Golden Lily: How the CIA Funded a Covert Empire

One of the darkest episodes of the second world war was the brutal slaughter of 30 million people in East Asia by the Japanese. The death rate of Allied POWs in this region was a staggering 30% (more than 7x higher than the death rate in Nazi camps). Yet, there is little discussion today of these war crimes. In fact, every member of the imperial family was exonerated. Why were Japanese royalty let go, while Germans were prosecuted? The grotesque answer lies with riches that were looted from the Chinese, Koreans, and Burmese during the conflict.

When Allied forces blockaded the Japanese, much of their stolen treasure was buried in the Philippines. Upon their surrender, General Yamashita was taken into custody along with his surrogates. His driver, Major Kojima Kashii, was tortured to reveal the booty’s location.

Since Yamashita had arrived from Manchuria in October 1944 to take over the defense of the Philippines, Kojima had driven him everywhere. In charge of Kojima’s torture was a Filipino-American intelligence officer Severino Garcia Diaz Santa Romana, a man of many names and personalities, whose friends called him ‘Santy’. He wanted Major Kojima to reveal each place to which he had taken Yamashita, where bullion and other treasure were hidden.

Supervising Santy, we learned, was Captain Edward G. Lansdale, later one of America’s best-known Cold Warriors. In September 1945, Lansdale was 37 years old and utterly insignificant, only an advertising agency copywriter who had spent the war in San Francisco writing propaganda for the OSS. In September 1945, chance entered Lansdale’s life in a big way when President Truman ordered the OSS to close down. To preserve America’s intelligence assets, and his own personal network, OSS chief General William Donovan moved personnel to other government or military posts. Captain Lansdale was one of fifty office staff given a chance to transfer to U.S. Army G-2 in the Philippines. There, Lansdale heard about Santy torturing General Yamashita’s driver and joined the torture sessions as an observer and participant.

Early that October, Major Kojima broke down and led Lansdale and Santy to more than a dozen Golden Lily treasure vaults in the mountains north of Manila, including two that were easily opened.

$100 billion in wealth (in 1945 prices) was estimated to be buried in the Philippine hills, including tens of thousands of tonnes of gold. Adjusted for inflation, its worth is valued at about $3 trillion. After being briefed of the situation, the Truman administration decided to keep the treasure a state secret. The loot would be funneled into a covert political action fund to fight communism. It was called the Black Eagle Trust.

According to [CIA Deputy Director] Ray Cline and others, between 1945 and 1947 the gold bullion recovered by Santy and Lansdale was discreetly moved by ship to 176 accounts at banks in 42 countries. Secrecy was vital. If the recovery of a huge mass of stolen gold became known, thousands of people would come forward to claim it, many of them fraudulently, and governments would be bogged down resolving ownership. Truman also was told that the very existence of so much black gold, if it became public knowledge, would cause the fixed price of $35 and cause the fixed price of $35 an ounce to collapse...

Documents do show that between 1945 and 1947 very large quantities of gold and platinum were deposited in the world’s biggest banks, including Union Banque Suisse and other Swiss banks, which became major repositories of the Black Eagle Trust.

 

Hirohito & Asia’s Stolen Treasures

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Part 2: From Golden Lily to the War on Terror

Part 3: The Collateral Damage of Golden Lily

Part 4: Golden Lily's Liar Loans and the Subprime Meltdown

Tags: Golden Lily, Japan, United States, WWII, Yamashita, Lansdale, CIA, empire, Cold War, communism, OSS, philippines, Santy, Black Eagle Trust, gold, Hirohito, war crimes (all tags)

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