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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 [5].) 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.

It was 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.

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.) (Ibid.; p. 12.)