Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #696 Miscellaneous Articles and Updates

MP3 Side 1 | Side 2

Introduction: Beginning with fallout from the recent elections in Japan, the program notes that Prime Minister Hatoyama has publicly discussed the M-Fund, without naming it as such. One of a number of secretive, very important funds derived from Japanese war loot, the M-Fund has dominated postwar Japanese politics and has featured prominently in these broadcasts.

After reviewing the history of the M-Fund’s origins and operations, the broadcast reprises the frightening experiences of Peter Johnston and W.R. “Cotton” Johnson when they attempted to redeem gold certificates issued by major banks. Their ordeals should inform those who might seek gold as a safe haven during these troubled economic times.

Next, the broadcast sets forth more of the “interesting” associations and activities of Italian Prime Minister Silvio Berlusconi (right), an alumni of the P-2 Lodge. A postwar underground locus of decisive Axis power, the P-2’s members wield pivotal influence in Italy. Incorporating military and intelligence officials, key political and business figures, media barons, mafiosi, the heirs to Mussolini’s blackshirts and the Vatican, the P-2 dominated postwar Italian politics and wielded influence in places like Argentina, Brazil, Uruguay and Monaco. The organization was headed by Lico Gelli (left), active, unrepentant alumnus of Mussolini’s fascisti.

Recent allegations have linked Berlusconi to the Mafia and also contend that he secretly bugged and recorded the recent G-7 proceedings.

The second side of the broadcast excerpts an interview of Jeff Sharlet, author of The Family. A protestant fundamentalist organization founded in the 1930’s by a Norwegian immigrant named Abram Vereide, the Family incorporates and propagates fascist ideas and has worked with fascists of both the above-ground and underground variety over the years.

Informed observers have noted similarities between the Family and Opus Dei, the Catholic order that has accumulated tremendous power within the Vatican in recent decades.

Working with and idolizing industrialists and financiers who backed fascism (such as Henry Ford), the Family wields decisive power within U.S. political and economic circles. The seminal force behind the creation of the National Prayer Breakfast, Billy Graham’s crusade and the Campus Crusade for Christ, the Family was deeply involved with the rehabilitation of Third Reich alumni, many of them war criminals, for service to the postwar German government and U.S. intelligence.

Program Highlights Include: Review of Richard Nixon’s manipulation of the M-Fund to try and guarantee his ascension to the White House in 1960; review of General Marquat’s role with the U.S. occupation government of Japan; the assistance given by the Family to Nazi banker Hermann Josef Abs (right); review of Abs’ postwar career.

1. Beginning with fallout from the recent elections in Japan, the program notes that Prime Minister Hatoyama has publicly discussed the M-Fund, without naming it as such. One of a number of secretive, very important funds derived from Japanese war loot, the M-Fund has dominated postwar Japanese politics and is discussed at length  below.

Former officials have come forward to describe a huge safe in the chief cabinet secretary’s office stacked with tens of millions of yen that they were able to hand out without providing receipts.

The fund was reported to contain Y1 billion (£6.7 million) but that figure has never been tested as no matter how much they gave to politicians the safe would always be replenished the next day.

It was officially used for “information-gathering,” but the bureaucrats said most of the money was spent to grease proceedings in parliament, to pay for gifts for politicians ahead of crucial votes and to cover expenses on overseas trips.

A politician fighting a close election campaign would be able to take several tens of millions of yen from the fund, they told the Asahi newspaper.

Disclosures about the apparently bottomless slush fund posed a challenge to the prime minister, Yuiko Hatoyama, who vowed that fighting wasteful spending and corruption in politics would be two of his main aims before he was elected in August.

The revelations also coincided with a report last week by the Board of Audit that government offices and publicly funded corporations in 2008 improperly spent a record Y236 billion (£1.6 billion) in taxpayers’ money through accounting sleight-of-hand, while a government committee convened for the first time on Wednesday to cut funds to public programmes it deems unnecessary.

Japan’s national debt stands at 170 per cent of GDP and measures are urgently required to bring that figure down, but there is anger that while the public is being forced to go without, it appears that the same rules are not being applied to politicians.

Previous Liberal Democratic Party of Japan governments consistently declined to reveal how the fund was used, prompting the Democratic Party of Japan to submit a bill in 2001 demanding transparency in the way the cash is handled.

In November, however, the new chief cabinet secretary in the DPJ administration, Hirofumi Hirano, announced that the government had changed its position on the issue and would keep the real scale of the fund and how it is spent a secret.

Mr Hatoyama has been forced to answer questions in the house about donations totalling Y21.8 million (£145,800) that were falsely reported in his annual political funding declaration, as well as his failure to declare Y72 million in income from the sale of stocks in 2008.

The prime minister admitted his accounting had been “careless” and blamed the oversight on his wealthy background.

“Japanese Politicians Plundered Bottomless State Fund” by Julian Ryall; Telegraph.co.uk; 11/15/2009.

2. The program reviews information about the M-Fund, placed at the disposal of the Japanese political elite and the LDP by then Vice President Richard Nixon.

“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.”

Gold Warriors—America’s Secret Recovery of Yamashita’s Gold; by Sterling Seagrave and Peggy Seagrave; p. 6.

3. The M-Fund grew out of the Golden Lily program. Note that General Marquat–for whom the fund was named–was charged with reforming the very Japanese social, economic and political order that the M-Fund reinforced.

“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. . .

. . . 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.’

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?’”

Ibid.; p. 109.

4. More about the M-Fund:

“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.

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.)”

Ibid.; p. 110.

5. With the rapid, dramatic rise in gold prices, many have sought the metal as protection against financial instability. Those to whom gold may appear to be a safe haven should consider the situation of Peter Johnston. (For more about the difficulty in redeeming gold certificates and the relationship of the world’s gold supply to Golden Lily and the formation of the Black Eagle Trust, see FTR #’s 501, 688, 689. For more about the Seagraves remarkable books, see FTR #’s 426, 427, 428, 446, 451, 509.)

“Take the bizarre case of Australian broker Peter Johnston, who was asked by a client to negotiate a UBS gold certificate in Europe. While traveling, Johnston did not want to carry the certificate, so he left it in ‘safe Custody’ with the London branch of Australia’s Westpac Bank. He often lodged such certificates with Westpac to attest to its being genuine. Yet the branch manager felt ‘uneasy,’ and without asking Johnston faxed copies to UBS in Switzerland, asking if it was genuine. Without ever examining the original, UBS ‘informally’ declared it a forgery. It is UBS policy to call all such documents forgeries but to avoid doing so formally by Tested Telex because that is equivalent to sworn testimony in a court of law. An informal opinion casts doubt, while avoiding liability. UBS does that to routinely scare away people hoping to negotiate gold certificates. Normally the City of London Fraud Squad would refuse to pursue a charge based on an informal opinion, but this time the Fraud Squad set up a sting, and when Johnson walked in to the Westpac office on March 6, 1995, he was arrested and charged with attempted fraud-because the certificate might be phony and Johnston might try in the future to negotiate it. Amazingly, Johnston was convicted on this specious charge and languished in prison for 18 months. At no time did UBS actually establish that the certificate was a forgery, only saying it was not issued by UBS in Zurich. This was a blatant dodge, because UBS gold bullion deals are not done in Zurich but by their subsidiary, Warburg Dillion Read, at Glattburg near Zurich airport. In short, Johnston appears to have been falsely imprisoned on false testimony, for something he did not attempt to do. There are many similarities to the Schlei case.”

Ibid.; pp. 231-232.

6. Also terrifyingly instructive is the case of W.R. “Cotton” Jones, whose efforts at aiding with the negotiation of gold certificates resulted in his being threatened by the U.S. Secret Service.

Against this background, it is revealing to see how quickly the U.S. Secret Service rushes to the aid of a Swiss bank, when a customer walks in asking if a gold certificate is genuine.

In march 1996, Filipino attorney Ben Aragones met retired Wall Street broker W.R. “Cotton Jones.” Aragones told Cotton how he had been arrested by Swiss authorities for trying to negotiate a gold certificate, spent three months in jail, and was forbidden to return. On another trip to Zurich, he said he and his wife were kidnapped and terrorized. He was told that UBS did this to scare him off forever.

Cotton, being a romantic, offered to test the water by seeing if the New York branch of Swiss Bank Corporation would tell him whether one of Ben’s certificates was real. Cotton would not try to negotiate the ‘cert’, which could be dangerous. If he only took a notarized photocopy, the original would not be confiscated. To be cautious, he chose the cert with the smallest denomination, only $25-million.

“On March 20, 1986,” he told us, “I walked into the Swiss Bank Corporation in New York City and asked that the bank verify and authenticate a $25-million Certificate of Deposit issued by their bank and bearing the Federal Reserve Seal.” They asked him to leave it for examination and come back in two days. When he returned on March 22, three men posing as bank officers demanded the original and made threatening noises. When Cotton tried to snatch his photocopy back, all three men jumped and identified themselves as U.S. Secret Service Agents, displaying badges and ID cards. They blocked his way and said if he forced the issue he would be assaulting a Federal Agent.

“I kept denying and still deny that I ever knew whether the documents were valid or not. They told me I would be in jail twenty-two years . . . that I had better cooperate with them so it would go easier on me.”

After ninety minutes of bullying, Cotton was taken downtown and issued two U.S. District Court Grand Jury subpoenas and ordered to be in Secret Service Agent Tom Atkinson’s office at 10 a.m. Monday. When Cotton appeared, he suffered more browbeating. Yet not once did anyone call the certificate false. He was told to appear before the Grand Jury the next day.

Cotton arrived on time, only to be informed that his presence was unnecessary….”

Ibid.; pp. 231-233.

7. Another postwar underground locus of decisive Axis power was the P-2 Lodge, whose members continue to wield pivotal influence in Italy. Incorporating military and intelligence officials, key political and business figures, media barons, mafiosi, the heirs to Mussolini’s blackshirts and the Vatican, the P-2 dominated postwar Italian politics and wielded influence in places like Argentina, Brazil, Uruguay and Monaco.

One of the P-2’s alumni is Prime Minister Silvio Berlusconi.

Recent testimony in Italy alleged Berlusconi was deeply involved with the Mafia.

A convicted mob hit man testified Friday that he was told Italian Premier Silvio Berlusconi made a deal with the Mafia in the 1990s, offering unspecified benefits in exchange for political support.

Berlusconi has denied the allegations, which have set off the latest storm to rattle the scandal-plagued premier.

Gaspare Spatuzza testified as a prosecution witness in the appeals trial of Sen. Marcello Dell’Utri, a close political associate of Berlusconi who was convicted in 2004 of ties with the Sicilian Mafia and sentenced to nine years in prison. Berlusconi is not formally involved in the trial.

Spatuzza, who is serving a life sentence for several murders, told the court that in 1993 he was told by his boss, Giuseppe Graviano, that the mob had made a deal with Berlusconi that would provide “benefits” to the Mafia in exchange for the mob’s support in elections.

The media mogul entered politics a few months later and won his first term as premier in 1994 elections.

Headline-grabbing reports of Spatuzza’s claims have been swirling for days, and most of his two-hour testimony was carried live by Italy’s Sky TV. The attention and credibility given to the statements prompted prosecutors last week to clarify that they were not investigating the premier.

Berlusconi and Dell’Utri have both branded the allegations ridiculous and denied any links to the Mafia.

Spatuzza addressed the court from behind a white hospital screen set up to conceal him, and surrounded by uniformed and plainclothes police officers. The hearing took place in the northern city of Turin in a high-security courtroom.

Spatuzza was one of the mobsters who took part in a 1993 terror campaign ordered by Graviano, a top Mafia boss in Palermo, which included deadly bombings in Rome, Milan and Florence.

Graviano was arrested in 1994 and convicted of the attacks. Spatuzza was arrested in 1997.

In meetings to plan the 1993 bombings, Graviano confided to Spatuzza that “there is something going on that will give us all benefits, starting with those who are in jail,” the turncoat told judges on Friday.

At a later meeting, in a cafe on Rome’s posh Via Veneto, Graviano purportedly told Spatuzza that he had made a deal with Berlusconi, with Dell’Utri acting as a go-between.

“Graviano told me we had obtained all that we wanted thanks to the seriousness of these people” Spatuzza said. “They practically put the country in our hands.”

Spatuzza said the boss confirmed to him that the Berlusconi he was talking about was “the one from Canale 5” — a reference to one of the TV channels that is part of the media magnate’s empire.

Answering questions from prosecutors, Spatuzza said he did not have other details on the purported agreement.

Dell’Utri told reporters after the hearing that the testimony was a political ploy to attack Berlusconi’s government.

“I don’t know these people,” he said referring to Spatuzza and Graviano. “These things are absurd.”

Dell’Utri, a longtime executive in Berlusconi’s business empire, was an architect of his political rise and is now a senator as the conservative leader serves his third term as premier.

Berlusconi has dismissed Spatuzza’s claims as “unbelievable” saying that he is the person “who is farthest away from the Mafia in terms of character, sensibility, mentality, education, culture and political commitment.”

His spokesman, Paolo Bonaiuti, said in a statement Friday that Spatuzza was not a real turncoat but was being controlled by the Mafia to undermine the government’s efforts to fight crime.

Recalling recent arrests of top mobsters, Bonaiuti said that “it is logical for the Mafia to use its people to make statements against the premier and a government that acts so determinately and concretely against organized crime.”

Prosecutors in Florence, who are probing the 1993 bombings, have denied reports they had placed Berlusconi and Dell’Utri under investigation over Spatuzza’s statements.

Berlusconi already faces charges of tax fraud and corruption in separate, unrelated trials in Milan. He denies wrongdoing in both cases.

“Mob Turncoat Alleges Berlusconi Tie to Mafia” by Ariel David [AP]; Yahoo News; 12/4/2009.

8. Berlusconi allegedly bugged the G-7 proceedings.

The Italian Prime Minister Silvio Berlusconi was at the receiving end of an unusual allegation yesterday when a senior Italian official claimed the Italian delegation had been secretly bugging the deliberations at the G8 summit – which protocol dictates are kept firmly off the record – to help Mr Berlusconi keep up.

The Financial Times reported on its website that the official, who wished to remain anonymous, had reported that aides to the Italian team had been listening to the proceedings through headphones in rooms near the conference rooms. . . .

“Berlusconi Accused of Bugging Talks” by Peter Popham; The Independent [UK]; 7/10/2009.

9. The second side of the broadcast excerpts an interview of Jeff Sharlet, author of The Family. A protestant fundamentalist organization founded in the 1930’s by a Norwegian immigrant named Abram Vereide, the Family incorporates and propagates fascist ideas and has worked with fascists of both the above-ground and underground variety over the years.

Informed observers have noted similarities between the Family and Opus Dei, the Catholic order that has accumulated tremendous power within the Vatican in recent decades.

Working with and idolizing industrialists and financiers who backed fascism (such as Henry Ford), the Family wields decisive power within U.S. political and economic circles. The seminal force behind the creation of the National Prayer Breakfast, Billy Graham’s crusade and the Campus Crusade for Christ, the Family was deeply involved with the rehabilitation of Third Reich alumni, many of them war criminals, for service to the postwar German government and U.S. intelligence.

Among the better known of these Nazi alumni was Herman Josef Abs, the most important of the Third Reich’s bankers and a foundational element of the postwar German economic “miracle” and the Bormann capital network. FTR #697 features additional discussion of the Family, the Third Reich and the Bormann organization.

Stephen Crittenden: A dramatic moment from the movie ‘There will be Blood’ based on a novel by Upton Sinclair, which won an Oscar last year for the glowering Daniel Day Lewis.

If you’ve seen the movie you’ll know it’s an allegory depicting the clash between two very different sides of American society, the religious and the capitalist. If they seem to mix all too comfortably together these days, ‘There Will Be Blood’ is a reminder that it wasn’t always so.

Today’s program is really the story of how those two sides came together. It’s the story of a shadowy religious organisation known as The Fellowship, or The Family, founded in the 1930s by a Norwegian immigrant to the United States named Abraham Vereide. He believed that the best way to change the world was to minister to business and political leaders, powerful men like Henry Ford, who weren’t much interested in the churches.

A bit like Protestant version of Opus Dei, the Fellowship is basically theocratic in impulse and deeply hostile to democracy, and over decades it has managed to penetrate to the very centre of American political power by preaching a gospel of American power. In the 1950s the Fellowship established the National Prayer Breakfast, and now every week in Washington, business leaders and politicians from all sides sit down to read the Bible and pray together.

The current leader of the Family is the reclusive Doug Coe. Described by Hillary Clinton as ‘A genuinely loving spiritual mentor and guide to anyone, regardless of party or faith, who wants to deepen his or her relationship with God’, as we’ll hear, he’s also an admirer of Hitler, Lenin and Mao.

Jeff Sharlet is a contributing editor for Harper’s and Rolling Stone, an association research scholar in the Centre for Religion and Media at New York University, and he’s the author of an new book about the Fellowship entitled ‘The Family: Politics, Power and Fundamentalism’s Shadow Elite’. It’s based on research he did on documents kept at the Billy Graham Centre Archives, and it’s one of the most absorbing books I’ve read all year.

Jeff Sharlet says that when we think of American Christian fundamentalism, we tend to think of the populist, Bible-thumping TV evangelists. But the Fellowship is about a different kind of fundamentalism, elite fundamentalism. More upper class, more sophisticated, it doesn’t need the media, doing its work behind the scenes.

Jeff Sharlet: Elite fundamentalism and especially the elite fundamentals in The Family, is not so much interested in holding mass rallies, or saving everybody’s souls, rather it grows out of this belief that took hold in the 1930s that God works through a few specially chosen individuals. They call them key men, the sort of anointed. And there’s the real concerns, well, not social issues but economic, something that they came to call ‘Biblical capitalism’, a sort of laissez-fair capitalism, and especially foreign affairs, and I think that comes as a surprise to a lot of folks here in the United States, but also overseas, but they’re the kind of Christian fundamentalism in America that has always taken as its main concern the role of American power in the world, and the expansion of that kind of power.

Stephen Crittenden: Now the book is basically about a shadowy organisation called The Family, or The Fellowship that was founded by a guy called Abraham Vereide, a Norwegian immigrant to the United States in the 1930s. Tell us about him and the foundation of this organisation.

Jeff Sharlet: Vereide is a fascinating character. This guy who comes to America from Norway, because he sees America’s the land of the Bible unchained. Even from a boy he’s given to what he thinks are prophetic visions. He believes that God comes to him and talks to him in very literal words. He comes to America and he makes quite a name for himself, becomes a preacher and starts preaching to guys like Henry Ford and titans of the steel industry and so on, and then has this Epiphany, this realisation in the middle of our Great Depression in the 1930s. He decides that the Great Depression is actually a punishment from God for disobeying God’s law, and how are we disobeying God’s law? Well it’s because we are trying to regulate the economy, we are trying to take matters into our own hands. Well we just have to completely trust God, and those he chooses, men like Henry Ford and the CEO of US Steel and so on.

Stephen Crittenden: Yes, it’s a muscular Christianity. You’d almost say he had a ministry to bring that industrial class back into religion.

Jeff Sharlet: Absolutely. This must be a Christianity on steroids. They were building on this tradition of this kind of macho Christ, and taking it to these businessmen who didn’t really care about church or the Bible or anything like that. What they cared about was organised labour, and in fact particularly in Australia, men and Harry Bridges was a major, major labour leader here in the United States. And they just saw him the Devil Incarnate, and began to organise against him. And that’s what this group has become – and are to this day. They still see God’s interests as those of the absolutely unregulated free markets – a very sort of macho, muscular Christianity that tends to serve the interests of those involved.

Stephen Crittenden: As I was reading the book, I was constantly reminded of the Catholic elite fundamentalist organisation, Opus Dei, which was founded just a couple of years before The Family, and clearly had a political program. There seem to be very interesting similarities between them.

Jeff Sharlet: There are really striking similarities between Opus Dei and The Family, they were actually both founded at this moment, when conservative Catholics in the case of Opus Dei, and conservative Protestants in the case of The Family, conclude that democracy is done, that it’s spent, that it can’t compete with these incredibly vigorous forces of communism and fascism. And there’s a mistaken idea that the Opus Dei, and also The Family, wanted to be just fascist. No, they didn’t want to be fascist, they saw a lot to admire in fascism, but they wanted to create their own religious way, where fascism sort of idolised the character like Hitler and Mussolini, they said No, we want that same kind of cult of personality, that same kind of muscular politics and religion, but we want it to be centred around Jesus. Well of course who’s Jesus? And that’s when you run into the real religious horror story of this book, which is that they read the same Bible that most of the rest of us do, but they take a very different message, one that’s not about mercy or justice or love or forgiveness, but rather is about power. And very literally, when I look through The Family’s papers, 600 boxes of documents, that’s what they saw in the New Testament as the bottom line, was this message of power, and it’s striking I think, and unsettling to even most conservative Christians.

Stephen Crittenden: So much to talk about in what you’ve just said to unpack. Let’s talk about the theological question about Jesus first. You speak about a theology which you say is totally malleable, and you talk about a theology of Jesus plus nothing. It’s almost like a home-grown American religion that purports to be about Jesus, purports to be Christian, but it’s had all the content drained out of it.

Jeff Sharlet: Yes, that’s really exactly it. I begin the book, and I begin the story with a month I spent living in one of The Family’s houses where they sort of groom younger men for leadership by signing you up for mentoring with a Congressman and so on. And I remember being struck at the time when a US Senate Aide was telling us about former Vice-President, Dan Quayle, who had volunteered to lead a Bible Study for political men, for The Family, but he needed some help, he needed someone to come over and give him just a quick crash course, ‘Because’, he said, ‘well, he hadn’t actually ever read the Bible.’ So he was quite certain he knew what the Bible said, he was quite certain it supported his political program. He felt confident in scolding others for not living up to the Bible, but he had never actually read the Bible. And that’s what you really see when you look at this elite fundamentalism. It’s a religion of the status quo, it’s a religion of things as they are. It’s not the sort of science fiction vision of what the world will look like when the fundamentalists have taken over. These guys are very content with the world as it is, and they top up the Bible as something that is supporting themselves and power. Doug Coe, the leader of the group says ‘We work with power where we can, build new power where we can’t.’ And that’s a very status quo religion.

Stephen Crittenden: The next big question is to unpack where the religious program ends and the political program begins.

Jeff Sharlet: You know, I like to think of it as sort of a mobia Strip, you know, that popular optical illusion of a ribbon that’s sort of twisting, and you can never figure out which side you’re on. There is no clear line where the religion ends and the politics begin. They don’t draw the distinction. I’ll give you an example of the project they did recently, something called The Silk Road Act. These is a piece of American legislation passed in 1999 by our Senator Sam Brownback in a Congressman Joe Pitts, both members of The Family. The Silk Road Act directed US funds to the dictatorships of the Central Asian region, and as Senator Brownback explained to me, his role was to essentially buy these countries off, to open them up to free markets by giving them a lot of money, a sort of an odd concept of free markets. And the reason he wanted to do that is Well we have free markets where capitalism goes the gospel follows. And so there you have economics, you have politics, and you have religion, and they’re all caught in this loop.

Stephen Crittenden: Jeff, let’s go back to the early history of The Family and look in more detail at its political program during the 1930s and ’40s which seems to focus primarily on destroying trade unionism in the United States, and in that, they completely succeeded.

Jeff Sharlet: Yes, they really did. I mean I think that again takes me back to this question, people always ask what the fundamentalists want to do? I think the more relevant question is what have fundamentalists done. And you look in the United States and say Why do we alone in the developed world, not have a serious organised labour movement? Our organised labour movement is nowhere near as powerful and influential as yours in Australia. I think we really have to look to groups like The Family and elite fundamentalism. They came into being to opposed organised labour, worked steadily at that, and counted as one of their first big victories a law that was passed here in 1947 which essentially rolled back many of the rights to organise and to form unions, that had been won under Franklin Roosevelt. They counted that as their first victory, and then they just sort of went forward from there and played this role of driving the centre to the right, they were very involved in the Cold War, very involved in the economics of globalisation. These are their projects, but they see them as religious ends.

Stephen Crittenden: You mention that in these years The Family was attracted by Fascist and even Nazi ideas, and you say that in the immediate aftermath of World War II, they were involved in rehabilitating key Nazi industrialists and bankers, helping them out or even bringing them to the United States.

Jeff Sharlet: That was their first big step overseas. That’s when they became international during World War II. Abraham Vereide, the founder, actually travelled to the allied prisons in Germany where we were holding the prisoners of war, with a mandate from the United States State Department to go among these Nazis and sort of interview them and decide which ones could be used for rebuilding Germany. And brought in quite a few scary characters, perhaps the most notable of whom was Hermann Josef Abs who after Vereide and The Family had vouched for him, rose to become the chief financial wizard behind West Germany’s rise, enjoyed a very successful career into the 1970s until the Simon Wiesenthal Centre discovered that before he had been known as Germany’s banker, he’d been known as Hitler’s banker, that he had helped spirit uncounted sums of money off to the Nazis who escaped to Latin America. He was a bad guy, he was driven out of politics. But that was the role that The Family was playing, was whitewashing these guys and getting these guys back into power because they wanted them for the Cold War.

Stephen Crittenden: Jeff, I guess the most public face of The Family, or The Fellowship, in the last 30, 40, 50 years, has been the fact that it created the National Prayer Breakfast, and you tell the story of how President Eisenhower really officiates at the first National Prayer Breakfast a bit reluctantly. He’s a bit like a John McCain figure, not very comfortable with overt displays of religion.

Jeff Sharlet: Yes, exactly. 1953 they inaugurated the National Prayer Breakfast which has been held in Washington ever since. The United States President always attends, Congress attends, and they set these up around the world. You even have one there in Australia. And they’ve been sort of very deliberately banal events, very bland, but they refer to within the group and in their documents as recruiting devices to identify and bring people into closer involvement. And The Family had wanted to do this for many years but the previous US Presidents wouldn’t do it. Eisenhower didn’t want to do it, he said it’s ‘a violation of separation of Church and State which is a fundamental part of our constitution here’. But Billy Graham and a Senator who was involved in The Family, Frank Carlson, had organised an evangelical Christian vote for him, and they wanted payback, so Eisenhower went, concerned that this was going to become a tradition, and indeed it did, and now it doesn’t matter who’s elected, here in November, whether it’s McCain or Obama come February they’re going to the National Prayer Breakfast, and what that does is it gives The Family that kind of power and that draw. It doesn’t mean that every President signs off on their beliefs, but they’re able to go around and say ‘Look at this, we’re able to bring the President of the United States to one of our events, don’t you want to be associated with that?’

Stephen Crittenden: And is the National Prayer Breakfast then the key instrument of The Family’s power?

Jeff Sharlet: I think the key instrument is this really incredible network of politicians that they built up over the years. I mean you look back across American history and you find guys like Chief Justice William Renquist who’s one of the most influential conservative Chief Justices of our Supreme Court. The old legendary Dixie-crat named Strom Thurman, was a long-time right-winger. Even now I can give you a long list of American politicians and there have been Australian politicians involved as well, and folks around the world, they’re able to build this network so that if you want to get something done, it’s helpful to work through The Family.

Stephen Crittenden: You’ve got to tell us who the Australians are.

Jeff Sharlet: Well the Australians are going back in history. The first guy to get involved was man named Norman Makin who was actually not considered a right-winger, he was a long-time Ambassador to the United States, but was an early Cold warrior and saw The Family as a useful vehicle for working with the Conservative side of American politics during the Cold War. More recently, I would just bump into – in the documents -minor Australian politicians, Bruce Baird, a fellow named Ross Cameron, and I suppose Peter Costello has been involved, and I don’t know how involved and I just, that’s not something I followed up on.

Woman: Who is Doug Coe? Here he is on videotapes obtained exclusively by NBC News, with his account of atrocities under Chairman Mao.

Doug Coe: I’ve seen pictures of the young men in the Red Guard, they would bring in this young man’s mother, he would take an axe and cut her head off. They have to put the purposes of the Red Guard ahead of their father, mother, brother, sister, and their own life. That was a covenant, a pledge. That’s what Jesus said.

Woman: In his preaching he repeatedly urges a personal commitment to Jesus Christ, a commitment Coe compares to the blind devotion Hitler demanded.

Stephen Crittenden: NBC News reporting on the reclusive leader of The Family, Pastor Doug Coe. Jeff, you say that The Family has penetrated American politics so thoroughly that even someone like Hillary Clinton has to be part of these prayer breakfasts. It doesn’t really matter what side of politics you’re on, The Family isn’t interested in that.

Jeff Sharlet: Yes, I write in the book about Hillary Clinton’s involvement which is actually fairly long-standing. She’s upfront about it in her autobiography, ‘Living History’. She writes in 1993 of coming to Washington and having a segregated women’s prayer group organised for her of the wives of very conservative political brokers, and this was not just prayer business. Clearly politics. NBC one of our network news stations here did a little segment on that aspect of the book and they noted that both John McCain and Barak Obama had also attended the weekly Senate prayer breakfasts, there’s the Annual National Breakfast and then there’s a weekly breakfast also run by The Family. And what that really shows is not that John McCain or Barak Obama are part of it. It shows that it’s become this almost necessary piety pit stop, that to run for national office in the United States, you have to show your religiosity, which is forbidden by our Constitution. We say there’s no religious test, anyone’s allowed to run. But it’s become this de facto test, and what that does is it also opens the door for a kind of conservative politics that people don’t notice. Here we have something called faith-based initiatives, introduced by President Bush, and what this amounted to was a massive privatisation of government resources, turning over social welfare to religious organizations; changing the law so those religious organisations are free to discriminate against who they want, and one of the most dismaying things I think about our campaign right now is that both John McCain and Barak Obama have pledged to not just continue this program, but to expand it. And the reason is, they have to do that because The Family, populist fundamentalism, and elite fundamentalism working together have so set the terms of religiosity in American life, that we don’t have a whole lot of room for genuine religious discussions, genuine discussion of religious ideas, which are always welcome. We have only room for these kinds of public proclamations of piety.

Stephen Crittenden: You mentioned the Reverend Billy Graham earlier. He’s a very interesting character in this story, he only appears once or twice, but he’s obviously pivotal at the beginning of setting up the National Prayer Breakfast, as you mentioned. He shoehorns President Eisenhower into sort of turning up and playing along. What is Billy Graham’s role in all of this? He always strikes me as a much more complex and ambiguous character than he sometimes seems on the surface.

Jeff Sharlet: He really is. He really is a complicated character, which is interesting, because he was not a complicated man, but I’m sorry, ‘was not’, put it in the past tense. Still alive, still with us, but mostly his public career is over. He was a simple man who found himself at the nexus of a lot of power, and was a little bit proud of that. You know, I mean I was able to put together the account of his role in the National Prayer Breakfast, not just through these documents which are in the archives, but through his own biography in which he really comes right out and boasts about bullying President Eisenhower into this role. He was a guy who came from a very right-wing fundamentalist place, a very anti-Semitic place which he never really quite overcome, and moved into the mainstream of American life and was instrumental for instance, in giving religious cover to President Nixon. And also played this very important role for The Family. . . .

“Elite Fundamentalism–The Fellowship’s Gospel of Capitalist Power” [Stephen Crittenden’s interview of Jeff Sharlet]; The Religion Report [Australian Broadcasting Co.]; 9/3/2008.


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