http://www.dissidentvoice.org/Feb07/Salzberg13.htm
Black Gold, Rising Sun: A Review of Gold Warriors
by Chris Salzberg
February 13, 2007
The average tourist entering Japan for the first time, Lonely Planet in hand, anticipating the land of contrasts -- of tea ceremonies and conveyor-belt sushi, of sumo and Sony -- would be hard-pressed to imagine anything of comparable intrigue emerging from the stale debate of contemporary Japanese politics. A walk through the evolutionary arms race that is the Shibuya fashion scene, among the Cambrian explosion of hi-tech plastic gizmos and gadgets, of mobile phones and bullet trains, would leave little doubt as to where the real action is. The land of the rising sun is driven by its technological innovation, unified by its culture and traditions; politics is for the politicians, history for the historians, so the thinking goes.
With their recent book, Gold Warriors: America's Secret Recovery of Yamashita's Gold, first published in 2003 by Verso Books with an updated and extended edition out in 2005, Sterling and Peggy Seagrave have provided a much needed antidote to this tired, politically-correct caricature of Japan, much trumpeted by its leaders and echoed in the mass media. They have done so, moreover -- given the implications of the conspiracy they unearth -- at considerable risk to their own safety. The introductory note to Gold Warriors concludes with the precaution that "should anything odd happen, we have arranged for this book and its documentation to be put up on the Internet at a number of sites. If we are murdered," they write, "readers will have no difficulty figuring out who 'they' are." [1] In a review of the first edition of the book, Chalmers Johnson, a former CIA consultant and one of the world's leading experts on Japanese history and politics, noted that, in fact, "the list of potential killers from this book alone would include at least several thousand generals, spies, bankers, politicians, lawyers, treasure hunters and thieves from half a dozen countries." [2]
What, you might ask, could the Seagraves have possibly uncovered that could be so earth-shattering as to invite a death wish of this magnitude? The answer begins with a classic tale of hidden treasure -- the stuff of legend for many decades -- referred to as "Yamashita's Gold," named after Japanese army general Tomoyuki Yamashita. Gold Warriors wields nearly one hundred pages of annotations, backed up by archival CDs containing further documents, photographs, maps, letters, and tax records, to deliver a devastating indictment of the Japanese political system and its sordid history of corruption and war crimes. Likened to "a giant vacuum cleaner" passing over East and Southeast Asia, the Seagraves describe how the Japanese government, with the help of key leaders in organized crime, systematically looted the treasuries, banks, homes, and art galleries of twelve Asian countries in the period leading up the end of the Second World War. The proceeds from this plunder, coordinated in secret by the Truman administration following its discovery in the years following the end of the war, was used to finance a covert political action fund to combat communism, referred to as the Black Eagle Trust, enabling the US government to buy elections in countries such as Italy and Greece and to maintain a one-party plutocracy under the Liberal Democratic Party (LDP) in Japan.
The first half of Gold Warriors largely concerns the complex tale of how Japan managed to accumulate, conceal, and later partly recover this vast quantity of loot from its occupied territories. While some of the plundered treasure was stashed within Japan's borders, from 1943 onwards an American submarine blockade stationed north of the Philippines made it impossible for Japanese ships to deliver the loot without running the risk of being torpedoed. From this point onward, a new strategy was employed. "The solution was obvious," the Seagraves explain, "for gold is a curious commodity. It does not have to change hands. Once you take physical possession of gold bullion, you can put it in any secure place and leave it there for decades or centuries, provided no one else can remove it" [1, p. 64].
And this is precisely what they did. The authors describe how a series of vaults, tunnels, and caves in the Philippines, ingeniously concealed and booby-trapped, served as the hiding place for untold billions of dollars worth of stolen treasure. One of the largest of these, a tunnel complex beneath an army camp in San Fernando, connected a vault the size of a football stadium, called Tunnel-8, to two other gymnasium-sized caverns. In the final throws of the war, with Tunnel-8 stacked "wall-to-wall with row after row of gold bars," General Yamashita and the princes in charge of the operation detonated explosives in the access tunnels to the vault, burying 175 chief engineers 220 feet underground, where they later suffocated to death [1, p. 1]. Numerous others involved in the burial of war loot -- many of them slave laborers forcibly recruited to assist in the war effort -- met with a similar tragic fate.
At the centre of the plunder operation was a secret organization called kin no yuri (Golden Lily), named after one of Emperor Hirohito's favorite poems and overseen by his brother, Prince Chichibu. Created by the Imperial General Headquarters in the aftermath of the Rape of Nanking in an attempt to maintain control over the financial side of the war conquest, Golden Lily brought together Japan's top financial specialists, supported by army and navy units and coordinated through lesser princes stationed throughout the conquered territories. As the Seagraves put it, "When China was milked by Golden Lily, the army would hold the cow, while the princes skimmed the cream." Golden Lily was meticulous in carrying out its operations, with Special Service Units targeting "individual Chinese who owned banks, headed guilds, ran pawn shop networks, or were the elders of clan associations ... In this methodical fashion, Japan went far beyond the wild pillaging of Mongol hordes, or the drunken rampaging of British and French troops" [1, p. 38-39].
At the end of the war, public records show that the American forces reported finding immense quantities of plundered war loot in Japan. Although this type of information was later removed from public archives in the United States, the Seagraves describe how, from the very beginning of the US occupation of Japan, key figures -- General MacArthur, President Truman, John Foster Dulles, and a handful of others -- knew about this loot. An official report prepared by General MacArthur's headquarters admitted as much. While publicly claiming that Japan was financially bankrupt, the report explained that:
One of the spectacular tasks of the occupation dealt with collecting and putting under guard the great hoards of gold, silver, precious stones, foreign postage stamps, engraving plates, and all currency not legal in Japan. Even though the bulk of this wealth was collected and placed under United States military custody by Japanese officials, undeclared caches of these treasures were known to exist. [1, p. 8]
As priorities changed following the end of the war, the potential afforded by the newly discovered war loot for effecting political transformation on a worldwide scale became readily apparent to the architects of the US occupation. The Seagraves report that three underground funds were created to finance this transformation: the M-Fund, the Yotsuya Fund, and the Keenan Fund. The first and most well-known of these funds was named after General William Frederic Marquat, who headed a program ostensibly in charge of cracking down on war profiteering. In fact, however, the Marquat Fund accomplished quite the opposite. Rather than dissolving the banks and conglomerates such as Mitsui and Mitsubishi who were deeply implicated in war crimes, Marquat let them off the hook, demanding nothing more from these major war profiteers than cosmetic changes while leaving their internal structure largely intact.
The Seagraves explain that the M-Fund was subsequently employed in a frantic attempt to suppress the rise of the Socialist Party in the late 1940s: "great sums were distributed by SCAP [Supreme Commander for the Allied Forces] to discredit the Socialist cabinet, and to replace it with a regime more to Washington's liking." [1, p.109] In 1960, the M-Fund was given away by Vice President Nixon to then-Prime Minister Kishi Nobusuke in exchange for support of his bid for the US presidency. The Seagraves claim that the M-Fund, the "ultimate secret weapon, a bottomless black bag," has since been employed by seven LDP politicians to maintain a virtual stranglehold on political power in Japan. [1, p. 120] Former US Deputy Attorney General Norbert Schlei, who himself became tragically snared in the complex web of deceit surrounding the fund's disputed existence, estimated that its value has climbed from $35 billion to over $500 billion today, arguing that it "dominates Japanese politics and is a major force in the Japanese economy." [3]
Another of the war-profit slush funds, the Yotsuya fund, is claimed to have been set aside to finance underworld operations aimed at suppressing popular protest and leftist activities in concert with legions of yakuza, headed by Golden Lily's most effective negotiator, Kodama Yoshio. The Keenan Fund, in contrast, served to bribe witnesses at war crimes trials and persuade them to falsify their testimony, aiding to cover up Japan's biological and chemical warfare program and to conceal the looting carried out by Golden Lily. The Seagraves write that POWs liberated from Japanese slave and labour camps by the Allied Forces were "bullied into signing secrecy oaths before they were allowed to go home, forced to swear that they would not reveal anything they knew about war looting or about the chemical and biological weapons testing." [1, p. 113]
The relevance of Gold Warriors in the context of the modern Japanese political landscape becomes immediately apparent when one traces the web of fraud emerging from these post-war funds to its counterpart in the incestuous network of present-day LDP leadership. Current Prime Minister Abe Shinzo is a direct descendant of this legacy, his grandfather Kishi Nobusuke, Prime Minister between 1957 and 1960, having apparently been entrusted with control over the M-Fund from President Nixon in 1960. Kishi reportedly availed of this opportunity to immediately help himself to one trillion yen, or about 3 billion dollars, valued at approximately ten percent of the fund's total assets in 1960. Kishi and his entourage subsequently arranged for the selection of Tanaka Kakuei as Minister of Finance in the new Ikeda administration. The Seagraves write that Tanaka -- who later served as Prime Minister twice in the period between 1972 and 1974 -- personally took charge of the M-Fund for a period of 26 years, until scandal forced him from office in 1986.
It was under Tanaka's control that perhaps the most tangible manifestation of the M-Fund's complex and insidious influence on Japanese society became acutely felt among a small but significant group of domestic and foreign investors. A scheme was devised in which special government bonds, with values ranging from ten billion to fifty billion yen, served as a government-sanctioned repository in which to park huge sums of black money from the M-Fund; Diet approval was not required for the bonds to be technically legitimate as they were issued directly by the Ministry of Finance, of which Tanaka was the chairman. By collecting the profits accumulated through interest on the bonds, Tanaka is claimed to have personally profited from this arrangement to the tune of ten trillion yen.
When the Lockheed bribery scandal in the mid-1970s threatened to create a rift among the club of bond-holders and bring down the entire Ministry of Finance, Tanaka created a new set of bonds (referred to as "57s") to serve as IOUs. The Seagraves explain that the new bonds were unlike anything previously issued by the Japanese government and "were not offered to the public at large, nor were they to be traded on the international bond-market like normal government bonds." [1, p.128] The trick, of course, was that the complete obscurity of these bonds allowed the Ministry of Finance, at its own discretion, to declare nearly all "57s" to be forgeries, with exceptions granted only to those especially close to the LDP leadership, and even then at a heavy discount. Less powerful bond-holders thus directly financed the profiteering of powerful insiders, financial collapse was averted, and the LDP stayed in power, all of it largely out of the public eye. "As power corrupts," the authors note, "secret power corrupts secretly." [p. 139]
And the corruption, it would appear, runs deep indeed. The Seagraves claim that huge quantities of war loot remain to this day stashed in the vaults of well-known international financial institutions such as Citibank, Chase, Hongkong & Shanghai Banking Corporation (HSBC), and Union Banque Suisse (UBS). One of the key characters in the Seagraves' book is a mysterious man of many identies named Severino Garcia Diaz Santa -- known to his friends simply as "Santy" -- revealed in the new edition to have been an agent of the Vatican secret services. Involved in the torture of Major Kojima, General Yamashita's driver in the last year of the war, Santy was able to extract the locations of more than a dozen Golden Lily treasure vaults in the mountains north of Manila, two of which were immediately and easily opened. In the decades following the end of the war, Santy played the role of gatekeeper in an organization referred to as "The Umbrella," set up to move gold from the Philippines "to 176 bank accounts in 42 countries," according to a letter written in 1991 by former Justice Department attorney Robert Ackerman. [1, p.227] Hounded relentlessly by Philippine President Ferdinand Marcos, Santy became worried and took steps to protect himself, hiring a bookkeeper named Tarciana Rodriguez who he put "in charge of billions in cash, bullion, gold certificates, stocks and other assets all over the world." When he finally slipped into a state of deep alcoholic depression leading to his death in 1974, "The Man With No Name," as he was often called, left behind a fortune conservatively estimated at $50 billion to his fourteen heirs. [1, p. 150] The largest single account, stored at Union Banque Suisse, is claimed to contain 20,000 metric tons of gold bullion alone, this according to original UBS documents reproduced on the Gold Warriors CDs. [1, p. 222-223]
Attempts to recover this fortune brought the legitimate heirs to Santy's estate face-to-face with the seedy underbelly of corporate finance. Santy's common-law wife Luz Rambano is reported to have met with a vice-president of UBS in Geneva, who told her, according to an American friend who was with her at the time, that "he wouldn't recommend her trying to claim this account while she was in Switzerland, because before the bank or even the government of Switzerland would agree to allow her to take what this account represented, they would not be beyond having her killed first." [1, p. 224]
Similar results were reported in encounters with other banks. Faced with stonewalling from HSBC and Sanwa Bank, efforts eventually turned to Citibank, and in December 1990 Tarciana traveled to Manhattan to meet with then-CEO John Reed. "According to Santy's own records and documents Tarciana had with her," the Seagraves write, "Citibank held 4,700 metric tons of gold bullion belonging to Santy's Estate." Employing a well-known technique, Reed reportedly responded to the claims by hiring a phalanx of lawyers and moving Santy's assets offshore, to Cititrust in the Bahamas. The case was later taken up by attorney Mel Belli, who charged that "Reed and Citibank have systematically sold and are selling said gold bullion to buyers and converting the sale proceeds to their own use." [1, p. 230] Belli, however, died in 1996 with the case still pending. Reed was later ousted by Citibank under allegations of money laundering.
Thousands of years ago, Thucydides observed that: "The strong do what they can and the weak suffer what they must." If the Seagraves' account is to be believed, the tale of Santy's fortune plainly evidences the ugly reality that, behind a facade of exactitude and impartiality, our modern international money system in fact operates largely according to this ancient adage. The authors explain: "Account holders may think some gold or platinum is theirs because they have title to it in bonds or certificates[, but] if they try to redeem the bonds or certs, chances are they will end up arrested, imprisoned, or murdered, and their bonds or certs will be confiscated or vanish." While the tale of Santy's heirs is one in which the assets in question dwarf the political power of the individual claimant, a deeper truth is revealed when one reflects on the basic premise of a banking system as it emerges in such a struggle. "Once citizens of a country relinquish control of their money to private bankers," the authors point out, "they are at the bankers' mercy -- which is the whole idea." [1, p.247]
And here, perhaps, is where this book strikes its most decisive blow. Variously interconnected and complex, the narratives woven together in Gold Warriors -- a small sample of which I have attempted to sketch above -- paint a frightening and yet mystifying picture of world finance that stretches well beyond the borders of Japan. More than anything else, the book shines a powerful spotlight on a corner of society cloaked in secrecy, a small network of powerful players cutting deals of global significance behind closed doors. "Seen as giant spider's web," the authors write, "the involvement of a great many organizations and individuals becomes apparent." [1, p. 271]
It is no great surprise, then, that many of the elementary facts upon whose basis the Seagraves argue their claims have been repeatedly and emphatically denied by the stake-holders who stand the most to lose. Both Tokyo and Washington allege that the "57s" are counterfeit, despite painstaking work by Professor Edmond Lausier at the University of Southern California's Marshall School of Business which confirms their authenticity. [1, p. 128] The Philippine government, on the other hand, denies outright the very existence of the character named Santy. The Seagraves respond mockingly:
"Tell this to his family. We have interviewed his brother, his mistresses, and his children. We have visited his tombstone. We have amassed [...] indisputable evidence from more than 60 years that Santa Romana is real, and that his vast fortune of cash and gold bullion sleeps in banks all over the world." [1, p. 140]
And yet, despite numerous anchors to documentary evidence and expert testimony verifying its factual basis, the story of Yamashita's Gold necessarily involves a degree of extrapolation. Such extrapolation inevitably lends itself to conspiracy theories which, one might argue, serve to only to further conceal the truth. David McNeill has written that, due to its secrecy, "the M-Fund has become a staple of bad conspiracy thrillers and racy weekly magazines in Japan, a topic used to spice up limp narratives or weak stories." [4] While the story of secret CIA involvement in supporting the LDP through the 1950s and 1960s has been firmly established for over a decade now [5], the much deeper level of corruption and fraud explored in Gold Warriors remains well beyond the bounds of accepted discourse in mainstream politics, both in Japan and in the US, to this very day. Chalmers Johnson summed up the situation well in 1995: "The issue today is not whether Japan might veer toward socialism or neutralism but why the government that evolved from its long period of dependence on the United States is so corrupt, inept, and weak." [6]
While many of the missing pieces in the story of Yamashita's Gold may, like the loot itself, remain forever buried with the thousands who died digging its grave, the Seagraves have nonetheless opened a rare window onto a side of Japanese and American history direly in need of attention. Languishing in obscurity, stories of this kind endlessly spawn tales of conspiracy; confronted head-on, they spark derision and denial. Ultimately, however, if not recognized and addressed, the specters of the past will return to corrupt the society of today and of the future. Indeed, observing the political climate in Japan today, one might say that they already have.
Chris Salzberg is a graduate student at the University of Tokyo. This article was originally posted at gyaku, a media project based in Japan.
REFERENCES
[1] Sterling and Peggy Seagrave, Gold Warriors: America's Secret Recovery of Yamashita's Gold, Verso Books, London and New York, 2005, p.xii.
[2] Norbert A. Shlei, "Japan's 'M-Fund' Memorandum, January 7, 1991," in Japan Policy Research Institute Working Paper No. 11, July 1995.
http://www.jpri.org/publications/workin ... /wp11.html
[3] Chalmers Johnson, "The Looting of Asia," London Review of Books Vol. 25, No. 22, November 2003.
[4] David McNeill, "True Lies," Japan.Inc, April 2004.
[5] Tim Weiner, "C.I.A. Spent Millions to Support Japanese Right in 50's and 60's," New York Times, Oct. 9, 1994.
[6] Chalmers Johnson, "The 1955 System and the American Connection: A Bibliographic Introduction," in Japan Policy Research Institute Working Paper No. 11, July 1995.
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