Part 3: The Collateral Damage of Golden Lily

In parts one and two, an outline was given how trillions in stolen loot buried during the second world war were confiscated by intelligence officers and funneled into a covert action fund under the auspices of fighting communism.  Still, the early riches recovered by Lansdale and his affiliates comprised no more than one-sixth of the total that was hidden.

Many of the 176 vaults in and around the city of Manila would not be dug out until much later. The president of the Philippines, Ferdinand Marcos, began excavating these in the mid 1970s.

After World War II, Ferdinand Marcos learned of gold recoveries in Luzon by some of his Ilocano constituents, and made a claim on them. Thereafter he made deals with Japanese to carry out joint recoveries. In 1975 he hired Nevada mining engineer Robert Curtis to excavate a major loot burial site at Teresa... this site was worth around $190 billion. Curtis figured out the Japanese map codes and excavated half the site, from which Marcos removed the contents. Curtis built Marcos a smelting factory at Subic Bay to recast the gold and disguise its metallurgical fingerprint, so that the bullion could be moved into the world gold market without arousing suspicion about its provenance.

Marcos personally obtained $14 billion from the excavation, which was moved into Swiss accounts. In addition to his wealth, he counted several well-known Americans among his friends, including the governor of California.

Certainly in 1980, Marcos was in Reagan's camp. They had been friends for years, since 1969 when President Nixon assigned Reagan to represent the United States at the gala opening of Imelda Marcos's multi-million-dollar cultural center in Manila. Reagan charmed the Philippine president and his wife as the former beauty queen danced with the former actor.

In 1980, Marcos also was annoyed by Carter's nagging about human rights and frightened by Carter's inability to protect another despot, the shah of Iran, from ouster and a humiliating exile. As U.S. president, Reagan would drop the human rights lectures, look the other way on Marcos's renowned corruption, and defend Marcos as an important Asian ally. Vice President George Bush would even toast Marcos for his "adherence to democratic principles."

Documentary evidence about the alleged Marcos-to-Reagan payoffs first surfaced after Marcos was ousted by a revolution in March 1986. As Marcos's fall neared, Reagan arranged for the dictator to be flown to Hawaii. Marcos's opponents then ransacked government files and found a Feb. 17, 1986, letter signed by a senior Marcos aide, Victor Nituda.

In the letter, Nituda warned Marcos that Reagan's emissary, Sen. Paul Laxalt, R-Nev., was demanding that sensitive files, including ones listing the 1980 transactions, be turned over to the Americans before Marcos could go to Hawaii. Nituda's letter specifically cited accounts set up for Reagan and his 1980 campaign manager William J. Casey, who, in 1986, was Reagan's CIA director.

However when Ferdinand refused to lend Ronnie his gold, the Gipper turned on him.

Given the concurrent attempt to blackmail Tokyo over the Showa Trust, Reagan's advisors – particularly Casey – argued that Marcos had gone too far. The time had come to depose him, and in the process divest him of the mass of bullion he still had salted away. Casey swung into action. In the months that followed, People Power took to the streets of Manila, mobs demanding that Marcos step down.

As popular clamor increased in the streets, Casey is said to have flown to Manila with Treasury Secretary Regan, CIA economist Professor Frank Higdon , and attorney Lawrence Kreagar. The purpose of the meeting, according to a Marcos aide, was to convince Ferdinand to turn over 73,000 metric tons of gold. Casey and Regan were giving Marcos a last chance. Regan reportedly told Marcos that he must sign over the gold in return for 80 percent of the value in U.S. Debt instruments, 20 percent in cash. Sensing that the end was nigh, Marcos wanted 80 percent in cash, only 20 percent in debt instruments. When haggling proved fruitless, Professor Higdon is said to have told Marcos he would be out of power 'in two weeks'. Indeed, weeks later Marcos was in Hawaii, effectively under house arrest.

Vice President "Poppy" Bush went on to use a shell mining company, Barrick Resources Corporation, to process the stolen gold out of the Philippines. Upon leaving his one term as president, George H.W. became an international consultant for the company. It's owner Peter Munk, a tycoon with ties to the mafia, gave more than $100,000 to Junior Bush's presidential campaign. Once George W. took office in 2001, one of his first acts was to send a team to Manila.

George W. got into the act in March 2001, sending Navy SEAL commandos to the Philippines to recover a portion of General Yamashita's gold. Bush was privately in the market to buy some of the bullion that was being recovered. His representative was William S. Parish, his nominee as ambassador to Great Britain, and the manager of his blind trust.

As the Fall of 2001 approached, Junior faced a conundrum. The enormous trove of 10 year bonds which his father had covertly borrowed to flush out the Soviet economy in 1991 were coming due. Yet, the collateral pledged against the notes were being held in the illegal Black Eagle Trust, sourced from stolen war loot. The secrecy of the funds could be compromised if they were used to pay off the securities, which were held by Cantor Fitzgerald in vaults beneath the World Trade Center.

According to an unofficial analysis based on documents released by the Office of Naval Intelligence, this circumstance may have provided a strategic rationale for the WTC attacks.

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Tags: Golden Lily, collateral damage (all tags)

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