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For The Record  

FTR #428 Gold Warriors: An Interview with Peggy Seagrave

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Introduction: Following directly and supplementing FTRs #426 and #427, this interview with Peggy Seagrave highlights many of the key points of discussion in the remarkable new book authored by Peggy and her husband Sterling–Gold Warriors: America’s Secret Recovery of Yamashita’s Gold. (The Seagraves authored The Yamato Dynasty, which was the focal point of FTR#’s 426, 427.) Centered on the pivotally important (but little known) “Golden Lily” operation executed by the Japanese prior to and during World War II, this program sets forth the role played by this war loot in the postwar world. In addition to providing much of the foundation for the postwar Japanese economy (the world’s second largest), the plunder secreted by Japan in the Philippines provided a vast financial reserve that was used to finance US intelligence operations during the Cold War. Moreover, this vast pool of clandestine wealth was the source for a number of overlapping funds used to fix elections in a number of countries, control the Japanese political establishment in the postwar period and buttress major financial institutions around the world. In addition, this “black gold” was partially recovered by the late Philippines dictator Ferdinand Marcos, who utilized the loot to finance his regime and to manipulate both Japan and the United States. The corrupting influence of this vast pool of wealth continues to be felt around the world.

Program Highlights Include: The role of the Japanese underworld in that nation’s military and corporate imperialism; the rehabilitation of key Japanese war criminals, who served as kingmakers in the postwar “reformed,” “democratic” Japan; the secret provision at the 1944 Breton Woods conference to use Axis plunder to finance anti-Communist operations; the roles of Secretary of War Henry Stimson’s proteges John J. McCloy, Robert Lovett and Robert B. Anderson in administering the postwar disbursement of the Golden Lily assets; the recovery of the Golden Lily caches in the Philippines by OSS (and later CIA) officer Severino Diaz Garcia Santa Romana; CIA General Edward Lansdale’s partnership with Santa Romana in the manipulation of the Golden Lily loot; the marriage of the Golden Lily plunder with Nazi gold in order to form the pivotal Black Eagle Trust; then Vice-President Richard Nixon’s collusion with the Japanese to fix the US Presidential election; the role of the “M-Fund” in the corruption of postwar Japan and the perpetuation of Japanese oligarchy; the use of Golden Lily loot to finance right-wing militias in the United States; the role of the Black Eagle Trust in manipulating international currency standards; the apparent role of acting NYSE head John Reed in secreting away Golden Lily gold accounts for Citibank; the deliberate frustration of reparations lawsuits by former POW’s against Japanese corporations; US State Department officials’ professional connections to corporations that were defendants in those lawsuits.

1. (Note: the entire program is based on the book Gold Warriors. Although some text excerpts are presented here, the usual complete footnoting process is omitted for obvious reasons. Readers are emphatically encouraged to obtain and read the book. Be sure to visit the web site.) Beginning with discussion of the structure of Japanese imperialism in the 20th century, the program sets forth the profound operational relationship of Japan’s major corporations, its underworld syndicates and the Patriotic societies. The zaibatsu-the giant Japanese family trusts that dominate that nation’s economy use both the yakuza-the deadly Japanese criminal organizations-and the Patriotic societies (such as the Black Dragon and Black Ocean societies) as cooperative agents in the process of conquest and economic plunder. In this regard, Japan’s military functioned in seamless coordination with these entities (as well as the Emperor and his family) as partners in the conquest, brutalization and looting of Asia prior to, and during World War II. (For more on the zaibatsu, see Miscellaneous Archive Show-available from Spitfire-as well as FTR#’s 290, 426, 427. For more about the Patriotic Societies, see FTR#’s 291, 296, as well as RFA#7-available from Spitfire.)

2. One of the principal elements of discussion concerns the role of Princes Takeda and Chichibu in stashing vast amounts of looted in wealth in the Philippines, for eventual recovery and use on behalf of Japan’s postwar economic recovery. (See FTR#’s 290, 427.)

3. Supplementing the focal point of FTR#426, the program sets forth the deliberate subversion of Japanese reform by General Douglas MacArthur and his staff, acting on behalf of political and economic interests that sought a preservation of the status quo. In order to maintain the Japanese business and political infrastructure, the Emperor and the royal family were absolved of war guilt and notorious war criminals such as Nobosuke Kishi, Yoshio Kodama and Royichi Sasakawa were rehabilitated. Kishi, Kodama and Sasakawa became key movers on the postwar Japanese political stage. (For more about Kodama and Sasakawa, see FTR#’s 291, 296, as well as RFA#7-available from Spitfire.) Another of the significant players for Japan during the war-Kakuei Tanaka-evolved into one of the major controllers of the postwar clandestine monies, the “M” Fund in particular. (For more about the M-Fund, see FTR#290.)

4. One of the more important postwar US intelligence operatives was a 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” (see FTR#427), 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 Ms. Seagrave explains, 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.

5. At the epicenter of the events set forth in Gold Warriors, a vast engine of clandestine wealth known as the Black Eagle Trust grew from the synthesis of the Santa Romana recoveries with Nazi loot recovered at the close of the war in Europe. Named for the black eagle imprinted on ingots of Nazi gold bullion, the Black Eagle Trust was the outgrowth of planning engaged in at the Bretton Woods conference in 1944. (Bretton Woods laid the groundwork for the postwar international economy.) Stemming from planning by the influential Secretary of War Henry Stimson and his power-elite proteges John J. McCloy, Robert Lovett and Robert B. Anderson, the Black Eagle Trust was used to finance US covert intelligence operations throughout the Cold War. Black Eagle gold was used to fix elections in many countries and to provide an underpinning for many of the world’s most important financial institutions. In addition, other (related) funds had much to do with the behind-the-scenes maneuvering on the Japanese, Philippine and U.S. political stages.

6. Next, the program focuses on the decisive role of Golden Lily loot and other “black” (clandestine) monies played in the affairs of postwar Japan. The most important of these funds was the “M-Fund,” deriving its name from General William Frederic Marquat, a key MacArthur aide involved with the administration of Japan’s postwar economy. As discussed above, that economy was entirely derivative from the institutions of Imperial Japan. (The M-Fund is discussed in FTR#290.) Initially administered by the U.S., the M-Fund was disbursed in conjunction with resurrected Japanese war criminals and profiteers, such as Msrs. Kishi, Kodama and Tanaka. Eventually, then Vice-President Richard Nixon effected the transfer of control of the M-Fund back to the Japanese, in exchange for kickbacks from this multi-billion dollar fund to Nixon’s campaign to win the presidency. After becoming Prime Minister, Tanaka used the vast wealth of the M-Fund to systematically manipulate the political topography of Japan. A central vehicle for this control was the issuance of bonds, such as the “57’s”, named for the year of Emperor Hirohito’s reign. These certificates could be redeemed or deemed “counterfeit” at the discretion of the controllers of the fund-a deliberate caprice that was used to devastating, Machiavellian effect. Among those ruined by the “57’s” was former Deputy Attorney General Norbert Schlei (see FTR#290.)

7. “A related legal battle was that of former U.S. Deputy Attorney General Norbert Schlei, who had to fight for his survival after being stung by the U.S. Treasury Department for asking too many questions about Japan’s secret M-Fund. While Schlei was indicted, prosecuted, bankrupted, and professionally ruined for trying to negotiate a financial certificate based on the M-Fund, former Secretary of State Alexander Haig-according to eyewitnesses-went to Japan and negotiated a similar certificate successfully, with the help of a personal letter from President George H.W. Bush. Why one man succeeded while the other was destroyed is a chilling story of financial collusion between Washington and Tokyo.” (Gold Warriors-America’s Secret Recovery of Yamashita’s Gold; by Sterling Seagrave and Peggy Seagrave; Verso [HC]; Copyright 2003 by Sterling Seagrave and Peggy Seagrave; ISBN 1-85984-542-8; p. 9.)

8. In addition to the M-Fund, the related Yotsuya and Keenan Funds were employed by the MacArthur group, Landsdale and their Japanese allies to manipulate Japanese and Asian affairs in a cynical (and often bloody) fashion. Administered by MacArthur’s fascist intelligence chief General Charles Willoughby, the Yotsuya Fund was used in conjunction with the Japanese criminal syndicates to efffect some of the more gruesome machinations of the early Cold War period in Japan. (For more about Willoughby, see-among other programs-RFA#’s 10, 11, 15, 37-available from Spitfire, as well as FTR#’s 54, 120.) “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.)

9. The Keenan Fund was yet another of these pools of “black” money. “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. . . .Simply put, it was used to bribe witnesses at the war crimes trials, or to grease the intermediaries who persuaded the witnesses to falsify their testimony.” (Ibid.; pp. 111-112.)

10. Eventually, the late Philippine dictator Ferdinand Marcos learned of the Golden Lily plunder and the use of the clandestine funds by MacArthur and the Japanese. He then used this information to recover some of the treasure entombed the Philippines, and to blackmail both the Japanese and the Americans. It should be noted that this blackmail evolved into deep political collusion, in which the Marcos-controlled Golden Lily loot was trafficked around the world as part of various U.S. and Japanese covert machinations.

11. In addition, some of the Golden Lily caches in the Philippines were recovered by various “private” organizations, themselves intimately linked to elements of U.S. intelligence and reactionaries evolved from the MacArthur infrastructure. Among the participants in these recoveries were the John Birch Society and General John Singlaub-the later closely associated with the former World Anti-Communist League and the off-the-shelf intelligence operations associated with the Iran-Contra affair. (For more about the John Birch Society, see RFA#’s 10-12-available from Spitfire. For more about WACL, see RFA#’s14, 15, 36, 37. For more about the Iran-Contra affair and the machinations of Singlaub and Company, see RFA#’s 29-35. All of these programs are available from Spitfire.)

12. “Included here are handwritten letters and diagrams showing how a group of senior U.S. Government officials and Pentagon generals hoped to use Golden Lily treasure to create a new private FBI and a military-industrial complex controlled by them, in partnership with the John Birch Society, the Moonies and far-right tycoons. This is confirmed by tape recordings of a 1987 conference in Hong Kong that included retired U.S. Army General John Singlaub and General Robert Schweitzer of the National Security Council under President Reagan.” (Ibid.; p. 11.)

13. Recently, former Citibank CEO John Reed took over as acting head of the New York Stock Exchange. While presiding over Citibank’s operations, Reed was the focal point of litigation by the heirs to Santa Romana, who had secreted significant amounts of “black gold” in accounts at Citibank. The residual assets from Golden Lily, the Black Eagle Trust, the M-Fund etc. continue to occupy a decisive position in the clandestine affairs of governments and financial institutions around the world.

14. In what the Seagraves describe as the “last battle of the Pacific War,” surviving victims of Japanese atrocities, including American former POW’s sued for compensation for their wartime suffering. The federal government effectively blocked these suits, maintaining that international diplomatic relations took precedence over legal ethics and morality. “The real issue is conflict of interest. During the Clinton Administration, U.S. Ambassador to Japan Thomas Foley was adamant in rejecting compensation for POW’s and other slave laborers, insisting that ‘The peace treaty put aside all claims against Japan.’ His Deputy Chief of Mission, Christopher J. LaFleur, echoed this dogma at every opportunity.” (Ibid.; p. 12.)

15. “It ws a matter of some interest to victims that Foley’s wife was a well-paid consultant to Sumitomo, one of Japan’s biggest zaibatsu conglomerates, heavily involved in wartime slave labor and a target of the lawsuits. The moment Foley ended his tenure as ambassador and returned to America, he signed on as a paid advisor and lobbyist to another huge conglomerate-Mitsubishi-one of the biggest wartime users of slave labor.” (Idem.)

16. “Of greater significance, perhaps, is that Lafleur is married to the daughter of former prime minister and finance minister Miyazawa, one of the three Japanese who secretly negotiated the 1951 treaty with John Foster Dulles. (Miyazawa also is considered by professor Lausier and others to be the financial overseer of the M-Fund.) Conflict of interest does not seem to be an obstacle in diplomatic appointments to Tokyo.) (Idem.)

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