meted out to Generals Yamashita and Homma in Manila, the War Crimes Tribunal in Tokyo dragged on for three years, while a lot of horse-trading took place. The Tribunal had been established to try General Tojo and other senior military and civilian leaders for complicity in Japan’s cruel aggression. Although the Tribunal was labeled an international commission, the whole operation was carried out exclusively by MacArthur’s inner circle. In the charter establishing the Tribunal, MacArthur invested himself with broad powers, and the Tribunal was kept under his sole and exclusive authority. As a final touch, the charter (written by MacArthur and Keenan) stated, ‘the Tribunal shall not be bound by technical rules of evidence.’”
(Idem.)
43. “Accordingly, MacArthur’s men were able to control access to the defendants, to suborn whoever they wished, and to arrange omissions of evidence. Money changed hands secretly to assure scapegoats that their families would be cared for. As we documented in The Yamato Dynasty, the private papers of MacArthur’s military secretary Brigadier General Bonner Fellers reveal that he personally suborned witnesses, got them to falsify their testimony, and made sure that Emperor Hirohito was not brought to trial. On January 25, 1946, MacArthur sent a secret telegram to Army Chief of Staff Dwight Eisenhower saying the ‘investigations’ conducted by SCAP could not support any criminal charges against Hirohito: ‘No specific and tangible evidence has been uncovered with regard to [the emperor’s] exact activities which might connect him in varying degree with the political decisions of the Japanese Empire during the last decade . . .’ Documents we found in the MacArthur Memorial in Norfolk, Virginia, show that MacArthur and Bonner Fellers conspired with former president Herbert Hoover to guarantee that Hirohito would escape punishment of any kind, and that General Tojo would falsify his testimony to take all responsibility for the attack on Pearl Harbor. Intermediaries, including Admiral Yonai, were paid large sums from the Keenan Fund to negotiate with Tojo and guarantee his perjury, In his papers, General Fellers proudly describes his meetings with Yonai to set up the false testimony. (During the war, incidentally, Admiral Yonai was the immediate superior of Rear Admiral Kodama.)”
(Idem.)
44. “ A number of key witnesses who resisted subornation died violently, or under suspicious circumstances. Fellers and MacArthur intensely disliked Hirohito’s close adviser and one-time prime minister, Prince Konoe, one of the few statesmen who had tried to talk Hirohito into seeking an early peace. Fellers denounced the prince as ‘a rat who’s quite prepared to sell anyone to save himself [and who had even called] his master the emperor ‘the major war criminal.’’ Konoe was blackballed by MacArthur’s men and hounded to despair by a campaign of backbiting, disinformation, and innuendo. For example, he was falsely informed that his name had been added to the list of war criminals, and that he faced imminent arrest, imprisonment, and hanging. On December 16, 1945, Prince Konoe was found dead in his home under suspicious circumstances. Most sources say he would not submit to the indignity of trial, and the official ruling was suicide, but it appears to have been one of the first postwar episodes of ‘assisted suicide.’ Scholars Meirion and Susie Harries, among others, believe that Prince Konoe was murdered because he represented a danger to the plans of MacArthur to exonerate Hirohito. Other crucial witnesses who died conveniently before the trials began were two of Prince Asaka’s staff who had first-hand knowledge of Asaka’s instructions for the Rape of Nanking. At the end of 1945, both these aides suddenly developed ‘heart trouble’ and died.”
(Ibid.; pp. 112–113).
45. “Bribes from the Keenan Fund also were used to prevent testimony about Japan’s biological and chemical warfare program, and the vast scale of looting carried out by the imperial family’s Golden Lily operation. We now know that the U.S. government and other Allied governments browbeat POW’s when they were liberated from Japanese slave labor camps. They were bullied into signing secrecy oaths before they were allowed to go home, forced to swear that they would not reveal anything they knew about war looting or about the chemical and biological weapons testing of Unit 731. Even men who had been victims of Japanese medical experiments were forced to take this oath. At the time, they were told it was their patriotic duty to remain silent. Today they are realizing that they were victimized by their own governments, which were less interested in justice than in staying in power, and preparing for the coming Cold War.”
(Ibid.; p. 113.)
46. Yet another of these clandestine funds that derived from the Golden Lily loot was the enormous Showa Trust, administered by Emperor Hirohito himself and set up with the assistance of General Douglas MacArthur. In the 1980’s Ferdinand and Imelda Marcos attempted to blackmail the Japanese and American governments in connection with the Showa Trust. They wanted a piece of the action and, as we will see, this led to their ouster later in the decade.
“In the early 1980’s, there was another bizarre development, when Ferdinand and Imelda learned of an extraordinary secret account set up with Golden Lily plunder after the Pacific War. This was the billion-dollar gold bullion trust at Sanwa Bank in Osaka, set up in the names of General MacArthur and Emperor Hirohito, mentioned in Chapter Nine. Japanese call it the MacArthur Fund, while Americans call it the Showa Trust, using the name of Hirohito’s reign period. Sanwa Bank is one of Japan’s oldest, and Hirohito owned a large chunk of its stock from before World War II. The trust appears to have been set up by Robert B. Anderson shortly after he toured the Golden Lily treasure sites in the Philippines with MacArthur and Lansdale. Although MacArthur’s name is identified with it, it does not appear to have been intended to benefit MacArthur, at least not directly.”(Ibid.; p. 194.)
47. The program then highlights Vice President Richard Nixon’s give-away of the M-Fund. Note that Nixon returned the M-Fund not to the nation of Japan but to war criminal Kishi Nobosuke. This transaction was part of a quid pro quo, in which Kishi and the LDP would kick back some of the money to back Nixon’s bid for the presidency.
“America lost control of the M-Fund in 1960 when it was given away by Vice President Nixon, in exchange for Tokyo’s secret financial support of his bid for the U.S. presidency. For more than forty years since then, the M-Fund has remained the illicit toy of seven LDP politicians who have used it to keep themselves in power. Nixon effectively gave them the ultimate secret weapon, a bottomless black bag.”(Ibid.; p. 120.)
48. “President Eisenhower was going to Tokyo to conclude revisions to the Mutual Security Treaty, but his trip was canceled after violent protests in Japan. Instead, Prime Minister Kishi Nobosuke flew to Washington, where the Security Treaty negotiations were conducted by the vice president. Nixon was obsessed by his craving to become president, and was willing to turn over control of the M-Fund, and to promise the return of Okinawa, in return for kickbacks to his campaign fund. Kishi, an indicted war criminal, a key figure in the wartime regime and in hard drugs, munitions and slave labor, thereby gained personal control of the M-Fund. According to Takano Hajime and other well-informed sources, Nixon justified the deal with the dubious excuse that Tokyo needed an emergency covert source of money in the event that war broke out in Northeast Asia. In theory, Japan’s post-war constitution prevented it from creating a new army, so Tokyo could not allocate a huge defense budget—at least not publicly. Nixon argued that full LDP control of the M-Fund would accomplish the same thing covertly. In 1960, the M-Fund was said to have an asset base worth 12.3 trillion Yen ($35-billion). It is important to note that Nixon did not turn the M-Fund over to the government of Japan, but to Prime Minister Kishi personally, putting the lie to his grandiose justifications. So a few months later, when Kishi ceased to be prime minister, he and his clique continued to control the M-fund. It goes without saying that they never used it for the designated purpose, instead turning it into a private source of personal enrichment. . . .”
(Idem.)
49. The M-Fund at this point in time included monies from both the Yotsuya and Keenan funds, which had been folded into it.
“Until Nixon interfered, the M-Fund was controlled and administered by a small group of Americans in Tokyo close to MacArthur. In 1950, when the Korean War started, most U.S. forces in Japan were rushed to Korea, creating a security vacuum. Because the postwar constitution prohibited setting up a new army, the M-Fund secretly provided over $50-million to create what was characterized as a self-defense force. When the occupation ended in 1952 and Washington and Tokyo concluded their joint security treaty, administration of the M-Fund shifted to dual control, staffed by U.S. Embassy CIA personnel and their Japanese counterparts, weighted in favor of the Americans. The Yotsuya Fund and Keenan Fund were folded into it. The M-Fund’s asset base was being invested in Japanese industry and finance, and the returns were used for political inducements. The M-Fund council interfered vigorously to keep Japan’s government, industry, and society under the tight control of conservatives friendly toward America. This meant blocking or undermining Japanese individuals or groups who wished to liberalize Japanese politics, or unbuckle what Dr. Miyamato Masao called Japan’s ‘straitjacket society.’”(Ibid.; p. 121.)
50. “In 1956, for example, the Eisenhower Administration labored long and hard to install Kishi as head of the newly-merged Liberal-Democratic Party and as Japan’s new prime minister. This was the same Kishi who had been a member of the hard-core ruling clique in Manchuria with General Tojo Hideki and Hoshino Naoki, head of the narcotics monopoly. Kishi had also signed Japan’s Declaration of War against America in December 1941. During World War II, he was vice minister of munitions and minister of commerce and industry, actively involved in slave labor. Along the way, he made a personal fortune in side-deals with the zaibatsu. Following Japan’s surrender, he was one of the most prominent indicted war criminals at Sugamo, where he was a cellmate of Kodama. In 1948, when his release from prison was purchased by Kodama, Kishi began organizing the financial base of the LDP, using Kodama’s black gold and injections of M-Fund cash. For ten years, Kishi was groomed as America’s Boy by Harry Kern, Eugene Dooman, Compton Packenham and other members of Averell Harriman’s group at the America Council for Japan (ACJ). They worked tirelessly to improve Kishi’s mousy image, tutored him in English, and taught him to like Scotch. To them, Kishi was America’s ‘only bet left in Japan.’ All this was done covertly, for if the Japanese public learned that Washington was using the M-Fund to replace one prime minister with another, the democracy fiction would collapse.”
(Ibid.; pp. 121–122.)
51. “During Kishi’s term as prime minister (1957–1960) the LDP received $10-million each year directly from the CIA, chiefly from the M-Fund and many other operations in Japan from 1955 to 1958, said: ‘We financed them,’ because the CIA ‘depended on the LDP for information.’ When the party’s coffers were depleted by the monumental effort to get Kishi named prime minister, Finance Minister Sato Eisaku (Kishi’s brother) appealed to Ambassador Douglas MacArthur II (the general’s nephew) for additional secret funds. In July 1958, Ambassador MacArthur wrote to the Department of State, providing details of this request: ‘Sato asked if it would not be possible for the United States to supply financial funds to aid the conservative forces in this constant struggle against Communism . . . This did not come as a surprise to us, since he suggested the same general idea last year.’”
(Ibid.; p. 122.)
52. “A few months later, when Nixon renegotiated the Mutual Security Treaty in 1959–1960, he not only gave Kishi the M-Fund, he also promised that when he became president he would give Okinawa back to Japan, while retaining military base rights there. According to sources close to former Prime Minister Tanaka, ‘Nixon told Kishi that if Japan would assist him in becoming president, he would see to it that the U.S. withdrew from its role in managing the M-Fund, and upon his being elected, Nixon would return Okinawa to Japan.’ Accordingly, when Nixon and Kishi concluded the revision of the security treaty in 1960, the M-Fund was turned over to Kishi. And in 1973, when Nixon at last was elected president, he returned Okinawa to Japan. . . .”
(Idem.)
53. The Marcoses had recovered many of the Golden Lily treasure sites in the Philippines and that gold was the source of their enormous personal wealth. In yet another episode in which the “black gold” of Golden Lily played an important role in postwar economic maneuvering, the Marcoses failed to cooperate with the Reagan administration’s plan to utilize Marcos Golden Lily gold to help back its “Rainbow Dollars” plan.
“Tokyo probably complained to Washington about this threat, and it probably contributed to the downfall of the Marcoses soon afterward. But the main reason Washington finally gave up on Marcos was the failure of Reagan’s Rainbow Dollars. President Reagan declared at the beginning of his administration that he would restore the gold standard, abandoned by Nixon in 1971, and introduce a new gold-backed currency called Rainbow Dollars. In the decade since Nixon’s action, the United States had experienced periods of raging inflation, recession, and killing interest rates. Reagan’s remedy was to go back on the gold standard. Treasury Secretary Donald Regan said this would bring about a ‘roaring boom.’”(Ibid.; pp. 195–196.)
54. “So many dollar banknotes were in circulation that if they suddenly became convertible to gold, as was the case before 1933, Washington could be swamped with demands for bullion. The solution was a two-tier system. Rainbow Dollars would replace greenbacks gradually, but ordinary people could not walk in and exchange them for gold. There would be special issues of Rainbow Dollars, convertible to gold when held by central banks.”
(Ibid.; p. 196.)
55. “To make this work, America needed a large stock of gold, enough to manipulate gold prices. If the price fell too low, Washington would buy gold to keep currency values stable. If the price rose too high, and central banks demanded bullion from Washington, the government would release bullion into the market, depressing the price. This was Reagan’s essential plan. The change to Rainbow Dollars also would mean that people hoarding illicit cash, such as heroin and cocaine druglords, would have to exchange their old currency for new, so money would come out of hiding. The result could help reduce the federal deficit.”
(Idem.)
56. “President Reagan privately asked Ferdinand to lend part of his hoard of black gold to back Rainbow dollars. As usual, he could charge a commission for lending his gold to Reagan. Unfortunately for Marcos, he demanded a higher commission than the White House thought fair. According to our sources, including one who was on the White House staff at the time, Reagan was dismayed that his old friend had let him down.”
(Idem.)
57. In combination with Marcos’ attempts to blackmail the Japanese over the Showa Trust, his recalcitrance over the Rainbow Dollars project led to his ouster.
“Given the concurrent attempt to black mail Tokyo over the Showa Trust, Reagan’s advisors—particularly Casey—argued that Marcos had gone too far. The time had come to depose him, and in the process divest him of the mass of bullion he still had salted away. Casey swung into action. In the months that followed, People Power took to the streets of Manila, mobs demanding that Marcos step down.”(Idem.)
58. “As popular clamor increased in the streets, Casey is said to have flown to Manila with Treasury Secretary Regan, CIA economist Professor Frank Higdon, and attorney Lawrence Kreagar. The purpose of the meeting, according to a Marcos aide, was to convince Ferdinand to turn over 73,000 metric tons of gold. Casey and Regan were giving Marcos a last chance. Regan reportedly told Marcos that he must sign over the gold in return for 80 percent of the value in U.S. debt instruments, 20 percent in cash. Sensing that the end was nigh, Marcos wanted 80 percent in cash, only 20 percent in debt instruments. When haggling proved fruitless, Professor Higdon is said to have told Marcos he would be out of power ‘in
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