-Caveat Lector-
an excerpt from:
The Marcos Dynasty
Sterling Seagrave©1988
Harper & Row, Inc
ISBN 0-06-015815-8
-----
--The Counter-Intelligence Corps and its successor agency, the CIA, naturally
never revealed exactly how they spent the $100 million provided by Kodama,
but a number of new anti-Communist organizations soon came into existence and
established cells throughout the Far East. One of these was the religious
cult of the Moonies, founded by the South Korean Sun Myung Moon, with help
from the CIA and its South Korean stepchild, the KCIA. Another was the Asian
Peoples' Anti-Communist League (APACL), founded by South Korea's Syngman
Rhee, Taiwan's Chiang Kai-shek, and the CIA. Kodama's old friend Sasakawa
Ryiochi became the champion of the Moonies in Japan, and one of the prime
movers behind the Japanese branch of APACL. In 1970, Sasakawa organized the
World Anti-Communist League as the successor to APACL. According to one
version, the Reverend Moon and Sasakawa jawboned with prominent Japanese
rightists at one of Sasakawa's speedboat racing courses at the foot of Mount
Fuji and laid their plans to spread the League worldwide.--
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Nineteen
CLOAK AND DAGGER
WHETHER FERDINAND FIRST APPROACHED the CIA about Yamashita's Gold, or the CIA
approached him, is not important, for he had been involved with the Agency
intermittently since the early 1950s. Where the gold was concerned, the group
he dealt with was a .veritable Who's Who of American clandestine operations.
Among them were some of the same men fleetingly exposed in the Iran-Contra
scandal—a quasi-private military intelligence cell calling itself "The
Enterprise" and engaged in worldwide intrigues for the White House involving
huge black-bag payoffs. Marcos and Ver themselves were implicated in the
Iran-Contra scandal for providing the false end-user certificates that
allowed the secret team to divert arms wherever it wished.
Hundreds of millions of dollars were involved in the Iran-Contra arms deals,
with collusion among the United States, Israel, the Philippines, and other
countries, including all the cloak-and-dagger paraphernalia of Swiss numbered
accounts, dummy companies, and clandestine ships and planes. But as one of
The Enterprise testified, "This is pipsqueak stuff."
Reading between the lines of Lieutenant Colonel North's testimony, it is
clear that CIA director William Casey was proud of having an "off the shelf"
team of private operators funded by unofficial sources. This enabled Casey to
avoid the kind of interference from Congress that had been blocking the
Reagan administration's initiatives to topple the Sandinista government in
Nicaragua. But Casey's gambit was not entirely new. The members of The
Enterprise were all larger-than-life characters who had worked together for
many years, a first generation of colorful old OSS hands, and a second
generation of hard-nosed covert action types who cut their milk teeth at the
Bay of Pigs. Some of their names have since become familiar: John Singlaub,
Richard Secord, Ray Cline, Theodore Shackley, Thomas Clines, and others.
But no longer around is the man who, in a way, started it all going: the
CIA's original overseas paymaster and Mister Black Bag. His name was Paul
Helliwell.
Helliwell was America's chief of intelligence in China during World
War II, part of the same overall operation as Captain (later Rear Admi-ral)
Milton "Mary" Miles, who supported the charming but ruthless Nationalist
Chinese secret police boss, Tai Li, until Tai Li's death in a booby-trapped
plane soon after the end of World War II As China desk officer for the OSS,
Helliwell became the man who controlled the pipe-line of covert funds for
secret operations throughout East Asia after the war. This was virgin
territory. A lawyer by training, he evolved a system of handling black money
from a multitude of sources, many of them extra-legal, laundering it, and
moving it around in a shell game through banks he set up like walnuts for
that purpose, using artful dodgers as couriers and financial sleight of hand.
Often, he ended up with more money than he began, because of the way black
funds have of growing
when freed of legal restraints, and thanks to the violent death in war and
revolution of so many of his depositors, leaving their inheritance to be
spent as the Agency wished.
Thanks to the CIA's part in rescuing the regime of Generalissimo Chiang in
1949, Helliwell had access to its black resources. In 1949 Helliwell and a
handful of other CIA agents salvaged Claire Chennault's Civil Air Transport
(CAT) and other American and Chinese aircraft from the mainland, and
transferred them by ship to Taiwan.
He spent the years immediately following Mao's victory reorganizing the U.S.
line of defense around Red China. With war-surplus Victory ships and Liberty
ships, and some of Chennault's planes, he set up Sea Supply Corporation and
Air America, using the Philippines and Thailand as staging bases for secret
operations throughout Southeast Asia. As a means of harassing Red China from
the rear, and gathering intelligence, Sea Supply ferried materiel to Thailand
to support the KMT opium armies in Burma and the rebellious Champa tribesmen
in eastern Tibet. CAT and Air America flew these supplies from Thailand into
the Golden Triangle poppy fields and across upper Burma to the Himalayas,
and flew supplies from the Philippines for the beleaguered French at
Dienbienphu.
It was an expensive business. The KMT and the CIA paid off General Phao, the
commander of the Thai police, who obligingly transshipped heroin from the
opium armies down to Bangkok for export. They also paid the KMT's General Li
Mi what it took to keep his army of ten thousand going, which Li Mi was not
about to do with his share of the opium proceeds. All this took a lot of gold
bullion, but Helliwell rose to the 0ccasion. He and other Agency financial
experts in the field followed basic rules laid down by the original CIA
director of covert operations, Frank Wisner. First get the rich people on
your side, including the rich gangsters, then set up channels for black money
so you can provide funds across borders to the people who need them to get
the job done. Kim Philby said Wisner once told him, "It is essential to
secure the overt cooperation of people with conspicuous access to wealth in
their own right." The cooperation of rich people hid the transfer of black
money.
On the other side of the world in Europe, a program similar to Helliwell's
was set up by a Hungarian-born OSS officer, Nicolas Deak. Eventually, this
matured into the legitimate money trader Deak & Company, a glossy firm with
fifty-nine international offices. Deak's services were used by the CIA's Kim
Roosevelt to finance the 1953 coup against Mohammed Mossadeq in Iran, which
involved paying massive bribes to undermine Mossadeq in favor of the young
Shah.
At the end of the Pacific War, most of the money in Asia was in the hands of
relatively few people: those who had managed to hold onto what they had
before the war, and those who had taken advantage of the war to help
themselves to the wealth of others. Both groups contributed to Helliwell's
operations for the same reason, dread of communism. Helliwell supported
right-wing groups all over Asia by drawing on the coffers of the Chiangs, the
Korean generals, and the kuromaku of Japan, foremost among them Kodama.
Half of Kodama's personal wartime hoard of $200 million was turned over to
the Counter-Intelligence Corps (CIC) in 1948, as part of the complex deal
worked out between MacArthur and Chiang for Kodama's freedom and that of his
powerful cellmates. The $100 million that the CIC got, shy of what it had to
split with the generalissimo (perhaps fifty-fifty), became seed money and
fertilizer for Helliwell's money tree. The CIC used Kodama first to pay off
pro-American politicians in Japan, Korea, Thailand, and Indonesia. After ten
years literally as an employee of G-2, Kodama was officially put on the CIA
payroll in 1958. That same year, he became the Lockheed agent in Japan,
receiving $6.3 million in bribes either from Lockheed or from the CIA through
Lockheed during the years from 1966 to 1972. Kodama preferred cash, so
Lockheed delivered it to him via Deak & Company couriers. The Lockheed affair
climaxed in 1976 with the arrest of Prime Minister Tanaka for bribery, of
which he was later convicted.
The Counter-Intelligence Corps and its successor agency, the CIA, naturally
never revealed exactly how they spent the $100 million provided by Kodama,
but a number of new anti-Communist organizations soon came into existence and
established cells throughout the Far East. One of these was the religious
cult of the Moonies, founded by the South Korean Sun Myung Moon, with help
from the CIA and its South Korean stepchild, the KCIA. Another was the Asian
Peoples' Anti-Communist League (APACL), founded by South Korea's Syngman
Rhee, Taiwan's Chiang Kai-shek, and the CIA. Kodama's old friend Sasakawa
Ryiochi became the champion of the Moonies in Japan, and one of the prime
movers behind the Japanese branch of APACL. In 1970, Sasakawa organized the
World Anti-Communist League as the successor to APACL. According to one
version, the Reverend Moon and Sasakawa jawboned with prominent Japanese
rightists at one of Sasakawa's speedboat racing courses at the foot of Mount
Fuji and laid their plans to spread the League worldwide. During its early
years, WACL was widely reported to have been financed largely from Sasakawa's
huge fortune.
Among other covert operations, Helliwell's black-money channels were used to
underwrite Lansdale's anti-Huk campaign in the Philippines, the election of
President Magsaysay, and subsequent Filipino political contests. From the
Philippines, it was used to pay the Indonesians fighting Sukarno. When
America became entangled in Vietnam, Helliwell's financial magic was used to
keep the Saigon generals happy and to set up overseas accounts for Laotian
princelings and druglords.
Glamorous as they were in cloak-and-dagger terms, the CIA operations in
Tibet, Burma, and Indonesia were military failures and intelligence failures
as well, although many of the technical people-pilots and individual
agents-performed heroic feats under hazardous conditions. They failed not for
want of daring and ingenuity in the field, but because of bad judgment,
questionable motives, and evasion of responsibility at policy levels in
Washington. One of the KMT opium generals, General Lee, told me that his
troops got such a bad reception from villagers on the Chinese side of the
border that they stopped making forays, and thereafter provided the CIA with
intelligence that was invented to suit the occasion.
Helliwell's financial methods, on the other hand, were seen as a great
success, with application worldwide. What could not be achieved by killing
people often could be done by buying allies and paying off enemies, something
Asians and Europeans had learned to do centuries earlier. In 1960—following
Castro's victory in Cuba the previous yearCIA covert operations director
Richard Bissell brought Helliwell back from the Far East to set up a Western
Hemisphere version of Sea Supply and Air America out of Miami called Southern
Air Transport, and a new chain of black-money banks to pay for the Bay of
Pigs operation that Bissell was planning.
Among Helliwell's creations were Castle Bank and Mercantile Bank & Trust in
the Bahamas. One of his associates was Wallace Groves, who was involved with
Ferdinand in the Benguet mines. Like Kodama, Groves was taken on as a CIA
adviser.
Helliwell thereby became the paymaster for the Bay of Pigs. He did not scrap
his Asian networks, he just extended them around the world, his string of
banks eventually stretching from Florida and the Bahamas to the Caymans, the
Netherlands Antilles, Panama, Honolulu, Hong Kong, Manila, Bangkok,
Singapore, Sydney, Beirut, and Teheran. No one will ever know how much flight
capital flowed through the murky streams between these banks. One by one, the
banks collapsed in scandal, lasting only as long as they were needed, to be
replaced somewhere else by their clones. One of these clones was the
Nugan-Hand Bank, which became a pipeline for the Marcos gold deals.
Working for Paul Helliwell in China near the end of the Pacific War were two
young intelligence officers, Ray Cline and John Singlaub, one a brilliant
analyst, the other a paramilitary expert.
Singlaub was a legitimate American hero. As a young OSS agent, he parachuted
behind German lines in France in 1944 to help the Resistance prepare for
D-Day. According to legend, during the liberation of Singapore it was
Singlaub who parachuted in to unlock the gates of Changi Prison. Near the end
of the war, he was dropped into China to train KMT guerrillas, in the process
developing an inflexible anti-Communist bond with the Chiang regime. When the
Japanese surrendered, he was appointed chief of the U.S. military mission in
Mukden, Manchuria, attempting from there to influence the outcome of the
Chinese civil war. With Mao's victory, Singlaub succeeded Paul Helliwell as
China desk officer for the CIA. As a paramilitary expert, he helped organize
the Ranger Training Center at Fort Benning, Georgia, to prepare army
commandos for CIA missions, and directed many of the agent drops in China,
most of whom vanished without a trace. During the Korean War he became CIA
deputy chief in South Korea, rising to the rank of general.
Understandably, Singlaub the centurion came to be regarded with awe by a
whole generation of American military men and intelligence officers, many of
whom shared his conservative views about the way things should be in Asia.
Around him grew a following that developed into an infrastructure at the
Pentagon and CIA.
When Singlaub took over the China desk from Paul Helliwell, one of his top
agents was Ray Cline. After the Chiang regime fled to Taiwan, Cline became a
key operative in Taipei because of his close friendship with the
generalissimo's son and heir, Chiang Ching-kuo ("CCK"). They engaged in
heroic all-night drinking bouts that became a legend in the Agency. Cline
also was the conduit through which CIA funds flowed to set up the Asian
People's Anti-Communist League (APACL) in Taiwan and South Korea in 1955-56,
which soon had its own agents operating throughout the Far East. One of the
chief fundraisers for Cline's creation was Kodama's fellow kuromaku Sasakawa.
At Sasakawa's initiative, the APACL eventually became the World
Anti-Communist League, and was headed for many years by Chiang Kai-shek's
henchman, Ku Cheng-kang.
Cline's drinking buddy, the generalissimo's son, rose to be security chief,
defense minister, and ultimately president of Taiwan. From 1958 to 1962,
Cline served as CIA station chief in Taipei, and had extraordinary influence.
Cline and CCK worked in harness to carry out black operations throughout
Asia, including the struggle to dominate the overseas Chinese communities in
the Philippines and Indonesia. Together they set up the Political Warfare
Cadres Academy in Peitou, outside Taipei. An exceptionally clever and
intelligent man, Cline went back to Washington at the end of 1962 to become
the CIA's deputy director for intelligence worldwide. In this position he
continued to work closely with Paul Helliwell, John Singlaub, and CCK, and
would have been kept well informed on Marcos gold deals by agents in Manila,
since these deals were an item of great interest.
The decision of President Eisenhower to begin planning an invasion of Cuba,
and to explore options for assassinating Fidel Castro, led the CIA to strike
a bargain with Mafia don Santo Trafficante, whose casinos and brothels in
Havana had been closed down by Castro, and antiCastro operations became a
joint venture with the Mafia. The Kennedys intensified the effort, bringing
new players into the forefront of the CIA's covert action group. Two of this
new generation were Theodore Shackley and Thomas Clines. For the next three
decades, Clines and Shackley moved back and forth from Asia to the Caribbean
leaving in their path all manner of invasions, military coups, political
assassinations, and what one member of The Enterprise boasted were "the
biggest black-bag operations of all time."
Shackley and Clines were among those given the job of organizing the Bay of
Pigs invasion. Its embarrassing failure cost Allen Dulles his job as head of
the CIA and Richard Bissell his as director of covert operations. But
Shackley and Clines were moved on to the next urgent task at hand: helping to
arrange the assassination of Fidel Castro, his brother Raul, Che Guevara, and
others in Operation Mongoose.
It was the decision of the Kennedy brothers to bring General Edward Lansdale
back from Manila and Saigon to plan Operation Mongoose. They, like so many
others, had allowed themselves to be convinced that Lansdale's Huk campaign
and the election of Magsaysay had been an unqualified success. It took many
months for the realization to sink in that Lansdale lived in a covert version
of Disneyland. This became apparent within the Agency when word spread that
the general was planning a triumphal victory parade through Havana: it would
be accomplished by having a submarine surface one night off the Malecon to
fire star shells into the sky, which Catholic Cubans would take to be the
Second Coming.
On assuming the presidency, Lyndon Johnson turned his attention away from
Cuba to Vietnam, and Shackley and Clines were sent off to apply their
peculiar specialty in Indochina. Operation Mongoose was turned into Operation
Phoenix, a monthly bounty hunt to destroy America's enemies at the village
level by assassinating them. Phoenix resulted in the killing (often with
silenced pistols in the middle of the night) of more than twenty thousand
Vietnamese, some said fifty thousand-mostly civilians-reaching an estimated
total of seventy-five thousand people throughout Indochina, including women
and children. The overall coordination of Phoenix was attributed -to William
Colby, but General John Singlaub ran the cutting edge in Vietnam (called SOG,
or Special Operations Group), while Shackley and Clines ran the parallel
program in Laos. The chief of secret air operations throughout was General
Heinie Aderholt, an amiable, immensely likeable technical wizard and old OSS
hand who earlier had run air operations in Indonesia and Tibet for Paul
Helliwell. His deputy air -wing commander for Singlaub's SOG was air force
Lieutenant Colonel Richard Secord. It was in this way that many of the key
elements of The Enterprise first came together.
While Operation Phoenix failed -to have any decisive effect on the outcome of
the Indochina War, considerable success was being achieved simply by buying
the loyalty of military officers and politicians. Businessmen, drug
merchants, and statesmen like Ferdinand Marcos gladly cooperated with the CIA
in return for help in moving their hidden funds to overseas banks, where the
Agency felt free to dip into them to achieve its own ends.
Because buying was demonstrably more effective than killing, Paul Helliwell's
black-money network bore down and gave birth to Nugan-Hand, with its head
office in Sydney and branches in Manila, Hong Kong, Bangkok, Singapore,
Honolulu, and Washington, D.C. One of Nugan-Hand's covert associates
described the bank as a convenience provided "for people out of Southeast
Asia during the Vietnam War ... they needed to buy property and they needed
to buy gold and they needed to put their money on deposit and they couldn't
have it up in Thailand or Laos or Cambodia or Vietnam. . . . " (Or stuck in
bank vaults in the Philippines.)
Sprinkled through Nugan-Hand were a number of Ray Cline's and John Singlaub's
closest associates in the military intelligence community: In Washington,
Walter McDonald, the CIA's deputy director for economic research, arranged
for former CIA director William Colby to become legal counsel to Nugan-Hand.
The Honolulu office was headed by retired General Edwin F. Black, for many
years a top aide of CIA director Allen Dulles, a member of the NSC staff, and
chief of the U.S. military in Thailand during the Vietnam War. The Washington
branch was headed by retired Rear Admiral Earl P. Yates, former
chief-of-staff for plans and policy of the U.S. Pacific Command, in charge of
all strategic planning as far as the Arabian Gulf. The Manila branch was
headed by General Leroy Manor, former special assistant to the joint Chiefs
of Staff for counterinsurgency and covert operations, who was said to have
retired from active duty to undertake secret missions, including negotiating
the 1979 military base rental agreement in the Philippines. Manor spent seven
months negotiating the base agreement, concluding with the payment to
Ferdinand of $500 million. The general then immediately accepted the post as
head of the Manila branch of Nugan-Hand.
Among the questions raised is whether it was entirely proper for General
Manor, as chief negotiator of the $500 million base agreement, to head a bank
doing business with President Marcos and his familyand in the process accept
delivery of a duty-free Ferrari. What this revealed about Manor's own
judgment is less important than what it revealed, about Washington's
involvement with Ferdinand. The Pentagon said Manor had retired from active
duty to undertake assignments too secret to discuss, including "special
liaison" with President Marcos; Nugan-Hand's business in Manila was reported
to include secret CIA airlifts of tons of black gold. Did "special liaison"
mean shepherding Yamashita's Gold out through the Agency's black-money
channels? Manor told a journalist that he was sent out to run the Manila
office "to learn"—sent out by whom, to learn what?
By the 1970s, this hard core of the CIA's covert action group was acquiring
positions of exceptional leverage. In 1966, Ray Cline had left his post as
the CIA's deputy director of intelligence after repeated clashes with the new
CIA director, Admiral Raborn. Cline made a lateral move, becoming station
chief in Frankfurt, West Germany, then landed on his feet when he returned to
Washington to take over the State Department's Bureau of Intelligence and
Research. In this position, he was in a much better slot to influence foreign
policy.
General John Singlaub became a deputy assistant secretary of defense from
1971 to 1973, then commander-in-chief of all U.S. forces in South Korea.
Shackley and Clines became station chief and deputy respectively in Saigon
during the bone-crushing period 1968-72, then directed Operation Phoenix from
CIA headquarters in Virginia from 1973 to 1975. As Saigon station chief,
Shackley was a primary instrument for Henry Kissinger's grim initiatives
throughout Indochina. The interruption in his tenure at Saigon in 1972 came
when he and Clines were brought back long enough to mastermind the violent
overthrow of Chile's popularly elected Marxist president, Salvador Allende,
during which Allende was murdered. By the time Watergate removed Nixon from
the Oval Office, Shackley was the CIA's deputy director for operations, in
charge of covert action worldwide.
The fall of Saigon shifted the focus of covert action to other capitals.
Richard Secord went to Iran, where he commanded the U.S. military mission. In
Washington, Shackley and Clines became as alarmed by the rise of Gough
Whitlam and the Labor party in Australia as they had been by the election of
Salvador Allende in Chile. It is not unusual for CIA field officers to become
overinvolved in local passions, but the Agency's senior executives are
expected to remain aloof, serving only as instruments of the president. The
Agency's worst setbacks were experienced when its senior executives became
obsessed with particular missions, as when Bissell became relentless in his
commitment to the Bay of Pigs invasion. Shackley now showed similar signs.
Men who worked with him said he was "paranoid" about Whitlam and his Labor
party, considering it to be under the control or influence of Communists.
For some time, the CIA had been running a variety of covert operations in
Australia, involving Nugan-Hand and strange comings and goings at the big
U.S. technical intelligence base called Pine Gap, near Alice Springs in the
Outback. Many of these intrigues were carried on with the knowing
collaboration of the Australian Security Intelligence Organization, ASIO,
headed by Brigadier Sir Charles Spry, who had close personal ties to the CIA
going back to Allen Dulles and the OSS. Colonel Secord, who had become
Singlaub and Shackley's primary air operations man in Indochina, was
identified with these Australian operations during the Vietnam War, and
apparently continued to serve as a link afterwards for the movement of black
money and weapons from the Philippines and Australia to Iran.
When he testified before Congress during the Iran-Contra hearings, it was
Secord who said: "This is pipsqueak stuff. When I was in Southeast Asia, we
used to pay our people in cash and gold bullion. I've been involved in some
of the biggest black-bag operations of all time."
By moving Ferdinand's illicit gold out through Nugan-Hand, the Agency would
be able to do financial favors for its wealthy friends in Australia, allowing
them to collect fat commissions in offshore accounts or to provide them
temporarily with the spot financing they might need to make a leveraged
hostile takeover. Those favors could then be called in whenever the Agency
wished.
Many of the CIA's Australian initiatives were directed at keeping the Labor
party out of office. When, despite them, Whitlam became Australia's new prime
minister, he began doing what any new chief of state would, moving to bring
Canberra's intelligence service under his own control. As time passed Whitlam
found alarming indications that the ASIO might actually be conspiring with
the CIA to bring his government down, including leaking information designed
to embarrass members of his cabinet in order to force their resignation.
Whitlam began sacking people at ASIO that he felt were responsible, including
some of the CIA's best friends Down Under.
>From Washington, Shackley counterattacked. He informed the ASIO's Sir Charles
Spry that what Whitlam was doing was causing the CIA "grave concern," and
unless something was done urgently the Agency would have to break off its
"mutually beneficial relationships" with the ASIO. Apparently Shackley also
appealed to M16 in London to do something urgently. Three days later the
Australian governorgeneral, a largely ceremonial post appointed by the queen,
exercised an obscure point of law that had never before seen the light of day
and removed Whitlam from office. Since then, there have been questions raised
in the House of Commons about whether M16 might have been responsible.
The downfall of Gough Whitlam endeared the CIA to a whole generation of
Australian tycoons horrified by what the British Labour party had done to
their counterparts in England, and who felt that their own liberties were
jeopardized by Whitlam's rise. For that reason alone, the Agency enjoyed
unprecedented freedom to operate in and through Australia from 1975 to 1982.
Nugan-Hand with headquarters in Sydney became a black hole for hot money from
all over Asia. During the fall of Saigon, a member of the secret team told
me, "On separate occasions, I was offered one million dollars in cash by
individual businessmen, mostly Chinese, to fly them and their families out to
the Philippines or Central America. One association of Chinese businessmen
offered me $100 million (a million per head) to get them all out at once to
Costa Rica. I'm sorry I didn't do it. I could have done it easily, but I just
didn't have any time. They must have gone elsewhere."
For the next decade Iran provided a useful laundering facility and
opportunities for the sort of arms deals that secret agents like to engineer
on the side. These included the resale of weapons stockpiles left over in
Thailand. So while Marcos gold and Chinese flight capital moved through
Australia to Teheran and Beirut, some of the proceeds helped grease the way
for new business arrangements. Nugan-Hand served as an intermediary in the
sale of at least one spy ship to the Shah of Iran. In Teheran Richard Secord
was the chief Pentagon representative in these deals. Everything was
sold-from jet fighters and radartransparent patrol boats (made of carbon
fiber and exotic plastics) to espionage equipment, AWACS spy planes, and
missile systems. Clines established a company called the Egyptian-American
Transport and Services Corporation (EATSCO), and began looking for other
outlets for weapons.
Ferdinand's role in many of these CIA weapons deals was to provide false
end-user certificates in order to mask the real destination. The procedure
was simple. As the world's largest weapons dealer, when America sold
armaments to another country, Congress required guarantees that the weapons
would not be resold to a third country without authorization. This guarantee
was provided in the form of certificates that specified exactly to whom the
weapons were going. The certificates had to be approved individually by the
State Department and the Pentagon. Fabian Ver, as chief of staff of the
Philippine armed forces, signed end-user certificates stating, for example,
that the weapons were being resold by Israel to the Philippines. That was
enough to satisfy Congress and the Pentagon, who knew that anything involving
the Philippines would be hopeless to trace. Instead, the weapons would go to
countries that were blacklisted.
For reasons of their own, members of the secret team were showing increasing
signs of operating independently of the CIA establishment. Some of this was
inevitable, due to the multiplication of CIA proprietaries, bogus banks, and
laundering operations.
That came to an abrupt halt when Jimmy Carter became president, decided to
clean house, and immediately ran head-on into this rightwing cabal.
One of Carter's cost-cutting moves was a decision to reduce the size of
American forces in South Korea. This was an unpardonable error of judgment
from the point of view of General Singlaub, who had spent the better part of
his life building up the Korean generals as a solid rock of anti-communism in
the Far East, a praetorian guard. As chief-of-staff of the United Nations
command in Seoul, Singlaub publicly denounced the decision of his
commander-in-chief. President Carter immediately fired him, and Singlaub was
forced to resign from the army.
Carter also had his new CIA director' Admiral Stansfield Turner, sack
Shackley and Clines. EATSCO, the arms broker set up by Thomas Clines, later
pleaded guilty to defrauding the U.S. government of some $8 million by
overbilling customers. Richard Secord, who had risen to major general and
deputy assistant secretary of defense for Africa, the Middle East and Central
Asia, eventually was embarrassed by the disclosures of the EATSCO affair, and
retired from the air force after being accused by the justice Department of
illegally using his Pentagon post to intercede for Clines's company.
To add to their woes, the overthrow of the Shah canceled Iran as a place of
remuneration for covert CIA agents. As part of his campaign for human rights,
Carter also invoked the Harkin Amendment to cut off U.S. military aid to
dictator Anastasio Somoza, which put a kink in the CIA hose leading to
Central America.
While the Shah was still in power, Nugan-Hand was said to have laundered
"billions" for him. After his expulsion, the bank set to work moving the
Shah's assets to safer places. Soon afterward, Frank Nugan's body was found
outside Sydney slumped behind the wheel of his Mercedes, a bullet hole in his
head and a rifle beside him. His partner Michael Hand (long identified with
the CIA) vanished off the face of the earth. Nugan-Hand Bank collapsed in
scandal, and all its generals and admirals sought employment elsewhere.
For a moment it seemed as though the warlocks had been put to flight. But
they had only been driven underground. In a series of stunning reversals,
President Carter was embarrassed by a parade of misfortunes, including the
humiliating failure of his attempt to rescue American hostages in Iran—a
military fiasco that seemed to have been produced by Mack Sennett, directed
by Harold Lloyd, and carried out by the Keystone Cops.
That there was a systematic campaign to unhorse President Carter has never
been in doubt, although its dimensions remain unmeasured. Ferdinand Marcos
must have been pleased with Carter's defeat and the election of Ronald
Reagan, because it brought on a new era of U.S.Philippine relations.
After Reagan's election and the appointment of his friend William Casey as
the new director of the CIA, the old secret team of Singlaub, Shackley, and
the others was reorganized into a privately funded, seemingly random group of
civilian consultancies, but with interlocking membership. The Enterprise
became a shadow CIA, modeled on England's Special Operations Executive in
World War 11, an elite group that was the despair of the regular Secret
Intelligence Service. When an initiative could not be undertaken by Casey's
CIA for reasons of political sensitivity, the private consultants were
brought in.
Secord described how this came about: "One of the problems with the CIA is
that they don't have experienced people running the show. You have shoe
clerks running the railroad. The Carter Administration eviscerated the CIA;
it was just wrecked, and the Clandestine branch, which was very small, was
finished. I think Casey was trying to do a good job, but he was too old to
really be effective." Secord and The Enterprise stepped into the breach.
As a civilian, John Singlaub became more active than ever in rightwing causes
and anti-Communist movements. Under Reagan he regained the influence he had
lost under Carter. He served as chairman of the World Anti-Communist League,
and headed its American chapter, the Council for World Freedom. In 1981 he
attended a WACL meeting in Taipei, where he was reported to have been given
nearly $20,000 by Ray Cline's old friend, President Chiang Ching-kuo, to set
up the American chapter. Lieutenant General Daniel 0. Graham, the former
director of the Defense Intelligence Agency, became its vicechairman.
The League's rosters included U.S. congressmen and senators, British Members
of Parliament, Nazi collaborators, notorious terrorists, death squad leaders
from Latin America, assorted right-wing strongmen, and underworld figures.
Among its Asian sponsors were the Chiangs, Park Chung Hee, Sasakawa Ryiochi,
Kodama Yoshio, and the Reverend Moon. During his twenty years of
dictatorship, President Marcos regularly attended WACL annual meetings, as
did Ray Cline, John Singlaub, Kodama, and Sasakawa.
Under pressure from the Reagan White House in 1982, Singlaub's U.S. chapter
of the League was granted tax-exempt status by the IRS. Ronald Reagan himself
regularly sent messages to WACL conferences, asserting that "Our combined
efforts are moving the tide of history toward world freedom."
Many of the organizations lobbying for conservative causes in Washington,
such as the Conservative Caucus, had interlocking directorships with WACL.
Tracing the interlocks could lead to interesting discoveries. For example,
Western Goals, established to keep track of subversives in America, was
headed by Singlaub's friend Congressman Larry McDonald, whose financial
backers included Nelson Bunker Hunt, who had tried to corner the silver
market. McDonald was also head of the John Birch Society when Bob Curtis said
it had offered to launder over $20 billion in Yamashita's Gold. It may be
only coincidence that the biggest corporation in McDonald's constituency in
Georgia was Lockheed, which had paid millions to Japanese officials through
Kodama, the man most responsible for gathering Yamashita's Gold and hiding it
in the Philippines. Congressman McDonald was one of the passengers aboard
Korean Air Lines flight 007 shot down when it intruded into Soviet airspace
in 1983.
Singlaub exerted direct personal influence within the National Security
Council through the military staff of generals and colonels in the Executive
Office Building. When he was not in Washington his contact with the NSC was
carried out for him by the Washington-based conservative lobbyist, Andrew
Messing. Singlaub's access to the NSC came in part through his close
friendship with Major General Robert L. Schweitzer, formerly with the
Pentagon's Strategy, Plans and Policy Office, and through General John W.
Vessey, chairman of the Joint Chiefs of Staff. Schweitzer also was chairman
of the Inter-American Defense Board, responsible for Nicaragua, El Salvador,
and Honduras. In 1986, just as the Iran-Contra scandal was breaking,
Schweitzer retired and joined Singlaub and The Enterprise in the civilian
world, taking a post as adviser with Singlaub in a Washington consulting firm
called GeoMiliTech Corporation. Similarly, when Ted Shackley had retired
under pressure from the CIA, he had joined a consulting firm in Houston
started by Thomas Clines.
In these new positions, they became especially useful to President Reagan
when Congress passed the Boland Amendment, ordering the White House and the
CIA to cease paying the Contras to overthrow Nicaragua's Sandinista
government. To get around the Boland Amendment, the NSC's Lieutenant Colonel
North struck a deal with the CIA's Casey to bring in Secord, Hakim, Shackley,
and Clines-and later their associates Singlaub, Aderholt, and Schweitzer-to
run guns to the Contras privately, once again turning to Ferdinand Marcos for
the false end-user certificates. The whole secret team network had again come
full circle, back to Manila.
By this point Ferdinand had been supplying these fake certificates to the CIA
for more than a decade. This was no small deceit. More than $8 million in
weapons was involved in a single shipment, totalling $100 million in 1983
alone. A Filipino arms dealer associated with General Ver received a 5
percent commission on the proceeds of these sales; so, in that year, the
dealer who was handling just the paperwork in Manila made $5 million. It is a
tribute to the ingenuity of Fabian Ver that he was not content merely to sign
the certificates. He went one step further and billed his own army for the
cost of the shipments, then pocketed the money. Documents show that Ver, in
collaboration with Israeli generals and U.S. businessmen, charged the
Philippine armed forces hundreds of millions of dollars for armaments that
never arrived.*[*Apparently he was still at it in 1986, long after escaping
to his villa in the United States. In October 1986, a cargo vessel was seized
off Negros by Philippine customs officials carrying war materials bound for
Iran. The shipment, traced to Ver, was stopping at a private pier owned
jointly by Geronimo Velasco (a business associate of Ferdinand Marcos and
Harry Stonehill) and Juan Ponce Enrile. Enrile retorted that he knew nothing
about the weapons, and they were doubtless being sent to the Communist
guerrillas of the New People's Army.]
In November 1984, Ted Shackley was said to have been contacted by former
members of the Shah's SAVAK now working for the Ayatollah Khomeini, and
informed that President Reagan could regain Iran by supporting moderates in
the regime with secret arms shipments.
The key figures in this latest intrigue turned out to be Iranian arms
merchant Manucher Ghorbanifar and the CIA's old friend Adnan Khashoggi,
Ferdinand's pal and Imelda's disco partner, fellow Lockheed agent and
business associate of Kodama. In this manner, they suggested that Reagan
could ransom American hostages being held by Palestinians backed by the
Ayatollah. Shackley reportedly passed this suggestion on to Colonel North,
and the Iran side of the Iran-Contra conspiracy was set into motion.
At Colonel North's urging, The Enterprise engineered both the
Iranian and the Contra arms deals through a number of private fronts, buying
American equipment cheap, selling it dear, and salting the difference in
Swiss accounts—$6 million in one alone. For his part, John Singlaub was asked
by North to solicit funds from foreign countries, and was believed to have
done so from South Korea, Taiwan, and the Philip-pines. Singlaub also
brokered a $5.3 million arms deal for the Contras, including thousands of
AK-47 assault rifles, apparently obtained cheap from his old adversary the
People's Republic.
When the Iran-Contra mess burst like a boil in 1986, Singlaub and his friends
were already busy elsewhere, armed with picks and shovels, taking up where
Ferdinand Marcos had left off in the hunt for what was left of Yamashita's
Gold.
pp.360-376
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris
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