Ferdinand Marcos: Black Gold


Ferdinand Marcos: Black Gold

Black Gold

Ferdinand Marcos: Iron Butterfly

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Ferdinand Marcos
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Ferdinand Marcos

Black Gold

FERDINAND DID NOT ABANDON the search for Yamashita’s Gold after Robert Curtis and Olof Jonsson fled his “Leber Group” in 1975. Far from it. Instead, he went into partnership with various Yakuza bosses and the CIA, helping it finance intrigues from Australia to Iran in return for CIA help airlifting out the contents of his vaults. Hence the mysterious “AAA” markings on many of the ingots, and the continuing involvement of wealthy right-wing Australian brokers in Marcos gold deals for years afterward.

In 1982, when the CIA was forced to back away from a decade of meddling in Australian politics, and to abandon its Nugan-Hand Bank conduit for black money, Ferdinand had to find other ways to dispose of his gold. He seemed to be in a particular hurry in 1983, for there was a flurry of huge gold deals being offered outside CIA channels that year, with total sums so large that they strain credibility to the breaking point.

How could anybody have 500 metric tons of World War II gold tucked away in his basement? And 1,000 tons more in his beach cottage, and 500 tons more in the basement of a warehouse down the street? Plus still more on four levels beneath a nearby bank? In the end it does not matter really whether the gold ever existed. It only matters that a lot of responsible people believed it did, and acted accordingly, including senior officers of the CIA, and of the National Security Council, and a chairman of the Joint Chiefs of Staff. Believing in gold is like believing in God: the belief is the reality. And once you begin to believe any of it, you are committed to believe it all. Still, it is better to begin by taking a small step at a time.

Massive secret gold shipments did take place from the Philippines during the twenty years Ferdinand was president. Of that, many sober people now are satisfied. This gold did not originate in the Central Bank or from mines like Benguet, although it was often presented as such. To be sure, gold was stolen regularly from Benguet by its own employees. The original mines, situated in the crater of an extinct volcano, were plagued by theft. Miners called “high graders” smuggled out the best ore, removing 16 percent of gold production each year (half a ton of gold) and selling it to a Chinese syndicate. The same occurred at other mining companies in the islands.

By contrast, the secret gold shipments identified with President Marcos involved thousands of metric tons, much of it in bars of exotic sizes marked with peculiar symbols not normally used in the international gold trade, including Japanese and Chinese markings, and the recurring “AAA.” A lot of people thought the reports of secret Marcos gold deals were nonsense or lies. But if the bullion was imaginary, another of Ferdinand’s lifelong fabrications, he would hardly have invented the many shapes and sizes, and the odd but consistent markings (which, in any case, unconnected people saw and remarked upon), and he could not have imagined the difficulty he encountered in recasting the ingots so they could be sold without raising too many questions about their origins.

The quantities involved were far in excess of the Philippine government’s known bullion reserves. I say “known” because governments, like misers, have taken pains to keep the true size of their reserves hidden. Most of the Marcos gold seems to have been sold through Australian, American, Japanese, and European intermediaries to oil-rich Middle Eastern syndicates, using devious methods designed to avoid agitating world gold prices. Other secret deals were made directly to the gold pools in Zurich and London, where they were referred to as “Marcos Black Eagle deals.” Still other contracts appear to have been arranged through the scandal-ridden Vatican Bank, headed by American Bishop Paul Marcinckus. If these reports were true (and the documentation is persuasive when seen all together), the only possible explanation was that Ferdinand Marcos indeed had found Yamashita’s Gold.

People had been searching for it since 1945, without the public disclosure of any absolute confirmation that it existed. Or was there?

The most frequent reports made by CIA agents in Manila over the years, it turns out, involved secret gold deals by President Marcos. The CIA was keeping a close watch. In some instances the Agency was not just watching, but helping. CIA sources stated that the Agency set up a conduit for the transfer of very large sums of black money out of the Philippines to Honolulu, in gold as well as currency, and was using this to obligate Ferdinand and to keep an eye on his financial transactions. This was confirmed publicly during sworn testimony in a Honolulu court case, and privately by one of the men directly involved. According to the testimony, the Honolulu conduit was set up for the CIA by the American Ron Rewald, with the help of Filipino billionaire banker Enrique Zobel, a close friend of the Marcoses and of the sultan of Brunei. Rewald got to know Zobel because he ran a polo club in Hawaii, and Zobel was a world-class polo player. Rewald testified that Zobel was (like him) a CIA collaborator, and that through such joint ventures as Ayala-Hawaii, they and the CIA were to “shelter monies of highly placed foreign diplomats and businessmen who wished to ‘export’ cash to the United States, where it would be available to them in the event of an emergency.” During the same period, we now know that the sultan of Brunei (another ardent polo player) was lending millions to the Agency as part of the secret Iran-Contra arms deal of Lieutenant Colonel Oliver North, but his money went astray when the CIA mistakenly gave him the wrong numbers for a Swiss bank account. That the CIA’s “secret team” was obtaining millions privately from the sultan reinforces allegations that it was obtaining millions similarly from President Marcos. Might this explain why the White House felt so obligated to Ferdinand that President Reagan did everything short of intervention to keep him in power?

A little background helps to set the stage: The total amount of “white gold” thought to have been mined “legitimately” throughout recorded history is estimated rather ingenuously at 90,000 tons. This does not take into account so-called black gold mined clandestinely, stolen, or acquired in narcotics and other criminal activities, or accumulated in the Soviet Union, or in areas of the world such as Asia where public records have not been kept, which could add up to two or three times as much, or more. There is no way, for example, that anyone could guess how much gold had been accumulated privately in imperial China over the last two or three thousand years, but we can be certain that more of it changed ownership during the first half of the twentieth century than at any other time since Kublai Khan seven centuries earlier. Yamashita’s Gold would have been derived from both types — “white gold” and “black gold.”

The world’s annual legitimate gold production is controlled at 1,400 tons per year, in line with market demand. Prices are set by the five-member London gold pool, which is not eager to lose this privilege to the Swiss gold pool in Zurich. The “London Five” at the time were Bankers (JMB),[4] Moccata & Goldsmid, Sharps Pixley, Johnson Matthey, Rothschild’s, and Samuel Montagu, known by their critics as “the cartel.” Officially, less than 200 tons of gold was produced in the Philippines during the 1970s. Only a third of that was refined there, the rest being exported in unrefined copper ore. The gold extracted from the copper ore then was sold back to the Philippine Central Bank (on paper), but remained physically in the gold pools of London, Zurich, New York, and Tokyo, credited to the Philippines. This procedure was customary because transporting bullion was costly and buyers were reluctant to buy gold if they would have to ship it from the Philippines to international financial centers. Better to keep the bullion in a gold pool and only transfer the ownership. For our purposes, gold was selling for $10 million per metric ton in 1983.

The temptation for a dictator to abscond with his government’s gold reserves is always great. Ernie Maceda, who worked for him for many years, said President Marcos was in a position to steal as much gold as he wanted without anyone knowing. During the first full year of martial law, 1973, Manila’s gold reserves dropped by 45 percent, or 25 tons, then worth $250 million. A U.S. official said he was “extremely suspicious” because this could not be explained by market forces. For the next several years the reserves stayed at 33 tons, which the same official called statistically impossible.

But there was a limit to how much anyone could steal from the Central Bank. One official said that even the thousands of commemorative gold coins minted for the celebration of Ferdinand’s sixtieth birthday, bearing the likenesses of Imelda and Ferdinand, found in Malacanang after they fled, could not have come from the reserves. He speculated that Ferdinand must have acquired the gold in the coins “outside the Central Bank system.”

In 1978, the international monetary authorities decided to allow government central banks to buy gold directly from private sources. This gave Ferdinand a discreet way to convert some of his hoard of ingots into cash. He issued a decree placing the entire gold procedure in the islands in the hands of the government. Thereafter, all gold mined in the Philippines had to be sold directly to the Central Bank. This made it possible for him to sell some of his own gold to the Central Bank through a variety of intermediaries, and the bank could then send the gold to financial centers without attracting attention. Cracked a Filipino journalist at the time, “The Leber Group must be busy now making plans with key people in the Central Bank to buy gold bullion from ‘private sources.’”

How much gold Ferdinand sold to the Central Bank in this way naturally was not recorded for posterity. Most of his gold was already refined, and once in the Central Bank could be moved directly into the international market — if a way could be found to disguise it from the inevitable statisticians, a question of complicating the paper chase. The way was found when Jaime Ongpin, then the head of Benguet, had a long talk with Dr. Henry Jarecki of Mocatta Metals, which was intimately related to Mocatta & Goldsmid of the gold cartel. At the time, it was costing Benguet more to mine gold than the company could earn from selling its ore to the government, which would only pay world market prices. Jarecki told Ongpin that to earn income from gold, well-known banks will lease quantities of dormant bullion from central banks, paying the owner a set fee for the right to use the gold in transactions over a specified period of time. They then invest the gold in creative ways and turn a tidy profit.

Ongpin took the hint. In 1979, Benguet began borrowing 55,000 ounces a year from the Philippine Central Bank (or so it was claimed). This was equal to half the mine’s annual production. Benguet immediately sold the borrowed gold and invested the proceeds in the volatile money market. The earnings from these investments were good enough to subsidize gold production at the mines. Ongpin said he knew in advance that he would have more than enough new bullion from the mines to cover his borrowings. It is also possible that he acquired this gold not from the Central Bank but from President Marcos, for whom the Ongpin brothers did many things, and who in due course gained control of Benguet — only to forfeit it to the First Lady.

Following Ongpin’s lead, in November 1981 the Philippine Monetary Board (Ferdinand Marcos) announced that it would place what it called “excess locally derived gold reserves” on the international market. During the next three months some 300,000 ounces of “excess” gold were shipped to Hong Kong, New York, London, and Zurich for the sort of commodity leasing Dr. Jarecki had described. The Central Bank entered into such contracts with banks in the United States, Canada, Great Britain, and West Germany for leasing periods of three or six months. These banks first had to undertake to move the bullion from Manila to banking centers. Then, for a fee of up to 1 percent a year, the depository banks could “play” with the gold. Throughout the process, the Central Bank retained ownership. This provided a discreet way for Ferdinand to get some of his black gold physically out of the islands. Once in the international trading centers, its ownership could be transferred by President Marcos easily to any Marcos front.

In addition, a former Filipino diplomat said Ferdinand’s personal plane often ferried gold bullion to a Zurich bank. Commercial airlines also were used, as evidenced by their waybills. Twelve secret shipments of gold in all were said to have taken place by commercial airlines including KLM, PAL, Air France, and Sabena. On September 16, 1983, for example, a KLM flight to Zurich carried a cargo of 7 tons of bullion. At the same time, another 3,000 kilos were shipped by air to London.

Another former Philippine diplomat, Ferdinand’s errand boy Amelito Mutuc, who was involved in the Leber Group with Robert Curtis, said that Ferdinand recovered $14 billion worth of Yamashita’s Gold just from the digs pinpointed by Olof Jonsson in 1975, mostly from the Teresa II site. This bullion, he said, was stored in the underground vaults of the special warehouse near Malacanang Palace, and in the basement vaults of the Bataan beach palace. In 1978, the year Ferdinand put all gold marketing in the archipelago under his direct control, it was reported that he sold 2,200 tons of Japanese war loot in a single deal and was attempting to sell more. In 1979, Professor Belinda Aquino of the University of Hawaii observed that President Marcos had been wooing the military with “Japanese war booty.”

When Curtis left in 1975, taking most of the original Japanese treasure maps with him, he had to abandon the equipment he had shipped to Manila to reprocess the gold into sizes and specifications that would be acceptable on the world market. This camouflage was important. Ferdinand explained to his intimates once that his government would be toppled if his plans for cashing in the treasure became public. He was quoted as saying that disclosure could bring “another world war” because of the outrage of the governments of countries whose national treasures he planned to sell.

The choice available to Ferdinand was to recast some of the loot in the standard 12.5-kilo bars recognized by the London gold market (known as “Good London Delivery”), and to recast the rest in nonstandard ingots that would seem to originate from a place such as New Guinea or Australia where there were many gold mines, and where odd shapes, sizes, and markings were not a particular novelty. Although Hong Kong gold traders were initially mystified by reports that much of the Marcos gold was marked “AAA,” a good deal of gold originating in Australia in years past had been poured into ingots shaped like a book, many of them stamped “AAA” — a hallmark peculiar to the market Down Under and familiar to expert London traders. Also common in Australia were ingots transferred there for safekeeping from the Dutch East Indies at the start of World War II. Many of these were stamped “Sumatra Lloyd” and later were sold to wealthy Australian buyers. It would not attract unwholesome attention if Ferdinand recast some of his hoard so that it could be sold through rich friends in Australia, in small rectangular ingots marked either “AAA” or “Sumatra Lloyd.”

An Australian official confirmed that to his knowledge, during 1981-83 Ferdinand was trying to have 450 metric tons of gold reprocessed, melted down, and made into smaller bars with an Australian stamp to hide its source.

When Robert Curtis first arrived in Manila in 1975 to discuss shipping out his own equipment, he saw newspaper reports that President Marcos was negotiating with Johnson Matthey Chemicals, Ltd., a precious metals refiner, to advise the Central Bank on the building of a refinery near Manila. General Ver told Curtis not to be alarmed by the stories or by the presence of Johnson Matthey people in Manila. He insisted that when President Marcos promised Curtis no member of the cartel would be allowed to establish a refinery in the islands, his word was good. Ver explained that Ferdinand had to entertain Johnson Matthey people when they were in town “because the company has been handling the sales of Philippine gold for a long time.” As Curtis was leaving Manila several months later, he realized how good Ferdinand’s word was when he read a news story saying that Malacanang had reached an agreement with Johnson Matthey, and that the new refinery would he built in Quezon City.

Once the refinery was completed in 1978, it became possible to cast much of the gold in Ferdinand’s vaults to standard 12.5-kilo ingots. This factory also may have been used to produce the odd-shaped “AAA” ingots, but it is possible that those were recast, for reasons of discretion, on the equipment forfeited by Curtis. Ferdinand doubtless knew that Johnson Matthey also minted its own tiny gold bars of 3% ounces which were common currency in India and the Arabian Gulf, so he may have cast some of his gold in bars for sale in India.

According to Stephen Fay — editor of the British magazine Business, and for many years with the Sunday Times — JMB’s banking division “encouraged and fostered speculation, concentrated loans in a few large hands, dealt with rascals, failed to dismiss officers who lived beyond their means, became involved in ‘splendid financiering’ and pursued a course that entirely ignored straightforward, upright, legitimate banking business.”

While he was casting ingots at the new refinery in Quezon City, Ferdinand also devised a scheme to float large loans using as collateral gold bullion that he was as yet unable to get out of the Philippines. This scheme was discovered in November 1983 when U.S. Customs examined a pouchful of documents carried into America by one of Ver’s agents. The documents described four floors of gold bullion stored beneath a privately owned bank in Manila (Benedicto’s bank). The deal was to be made through an accountant who appeared to have CIA connections in Alexandria, Virginia. The accountant refused to talk, telling Customs the deal involved “national security,”

Buddy Gomez, then billionaire Enrique Zobel’s right-hand man, said he was asked by Zobel in 1979 to set up a meeting in Hong Kong to arrange the transfer of gold out of the Philippines on behalf of Elizabeth Marcos Rocka, the sister of the president. Most of her gold eventually was moved through branches of the Nugan-Hand Bank in Hong Kong and Sydney with CIA help and the participation of a number of wealthy Australians. Her husband, Ludwig Rocka, helped Nugan-Hand set up a Manila branch that same year, 1979, in the Magsaysay Building, which included among its occupants a number of CIA fronts. Rocka then shared the office suite with the bank and with a senior American military/intelligence officer who headed that branch. Elizabeth still had $3.5 million in cash on deposit in Sydney when the Nugan-Hand Bank collapsed in 1982. Of her precious metals account, no record survived the shredder.

Ferdinand Marcos obviously was not the only member of the family with gold bullion overseas. An Australian broker said he was told by Andrew Tan, a close friend of Bong-Bong, that Bong-Bong had “tons of 12.5-kilo gold bars” stashed in Hong Kong, London, the United States, Singapore, Switzerland, Panama, and the Netherlands Antilles. Since Ferdinand clearly intended Bong-Bong to be his heir, it would seem logical for him to make provisions for his son to gain access to the principal deposits, or to hold them in common. So it would be a reasonable assumption that the bulk of Ferdinand’s holdings were in the same locations.

In 1985, Norberto Romualdez III, Imelda’s nephew, was mistakenly approached by emissaries of Arab oil sheiks who said they were aware of a particular precious metals account in Europe containing 5 metric tons of gold controlled by the Romualdez family, in this instance apparently meaning less prominent members of Imelda’s immediate family. Norberto was from the other branch of the clan and knew nothing. An American in San Jose, California, said he was asked to help move another 5 metric tons of gold out of the Philippines for the Romualdez family in the fall of 1985 — this time a deal involving the husbands of two of Imelda’s nieces, one living in Canada and the other in West Germany. It follows that if the husbands of the First Lady’s nieces had at least 5 metric tons, each of Imelda’s sisters and brothers probably had much more. Given the number in the family, this would represent a total well in excess of 50 tons. Kokoy and his brother Alfredo, being almost as acquisitive as their eldest sister, doubtless had a great deal more than Alita or Conchita.

Nugan-Hand collapsed after the mysterious shooting death of one of its principals, Frank Nugan, and a scandal in which the CIA was accused of meddling in Australian internal affairs to topple the Labor government of Gough Whitlam. According to one source, the CIA helped Ferdinand move gold through Australia, partly to pay off the wealthy conservative middlemen who were at the sharp end of its campaign against a “takeover” by leftists Down Under. Some gold was reported to have been flown directly from Clark Air Base to U.S. Air Force facilities in Australia, specifically the deep black security base at Pine Gap, where it could go in and out without anyone being the wiser, and leave Pine Gap by truck in various disguises. After the bank collapsed, Ferdinand continued to make deals through these same wealthy Australian connections, but without the convenience of the Nugan-Hand channel. Apparently, he also continued to receive help from the CIA in airlifting gold out to Hong Kong and elsewhere, and returned the favor for over a decade by conspiring with the Agency and the White House to make up false end-user certificates to mislead Congress and the Pentagon about the real destination of American arms shipments.

Inevitably, using channels other than Nugan-Hand resulted in a number of leaks and embarrassing disclosures, but these described such large sums that ordinary people, unaccustomed to the bizarre extremes of black-money transactions, regarded them as unbelievable.

In one deal, Tony Grant, a British solicitor with Denton, Hall, Burgin & Warren in Hong Kong — a firm that numbered among its clients some of the wealthiest people in the Far East, including Singapore’s Ng family — approached Tokyo-based businessman Michael Young about buying eighty-five gold bars, each weighing 50 kilos. The bars were owned, he told Young, by “older generation people,” and were marked “AAA” or “Sumatra Lloyd.” The deal fell through when the sellers refused to allow inspection without a letter of intent to purchase. (Providing a letter of intent can be dangerous if you are not certain of delivery and quality.)

In 1982, General Ramon Cannu of Ver’s Presidential Security Command was put in charge of shipping out 50 tons of gold, according to a retired American soldier of fortune in the Federal Witness Protection Program who used the pseudonym Ron Lusk. Lusk said he was sent to Manila by Bankers Trust-Zurich to help charter two Boeing 747s to fly the gold to Switzerland. Lusk said the gold was stored under a warehouse near Malacanang. He was shown bullion properly stored in copper boxes, including bars with Japanese and Chinese markings. The deal collapsed at the last minute, according to Lusk, because the principals could not agree on how to split the profit.

At least three shipments of gold and silver bullion were documented in a still secret U.S. Treasury report, originating from U.S. Navy intelligence sources. One shipment of 8 tons of silver bullion was loaded by Ver’s security men aboard the American President Lines ship President Kennedy, and delivered to Los Angeles, where it went on in trucks belonging to Alba Forwarding Service to Drexel, Burnham, Lambert Trading in New York. Drexel confirmed the shipment, but saw nothing out of the ordinary in view of the fact that the proceeds were deposited by Drexel, Burnham in the Philippine Central Bank’s account at the Federal Reserve Bank. However, the money then was wired at President Marcos’s instruction to various European accounts identified only by number, including some in Switzerland. According to European banking sources, in late 1983, a single one of Ferdinand’s Credit Suisse accounts — one in the name “Avertina Foundation C.A.R.” — contained 922 pounds of gold bullion worth $5,277,100.

Brian Lendrum, the head of American Express Private Bank in Hong Kong in 1983, was approached by a group of Filipino colonels, closely identified with President Marcos, who said they had “a very large amount of gold for sale.” The shipment was said to be “imminent.” Lendrum later received a letter in flowery prose stating that the deal was approved by “the highest person in the land.” For some reason, the gold failed to materialize. According to a Chinese gold dealer in Hong Kong, the colonels approached a number of banks in addition to American Express, and eventually concluded a better deal elsewhere; he said he knew this because he saw some of the paperwork. The amounts involved were huge, he said, more than 50 tons, $500 million worth of gold in all.

R. B. Wilson, of Australia’s Kerr & Associates, said he was contacted by C. Troncoso in California with an offer to deliver 60 metric tons of Marcos gold per week for a five-year period, in a deal connected to the Mitsubishi Bank in Las Vegas, part of the Japanese giant. Wilson became angry and talked about the deal when the participants bypassed him and he lost his commission. He said he understood that a total of 4,000 metric tons was involved, worth roughly $40 billion.

The people who bypassed Wilson may have been the same ones who then brought in Norman Lester “Tony” Dacus of Las Vegas, because the amounts involved were similar. Dacus was married to a Filipina whose uncle was in the Presidential Security Command, working for Ver at Malacanang. After the Marcoses fled into exile, Dacus disclosed he had contracts to broker a number of gold deals, and produced a lot of documentation to back it up. Viewed in isolation, the Dacus claims might have seemed a bit bizarre, but to anyone acquainted with the background they fit together like shoes and socks. He said he brokered Marcos gold to a consortium from Australia, England, and America. He produced telexes, correspondence, and contracts representing billions of dollars, including nine contracts approved by the Hong Kong-Shanghai Bank. One of these transactions referred to the purchase of 15,600 metric tons of gold over two years at $400 per ounce, delivery to be made weekly in 60-ton quantities (as in the Wilson deal). At $10 million per metric ton, this would have been worth $150 billion on the open market, perhaps somewhat less as it was being offered under the table.

There are people and syndicates aside from Arab oil tycoons who have such sums, among them drug merchants — in recent years cocaine syndicates and their bankers — who no longer can be bothered to count their cash receipts, finding it sufficient to weigh them. They are anxious to get rid of currency in favor of precious metals and gems. Organized crime in America, for example, with an estimated annual revenue of $150 billion, would find gold an excellent way to launder dollars that are rapidly diminishing in value.

The seller’s bank, Dacus said, was the Hang Lung Bank, Hong Kong; the buyer’s bank was the Heritage Bank & Trust, Salt Lake City. The corresponding bank was the Mitsubishi Bank’s Hong Kong branch. (In R. B. Wilson’s case, it was the Mitsubishi Bank in Las Vegas.) Dacus claimed that six other banks were involved: Swiss American Bank, Antigua; Hong Kong-Shanghai Bank, Hong Kong; Bank of America, San Francisco; Chartered Bank, Hong Kong; Chase Manhattan, Nassau; and Owner’s Bank, Hong Kong. Dacus said he was promised $100 million in commissions on this deal if he brokered it all. He claimed that when the deal went through, 60 tons of gold each week were trucked to Clark, where it was flown by U.S. Air Force planes and CIA pilots to Hong Kong between May and August of 1983, when the shipments from Clark suddenly halted with the Aquino assassination. Dacus said frankly that he was certain at least two of the 60-ton gold shipments took place, because he was paid commissions on them.

Dacus claimed that the Hang Lung Bank later went bankrupt because of the interruption of the gold deal and that the Mitsubishi Bank lost several hundred thousand dollars. According to Dacus, Pedro Laurel and Domingo Clemente, the Marcos men arranging the deal in Manila, were locked up in the Black Room at Malacanang Palace because they were causing problems and knew too much about the deals. Dacus said Ferdinand was angry because Clemente attracted too much attention; he rented a top floor of Manila’s Ramada Inn and was “spending money like crazy.” Dacus said President Marcos had Laurel and Clemente murdered in the Black Room. He knew this, Dacus said, because the job in the Presidential Security Command held by the uncle of his Filipino wife was as one of Ver’s jailers in the Black Room.

Although Dacus had a lot of documentation to back up his claims, other people that he said were involved denied they knew anything about it. This comes as no surprise. When the Robert Curtis story about Yamashita’s Gold was first reported in the American press in the late 1970s, Ferdinand exerted his influence on other people involved to get them to deny or recant statements they had made about the gold, and even resorted to bribery and hitmen. The detail that the CIA airlift was terminated abruptly because of the Aquino assassination is persuasive because Washington was very anxious at that moment to demonstrate its displeasure, particularly with General Ver.

In May 1983, just before the CIA airlift described by Dacus, an employee of one of the leading international banks in Luxembourg turned over to the CIA station there photocopies he had made of an extraordinary sales agreement that was passing through his hands. His bank was acting as the corresponding bank in a deal that had been negotiated between President Marcos and a consortium of foreign buyers. The deal specified a total of 4.2 million ingots of gold, each weighing 12.5 kilos, hallmarked from the Central Bank of the Philippines. This represented a total of 1,682,855,200 ounces. It was to be a graduated deal, involving sales of different quantities (called tranches) at various stages. The first tranche, which had been approved, was for 716,045 units of 12.5 kilos each that were still in the Philippines; the sale price for this alone was described as $124 billion. Among the terms of the deal was a stipulation that no mention of the sale was to be made to any Philippine embassy or consulate, and in particular that under no circumstance should Imelda and Ferdinand Marcos be identified with it in any way.

The cover letter set out how payment was to be transferred through the Luxembourg bank to the Philippine Central Bank. It was signed by a number of attorneys representing the buyers, who were identified as the members of the London gold pool. Ferdinand appeared to be selling to members of the London pool gold bullion that was largely in their physical possession already. All of this was to be accompanied by a letter of immunity from seizure, investigation, or arrest, signed by President Marcos.

These documents, including memoranda of agreement on presidential letterhead signed by Ferdinand’s executive assistant, Konsehala Candelarin V. Santiago, were carefully examined by the U.S. Embassy and were certified authentic with a stamp and seal by the vice consul. The existence of these documents has never been revealed. In 1986 the Philippines Free Press obtained a copy of the insurance agreement covering the first tranche of this same deal, but the newspaper apparently was unaware of the more detailed documents given the CIA in Luxembourg. The insurance document was from Manila’s Mercantile Insurance Company, owned by the Unson family, sugar oligarchs close to Ferdinand Marcos. Crony Bobby Benedicto was a major stockholder. Written on Mercantile’s letterhead and signed by its vice president for finance, the letter described a “Memorandum of Agreement to purchase gold bars” numbering 716,045 pieces (the first tranche of the Luxembourg documents), the shipment of which was to be insured by Mercantile. The letter, dated February 4, 1983, was addressed to “Foreign Buyers” through “The Engineering Construction Company Ltd.” on Shirley Street in Nassau. The attorney representing the foreign buyers was identified as Daniel W. Swihart and the broker was identified as John Ramsingh, representing the funding banks.

The Dacus story and the Luxembourg papers apparently describe the same mammoth sale. They are amplified further by a document evidently drawn up by Ferdinand himself on May 27, 1983, for what may have been the remaining tranches of this same gold deal. A copy of this contract was provided by an entirely different and uninvolved source. During a party given at the Washington home of the commandant of the U.S. Marine Corps, P. X. Kelley, in the first week of July 1985, a well-known journalist with a reputation for accuracy said he met a prominent American business executive, once a vice president of one of the big defense contractors. The executive took the reporter aside and told him of his involvement in a contract to sell Marcos gold. The executive claimed he became involved through a friend of his, a retired air force colonel. The colonel, the executive said, had made many flights to Manila over the years, and had become friendly with a number of senior Filipino military officers. At the colonel’s suggestion, the executive said he traveled to Manila where he was informed privately that President Marcos had tons of gold that he was trying to sell through frontmen, for an amount between $240 billion and $790 billion. (The figures vary because once again it was a graduated deal, in which the total could be increased once the initial transaction terms were fulfilled.) The executive was shown a large vault containing some of the gold bars, which were properly sized and hallmarked for international trading. This was a preliminary tranche of 100 metric tons still in Manila that Ferdinand wanted to sell immediately. A Hong Kong bank was to be the intermediary. The executive gave the reporter a copy of the contract, which is in my files.

According to the contract, much of the rest of the gold was already outside the Philippines, in the gold pools. This included gold that had been transmitted to London in a multiplicity of ways over the years between 1970 and 1983. Since then it had been sitting under Threadneedle Street at the Bank of England and in other bullion vaults at Rothschild’s, Mocatta & Goldsmid, and other members of the cartel. The Marcoses were on very familiar terms with the cartel. While their children were attending school in England, they made use of an otherwise unused Rothschild mansion in London as if they owned it.

Specifically, 38,000 metric tons worth $380 billion was said to be in “good London delivery” 12.5-kilo bars, and another 37,000 metric tons in bigger ingots weighing 75 kilos. Taken together, these 75,000 tons would be nearly equal to all the gold estimated to have been mined legitimately throughout history. The U.S. executive said an Australian syndicate headed by a wealthy friend of President Marcos was brokering the deal, along with two Americans and a group in Europe.

Initially, Ferdinand wanted to arrange the deal in a curious way. Instead of the buyers purchasing the gold itself in the form of gold certificates, he would sell them Philippine Central Bank treasury notes in U.S. dollar denominations, which they could then cash in for gold certificates. (On this transaction, he insisted upon receiving 1 percent himself as a commission.) The buyers were immediately suspicious and refused to proceed on these terms because of the possibility that he was attempting some form of ingenious fraud. At the very least he was trying to complicate the paper chase so that he could claim, if it ever became necessary, to have received the billions of dollars as foreign loans in exchange for Philippine Central Bank notes. He may have had other reasons for handling the sale in this manner, but after months of dickering Ferdinand dropped the intermediate stage of treasury notes and offered to sell the bullion directly. The contract was signed, witnessed, and notarized on November 6, 1984.

The American executive said he closely examined the original contract, which included the names of the Australian and two Americans acting for President Marcos. Then he drew some interesting conclusions:

Marcos wished to sell this gold,” he said. “I don’t know who the gold belonged to. I don’t know whether it was his stock of gold — I’ve always assumed that it belonged to somebody other than him. He was in the position of selling it. Whether he held title to it or not, I don’t know.

“I was told that most, if not all the gold, was outside the Philippines. Most interested buyers were aware that there was this much gold available, but they did not want to go and do any negotiating within the country [the Philippines] itself. Almost without exception, people said, ‘We want nothing to do with going into the country.’

“I remember being told at one time that there were twelve other nations who were part of this same pool [of owners], and that these nations had asked many times to have their gold returned …”

How do you find buyers with this much money?

“Well,” the executive said, “you don’t find them all in one place. You find people who are interested in buying in much smaller tranches … Most of the buyers are from the Middle East. Great pockets of Middle Easterners are interested in precious metals. They look upon gold and diamonds as the ideal way of holding wealth.”

The executive eventually walked away from the deal.


The most surprising revelation here was that the executive understood all along that the gold bullion did not belong to Ferdinand Marcos, although Marcos controlled it. The gold belonged to twelve other countries that were trying to get it back. Nobody ever really thought the gold did belong to Ferdinand, except in the sense that he found it and recovered it. On this basis, theoretically at least, he was entitled to the usual finder’s fee of 50 percent or whatever. And if he secretly attempted to keep the whole lot, well, he would not be the first successful treasure hunter to do so.

On the other hand, while people wrote of it as “Yamashita’s Gold,” or “Marcos gold,” surprisingly little concern was ever expressed in magazines or newspapers for its true owners, the individual citizens and governments overrun by the Japanese, then methodically looted by Kodama and his cohort in the name of the chrysanthemum.

Nowhere in all the other material associated with Ferdinand Marcos is there the slightest clue that what he was up to so furtively had been discovered by Kodama’s victims, or that they were taking action against him singly or jointly. Yet the American executive plainly asserted that he was not sure whose gold it was, but certainly not Ferdinand’s, and that President Marcos was trying urgently to sell it in 1983 under increasing pressure from its rightful owners — owners who were not pressing him individually but as a bloc of twelve countries, being aided in some way by a group of one hundred generals.

First, the executive drew attention to the fact that the contract mentioned a group of generals and “the VIPs.”

“The VIPs,” he said “— you’ll see one reference there, ‘GRLS’ — were the Generals. They were always referred to [during discussions in Manila] never as the VIPs, always as the Generals. Plural. And when I said, ‘Who?’ they said, ‘There’s a group of about one hundred of them.’”

He was given to understand that the Hundred Generals were connected in some manner to the true owners of the gold, or were somehow representatives of the twelve countries that were pressing Ferdinand Marcos to sell the gold and turn the proceeds over to them, or to return the gold itself to them. The executive gathered that this pressure had been under way for some years, and that by 1983 the pressure had increased to the point that Marcos was trying desperately to sell off huge quantities that he had already squirreled away in the gold pools.

A number of obvious questions immediately crowd forward: Who were these twelve countries? How did they discover Ferdinand was secretly recovering and selling off treasure looted from them? How did they come to band together, despite inevitable differences in political systems, to bring pressure on him? Who were the VIPs or Generals? Were they the senior military officers and political leaders of the twelve countries in question, or were they not necessarily from those countries, but acting for them in some manner — perhaps as paladins, or as brokers?

The twelve nations might be taken to mean the current political incarnations of the countries conquered by the Japanese: South Korea, China, Taiwan, Thailand, Burma, Malaysia, Indonesia, Singapore, Laos, Cambodia, Vietnam, and either Brunei or Hong Kong. The thirteenth, the Philippines, would not be included because its ruler was the one in possession or control of the treasure.

One item in the contract answers one of the questions immediately: While Ferdinand was to receive 1 percent for his role in brokering the deal, the Generals or VIPs were to receive 2 percent. Although his take was only 1 percent, it was fifty times more than that of any of the individual Generals.

This meant that the Generals were involved in brokering the deal, or needed to be compensated for the trouble they had been put to as intermediaries. Indeed, there are references to “Intermediaries/Beneficiaries” (implicitly the Generals) who “shall be paid individually and separately … to their respective Accounts with their designated Bank/s.”

In addition to the 1 percent for Ferdinand and 2 percent to the Generals as intermediaries, there would be the customary fees, commissions, and incentives to other brokers and banks involved, adding up to about $80 billion in all.

The bulk of the proceeds evidently were then to be turned over to the twelve nations as the rightful owners of the treasure. If the full $790 billion sale was concluded, this would represent something on the order of $700 billion net to be split twelve ways, or a bit less than $60 billion for each country. As a parlor game, Yamashita’s Gold could displace Monopoly.

Given these staggering sums, one might well wonder whether this transaction had anything to do with the sudden acute strain placed on the London gold pool in the months that followed. By 1984, the commercial banking division of JMB was in deep trouble due to improper loans and procedures. This much was admitted eventually as the scandal hit the press and brought rude questions in Parliament. But there may have been a good deal more to it than simply impropriety in the banking division. Although extreme secrecy was maintained by the Bank of England and the other members of the Five, the crisis went so deep that it endangered the entire London pool and risked forfeiting British domination of the world gold trade to the gnomes of Zurich.

Secretly, the Bank of England and the four remaining members of the cartel were obliged to intervene over a tense weekend in September 1984 to nip the scandal in the bud before the international gold markets reopened on Monday Hong Kong time. All of JMB was taken over abruptly and curtly by the Bank of England. Senior executives of JMB were purged and sent packing as if to get them out of sight urgently, the way the establishment customarily handles the discovery in its midst of Soviet moles.

The Bank of England and the British government continue to insist that the bullion side of JMB had nothing to do with the crisis. However, since JMB handled 15 percent of the London bullion trade, or 7.5 percent of the annual world market, scandal in its commercial bank division might make people worried about the bullion division and start a run on gold. Such a run could cost the London pool dearly and leave the London Five a hundred tons short. What the Bank of England was fighting, according to Deputy Governor Kit McMahon, was a “potential systemic threat.”

Some members of Parliament were not convinced. Two of the most suspicious were Dr. David Owen, leader of the Social Democrats, and the Labour party’s Brian Sedgemore. Shortly after the JMB rescue, Owen wrote privately to the Bank of England to say that his economic advisers had shown him that JMB’s bullion operations also were not sound, that there had been “sizable losses.” The governor of the Bank, Robin Leigh-Pemberton, replied that Owen’s sources were misinformed and that “The problems which gave rise to the rescue operation for JMB … do not arise in relation to its bullion and other dealing operations …” In July 1985, Chancellor of the Exchequer Nigel Lawson gave Parliament an update on the JMB investigation: “Although, strictly speaking, [the investigators] have not so far established prima facie evidence of fraud, they have revealed serious and unexplained gaps in the records of Johnson Matthey Bankers, including … missing documents relating to substantial past transactions …”

In February 1986, Dr. Owen resumed his attack, telling Commons: “Customs and Excise believe that something like 7.25 million [pounds sterling] worth of gold bullion may have been smuggled into this country since April last year [1985] until 11 days ago [February 16, 1986].” Owen went on:

The House has been attempting to discuss the problem of Johnson Matthey Bankers since October 1984 and there has never been a specific debate on that issue. It has many ramifications. It involves the Prime Minister because of her refusal to establish a public tribunal of inquiry … It involves the Chancellor of the Exchequer because of his repeated assurances over the Governor of the Bank of England’s claim that the bullion trading of JMB was sound and, of course, it involves the judgment of the Governor of the Bank of England.

It is my submission that it is urgent because today we have seen JMB’s headquarters raided by Customs and Excise under a warrant, to look at the transactions in the gold bullion market. We know that around thirty other premises in the country have also been similarly raided … I understand that there have been twelve arrests …

… There is reason to believe that the smuggling and purchase of gold at below market price by JMB has been continuing for a considerable time.

He then confronted the prime minister, saying, “Since the Governor of the Bank of England has repeatedly said that the banking and gold bullion business of Johnson Matthey Bankers is sound, will the Prime Minister now set up a tribunal of inquiry?”

Prime Minister Thatcher replied, simply: “No, sir.”

Six days later, Brian Sedgemore again took up the cry, asking the Chancellor of the Exchequer to set up an inquiry “into the operation of the gold bullion market … and bullion frauds since 1980.” The Exchequer responded, “No, since the Government has full confidence that the existing investigations into bullion-related fraud will be effective.”

One aspect of the transaction concerned nonpayment of the Value Added Tax, a form of technical smuggling. JMB purchased gold bullion from people who brought the gold to England from Switzerland and other unidentified locations. When JMB purchased the gold, they paid the market price and the 15 percent tax to the sellers. By customary practice it was then up to the sellers to turn over the 15 percent excise to British Customs, but instead they skipped with the extra money as a special commission. JMB was legally in the clear regarding the taxes, but it was a murky situation, given the huge amounts involved. British tax laws were changed to close the loophole.

Sedgemore and Owen charged in the House of Commons that millions of dollars’ worth of gold had been brought into England, without payment of taxes, from April of 1985 until February of 1986. Although neither Sedgemore nor Owen drew attention to this, these activities ended only days before Marcos fled the Philippines.

The JMB bullion operation was sold in mid-April of 1986 (appropriately enough) to the biggest Australian banking, mining, and bullion syndicate, Mase-Westpac.

Could JMB (which General Ver said had been “handling Philippine gold for years”) have become the principal overseas repository of Marcos gold — of Yamashita’s Gold — only to be crippled when too much was attempted? Where there any old friends of Ferdinand Marcos among the wealthy tycoons behind Mase-Westpac — the richest banking syndicate Down Under?

It may be wrong to read too much into these coincidences, but the Thatcher government seemed determined to block any scrutiny by Parliament of the way JMB handled its bullion business. One is reminded of the time President Macapagal abruptly announced that he was calling off the Stonehill investigation as “an act of national self-preservation.”


In the end, I could not avoid the conclusion that Ferdinand Marcos had found some of Yamashita’s Gold, enough of it to explain the large quantities of gold bullion observed over the years by various people whose separate descriptions bore persuasive similarities. I was also inclined to believe the many reports of secret gold shipments of a few thousand tons here and there between 1975 and 1983. If Marcos could seize billions of dollars in legitimate assets from wealthy Filipino oligarchs, and abscond with billions in foreign aid, it was at least possible for him to have seized tens of billions in bootleg black gold, conceivably as much as $50 or even $100 billion. What I found difficult to believe were the galactic sums mentioned in the big secret Marcos gold contracts of 1983-84, all of which were related, when for urgent medical and political reasons he seemed to be trying frantically to dispose of everything that he had built up in overseas vaults since the early 1950s. Just the first tranches alone boggle the mind. If these sums had totalled around $100 or $150 billion, there might have been some way to stretch the mind around them by thinking in terms of cocaine proceeds. I asked myself, why couldn’t Marcos have as much salted away as the Medellin dope cartel, especially if it had been stolen originally by the Japanese army and secret service during a great world war? But upward of $700 billion?

The overlord of the Japanese secret service, the prince for whom Kodama worked, was said to have estimated after the war that the treasure buried around Manila as a whole was worth $50 billion (1950 dollars) and would take a century to uncover. Okay. Even allowing for inflation, could this have increased in value to $700 billion? Compare this to the 1988 assets of America’s largest bank, Citicorp ($204 billion), and Japan’s largest securities firm, Nomura ($374 billion). Until more concrete evidence emerges, which presupposes a willingness of governments to make public investigations, the contracts must speak for themselves. They are signed by numerous attorneys and brokers for buyers as well as sellers, representing some of the world’s leading banking institutions. They would not all have put their names to paper if they were not reasonably certain that the gold existed. Only time will tell.

Not one of the twelve countries looted by Japan ever made any statement or announcement to the effect that it had recovered a portion of national treasure making up Yamashita’s Gold. There would be no reason to disclose it — many reasons to keep silent, and deny all.

By his own admission, we know that Ferdinand was quietly paying off a number of political leaders and senior military officers in neighboring countries. In 1976, when he confiscated the offshore oil options of Seafront Petroleum, he explained to Seafront’s owner Alfonso Yuchengco why he was doing so. Because Seafront’s concessions “were outside the Philippines’ territorial waters,” he said (meaning in international waters off the coast of Palawan), he had to “give some shares to the political and military officers of the countries surrounding the Philippines so they wouldn’t cause any problems.”

Whether or not that was his real reason for paying them off, he was nevertheless paying them off. Could he have been doing so because they were pressing him to return some of the gold he was recovering from Teresa II and other sites? “Their” gold?

As to the Hundred Generals, there was no difficulty figuring out who they might be, once you knew where to look.

Over the years, clandestinely, thousands of tons of gold had been moved for Ferdinand Marcos with the cooperation and participation of a number of generals and secret agents who, therefore, knew how much gold was moved and where it went. Completely aside from their professional affiliations with the U.S. government and its allies, most of these men were interlocked through a global network of ultraconservative, anti-Communist clubs, lobbying groups, consultancies, and professional organizations. Hard, concrete evidence shows them to have become directly involved in the hunt for Yamashita’s Gold while Ferdinand Marcos was in power, and then taking up the recovery effort again for themselves after he fled into exile. Since they considered themselves to be paladins in other respects, could they have turned on Ferdinand in 1983 and held his feet to the fire?






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