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.