Ferdinand Marcos: Cloak and Dagger

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Ferdinand Marcos: Cloak and Dagger

Cloak and Dagger

Ferdinand Marcos: Iron Butterfly

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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 Admiral) 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 pipeline 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 occasion. 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 Svngman 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.

Clamorous 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 year — CIA 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.

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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 anti-Castro 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 family — and 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 MI6 in London to do something urgently. Three days later the Australian governor-general, 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 MI6 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 radar-transparent 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 right-wing 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 II, 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 right-wing 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 O. Graham, the former director of the Defense Intelligence Agency, became its vice-chairman.

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.[5]

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 Philippines. 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.

 

 

 

 

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