"Chapter 7, Nazi Gold".
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"The Merkers Treasure."
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"The wealth robbed from the victims of the Nazis helped fund the so-called European miracle of reconstruction.
"The Nazis had precise plans for a comeback, resting on their ability to hide their ill-gotten loot from the Allies, and on aid from friends in foreign countries, including the United States. Some of the hoard was hidden safely in secret Swiss bank accounts; other portions were shipped to South America (mainly to Argentina) for safekeeping. One conduit to Argentina was controlled and directed by Martin Bormann. Bormann’s fate is still uncertain, and valuables he sent to Argentina in project Action Feuerland are still shrouded in a fog of mystery and intrigue."
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" ... A good deal of the American effort to recover the Nazi gold fell under Operation Safehaven. However, no one realized the enormous size and complexity of the task until early April 1945. Late in the evening of March 22, 1945, units of Lt. Gen. George Patton’s Third Army crossed the Rhine. What at first was a trickle of soldiers crossing the river soon turned into a raging flood of troops."
They got information about Nazi loot hidden in a mine at Merkers.
"Military wires blazed with requests for reinforcements to guard the mine. At first, Russell ordered the 712th Tank Battalion to advance to Merkers to guard the entrances. The Ninetieth Division Military Police provided additional forces. By evening, American troops discovered five more possible entrances to the mine, and it was obvious one tank battalion was not enough. Maj. Gen. Herbert L. Earnest then ordered the First Battalion of the 357th Infantry Regiment to go to Merkers and reinforce the 712th. Russell also told an XII corps G5 officer what was going on at the mine.
"On the morning of April 7, American forces placed guards at each additional entrance. At 10 a.m., Russell and two other officers with Rave and mine officials entered the main entrance, where a shaft took them 2,200 feet below the surface. In the main tunnel, they found 550 sacks of Reichsmarks, and located the main vault behind a 3-foot thick brick wall that enclosed an area at least 100 feet wide. In the center was a heavy bank vault door.
"Patton was informed that a large quantity of paper money but no gold was found. As Patton’s forces continued their lightning advance into Germany, he ordered the 357th Infantry Regiment, except for the First Battalion, to move out and join the Ninetieth Infantry Division. Patton also ordered the vault door blown open.
"Early on April 8, Russell, with a public affairs officer, photographers, reporters and soldiers of the 282nd Engineer Combat Battalion, reentered the mine. The vault door was easily blown open and they entered Room 8. The size of the hoard was simply stunning; stretching before them was a room about 75 feet wide and 150 feet long. The room was lighted, but not ventilated.
"Before them were more than 7,000 bags stretching all the way to the back of the room. The bags were laid out in 20 neat rows about knee-high and separated by roughly 2.5 feet. Baled currency was neatly stacked along one side of the room. At the back were 18 bags and 189 suitcases, trunks and boxes; each carefully marked with the name Melmer. It was obvious that these containers belonged to the SS. It also was the first clue to the complexity and scope of the Nazi looting of Europe.
"Russell and his men broke some of the seals on the bags to inventory the stash: 8,198 bars of gold bullion; 55 boxes of crated gold bullion; hundreds of bags of gold items; more than 1,300 bags of gold Reichsmarks, British gold pounds and French gold francs; 711 bags of American $20 gold pieces; hundreds of bags of gold and silver coins; hundreds of bags of foreign currency; nine bags of valuable coins; 2,380 bags and 1,300 boxes of Reichsmarks (2.76 billion Reichsmarks); 20 silver bars; 40 bags containing silver bars; 63 boxes and 55 bags of silver plate; one bag containing six platinum bars; and 110 bags of currency from various countries. In other tunnels, they found a large quantity of artwork. The hoard also revealed the brutality of the Nazi regime. Included in the inventory were bags of teeth containing gold fillings extracted from concentration camp victims.
"Once aware of the enormous size of the hoard, Patton considered the matter to be political and immediately requested that it be turned over to SHAEF. Eisenhower appointed Col. Bernard D. Bernstein, deputy chief, Financial Branch, G-5 Division of SHAEF. On April 15, a convoy with constant overhead fighter protection moved the treasure to the Reichsbank in Frankfurt.
"By mid-August, the gold was weighed and appraised. SHAEF valued the gold at $262,213,000, the silver at $270,469. A ton of platinum and eight bags of rare coins were not appraised. Early in 1946, SHAEF turned the gold over to the Inter-Allied Reparation Agency, which eventually turned it over to the Tripartite Commission for the Restitution of Monetary Gold. The Tripartite Commission returned the gold to the central banks of the countries from which it was looted. Due to the Cold War, some of the gold was not distributed until 1996.
"The manner in which the Allies divided the Merkers gold is plagued with controversy. The Allies took no account of how much was from smelting dental gold. Interestingly enough, in 1948, the army microfilmed the records of the Reichsbank’s Precious Metals Department and turned them over to Albert Thoms, who was working for the successor bank. These records disappeared in Germany and were not relocated again until the 1990s.
"No other cache of gold and valuables found in Europe rivaled the size of the Merkers find. In the Philippines, one of the caches of the Golden Lily, the Japanese Emperor’s looted treasure, reportedly unearthed by Philippine President Ferdinand Marcos, was larger. The only other possible cache from Europe that could rival the Merkers find would be the Croatian Ustashi treasure. However, the gold and valuables looted by the Ustashis have never been located.
"The best evidence suggests that the Ustashis smuggled them out of Europe through the Vatican-CIA ratline. How much of the Ustashi cache made it into the Vatican vaults remains shrouded in secrecy and mystery. American forces located several other smaller caches, mostly in the alpine region on the German-Austrian border, where the Nazis tried to stage a final stand."
"Considering South America was a prime refuge for the Nazis after the war, it is instructive to look at changes in the gold reserves of South American countries, particularly Argentina. Argentina’s gold reserves increased from 313.83 metric tons in 1940 to 1064 tons in 1945. The increase in the gold reserves of Argentina was $635 million. To put that figure in perspective, the U.S. budget for 1940 was about $9.4 billion. Brazil also saw an increase in gold reserves from 45 metric tons in 1940 to 314 tons in 1945, or an increase of about $228 million."
" ... However, gold was only part of the plan. Even more valuable were the bearer stocks and bonds, and the Nazi front corporations set up worldwide by Bormann. They held valuable patents, and produced a steady income stream to finance the Nazi underground."
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"Safehaven Operations"
"The Allies used various methods and programs to recover Nazi gold. Poland took the first measures against Nazi looting by moving their gold reserves to Romania before they were invaded. Unluckily, the Nazis soon overran Romania too, and seized the Polish gold.
"Several other European countries made similar efforts. French officials at the National Bank shipped their treasure to the United States. At the end of 1939, Belgium entrusted the French with $223 million for safekeeping. Soon after the German invasion of the Low Countries, Belgium urged France to ship its gold to London aboard military cruisers. However, the French transferred the gold to Dakar, in its West African colony of Senegal. After the fall of France and negotiations with Vichy, the Nazis got the Belgian gold.
"Within the first hour of the Nazi invasion of the Netherlands, Dutch authorities shipped their gold reserves in Amsterdam to England. A second boat carrying 11 metric tons of Dutch gold reserves stored in Rotterdam struck a mine near the coastline, and was marooned. By 1942, the Nazis recovered most of the gold aboard. Other European countries failed to take any precautions, and the Nazis seized their gold reserves as soon as they were overrun. In this way, most of the gold reserves in the central banks of Europe fell to the Nazis, except for those of France and a portion of those of the Dutch.
"The first action taken by the United States was Executive Order 8389, signed by Roosevelt on April 10, 1940 freezing Norwegian and Danish assets in the United States. Eventually, the United States froze the assets of every country except England, Japan and China. Freezing assets blocked Nazi accesss to them in the United States."
"On Jan. 5, 1943, the Inter-Allied Declaration Against Acts of Dispossession Committed in Territories Under Enemy Occupation or Control, better known as the London Declaration, was announced. The measure declared the Allies would no longer recognize the transfer of property in occupied countries, even if it appeared legal. The Allies were aware that the Nazis were forcing people in occupied countries to sell or transfer their property to them. Up to then, the Nazis had painstakingly created the illusion that such transfers were legal.
"On Feb. 22, 1944, the United States announced in its Declaration on Gold Purchases that it would no longer recognize the transfer of gold loot from the Axis, nor buy gold from any country that had not broken relations with the Axis. England and the Soviet Union followed with similar declarations."
"On Dec. 6, 1944, Operation Safehaven was organized. Four days later, the State Department released a paper urging a soft line toward Switzerland. This was the first step in sabotaging efforts to return assets to Holocaust victims. In essence, it continued a feud between the Treasury and State departments regarding peace terms and the 4Ds program.
"In February 1945, the Yalta Conference agreed that reparations would be exacted from Germany. The conference also set the groundwork for the Allied Reparations Commission."
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"Operation Safehaven was by far the best known and biggest action the Allies launched to recover assets looted by the Nazis. ..."
"In May 1944, Samuel Klaus, Special Assistant to the General Counsel of the Treasury Department, proposed a plan for a fact-finding mission to neutral countries dealing with the problem of hidden Nazi assets. ... "
"Klaus found the conditions in Spain the most troubling. There, U.S. Ambassador Carlton Hayes was unsympathetic to Safehaven’s investigations, although Spain was the country most damaging to its objectives. In fact, the OSS had to work out of Portugal due to the ambassador, who identified undercover agents to the Spanish police. Hayes insisted on censoring all incoming and outgoing OSS messages. He even blocked the broadcast of Safehaven publicity material for a time. Hayes was friendly to a fault with the Franco regime; however, he is credited with keeping Spain from joining the Axis, even though such an alliance probably never was part of the Nazis’ plans. Just as Hitler recognized the need for a neutral Switzerland to get foreign currency and laundered gold through, the Nazis most likely recognized the need for a neutral port on the Atlantic to receive supplies, for instance, gasoline imported through Spain after Hitler invaded the Soviet Union.
"Hayes was aware of Spain’s oil imports. On Feb. 26, 1943, he commented that oil products in Spain were considerably easier to get than on the East Coast of the United States. The supply of gasoline and petroleum products available equaled the full capacity of Spain’s tanker fleet. Standard Oil supplied the gasoline from its oil fields in South America. This presented the Roosevelt administration with a Pandora’s box of dilemmas. Forcing Standard to stop the shipments could have resulted in an interruption in the U.S. oil supply. At one point during the war, Standard threatened to do just that."
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"Cooperation between the OSS and Safehaven was informal until Nov. 30, 1944, when instructions sent to all OSS stations detailed the intelligence requirement expected by the program. Safehaven was able to use already active OSS operations, redirecting them slightly toward the collection of economic data.
"This made Safehaven dependent on the personalities of the various OSS station chiefs. As mentioned, the ambassador had compromised OSS missions in Spain. In Switzerland, Allen Dulles was the station chief. Dulles had already been exposed in an earlier operation, a joint program with the British, for spying on Americans, and he was suspected of being sympathetic to the Nazi cause. Roosevelt deliberately sent Dulles to Switzerland where he would be most tempted to help his clients. When Dulles reached Berne, he was aware that he was being watched. He knew he could not use official channels to help his clients in the United States. So he used his Vatican connections to help the Nazis and couriers with diplomatic immunity. The Vatican readily agreed to help Dulles in its zeal to regain its assets in Germany and further its fanatical anti-communist philosophy.
"Declassified files show that Slovenian Bishop Gregory Rozman was trying to arrange the transfer of huge quantities of Nazi-controlled gold and Western currency discreetly secreted in Swiss banks during the war. The bishop was sent to Berne with the help of Dulles’ friends in the intelligence service. For a few months, the Allies were successful in preventing Rozman from getting the funds. Then, suddenly, Rozman had the money for his Nazi friends living in Argentina. Dulles had fixed it. This incident may be only the tip of the iceberg. In 1945, the U.S. Treasury Department accused Dulles of laundering funds from the Nazi Bank of Hungary to Switzerland. Similar charges were made against Dulles’ agent, Hans Bernd Gisevius, who worked for the OSS while serving at the Reichsbank. The State Department quickly took over the case from the Treasury, after which the investigation was silenced and dropped. Gisevius also was involved in the ratlines.
"Dulles’ career in Berne during WWII was marked by several money-laundering cases. After the Nazis tipped off Dulles that the Swiss codes had been broken, he shifted his laundering activities to the banks of Belgium, Luxembourg and Liechtenstein. He used a roundabout route through Japan, aided by Vatican couriers. After the war, all the banks in these countries refused to allow Allied investigators to look at their books. One of Dulles’ dirtiest tricks may have been an effort to buy more time to move Nazi gold through Switzerland. A former East Bloc intelligence officer confirmed that Dulles warned the Nazis that their code had been broken. Shortly afterwards, the SS told the High Command to tighten code security, stop using the radio and switch to couriers. For once, the Allies had no information on German battle plans. This most likely explains how the Germans were able to launch the Battle of the Bulge as a complete surprise.
"Dulles and his comrades exerted a good deal of influence to ensure that U.S. investments in Nazi Germany were not seized for reparations. In Switzerland, the SS bought a large amount of stock in American corporations and laundered money through the Chase and the Corn Exchange banks. Even more brazen was the case of the Pan Am clippers hired by the W.R. Grace Corp., to transport Nazi gems, currency, stock and bonds to South America. These operations were the product of Dulles’ money laundering for the Nazis. Several American officers readily admit that much of the Nazi gold was never turned over to them. One officer tells of being in a huge vault filled with gold, gems and currency that never appeared in any U.S. files.
"Dulles backed Germany for a long time, seeing it as a bulwark against the Soviets. The young Lt. William Casey was another OSS agent who shared this view. Casey served in the SI division in France and the Lowlands following liberation. In a report from Paris, Casey wrote that Safehaven was a valuable field of endeavor, especially because of the potential for leverage with German financial circles. After the war, Casey worked on Wall Street before becoming Reagan’s CIA Director."
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"In 1946, Dulles’ men simply changed their OSS uniforms and became the War Department Strategic Service Unit. Sometimes they were the War Department Detachment; other times, the Document Disposal Unit. In effect, there were two factions left from the OSS - a liberal faction that took orders from the president and the other under the control of Dulles. The latter faction was hoping for a conservative victory by Dewey so it could unleash an émigré army against the Soviets. Dulles had a secret ally in Region IV around Munich, where the CIC was helping to recruit ex-Nazis.
"Due to Dulles’ close association with German industrialists, he was unwilling to give the attention to Safehaven that Washington expected. In November 1944, with the Allies now in control of France, a land route to Switzerland was reestablished, making it possible to send an X2 agent to Berne to help run the Safehaven program there. By April 1945, X2 in Berne had unearthed a great deal of information on Nazi dealings, including:
"Gold and bonds looted from Europe and received by certain Swiss banks.
"Additional funds sent by the Deutsche Verkehrs-Kreditbank of Karlsruhe to Basel.
"Stocks and bonds held in Zurich by private firms for the Nazi Party.
"Hoards of Swiss francs credited to private accounts in various Swiss banks.
"Cash and property held in Liechtenstein.
"More than 2 million francs held by the Reichsbank in Switzerland.
"Forty-five million Reichsmarks held in covert Swiss bank accounts."
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"Nazi money flowed in a circle from Germany to the Vatican, then on to Argentina and back to Germany. Argentina’s economy boomed from the influx. The so-called economic miracle of the 1950s came from the same money the Nazis looted from Europe in the 1940s.
"From the beginning, Safehaven was an ambitious project with several goals, including immediately forcing the neutral countries to stop trading with the Nazis. The secondary goals of Safehaven follow:
"To restrict German economic penetration outside the borders of the Reich.
"To prevent Germany from sequestering assets in neutral countries.
"To ensure that German assets would be available for postwar reparations and to rebuild Europe.
"To prevent the escape of those members of the Nazi ruling elite already cited for war crimes trials."
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"The British Ministry of Economic Warfare (MEW) estimated that the Merkers hoard made up only 20 percent of all the gold Germany held. In August 1945, the Bank of England estimated there would only be enough gold available for a 58 percent restitution of claims. Even this only included claims by central banks, without private claims. Where did the rest of the gold go? Although the CIA still denies that the Nazis had a plan for a comeback, captured documents show otherwise. Even members of Congress and, in particular, members of the Kilgore Committee, were aware of Nazi plans."
"By the time the Battle of the Bulge raged, Bormann had successfully moved assets out of Germany. In 1938, the number of patent registrations to German companies was 1,618, but after the Red House meeting, it rose to 3,377. Bormann also created a two-price scheme with Germany’s trading partners. The lower price was cleared or settled at the end of the banking day. The neutral importers retained the higher price on their books and the difference was collected in a German account as flight capital. Under this scheme, Bormann amassed about $18 million kroner and $12 million Turkish lira. Balance sheets showed he bought seven mines in central Sweden. He also created 750 new corporations scattered across the globe, representing a wide array of economic areas - from steel and chemicals to electrical companies. The firms’ locations were in: Portugal, 58; Spain, 112; Sweden, 233; Switzerland, 234; Turkey, 35; and Argentina, 98. All the corporations created by Bormann issued bearer bonds, so ownership was impossible to prove.
"Bormann had several means of dispersing Nazi assets. He used diplomatic pouches of Nazi Foreign Policy Minister von Ribbentrop to send gold, diamonds, stocks and bonds to Sweden twice a month. A similar pattern was used to ferry valuables to South America. Bormann also allowed other Nazis to transfer their valuables through the same channels."
"In 1941, German investment in the United States held a voting majority in 170 American corporations and minority ownership in another 108. Many of these corporations were part of the IG Farben cartel. In addition, U.S. corporations had investments in Germany totaling $420 million. With his program for flight capital well on its way, Bormann gave permission for Nazis to once again buy American stocks.
"Purchase of American stocks usually was done through a neutral country, typically Switzerland or Argentina. From foreign exchange funds on deposit in Switzerland and Argentina, large demand deposits were placed in such New York banks as National City, Chase, Manufacturers Hanover, Morgan Guaranty and Irving Trust. Manning reports the Nazis bought more than $5 billion in American stocks in this way. These same banks were active in supporting Germany. In addition, every major Nazi corporation transferred assets and personnel to its foreign subsidiaries."
"Intelligence reports since 1940 indicated the Nazis accumulated a fortune of roughly $1 billion in 1940 dollars, or about $10 billion today. The discovery of the Merkers hoard created a complex set of problems. First, the find was only about half of the estimated Nazi treasure. While the Merker’s hoard was most of the Reichsbank’s holdings, there was more gold and currency left in Berlin. Second, dividing the treasure presented a myriad of problems that remain controversial today."
" ... The SS account held the earnings skimmed from the Aktion Reinhardt operation that began in 1943 to strip the concentration camp inmates of all gold coins, jewelry and clothing. ... "
" ... Some of these private treasures, such as Goering’s, were substantial in their own right, while others were more modest. The value of these private treasure hoards is unknown, as is the fate of many of them."
"Additional caches were uncovered in the Merkers area. In another mine, the Allies found 400 tons of records from the German Patent Office, enough to fill 30 railroad cars. Another discovery included more than 2 million books, the records of the German High Command and much more."
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"With the capture of Merkers, the Allies were fast closing in on Berlin. As they advanced, the Nazis made a last desperate attempt to save the remaining Reichsbank assets by moving them to southern Germany in the alpine redoubt area. Many top Nazi officials desperate to save themselves also fled to this region with the fortunes looted from their victims.
"Ernst Kaltenbrunner, chief of the Reich Security Head Office, amassed one such private fortune and transported it into the Bavarian Alps to save himself and his ill-gotten gain. Only one document survives detailing the contents:
"50 cases of gold coins and gold articles (each case weighing 100 pounds)
"2 million U.S. dollars
"2 million Swiss francs
"5 cases of diamonds and gemstones
"a stamp collection worth 5 million gold marks
"110 pounds of gold bars
"Goering also transported his private hoard to the region, including a large collection of vintage wines. The Nazis did not ship all the Reichsbank’s assets to Merkers, leaving some in Berlin to pay the troops and cover other expenses in the final days of the war. Reichsbank assets left in Berlin included a prodigious quantity of paper money, 730 gold bars and millions in gold coins. The gold bars were valued at nearly $10 million.
"As the Allies continued to advance with the Russians on Berlin, the Nazis shipped most of the remaining assets of the Reichsbank to southern Germany aboard two special trains, code named Adler (meaning eagle) and Dohle (meaning jackdaw). Once these trains left Berlin, $3,434,625 of gold still remained in Berlin.
"Because of the rapid Allied advance and air cover, the trains were unable to travel directly to Munich, and were forced to take an alternate route through Czechoslovakia. On April 16, three days after leaving Berlin, the trains were stranded about 10 miles from Pilsen, waiting for the tracks to be cleared for a final run to Munich. While stranded, the Nazis loaded some of the treasure onto trucks for the remaining trip to Munich. On April 19, the trains were just inside the Bavarian border, and the Nazis again loaded another portion of the treasure onto trucks.
"By nightfall on April 19, the train was about 50 miles south of Munich at Peissenberg, where the Nazis planned to hide the treasure in a lead mine. However, the electricity was out and the mine began to fill with water. The Nazi in charge of the treasure decided to hide it in a small town named Mittenwald. At this point, it is believed the fortune consisted:
"365 bags, each containing two gold bars
"9 envelopes of records
"4 boxes of bullion
"2 bags of gold coins
"6 cases of Danish coins
"94 bags of foreign exchange
"34 printing plates and a supply of banknote paper"
"American authorities later duped Spacil into leading them to a small cache containing 19 bags of gold coins, bullion worth $11,722, and paper money consisting of $160,179 and £96,614 sterling. Many other private hoards were hidden in this area of southern Germany.
"Starting on April 19, 1945, the Allied gold rush teams were in full operation, headed by Col. Bernstein, Cmdr. Joel Fisher and Lt. Herbert DuBois. Helping them were Albert Thoms, chief of the Precious Metals Department of the Reichsbank, and Emil Puhl, vice president of the Reichsbank. Gold rush teams soon located several treasure hoards. On April 26, at the Reichsbank branch in Halle, they found 65 bags of foreign currency, which included about $1 million; at Plauen, they found 35 bags of gold coins, including 1 million Swiss francs and a quarter-million gold dollars. On April 27, they learned of 82 bars of gold bullion in Aue, which was still heavily defended. On April 28, they located more than 600 silver bars and 500 cases of silver bars, which comprised the entire silver reserves of Hungary. On April 29, they found 82 gold bars at Eschwege; the following day, they found additional gold bars hidden under a manure pile at Coburg. On May 1, they found 34 cases and two bags of non-Reich gold in Nuremberg. The gold recovery teams shipped these hoards to Frankfurt.
"Both combat troops and gold teams found caches of looted treasure, including the famed gold train containing treasures from Hungary. Total estimated value of the treasure recovered from the train was $500 million, including $350 million of gold.
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"Robert Kempner, the chief prosecutor for the Nazi diplomats’ trial, expressed in a letter to Perry Lankhuff of the political division of the military government many of the problems that plagued complete recovery of the Nazi gold. The letter appears below.
""In the course of our trial against Nazi diplomats which has just been concluded, it was brought to light that the German Foreign Office had - besides other gold funds - a special Ribbentrop gold fund, in gold bullion, weighing approximately fifteen tons. Leads and newspaper accounts from various countries in the Western Hemisphere indicate that unrecovered Foreign Office gold, probably in the hands of former German Foreign Office officials, is still at work for anti-American purposes. Large numbers of former German diplomats who had to do with the Foreign Office gold are still in foreign countries, e.g., Spain, Italy, Ireland, Argentina, Sweden, and Switzerland, living well from unknown resources.
""It should be noted that besides other former German diplomats, a brother-in-law of Ribbentrop is living in Switzerland, and at least two other German Foreign Office officials who dealt with German gold matters.
"Out of the fifteen tons, about eleven tons of Ribbentrop’s Foreign Office gold was hurriedly removed from Berlin in 1945:
"1. 6.5 tons to Ribbentrop’s Castle Fuschl in Austria (now American Zone of Austria). The larger part of this consignment was allegedly turned over to American troops in the neighborhood of Fuschl. However German Foreign Office officials stated here in Nürnberg the amount allegedly turned over was less than the amount, which was shipped to Fuschl.
"2. 2 tons to Schleswig-Holstein in the British Zone allegedly turned over to the British.
""3. 3 tons to the South of Germany on the shores of Lake Konstanze, an area then in American hands. Out of the last amount, two-thirds of a ton was taken to Berne, Switzerland, in the closing days of the war. This was done in the presence of the son of the former German Minister of Foreign Affairs, von Neurath, who according to newspaper reports, arrived a short time ago in the Argentine.
""About four tons were sent between 1943 and 1945 to German embassies, notably to Madrid, Spain (one ton), to Stockholm, Sweden (one-half ton), to Berne, Switzerland (three-fourths ton), to Ankara, Turkey (about 1 ton), to Lisbon, Portugal (an unknown quantity).""
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"The recent release of classified documents shows the recovered funds were deposited in the Land Central Bank in Munich, where the gold and currency vanished. None of the recoveries around Garmisch ever reached the Federal Exchange Depository. Various American authorities in the chain from Garmisch to Frankfurt were all familiar with the proper procedures for transferring funds, but the funds would reach Munich and then disappear. After an exhaustive search, authors Ian Sayer and Douglas Botting decided that $432,985,013 from the Reichsbank was unaccounted for. Included were diamonds, securities and currencies given to Otto Skorzeny by SS General Spacil totaling more than $9.1 million, of which the Allies only recovered $492,401. In one case, Maj. Roger Rawley recovered $8 million in paper currency and turned it over to Maj. Kenneth McIntyre. From there, the funds disappeared."
"Many Americans tried to strike it rich in the black market economy, but most failed. The lucky few came predominantly from the Office of Military Government in Bavaria. The head of the Financial Division in Munich was Col. Russell Lord and his aide, Maj. John McCarthy from Property Control. Both figure prominently in the disappearance of gold and currency once it reached Munich. Once the gold from Garmisch was turned over to the proper authorities in Munich, only McCarthy and Lord had access to it. An American investigator also accused McCarthy of having a hand in the drug trade in and around Garmisch and Munich."
"By the middle of July 1947, Col. Smith completed his preliminary investigation and filed his report to Gen. Clay. The report pointed out that there was enough evidence to warrant a full-scale investigation, and Gen. Clay issued an order to that effect. Fearing for his life, Smith asked for an immediate transfer. Afterward, the military governor and post commander of Garmisch were shipped back to the States and several other officers transferred out of the area. The Inspector General Office suddenly closed the investigation. Kulka alleges the order to stop the investigation came from Clay’s office. He also claims half of the U.S. command would have been in trouble if the investigation continued. Files gathered by Smith and Kulka were destroyed."
"The Garmisch affair did not end with Smith and Kulka. In September in Bad Tohr, Frank Gammache was charged with misappropriation of military property, and disorderly and discreditable conduct. The charges were trivial compared to the criminal activity in the area. Gammache was going to be the small fall guy. Operation Garpeck opened a further investigation. Heading the operation were Victor Peccarelli and Philip von Pfluge Benzell. The case soon reached to San Francisco, where now civilian Capt. Neumann lived. The investigation into Maj. McCarthy reopened. McCarthy’s influence still lingered in Munich, as files on him disappeared before investigators got to them. Shortly after they began bugging his phone, McCarthy learned of the tap and moved.
"The investigation soon crossed the path of journalist Guenter Reinhardt, who came from a German Jewish banking family. At the age of 21, he came to the United States and got his first job at a bank in New York. In 1933, he became a freelance journalist who wrote a syndicated column on foreign affairs for the McClure newspapers. Various banking and civic groups commissioned Reinhardt to conduct an investigation into Germany’s likely future international relations. Reinhardt turned over to the House Committee on Immigration and Naturalization the information he uncovered about Nazi activities in the United States. This led him into activities with American Intelligence. In 1934, he acted as a liaison between the McCormick Committee and the FBI. In 1942-43, Reinhardt infiltrated communist organizations for the bureau. In 1946, he joined the CIC in Germany.
"By all reports, Reinhardt was an enthusiastic and dedicated agent in Europe. However, he soon began to show signs of stress and fatigue when he realized the whole system was corrupt. By the summer of 1947, he realized that his CIC career was in jeopardy. His superiors secretly arranged to send Reinhardt home. He complained about the transfer, but there was no appeal and he was forbidden to go to the Inspector General, under threat of immediate arrest. He was further warned that if he spoke with the press or tried to get another job in Germany, he would be arrested for violating security regulations. In addition, they threatened to drag his German girlfriend through the mud.
"Outraged at the actions and threats, Reinhardt dictated the first of two memos. The formal 48-page report revealed the irregularities and fake intelligence reports in the Munich region, and accused CIC of widespread corruption and incompetence. The report, written in November, caused an immediate shake-up. The operations chief for Bavaria was dismissed and the executive officer was transferred. However, there also was a cover-up of two chains, one from Garmisch to Augsburg and another from Munich to Nuremberg. After he arrived in New York in December, Reinhardt wrote his second memo, a 55-page document that was divided into nine sections. The opening section, “Loot and Smuggling Situation,” described how U.S. personnel continued to smuggle valuables into the States; the higher the rank, the greater the problem. Reinhardt detailed how a general’s baggage contained 166 crates laden with silverware, china and other valuables looted from castles around Hesse. After his appointment as a special consultant, Reinhardt dictated his memo to Assistant Secretary of Army Gordon Gray, who later became director of the CIA.
"The heart of the memo charged that a group of Americans and Germans headed by John McCarthy were involved in widespread corruption in the Garmisch area and wielded enough power to derail any investigations. The memo was sent to Gen. Clay in Germany and caused an immediate uproar. Clay hated scandals in his command. Rather than clean up the mess, he launched another vast cover-up. Gen. Weems canceled the ongoing Operation Garpeck shortly after Reinhardt’s memo arrived in Germany. The Army decided the charges were overblown.
"McCarthy and his superior, Col. Lord, did not escape unscathed. While they survived charges from the Reinhardt memo, their boundless greed eventually caught up with them. The pair planned to buy various IG Farben plants through a front they set up in Liechtenstein. An investigation ordered by Gen. Clay unmasked their scheme and the Army discharged them. However, Gen. Clay made no public announcement of the illegality of the scheme or its outcome. Yet while the military government in the Munich area was beset with corruption, the looting of the Nazi hoard pales in comparison to the money laundered by the neutral countries."
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"The plot to counterfeit British pounds figured prominently in the Nazi finance plans. Perhaps one of the most understood affairs of the war, it is often mistakenly referred to as Operation Bernhard; its true name was Operation Andrew or Andreas. No one knows for certain the extent of the action, or how many bogus notes the Nazis placed in circulation.
"The Bank of London had its own reasons to keep mum about the forged bills it found in circulation as the Nazis designed Operation Andrew to bring about the downfall of the British pound. The operation was the brainchild of Alfred Nanjocks, a fanatical Nazi. Nanjocks was the officer who simulated the Polish attack on the German radio station that started the war. After occupying the Low Countries, Heydrich transferred Nanjocks to the documents division of the SD, because he had earned a reputation of being too reckless and violent for his own good. Forging passports was not to the hothead’s liking. However, flooding the world in bogus currency to destabilize the English economy appealed to him. Nanjocks was imagining just that.
"The British were the first to try disrupting the enemy’s economy using counterfeit money. The British forged German auxiliary certificates of payment for 50 Reichspfennige and dropped them from planes all over Germany.
"Immediately after, Nanjocks took the idea to Heydrich, who not only approved the scheme, but also added the forging of American dollars and sought out Hitler’s approval. Hitler refused to approve the forging of dollars, because at that time Germany was not at war with the United States. Funk and other bureaucrats did not like the idea much. Funk worried that destabilizing the pound could create a creditor backlash and destabilize the Reichsmark. Funk’s worries testify to the degree of collusion between the Bank of England and the Nazis.
"Heydrich assigned the matter to RSHA Bureau IV, which created a new division, SHARP 4, to oversee it. In the summer of 1942, the Nazis set up the forging ring inside the Sachsenhausen concentration camp headed by SS major Fredrich Kruger. The operation was formally known as Aktion1 in Berlin. The use of inmate labor limited security problems, but the group had a tough time developing a suitable paper. Max Bober, a printer by profession, headed the team of 60 inmates. The counterfeiters were isolated from the rest of the Sachsenhausen concentration camp. The Nazis provided the inmates with everything they needed, but sabotage would have resulted in their immediate death. It was not until 1943 that a Hahnemuhl plant produced a suitable paper. The factory delivered 12,000 sheets a month to the operation. Each sheet produced eight notes. Even then, the forged notes were only mediocre at best. It was not until the Nazis located Salomon Smolianoff, an expert counterfeiter, that they could produce suitable notes."
"The operation eventually shipped the equivalent of $4.5 billion in British pounds to Berlin and then all over the world. Nazi agents used the forged notes to buy legitimate objects, which they then resold for stable world currencies. German embassies in the neutral countries received some of the notes to exchange for local currency. The first attempt to distribute the notes widely was disastrous. The German military arrested their own agents when they tried to pass the forged notes, because Action1 was top secret.
"At some point, the underlying mission of Action 1 changed. Himmler and Lt. Grobel, head of Bureau VI, became greedy. They imagined laundering the notes on a large scale and skimming the profits for their personal benefit. To carry out the widespread distribution, Friedrich Schwend was brought into the operation. In the 1920s, Schwend was an arms dealer. He married the niece of the Minister of Exterior Baron von Neurath. Through his wife’s family connections, he received an appointment as the personal administrator of the wealthy Bunge family. This is the same Bunge family that made a small fortune by shorting the market the day John F. Kennedy was murdered. In the 1930s, Schwend was working from New York managing the investments of Bunge & Born."
"Operation Andrew continued to the end of the war. The Bank of England suffered enormous losses. Even with the Russians closing in on Sachsenhausen, the operation did not shut down. It just moved to southern Germany, near the Austrian border. There, it continued to produce fake notes until about May 3. Some of the last forged notes ended up at the bottom of Lake Topltz. The Nazis hid crates of forged notes there in a midnight rowboat operation. The boxes were recovered in 2000. The fate of the balance of the notes is unknown."
"As much as half of the Reichsbank gold remains unaccounted for. Bormann undoubtedly transferred some of it out of Germany, and top Nazi officials and U.S. personnel looted other portions of the treasure. However, a great deal of looted gold was used by the Nazis to buy munitions and raw material from neutral countries."
"It was not until three months before the defeat of Germany that Switzerland took any action against the Nazis. Further, it was only one month before the defeat of the Nazis when the Swiss finally banned gold trades with them. The willingness of the other neutrals to take action against the Nazis followed a similar timeline. They did nothing until it was clear the Nazis were defeated."
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"Many other Swedish corporations that enjoyed profitable dealings with the Nazis. The one most cherished by Germany was Enskilda Bank, owned by the Wallenbergs. The Nazis borrowed funds and laundered their stolen gold there. Safehaven documents revealed that the United States was tracking the pro-Nazi activities of the Wallenbergs for several years. In February 1945, in a letter to Secretary of State Edward Stettinius, Morgenthau charged that Enskilda was making large loans to the Nazis without collateral, and covertly investing money for German capitalists in U.S. industries, in line with the Bormann plans. He further charged the bank was repeatedly connected with large black market operations.
"Morgenthau identified Jacob Wallenberg as strongly pro-Nazi and rejected the claim that Marcus Wallenberg was for the Allies. Like S&K, the Wallenbergs were playing both sides. Cousin Raul Wallenberg helped to save 20,000 Jews in Budapest. When the Soviet army recaptured Budapest, Raul was arrested as an American spy. In June 1996, U.S. News and World Report published a review of declassified documents indicating that Raul Wallenberg was indeed a spy for the OSS."
" ... From the outset, Sweden agreed to the danger of Nazi assets being used to provide a rival, but contested the legality of the Allies’ claim to the assets.
"On July 18, the two sides reached an agreement. Of the estimated 378 million kroner (about $90.7 million) in German assets in Sweden, Sweden agreed to divide the assets as follows: 50 million kroner (about $12.5 million) went to the Intergovernmental Committee on Refugees (later the International Refugee Organization); 75 million kroner (about $18 million) went to the Inter-Allied Reparations Agency (IARA), excluding the amounts the United States, Britain and France received; 150 million kroner (about $36 million) went for aid in preventing disease and unrest in Germany. The last sum was used in Sweden or other countries to buy essential commodities for the German economy. Moreover, the agreement allowed for Swedish and German owners of liquidated property to be compensated in German currency. It also allowed for a mission to travel to the U.S., British and French zones of occupied Germany to inspect Swedish properties. Further it called for the release of frozen Swedish assets in the United States (estimated at the time at $200 million); the removal of any blacklists; and permission for the Allies to hold in reserve their claims to German properties in Sweden.
"In the agreement, Sweden would restitute 7,555 kilograms of fine gold (roughly $8.1 million), the same quantity stemming from the Bank of Belgium. The United States would hold Sweden harmless from any claims arising from transfers from the Swedish Riksbank to third countries. Finally, the agreement banned the Allies from claims to any gold received by Sweden from Germany and transferred to third countries before June 1, 1945 or any additional claims after July 1, 1947. In his report, Rubin noted the talks advanced smoothly and without bitterness.
"Sweden formally approved the agreement in November 1946. Shortly before the deadline for gold claims expired on July 1, 1947, the Allies filed a request for the return of 638 looted Dutch gold bars (worth about $10 million). Sweden challenged a portion of these claims. The Swedish challenge rested on the claim that some of this gold was acquired before the London Declaration. The Allies claimed the agreement included all the gold received. The debate over the Dutch gold continued into the 1950s. Eventually, in 1955, Sweden returned about 6 tons of gold (about $6.8 million) to the Netherlands.
"Other problems arose in fulfilling the agreement. Sweden did not turn over the gold specified in the July 1946 agreement by the March 1948 deadline. Although Sweden quickly fulfilled its obligation to IRO in July 1947, it was not as forthcoming with the funds for IARA. Throughout the period, Sweden argued that Law 5 was invalid.
"The latest investigation conducted by a bank-appointed commission revealed Sweden accepted 59.7 metric tons of gold from the Nazis. The newly discovered gold bears the same mark as that stolen from the Netherlands. The investigation also found 6 tons of gold of undetermined origin that could have come from the victims of the concentration camps. This additional find of gold was missed by the Safehaven operation. So far, Sweden has only returned 13.2 tons to Belgium and the Netherlands. The commission turned over its findings to the Swedish government. It was unclear whether that commission would have the power to recommend returning the gold. One of the investigators says Sweden has a moral but not a legal obligation to return the gold. The report was released in 1997."
................................................................................................
"Britain and the United States began to enlist Sweden in the Safehaven program in 1944. Britain was in favor of restricting the program in Sweden to gold, while the United States wanted to include other assets. The United States used trade agreements as an inducement for cooperation. The Riksdag, the Swedish Parliament, voiced its approval of Safehaven and in February 1945, Sweden began an inventory of its gold and foreign currency to see how much was linked to the Nazis. By spring, the British agreed with the Americans and drafted a proposal for Sweden, which then served as a basis for talks in Lisbon and Madrid. By summer 1945, Sweden had passed several measures to restrict the sale or dispersal of German property, and expanded the range of its census to include all types of German property. In January 1946, at the urging of the Allies, Sweden broadened the laws to include German subsidiaries. In November 1945, Sweden gave the Treasury Department a report on Swedish gold transactions. From it, the Treasury decided Sweden had received $22.7 million in looted gold from Belgium. The United States soon reduced the amount to $17 million."
................................................................................................
"Before the outbreak of WWII, Portugal held strong and long-standing political and emotional ties to Britain, dating back to the 14th century Anglo-Portuguese Alliance against Spain. England was Portugal’s largest trading partner in 1938. Portugal joined the British early in WWI and sent 50,000 troops to the frontlines.
"Portugal’s association with Nazi Germany emerged during the Spanish Civil War. Dictator Antonio de Oliveira Salazar sided with Franco and Hitler, helped Germany smuggle arms to Franco’s forces and sent Portuguese volunteers to fight. Salazar hoped thereby to achieve his long-term goal of stabilization and development of the country’s economy. By the end of 1938, Germany was Portugal’s second largest trading partner. However, Salazar did protest Hitler’s invasion of Catholic Poland."
" ... In October 1942, Britain capitalized on its long-standing relationship by inducing Portugal to accept sterling in payment for goods. Britain’s gold reserves were low, and both Sweden and Switzerland were demanding payment in gold."
"Portugal’s economic success hinged on its rich wolframite or tungsten ore deposits. The Nazis were dependent on Portugal and Spain for this mineral. Tungsten has various uses, including light bulb filaments, but it was of particular value in producing war munitions. Germany’s machining industry used tungsten carbide almost exclusively, whereas the United States was still largely using inferior molybdenum-tipped tools, mainly because of the cartel agreement GE held with Krupp for carboloy or cemented tungsten carbide. In addition, tungsten was useful in armor-piercing munitions. The Allies were not solely dependent on Portugal or Spain and could buy wolframite from other sources, but it was their goal was to deprive Nazi Germany of as much tungsten ore as possible, so they bought as much as possible from Portugal. ... "
"On May 14, 1945, a week after Germany’s defeat, Portugal passed law 34,600 freezing all German assets in the country, creating a licensing system for unblocking these assets, providing a census of these assets, prohibiting trade of foreign currency notes and establishing a penalty regime to enforce these provisions. On May 23, Portugal extended the law to include all its colonies. Included in these assets were the German government buildings. On May 6, at the request of the Allies, Portugal had seized all German government buildings. Included in the seizure were 5,000 gold sovereigns found in the German Legation in Lisbon.
"While the Portuguese law gave the appearance of cooperation, the State Department feared it contained too many loopholes. For one, the census excluded participation by the Allies. The law also allowed for the transfer of blocked assets to individuals for their subsistence, and the normal exercise of commercial and industrial activity. In a report issued on June 19, 1946, the Division of Economic Security Controls decided that German firms continued to operate without any serious handicaps and many of the Nazis’ assets had dissipated. Moreover, the Portuguese census failed to uncover any holdings the Allies had not already identified."
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"The Lisbon talks of 1946-47 failed to resolve any of these issues. Portugal took a firm stand in 1945 that it was not responsible for returning gold it had exchanged with Germany during the war for tangible assets. Portugal claimed it never received German gold shipments from 1938 to ‘45. Allied intelligence decided Portugal received $143.8 million in gold from the Swiss National Bank, about half of the increase in the country’s gold reserves. Of this amount, the Allies were certain that $22.6 million was from gold looted from Belgium. During the negotiations, the Allies proposed that Portugal turn over $50.5 million. The Allies contended that this amount of gold was obtained after 1942 when it was clear to everyone the German gold reserves had expanded by the looting of Europe. Portugal claimed it was not aware of such looting. Later during the negotiations, Portugal contended that all the gold it gained had been in good faith and was not looted. Throughout the long period of negotiations stretching into the 1950s, Portugal only agreed to return $4.4 million.
"Recent evidence shows that Portugal’s claims were, at best, disingenuous. In a confidential report, Victor Gautier, a high-ranking Swiss National Bank official, reported in his meeting with Albino Garble Peso, secretary general of the Banco de Portugal, that Portugal would not accept gold directly from the Nazis, due to political motivations and legal risks. He further noted Portuguese objections would evaporate if the money passed via the Swiss. These statements and others in Gautier’s report make it clear the Portuguese wanted the Nazi gold with a clean slate from the Swiss money launderers. Initially, Portugal used the Bank of International Settlements and the Yugoslav National Bank in Basel to launder the Nazi gold.
"However, starting in 1941 the Nazi invasion of Yugoslavia forced Portugal to look for other routes. Also, on Jan. 8, 1942, Montagu C. Norman, Director of the Bank of England, notified Thomas McKittrick, the American Director of the Bank of International Settlements, that it would no longer recognize shipments of gold from the International Bank to Portugal. Portugal then insisted the Reichsbank sell its gold for francs to the Swiss National Bank. The Reichsbank then deposited the francs into the Banco de Portugal account with the Swiss bank. The Banco de Portugal used these francs to buy the gold from the Swiss National Bank. In addition, the Portuguese used three accounts in the Swiss bank. Portugal used one to deposit gold transferred in payment for the purchase of escudos by SNB from the Banco de Portugal. It used the second account for gold bought from the Banco de Portugal, financed with the Swiss francs. The last account closed the circle by transferring gold on orders from Berlin to the Banco de Portugal account in Zurich.
"The Banco Espirito Santo also played a significant role in buying wolframite for the Nazis. An October 1945 FEA report charged that the bank was the financial agent for Nazi purchases of wolfram or wolframite (wolfram is the word for tungsten in German and other languages). After the Allies compelled the bank to forgo its German ties, the Nazis transferred their accounts to the Banco Lisboa e Acores.
"A significant amount of gold was smuggled into Portugal. The German Commercial Attaché in Madrid admitted to smuggling almost $1 million in English gold sovereigns from Berlin to the German embassy in Lisbon. The coins were sent in diplomatic pouches in 1943-44. Another report noted $360,000 in gold was flown to Portugal in June-July 1944 and deposited in the Bank of Portugal under the name of the ambassador. The bank director admitted several other dignitaries had special accounts, including the brother of Franco.
"While the Portuguese reached an early agreement with the Allies on German property, the issue of gold stalled the talks. Moreover, Portugal tied the property agreement to the gold issue and refused to liquidate the property. This delaying action only served to erode the value of the Nazi property seized. Talks continued off and on, formally and informally.
"Recently declassified documents show the American negotiators were aware of an OSS memo dated Feb. 7, 1946 stating that Portugal had received 124 tons of Nazi gold. Nevertheless, Allied negotiators were only seeking a return of 44 tons. The Azores complicated the negotiations from the end of the war until 1953. Portugal granted the U.S. permission to build an air base in the Azores for use during the war and for five years after. By July 1947, the State Department was urging negotiators to ease the hard-line approach and seek a compromise with Portugal on the gold issue. Foremost in the change of stance at the State Department was the Azores air base negotiation. In 1945, the Joint Chiefs designated the Azores as one of nine essential strategic bases needed to preserve the security of the United States. In 1947, the United States broke off the negotiations on gold until completion of the Azores negotiations.
"In 1948, Robert Lovett wrote the Treasury Secretary that “overriding political and strategic considerations of our foreign policy make it essential that the Portugal assets in the United States be unblocked.” A week later, the Treasury Department weakened the licensing procedures, effectively unblocking the assets. With that action, the United States lost all leverage over Portugal. On July 17, 1951, the State Department wired the embassy in Lisbon to settle on the Portuguese terms. The State Department based the decision on the overriding importance of politico-military objectives. Portugal had become a full member of NATO. Also at stake was a long-term lease for an air base in the Azores. Based on the priority of the Cold War objectives and after consulting British authorities, the State Department recommended settling the gold issue with Portugal for a mere $4.4 million.
"The Treasury Department would only agree to the terms if it received a letter signed at the Assistant Secretary level indicating there were political considerations warranting a settlement and that any agreement would not result in claims against the United States. Acting Assistant Secretary for European Affairs James Bonbright signed the letter to the Treasury. The United States finally agreed with Portugal on June 24, 1953. However, Portugal hinged the agreement on the condition of reaching an agreement with West Germany. It took until June 1958 before Germany and Portugal concluded an agreement. The next year, Portugal returned the $4.4 million in gold."
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"While many of the neutrals leaned toward fascism, none were fully fascist like Franco’s Spain. Both Germany and Italy provided support for Franco during the Spanish Civil War. In 1941, Franco sent 40,000 volunteers to Germany. Known as the Blue Division, they served for two years on the Russian front. Although Franco declared neutrality as soon as war broke out in Europe, Spain hovered on the brink of joining the Axis powers through 1940-41. Spanish belligerency was premised on an early German victory over Britain and Germany’s agreement to allow Spain to expand territorially into French Morocco, Africa and perhaps even Europe.
"The Nazis recognized the strategic location of Spain early on. As early as mid-1940, the Nazis had comprehensive plans to invade Gibraltar. The plans, code-named Operation Felix, originally called for a mid-1941 operation in which two corps would move by road across Spain, with Franco’s permission. Spain’s rail system was a different gauge than the rest of Europe, forcing the Nazis to rely on the roads. Once in position, Gibraltar was to be attacked from both the land and air with deadly Nazi efficiency. The plans also included two extra divisions to attack Morocco once Operation Felix succeeded.
"A Nazi seizure of Gibraltar would add weeks for oil tankers to reach Britain from the Mideast and give the Nazis strategic control of the Mediterranean. Franco certainly must have been aware of Britain’s precarious situation in 1940. With the empire under attack worldwide, it was hardly capable of defending itself against a follow-up attack on Morocco, the country that Franco eyed. Nevertheless, the Nazis failed to get Franco’s approval. Whether this was due to the intervention of the American ambassador or poor Nazi diplomacy, it has to be one of the biggest diplomatic and strategic setbacks for the Nazis.
"After 1941, there were similar plans to attack Gibraltar. However, once Hitler invaded Russia, any such plans were impractical. The Germans did not have the manpower or equipment to open a new battlefront."
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"Allied efforts to recover gold from Turkey were never pursued with any vigor. Turkey’s geographical location, controlling access to the Black Sea and its border with the Soviet Union made it a cornerstone for U.S. strategic interests in the coming Cold War. In 1946, formal talks were held to consider the gold received from the Nazis, as well as German assets in Turkey. The Allies estimated that German assets totaled $51 million. In March 1947, the Truman Doctrine included Turkey with Greece. In July, the United States signed a $150 million trade agreement with Turkey that dealt a deathblow to any further negotiations on restitution. Turkey never turned over any gold."
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"In January 1942, Argentina agreed to the terms of the Rio Conference, severing all commercial and financial relations with the Axis powers. In June 1942, Argentina agreed to the Final Act of the Inter-American Conference on Economic and Financial Controls, obligating all states to end commercial intercourse with the Axis. Argentina ignored the terms and continued business with the Nazis. Moreover, during 1942, Juan Goyeneche, a confidential agent of Peron, and Adrian Escobar, Argentina’s Ambassador to Spain, traveled through war-torn Europe, meeting with Nazi and Vatican officials. Goyeneche collaborated extensively with the Foreign Intelligence Branch of the SS. Escobar and his consul Aquilino Lopez were collaborating with Himmler’s secret service by crossing into Vichy France and reporting details on Spanish and Allied diplomats.
"After extensive meetings with Vatican Secretary of State Cardinal Luigi Magione, an agreement was reached in which, once peace was established, Argentina would generously apply its immigration laws. This seemingly innocent meeting takes on critical importance at the end of the war. It proves the Vatican was planning on helping Nazis war criminals escape from Europe as early as 1942. This meeting set up the Vatican ratlines.
""On Oct. 10, the Pope received Escobar and welcomed Argentina’s view that it was proper for the Vatican to engage in the peace talks. Goyeneche traveled to Germany and met with Ribbentrop seeking Nazi support for the nationalist candidate in the 1943 elections. This façade of neutrality was maintained until 1943 and the colonels’ revolution that eventually brought Peron to power.
"Once in power, the colonels sought arms from Germany in case war broke out between Argentina and Brazil. By September 1943, the colonels gave up the idea of smuggling arms into Argentina from Germany and, instead, sought an alliance with the Nazis. The group of colonels dispatched Osmar Hellmuth and Carlos Velez to Spain to negotiate. Unfortunately for the colonels, U.S. Magic intercepts detected the upcoming mission from transmissions between the SS agent in Argentina, a Capt. Becker, and Schellenberg in Germany, and had the British seize Hellmuth when the ship docked in Trinidad.
"The seizure of Hellmuth failed to deter further plots. Peron and Becker continued to plan the overthrow of neighboring governments to set up a pro-Nazi block in South America. Peron wrote in a secret manifest of the colonels:
""Forming alliances will be the first step. We have Paraguay; we have Bolivia and Chile. With Argentina, Paraguay, Bolivia and Chile, it will be easy to pressure Uruguay. Then the five united nations will easy draw in Brazil because of its type of government and its large nucleus of Germans. With Brazil fallen, the American continent will be ours.""
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"During the final year of the war, Argentina was a prime destination for many of the assets that Bormann spirited out of Germany for a rebirth of the Third Reich. Following the war, Argentina also was a prime destination for Nazi war criminals. Even war criminals who escaped to other South American countries generally first entered the continent through Argentina. While other South American countries generally supported the U.S. policies during the war, there was no cooperation from Argentina. Other countries adhered to the Proclaimed List and took steps to eliminate any smuggling efforts. The Treasury Department urged harsher actions toward Argentina than the State Department was willing to impose. The State Department was hampered by a fear that a harsher policy would alienate other South American countries and by a difference of opinion with the British. During both world wars, England depended on Argentina for beef. However, as early as 1942, Argentina’s neutrality policy made it a leading focus of the Treasury Department and the Board of Economic Warfare."
"Safehaven negotiations with Argentina started in 1944. However, the distressed relations restrained any progress in the negotiations. In February 1944, Argentine President Ramirez delegated his powers to Gen. Edelmiro Farrell. The United States failed to recognize the Farrell government and recalled the ambassador. In August and September, the State Department announced more sanctions against Argentina due to its failure to comply with denazification. In response, Argentina withdrew from the Montevideo Committee for the political defense of the continent. The Argentine Central Bank provided little help to U.S. investigators in locating German assets. After Cordell Hull resigned as Secretary of State in November 1944, the incoming Secretary, Edward Stettinius, developed an easier policy toward Argentina. Nelson Rockefeller, the appointed wartime chief of South American intelligence, also favored easier terms with Argentina. Rockefeller-controlled banks illegally transferred funds between the U.S. and Argentina from frozen accounts."
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"Recognizing its increasing isolation from other nations in the Western Hemisphere, Argentina declared war against Germany in the last month of hostilities.
"On Feb. 11, 1946, the State Department released the famed Blue Book on Argentina. The book confirmed that the Argentine government asserted no control over German firms, delaying the efforts to seize the Nazi assets until they were dispersed elsewhere. The book also confirmed that Nazi Germany sent large sums of money to its embassy in Argentina without any serious obstacles. Some historians credit the release of the Blue Book for Peron’s election as part of an anti-American backlash. On May 22, 1946, the Safehaven team reported the total value of German assets at roughly $200 million. The assets included bank balances, real estate and merchandise. The Safehaven team found no caches of art or gems, and assumed that Argentina was not a major destination of looted treasure. The team also reported that no records revealed Argentina receiving Nazi gold.
"As early as 1942, the United States knew of illegal Argentina currency dealings. In April 1942, the U.S. Consulate in Switzerland reported that an Argentine diplomat was smuggling dollars stolen by the Nazis to his homeland for sale; the funds were then transferred to Switzerland. British cables from 1944 show Argentina conducted vigorous trade with Switzerland and often the payment was in gold. By 1945, the State and Treasury departments found decisive evidence of extensive transactions involving the transfer of Argentine pesos, Reichsmarks and Swiss francs from Argentina to Switzerland. In May 1947, Argentina proposed a transfer of $170 million to its Federal Reserve account. Concern over the source of the gold only momentarily delayed the transfer. Guyatt reports that in 1973, after returning to power, Peron sold 400 tons of gold on the black market. Peron code-named the sale Bormann 1345. While the Spanish government tutored the sale, the transfer agent labeled it political. Despite the massive increase in Argentina’s gold reserve and the number of Nazi war criminals who found sanctuary in Argentina, even after 50 years there is little proof of Argentina accepting gold from the Nazis.
"The Cold War badly compromised Safehaven investigations in Argentina. On June 3, 1947, President Truman and Argentine Ambassador Ivanissevich issued a joint announcement that the two countries would renew consultations with other Latin American countries about creating a treaty of mutual aid. In September, Argentina joined the United States and other American Republics in agreeing to the Inter-American Treaty for Reciprocal Assistance, the Rio Pact, for mutual defense against aggression. Bormann’s cloaked companies in Argentina, as well as any treasure, were safe and secure. The hemisphere had to be protected from communism."
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"On April 10, 1941, following the Nazi invasion of Yugoslavia, the so-called independent state of Croatia was established, headed by Ante Pavelic, a member of the fascist Croat Ustashi political movement. Mussolini declared Croatia a protectorate of Italy. Both Italy and the Nazis supported Croatia. The Ustashi also were closely aligned with the Vatican. On May 18, 1941, Acting Secretary of State Sumner Welles reaffirmed the exile government of Yugoslavia did not recognize the independent state of Croatia. Shortly after, Croatia sealed the U.S. embassy in Zagreb. Since Croatia only existed as a state during the war and the United States never recognized it, the figures presented in this section are likely to be subject to revision in the future.
"Postwar reports suggest the Ustashi treasury had at its disposal more than $80 million, mostly gold coins, some stolen from their victims. On May 31, 1944, Croatia deposited $403,000 in the Swiss National Bank. On Aug. 4, 1944, Croatia deposited another $1.1 million in gold. An OSS report in July 1945 concluded that Croat-owned commercial accounts in Bern totaled more than $93,000. The Historical Section of the Task Force of the Swiss Federal Department of Foreign Affairs shows that on July 24, 1945, the Swiss National Bank returned to the National Bank of Yugoslavia all 1,338 kilograms of gold in 121 ingots in the account of the wartime Croatian regime.
"While bank records of deposit are not likely to change much, the gold the Ustashi carried as they fled to Austria as the war was reaching an end is very much in doubt. Estimates placed the value of gold Ante Pavelic had when entering Austria at $5 million-$6 million. Whatever the value of the loot, it is certain that much of it was used to set up and run a ratline with the Vatican. In October 1946, U.S. intelligence reported to the Treasury Department that the Ustashi had $47 million deposited in the Vatican before transfer to Spain and then to Argentina. Due to the Cold War, the Allies expended little effort in returning the thousands of war criminals from Italy to Yugoslavia. The issue of Ustashi gold received even less attention at the war’s conclusion."
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"In August 1938, after the Anschluss the Federal Council ordered the borders closed. Fearing a mix of refugees, including Jews, the Federal Council petitioned the Nazi government in Berlin to affix a “J” stamp on all Jewish passports. The Nazis initially were not keen on the idea because they were still using immigration as a way to free Germany of Jews. Negotiations continued throughout late summer and autumn. Eventually, the Swiss threatened to require visas for all Germans entering Switzerland. The Nazis then proposed the “J” stamp on passports as a solution. Now it was a Nazi idea in the eyes of the Federal Council.
"The only reason the Swiss were so intent on such a marking on passports was to make it easier for border guards to turn away Jews. Despite the myth of Switzerland as a refuge for Jews during the war, border guards turned away more than 30,000 Jewish refugees. In August 1942, the Federal Council passed another law to seal the border to Jewish refugees, despite vigorous pleas from some church members and the press. The Swiss people were not anti-Semitic and opposed the government’s policy. Other than closing the border to Jews, Switzerland passed no anti-Jewish laws. The Jewish community in Switzerland was divided, with a minority favoring demonstrations to allow more Jewish immigration and a majority favoring a policy of “don’t make trouble.”
"Even if the Jewish refugees were able to get past the border guards, Swiss officials demanded to see their passports. If the passport had the “J” stamp, the officials forced the hapless Jews back into the hands of the Nazis. Border guard Grueninger received his order in 1938 not to allow in any Jews. However, Grueninger allowed 3,600 Jews entry and helped them to alter their passports so they could remain. Alerted by the Nazis of Grueninger’s acts of humanity, the Swiss suspended him in December 1938. In January 1939, the government filed charges against him for forging documents. In 1941, a court found him guilty of insubordination and took away his job, retirement and severance pay, and levied a stiff fine. Afterward, he never was able to find a suitable job and was dogged by rumors that he demanded money and sexual favors from those he helped. The former boarder guard vigorously denied the unfounded rumors."
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"From the beginning, Swiss government officials knew of the early methodology of the Nazi genocide. The Nazis invited Swiss army doctors to serve on the Eastern Front to treat wounded Nazi soldiers in Operation Barbarossa. At that stage, roving bands of the Einsatzgruppen carried out the killings by shooting the Jews they rounded up. While the Swiss doctors did not see the killing squads, they saw the effects and reported them to the Red Cross and government officials. A 1943 National Bank Legal report mentions the deportations and persecutions of Jews."
"The earliest news of the Holocaust to reach the West came in a telegram on Aug. 8, 1942 from Gerhart Riegner. The informant who provided the information was a Leipzig businessman, Eduard Scholte.
""Received alarming report that in Fuhrer’s headquarters plan discussed and under consideration according to which all Jews in countries occupied or controlled Germany numbering three and a half to four million should after deportation and concentration in the east be exterminated at one blow to resolve once and for all the Jewish question in Europe. Action reported planned for autumn; methods under discussion including prussic acid. We transmit information with all necessary reservation as exactitude cannot be confirmed. Informant stated to have close connections with highest German authorities and his reports generally reliable."
"Unfortunately, this report was widely disbelieved, even by Jews. Allen Dulles labeled it hysterical Jewish propaganda. Rabbi Stephen Wise, one of the recipients of the telegram, released it to the press on Nov. 24, 1942. After that, everyone was aware of the savagery and horror occurring in the Third Reich."
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"A Feb. 5, 1946 report by the economic intelligence group Allied Claims Against Swiss for Return of Looted Gold provides the best estimate of gold looted from the central banks of Europe. The report estimates the total amount of gold the Nazis accumulated at $648 million. At the outbreak of the war, the best estimate of the Nazi gold reserves was $100 million. The Nazis looted the difference of $548 million from the countries of Europe. The report estimates from bank records that the Nazis sold between $275 million and $282 million to the Swiss National Bank. In addition, the Nazis sold another $20 million to commercial Swiss banks. The report proves that much of the gold ended up in Portugal and Spain after the Swiss laundered it."
"A six-page report, Safehaven No. 2969, detailed the extent of Nazi assets in Switzerland. The document was sent by Americans in Bern to the Secretary of State. ... In the report, a Swiss banker estimates the banks held $110 million in Nazi assets. ..."
"In addition, the Nazis had large amounts of gold, currency, gems and art stored away in safe-deposit boxes. The British estimated the value of 53 paintings at $484,000. The report determined the total value of all the looted paintings at $390 million-$545 million."
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"In February 1945, after much wrangling about imposing sterner measures against Switzerland, Lauchlin Currie, assistant to President Roosevelt, headed the American delegation to Switzerland for talks on stopping the wartime trade and to begin negotiations on gold issues. William Rappard headed the Swiss delegation, although the man pulling the strings was Walter Stucki. In March, Currie reported some success. The Swiss agreed to freeze all German assets; ban importation, exportation and dealing in all foreign currencies; and restrict Swiss purchases of gold from Germany. While the Currie mission was greeted as a success, controversy soon followed. In May 1945, the U.S. Legation in Bern reported the Swiss bought 3,000 kilograms of gold from Germany. The Currie agreement clearly excluded the buy. However, the Swiss argued the gold was not looted.
"In June 1945, Harley Kilgore chaired the Senate’s War Mobilization Subcommittee. In the hearings, he introduced documents uncovered by Allied investigators of correspondence between German Reichsbank Vice President Emil Puhl and the German Minister of Economic Affairs Walter Funk about German-Swiss commercial discussions conducted during the Currie Mission. The treachery of the Swiss received widespread publicity. Orvis A. Schmidt, Director of Foreign Funds Control for the Treasury Department and a member of the Currie Mission to Bern, testified before the subcommittee:
""Even at this late date, the Swiss Government is loath to take the necessary steps to force banks and other cloaking institutions to disclose the owners of assets held in or through Switzerland. This means that German assets held in or through Switzerland will not be identified. Thus, the true picture of German financial and industrial penetration throughout the world will be kept a secret. By the same token, Swiss banks will continue to profit by protecting, through their secrecy laws, German’s war potential and the hidden assets of it financiers and industrialists.""
"In March 1946, formal talks with Switzerland, United States, Britain and France opened in Washington. U.S. negotiators held an optimistic view that the Swiss were committed to the Currie Mission agreement. On the other hand, Switzerland viewed its actions during the war as consistent with the internationally recognized obligations and rights of a neutral power. The Swiss asserted that international law granted the Nazis’ seizure of monetary gold from the occupied countries (the right of occupying powers to war booty). Thus, the receipt of the gold by Switzerland was legal. Switzerland argued the Allies’ claim to Nazi assets beyond Germany’s border was illegal and a violation of Swiss sovereignty. In addition, Switzerland sought the removal of all Swiss companies and individuals from the Allied blacklist."
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" ... Treasury briefing material for the U.S. negotiators urged a global approach to the gold issue, rather than settling the amount of looted gold in each transaction. Also, the Treasury wanted an open-end clause in any agreement, which required Switzerland to return any looted gold found in the future. Treasury Assistant Secretary Harry Dexter White insisted that Swiss funds remain blocked in the United States until the Swiss provided ironclad guarantees that they would identify and seize all accounts under German control. White estimated total of German assets in Switzerland, excluding numbered accounts and cloaked assets, to be $500 million.
"The American negotiators had the benefit of two comprehensive evaluations of German gold movements during World War II. Both reports were prepared from the records of the Reichsbank. Otto Fletcher, Special Assistant to the Division of Economic Security Controls of the State Department, estimated that at the beginning of the war, Nazi gold reserves totaled $120 million. He estimated the Nazis acquired another $661 million in monetary gold during the war, most of which was looted. Fletcher also reported that all gold sold by the Nazis after early 1943 was looted. His report showed the Nazis sold or transferred $414 million in looted gold to the Swiss National Bank. The second report, prepared by James Mann of the Treasury Department, estimated the total monetary gold looted by Germany at $579 million, out of $785 million available after June 30, 1940. Mann’s report decided the Swiss took $289 million in gold from the Nazis."
" ... the Swiss released a report, Swiss Observations With Regard to the Gold Problem that differed markedly from Allied calculations about German gold holdings at the beginning of the war, and questioned the credibility of information provided by former Reichsbank Vice President Emil Puhl. Puhl told Allied investigators the Swiss National Bank knew the gold was looted because he had told them."
" ... Finally, on April 24, Seymour Rubin told Under Secretary Acheson and Assistant Secretary Clayton that the Swiss suspended the talks. The Allies sought the return of $130 million in gold looted from Belgium and traceable to Switzerland."
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"Negotiations with Switzerland continued until 1952 before reaching a final accord. Throughout the years, Switzerland displayed a disregard and contempt for the Allies’ authority. Swiss duplicity marked all the negotiations, especially in the heirless assets. With heirless assets, the Swiss banks had no problems liquidating accounts for the benefit of the bank, but refused all help to Jews seeking the accounts of loved ones lost in the Holocaust. Often the banks demanded a death certificate, knowing the Nazis never issued them for concentration camps victims. This final issue was not settled until the 1990s initiative started by President Clinton and headed by Eizenstat.
"Although there were renewed talks in the 1990s, Swiss duplicity still abounds. A new scandal emerged in 1997 when former bank guard Christoph Meili came forward with evidence that Union Bank of Switzerland was shredding documents about its activities with the Nazis. Meili, a night guard at Union Bank, discovered a large quantity of documents waiting to be shredded. Among them were records of accounts from the war years. The young guard turned over two books and pages ripped from another to a Jewish organization in Switzerland. Swiss law forbids destroying documents that might relate to WWII investigations. As a reward for his efforts to uncover the truth, Union Bank fired Meili. The government also is studying whether he violated any Swiss secrecy laws. The young man was threatened with the kidnapping of his daughters and has since moved to the United States. Even in the U.S., Meili still receives death threats. President Clinton signed a bill granting the Meili family permanent resident status. Christoph Meili has the distinction of being the only Swiss citizen ever granted political asylum in the United States."
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"However, in negotiations over the gold issue, the Allies and the United States, in particular, were equally willing to sacrifice their morality for strategic gains in the Cold War. It is readily obvious in the disregard of the Allies and the United States in handling the nonmonetary gold and victims of the Holocaust. U.S. authorities were aware of the problem from the start with the discovery at a Merkers of the Melmer account consisting of dental gold, gold watches, wedding rings, etc. Albert Thoms, head of the Reichsbank’s Precious Metals Department, identified 207 bags at Merkers belonging to the Melmer account. Gen. Frank McSherry recognized the significance of the Melmer account. McSherry suggested that “this SS property contains evidence which would be useful in prosecuting SS war criminals.”
"The details of the Melmer account were pieced together through examinations of the Reichsbank records and by the interrogations of Thoms, Reichsbank Vice President, Emil Puhl and SS-Hauptsturmführer (Captain) Bruno Melmer. As head of the precious metals department of the Reichsbank, Thoms was able to provide the Allies with many of the details about the SS account. Thoms told his interrogators that Frommknecht sent him to Puhl in the summer of 1942. Puhl told him that the SS was about to begin the shipments to the Reichsbank containing jewelry and other items of nonmonetary gold and silver. However, because of the secrecy needed, the Reichsbank was responsible for their disposal. Shortly after this meeting, a SS-Brigadeführer (brigadier general) told Thoms that an SS officer named Melmer would deliver the first shipment in a truck. The shipment arrived on Aug. 26, 1942. The 10th delivery, in November 1942 was the first to include dental gold.
"The SS first deposited the materials in the Melmer account, where the bank sorted them. Reichsbank bought the gold and silver bars, as well as currency at full value. Small items like wedding rings were sent to the Prussian Mint for resmelting. Larger jewelry items were sent to the Municipal Pawnshop, which sold the better-valued pieces. The rest of the material was sent on to Deutsche Gold-und Silber-Scheideanstalt (Degussa for resmelting. The Nazis allowed Degussa to keep a small portion for industrial purposes, but any gold in excess was sold to the Reichsbank and the amount credited to the Melmer account.
"Degussa was a large German firm engaged in metal refining and chemical production, including Zyklon-B cyanide tablets used in the gas chambers. Degesch produced the Zyklon-B tablets. Degussa and IG Farben jointly owned Degesch. Degussa also was the firm that supplied the uranium for the Nazis’ atomic bomb project. Recently, Degussa spokespeople admitted ties between Degussa and IG Farben during the war. Much of the information surfacing recently about Degussa comes from a lawsuit filed in New Jersey. Degussa held an exclusive contract with the Nazis for resmelting items taken from the Jews in the concentration camps, including dental gold. The Nazis were taking so much gold from the victims at Auschwitz that Degussa built a smelter there. According to Obersturmbannfuhrer Rudoff Hoss, the commandant of Auschwitz, the daily yield of gold at the camp was 24 pounds.
"More recently, Degussa’s role in nuclear proliferation was exposed in the film documentary Stealing the Fire. The filmmakers document the trial of Karl-Heinz Schaab, who was tried for treason in Munich. Schaab is the first person convicted of atomic espionage in an open trial in the last 50 years. He sold top secret documents stolen from Germany to Saddam Hussein and traveled to Baghdad many times to help Iraq build an atomic bomb. Schaab was linked to Degussa and its subsidiary, Leybold He was fined only 100,000 deutsche marks and sentenced to five years of probation."
" ... After the war, Gernot Zippe, known as the father of the centrifuge and an employee of Degussa, was of great interest to the militaries of several industrialized nations. Captured by the Russians, Zippe helped them build their atomic bomb. The Russians returned him to the West in 1956. On his return, the CIA immediately snapped him up to work on U.S. centrifuge technology, which is critical in separating isotopes of uranium. Through a complicated path, UN inspectors discovered a variant of Zippe’s centrifuge technology in Iraq in 1996. Due to the murky underworld of arms dealing, Degussa was spared charges of treason, largely due to its connections with American defense contractors, such as du Pont. Shaab was a convenient fall guy. Iraq’s Scud-b missile technology can be described as 90 percent German and its atomic technology 60 percent German."
" ... Degussa was a large contributor to the election campaign of George W. Bush. As early as June 1999, Degussa contributed $1,950. It should be noted that Degussa is a German company contributing to an American election campaign. Today, Degussa is a worldwide conglomerate reporting sales of 11.8 billion euros. Once again, a corporation associated with the Nazis has advanced, unencumbered, since the end of the war."
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" ... The controversy renewed in the 1990s has shown beyond any doubt that the Allies knew of the inclusion of victim gold in the monetary gold pot. While the Allies estimated that the amount of gold taken from the victims of the Nazis was $14.5 million, only about $3 million was ever used to help the victims."
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"What is known with certainty is until June 1944, Bormann transferred his loot in trucks across France to Spain. In Spain, the treasure was transferred to U-boats for the voyage to Argentina. After D-Day with the land route closed to Spain, Bormann continued his transfer of assets to Argentina by air. Author Ladislas Farago claims the complete record of this operation is preserved in the archives of Coordination Federal in Buenos Aires, in FBI files and in the archives of the British Admiralty. The latter assumed the U-boats were on regular patrol. Farago claims the shipments began in 1943 and arrived every six to eight weeks. He said the money and gold were deposited in the name of Eva Peron.
"According to Farago, the Perons gained control over much of Bormann’s treasure, and in Eva’s Rainbow Tour of Europe, she deposited more than $800 million in numbered accounts in various Swiss banks. Farago lists the treasure:
"187,692,400 gold marks
"17,576,386 American dollars
"4,632,500 pounds sterling
"24,976,442 Swiss francs
"8,370,000 Dutch florins
"17,280,009 Belgian francs
"54,968,000 French francs
"87 kilograms platinum
"2,511 kilograms of gold
"4,638 carats of diamonds and other precious stones."
................................................................................................
" ... Allied intelligence believed that much of the first gold to arrive in Argentina financed the Nazi espionage web in South America.
"One legend about Argentina and Nazi gold claims that in the closing days of the war, a fleet of Nazi U-boats containing the treasure and top officials, including Hitler, left Germany for Argentina. En route, they met an Allied naval task force and a battle resulted in the loss of several Allied ships, which the United States continues to deny. Recently, more evidence surfaced in Pravda shedding new light on the legend. In the last days of the war, the Nazis sent U-boats to Argentina.
"Pravda claims that at least five of them reached Argentina with no less than 50 top Nazis. During the trip, the U-boats sank an American battleship and the Brazilian cruiser Bahia, resulting in a death toll of more than 400, including U.S. citizens. Pravda claims the U.S. ship was the USS Eagle 56. However, the USS Eagle 56 was sunk on April 23, 1945 off the Maine coast towing targets for dive-bombing practice. Only 13 of the 67 crewmembers survived. Until recently, the Navy maintained a boiler room explosion sank the ship. It has now finally admitted that U-boat U-853 sank the USS Eagle 56. U-853 was sunk on May 6, 1945 in the North Sea, southeast of New London.
"The Bahia was sunk by U-977, which surrendered at Mar del Plata, Argentina, on Aug. 17, 1945, and was turned over to the United States for testing. Four U.S. radio operators - William Joseph Eustace, Andrew Jackson Pendleton, Emmet Peper Salles and Frank Benjamin Sparksere - were killed. The U.S. Navy still lists the men as missing in action. Brazil attributes the Bahia sinking to an onboard explosion.
"The article in Pravda is based on information from Argentine researchers Carlos De Napoli and Juan Salinas. They claim that a fleet of almost 20 U-boats sailed from the Norwegian port of Bergen from May 1st to 6th. They joined another group of U-boats coming from the U.S. coasts around Cape Verde, off the western coast of Africa. There they learned of the surrender. Some scuttled their boats, others surrendered, and still others set course for Germany. However, at least six of the U-boats continued for Argentina. Further, the article claimed Churchill ordered the Argentine navy to stop attacks on German U-boats operating close to Argentina. Farago has confirmed Peron issued such an order to the navy. However, he does not mention the order came from Britain.
"The Pravda article contains a serious error in the name of the sunken U.S. ship. Because of the controversy surrounding the boiler explosion story, when the survivors reported seeing a U-boat with a trotting horse on a red shield on the conning tower, the sinking of the USS Eagle 56 has been thoroughly investigated. However, the article contains much information known to be true, including the listing of two of the U-boats: U-530 and U-977. U-530 surrendered in Mar del Plata, Argentina on July 10, 1945, and was turned over to the United States for testing. Other information has been partially confirmed by other investigators. Initially, the U.S. did not believe the report of Hitler’s suicide and launched a search in South America for him and other missing top Nazis. After surrendering, the commander of U-977, Heinz Schaeffer, was arrested and charged with smuggling war criminals to South America.
"Interestingly, U-530 was stationed around Cape Verde in 1944. On June 23, 1944, U-530 rendezvous’d with the Japanese submarine I-52 to transfer a radar detector about 850 miles west of the islands. The Allies were aware of the transfer and planes sank the Japanese sub. The I-52 was located in 1955 and still contains 2 tons of gold.
"More information surfaced in 1997 in Argentina. The national newspaper, Ambito Financiero, was contacted by a man giving his full German name and his commander’s identity number. He claimed he arrived in Argentina after scuttling his U-boat. In the 1970s, a different person making the same claim contacted the same paper. This U-boat commander wrote that, on Hitler’s orders, 10 submarines, each with 50 officers and crew, were to sail to Argentina to help found the Fourth Reich."
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" ... Japanese cargo submarines transported gold to the Nazi sub base at Lorient, France to pay for the uranium. German U-boats and fast-surface raiders hauled the uranium to rendezvous points in Indonesia and the Philippines. From these rendezvous sites, Japanese subs hauled the uranium to its final destinations in Japan and Korea."
" ... Nelson Rockefeller was in charge of South American security during WWII; however, he never took any steps against this conduit between Argentina and the Nazis. ..."
"Author Uki Goni presented proof of the difficulties faced in relying on Argentina records. He found that Argentina officials purged those records of incriminating files on at least two different occasions. The full truth of the Bormann treasure may never be revealed unless the United States and England declassify all WWII documents. The Pravda article was obviously inflated largely by Soviet suspicions of the time. However, setting aside its faults, it sheds additional light on Bormann’s operation that the United States and England would like to see buried. More searches for German U-boats along the Argentine coast are already planned. Any discoveries would only serve to confirm more of the Pravda article, as well as the contacts made with the Argentine paper."
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"The Emperor’s Golden Lily"
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"While the size of the Bormann treasure is not known with any accuracy, it undoubtedly is the largest Nazi treasure the Allies failed to recover. The only other treasure remaining from WWII that could rival it in size is the Golden Lily treasure collected for the Japanese Emperor. While the Nazi treasure has been the subject of many searches and research, the Japanese treasure has been largely unexplored. While the Nazis appointed a special unit of the SS, Devisenschutzkommando, to take charge of the looting of Europe, the Japanese also had a special unit. Further, the Nazi unit employed the French to find gold and currency on a 10 percent commission. However, individuals seeking to enrich themselves, rather than the Third Reich, plagued the unit and much of the gold was siphoned off into private treasures.
"Seeking to avoid a similar problem, Hirohito appointed Prince Takeda Tsuneoshi as chief financial officer of the Kwantung Army. The Golden Lily involved several princes overseeing the looting to ensure the gold went to the Emperor. After the Japanese invaded China in 1937, the Golden Lily ran a parallel operation to the military campaign. The loot was amassed and trucked to Korea for shipment to the Japanese homeland.
"In 1939, the Japanese invaders suffered a stinging defeat at Nomonhan after a border clash with the Soviets. It’s worth noting that this was the first battle in which Japanese Unit 731 employed biological warfare using typhoid bacteria. The experiment was a failure. In 1941, Roosevelt signed a secret agreement with Britain and the Netherlands to go to their defense if Japan attacked their colonies in Southeast Asia.
"In 1940, the Emperor appointed Prince Chichibu to head the Golden Lily. He and Takeda traveled throughout China and Southeast Asia overseeing the looting and shipping of treasure back to Japan aboard hospital ships. By 1943, the United States submarine blockade of the home islands became effective. This forced Prince Chichibu to move his Golden Lily headquarters from Singapore to Luzon. He spent the next two and half years inventorying and hiding the treasure in a series of vaults, tunnels and caves. Chichibu hid the treasure in 172 sites. The Japanese hoped to avoid surrender by arranging a cease-fire, in which Japan was allowed to keep the Philippines as a territory. Once hostilities ended, they could recover the treasure.
"Besides using the Philippines to hide the treasure in the last year of the war, Japan hid gold at sea by scuttling ships. A Japanese submarine torpedoed the cruiser, Nachii, in Manila Bay. The submarine then machine-gunned any survivors to ensure secrecy. The Nachii was loaded with gold. President Marcos recovered the gold from the Nachii in the 1970s. In 1997, a Japanese television crew filmed the recovery of 1,800 gold bars worth $150 million. The Igorot Hill people discovered the gold. After the death of Prince Chichibu in the 1950s, a member of the Imperial family confided that the Golden Lily amassed more than $100 billion in treasure, much of which was hidden in the Philippines. He also confirmed Prince Chichibu escaped by submarine from the Philippines and MacArthur’s advancing forces.
"The hospital ship, Tenno Maru, arrived at Yoksuka Naval Base loaded with casualties from the Philippines and 2,000 metric tons of gold. Days later, it moved to Maizura Naval Base, where more treasure was loaded. The ship then sailed at night. In the night, the crew was murdered and the ship sank in the bay. In a secret operation in 1987, Japan recovered the gold. The Allies mistakenly sank another hospital ship, Awa Maru, off the coast of China in April 1945. Aboard the ship was 40 metric tons of gold, 12 metric tons of platinum, 150,000 carats of diamonds, a large quantity of titanium and other strategic materials. Old mines in the Japanese mountains served as repositories for portions of the Golden Lily treasure. Near the Olympic Village of Nagano, the Japanese forced Korean slave laborers to dig a tunnel complex. A 10-kilometer tunnel completed the complex, in which portions of the Golden Lily treasure were hidden.
"The Allies made it clear that they intended to prosecute Japanese war criminals in the same manner as Nuremberg. However, unlike Germany, the Allies only convicted a few generals and admirals. The archives in Japan had vanished. The United States took exclusive control of Japan, unlike the four zones in Germany. President Truman appointed MacArthur as the Supreme Commander. For six years after the surrender of Japan, MacArthur held almost unchallenged power. As Supreme Commander, he ignored the Far Eastern commission of 11 nations. MacArthur had the power to reform the country, but instead left it in the hands of those who had bombed Pearl Harbor."
"There were ambitious plans for reforms, such as dissolving the zaibatsu, conglomerates and banking reforms, and a new constitution, as well as restitution payments to nations ravaged by Japan. MacArthur never tried to impose any of the plans. Instead, he killed the reform efforts and started backing away from punishment of war criminals. To protect the ruling elite, MacArthur soon banned all labor demonstrations and canceled the right of labor unions to strike.
"In much the same manner as the 4Ds program in Germany was sabotaged, MacArthur and his staff sabotaged the democratization of Japan with help from former Ambassador to Japan Joseph Grew and former President Herbert Hoover. Grew was appointed ambassador by Hoover in 1932 and was acting Secretary of State in 1945. His wife was a grandniece of Commodore Perry and her mother was a Cabot. Grew was from the top society of Boston and was deaf to those beneath his social status. The Grew family had longtime ties to Asia. The Grews had been bankers who underwrote the opium clipper ships of the 1800s.
"Grew started sabotaging the democratization of Japan during the war. He held private talks with Japan’s ambassador to Switzerland, and promised the United States would not prosecute Hirohito and would allow him to keep his throne. Both the Roosevelt and Truman administrations adamantly opposed such a promise. Both administrations called for unconditional surrender and prosecution of war criminals.
"However, Grew knew he had the backing of some of the most powerful figures in American politics and high finance. He left it up to Bonner Fellers to see to it. Fellers was a former OSS agent attached to MacArthur’s command. During 1941, the OSS stationed Fellers in Cairo. While there to observe the British North Africa campaign, he broadcast reports to his superiors using the black code. The Italians had broken the black code and within minutes of Feller’s transmissions, Rommel knew the positions of British forces and their battle plan. Once the Allies discovered the breach in security, the Army transferred Fellers briefly to the States before attaching him to MacArthur’s command."
"As president, Hoover showed little concern about foreign affairs. However, after his defeat and as the war clouds descended on Europe, he took an active interest. In 1938, Hoover met with Hitler. Even at this late date, Hoover still would have aligned the country with Hitler to defeat Stalin. He also was a friend of Japanese royalty from his time spent in China. Hoover wanted Japan to be a conservative Pacific outpost strongly opposed to communism. He wanted an alliance with Japan for an Asian base for the Republican Party and its Wall Street cronies. Once he cleansed the Emperor and government of any guilt over the war, Japanese factories would be humming again.
"Hoover and Grew’s plan to cleanse the Emperor and the Japanese government of any war crimes required complete secrecy. There were still far too many bitter war memories from Pearl Harbor, the Bataan death march and Japanese forced labor camps. As late as 1945, Congress voted to charge Hirohito with war crimes. Fellers and another Grew protégé, Max Bishop, engineered the cleansing process. First, to discover the true extent of Hirohito’s guilt, they questioned Japanese officials and indicted war criminals in secret. Once Grew and Bishop assembled all the facts, they sanitized each incriminating piece of information by threatening and bribing witnesses. Before the trials could begin, several witnesses who refused to be intimidated or bribed conveniently died. U.S. intelligence forced American POWs on their way home to sign documents forbidding them to talk about the harsh treatment they received at the hands of the Japanese.
"While MacArthur was quietly trying to stop the trials, he received a blunt reminder from the Joint Chiefs to get serious about bringing the Emperor to trial. Despite such orders, MacArthur refused to allow a trial of Hirohito. MacArthur even put Hirohito on the public relations circuit, showing him shaking hands and portraying him as a great pacifist. Behind the scenes, MacArthur and Fellers castigated anyone not falling in line with the opinion that the war was the fault of the military.
"MacArthur’s list of war criminals was remarkably short. Of 300 cases investigated, only 28 appeared before the court. The Allies executed only seven Japanese war criminals. All of those hung were Choshu, not Satsuma. This may have been a payoff to the royal court from a long-standing feud dating back to the early days of the Meiji Restoration. Even postwar maps omitted the name Choshu after renaming the prefecture Yamaguchi.
"Chief prosecutor was Joseph Keenan; the 11-member panel of judges consisted of a judge from each Allied nation. The Allies arbitrarily granted pardons to some of the criminals high on the list. For instance, the British decided not to prosecute a naval officer who ordered the machine gunning of 600 British sailors trying to stay afloat after their ship sank. MacArthur ordered that no information about biological warfare and Unit 731 be admitted in the trials."
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" ... Averell Harriman founded Newsweek, in 1937. His brother was a director. Newsweek’s pro-Japanese stance had his blessing. ..."
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"Grew’s cochairman at ACJ was another of Hoover’s agents, William Castle, a wealthy plantation owner from Hawaii and former Ambassador to Japan. Until WWII, the wealthy elite regarded ambassador positions at the State Department as their own providence. Grew’s assistant at ACJ was Eugene Dooman, who was raised in Japan. They regarded their mission as stopping any excesses in reforming Japan. Right-wing business leaders were careful to denounce cartels and monopolies in principle, but fought vigorously against efforts to break up Japanese conglomerates. They looked toward restoring trade with Japan, which was Asia’s only industrial base. The sooner Japan’s financial elite was restored to power, the quicker business could resume.
"In the summer of 1947, Kauffman visited Tokyo for Dillon Read and made a personal assessment of Truman’s plan to break apart the zaibatsu. Truman’s plans were classified secret. However, Undersecretary of Defense William Draper leaked the documents to Newsweek. Draper also played a prominent role in sabotaging the 4Ds program in postwar Germany. In December, as the nation was gearing up for the presidential election, Newsweek denounced the overall plan for Japan as costly.
"In Congress, Republican Sen. William Knowland, a wealthy newspaper publisher from California, led the attack. Knowland claimed communists wrote the Truman policy on Japan, easing the way for Joe McCarthy. Knowland and Rep. Walter Judd, a Republican from Minnesota, led the China lobby on Capitol Hill and blamed the loss of China to communism on Truman. Meanwhile, Herbert Hoover continued to lead MacArthur on about his chances to head the Republican ticket. MacArthur was particularly sensitive to Newsweek’s charges of communism. Those charges enraged the general and he halted all further implementation of the reform program.
"The final deathblow for reform in Japan came early in 1948. In February, William Draper and Percy Johnson, a Wall Street banker, toured Japan to review the policy. Johnson was chairman of Chemical Bank, which had a longtime alliance with Mitsui Bank. The outcome was predictable. Of the original list of 325 Japanese companies to be broken apart, only 20 remained on the Draper-Johnson list. Not a single Japanese bank was restructured. The Japanese banks changed their names as a precaution and hid their past.
"By 1952, when the occupation ended, all leftists had been purged and the conservatives were in control of Japan. The Emperor’s fortune was still in Tokyo Bay and in other locations. The first recovery of a portion of the Golden Lily is known as the Santa Romana recov. In the Philippines in the waning days of the war, Filipino guerrillas saw the Japanese hiding heavy bronze cases in a cave. An OSS major was with the group that watched the burial. After the Japanese finished hiding the treasure, they dynamited the cave entrance. The OSS agent reopened the cave and found the cases to contain gold.
"From 1945-48, the United States covertly recovered the gold. William Donovan, MacArthur, Fellers, Edward Lansdale and Hoover knew of the recovery. Later, Allen Dulles learned of the gold recovery, headed by Donovan and Lansdale. The United States made no attempt to return the gold to its rightful owners. Instead, it was deposited in 176 bank accounts in 42 different countries and became the basis of the CIA’s off-the-books financing. This financing was done by issuing gold certificates to influential people and binding them to the CIA. One account in Lansdale’s name in the Geneva branch of Union Banque Suisse contained 20,000 metric tons of gold. The insiders squirreled some of the bullion away for private use. Documents confirm that one of the largest accounts was in the name of MacArthur.
"Other documents note that Hoover had an account containing $100 million in gold bullion. One can be certain that Hoover’s deep concern over Japan was based on his ability to smell a big payoff in gold from his previous experiences in China and Australia. Hoover’s holdings were confirmed after his death, when his son sought government approval to dispose of a large sum of bullion. The large accounts of MacArthur and Hoover suggest that cleansing Hirohito came at a high price to the Japanese Emperor.
"Edwin Pauley, a rich oilman, was sent to Japan to assess its ability to pay reparations. Pauley learned about the $2 billion in gold in Tokyo Bay shortly after his arrival. Yet, he decided Japan was in shambles and could not pay its fair share of expenses of the American occupation, let alone anyone else’s rebuilding efforts. Largely due to Pauley’s assessment, Japan’s bill for reparations came to only $1 billion. If such a sum had been distributed equally to the next of kin of the 20 million people who died because of Japan’s aggression, each would have received the paltry sum of $30. In the immediate postwar scramble for reparations, the wealthy in Japan who profited from the war and hid their profits filed their own claim for reparations, totaling $5 billion. Many of these claims were paid."
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"One intriguing theory that sheds more light on the fate of the Golden Lily comes from author and researcher David Guyatt. Guyatt theorizes the total of mined gold is deliberately understated and the supply is much larger than the 140,000 tons reported. Right-wing fascists control this additional supply of black gold. One reported trader in this market is George W. Bush.
"His theory revolves around the year 1954. In 1939, Britain shut down the London Bullion Market due to a shortage of gold. Even before the war, England’s gold reserves were dangerously low. The war was another drain on those reserves, as evidenced by the destroyer trade and England’s reliance on the Lend-Lease program, as well as the concession of Portugal to accept the pound in trade rather than demand gold. In short, England was walking among the financially dead at the war’s end. However, in 1954, just nine short years from the end of the war, England seemingly obtained enough gold to reopen the bullion market."
"Nazi gold was moved from Argentina to the Philippines in 1954 after the Mossad determined where it was located.
"Research done by the Seagraves found 172 treasure sites of the Golden Lily in the Philippines. One audited by Japanese accountants contained a staggering 777 billion yen or the equivalent of $194 billion. Estimates for all 172 sites: $100 trillion. Over the years, several right-wing groups have aided and helped the CIA by laundering plundered items from the Golden Lily.
"One of the latest recoveries, which raised scandalous headlines in 1994, involved former UN Secretary Gen. Kurt Waldheim, who took part in an operation involving the CIA and former Gen. John Singlaub. The operation, dubbed Nippon Star, recovered more than 500 metric tons of gold from the Philippines. Singlaub, who was active in right-wing extremist groups and political intrigue in Central and South America, headed the team. Singlaub was part of the military intelligence complex before retiring. The team consisted of Gunther Russbacher, a CIA agent, five other Americans and a handful of Filipinos. They recovered Nazi gold and gold stolen from China by the Japanese. Kurt Waldheim served as the intermediary between the Austrian National Bank and Philippine President Ramos.
"What is intriguing about this sale, besides the extraordinary size, is the Knights of Malta knew details of it. A document from the Knights of Malta, Lansdale Project, references 500 MT (metric tons). Moreover, it refers to a meeting of Washington people to discuss the ramifications of another Lansdale project. While several former intelligence officials and military leaders are members of the Knights of Malta, their knowledge of a secret CIA operation raises further questions. Who else was in on this operation? What were the ramifications of the second Lansdale Project? Was the Vatican part of this operation? For now, those questions and others go unanswered.
"The stated reason for the transfer to Austria was to provide backing for the euro. However, the presence of Waldheim as an intermediary only raises questions of connections to Nazis and fascism. Even before Waldheim took his office in the UN, the CIA and military intelligence must have known about his background as an SS officer. It is inconceivable the United States did not know he was in an automatic arrest category after the war.
"A 1956 gold certificate is one of the earliest documents testifying to Marcos recovering Golden Lily treasure. This was before Marcos became a member of the Senate. Swiss Bank Corp., (Schweizerische Bank Gesellschaft M.H.C.) issued the certificate for a deposit of 7,120 metric tons of gold. Marcos collaborated with Japanese-American investigator Minoru Fukimatsu. Together, they interviewed more than 300 witnesses and somehow accessed secret Japanese government archives to discover the locations of the treasure.
"The Union Bank of Switzerland issued another gold certificate on Jan. 17, 1963 to Adnan Kasogi. Adnan Kasogi was actually Adnan Khashoggi, a Marcos crony. Khashoggi’s name was misspelled, but that is often the case in these certificates. Khashoggi was a Lockheed agent and partner of Yoshio Kodama. Kodama was a Japanese rear admiral during the war and a member of the Japanese Yakuza crime clan. During the war, Kodama was in charge of shipping loot to the Philippines. This gold certificate was issued to Khasoggi just before Lockheed paid the first bribe to Prince Bernhard. The CIA used Lockheed to funnel money worldwide. Moreover, Lockheed’s European Sales Director, Dutchman Fred Meuser, was a member of Prince Bernhard’s wartime air force squadron. Another member of the Lockheed bribe team was CIA officer Nicholas Deak. Deak founded a money-brokering firm to funnel money to Kodama. Deak’s company later merged with Lionel C. Perera, who founded the money firm of Perera Manfra & Brookes. Perera was attached to the Chief of Military Government Finance Office at the Third Army’s headquarters in Germany at war’s end, where he interviewed Col. Rauch. Rauch was the SS colonel responsible for hiding the Reich Bank gold reserves.
"With so many figures directly involved with both the Nazi and Japanese treasures, an event such as the Lockheed bribery cannot be dismissed as mere happenstance. However, the intrigue does not stop here. Marcos, Kodama and Singlaub were all members of the World Anti-Communist League, a right-wing extremist group populated with known war criminals and fascists. The Reagan administration granted the World Anti-Communist League tax-exempt status. That raises the possibility that the CIA also used the World Anti-Communist League as a front in money laundering and the drug trade.
"Guyatt goes on to claim that Henry Kissinger sent a letter dated Feb. 21, 1986 to Marcos on Trilateral notepaper. Kissinger demanded that Marcos sell “63,321 tons of gold to 2,000 U.S. and European banks controlled by the Trilateral.” Marcos refused and was overthrown as a result. However, Imelda Marcos chose to sell the gold to avoid criminal charges. It was transferred aboard the USS Eisenhower to the United States.
"More evidence of Marcos recovering the Golden Lily treasure comes from the Filipino newspaper, The Inquirer. In 1998, the paper published an article, “Soldiers of Fortune,” that revealed that all members of the 16th Infantry Battalion signed a joint affidavit declaring that, with members of the 51st Engineering Brigade, they recovered 60,000 metric tons of gold from 30 sites between 1973-85. Both units operated in strict secrecy under Marcos lackey Fabian Ver."
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"The Black Eagle Trust"
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"Until September 1945, Edward Lansdale remained an insignificant advertising copywriter who spent the war producing OSS propaganda. After the OSS disbanded, he was offered an opportunity to transfer to the U.S. Army’s G2 operation in the Philippines. There, he was in charge of supervising a Filipino-American intelligence officer named Severio Garcia Diaz Sanata, better known as Santy.
"Gen. Tomoyuki Yamashita, the “Tiger of Malaya” sent to take over the command in the Philippines, had surrendered. He was charged with war crimes relating to gruesome atrocities Adm. Iwabuchi Kanji’s sailors committed while evacuating Manila. While Yamashita was innocent, it was essential to Lansdale and his cadre of plotters that he be hanged because of his knowledge of the Japanese treasure. There was no mention of the Golden Lily or war loot during Yamashita’s trial. Because of his arrest as a war criminal, it was impossible to torture Yamashita directly because it would be exposed in the resulting trial. However, Yamashita’s driver fell under special scrutiny. He had driven everywhere since Yamashita’s arrival in the Philippines.
"Santy proceeded to torture the driver, Maj. Kojima Kashii, to find the burial sites of the Japanese treasure. Lansdale soon joined the torture sessions as an observer and participant. In October, Kojima broke down and led Santy and Lansdale to the location of a dozen sites in the mountains north of Manila. Two of the sites were easily opened and revealed a prodigious quantity of gold, precious metals and gems.
"While Santy and his teams started to open the other sites, Lansdale flew to Japan to brief MacArthur and then on to Washington to brief President Truman. After a cabinet discussion, Truman decided to continue with the recovery that would be kept a state secret.
"The decision was not Truman’s alone. Henry Stimson, Secretary of War, first proposed using gold recovered from the Nazis as a secret slush fund during the Roosevelt administration. The Nazis had already done the dirty work and resmelted the gold, making it hard to trace its origin. Many of the owners perished in the war and much of the prewar governments ceased to exist. With many of the eastern countries falling under the influence of the Soviet Union, returning any gold to these countries was out of the question with the Cold War Warriors.
"Stimson’s special assistants on this were John McCloy, Robert Lovett, Clark Clifford and Robert Anderson. Anderson was a former Texas Republican legislator. In 1953, President Eisenhower appointed Anderson Secretary of Navy, and in 1954, Secretary of Defense. Some sources say his appointment as Secretary of Navy was based solely on the need to move gold from the Philippines. In 1957, Eisenhower appointed him Secretary of Treasury. In 1987, he pleaded guilty to running an offshore bank after being caught up in the BCCI scandal, which also ensnared Clark Clifford."
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"The Allies first discussed the idea of the Black Eagle Trust in secret during July 1944 at Bretton Woods. CIA Deputy Director Ray Cline has confirmed the secret talks. As late as the 1990s, Cline tried to control Japanese war booty sitting in the vaults of Citibank.
"After briefing Truman, Stimson, Lovett and others, Lansdale returned to Tokyo with Anderson in November. From there, MacArthur and Anderson accompanied Lansdale on a secret flight to Manila. At the sites, MacArthur and Anderson strolled down row after row of gold bullion stacked two meters high. This was only the gold that had not reached Japan because of the Allied blockade of the home islands.
"Cline and others have confirmed the gold recovered by Santy and Lansdale was covertly moved by ship to 176 accounts in 42 countries. Truman was informed that if such a large quantity of gold became public knowledge, the fixed $35 an ounce price would collapse. Other documents show large deposits of gold and platinum made in various Swiss banks from 1945-47.
"Because the Black Eagle Trust and the political actions funds it spawned remain off the books and invisible, the potential for abuse in unscrupulous hands remains high to this day. In 1960, Vice President Nixon gave one of the largest funds, the M-Fund, to leaders of the Japanese Liberal Party in return for kickbacks to his election campaign. The fund, then valued at $35 billion and now estimated as worth more than $500 billion, has served to keep the Liberal Party in power and effectively reduce politics in Japan to a one-party dictator with a block on any reforms. This is readily obvious in Japan’s troubled economic state. Even after sliding into an economic abyss 15 years ago, Japan has still not addressed its economic policies in any meaningful manner. In effect, Nixon’s action has left Japan with an inept, corrupt and weak regime that has not even confronted its role in starting WWII."
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"MacArthur’s staff was well aware of the Japanese treasures, including the $2 billion of gold lying on the bottom of Tokyo Bay. Another large hoard discovered in 1946 by U.S. intelligence was the $13 billion cache of underworld godfather Kodama Yoshio. Promoted to a rear admiral during the war, Yoshio oversaw the looting of the Asian underworld. After the war, Allied forces arrested and held Kodama for war crimes. To avoid trial and imprisonment, he offered the CIA a $100 million bribe. The CIA added the bribe money to the M-Fund and freed Kodama. He later financed two political parties that eventually merged into the Liberal Party.
"Following the death of Santy in 1974, some of the biggest black gold accounts were placed in Lansdale’s name. Curiously, Lansdale retired from the CIA before 1974.
"Much of the information about the Black Eagle Trust has seeped to the surface in several lawsuits that named Citibank CEO John Reed as a participant. In another, Rogelio Roxas, a Filipino locksmith, sued President Marcos for seizing a 1 ton golden Buddha that he found. In another legal battle, former U.S. Deputy Attorney General Norbert Schlei fought for his survival after being stung by the Treasury Department for asking too many questions about Japan’s secret M-Fund.
"Schlei was a key lawyer during the Kennedy and Johnson administrations. He was the attorney who found legal grounds for the Cuba blockade during the missile crisis, and the principal author of the 1964 Civil Rights Act. He also was the primary author of the following landmark bills: the Economic Opportunity Act of 1964, the Voting Rights Act of 1965, and the Immigration Reform Act of 1967.
"The court acquitted Schlei of eight counts, including wire and bank fraud, and money laundering, but convicted him of conspiracy and securities fraud. The charges stem from Schlei negotiating a settlement for a client based on a gold certificate backed by the M-Fund. In 1998, The 11th Circuit Court of Appeals vacated the judgment, in effect admitting that Schlei was innocent of the charges and a victim of partisan politics.
"While Schlei was being indicted, prosecuted and forced into bankruptcy, former Secretary of State Alexander Haig went to Japan and negotiated a certificate based on the M-Fund. This was the same action that led to Schlei’s arrest. Haig carried with him a personal letter from then President George H.W. Bush.
"Haig was the ideal choice to negotiate the certificate. In 1947, he served as an aide to Gen. MacArthur and undoubtedly had firsthand knowledge of the Golden Lily and the various secret funds created from it. While in Japan, Haig married the daughter of Gen. Alonzo Fox, MacArthur’s deputy chief of staff."
"Japan used the same tactics the Nazis did in laundering looted gold. Japan moved it through Swiss banks in Tokyo, Portuguese banks in Maco, and banks in Chile and Argentina. It moved the gold to South America in large cargo submarines. The Portuguese cleverly omitted Maco in the Bretton Woods agreement.
"Journalist Paul Manning had an opportunity to see Emperor Hirohito’s financial records when they were still in the custody of the occupation authorities. The records showed that advisers to the Emperor began moving his gold out of Japan in 1943, about the same time Bormann began moving Nazi loot out of Germany. Historian James Mackay concludes the Emperor’s accounts included $35 million in South America banks, $20 million in Swiss accounts, and $45 million in Portuguese, Spanish and Vatican accounts."
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"The Japanese were especially brutal with their POWs, even more than the Nazis. More than 30 percent of the Allied POWs died in captivity at the hands of their tormentors. In comparison, only 3 percent of Allied POWs died in Nazi camps. The Japanese deliberately left Allied POWs to die untreated from beriberi and other tropical diseases. In a prisoner of war camp on Hainan Island, the camp commandant, Capt. Kikuchi Ichiro, withheld vitamin B capsules to prevent beriberi and calculated the minimum amount of food to keep the POWs barely alive.
"The Japanese transported thousands of POWs to Japan on Hell Ships, sealed in the cargo holds under conditions so grim that it was not uncommon for 10 percent of the prisoners to die before reaching Japan. Ships carrying POWs were supposed to be marked as such, but Japan refused. When the ships were attacked and sunk, the POWs drowned, locked in the cargo holds. The Allies mistakenly sank at least 16 Hell Ships, resulting in the loss of 17,036 Allied POWs.
"By mid-1942, Japan held 140,000 Allied POWs, about a half-million Western civilians, and more than 1 million overseas Chinese. The Japanese treatment of prisoners followed racial lines. They singled out the Chinese for exceptional brutality. Prisoners were forced into slave labor for various uses, including mining gold and coal. Other prisoners worked in factories, including Mitsui, Kawasaki Heavy Industries, Mitsubishi, Nippon Steel, Showa, Denko and others. Mitsui was by far the largest employer of slave labor. Operators of the Hell Ships include the following corporations: NYK Line, KKK Line and Mitsui. These corporations have never been obligated to pay compensation to their victims. Tokyo and Washington have blocked all attempts at compensation.
"Japan dragooned about 1 million Chinese and another million Koreans to work in mines. The Japanese forced Korean women and young girls into prostitution. Known as comfort girls, they were slaves to the military. After capturing the Philippines, the Japanese rounded up wealthy women and young girls and raped them as many as 50 times in a day. The rapes continued until their families came up with ransoms.
"After liberation, U.S. POWs in Japan were transported to Guam where they were browbeaten until they signed papers agreeing they would tell no one of their experiences. For some reason, Tokyo and Washington both wanted silence surrounding the abuse of POWs. Further documentation supporting this comes from files captured by the British Royal Marines in 1945. In the files is a revealing document written by a commander of a POW camp at Taihoku in Taiwan. He received emergency instructions from the 11th Unit of Formosa: “Whether they are destroyed individually or in groups, or however it is done, with mass bombing, poisonous smoke, drowning, decapitation or what … it is the aim not to allow the escape of a single one, to annihilate them all and not to leave any traces.”
"Obviously, Tokyo was insistent on silencing all evidence of their abuse of POWs. However, Washington’s concurrence is perplexing. The war was over and Japan had been vanquished. What cities that weren’t in ruins from the massive firebombing were in ashes from two atomic bombings. The only possible motives for Washington’s agreement are bribery or blackmail. Meanwhile, the leaders in Washington betrayed those American GIs who suffered in the brutal slave labor camps and left them with no means of recourse."
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"It is almost impossible to keep something the size of the Golden Lily secret. Periodically, reports of stolen loot have surfaced. One of the first reports concerned Dutch silver. In 1946, American sources told the Dutch military mission that 110 cases of Dutch coins were transferred from Yokosuka Bank to the Bank of Japan. In 1947, Lt. Gen. Schilling of the Dutch military mission reported to his government the recovery of 30 tons of Dutch silver from Tokyo Bay. The Japanese 16th Army on Java seized this silver and shipped it aboard fake hospital ships to the Osaka Mint. Additional Dutch ingots were recovered from Etchugina Bay.
"Due to postwar detective work by the former Dutch POW, Lt. A. Looijen, Japan eventually returned 187 tons of Dutch silver to the Netherlands. Looijen traced the silver bullion from Java to the Bank of Japan. Another Dutch POW, C. Broekhuizen, who was forced into slave labor, reported that it was the Japanese government’s plan to hide the gold and silver until after the war, and then to melt and recast it to launder it. Other Dutch and American POWs have testified that they saw a warehouse full of coins from the various countries of Asia and the South Pacific. Standard Oil previously owned the warehouse. Still other POWs reported seeing copper coins resmelted at a Hitachi factory.
"POWs also reported seeing copious amounts of diamonds and other precious gems. The finest were culled and set aside, the smallest consigned for industrial use. The remaining was stored in oil drums. The Japanese hid almost all the loot in either private vaults or tunnels and bunkers. They avoided depositing all but a little in Japanese banks because the elite were not about to share the wealth with the lower classes.
"The largest tunnel complex is at Matsushiro near Nagano, the site of the 1998 Winter Olympics. The tunnel complex is 10 kilometers long with more than 60,000 cubic feet of underground space. It was originally built to house the imperial family, members of the aristocracy and all government agencies. Slave labor from Korea dug the tunnel complex. No one ever saw the slaves after the complex was completed, a frequent circumstance with the Japanese treasure sites. They were probably buried alive in a side tunnel. The complex also was used to hide treasure from the Golden Lily.
"After the war, Allied investigators learned that on Aug. 2, 1945, just days before Japan’s surrender, 387 Allied POWs were buried alive on the Japanese island of Sado. They had been forced to work in a gold and coal mine. Lt. Tsuda Yoshiro described the event to investigators. Mitsubishi ran the mine and had a notorious reputation for brutal treatment of slave labor. In another gold mine in Sado, also managed by Mitsubishi, 1,000 Korean slave workers were buried alive. Their fate was determined from company records released in 1991. The records covered Mitsubishi’s distribution of cigarette rations to its slave labor.
"In 1947, Gen. MacArthur brought several gemologists to Japan, including Edward Henderson. MacArthur invited him to appraise some $50 million in gems the U.S. Army recovered. According to journalist Robert Whiting, the Bank of Japan transferred roughly 800,000 karats of diamonds to MacArthur’s command. No record of these diamonds has ever been found."
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"By 1960, it was clear to European central banks that they soon would be holding more dollars than the official U.S. gold reserves. Until the 1960s, the U.S. gold reserves and the secret Black Eagle Trust allowed the United States to browbeat any nation into complying with U.S. wishes and desires. By 1960, the printing of fiat money nearly equaled the U.S. gold reserves. The dwindling ratio of the U.S. gold reserves to the money supply allowed other nations to escape from under Uncle Sam’s heavy hand. As a result, starting around 1960, various nations began striking out on their own, most notably France. The role of gold in the Cold War is perhaps one of the most unrecognized factors in the entire era. While the Black Eagle Trust still could fix elections globally, the United States, forced by its dwindling gold stocks, eased the heavy repression of the 1950s, both domestically and globally. The result was an almost spontaneous global protest leading to one of the most tumultuous decades of the 20th century. French demands to exchange dollars for gold led to Nixon closing the gold window.
"The 1948 Italian election is the first known example of the use of the Black Eagle Trust to fix an election. CIA agent James Jesus Angleton recovered Ethiopian treasure plundered by Mussolini. Angleton did not return the treasure to impoverished Ethiopia; he seized it for the CIA. He arranged for the Vatican to provide 100 million liras to back anti-communist candidates in the election. Some of the funds likely came from the Black Eagle Trust, considering the Vatican was one of the 42 recipients of shipments of recovered gold in 1946-47.
"Manipulating elections and other covert operations was the black side of the Truman Doctrine. Following London’s appeal to Washington that it had no money for military aid to Greece and Turkey, Truman appealed to Congress for a $400 million aid package. Secretly and simultaneously, Truman sanctioned the use of funds from the Black Eagle for covert operations to defeat the communist uprising."
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"Frank Wisner was the man in charge of the CIA covert operation in Europe following WWII. Wisner came up with hiring ex-Nazis to create a fifth column against the Soviet Union. By 1952, he had operations in 47 countries, an official budget of $84 million and staff of 3,000. It is unknown how much funding he may have received from the Black Eagle. Wisner was supported by powerful friends: the Dulles brothers, George Keenan, Averell Harriman, and Joe and Stewart Alsop."
"Marquat did little in the way of shutting down the profit mongers during the war. He also was in charge of bringing the war criminals from Unit 731 to justice. Unit 731 was Japan’s biological and chemical warfare division that used victims as test subjects for warfare agents. Instead of fulfilling his duties, Marquat presided over the transfer of Unit 731 to Fort Dietrich. All information on the unit was withheld from the American and Japanese public, and the War Crimes Tribunal.
"MacArthur and his staff created the M-Fund to buy elections. Its first big application came in the late 1940s when the socialists won. The M-Fund immediately began dispensing great sums to discredit the socialist cabinet. Later, Washington used the fund to discredit Tokyo’s move to open relations with the People’s Republic of China.
"MacArthur and his staff set up the Yoshida Fund with a different objective. It was used to finance the Japanese underworld for “wet work,” kidnapping and murder. Gen. Willoughby controlled the Yoshida Fund, where money was used to silence union leaders and organizers."
"Joseph Keenan, another figure from MacArthur’s inner circle, controlled the Keenan Fund. Keenan was the chief prosecutor in the Tokyo war crimes trials. The sole purpose of the Keenan Fund was to bribe witnesses at those trials. Unlike the swift trial of Yamashita in the Philippines, the Tokyo trials dragged on for three years. MacArthur’s staff bribed witnesses to prevent any testimony implicating the Emperor. Witnesses who could not be bribed met with violent and sudden deaths. The fund also was used to prevent testimony of Unit 731.
"In 1956, the Eisenhower administration used the M-Fund again to place Kishi as head of the newly merged Liberal-Democratic Party and as Japan’s new Prime Minister. Kishi, a signer of the Japanese Declaration of War against the United States, was actively involved in slave labor and part of the hard-core ruling clique in Manchuria. He was one of the most prominent war criminals arrested in postwar Japan. However, he was freed with bribe money from Kodama.
"Harry Kern, Eugene Dooman, Compton Packenham and other members of Averell Harriman’s group groomed Kishi for 10 years. Nevertheless, Kishi lost in the 1956 election to Ishibashi Tanzan. Washington widely regarded Tanzan as the least favorable candidate. Annoyed, Eisenhower personally ordered the CIA to destroy Tanzan. After a year of paying bribes to all the factions in the Liberal-Democrat Party, the Eisenhower administration successfully placed its man in the prime minister’s chair."
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"During Kishi’s term, 1957-60, the Liberal-Democrat Party received $10 million annually from the CIA, chiefly from the M-Fund. While Nixon was negotiating the Mutual Security Treaty, he promised Kishi that he would turn over the M-Fund to the Liberal-Democrat Party, and return Okinawa to Japan in exchange for black money help in the 1960 election. On settling the security treaty, Nixon turned over the control of the M-Fund and, in 1973 as president, he returned Okinawa to Japanese rule.
"In 1972, Nixon and Kissinger arranged a deal with Premier Chou En-lai to keep China out of the conflict over Taiwan. In return for standing down, Nixon offered China a large quantity of gold provided by Marcos. At that time, China’s economy was in bad shape and the country lacked foreign currency to buy any foreign goods, including grain to relieve the widespread rural famine. According to CIA and Pentagon analysts, China was about to invade Taiwan to gain badly needed assets and foreign currency. At the same time, the United States was bogged down in Vietnam and the public was demanding peace.
"Although the details are sketchy and the exact amount is uncertain, Kissinger apparently offered China $68 billion in gold. Supporting evidence for the deal comes from numerous bank accounts, held by members of the Black Eagle Trust, which were moved to mainland banks inside China. These rabid anti-communists would have had no other reason to move their accounts to China at the height of the Cold War."
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"All presidents, from Truman to George W. Bush, have used the Black Eagle Trust to fund covert operations. While these black operations are odoriferous and criminal, the real danger comes in keeping the gold out of the hands of private individuals. Yet, from the beginning, the gold was held in private accounts. When President Kennedy sacked Lansdale over his operations against Cuba, Lansdale did not give up his covert activities. He merely went private. He still had enough contacts in the military and the CIA, and accounts of gold in his name to remain a player in covert operations. In practice, this left Lansdale as a private individual with the power to overthrow foreign governments and even the ability to plunge a country accidentally or deliberately into an unwanted war.
"President Reagan enhanced the capacity of private individuals or groups to wage war. Early in his first term, Reagan signed Executive Order 12333 at the urging of Bill Casey. This executive order allowed the CIA and other government agencies to contract with private military firms. Furthermore, the agency did not have to reveal the contract or arrangement.
"Such contracts set a dangerous precedent that allows the president to bypass the ability of Congress to declare war. Reagan immediately used it to wage war in Nicaragua. The resulting aftermath became known as the Iran-Contra scandal.
"By 1980, there were plenty of individuals like Lansdale who were terminated from government service to staff private military or intelligence firms. Starting in 1972, after John Schlesinger replaced Richard Helms as CIA Director, hundreds of agents who had been engaged in the dirty tricks clique of Helms were forcefully retired. Once the CIA’s involvement in Watergate and other domestic break-ins became known, Schlesinger ordered an investigation. The report, The Family Jewels, led to leaks about assassination programs, death squads like Phoenix and other embarrassing operations. More than 1,000 agents were terminated because of the investigation.
"Further investigations in the 1970s led to more dismissals, not only at the CIA, but also the Pentagon. The Carter administration dismissed additional CIA and military personnel. Among them were Gen. John Singlaub, Ray Cline and Gen. George Keegan. Many of these men regrouped privately in such radical, far right-wing organizations as the John Birch Society, the World Anti-Communist League and the Moonies. Singlaub became an icon among the far Right."
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"Casey is a good example of these ex-agents. Casey was one of the original OSS crowd. He was Singlaub’s case officer during WWII; Paul Helliwell was Casey’s immediate superior. In addition, Casey was friendly with the Dulles brothers and worked with Cline. He became involved with Lansdale during the torture of Maj. Kojima, making Casey one of the key players in the Black Eagle Trust.
"After the war, Casey founded his own Wall Street law firm. His continued involvement with former intelligence agents allowed him to form Capitol Cities in 1954, just as the CIA was pouring millions of dollars into media companies. Casey benefited from some of that money. It is likely that Casey never left the CIA. In 1973, Nixon appointed him Chief of the Securities and Exchange Commission. While serving as the SEC chief, Casey worked closely with Stanley Sporkin, whom Casey later appointed as the CIA’s general counsel in the Schlei case. In 1978, Casey founded the Manhattan Institute, a think tank that absorbed several former CIA agents. In 1980, Casey left Capitol Cities to become head of the Reagan campaign. Reagan appointed Casey as CIA Director.
"By 1980, private military and intelligence firms proliferated to such an extent that they became known during the Iran-Contra scandal as “The Enterprise.” Marcos had connections that extended beyond the CIA into this loosely confederated network."
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"In the mid-1970s, Marcos became pathologically greedy. He was already a billionaire from clandestinely recovering some of the Golden Lily’s treasure. However, the only means he had of selling it was through the CIA or Japan. Both would take the odd-size ingots without the standard paper trail required in the legitimate gold market, but only at a steep discount.
"To bypass the CIA and Japan to sell in the open market, Marcos had to have the gold resmelted and the fingerprint from impurities altered so the gold would appear to have a Philippine origin. By 1975, Marcos had already formed the Leber group (rebel spelled backward) to uncover the Golden Lily treasure from 34 of the known 172 sites. Due to Marcos’ personal fascination for psychics, the group included Olof Jonsson, a psychic from Chicago. Marcos then contacted Robert Curtis, a mining engineer from Sparks, Nev.
"Curtis developed a method to extract platinum and reclaim more gold from mining tailings in the Sierras, which made him a moderately wealthy man. He also was an expert at changing the fingerprint of gold bullion. At first, Curtis turned down Marcos’ offer to resmelt the gold.
"However, the amount of gold discussed in the offer amazed Curtis. It was 10 times the average gold Philippine mines had ever produced. Marcos finally revealed that the gold came from Japanese looting during WWII. The idea of recovering Japanese gold fascinated Curtis and he accepted the job, arriving in the Philippines at the end of February 1975."
" ... After Nixon allowed citizens to own gold, the Birch Society developed a backdoor through Canada to buy overseas gold and smuggle it into the United States. The society then used the gold to fund its own vigilante force, similar to a private FBI. The John Birch Society has always kept some type of blacklist, which is typical of all hard-right groups. Periodically, news articles have appeared about the Birch blacklist. Generally, these right-wing blacklists receive a wink and nod from the FBI that views them as helpful. ..."
"By the time Curtis opened the first treasure site, the John Birch Society placed new demands on him for additional security for the loan. Curtis offered titles to his heavy equipment in Nevada. He also was obligated to give the Birchers exclusive right to market up to $20 billion of any gold recovered. The Birchers told Curtis the gold would be sold through Commonwealth Packaging Ltd., located in the Bahamas and owned by Kwik Lok. The money would be deposited in the Nassau branch of the Royal Bank of Canada and finally transferred to a branch in Kelowna, Canada. There, a key financial expert of the Birch Society would smuggle the money into the United States.
"The July 4-5, 1975 columns by Jack Anderson triggered the sudden demands of the Birch Society. Anderson reported Marcos was recovering gold with the help of several Americans. Curtis barely escaped from the Philippines with his life. Later, Curtis learned that Marcos had recovered 22,000 metric tons of gold bullion. Marcos had the treasure resealed without recovering two gold Buddhas and barrels of gemstones.
"While Curtis was still in the Philippines, he learned the Gold Cartel had offered Marcos a Mafia-style deal: either kill Curtis and let the cartel handle the gold or Marcos would be in trouble. The Gold Cartel refers to the alliance of prime banks, gold companies and national treasuries, including the Federal Reserve and the Bank of England, that dominate the world gold market. In the end, Curtis was left broke. Johnson-Mathey Chemicals, part of the Gold Cartel, now owned his two Philippine smelters."
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"In his first year in office, Reagan declared that he would restore the gold standard. He had ties with the Birch Society dating back to the 1950s. The Reagans also were long-time friends with Marcos. To make his plan for a new gold standard work, Reagan needed a large stock of gold. He asked Marcos privately to lend part of his hoard for the plan, but Marcos demanded a higher commission than Reagan was willing to pay.
"In blackmailing the Japanese and overplaying his hand with Reagan, Marcos sealed his fate and was quickly removed from office. Once Marcos was besieged in Manila, Sen. Paul Laxalt offered him an ultimatum: forfeit the gold in return for rescue by the United States. That evening after he accepted ultimatum, barges were towed alongside the presidential palace, loaded with gold and towed to Subic Bay. Marcos was rescued and taken to Hawaii, where authorities seized billions of dollars worth of gold certificates.
"The high-flying days off Marcos playing wild and loose with black gold ended in Hawaii. However, the Reagan administration’s interest in the Golden Lily treasure buried in the Philippines continued. In January 1987, Alan Foringer contacted Curtis to talk about Philippine treasure.
"Foringer and his aide, John Voss, told Curtis they were with the Nippon Star. Gen. John Singlaub formed the Nippon Star to search for treasure in the Philippines. Curtis wanted no part of dealing with the CIA or any CIA-connected fronts. However, Curtis was then informed in a phone call from Gen. Schweitzer that President Reagan personally supported the Nippon Star and the Phoenix Exploration groups. Reagan could not publicly approve the explorations, but had fully briefed the U.S. Embassy in Manila, and commanders at Subic Bay Naval Base and the Clark Air Force Base. Others involved in the exploration included Col. Dick Childress, Gen. Daniel Graham, Gen. Jack Vessy and Ray Cline.
"Curtis reluctantly agreed to meet them in Hong Kong. However, this time he demanded that the meeting be tape-recorded. Once again, the John Birch Society was financing the operation. Curtis also discovered that Singlaub had been duped and was using false maps. Curtis retained the maps for all the sites from his earlier trip to the Philippines. Desperate to dig himself out of a financial hole, he suggested starting at a site on Corregidor. After five days of digging, Philippine Army helicopters swooped down and demanded the treasure hunters leave at gunpoint. Curtis then returned home.
"Curtis returned to the Philippines a third time as a partner with Charles McDougal, a former Green Beret. Once again, as he was about to strike gold, Curtis was forced to leave the Philippines. Later, his former partners recovered roughly $4.5 billion in gold that Curtis had located.
"Further evidence of the Reagan administration’s involvement in recovering Golden Lily treasure comes from a suit filed by San Francisco attorney Melvin Belli over gold deposits held by Citibank. Belli concluded that Citibank’s John Reed joined with President Reagan, James Baker, Bill Casey and Prime Minister Margaret Thatcher to use Golden Lily treasure to finance covert operations by the United States and Britain, and Monsanto was also linked to IG Farben. Belli referred to the plan as “The Purple Ink Document.” Unfortunately, Belli died before the case could proceed. The case was still pending as of this writing."
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"The danger now is the Black Eagle Trust is no longer fully in the hands of the government. Instead, several far-right groups have access to it and can use it to further their radical agenda. They know more treasure is hidden in the Philippines. Undoubtedly, some of the political shift to the right in the United States since the 1980s was funded with parts of the Black Eagle Trust.
"In 2001, George W. Bush sent a Navy Seal team to the Philippines to recover a portion of the loot. The younger Bush has been a player in the black market for gold for some time. His representative to purchase the gold was William S. Farish, his nominee as Ambassador to Great Britain and manager of his blind trust. George W. Bush appointed James Foley as Ambassador to Haiti before the Bush-inspired revolt in 2004. Foley was another player in the Black Eagle Trust, which leads to the question: Did money from the Black Eagle Trust finance the arming of the Haitian rebels?"
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"Since the fall of the Soviet Union, there have been several reports of treasures looted by the Russians. Many paintings taken from Germany are in the possession of the Hermitage Museum in St. Petersburg and the Pushkin Museum in Moscow. Next to no one knows the United States had its own program of plunder, directed by Army officer Gordon Gilkey. Gilkey must have been a busy man in postwar Germany, as proved by roughly 11,000 paintings from Germany stored in the Pentagon. The most valuable of those paintings are stored in the vault at the U.S. Center of Military History.
"The list of official looters ranged from government officials to private individuals. Herbert Hoover’s famed postwar global tour to relieve hunger was a cover for a private mission to loot to his content. His staff plundered thousands of items for the Hoover War Library at Stanford University. One item pillaged was Joseph Goebbels’ 7,000-page typed diary. Doubleday agreed with Hoover to publish part of the diary for $400,000, which could have better served hungry children of war-torn countries. Hoover’s library still has the original diary. Hoover also plundered a large collection of papers and items belonging to Heinrich Himmler and the Nazi Party. No doubt, Hoover saw to the removal of any incriminating files in Germany and Japan, such as those that would have revealed his collaboration with top Nazis in the 1940 election."
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"The treasures of all the top Nazi officials were looted to some degree. Goering hid his vast art collection in several locations. It was simply too vast to have it all transported to a final cache. He buried some of it at Carinhall, his palatial estate and hunting lodge, when the Russian advance threatened to overrun the area. The rest was transported by train to Veldenstein, Goering’s castle. As the Allies approached Veldenstein on April 7, 1945 Goering once again ordered the treasure be moved by rail to Berchtesgaden, Hitler’s retreat in the Bavarian Alps and the center of the redoubt area. There, Goering was able to commandeer four trains. The ease with which Goering was able to find four trains in the final days of the war was largely due to the incredible and surreal conditions surrounding the redoubt area. During the final days of the war, 14,000 freight cars arrived, many loaded with supplies and equipment for the Nazis’ final stand in the Alps, others simply loaded with treasures collected by top officials. Wounded soldiers lucky enough to find a horse and cart filled the roads, while others laid at the roadside, unable to find transportation to a hospital, dying an agonizing death in the mud and snow. To hide some of Goering’s treasure from the Allies, five freight cars laden with treasure were sent to nearby Unterstein. The rest of the treasure was left sitting on railcars that were looted by townspeople.
"The 101st Airborne Division that liberated the area was soon aware that it had stumbled across Goering’s art collection. After locating a hidden side room in the underground command post, soldiers blew the entrance open to Aladdin’s Cave and didn’t hesitate to take part of the treasure. One soldier found Goering’s guest book from Carinhall. The book contained many signatures of distinguished guests, including Herbert Hoover.
"Gen. Patch took one of Goering’s field marshal batons, which went to the West Point Military Museum when he died. Lt. Eckberg took Goering’s second baton and other items, and mailed them to his mother in Chicago. Eckberg remained in Germany. His mother sold a gold medallion to a jeweler, who then placed an ad. U.S. Customs read the ad and recovered the medallion, the baton and the other items the lieutenant had mailed home. Soldiers pillaged many other personal items, such as Goering’s dagger and sword. Lt. Col. Willard White, probably the most prolific looter at Berchtesgaden, helped himself to a large collection of Hitler’s silverware and crystal items, mailing them home to his wife, the sister of Ladybird Johnson."
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"The best-known case of looting by American personnel was the theft of the Hesse Crown Jewels. The primary instigators of the theft were Capt. Kathleen Nash, Maj. David Watson and Col. Jack Durant, who was Nash’s lover, found a fresh patch of concrete in the cellar as they explored the castle. There they found zinc-lined boxes full of jewels. The trio removed tiaras, bracelets and other items, and sold them in Switzerland. In late 1945, the trio returned to the United States. Besides the jewels and gold, they looted silverware, books and hundreds of other items. In January 1946, a member of the Hesse family reported the jewels missing. The Army’s Criminal Intelligence Division determined the extent of the theft and soon arrested the trio. Durant married Nash so she could not testify against him. The court sentenced Watson to three years in prison, but he was released after four months. His family owned a large West Coast grocery store chain that obviously had connections to people in power. The court sentenced Durant to 15 years and released him after six years. However, Nash was described as a difficult prisoner and served her entire five-year sentence. Nash mailed about half of the jewels to her sister.
"Nazi gold and treasures continue to be discovered. Recently, the Roman Catholic shrine of Fatima in Portugal confirmed it held Nazi gold bars in the mid-1980s. The Nazi insignia was found on four bars after the shrine requested a Portuguese bank to melt them. The bars were sold between 1982-86 to finance construction. A 1976 bank statement shows the shrine held four Nazi gold bars totaling 50 kilos. It is unknown if the shrine held more.
"Another treasure surfaced in 1990. It consisted of medieval works of art, including gold and silver crucifixes; rock crystal flasks; a beautiful silver receptacle called a reliquary for keeping and displaying sacred relics, inlaid with precious stones and enamels; a liturgical ivory comb; various priceless gifts belonging to warlords who ruled the old states of Germany in the 9th and 10th centuries; and perhaps the most priceless of all, a beautifully illustrated 9th-century version of the four gospels in a gold and silver binding, encrusted with gold and jewels. The treasure was discovered at the end of the war in an unused mine tunnel at Quedlinburg, a few miles south of Magdeburg in eastern Germany. U.S. Army Lt. Joe T. Meador discovered the treasure and was assigned to guard it with three other soldiers. However, Meador had other ideas. He quietly removed the items piece by piece and mailed them home. The Army launched an inquiry, which quickly ended when the area was assigned to East Germany. After Meador died in 1980, rumors quickly spread of an impending find of a remarkable medieval artwork. In 1990, the four gospels surfaced with a 1513 manuscript valued at $500,000. Further investigation in Meador’s hometown of Whitewright, Texas, turned up the rest of the loot.
"In 1997, a vault was opened in Sao Paulo, Brazil containing more than $4 million worth of looted property - cash, gold bars and jewelry. The vault was owned by Albert Blume, a German who came to Brazil before World War II. He allegedly acted as a banker for escaping Nazis."
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"The question of victim compensation is still hotly debated. Clinton appointee Stuart Eizenstat brought many of their lawsuits to a fruitful conclusion. However, controversy remains, as victims sneer at the pitiful settlements for their time in concentration and forced labor camps. The Eizenstat study reached five major conclusions about Nazi gold:
"Much of the gold passed through Swiss banks and then into other countries. The conversion of the Nazi gold into Swiss francs was the primary means by which the Nazis bought war material from neutral countries.
"Trade with the neutral countries allowed the Nazis to prolong the war.
"The Reichsbank knowingly incorporated into its gold reserves looted monetary gold from the national banks of other countries. This was a primary means by which the Nazis financed their aggression.
"Gold from the victims of the concentration camps was mixed with monetary gold and found its way into the neutral trading parties of the Nazis.
"Complete recovery of the looted gold was hampered by the indifference among neutral nations and conflicting priorities and inaction of the Allies"
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"While the gold rush teams did an admirable job in locating the Nazi treasures in the first few days following the end of the war, the program soon became beleaguered with ineptness and corruption. With Nazi gold, there is no direct evidence of a systematic plan to sabotage the recovery of the Nazi treasures. However, there is strong evidence that Allen Dulles aided the Nazis in transporting and hiding their looted treasures in other countries. For the Golden Lily, there is ample evidence that recovery and return of gold looted by the Japanese was systematically sabotaged by high-level intelligence officers, Herbert Hoover and elites from Wall Street.
"It is equally certain the recovery of Nazi gold from the neutral countries was compromised at almost every step by the objectives of the State Department and the military. From the latest information from Argentina, it seems certain that the Perons had an enormous sum of Nazi gold at their disposal. Powerful figures in the Republican Party and business community pushed the United States into the precise trap the Nazis planned for a comeback - a war between the U.S. and Soviet Union. The shooting had hardly stopped before the pro-fascist element in the United States that opposed the war under the banner of isolation was calling for a war against the Soviets.
"Justice for the victims would be sacrificed, further recovery of the Nazi gold from the neutrals would be stopped, and all resources would be employed in fighting the Red menace to protect the same corporations that built Hitler’s war machine. The Nazi treasures squirreled away in neutral countries would be used to rebuild Germany as a bulwark against the Soviets."
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Chapter 8,
Ratlines, the CIA and the Nazis
Operation Northwoods
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"A recent episode of CIA bungling took place in the bombing of Serbia during the Kosovo crisis. By mistake, the United States bombed the Chinese Embassy. President Clinton was quick to apologize to the Chinese, and the CIA stepped forward and admitted its error. The maps had not been updated in four years. More information surfaced later. A lower-level CIA employee had warned repeatedly of the possible misidentification of that target site, but was ignored. There may have been more to the bombing than a bad map. The London Guardian reported that NATO deliberately targeted the embassy because it was sending messages for the Yugoslav army.
"The embassy bombing points to two problems. First, the agency works in total secrecy; even its budget is classified. It may be years or even decades before the truth is finally known. Second, many questioned whether the CIA was deliberately misleading President Clinton. The agency was known to pass on less-than-credible documents to higher policy making officials. During a November 1995 Senate Select Committee, it was revealed that CIA officials passed on more than 35 reports without disclosing the information came from known Soviet double agents. Between 1986-94, the CIA passed on at least 95 reports based on information from double agents without revealing the doubtful source or accuracy.
"At other times, the CIA deliberately defied presidential orders. During the Kennedy administration, the agency defied orders to close a training facility for Cuban guerrillas in Louisiana. Kennedy resorted to using the FBI and other agencies to close it."
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"Today, the CIA is perhaps the most despised agency in the government. It has overthrown governments worldwide, including those of allies such as Canada and Australia when they turned toward liberalism. In other operations, the agency has conducted gruesome operations such as Project Phoenix in Vietnam. Far too often, elements in the agency have hatched bizarre plots to achieve an agenda. One such plot was Operation Northwoods, which evolved out of the Bay of Pigs fiasco. (See Appendix 13.) While Operation Northwoods was a military operation controlled by the Joint Chiefs of Staff, it illustrates the problem with covert operations and the broader intelligence community.
"In early November 1961, Robert Kennedy held a meeting in the Cabinet Room of the White House in which he announced that all responsibility for dealing with Cuba was to be shifted from the CIA to the Pentagon. This shift reflects the continuing distrust of the CIA by the Kennedy administration. The Right Wing savagely attacked the Kennedy administration for being soft on communism after the failure of the Bay of Pigs invasion. John F. Kennedy fired Allen Dulles as CIA Director over the fiasco.
"Edward Lansdale and Lyman Lemnitzer directed the new Cuba operation, code-named Mongoose. Lansdale was an OSS agent during WWII who then transferred to the Army. In 1960, he was a one-star general and the deputy director of the Pentagon’s Office of Special Operations. Lemnitzer was a career military officer who served as an aide to Eisenhower during the war and was appointed Chief of Staff in 1957. He helped create the NATO stay-behind network, turning Nazi agents into spies against the USSR, and infiltrating Nazi war criminals into Latin America in the 1950s.
"Lansdale and Lemnitzer quietly set about exploring the possibility of doing what they wanted to do: a full-scale invasion of Cuba. The last vestiges of McCarthyism were still strong in the ranks of the military and the Right Wing. Many ranking officers believed communist agents infested the government. The John Birch Society was at its zenith. The firing of Gen. Walker for indoctrinating his troops with Birch Society propaganda in April 1961 reenergized the Right.
"Walker’s discharge triggered a study by the Senate Foreign Relations Committee into the dangers of right-wing extremism in the military. Its report warned of considerable danger in the education and propaganda activities of military personnel. Among the key targets were Kennedy’s domestic social policies that the Right Wing deemed communist-inspired. The report concluded with a chilling warning of a possible revolt by senior military officers, and called for examination of Lemnitzer’s extreme right-wing connections. Lemnitzer became increasing paranoid after Kennedy took office; he resented the youthful president. Further, Lemnitzer did not trust civilian command, which he believed interfered with the proper role of the military.
"The roots of Operation Northwoods extend back to the last days of the Eisenhower administration. The Cold War was at one of its hottest points after the Soviet Union shot down Francis Gary Powers’ U2. Eisenhower wanted desperately to invade Cuba. On Jan. 5, 1961, he told Lemnitzer and other aides in the Cabinet Room he would move against Cuba before the inauguration if only the Cubans would give him a good excuse. Eisenhower then suggested that if Castro failed to provide an excuse, perhaps the United States could manufacture something that would be generally accepted. Eisenhower suggested feigning a bomb attack or an act of sabotage against the United States. It was a dangerous suggestion from a president with only a few days remaining in office.
"Approved and signed by all the Joint Chiefs, Operation Northwoods called for acts of terrorism to be committed on American soil. Various plans included shooting innocent people on American streets, sinking boats of Cuban refugees and a violent wave of terrorist attacks launched against Washington, D.C., Miami and other cities. Using phony evidence, innocent people would be framed and Castro would be blamed.
"On Feb. 26, 1962, Robert Kennedy ordered Lansdale to stop all covert planning against Cuba and to concentrate on intelligence gathering, due to the increasingly outrageous nature of Operation Mongoose. However, Lemnitzer continued with Operation Northwoods: a raft of dirty tricks like blaming Castro if the rocket carrying John Glenn into space exploded, sabotaging ships at Guantanamo or fake attacks against the base or civilians in the U.S. There was no limit to Lemnitzer’s fanatical fancy. Other schemes called for bombings, hijackings, disguising a drone as a passenger plane and blowing it up, and fake attacks against the U.S. Air Force.
"On March 15, 1962, President Kennedy told Lemnitzer there was almost no possibility the United States would use military force in Cuba. However, Lemnitzer persisted in his plans against Cuba to the point of insubordination. Within months, President Kennedy denied Lemnitzer a second appointment as Joint Chief of Staff and transferred him to Germany, effectively removing him from causing any further damage and ending his career.
"Years later, President Gerald Ford appointed Lemnitzer to the President’s Foreign Intelligence Advisory Board. Lemnitzer’s aide, Brig. Gen. Craig, who helped plan Operation Northwoods, was promoted to major general and spent three years as chief of the Army Security Agency, NSA’s military arm."
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"On Oct. 1, 1945, President Truman ordered the OSS disbanded. Bill Donovan sealed the fate of the agency when he hired liberals and socialists to fill its ranks. By the end of the war, the OSS was split into two factions in Europe. One faction vigorously hunted Nazi criminals and worked hard to decartelize Germany, while the other, led by Allen Dulles, worked equally hard to cover up war crimes and to undo any attempts at decartelization. The hard Right and Nazi sympathizers clamored to rid the nation of a spy agency full of communists."
"On Oct. 22, 1945, three weeks after Truman’s order, Secretary of War Robert Patterson created the Lovett Committee, chaired by Skull and Bonesman Robert Lovett, to advise the government on the postwar organization of U.S. intelligence activities. The new agency, which consulted with the armed forces, was to be the sole intelligence collection agency in foreign espionage and counterespionage. It had its own secret budget. On Nov. 14, 1945, Lovett appeared before the Secretaries of State, War and Navy, and pressed for a virtual resumption of the wartime OSS.
"On Jan. 22, 1946, President Truman issued an executive order setting up a National Intelligence Authority, and under it, a Central Intelligence Group, the forerunner of the Central Intelligence Agency. In 1947, Congress passed the National Security Act, which mandated a major reorganization of the U.S. government’s foreign policy and military establishments. The act, which took effect on Sept. 18, 1947, combined the departments of War and Navy into the single cabinet position of the (so-called) Department of Defense, and established the National Security Council and CIA.
"Since 1980, there has been a steady stream of headlines indicative of America’s involvement with the Nazis. Summaries from some late 1990s headlines follow:
""Billions of German Marks from German taxpayers are being paid for “victim” pensions. These pensions are paid to as many as 50,000 war criminals - on top of their regular pensions. One notable recipient was Wilhelm Mohnke, a Hitler confidant and commandant of the Führer bunker. He also had a role in executing 72 POWs during the Battle of the Bulge. Germany has only reluctantly agreed to halt such payments."
""Kazys Ciurinskas, a retired Indiana contractor who served as a member of the 2nd Lithuanian Schutzmannschaft Battalion, a mobile Nazi killing unit, faces deportation for lying on his immigration papers about his involvement with the Nazis during WWII. Kazys’ battalion in October 1941 murdered over 10,000 people in Byelorussia
"Five U.S. banks: Chase, J.P. Morgan, Guaranty Trust Co., Bank of the City of New York and American Express all turned over the accounts of Jewish customers to the Nazis during the occupation of France.
""In an article appearing in Newsweek dealing with the return of the heirless assets, the cooperation of American corporations with the Nazis is exposed. Recently declassified documents show that at least 300 American firms continued to do business with the Nazis during the war.
""The articles suggest a faction of Americans played a much greater role in aiding Hitler and the Nazis than commonly thought. While the widespread belief is that only a handful of American companies aided the Nazis, the Newsweek excerpt implicates more than 300 American corporations in wartime acts of treason."
"Congress passed a bill to release all documents about war criminals. However, some agencies, such as the State Department, the Department of Defense and the CIA, are still raising objections, citing national security. Full disclosure of all documents about Nazi war criminals proved too embarrassing to several American corporations, powerful elite families, politicians, government agencies and programs.
"In September 2000, the CIA admitted for the first time that it employed ex-Nazis. The story was only carried on the UPI wire. In the article, the CIA admitted that it employed Gen. Gehlen and his intelligence network after WWII. The acknowledgment confirmed perhaps the most widely known secret of the CIA and passed largely unnoticed. The more interesting aspect of the CIA-Nazi connection is how these former Nazis have molded foreign and domestic policies at the highest levels of government. The agency is guilty of sanitizing the records of other war criminals so they could come to the United States, then covering up these operations from Congress, federal investigators and the American public."
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"Besides the Vatican ratline, the Nazis had their own organizations devoted to helping war criminals flee Europe. The organization of former SS members, better known as ODESSA, was one part of the Nazis’ plans to escape Europe. Hollywood has embellished the fabled network, which was well organized and financed with stolen loot. While the exact origins of the network are unknown, some assign its origins to the Red House meeting in 1944. Other names for ODESSA were Die Spinne, the spider; Kamradenwerk, Comradeship; der Bruderschaft, the Brotherhood.
"One person known to be associated with ODESSA was Otto Skorzeny. Skorzeny’s war exploits were legendary, resulting in the Allies declaring him the most dangerous man in Europe after the end of the war. Skorzeny surrendered to American forces in May 1945 and was interned at Dachau. During the war, Skorzeny trained the Werewolves, who formed the nucleus of the postwar Nazi underground and were instrumental in establishing the ratlines out of Europe.
"The Allies believed the underground Nazi Werewolves functioned as commandos, conducting sabotage raids and assassinating any German who became too friendly with the enemy. There is unmistakable evidence that the Werewolves did assassinate some Germans aiding the Allies. However, it appears their primary function was to aid Nazis escaping Europe, which places the origins of the ODESSA network before the end of the war and perhaps as part of the plans evolving from the Red House meeting in 1944.
"The American Army Counter Intelligence Corps (CIC) placed moles inside the camps holding Nazi prisoners. In Operation Brandy, CIC moles determined there was a well-organized, illegal POW mail service. People living close to the internment camps were eager to help the POWs escape and find money. To gain further information about the underground Nazi ratline, a CIC mole arranged for his escape with two others from Dachau. The experience confirmed the existence of the ODESSA network and clearly identified Skorzeny as its director. Polish guards at Dachau were found to be part of the network, as were some of the drivers hired to operate army trucks between Munich and Salzburg.
"After reaching Salzburg, the ODESSA ratline connected with the Vatican’s string of monasteries reaching to Rome. There was a second ratline, ODESSA North, stretching through Norway, Sweden and Denmark. An underground network of SS veterans and Werewolves smuggled Nazi war criminals overland to ports, where they sailed to Argentina or Spain. Argentine diplomats were instrumental in easing traffic along this route.
"The wholesale emigration of Nazi war criminals out of Europe could not have taken place without the approval of U.S. officials in Germany. Skorzeny was still in U.S. custody in 1948, even after being found innocent of war crimes. An American military lawyer who liked him successfully defended him; and later bragged about tricking the court to get him acquitted. However, Skorzeny still faced other charges in Czechoslovakia. Warned by American officials that a Czech government appeal to extradite him might succeed, Skorzeny plotted his escape with the help of American officials.
"After escaping from the Darmstadt internment camp, Skorzeny made his way to a farm in Bavaria rented by Countess Ilse Luthje, a niece of Hjalmar Schacht. Skorzeny later married the countess before making his way to Spain. While there, Skorzeny maintained constant contact with Gehlen. The ongoing relationship between the Gehlen organization and the CIA was emblematic of a pivotal alliance with ODESSA. Former U.S. intelligence officer William Corson describes Gehlen’s organization as a well-orchestrated diversion. The primary role of Gehlen’s organization was to neutralize U.S. intelligence so the Nazis could continue their quest for world fascism by using the ODESSA network.
"In September 1948, German police noted a Skorzeny movement had sprung up in the U.S. zone and was spreading across Germany. British intelligence concluded that Skorzeny was working for U.S. intelligence and building a sabotage network. Declassified documents indicate American intelligence officials seriously considered enlisting Skorzeny, but Maj. Sidney Barnes killed the idea. Skorzeny’s notoriety would expose the United States to too much potential embrassment.
"Little else is known about the shadowy ODESSA network beyond Skorzeny’s association with it, but it appears that Francois Genoud, a Swiss resident of Pully on Lake Lausanne, functioned as the banker. In 1934, Genoud joined the Swiss pro-Nazi National Front. Two years later, he traveled to Palestine and befriended Amin al-Husayni, the pro-Nazi religious and political leader of Palestinian Muslims, who had been appointed Grand Mufti of Jerusalem in 1921 by the Zionist High Commissioner Herbert Samuel. In 1940, Genoud set up a nightclub in Lausanne to serve as a covert operation for the Abwehr, the German counterintelligence service. In 1941, his Abwehr contact, Paul Dickopf, sent him to Germany, Czechoslovakia, Hungary and Belgium. As part of his Abwehr services, Genoud dealt in currency, diamonds and gold, to name a few.
"In 1942, Dickopf went underground with help from Genoud. Ironically, from 1968-72, Dickopf was president of Interpol. At the end of the war, Genoud represented the Swiss Red Cross in Brussels.
"Using banking contacts established while working for the Abwehr, Genoud set in motion networks that later became known as ODESSA, which functioned principally for the transfer of millions of marks from Germany into Swiss banks. By 1955, Genoud was an adviser, researcher and banker for the Arab nationalism cause. He set up AraboAfrika, an import-export company that served as a cover for disseminating anti-Israeli propaganda and the delivery of weapons to the Algerian National Liberation Front. He also made investments for Hjalmar Schacht, a key postwar intermediary between Germans and Arabs. When Algerian independence was proclaimed in 1962, Genoud became director of the Arab Peoples’ Bank in Algiers.
"Beginning in the 1960s, Genoud helped finance and supply weapons to numerous Arab terrorists. Genoud also was a close friend of David Irving. On May 30 1996, Genoud committed suicide by taking poison."
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"Records show that at the end of the war, CIC had two large Civilian Internment Centers, code named Ashcan and Dustbin. Both Ashcan and Dustbin served as central internment camps for POWs and Nazi collaborators. CIC identified many American internees who had remained in Germany and aided the Nazis. Much of the overwhelming, indisputable evidence for charging them with treason came directly from captured German records. But suddenly, on orders from the Department of Justice, they were released. Those in the department who spoke out were fired. The attorney who helped bury the treason cases was later promoted.
"Central to the Wall Street alliance with the Nazis and the OSS-CIA was Allen Dulles. Dulles played a pivotal role in helping American investors cover up their dealings with the Nazis. His reassignment to Bern from New York was a continuation of Roosevelt’s secret plot, allowing British intelligence to spy on Americans believed to be aiding the Nazis. Both postings placed Dulles in a position where he would be most tempted to aid his clients. While the evidence would be inadmissible in court, it was incriminating and caused a widespread public cry for full investigations.
"However, some time after Dulles arrived in Bern, the Nazis tipped him off that he was being watched. It is commonly believed the leak occurred when Vice President Henry Wallace told his brother-in-law, the Swiss Minister in Washington, about Roosevelt’s secret spying. Unfortunately, the Nazis had recruited the head of the Swiss Secret Service, and in Berlin, they were soon reading any information given to the Swiss. Wallace was one of only a few in the Roosevelt administration aware of the British spying. Many of the old spies believe Roosevelt dumped Wallace from the 1944 ticket due to the leak.
"The British wiretap operation originally was conducted by a special section of Operation Safehaven. Before his death, Justice Goldberg confirmed Dulles’ appointment was a setup and insisted the Dulles brothers were traitors.
"The British operation was extensive and included spying on Joseph Kennedy and Nelson Rockefeller. The spying on Kennedy netted his radio operator, who was tried in secret by the British and imprisoned until the end of the war. Rockefeller’s appointment to an intelligence post for South America also was part of Roosevelt’s scheme. Others included James Forrestal and industrialists such as Henry Ford.
"Many of Rockefeller’s dealings with the Nazis were conduited through shell corporations in Latin America. The dealings were facilitated by his appointment to the post of Coordinator of Inter-American Affairs by Forrestal in 1940, at his own request. This was the position of the top spy in Latin America. Rockefeller proposed to Harry Hopkins that England and Hitler fight each other to the death so that, regardless of who won, the United States could pick up the pieces to increase corporate America’s economic influence. Rockefeller was only concerned with corporate America’s interests. His definition of totalitarianism was limited to the USSR.
"Many of Rockefeller’s dealings with the Nazis were conduited through shell corporations in Latin America. The dealings were facilitated by his appointment to the post of Coordinator of Inter-American Affairs by Forrestal in 1940, at his own request. This was the position of the top spy in Latin America. Rockefeller proposed to Harry Hopkins that England and Hitler fight each other to the death so that, regardless of who won, the United States could pick up the pieces to increase corporate America’s economic influence. Rockefeller was only concerned with corporate America’s interests. His definition of totalitarianism was limited to the USSR.
"Once Nelson Rockefeller accepted the position, he told his staff that their job was to use the war to take over Latin American markets. Rockefeller also used his position to see to it that the Nazis got anything they wanted in South America, such as refueling bases, while forcing the British to pay cash. In addition, he effectively blackmailed Britain by threatening to withhold or block raw materials and food shipments. Rockefeller’s chief aim was to drive the British out of Latin America and monopolize the markets. In each country, he set up coordinating committees composed of reactionary executives from Standard Oil of New Jersey, United Fruit and General Electric.
"Rockefeller never bothered to help the war effort; by 1945, a third of the countries in South America had still not declared war on the Nazis. Further, a pro-Nazi bloc of countries, led by Peron of Argentina, was actively involved in helping hide escaping war criminals. Peron was a friend of none other than Allen Dulles."
"Dulles reacted quickly after the Nazis told him of the Safehaven wiretaps. In January 1944, he closed down the pipeline by telling both sides that their secret messages were being intercepted. But there is a much more sinister and serious implication of Dulles’ warning to the Nazis that their codes had been broken. Before the Battle of the Bulge, the Nazis began a radio blackout and relied solely on couriers to deliver orders. As a result, allied intelligence was completely blind to the Nazi battle plan for the Battle of the Bulge. Dulles’ warning was a clear act of treason.
"Dulles attempted to use Gero von Gaevernitz as a secret courier, but he also was under surveillance. Both Dulles and Gaevernitz were charged with laundering the assets of the Nazi Hungarian Bank through Switzerland after the end of the war, under the guise of a series of film companies. Both men managed to avoid prosecution by angry denials and subterfuge.
"With the end of the war rapidly approaching, the tip-off that the Allies were intercepting his messages presented Dulles with a special problem. He could no longer use Swiss banks to launder the assets of his American clients and Nazi conspirators which were trapped in Germany. Dulles briefly shifted his money-laundering business to the Central Bank of Belgium. A significant part of the Nazi gold stocks was routed through banks in Belgium, Luxembourg and Liechtenstein. All three countries refused the Allies’ postwar demand to examine their files. The Normandy invasion soon shut down this route for Nazi flight capital, leaving most of the American investors’ capital still at risk in Germany. Dulles then shifted his money laundering across Austria and into Italy, where his Vatican contacts were waiting to complete the shipping to Argentina.
"At the end of the war, U.S.-British Combined Chiefs of Staff investigated Dulles for dereliction of duty and refusal to follow orders. Those military records have conveniently disappeared. The charges stem from Dulles brokering a deal for the surrender of Karl Wolff. Dulles was ordered to break off talks with Wolff, but continued ignoring orders, even to the point of rescuing him from Italian partisans. Wolff eventually was granted amnesty with help from Dulles, despite being the highest-ranking SS officer in Italy and a war criminal. Wolff eventually went free, even though he was Himmler’s chief of staff and had arranged contracts for slave labor. In addition, Wolff was the chief Nazi sponsor behind Treblinka. According to information released in 2000 by the CIA, Wolff was deeply involved in deporting Italian Jews to Auschwitz."
"Both John Foster and Allen Dulles benefited greatly from trade with the Nazis before war broke out. Allen was a director of Schroeder Bank and John Foster sat on the IG Farben board. There also is evidence that both of the Dulles brothers made large, indirect contributions to the Nazi Party as the price to pay for influence in the Third Reich."
................................................................................................
"When the Sullivan & Cromwell office in Berlin was shut down in 1934, the Dulles brothers merely shifted their business to front men, increasing their profits as Hitler’s rearmament program advanced. The buyout of Anaconda Copper by the German Giesche conglomerate is an example of how the Dulles brothers structured deals for the benefit of their clients. Anaconda bought a large block of stock in Giesche, which was secured with Anaconda’s 51 percent share of Giesche’s interests in Polish Silesia. Giesche provided the Nazis with funding in the early 1930s, but after they invaded Poland, he was forced to sever the American tie or face a Nazi takeover. Allen Dulles represented Anaconda. Giesche bought back its shares from Anaconda with loans from Swiss banks represented by the Dulles brothers. The Swiss banks then held stock in the German banks that arranged the loans. The net effect was to use Swiss bank secrecy as a shield from both Hitler and the American government.
"The treachery of the Dulles brothers was boundless. In 1940, a three-way deal was structured with their help. Allen Dulles represented Nazi buyers like IG Farben. John Foster Dulles represented the German bankers and Spanish financiers. Jack Philby represented the Saudi sellers. To understand fully the relationships in this deal requires looking at the career of Allen Dulles after WWI. Dulles was stationed in Istanbul and ran a network there that amassed a good deal of information about the potential wealth of Arabia. Jack Philby was the British Secret Service’s head of intelligence for Transjordan. During this period, Philby was, in effect, rehabilitating Dulles. During WWI, Dulles was recruited by British intelligence in Bern and fell victim to a German honey trap. In return for sexual favors, he arranged for his mistress’ employment in the American Legation’s secret code room. The British discovered the intelligence leak and arrested both Dulles and his mistress. Dulles denied the treason and vowed to help the British if they saved his neck.
"Under Philby’s tutorage, Dulles’ reputation as an observer solidified and he returned to Washington in 1922 to head the Near East Division. Meanwhile, Philby helped direct anti-Jewish terror and, in 1923, created the Arab Legion. In 1924, Philby aligned behind Ibn Saud. After Saud’s forces captured Mecca and Medina, Philby became an adviser to the house of Saud. At the same time, Allen Dulles resigned from the State Department. He found private intelligence work to be more profitable, especially when he and his brother worked out deals with the Saudis through his friend Philby.
"All three men - Dulles, Philby and Ibn Saud - were known to harbor an intense hatred of Jews. Ibn Saud was the leader of the extremist Wahhabi sect of Moslems and the Arab leader who united the Arabian Peninsula."
................................................................................................
"Behind the complex web of paper in the deal, Dulles’ Nazi client, IG Farben, had Forrestal on its payroll and Forrestal’s client, Caltex, had Saudi oil. Philby held the deal together and the Nazis had a supply of Mideast oil. The deal worked well until the entry of the United States into the war. While Harry Truman declared the buna rubber deal between Standard and IG Farben looked like treason, Standard Oil avoided all but a minor fine. Standard’s principal line of defense against the government’s charges was simply blackmail. Arthur Goldberg confirmed that Dulles was behind the blackmail threat to cut off the Mideast oil supply to the United States, which was already suffering from gasoline rationing.
"Dulles also threatened to cut off Britain’s oil supplies after the British began leaking information about IG Farben. In their threat to Britain, the Dulles brothers expressed concern that British propaganda about IG Farben might involve large American companies like Standard Oil and hinder the war effort.
:The blackmail by Standard Oil resulting from the Dulles-Philby connection was not the end of their treachery. Ibn Saud was pro-Nazi. To stay out of British prison as a Nazi sympathizer, Philby added another angle to the 1940 deal by keeping Saudi Arabia neutral during the war for a bribe. In effect, the Saudis were paid to not pump oil for either Britain or Germany. In June 1941, James Moffett of Caltex tried the same shakedown on Roosevelt. To guarantee Saudi Arabia’s oil would not fall into Nazi hands, the American government paid more than $6 million a year to Ibn Saud. However, Roosevelt turned the matter over to the British. Soon after, all Saudi oil wells were capped with cement.
"After the U.S. entry in the war, rumors continued that Caltex was shipping oil to the Nazis. The Dulles brothers used their cronies in the State Department to drag the investigation out for two years. Then Forrestal proposed to Roosevelt that Caltex’s loyalty to the government could be bought. They argued the British were becoming too influential in the Mideast. Roosevelt was faced with a hopeless situation; he could never get Congress to approve a government investment in Aramco. He was forced to do the next best thing and added Saudi Arabia to the Lend-Lease program to keep Middle East oil from the Nazis."
................................................................................................
"The Dulles brothers were able to engineer a massive cover-up of their Nazi dealings. Their web of intrigue extended to all corners of the government. In the 1930s, they created an incredible interlocking financial network between Nazi corporations, American Oil and Saudi Arabia. Perhaps the best-known deal arranged by them was between IG Farben and Standard Oil of New Jersey. IG Farben was the second-largest shareholder in Standard Oil of New Jersey, after John D. Rockefeller.
"The Navy captured Nazi documents concerning the Nazi oil cartel, Kontinentale Öl AG, headed by former Reichsbank officer Karl Blessing. Dulles personally vouched for Blessing to protect German oil interests in the Mideast. Blessing and Konti were the missing Nazi link between Ibn Saud and Armco. If Blessing had been exposed, he could have taken a lot of people down with him, and the entire deal struck between the Dulles-Philby team and the Nazis would have unraveled.
"The Navy assigned the documents to a young naval officer for review. Allen Dulles contacted the officer and told him to remain quiet about what he had seen and, in turn, he would arrange financing for his first congressional campaign race. This was the beginning of Richard Nixon’s political career. In 1947, Nixon privately pointed out that confidential government files showed that Alger Hiss was a communist and one of John Foster Dulles’ foundation employees. After the 1948 election, Nixon became Dulles’ congressional mouthpiece. When McCarthy went too far in his communist witch hunt, it was Nixon who steered CIA Director Bedell Smith away from the intelligence community."
................................................................................................
"An early supporter of Nixon’s political career was Prescott Bush. Prescott Bush had employed the Dulles brothers to hide Nazi ownership in numerous companies. Prescott Bush also was instrumental in selecting Nixon as the vice presidential candidate in 1952. Nixon returned the favor by helping George H. W. Bush’s political career. George H. W. Bush has described Nixon as his mentor.
"Concealing the Konti documents was far from the end of Nixon’s aid to former Nazis. For example, Nicolae Malaxa was the supplier of arms to the Iron Guard in Romania and a business partner of Goering, who was later convicted of war crimes in that country. In 1948, he formally applied for permanent U.S. residency and faced a blizzard of legal challenges. In 1951, Nixon introduced a bill in the Senate that would have granted him resident status. It failed. Later that year, Malaxa formed a shell corporation named Western Tube in Nixon’s hometown. It shared a mailing address with Nixon’s former law firm. The firm applied for a certificate of necessity to get top wartime priority for its material and personnel. Nixon supported granting residency to Malaxa because he was indispensable to Western Tube. Yet Western Tube never produced a single product. Others who aided Malaxa in his legal battles include John Foster Dulles and former Undersecretary of State Adolph Berle.
"Nixon’s fraternization with Nazis continued beyond his congressional terms and into his presidency. In fact, a lasting result of Nixon’s aid to Nazis has manifested in every election since 1972, including the 2004 election. Nixon, like Allen Dulles, believed the pro-Nazi émigrés from Eastern Europe would be useful in getting out the vote. Both Dulles and Nixon believed Jews were responsible for Dewey’s loss to Truman. In 1972, Nixon’s State Department spokesperson confirmed to his Australian counterpart that ethnic heritage groups were useful in getting out the vote in several key states."
................................................................................................
"The Republican Ethnic Heritage Groups had their roots in Eastern Europe during WWII. In each of the countries, the SS funded or set up political action groups and militias. A partial list follows:
"Hungary - Arrow Cross Byelorussia -
"Byelorussian Brigade Romania - Iron Guard
"Bulgaria - Bulgarian Legion
"Latvia - Latvian Legion
"Ukraine - Ukrainian Nationalist
"Often these groups were more brutal and savage than the SS. Many formed active military divisions: 14th Galician, 15th and 19th divisions of the Waffen SS. All the military units from these groups played an integral role in the genocide in Eastern Europe.
"Nixon’s first attempt at using ethnic groups was in 1952 when he formed an Ethnic Division in the Republican National Committee. In 1953, immigration laws changed to admit Nazis, including former SS members. Nixon oversaw the new immigration policy. In 1968, Nixon promised he would create a permanent ethnic council if he won the presidential election. Until this time, the Ethnic Division surfaced only during presidential campaigns. After winning the 1968 election and appointing George H. W. Bush as chairperson of the Republican Party, Nixon delivered on his promise to the fascists. Laszlo Pasztor organized the Republican Heritage Groups Council.
"During the war, Pasztor was a leader of the Arrow Cross in Hungary. Once the Arrow Cross seized power, it conducted a terror campaign against Jews until deporting them to the concentration camps. Many members of the Arrow Cross were tried and executed for war crimes. Pasztor served as a liaison in Berlin between the Nazis and the Arrow Cross government of Hungary. He was convicted of collaborating with the Nazis and served a prison sentence. Pasztor, who arrived in the United States during the 1950s and joined the Republican Ethnic Division, was one of its leaders in the 1968 Nixon-Agnew campaign.
"Pasztor claims he selected others for the council with similar backgrounds. The only groups approached by Pasztor from Eastern Europe were those with ties to the Nazis. There is a high degree of correlation between CIA domestic subsidies to fascists during the 1950s and the leadership of the Republican Party’s ethnic heritage groups. During the 1950s, while Allen Dulles directed the CIA, many immigrants registered as Republicans, and groups like the Byelorussian Republican Committee emerged. The same fascist leadership received covert CIA subsidies to buy printing presses, and dominated many of the ethnic campaign groups. The subsidy program ended after the Church Committee investigations of the mid-1970s.
"The Republican Party cannot be ignorant of the fascist background of the leaders of its Ethnic Groups because Jack Anderson did a series of reports in the 1970s exposing them. According to old spies, President Ford appointed George H. W. Bush CIA Director to fend off any further congressional investigations of Nazis in the United States.
"Pasztor has several connections to right-wing extremist groups, such as the Heritage Foundation, the Free Congress Foundation and the World Anti-Communist League. In 1985, he gave up his seat on the Republican Ethnic Council in favor of an American-born ethnic in order to make it easier for the Group Council, an umbrella organization of ethnic heritage groups, to oppose the Justice Department’s Nazi-hunting unit. In 1988, Pasztor was forced to resign from the George H. W. Bush presidential campaign after his past Nazi connections were exposed. He was one of several former Nazis serving on the Bush campaign team. However, Pasztor remains closely connected with the Bush family, as this letter from Laura Bush reveals. Clearly, the Bush family sees nothing morally wrong in associating with known Nazi war criminals.
""October 3, 2002
"Mr. Laszlo Pasztor
"National President Emeritus
"National Federation of American Hungarians
"717 Second Street NE Washington, D.C. 20002-4307
"Dear Mr. Pasztor,
"My thanks to you and the National Federation of American Hungarians for Stephen Sisa’s book, The Spirit of Hungary. I hope you will extend to the membership my appreciation, especially for the kind inscription.
"You are kind to think of me, and I am grateful for your generosity.
"With best wishes,
"[SIGNATURE]
"Laura Bush""
................................................................................................
................................................................................................
"Operation Mockingbird
....................................................
"In September 1951, Robert Lovett replaced George C. Marshall as Secretary of Defense. Averell Harriman was named director of the Mutual Security Agency, making him the U.S. chief of the Anglo-American military alliance. A central focus of the Harriman security regime in Washington, from 1950-53, was organizing covert operations and “psychological warfare.” Harriman, with his lawyers and business partners, Allen and John Foster Dulles, wanted the government’s secret service to conduct extensive propaganda campaigns and mass-psychology experiments in the United States and paramilitary campaigns abroad."
"Shortly before the 1952 election, while the country was firmly in the grip of McCarthyism, the CIA launched a massive multimillion-dollar media blitz. The publicity campaign was designed to legitimize the expansion of U.S. Cold War operations in Europe. In essence, it was a psychological war against the American people. The program was guided by a theory of liberationism, and a major feature was the portrayal of former Nazis as freedom fighters against the USSR. The CIA’s propaganda campaign inside the United States was clearly illegal, but the agency managed to cloak its role. The forefront of this campaign was known as Crusade for Freedom, which generated massive amounts of propaganda."
"Republican tactics in the émigré communities were almost indistinguishable from the CIA’s Crusade for Freedom. Lane’s specialist in the Ukrainian community was Vladimir Petrov, a Nazi quisling city administrator of Krasnodar, during the time gas trucks were introduced and used to kill at least 7,000.
"There is no evidence that these émigré groups were useful in swaying election results. They do point to Republican Party’s continued association with fascism. As recently as 1988, several George H. W. Bush campaign employees were forced to resign once their past Nazi connections were revealed.
"Dulles was able to use this illegal covert CIA propaganda campaign, casting ex-Nazis as freedom fighters, to open U.S. immigration doors. After the 1952 election he had a willing aide in Vice President Nixon.
"By using foundations such as the Ford Foundation as fronts to wage the Crusade for Freedom, CIA involvement in domestic politics went undetected in the 1950s. A 1976 congressional investigation revealed the CIA funded nearly half of the 700 grants in international activities by the principal foundations. The Ford Foundation not only acted as a front for CIA propaganda campaigns, but also served to undermine the Left."
"The Rockefeller Foundation also served the CIA. Both John Foster Dulles and later Dean Rusk were presidents of the foundation before becoming Secretaries of State. John McCloy and Robert Lovett served as Rockefeller trustees. Nelson Rockefeller’s service as head of South American intelligence and his central position in the foundation cemented the close link with the CIA."
................................................................................................
"In 1952, at MCA, Actors’ Guild president Ronald Reagan - a screen idol recruited by MOCKINGBIRD’s Crusade for Freedom to raise funds for the resettlement of Nazis in the U.S., according to Loftus - signed a secret waiver of the conflict-of-interest rule with the mob-controlled studio, in effect granting it a labor monopoly on early television programming. In exchange, MCA made Reagan a part owner. Furthermore, historian C. Vann Woodward, writing in the New York Times, in 1987, reported that Reagan had fed the names of suspect people in his organization to the FBI secretly and regularly enough to be assigned an informer’s code number, T-10. His FBI file indicates intense collaboration with producers to “purge” the industry of subversives."
................................................................................................
"The Gehlen Network
..........................................
"One of the first Nazis brought to America, and perhaps the one who exerted the most influence over U.S. policy, was Gen. Reinhard Gehlen. Gehlen was the Nazis’ most senior intelligence officer on the Eastern Front. He began planning his surrender to American forces as early as the summer of 1944. Like all senior Nazis seeking to surrender to the United States rather than the Soviets, he offered something of value to U.S. forces in exchange for freedom from prosecution as a war criminal. Such Nazi offers were characterized by alibis that downplayed their roles in the war and war crimes.
"In early March 1945, Gehlen and a small group of his most senior officers microfilmed the vast holdings on the USSR of the Fremde Heere Ost (military intelligence section of the German general staff). They sealed the microfilm in watertight drums and buried them in the Austrian Alps.
"On March 22, 1945, Gehlen and his top aides surrendered to CIC and were taken to Camp King near Oberursel in the American zone. Capt. John Bokor, the assigned interrogator, was reportedly anti-Nazi, but claimed a great deal of knowledge about the Soviet Union and sensed the Soviets as a threat. As the two men became friends, Gehlen gradually revealed his secret microfilms and an embryonic espionage underground inside the Soviet Union. Bokor was interested in Gehlen’s information, but faced several obstacles. For one, the Yalta agreements required turning over Nazis from the Eastern Front to the Soviets in exchange for help in the return of American POWs liberated by Stalin’s advancing forces.
"Bokor continued on his own accord and kept Gehlen’s offer secret from other CIC officers. With the help of Col. William Philip, chief of the CIC interrogation center at Camp King, Bokor arranged for seven of Gehlen’s senior officers to be transferred to Camp King. There, Gehlen and his senior officers set up a “historical study group” as a cover. Gehlen’s microfilms were shipped to the camp without the knowledge of the CIC’s chain of command. Bokor feared that if he reported Gehlen’s existence too soon, he would be exposed to hostile actions from the Pentagon and military command in Frankfurt.
"By the end of the summer, Bokor won the support of Gen. Edwin Sibert and Walter Bedell Smith."
"Sibert shipped Gehlen and three of his aides off to Washington in August 1945 for debriefing. By December, Sibert had authority to continue at his own risk. In other words, Sibert had permission to continue with Gehlen, but if anything went wrong, the U.S. government would deny any knowledge of the operation.
:Dulles’ OSS Secret Intelligence Branch had direct contact with Gehlen. Frank Wisner, a former Wall Street lawyer and OSS agent, headed the coordinating team. It is unclear how much President Truman knew about Gehlen, since those documents remain classified. However, the Soviets raised vigorous protest over Gehlen at Potsdam, so it is certain Truman was at least aware of the plans to use his intelligence.
"Within a year, the United States set Gehlen’s organization up near Pullach in a former Waffen SS training facility. He handpicked 350 former German intelligence agents to join him; their numbers eventually grew to 4,000 undercover agents. Gehlen’s organization evolved into Germany’s equivalent of the CIA, the Bundesnachrichtendienst (BND)."
""As early as the beginning of 1947 Gehlen had confided to one of his staff that he was reckoning on the possibility of war between Russia and America; even should there be no armed conflict, he said Europe faced a decade of growing tension. Meanwhile he was toying with a fantastic notion - that the Russians and Americans would tear each other to pieces and so give Germany the opportunity to create a new order in Europe."
"The extreme fear of the Soviets at the end of the war was largely illusory and more a product of vivid imaginations rather than anything of substance. Russia suffered immensely during the war, sustaining far more casualties than any other country."
"The Ukraine and other eastern areas of the country suffered from two scorched earth policies of the retreating forces. Eisenhower once remarked to an aide that it would take several years before the Soviets would threaten Europe because it was ripping up the railroad tracks in Germany and shipping them back to Russia. Without the railroads, there was no way for the Soviets to move a massive number of troops forward for an invasion of Europe. Moreover, there is evidence that Stalin wanted peace after the war. On his return to Washington, Roosevelt’s envoy to Moscow, Donald Nelson, indicated Stalin proposed a trade plan for the postwar period. The plan was for the United States to provide Russia with finished goods, such as agricultural equipment, cars, household appliances and similar items in return for raw materials.
"Gehlen is perhaps the man most responsible for starting the Cold War. At first, the military was skeptical of Gehlen and his reports. However, because of the meddling of Allen Dulles and postwar rivalries between the OSS and the Pentagon’s Military Intelligence Service, Gehlen soon became the leading expert on the Soviets."
................................................................................................
"On July 30, 1946, Chamberlin, the Army Director of Intelligence, proposed a plan to smuggle 30 ex-Nazi experts on the USSR into the United States as part of a group of 1,000 scientists. The Army wanted to shut down Operation Paperclip because of the expense of custodial duties and surveillance over the scientists. Chamberlin wanted desperately to save the Paperclip project. In response , Clay issued his famous telegram to Washington suggesting a Soviet invasion of Europe was imminent:
""For many months based on logical analysis, I have felt and held that war (with the Soviets) was unlikely for 10 years. Within the last few weeks, I have felt a subtle change in the Soviet attitude … which now gives me a feeling that it may come with dramatic suddenness.”
"Clay’s telegram was quickly leaked to the press and whipped into a full-blown war scare.
"In a series of secret conferences with Gen. Clay in late 1947, Gehlen claimed the Soviet troop strength in Eastern Europe was not less than 175 divisions. He further claimed that most were combat ready and that quiet changes in Soviet billeting suggested they were preparing for a major mobilization.
"In February 1948, the coalition Czech government failed, partly due to lack of U.S. support for President Edward Benes, a social democrat, on the grounds that he was not sufficiently anti-communist. Also in February, Gen. Stephen Chamberlin visited Clay and stressed that there were major military appropriation bills before Congress and there was a need to galvanize American support for increased military spending.
"Gehlen’s estimate of 175 divisions was accepted without question. The same troops that the 1946 Army analysis described as tied down with immediate occupation and security requirements were now described by Gehlen as highly mobile. The Army’s earlier acknowledgment of Soviet troop transport and logistic problems disappeared. On Gehlen’s estimates, the Soviets were now capable of simultaneously launching large-scale offensives at Europe, the Middle East and Far East. There was no reasonable voice asking where all the required divisions or logistical support would come from. The Truman administration’s response was to stop any further cuts in military programs and to speed up the atomic weapons program. Operation Paperclip continued."
................................................................................................
"Initially, Gehlen’s information was derived from the Nazi torture and interrogations of prisoners. Some 4 million Soviet prisoners died of starvation. While Gehlen and his men may not have engaged in the executions, he was responsible for organizing the interrogations of the Soviet prisoners, which were actually a step toward liquidating thousands of them. Many were executed or simply left to starve to death.
"As Gehlen’s organization grew, it began to depend on interviews with émigrés from Eastern Europe, and eventually evolved into a spy web inside the Iron Curtain. Gehlen’s reassurances to the United States that he would not employ any former SS men were promptly broken. At least a half dozen of his first staff of 50 were former SS men. Included were Hans Sommer, who torched seven Paris synagogues in 1941; Willi Kirchbaum, senior Gestapo leader for southeastern Europe; and Fritz Schmidt, former Gestapo chief of Kiel. The earliest SS recruits enlisted with phony papers and false names. It is reasonable to suspect that some American authorities were aware of the ruse.
"Gehlen privately negotiated a position for Gustav Hilger with G2’s Technical Intelligence Branch in 1946. Hilger’s influence on American policy rivaled Gehlen’s. A German diplomat assigned to Russia before the war, he developed close friendships with Americans stationed in the Moscow embassy. During the war, Hilger was directly under von Ribbentrop and served as the chief political officer on the Eastern Front. He also was a liaison between Ribbentrop’s Foreign Office and the SS.
"Hilger had full knowledge of the extent of the Holocaust. In December 1943, he negotiated an agreement with Italy to round up Jews into work camps. During the spring of 1944, several trainloads of Jews from these work camps were shipped to Auschwitz.
"The Nazi Foreign Office also assigned Hilger to liaison with Vlasov and, by 1944, he completely integrated himself in the command structure of Vlasov’s army. At the end of the war, Hilger was officially sought as a war criminal for torture. He surrendered to U.S. forces in May 1945 and, after a brief confinement at the Mannheim POW camp, was sent to Washington for debriefing because of his expertise in Soviet affairs. Hilger was eventually given asylum in the United States under the Bloodstone project. For several years, he shuttled between Washington and West Germany, becoming an unofficial ambassador for Konrad Adenauer. Hilger was instrumental in forming the Adenauer government. Initially, Washington opposed Adenauer, but Hilger’s contacts in the State Department eventually swayed American officials to approve it in 1949.
"By 1946, Gehlen resumed funding Vlasov’s army, the underground Ukrainian army and other Nazi quislings. In 1947, SS officers Franz Six and Emil Augsburg took charge of the émigré work. Both were from the Amt VI group of the SS, the combined foreign intelligence apparatus of the Nazi equivalent to the CIA. Most of Amt VI’s top officers were instrumental in the mass extermination of Jews. Augsburg escaped any prosecution. Six was a major war criminal favored by both Eichmann and Himmler. Speaking at a 1944 conference on the Jewish question, Six said: “The physical elimination of Eastern Jewry would deprive Jewry of its biological reserves. The Jewish question must be solved not only in Germany but also internationally.” Himmler was so pleased with Six’s work that he promoted him to a newly created department of his own, Amt VII."
................................................................................................
"Six eventually was betrayed, tried for war crimes, found guilty and sentenced to 20 years in prison. He only served four before John McCloy granted him clemency. Once freed, he returned to Gehlen’s organization. McCloy could hardly have been unaware of Six’s background when he granted the pardon.
"In 1954, Gen. Arthur Trudeau, chief of U.S. military intelligence, received a copy of a lengthy report prepared by retired Lt. Col. Hermann Baun of Gehlen’s staff. Baun was a highly competent officer who took a dim view of the network and hated Gehlen for forcing him out of his postwar intelligence position with the West. Baun’s report listed the backgrounds of many of Gehlen’s staff members. Trudeau was so annoyed with the report he took it to Konrad Adenauer during his visit to Washington. Adenauer was deeply alarmed over the report, portions of which were leaked to the press. Through meddling by the Dulles brothers (Allen was Director of the CIA and John Foster was Secretary of State at the time), Trudeau was effectively silenced by a transfer to a remote Far East post.
"Listed in Baun’s report was SS-Oberführer Willi Kirchbaum. Kirchbaum was an associate of Gestapo Chief Heinrich Müller and later the Deputy Chief of the Gestapo. He was in charge of deporting Hungarian Jews in 1944. Another was SS-Standartenführer Walter Rauff. Rauff supervised construction of the vans used on the Eastern Front to gas Jews, and was involved with SS Gen. Karl Wolff’s negotiations to surrender the German troops in Italy in 1945. After his exposure as part of the network, Gehlen transferred him to Chile, where he functioned as an agent.
"SS-Sturmbannführer Alois Brunner was another member of Gehlen’s network who was a former Gestapo official working directly under Adolf Eichmann. Brunner was sentenced to death in absentia by a French court for instigating the notorious razzia carried out in France in 1942 against the Jews of Paris. Brunner was sent to Damascus as Gehlen’s resident agent and lived under various aliases. Brunner later took part in a CIA-directed program to train the security forces of Abdel Nasser. U.S. officials had to know Brunner was on the CIC’s wanted list.
"One of the worst members of Gehlen’s organization was SS-Gruppenführer Odilo Globocnik, who ran the Lublin camps in Poland. Before working for the United States, Globocnik worked for the British. He was also stationed in Damascus. Other members of the Gehlen organization included SS-Sturmbannführer Emil Augsberg, head of Treblinka and Belzec concentration camps; SS-Sturmbannführer Ernst Bibernstein, who commanded Einsatzkommando 6 of Einsatzgruppe C; and SS-Sturmbannführer Karl Döring, a staff member of the Dachau concentration camp. Döring was later postwar West German Ambassador to the Cameroons. SS-Standartenführer Eugen Steimle, the commanding officer of Einsatzgruppen B and later C, was convicted by an Allied court and sentenced to a long term in prison; he was released in 1951. Baun’s list included many other SS officers who served in concentration camps or were part of the Einsatzgruppen and guilty of war crimes. Most of them had little knowledge of the Soviet Union, and their use by the CIA is indefensible."
................................................................................................
"Vlasov’s Army
...............................
"Vlasov’s army and émigrés from other eastern European countries were the source for Frank Wisner’s covert actions behind the rapidly developing Iron Curtain. Wisner, who believed in covert actions to eliminate communism rather than the containment policy of Kennan or Truman, recruited heavily from various émigré groups. The recruits were trained and often dropped across the borders into communist territory. Usually, Wisner’s agents met quick fates when apprehended. The thought of a spy or a mole in their organization never occurred to them, but Vlasov’s army and the Gehlen network were both infested with Soviet moles. As a result, Wisner was responsible for killing more Nazis after than during the war!
"U.S. plans for a nuclear war with the USSR included integrating Vlasov’s army as part of the overall strategy. The idea of using former Nazis to conduct guerrilla warfare after dropping 60-70 atomic bombs on the USSR was first proposed in 1947 by Hoyt Vandenberg. Five wings of B29 bombers were committed to the émigré guerrilla army project. The Nazis were to be dropped inside the USSR after the bombings to gain control of strategic sites, as well as control of the local populace. Toward the end of 1948, Gen. Robert McClure won the approval of the Joint Chiefs for full-scale guerrilla warfare following a nuclear attack on the USSR. Until 1956, this was the attack plan. It employed thousands of émigrés from the USSR, including Vlasov’s army and Waffen SS men. Documents in the National Archives reference a top secret State Department plan to recruit a network of Albanian anti-communists who previously were denied visas as Nazi collaborators and war criminals."
"To hide an army of thousands in Europe, the United States simply hid them inside another army of sorts, in full view of everyone. They were hidden in labor camps known as Labor Service companies. Roughly 40,000 displaced persons were employed in these Labor Service companies, guarding POWs, removing bombing rubble from cities, locating gravesites and similar work. Officially, former Nazis were barred from these camps. But at least as early as 1946, the Labor Services recruited them. For example, Voldemars Skaistlauks, an SS general, and his top aides were part of the Latvian labor company formed on June 27, 1946. Talivaldis Karklins was another top Nazi in Madonna concentration camp. His role in torture and murders was known at least as early as 1963. He came to the United States in 1956. Finally in 1981, the office of Special Investigations - Nazi hunters in the Justice Department - succeeded in bringing charges against Karklins, resulting in a complex legal battle. He died peacefully in 1983 in Monterey, Calif.
"Right-wing fears of communism backfired. The hard anti-communist faction led by Allen Dulles was the prime sponsor of the Gehlen network and Vlasov’s army in the Cold War. Since both groups were infested with Soviet moles, this led to greater Soviet penetration of U.S. intelligence and military organizations."
................................................................................................
"Project Overcast and Paperclip
...............................................................
"On Dec. 1, 1944, OSS head Bill Donovan asked President Roosevelt if Nazi recruits could be given special privileges, including entry to the United States after the war. Roosevelt’s blunt reply:
""I do not believe that we should offer any guarantees of protection in post-hostilities periods to Germans who are working for your organization. I think that carrying out of any such guarantees would be difficult and probably be widely misunderstood both in this country and aboard. We may expect that the number of Germans who are anxious to save their skins and property will rapidly increase. Among them may be some who should properly be tried for war crimes or at least arrested for active participation in Nazi activities. Even with the necessary controls you mention I am not prepared to authorize the giving of guarantees."
"The first official program to bring Nazis to the United States was Project Overcast. The Army’s TICOM forces may have preceded Overcast, but those documents remain classified. TICOM forces followed the advancing Allied troops seeking the newest German cryptographic equipment code-named Swordfish, or more simply, Fish. TICOM teams managed to secure roughly 5 tons of German Sigint documents, as well as many cryptological devices. Equally important were the secret interrogations of German code breakers at the secret location code named Dustbin. The teams also secured a secret Russian cryptograph machine that allowed the American military to read Soviet transmissions. Thus, there was no need to rely solely on Gehlen and his associates for information on the Soviets. It is known the British employed several Nazi cryptographers and that Erich Huettenhain was brought clandestinely to the United States.
"The birth of Project Overcast had its origins in the summer of 1945 at Hotel Wittelsacher in Bad Kissingen, where German scientists from Peenemunde were held. Col. Putt soon convinced Gen. Hugh Knerr that their technical knowledge would benefit the air corps. Knerr sought permission from Washington to bring five of these scientists to the U.S. The War Department assured Truman that accused war criminals would be kept in close confinement and stern control. The deciding factor for approval was the continuing war with Japan. With the inclusion of the following phrase, Project Overcast was launched: “If any specialists who are brought to this country are subsequently found to be listed as alleged war criminals, they should be returned to Europe for trial.”
"This restriction was soon ignored. ... "
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"By the spring of 1946, the name of Operation Overcast was changed to Paperclip and closely coordinated with the British programs. Britain was already exploiting several groups and in March 1946, began dumping German scientists on other Commonwealth countries, including Canada and Australia. Some of those sent to Canada later entered the United States in the 1950s under Operation Paperclip. The JIOA governing committee by this time had already embarked on its own agenda. Samuel Klaus, the State Department representative, was routinely excluded from meetings. The agenda of the military officers on the governing committee was to expand the recruitment list to include POWs, militarists, SS officers and others they considered useful. Monroe Hagood, the branch chief of G2, was instrumental in hatching a plot to smuggle SS officers into the United States under Paperclip. The idea that Paperclip only recruited scientists is myth, not fact.
"The final policy for expanding Paperclip was presented to Truman by acting Secretary of State Dean Acheson with recommendations by him and the military to sign it. It explicitly defined the policies and procedures to be followed, including the following clause: “No person found by the Commanding General, USFET to have been a member of the Nazi Party and more than a nominal participant in its activities, or an active supporter of Nazism or militarism shall be brought to the U.S. hereunder.” But President Truman’s directive against using Nazi Party or SS members was promptly ignored.
"Many Nazis were admitted under Operation Paperclip as rocket scientists, but some, like Walter Dornberger, first had to have their records sanitized. Dornberger was a major general at Peenemunde who was sentenced to hang for war crimes. England warned the United States not to admit him because he already was conniving to start another war. He later rose to Vice President of Bell Helicopters; a visible post, to be sure, but even more visible after Bell announced its V22 helicopter - a surprisingly close nomenclature for someone who had been involved in the V2 program.
"While most Americans realize that Wernher von Braun and other Nazi rocket scientists were brought to the United States to develop the U.S. space program, few know the extent and scope of Operation Paperclip. The GAO still perpetuates the lie that the program ended in 1947 and brought just a handful of Nazi scientists to the United States. In fact, Paperclip did not end until 1973. Under the project, more than 1,600 Nazi scientists, specialists and their dependent families were admitted to the U.S. Another common misconception of Paperclip is that the only Nazi scientists allowed entry were connected with rockets, jets and the like. The hundreds of Nazi doctors from the concentration camps are never mentioned in official reports on Paperclip. Their admission led to horrifying psychochemical experiments on American soldiers and civilians, and eventually to CIA projects in mind control involving child abuse.
"It has been 60 years since the end of the war and most Americans are unaware of the number of Nazi doctors and scientists who were allowed to come to the United States. Moreover, most are content to assume that the Nazi doctors have no effect on their lives. Such wishful thinking can be deadly, as in the appearance of Lyme disease in Connecticut in the mid-1970s. Two miles offshore from Old Lyme, Conn., is Plum Island, home of Lab 257, where secret biological experiments are conducted with the most deadly strains of bacteria and viruses. After WWII, the Army turned over control of the island to the U.S. Department of Agriculture (USDA).
"The initial charter from Congress mandated the study of animal diseases, such as hoof and mouth disease, directed to eradicating them from the nation’s livestock. In 1954, the laboratory took an aggressive turn to biowarfare, seeking ways to inflict widespread disease in Soviet herds to cause a famine. Cuba alleges that bioweapons from Plum Island were used against its agriculture in the 1960s-70s.
"Plum Island appears to be the site where Nazi scientists conducted experiments with disease-infested ticks. One of them was Dr. Erich Traub who received a fellowship from the Rockefeller Institute in Princeton, N.J., before the war. Traub was involved in Nazi activities in the United States during the 1930s, and was a member of Camp Siegfried and the powerful NSKK, the Nazi Motor Corps. During the war, Traub served as lab chief at Insel Riems, a secret Nazi biological warfare facility in the Baltic Sea. He served directly under Himmler, packaging weaponized hoof-and-mouth disease virus, which was dispersed from a Luftwaffe bomber onto cattle and reindeer in Russia. At Himmler’s request, Traub traveled to Turkey to find a lethal strain of rinderpest virus for use against the Allies.
"In 1949, Traub and his family escaped from East Germany to West Berlin. He immediately applied to work under the Paperclip Program. Within months, Traub was invited for a talk with germ warriors from Fort Detrick, the Army’s biological warfare headquarters in Frederick, Md. A former declassified summary confirms the meeting occurred, but the CIA denies the summary exists and claims that if it did, it would withhold it for reasons of national security. Almost all documents concerning Traub and the Army’s biowarfare at Plum Island have been destroyed or remain deeply buried in the government’s secret vaults. The few documents that remain show that Traub worked with more than 40 lethal viruses on large test animals. He was at Plum Island from 1949-53 and remained an active collaborator thereafter. Reports of a Nazi scientist releasing infected ticks come from a former employee of Plum Island. The island also may be the source of the outbreak of the West Nile virus. Both the Lyme and West Nile diseases first appeared in the general area. The George W. Bush administration transferred control of the site to the Department of Homeland Security with a mission to protect the nation from bioweapons.
"Scientific American dismisses the possibility of a “Nazi scientist” link to Plum Island, but documents reveal Traub was a founding member of the biowarfare program. Scientific American is published by Von Holtzbrinck, a firm with firm roots in the Third Reich. Von Holtzbrinck also owns Henry Holt Publishing, St. Martin’s Press, MacMillan and several other major U.S. publishers.
"In the race to entice Nazi scientists to the United States and thereby deprive the Soviets of their knowledge, security and screening methods were lax. The Soviets penetrated the project from the start. Donald Maclean was the first secretary of the British Embassy and a Soviet mole who helped recruit Nazi scientists. Maclean supplied a list of scientists he claimed were of no value to recruit. Among them were Otto Hahn and Carl von Weizsacker, who were as well known in scientific circles as Churchill or Roosevelt in political circles. Hahn went on to win the Nobel Prize in chemistry.
"One of the myths about Paperclip is that German scientists were closely watched by the military, but nothing could be further from the truth. Security was lax to say the least. Often they were permitted to travel freely. Their mail was rarely checked and their phones were not tapped or monitored. For example, in the second test firing of the GE Hermes II missile, several German scientists were positioned at a distance surrounding the site to observe and to radio the command center in case the missile veered off course. The missile did veer to the south, but the German observers allowed it to continue. It landed about three miles from the main business district of Juarez, Mexico. There was evidence of sabotage, but no attempt was made to restrict the German scientists. In fact, at least three of them at White Sands were known to have illegal mail drops of money from foreign sources and coded messages from South America.
"Elements of the U.S. military did not wait for Project Overcast to be approved. On May 19, 1945, just two weeks after the German surrender, a military transport with blackened windows landed in Washington. Its secret cargo was Herbert Wagner and two of his aides. Wagner was the chief missile designer for Henschel Aircraft Co., and the creator of the HS-293, the first Nazi guided missile used in combat. He was smuggled into Washington by a U.S. Navy team anxious to use his guided bombs against Japan. Wagner had been a fervent member of the SA or Sturmabteilung (brown-shirted storm troopers) and equally ardent member of four other Nazi organizations."
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"At first, the justification given for these ex-Nazi scientists was that their expertise would be useful in the war with Japan, but within a month, Japan surrendered. As early as June 1945, some were already arguing the Nazi scientists needed to be moved to the United States to deprive the Soviets of their talents. One of these was Truman’s chief science adviser, RCA chief David Sarnoff. Through its subsidiary, Transradio, and with Sarnoff’s full knowledge, RCA maintained a radio link between Buenos Aires and Berlin for the Nazis.
"Bosquet Wev, director of JIOA, presented the first group of scientists’ dossiers to the State and Justice departments about six months after Truman approved Operation Paperclip. Included were reports by the Office of Military Government (OMGUS) and the CIC. Wev’s job was to guide the dossiers past the review board, which included Samuel Klaus from the State Department. Klaus was an ardent foe of the Nazis and demanded details. OMGUS reports on Wev’s first batch of recruited scientists were prepared by CIC men who fought their way across Europe and saw Nazi brutality firsthand. They knew their job and reported that the first wave of scientists had been ardent Nazis entangled in war crimes. CIC was rapidly transformed and corrupted after the end of the war with the rapid demobilization of troops and replacement of agents who fought the war with those less experienced.
"Wev and Klaus soon became bitter enemies. Wev excluded Klaus from JIOA meetings, demanded he approve lists he had not seen and accused him of sabotaging the project. Wev’s solution was to angrily demand that OMGUS rewrite the dossiers, deleting any negative information, but not before the situation turned into a crisis. One of the dossiers Wev ordered altered concerned Heinrich Kliewe. Kliewe had been in charge of the human experimentation for Hitler’s biological warfare program. Kliewe was a wanted war criminal who slipped over the border into the French sector to avoid arrest.
"Hamilton Robinson, Director of the Office of Controls inside the State Department, was placed in charge of the Paperclip problem. Robertson had been a law associate when John Foster Dulles was a legal adviser for the State-War-Navy Coordinating Committee which originated Paperclip. Robinson immediately rejected five dossiers, demanding more information on the scientists’ background. Samuel Cummings from the State Department added to the crisis by noting differences between Wev’s dossiers and the documents held in the Berlin Document Center.
"Besides falsifying the dossiers, the G2 branch of the military began a smear campaign against State Department employees who rejected Nazi scientists. Eventually, Robinson was hauled before a House subcommittee on charges he was sympathetic to communists. Republican Rep. Fred Busby from Illinois filed the charges. Although the House cleared Robinson, Busby would not relent, and carried his campaign against him and the State Department to the press. On March 27, 1948, two days after a blistering attack on him and the State Department, Robinson resigned. He was the last watchdog at the State Department. The McCarran rider, which allowed the Secretary of State to dismiss any employee judged a security risk, had already led to 11 dismissals.
"By the spring of 1948, the floodgates to Nazi immigration cranked open. Gen. Clay sounded his war message; Busby had successfully removed men like Klaus, Cummings and Robinson from the State Department. Many Nazi scientists were already in the United States, and Gehlen’s network and Vlasov’s army were both fully integrated into U.S. defense plans and intelligence."
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"The eight programs were used to bring Nazis to the United States. A 1978 GAO study established the CIA had a clear working relationship with war criminals among émigré groups. In a sample of 111 war criminals, the study found 20 percent had worked as informants for intelligence and security agencies. Under the Displaced Persons Act, a religious or charitable group could sponsor émigrés. That’s how Stanislaw Stankievich entered the United States after his file was sanitized. Stankievich was a war criminal and member of the Einsatzgruppe B who ordered the murders of more than 7,000 Jews in Borissow. Once in the United States, these war criminals were then free to sponsor additional émigrés. By this method, the entire Belarus Nazi quisling government came to settle around Patterson, N.J."
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"In 1950, the Army lobbied Congress to pass the Lodge Act, which initially allowed 2,500 alien nationals living outside the U.S. to enlist in the Army with a guarantee of citizenship after five years of service. Later, Congress raised the limit to 12,500. Like all the other programs, the CIA chose to mix in Nazis, including former Gestapo agents. Ironically, Jews were mostly excluded from entering the United States in this manner. The Adjutant General Office branded them as one of the more politically unreliable groups, a reference to anyone not part of what could be considered the Right Wing. The first Lodge recruits were mostly Poles and Ukrainians who arrived in October 1951. About 25 percent of the recruits were channeled into confidential posts, such as biological, chemical or atomic warfare specialists. Others were used as translators and posted to the Defense Language School in Monterey, Calif. The remainder was sent to Fort Bragg, N.C., for special guerrilla training, becoming the nucleus of the Green Berets. This explains the Nazi-style racism prevalent among the early Green Berets. By 1952, only 211 out of 5,272 applicants passed the Army’s screening tests. Special Forces recruiters then lowered the language and literacy requirements to admit more recruits.
"The CIA and military used the above programs as ratlines to covertly allow Nazi war criminals into the United States. Although President Truman specifically barred the entry of anyone with more than nominal connections to the Nazi Party, military and intelligence agencies promptly ignored him. In a 1985 article for the Union of Atomic Scientists, Linda Hunt found that files of more than 130 Paperclip subjects had been altered. Past Nazi connections that would have excluded them from entry into the United States were deleted."
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"Wernher von Braun and several other Nazi rocket scientists first entered the United States as POWs shortly after the war and before Operation Paperclip. They later were allowed to reenter the United States from Canada as Paperclip recruits to gain citizenship. The military governor in Germany considered von Braun a security threat. Security files on him show how they were altered.
"In the original version from Sept. 18, 1947, Von Braun’s report read, in part: “He was an SS officer but no information is available to indicate that he was an ardent Nazi. Subject is regarded as a potential security threat by the Military Governor. A complete background investigation could not be obtained because subject was evacuated from the Russian Zone of Germany.”
"Bosquet Wev, JIOA Director,sent a letter to the European Command director of intelligence, Dec. 4, 1947 that read as follows.
""1. OMGUS security reports recently forwarded from your headquarters classify (14) specialists (including Herbert Axster and Wernher von Braun) as potential or actual threats to the security of the United States...
""2… 3. There is very little possibility that the State and Justice Departments will agree to immigrate any specialist who has been classified as a potential or actual security threat to the United States. This may result in the return to Germany of specialists whose skill and knowledge should be denied other nations in the interest of national security...
""4. It is requested that the cases of the specialists listed in paragraph one be reviewed and that new security reports be submitted where such action is deemed appropriate in view of the information submitted in this letter."
"After recieving Wev’s letter, the European Intelligence unit sanitized von Braun’s record. Here is the Feb. 26, 1948 version of his report.
""Further investigation of Subject is not feasible due to the fact that his former place of residence is in the Russian Zone where U.S. investigations are not possible. No derogatory information is available on the subject individual except NSDAP records, which indicate that he was a member of the Party from 1 May 1937 and was also a Major in the SS, which appears to have been an honorary commission. The extent of his Party participation cannot be determined in this Theater. Like the majority of members, he may have been a mere opportunist. Subject has been in the United States more than two years and if, within this period, his conduct has been exemplary and he has committed no acts adverse to the interests of the United States, it is the opinion of the Military Governor, OMGUS that he may not constitute a security threat."
"Arthur Rudolph, another of Hitler’s rocket scientists, directed the Mittelwerk factory at the Dora-Nordhausen concentration camp in which more than 20,000 workers died of beatings, hangings and starvation. He was an active Nazi Party member from 1931. His military file listed him as “100 percent Nazi, dangerous type, security threat, suggest internment.” Rudolph later directed development of the Saturn V rocket program. In 1984, he surrendered his U.S. citizenship after the Office of Special Investigations of the Department of Justice discovered his role in persecuting slave laborers at an underground V-2 missile factory.
"More grievously, a number of Nazi doctors were admitted to the United States. Hermann Becker-Freysing, Siegfried Ruff, Konrad Schaefer and Kurt Blome were all defendants at Nuremberg. All four were charged with gruesome experiments on inmates at Dachau, Buchenwald and other concentration camps. Ruff conducted high-altitude experiments on prisoners in a low-pressure chamber in which more than 80 inmates died. Becker-Freysing and Schaefer conducted experiments on inmates in which all food and water was withheld, except for processed seawater. Becker-Freysing was found guilty and sentenced to 20 years in prison. Blome was charged with participation in euthanasia, extermination of Polish TB sufferers, biological warfare and other experiments. On Aug. 21, 1951, he signed a contract to work for the Army Chemical Corps under Project 63.
"Heinrich Rupp was another Nazi allowed to immigrate to the United States under Paperclip. Rupp was convicted of bank fraud. He was an operative for the CIA and deeply involved in the Savings and Loan scandals. He also is believed to have taken part in the October Surprise, sabotaging President Carter’s attempted rescue of the hostages in Iran.
"However, most Nazi war criminals smuggled into the United States were not scientists. For instance, Hermine Braunsteiner Ryan immigrated to Canada in 1958, then married an American and moved to Queens, N.Y. In 1963, she became a naturalized citizen and, in 1964, was exposed as a former Nazi concentration guard. One witness at the 1974 trial described how she whipped an inmate to death at Majdanek. Ryan claimed she was a homemaker and wife of a tradesman who had a hard time making ends meet. Yet for almost a decade, she was able to afford the services of the Barry law firm, one of the most expensive and experienced, specializing in immigration. While funding sources are still unknown, other incidents of interference with the prosecution have come from the judicial system. The intelligence community appears to have been Ryan’s benefactor.
"The example of Ryan explains two points common to the deportation cases. The defendant received top-level help, most likely from intelligence agencies. Second, the cases invariably involved low-level officials or guards. The top echelon of the former Nazi quisling governments seemed immune from prosecution, even after being exposed."
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"The Vatican Ratline
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"The CIA and military were able to smuggle many Nazi war criminals into the U.S. under various programs, but not the most notorious. Yet the military and intelligence agencies still employed Nazis like Klaus Barbie in Europe, and aided their escape to South America through the Vatican ratline.
"Evidence suggests the Vatican planned on aiding the Nazi war criminals as early as 1942. On Aug. 14, 1942, Juan Carlos Goyeneche and Adrian Escobar took a flight to Rome to meet with Pope Pius XII. Goyeneche was an envoy of Juan Peron. Escobar was Argentina’s Ambassador to Spain and had collaborated extensively with the Nazis. Before the meeting with the Pope, both men traveled to France and Germany to meet with top Nazis and the French puppet state. In the long meeting with the Pope, Argentina’s role as a peacemaker was discussed. Afterward, Escobar was ordered to the Vatican to reaffirm Argentina’s willingness to mediate peace. The talks were extensive and included the Vatican’s Secretary of State, Cardinal Luigi Maglione. They agreed that once peace was established, Argentina would apply its immigration laws generously. Both sides agreed that it was appropriate for the Vatican to take part in the search for peace.
"While this meeting discussed applying Argentina’s immigration laws generously, there is no evidence that it included Nazis or war criminals. However, both the Vatican and Argentina were aligned favorably to the fascist cause and within three years, the Vatican operated an extensive ratline for war criminals leading directly to Argentina. In fact, the Vatican route was the only one for the Croatian Ustashi.
"Dulles had contacts with the Vatican before the ratline. His first were in the surrender of Wolff, and smuggling Nazi gold out of Germany through the Vatican after the D-Day invasion. Two names figure prominently in setting up the Vatican ratlines: Bishop Hudal and James Angleton. Dulles’ contacts with the Vatican were mainly through the father-son team of Hugh and James Angleton. The truth behind the CIA-Nazi connection has remained buried through the efforts of such men as Allen Dulles and George H. W. Bush. As CIA director, Bush allowed James Angleton to access his own files, which he quickly destroyed. The Dulles-Angleton cover-up masked various Western financial transactions and negotiations with the Nazis during the war and helped shift postwar U.S. policy."
"Some evidence suggests that Hugh Angleton acted as courier for secret financial transactions between the Vatican and Nazi Germany. At least one ex-CIA agent claims the elder Angleton personally arranged to transport Nazi gold from Germany to Italy. The younger Angleton has successfully blocked every investigation into the Dulles-Angleton smuggling system."
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"At the end of the war, after President Truman ordered the OSS disbanded, agents simply changed uniforms and became part of the War Department’s Strategic Services Unit. The OSS always had two factions. The liberal faction consisted of dedicated men who followed orders by Roosevelt and Truman. The other faction consisted of Dulles and his followers who were waiting for Dewey to be elected. By the war’s end, the split between the factions was pronounced.
"It was no accident that much of the gold disappeared that was recovered in Region IV in Bavaria, the area around Munich, which became a center for drug trade and smuggling. The Army’s CIC agents in that area were Dulles allies and were quietly helping him recruit ex-Nazis and hide them in the region, technically an act of mutiny. For Nazi war criminals wishing to flee Europe to avoid prosecution, it was just a short trip across Austria to Italy and the waiting Vatican ratline. Many began their flight from Europe in the Munich area.
"One of the first war criminals rescued by the Vatican ratline was Walter Rauff. ...
"Rauff was released to S Force, an OSS unit working with the British-American Special Counter Intelligence team in Italy, headed by James Angleton. Rauff was deemed a valuable asset by this OSS team, despite the Army CIC’s objections that he was an unrepentant Nazi who should be imprisoned for life, if not eliminated. After extensive debriefing, Rauff was released by the OSS unit. According to the French publication Cercle Noir, after his release Rauff contacted Archbishop Siri of Genoa and immediately went to work establishing the Vatican ratline. Rauff’s contribution to Hudal’s ratline may have been more financial. Rauff became a money launderer with the help of Frederico Schwend, an SS counterfeiter. Forged notes provided seed money for the ratline.
"Bishop Hudal’s first contact with a senior Nazi was probably his meeting with Franz von Papen on his arrival to negotiate the 1933 Concordat between Berlin and the Vatican. In 1936, Hudal published a philosophical treatise, Foundations of National Socialism. His pro-Nazi views were well known by then, but they did not hinder his career in the Vatican. Hudal seems to have enjoyed a close relationship with both Pius XI and Pius XII. In 1943, Hudal met Walter Rauff. By then, Rauff was a major war criminal. He had overseen development of the mobile gas vans used on the Eastern Front to kill more than 100,000 people. Rauff and Hudal became close friends. After the Allied invasion of Sicily, Bishop Hudal changed the Greater German flag on his car to the Austrian. There is no doubt of Hudal’s aid to Nazi war criminals, as an excerpt from his Römische Tagebücher (Roman Diaries) reveals:
""The Allies’ war against Germany was not a crusade but the rivalry of economic complexes for whose victory they had been fighting. This so-called business … used catchwords like democracy, race, religious liberty and Christianity as bait for the masses. All these experiences were the reason why I felt duty bound after 1945 to devote my whole charitable work mainly to former National Socialist and Fascists, especially to the so-called war criminals."
"From the fragments of information now available, it appears the Vatican was much more supportive of the Nazis than previously believed. Evidence of monetary backing of Hitler before his rise to power, and the 1942 plea to the Argentina ambassador and envoy to be generous with immigration once the war was over, all suggest deep support. There is also evidence the Vatican was aiding Hudal’s smuggling of Nazi war criminals. In August 1944, Vatican Secretary of State Giovanni Montini (later Pope Paul VI) took up the question of extending the Vatican’s charity mission to German prisoners. For a couple weeks, Americans and the British debated the Pope’s request, delivered by Montini, before granting it. Within a few days, the Vatican requested that Bishop Hudal be allowed to visit German civilian internees. Hudal’s pro-Nazi views were well known to American intelligence. Although Allied headquarters previously refused some Vatican requests, it granted the necessary permits for this one. Free to travel and visit prison camps, Hudal was able to spread word of his ratline."
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"In 1947, the Vatican was promised continuing financial aid from America to defeat the Communist Party in the 1948 election. The U.S. provided more than $350 million in civilian and military aid. In 1947, the CIA withdrew about $10 million from recovered Nazi gold laundered through a maze of bank accounts. The funds were delivered clandestinely to the Christian Democrats, often through Vatican channels. Some of this money found its way to Monsignor Bicchierai, who used it to fund an underground squad of anti-communist hoodlums. Members of the squad beat leftist candidates, broke up their political meetings and rallies, and intimidated voters leaning to the Left, while the CIA sponsored well-known Italian-Americans to broadcast propaganda warnings against the communist menace.
"Continued worries about popular support for the Communist Party in Italy spurred the CIA to launch Operation Gladio in the early 1950s. The Gladio network was operated by the secret services and initially funded by the CIA, which trained 622 recruits. Eventually, the network is believed to have gained as many as 15,000 members. Closely associated with the Gladio network is the secret Masonic lodge “Propaganda Due” (P2), headed by Licio Gelli. During the war, Gelli was a member of Mussolini’s notorious Black Shirts, and later acted as liaison officer to the Hermann Goering SS division.
"By 1974, P2 had more than 1,000 members, a “who’s who” of Italian political, military and economic power. In 1974, Prime Minister Aldo Moro met with Secretary of State Henry Kissinger. Moro wished to reach an accommodation with the Communist Party in Italy, offering its leaders cabinet rank in a new centrist ruling party. Although Kissinger warned Moro that the idea was dangerous, he continued a left-centrist policy. In 1978, Moro was kidnapped and murdered, allegedly by the Red Brigades. However, evidence now exists that Moro’s murder was orchestrated by P2, and that both the Red and Black brigades were heavily penetrated and run by U.S. intelligence."
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"In the fall of 1947, Ferenc Vajta was arrested trying to enter the United States. Vajta was a Hungarian war criminal working with Britain, France and America after the war. Truman demanded an investigation into who was smuggling Nazis into the United States. The historical record indicates that Truman was not in the know that war criminals were being smuggled in by falsified documents.
"Vajta’s arrest and the following investigation presented Allen Dulles with a problem. He had plenty of ex-Nazis piling up in Austria and southern Germany. The number of ex-Nazis presented a security threat, as well as a source of embarrassment. He was forced to make a deal with the Vatican to move his ex-Nazis out of the area. Proof of a deal comes from an American agent, Paul Lyon, who later wrote the history of the Italian ratline for Maj. James Milano, the American officer who coordinated the operations of the ratline. ..."
"Recently, an Oct. 21, 1946 Treasury Department memo surfaced linking the Vatican directly with hiding Nazi gold. The memo quotes a reliable source in Italy confirming the Vatican was safeguarding roughly 200 million Swiss Francs for the Nazis. Presumably, this gold was from the Nazi quislings, the Ustashi. This recent memo suggests the agreement between Dulles and the Vatican was more extensive than previously believed. However, James Angleton jealously guarded his contact with the Vatican, going so far as refusing to identify him. Once Dulles cemented the Vatican deal, the worst of the Nazis began moving down the line to Italy and thence to South America. More than 30,000 war criminals escaped from Europe - and justice - in this manner, including some of the most notorious war criminals, such as Barbie, Mengele, Eichmann and Bormann.
"A declassified top secret memo proves CIC arranged Barbie’s flight to Argentina. The memo from the 430th CIC informs the State Department of the informant’s real name and “shipping name.” The State Department then notified the receiving country to expect his arrival. Once these war criminals were reestablished in South America, many of them offered their services as military advisers or intelligence officers to some of most repressive regimes in South America. Barbie helped Bolivian dictator Banzer hang on to power by forming a mercenary army of neofascist terrorists. A Nazi colony in Chile known as Colonia Dignidad played a pivotal role in Pinochet’s coup in Chile, as well as in Operation Condor, launched by Pinochet to eliminate leftists. Many other ex-Nazis also were engaged in military, intelligence or police training, torture, and the drug trade.
"While Nazi war criminals had exerted considerable influence in South America, their counterparts admitted to the United States had even more, extending far beyond the space program, to shaping U.S. foreign and domestic policies, and Allen Dulles and Richard Nixon influencing elections. The use of Nazi scientists and their research has led to many abuses in medicine."
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" ... The media not only blacked out CIA propaganda activities. They falsified reporting of the CIA’s role in Radio Free Europe and Radio Liberty for years, leading the public to believe these operations were financed by nickel-and-dime contributions from the public. Ronald Reagan was featured in many of the fundraising ads for these programs.
"By 1953, James Burnham, a psychological warfare consultant for the CIA’s Operations and Policy Coordination Office, estimated the United States was spending more than $1 billion annually on various propaganda projects. To place this figure in proper context, the average hourly wage of a factory worker in 1953 was $1.75. The gross national product in 1952 was $346.1 billion, while the federal budget was $74.6 billion. As a measure of the importance attached to these clandestine CIA propaganda projects, the government was spending nearly 2 percent of its annual budget on them - or 200 times the $5 million spent in the combined Truman-Dewey presidential election campaign of 1948.
"While broadcasts by Radio Free Europe and Radio Liberty often included praises of Thomas Jefferson, Abraham Lincoln and other American leaders, as well as leaders of Eastern Europe, they often contained material created by the Nazis. At other times, Radio Free Europe featured Nazi collaborators and even war criminals. One of the most successful reports ever aired by Radio Free Europe was created by the Nazi intelligence service. The report referred to the “Document on Terror.” The document, which falsely claimed to be a translation of a captured Soviet directive, urged the use of terror against civilians. It included sections on general terror, such as shootings and hangings, and sections on creating the psychosis of white fear or the use of agent provocateurs and other covert operations. The “Document on Terror” soon became a staple in anti-communist propaganda, becoming a widely cited source. It was recycled numerous times in Reader’s Digest and appeared in countless newspapers.
"Paul Blackstock, a noted psychological warfare expert, traced the origin of the section on disintegrating operations to a Nazi manual used for indoctrinating eastern European collaborators and troops, including the Ukrainian Waffen SS. The manual was recovered from the body of a dead Nazi.
"The propaganda efforts by Project Bloodstone encroaching on the American media should have triggered alarm bells, because the CIA charter restricted it to foreign operations. But the Nazi alliance inside America, driven by Prescott Bush, Averell Harriman, John Foster and Allen Dulles, wanted the government’s secret services to conduct extensive propaganda campaigns and mass psychology experiments in the United States, and paramilitary campaigns abroad.
"In the late 1940s, what began as voluntary cooperation between media agents and the CIA soon grew into a new CIA project. Headed by Frank Wisner, Allen Dulles, Richard Helms and Philip Graham (publisher of the Washington Post and a graduate of the Army Intelligence School in Harrisburg, Pa.), Project Mockingbird began buying influence behind the scenes at major media outlets and putting reporters on the CIA payroll. The CIA soon was recruiting news organizations and journalists to become spies and disseminators of propaganda. Media assets soon included all the major news sources, such as ABC, NBC, CBS, Time, Newsweek, the Associated Press, United Press International, Reuters, Hearst Newspapers, Scripps-Howard and Copley News Service."
"The propaganda associated with Bloodstone and Mockingbird often portrayed the defectors from the Baltic States and Eastern Europe as tragic freedom fighters who chose to fight communism and Stalin by joining the Nazis. To some extent this was true, but it was no excuse for committing war crimes. Often these Nazi quislings were more brutal than the SS and Gestapo. Units from the Baltic States and the Ukraine committed some of the worst atrocities and war crimes in carrying out the final solution on the Eastern Front, leaving their German advisors in disbelief over their brutality.
"An excellent example of the collaboration of the press associated with Project Bloodstone and Mockingbird can be found in coverage by Life magazine, written by Wallace Carroll. “… the Germans had millions of eager accomplices in Russia... There was no Partisan movement in their area, no sabotage, and the peasants fulfilled the German requisitions of farm products on schedule.” The Nazi collaborators from Eastern Europe were extremely brutal and are associated with many of the massacres on the Eastern front, and these facts were known for a long time to Russian experts of the State Department and to a few American officers. Carroll claimed that Soviet propagandists shrewdly attributed atrocities to Vlasov’s forces, as well as the numerous pro-Nazi and anti-Jewish periodicals published during the war, which were supposedly forged by the Soviets. Carroll’s conclusion was, in part, that America needed to embrace the former Nazi collaborators as a central tactic in a comprehensive strategy of political warfare against the Soviets.
"In addition to the massive propaganda effort, the CIA launched Operation Shamrock. As early as March 1946, Eisenhower was aware of this project, which involved cooperation by the three major cable corporations to facilitate the review of all messages into and out of the United States. Eventually, Shamrock evolved into a much larger eavesdropping operation, including domestic spying on SDS and other leftist elements, as well as drug dealers. With the advent of the Internet, Shamrock evolved again into a global CIA operation called Echelon to read emails. The FBI launched a parallel operation called Carnivore."
................................................................................................
"Coinciding with Project Mockingbird propaganda was a drive to fluoridate municipal water supplies. The first proposal came in 1939 from Gerald J. Cox, an Alcoa chemist. The aluminum industry produces tons of sodium fluoride as a waste product in processing ore. In 1945, two Michigan cities were chosen to take part in a 15-year comparison study to decide whether fluoride was effective in fighting children’s cavities. By 1946, six more cities were permitted to fluoridate their water, and in 1947, 87 more. The Michigan study was abandoned before it was half finished because the government cited popular demand for fluoridation. The latest tests suggest fluoridation is of little value in reducing cavities.
"There is a more sinister side to fluoridation. At the end of WWII, Charles Eliot Perkins, a research worker in chemistry, was sent to Germany to take charge of the vast IG Farben chemical plants. While there, he learned about a scheme by IG Farben scientists during the war and adopted by the German general staff. Water supplies in certain areas were medicated with sodium fluoride to control the people. Repeated doses in minute amounts over time can reduce an individual’s power to resist domination by slowly poisoning and narcotizing a certain area of the brain, making the person submissive and easy to control. The Nazis used fluoridation in the concentration camps.
"Maj. George Racey Jordan independently confirmed Perkins’ findings on fluoride in Germany. Jordan, stationed at Great Falls, Mont., was in charge of overseeing the Lend-Lease shipments of sodium fluoride to Russia. When he asked his Russian counterpart what the shipments were for, he was told bluntly that it was added to drinking water in the prisoner of war camps to take away their will to resist."
................................................................................................
"Until 1945, the U.S. Public Health Service (USPHS) resisted fluoridation. Then in 1945, Oscar Ewing took over as administrator. Ewing came from a job with a much higher salary as an attorney for Alcoa.
"Was fluoridation part of the Mockingbird project to ease the acceptance of the propaganda and the repression that followed in McCarthyism? The suspicions and the evidence against flouride continue to accumulate.
"The extent of CIA corruption began to surface in the aftermath of Watergate. On Dec. 22, 1974, Seymour Hersh published a front-page article in the New York Times, “Huge CIA Operation Reported in U.S. Against Anti-War Forces.” The report shocked the Ford administration. In an attempt at damage control, President Ford appointed a blue ribbon panel known as the Rockefeller Committee that included Nelson Rockefeller, John Connor, C. Douglas Dillon, Erwin Griswold, Lane Kirkland, Lyman Lemnitzer, Ronald Reagan and Edgar Shannon.
"A look at the members’ backgrounds shows the investigation was intended to be a whitewash. During WWII, Nelson Rockefeller headed the intelligence unit for South America, while Rockefeller-controlled companies continued to supply the Nazis. C. Douglas Dillon arranged for one of the largest bond offerings for Nazi Germany. John Connor joined Cravath Swaine & Moore in 1914. Paul D. Cravath, one of the founders, also founded the Council on Foreign Relations. In 1924, John McCloy joined the firm. During World War II, Connor was a general counsel at the Office of Scientific Research before becoming a Marine combat intelligence officer. Later, he became a special assistant to Navy Secretary James V. Forrestal, where he assisted with legislation creating the National Security Act in 1947. Connors helped create the Defense Department and the CIA. Gen. Lemnitzer was a planner for Operation Northwoods. Reagan’s behavior on the commission can be taken as a proxy for the seriousness of the general investigation. He left the first meeting early and managed to miss three of the next four. In fact, he was so busy stumping that he only visited the headquarters once in the first month.
"While the Rockefeller Committee was a whitewash, Congress established the Church Committee in the Senate and the Pike Committee in the House. Both committees worked diligently to uncover CIA corruption with help from Director William Colby and to the dismay of the Ford White House. By summer, the Ford administration was already planning what became known as the Halloween Massacre. A memo from Donald Rumsfeld to Ford dated July 10, 1975 outlines the possible choices for replacing Colby at the CIA. The choices listed came from a poll conducted by Dick Cheney. Henry Kissinger suggested C. Douglas Dillon, Howard Baker, Galvin and Robert Roosa. Cheney proposed Robert Bork, followed by George H. W. Bush and Lee Iacocca. Rumsfeld proposed Bork, Dillon, Iacocca, Stanley Resor and Walter Wriston. On Nov. 2, 1975, Ford fired Colby."
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Further information about the CIA’s role in Greece came with the assassination of Richard Welch, the CIA chief in Athens, on Christmas day 1975. Welch had been identified as an agent in the Greek news. The “Committee of Greeks and Greek Americans to Prevent Their Country, Their Fatherland, from Being Perverted to the Uses of the CIA” denounced the agency’s role in installing the reactionary Greek government.
"The CIA supported the revolt of the colonels in 1967 because of their strong anti-communist stance. The resulting vicious military junta was strongly embraced and aided by the Nixon administration, with Tom Pappas acting as middleman. Pappas, whose name surfaced several times during the Watergate scandal, played a part in the original fundraising scams of the Nixon gang. The Nixon tapes show Pappas provided the crucial cash to buy the silence of E. Howard Hunt and the other break-in artists. Moreover, Pappas donated $549,000 to Nixon’s 1968 presidential campaign. The money came from KYP, the Greek intelligence service, which at the time was a wholly subsidized arm of the CIA. The donations broke two U.S. laws, prohibiting use of campaign funds from foreign countries and CIA use of funds in American elections.
"The Nixon tapes reveal that on March 2, Haldeman told Nixon that White House counsel John Dean and Attorney General John Mitchell were getting money for the burglars from Pappas. Pappas had the great advantage of dealing in cash and, in return, he wanted to keep U.S. Ambassador Henry Tasca in Athens.
"George H. W. Bush’s appointment as CIA director was greeted with much misgiving. References were made to Bush’s receipt of financial largesse from Nixon’s Townhouse Fund and related operations. The Townhouse Fund was another of Nixon’s slush funds that gave about $100,000 to Bush’s losing Senate race in 1970. Bush also was deeply entangled in the Watergate scandal. However, the network established by his father Prescott Bush prevailed in securing his nomination and confirmation as CIA Director. When Sen. Church was asked about Bush’s nomination, he responded in anger: “There is no question in my mind but that concealment is the new order of the day... Hiding evil is the trademark of a totalitarian government.”"
................................................................................................
"On Feb. 12, Bush claimed to have removed all full-time or part-time news correspondents accredited by any U.S. news service, newspaper, periodicals, radio or TV network or station from the CIA payroll. He also claimed that there were no clergy or missionaries on the payroll. In April, the Senate Select Committee on Intelligence Activities announced that it already caught Bush lying because at least 25 journalists and reporters were still on the payroll, and the CIA was determined to keep them there. Shortly after, President Ford announced Executive Order 11905 authorizing the CIA to conduct foreign counterintelligence activities in the United States, which opened the door to many things.
"The Bush-Kissinger-Ford counteroffensive against the Congressional committees began immediately. On March 5, the CIA leaked the story that the Pike Committee had lost more than 232 secret documents, which had been turned over from files of the executive branch. Anyone opposing them or investigating CIA misdeeds was held up for ridicule and branded a traitor. The CIA’s dirty secrets were safe under Bush’s directorship.
"While Bush maintained an amiable exterior, his vicious character soon showed through. All congressional probes into the dark secrets of the CIA had to be stopped. Using Don Gregg, the CIA station chief in Seoul, Bush leaked to the press stories of Democratic congressmen receiving payments from Korea’s CIA agent, Tongsun Park. This is the same Don Gregg who later served as Bush’s national security adviser during his second vice presidential term, and who managed decisive parts of the Iran-Contra operations. By hyping the reports, the scandal was soon overblown. By leaking information about Koreagate which ended the careers of several members of congress, Poppy Bush was able to terrorize Congress into halting any further investigations of the CIA."
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"Besides silencing Congress, Bush also took steps to silence former agents. As CIA Director, he set up the Publications Review Board, the first peacetime government censor. The Review Board gave the CIA the power to censor all speeches and writings of former agents, as well as approve all books by them.
"In the aftermath of Watergate, Congress began a series of investigations of Nazi war criminals living in the United States. Congresswomen Elizabeth Holtzman was one of those leading the investigations. Among some of the more startling facts she uncovered was that Paperclip did not end in the late 1940s as the public was led to believe; in fact, it terminated only a year or two before the 1974 start of her investigations. She also uncovered that the Displaced Persons Act barred Nazis before 1953, but a change in the law that year allowed convicted war criminals to immigrate. Holtzman proposed an amendment to close that loophole. She also lobbied hard to establish the Office of Special Investigations, the Nazi hunters in the Justice Department, which was opposed by George H. W. Bush.
"It was not until 1982 that the CIA openly admitted that reporters on its payroll acted as case officers to agents in the field."
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"As the Bush-Harriman-Dulles-Nazi alliance gained power in the postwar period, in 1951 President Truman signed the directive creating the Psychological Strategy Board. The board was established to authorize and provide for the more effective planning, coordinating and conducting of psychological operations within the framework of approved national policies. The first director of the board was Gordon Gray, a broadcast and publication media specialist. Gray was instrumental in keeping the electorate uninformed. He previously was in charge of sterilizing children in North Carolina and was a member of the Eugenic Society. Gray was a close associate of Prescott Bush. Henry Kissinger was Gray’s consultant, as well as the paid political consultant to the Rockefeller family. Eisenhower signed Presidential Executive Order 10483, replacing the Psychological Strategy Board with the Operations Coordinating Board. On Feb. 19, 1961, President John F. Kennedy issued a statement abolishing the Operations Coordinating Board."
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"Mind Control
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"The Bush-Harriman-Dulles alliance went beyond propaganda into horrifying experiments in mind control. The experiments started almost simultaneously with Mockingbird and Bloodstone.
"During the war, the Allies captured documents on Nazi experiments using mescaline and other psychedelics on inmates of Dachau in the search for a truth serum. Mescaline caused some people to tell their innermost secrets, but even when combined with hypnosis, the drug never gained the Nazis’ confidence as a mind control drug. At the same time, the OSS conducted research on marijuana as a truth serum. Dr. Hubertus Strughold oversaw the Dachau experiments that included barbaric high-altitude tests on inmates. Strughold was brought to the United States in Operation Paperclip and became America’s father of space medicine. His use of mind-altering drugs on inmates provided the foundation for CIA research into truth serums and mind control.
"The U.S. Navy began some of the first experiments on mind control in 1947. The first known participation by the CIA was in 1950 with the launch of Project Bluebird. In 1953, the CIA placed its mind control under Project MK-ULTRA, an umbrella operation involving 149 subprojects. The MK prefix refers to projects sponsored by the CIA's Technical Service Division. MK-ULTRA grew to involve 185 nongovernment researchers and assistants working for 80 institutions under the direction of Allen Dulles. These institutions included 44 colleges or universities, 15 research foundations or chemical or pharmaceutical companies, 12 hospitals or clinics, and three penal institutions."
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"The military and CIA were concerned about the large number of captured Americans who signed confessions for the North Koreans. By the end of the Korean War, 70 percent of the 7,190 U.S. prisoners held in China had either made confessions or signed petitions calling for an end to the American war in Asia. Often, they accused the United States of using germ warfare in Korea, which it now appears was true.
"Hunter turned out a steady stream of articles and books on brainwashing, inciting the fears of the public. The notion of a “mind-control gap” was as much of a myth as the later bomber and missile “gaps.” However, the furor over mind control took on a momentum of its own. The resulting public frenzy provided cover for the CIA mind control programs in an attempt to “catch up” with the Soviets and Chinese. Ten years after the Korean War, CIA Deputy Director Richard Helms admitted the Soviet mind control research was years behind American efforts. The brainwashing scare was a propaganda effort by the CIA so it could start its mind control research."
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"Quinuclidinyl benzilate, or BZ, is a powerful hallucinogen with effects that generally last three days to six weeks. Edgewood Arsenal conducted BZ studies from 1959-75, involving as many as 2,800 soldiers as test subjects. Many of the soldiers reported never being the same afterward.
"While BZ failed the Army as a mind control drug, it did become its standard incapacitating agent. BZ weapons, such as bullets, grenades, bombs and warheads for missiles, were made for the Army. Between 1968-70, these weapons were tested five times in Vietnam. For instance, in Operation White Wing, grenades filled with BZ were dropped on 500 Viet Cong; only 100 survived. The Army stored (and mostly likely still has) 50 tons of BZ, enough to “trip out” everyone in the world. Army documents suggest there is a contingency plan to use BZ as a domestic civilian riot control method. STP, PCP and hundreds of other drugs were tested for use in mind control and as incapacitating agents.
"Most research involved LSD. The Army tested LSD on approximately 1,500 military personnel in the mid-1960s. Soldiers were not the only guinea pigs used by the CIA. The list of expendables: war prisoners, prostitutes, sexual psychopaths, prison inmates, certain war objectors, mentally retarded people, the elderly, terminally ill patients, schizophrenics, drug addicts, foreigners and, of course, any other man, woman or child who fit the need.
"Operation Midnight Climax was a series of CIA-run brothels in San Francisco and New York. The contract agent, George Hunter White, a narcotics officer, ran the operation. He hired drug-addicted prostitutes to lure customers to CIA-financed bordellos. The prostitutes spiked the drinks of their johns and agents observed the results from behind one-way mirrors. The prostitutes were guaranteed safety and chits to get out of jail if arrested. Besides being illegal, such testing without subjects’ informed consent is a violation of the Nuremberg code, a set of ethical principles regarding experiments with human subjects and other medical research, which guided the Nuremberg tribunal .
"In another operation for MK-ULTRA, Dr. Harris Isabel conducted LSD research on inmates at the Lexington federal drug hospital, a treatment facility. Asked by the CIA to discover a range of synthetic drugs, Isabel began experimenting on black inmates. Anxious to please his CIA bosses, he fed his guinea pigs large daily doses of LSD, mescaline, marijuana, scopolamine and other substances. In exchange for taking part in the experiments, the inmates received injections of high-quality morphine, sometimes getting “shot-up” several times a day, depending on their cooperation. Some inmates were kept on LSD for 77 consecutive days.
"The CIA’s testing of LSD was so extensive that the agency can be considered one of the creators of the drug culture of the 1960s. The first “acid heads” were agents and psychologists employed by the CIA. At large universities, the CIA advertised for paid volunteers in a drug study. Most of the time, there were enough willing volunteers - and a waiting list. Harold Abramson, a CIA contractor, spoke favorably of LSD at seminars for health professionals at universities. Many of the students and professionals then tried LSD.
"Ronald Stark, a CIA agent from 1960 on, was jailed for selling marijuana, morphine and cocaine. Stark manufactured 50 million hits of LSD and sold them on the black market in the late 1960s and early 1970s. Stark was released from prison after a judge learned of his CIA background.
"The CIA helped underground chemists set up acid laboratories in the San Francisco Bay Area in 1967 to “monitor” events in the Haight-Ashbury district. Dr. Louis West rented a house in the district for observation purposes. West had extensive contacts with MK-ULTRA and LSD testing. Previously, he treated Jack Ruby, who he decided was insane. Ruby died in prison of cancer a few years later. Some believe Ruby’s death was part of a continuing cover up of the Kennedy assassination, because one of the goals of MK-ULTRA was to find a substance that could induce cancer, and deaths from cancer would be above question."
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"The CIA also contracted with Eli Lilly Co., to ensure the supply of LSD. The contract signed in 1953 under Subproject 18 of MK-ULTRA totaled $400,000. George H. W. Bush was once a member of the Eli Lilly board, and the Quayle family was a large stockholder.
"Many of the acid advocates in the 1960s had connections to the CIA. Ken Kesey, author of One Flew Over the Cuckoo’s Nest and leader of the Merry Pranksters, Beat poet Allen Ginsberg, and Robert Hunter, lyricist for the Grateful Dead, first took LSD in a CIA-connected program at Stanford University. There also are suggestions that Timothy Leary received CIA-channeled money through various government agencies.
"Accidental outgrowths of MK-ULTRA and its associate subprojects were all the “crazies” roaming the country. Dr. Hackney was a psychiatrist who did BeMod experiments for the CIA from 1970-75, involving how much pain a subject could withstand. These experiments were done at the Veterans Administration Hospital in Minnesota on the homeless or those who had no family. Society already considered them crazy, so no one would listen to them if they complained about the BeMod experiments. Hackney then began to figure out that these people really were not insane. Almost all of them had flashbacks involving the military, killing or learning to kill. Hackney found the stories consistent. Studies showed that these “crazies” were very conditioned and brainwashed when they were 18-21, and it worked great. The problem arose when the victims turned about 40 and all of it began to unravel. Repressed memory syndrome was offered as the diagnosis.
"Shortly after repressed memory syndrome was accepted, the False Memory Syndrome Foundation appeared. The foundation’s sole aim appears to be to discredit studies and research on repressed memory syndrome. Many members of the foundation have ties with the CIA and MK-ULTRA. For instance, Martin Orne, a senior CIA-Navy researcher based at the University of Pennsylvania’s Experimental Psychiatry Laboratory, is one of the founding members.
"One of the crazies roaming the streets was a subject of Dr. Henry Murray of Harvard. Murray was a former OSS officer deeply involved in mind control. Between 1958-62, Theodore John Kaczynski agreed to be the subject of “a psychological experiment” conducted by Murray. Kaczynski is better known as the Unabomber."
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"Some of the best evidence of the CIA’s mind control experiments comes from Canada, where Dr. Ewen Cameron conducted some of the most horrific experiments funded by the CIA at the Allan Memorial Institute. Much of what is known about Cameron’s research has come from lawsuits by survivors. Cameron’s treatment started with “sleep therapy,” in which subjects were knocked out for months, then “depatterned,” which included massive electroshock and LSD dosage. Depatterning was supposed to wipe out past behavior so new patterns could be installed. Finally, the subjects underwent “psychic driving,” when they were heavily drugged and confined to “sleep rooms.” In the sleep rooms, speakers under their pillow played a tape-recorded message over and over, 16-24 hours a day. The treatments were a failure and only messed up the lives of the victims."
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"The number of deaths associated with the CIA’s mind control programs remains uncertain. Lack of evidence, including the known destruction of documents about mind control, cloaks all the projects. Much of what is known has come from victim lawsuits and survivors. However, due to the tenacious efforts of Eric Olson, at least one death can be attributed to the CIA’s mind control projects. Olson’s father, Frank Olson, was a biochemist working at Fort Detrick in the Army’s biowarfare facility from 1943 until his death in 1953. At the time of his death, Olson may have been engaged in, and would have certainly known about, the biowarfare the United States was conducting in Korea.
"After the war, Frank Olson met Kurt Blome at Camp King in Germany. Blome was among the defendants in the Nuremberg War Trials who would have been convicted and hanged, but for American intervention. Olson made several visits to Camp King as part of Project ARTICHOKE. Olson was present during brutal American interrogations of Soviet prisoners and suspected double agents, some of whom died under torture. Olson was deeply disturbed by what he saw. On his return from Europe, he told a friend that he was disgusted with what the CIA was doing and was determined to leave. In November 1953, Olson attended a meeting of CIA agents at a country retreat. Considered a security risk, Olson was given a drink laced with LSD and, when under the influence, was subjected to interrogation using ARTICHOKE techniques.
"The cover story that has survived for more than 20 years was that after taking LSD, Olson became depressed and a week later committed suicide by jumping through a closed window on the 13th floor of a New York hotel. However, an autopsy conducted 40 years later on the exhumed corpse revealed an injury to the skull most likely caused by a blow to the head and no evidence of any cuts on the body from broken glass. It seems that Olson, exactly as recommended in a CIA assassination manual, was struck on the head and thrown from the window. His death resurfaced in the mid-1970s in the Rockefeller Commission’s investigation. President Ford apologized to the family and agreed to a settlement that restricted further civil suits. Further investigation was called for, but in a White House memo, advisers to President Ford stated that this would risk revealing state secrets. Kathryn Olmstead, a California history professor, has discovered documents at the Gerald Ford library about the cover up of Olson’s death. Dick Cheney and Donald Rumsfeld signed the documents."
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"Project Monarch and Child Abuse
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"One of the most outrageous and repugnant aspects of the CIA’s mind control projects involved children. At least four of the MK-ULTRA subprojects document that the CIA was using children without the informed consent of parents. The more gruesome experiments on children were conducted under Project MONARCH, which may have evolved from Project MK-SEARCH subprojects, such as operation SPELLBINDER, devoted to creating a Manchurian candidate who could later be activated with a code word. Operation OFTEN was a study that attempted to harness the power of occultic forces. It may have been one of several cover programs to hide the insidious reality of Project MONARCH.
"The name derives from the butterfly. When a person is undergoing trauma like that induced by electroshock, there is a feeling of light-headedness as if floating or fluttering like a butterfly. It also is symbolic in the transformation or metamorphosis of this beautiful insect. Moreover, occultic symbolism may give additional insight into the true meaning. Psyche is the word for both “soul” and “butterfly,” stemming from the belief that human souls become butterflies while searching for reincarnation. Project MONARCH is best described as a form of structured dissociation and occultic integration to compartmentalize the mind into multiple personalities within a systematic framework. During this process, a satanic ritual is performed to attach a particular demon or group of demons to the corresponding alter ego. In addition, drugs, sexual abuse and physical trauma, including electroshock treatments, are used to create multiple personalities. MONARCH programming involves several stages:
"Alpha: The first stage, regarded as general or regular programming. It is characterized by pronounced memory retention with substantially increased physical strength and visual acuity. Alpha programming works by deliberately subdividing the victim’s personality.
"Beta: Sexual programming. At this stage, all learned moral convictions are eliminated, leaving the victim devoid of inhibitions.
"Delta: Killer programming developed for covert operations and elite forces. Subjects are fearless and methodical in carrying out assignments. Suicide programming is layered in.
"Theta: Considered “psychic” programming. Usually reserved for bloodliners or those from families with a multigenerational satanic background. Omega: Self-destruct programming. Also known as Code Green, it generally is activated when the victim begins therapy or interrogation and too much memory is recovered.
"Gamma: Another form of system protection by “deception” programming, eliciting misinformation and misdirection.
"The first stages of programming usually begin by age six. Because of the trauma induced by electroshock, sexual abuse and other methods, the victim’s mind splits into alternate personalities in order to cope. Formerly referred to as Multiple Personality Disorder, it is now recognized as Dissociative Identity Disorder and is the basis for MONARCH programming. Further conditioning of the victim’s mind is enhanced through hypnotism; double-bind coercion; pleasure-pain reversals; food, water, sleep and sensory deprivation; and drugs. The final stage of programming usually occurs on military bases to ensure security. Several bases are implicated with MONARCH programming. In the 1980s, Offutt and the Presidio were connected to MONARCH by incidents involving children.
"The Presidio case dates back as far as 1982, when a military doctor warned the Army of the danger to children in its daycare center. The Army failed to follow its own regulations in allowing children to go on field trips off base without parental consent. On Aug. 14, 1984, the FBI and officers from the Army’s criminal investigation division raided the home of Lt. Col. Michael Aquino looking for evidence of child molestation. The Presidio case attracted the attention of investigative reporter and radio talk show host Mae Bruessell. During her investigation, she received several death threats. Her daughter was killed in a car wreck that she attributed to a hit. Before ending her investigation, Bruessell was struck with a rapid onset of cancer. The CIA has developed a fast-acting cancer virus. Her death may have been induced rather than from natural causes.
"Linked with both Offutt and the Presidio cases is Aquino, who founded the Temple of Set, an offshoot of Anton LaVey’s Church of Satan. He was attached to the DIA’s Psychological Warfare Division and holds top secret security clearance for his work in military intelligence and classified psychological warfare. Aquino is obsessed with Nazi pagan rituals. He officiated at SS black magic ceremonies held at Wewelsburg, the castle once used by SS chief Heinrich Himmler to create an order of Teutonic Knights, based on the Knights Templars. His hypnotic manipulation of people made him an ideal candidate for the position of master programmer. Aquino and others were arrested for child molesting. Evidence of their guilt was overwhelming, but all charges were dropped, to the dismay of the victims’ parents. Aquino has developed training tapes on how to create a MONARCH slave. He worked as a liaison between government-military intelligence and various criminal organizations and occult groups in distributing MONARCH slaves.
"On Aug. 14, 1987, San Francisco police raided Aquino’s home after the brutal rape of a 4-year-old girl there. The principal suspect in the rape was a Baptist minister named Gary Hambright. Hambright was indicted on charges that he committed “lewd and lascivious acts” with six boys and four girls, ranging in age from 3-7, from September-October 1986. At the time of the alleged sex crimes, Hambright was employed at a childcare center on the U.S. Army base at Presidio. Police also claimed Hambright was involved in at least 58 separate incidents of child sexual abuse. One of the victims identified Aquino and his wife as participants in the child rape.
"Aquino’s home also served as headquarters of the Satanic Temple of Set. During the raid, police confiscated 38 videotapes, photo negatives and other evidence that the home had been the hub of a pedophile ring.
"Although the evidence was overwhelming, Aquino was never charged with child abuse. On April 19, 1988, U.S. Attorney Joseph Russoniello dropped the 10-count indictment against Hambright on the grounds that there was insufficient evidence linking him or the Aquinos to the crimes. Russoniello later was implicated in efforts to cover up the links between the Nicaraguan Contras and South American cocaine trafficking."
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"Almost all the evidence on child abuse comes from the victims. Several from the Franklin case were later charged with felonies for refusing to recant their testimony. One of the Franklin victims told investigators that she saw George H. W. Bush pay Larry King and then leave with a young black boy. Numerous investigators on the Franklin case met sudden violent deaths. King was sentenced to 15 years for fraud in the failure of the community credit union. Yet neither he nor anyone else has faced a single charge in the pedophile sex ring.
"Pedophile sex rings are the product of the CIA’s mind control project MONARCH. Evidence suggests these sex rings operated continuously since the 1950s and were used by the CIA to control politicians and members of Congress. Victims have implicated at least two ex-presidents, George H. W. Bush and Gerald Ford. Evidence suggests the CIA’s pedophile sex rings extend beyond the borders of the United States and may be used to also control foreign politicians. In November 2002, a similar case of child abuse emerged in Portugal. Several government ministers and the spokesperson for the opposition Socialist Party were arrested. The abused children were residents of Portugal’s largest home for trouble children, Casa Pia. The investigation sparked a public outcry after it was revealed that a former president and several government ministers, as well as police, knew of the allegations as far back as the early 1980s, but failed to act. Many of the victims were deaf mutes. In the late 1990's, a scandal involving a pedophile ring in Belgium forced two ministers to resign; even the King was alleged to be implicated.
"In November 2003, a pedophile sex ring involving sadomasochistic orgies with children and linked to two right-wing senators of the Independent Democratic Union Party, as well as prominent businessmen and four police officers, emerged in Chile.
"On Jan. 28, 2003, amid the furor of the impending war with Iraq, the British press briefly reported on Operation Ore, the most thorough and comprehensive police investigation of crimes against children, before being quashed by the Blair government. Besides entangling Rock guitarist Peter Townsend of the Who, the report claimed that senior members of Tony Blair’s government were being investigated for pedophilia and “enjoyment” of child-sex pornography. With the investigation reaching to senior members of his government, Blair declared a news blackout on the story."
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"Most information about mind control abuse also comes from former victims, such as Candy Jones and Cathy O’Brien. Other information comes from Canadian lawsuits against Dr. Cameron. What little information available under the Freedom of Information Act that survived the purging of files is heavily redacted. More recently, another victim, Paul Bonaci, who survived two decades of torture under Project MONARCH, came forward. Bonaci testified about sexually abused males who were selected from Boys Town in Nebraska and taken to nearby Offutt AFB. There they were subjected to intense MONARCH programming, directed mainly by Cmdr. Bill Plemmons and former Lt. Col. Michael Aquino. Bonaci’s testimony disclosed strong corroborating evidence of wide-scale crimes and corruption from the municipal and state levels, all the way up to the White House.
"John DeCamp, a former Republican state senator, documented Bonaci’s story that emerged in 1985 in the Omaha area. The first indication that something very sinister was afoot came on July 10, 1985 when the Washington County, Nebraska Sheriff’s Department contacted a state Department of Social Services social worker handling the case of three foster children. The sheriff’s department picked up the three youngsters from the home of Jarrett and Barbara Webb on a child abuse complaint.
"Jarrett Webb was a board member of the Franklin Community Federal Credit Union headed by Larry King. His wife was Larry King’s first cousin. The Webbs cared for as many as nine foster children at a time. Although Jarrett Webb stated in March 7, 1986 that his income was only $32,000 a year, the Webb home was lavishly furnished. His wife wore a four-carat diamond ring, a full-length fur coat and custom-made dresses. After social workers removed one of the young girls from the care of the Webbs, State Patrol Investigator Jane Tooley found out from her that the abuse was physical and sexual. Further investigation revealed the Webbs forced the foster children to attend parties about once every other week at Larry King’s home.
"The young girl told investigators there were youths from Boys Town and usually around 30 adults with about 20 children present. If a man was interested in one of the children, he would hold up a folded $50 or $100 bill and go somewhere in the house to have sex with him or her. Sometimes the sex involved more than two people and couples of the same or opposite sex. The Webbs took the money from the foster child, supposedly to keep for her.
"On the surface, King appeared as a benefactor of Boys Town and an upright resident of Omaha. However, underneath the façade, King had powerful underworld connections. The foster girl taken from the Webbs told investigators that, starting when she was 15, she was taken to parties hosted by King in Washington, D.C, Chicago and New York. She missed 22 days of school while on these trips. At some of these parties, only men and young boys were present and she saw acts of sodomy. She indicated that at two of the parties, one of them all-male, she saw Vice President George H. W. Bush. This was the first time Bush’s name surfaced in the Franklin case, and it would not be the last.
"Local investigators were soon overwhelmed. What started as a simple case of child abuse evolved into a national ring of child prostitution with sensitive political overtones reaching all the way to the White House. As other victims came forward, it became clear that King was running a child prostitution ring that involved ritual murder to control the children. Other victims said that if they failed to take part in nude photographing sessions, their families would be killed. In 1988, another 15-year-old girl came forward and told investigators that King believed in devil worship. As she grew to trust the investigators, she told them of witnessing several ritual murders of young children. The young girl indicated that King first took her to what he called power meetings when she was 10. At one such meeting, she was drugged. After about eight months attending such meetings, the girl said they put her through her first test.
"During the test, they locked her in a small room with an infant. Around midnight, they returned and cut the infant’s head off and stuck it on the wall. They then forced the young girl to sit in front of the severed head. Later, they returned and held her down while they cut the eyes out of the severed head and then left her locked in the room another 24 hours. At another meeting, she told investigators a small child was sacrificed, fried and eaten.
"The early investigation was promptly buried and covered up by local officials, with the mayor of Omaha threatening one of the police investigators with a psychiatric examination. King was well connected locally, because both the Omaha mayor and police chief were reportedly guests at some of his parties with children present. Moreover, King was a rising star in the Republican Party. He sang the national anthem at the 1984 and 1988 Republican National Conventions, and hosted a party at the 1984 convention at the South Fork Ranch.
"On Nov. 4, 1988, the FBI, IRS and National Credit Union Administration raided and shut down Franklin Credit Union. Ultimately, more than $40 million was missing from the failed credit union. The failure of the credit union opened old charges that King ran a child prostitution ring and new charges of his use of the credit union as a front for the CIA.
"By late 1989, Gary Caradori, the Nebraska legislator’s chief investigator for the Franklin case, found four of King’s victims who were willing to talk. Caradori and his son were killed in a suspicious plane crash on July 11, 1990. At least 15 others associated with the Franklin case have died suddenly under mysterious circumstances, including violent ends. Former CIA Director William Colby warned his friend John DeCamp, author of the Franklin Cover-Up, about threats to his safety. Colby was found dead under mysterious circumstances near his home in 1996."
................................................................................................
"In 1989, Craig Spence was found dead of an apparent suicide. Spence was involved in another case of child prostitution that broke about the same time as the Franklin case. Spence was a Republican power broker known for his lavish parties. On June 29, 1989, the Washington Times broke the story about Spence in an article, “Call Boys Took Midnight Tour of White House.” The story entangled several top officials in the Bush administration and GOP members of Congress. Two of the ring’s callboys were allegedly KGB operatives. However, all evidence pointed to a CIA sexual blackmail operation. Spence’s mansion was covered with hidden microphones, two-way mirrors and video cameras. Spence hinted at his work for the CIA on many occasions, claiming he took part in covert operations in Japan and Southeast Asia. The CIA denies any connection to Spence; however, there is no question he was blackmailing several officials in the United States and Japan.
"Another associate in the CIA’s male prostitution network was Ronald Rosken, former chancellor of the University of Nebraska. The university board of regents fired Roskens after it verified charges of his involvement in homosexual orgies. Larry King served as one of Roskens’ closest advisers. A year after his termination from the University of Nebraska, George H. W. Bush appointed Roskens to head the Agency of International Development. The agency, commonly used as a CIA front, dispenses $7 billion in nonmilitary foreign aid, thus wielding formidable clout in the geopolitical landscape.
"The Bush White House remained silent as the story of the White House callboys mushroomed, refusing to answer any questions about the case. After months of silence from the White House, the case faded away. Meanwhile, half a continent away in Omaha, the Franklin case was breaking. However, it suffered from a lack of publicity because of the more sensational Spence case involving top GOP officials. Moreover, the Franklin case is directly connected with Spence. As several of King’s young victims stated, they were at parties in Washington that he attended. In addition, Paul Bonacci has said that he was in one of the private tours of the White House for young prostitutes conducted by Spence. Bonacci told investigators that he was flown to 200-300 parties nationwide, including two in Washington and several in California. On another trip, Bonacci told investigators of being taken to Bohemian Grove where he and two boys were forced to perform sex acts on each other. After one of the boys was murdered, they were forced to eat parts of him. A snuff pornography film was made of the events. At the time, Bonacci was too young to realize he was at Bohemian Grove; however, from his description of the surroundings, the location is unmistakable.
"Bonacci suffers from multiple personality disorder induced by MONARCH programming. He told investigators the ring, which plunged him into Satanism, was centered at Offutt air base. He was first abused at Offutt when he was 3 years old. He described his MONARCH programming as a series of tortures, heavy drugging and sexual abuse. He also said he was trained in military arts, including assassination. In fact, his knowledge in these realms cannot be accounted for by any other means. Bonacci and others have given evidence of the central role Lt. Col. Michael Aquino played in the programming.
"Bonacci and other children reported that they often were used as mules to smuggle drugs across borders. President Reagan appointed Bush to run the National Narcotics Border Interdiction System. One of Bush’s key aides was Lt. Col. Oliver North, whom several children have witnessed attending King parties. James Flanery, the first reporter to investigate the Franklin case, told associates that King was running guns and money into Nicaragua, and the CIA was heavily involved. Flanery was removed from his position and sent out of state for a year. King was known to have traveled several times to Jamaica, where Oliver North and other Iran-Contra figures carried out many banking transactions. King also received many phone calls from Switzerland. Tom Harvey, Franklin’s chief accountant, also made several trips to Switzerland during the time money disappeared. In 1987, King gave $25,350 to Citizens for America, which sponsored speaking tours for Oliver North and Contra leaders.
................................................................................................
"The Finders case provides another connection between the CIA and child abuse. On Feb. 7, 1987, the Washington Post ran an article about a case of possible kidnapping and child abuse. Tallahassee police arrested two men after observing them watching several children, ages 2-7, described as neglected, covered with insect bites and extremely dirty. The investigation led to the Finders, a cult-like commune, and to properties in Washington owned by the organization. The adult males were Michael Houlihan and Douglas Ammerman. They led authorities to an old warehouse where police found color slides, photographs and photo contact sheets. Some photos revealed children engaging in bloodletting cult rituals involving animals. Other documents described “blood rituals” and sexual orgies involving children, and an unsolved murder in which the Finders might be involved. Additional documents revealed detailed instructions for getting children for unspecified purposes. The instructions included the impregnation of female members of the community, purchasing children, trading and kidnapping.
"Several telex messages also were found in the warehouse. One ordered the purchase of two children in Hong Kong to be arranged through a contact in the Chinese Embassy. There was a file called “Pentagon Break-in” and references to activities in Moscow, Hong Kong, China, Malaysia, North Vietnam, North Korea, Africa, London, Germany, “Europe” and the Bahamas. Other documents identified interests in high-tech transfers to the United Kingdom, numerous properties controlled by the Finders, and interest in terrorism, explosives and evading law enforcement. The warehouse also had a video room, apparently used for indoctrination.
"U.S. Customs officials verified all findings by local police. The officials soon ordered a full investigation and obtained search warrants for various locations. The investigation brought in the FBI, as well. Nevertheless, this was as far as the investigation ever got. All law enforcement agencies involved were ordered by the Department of Justice to halt their investigations on grounds of national security. It was turned over to the CIA as an “internal security matter,” since the Finders is a domestic and international covert operation of the CIA. Evidence was suppressed and the abused children returned to their handlers."
................................................................................................
"In 1998, Massachusetts attorney Ray Kohlman filed a $63 million lawsuit on behalf of former Green Beret Bill Tyree (Case No. 98CV11829JLT). The suit alleges the U.S. government sanctioned drug smuggling, murder and cover-up. The suit names the CIA, former Massachusetts Gov. A. Paul Celucci, former Massachusetts Attorney General Scott Harshbarger, former CIA Director and U.S. President George H. W. Bush, and government assassin D. Gene Tatum as defendants. Tyree is currently serving a life sentence for the murder of his wife. The murder is eerily similar to that of Dr. Jeffrey McDonald, a Ft. Bragg doctor framed for the murder of his wife and children in the early 1980s. Tyree’s wife had been keeping a diary of her husband’s secret missions. Her diary has never been found. Tyree and other Green Berets were led into Colombia as part of Operation Watchtower. Documents filed in the suit give precise details of CIA drug operations using Special Forces personnel. It also describes how Tyree was framed for the murder of his wife, and how Special Forces personnel were used to intimidate and conduct illegal electronic and physical surveillance of anyone who might expose CIA drug dealing. The documents allege the defendants, the CIA and George H. W. Bush were negligent with regard to Operation Watchtower, monitoring post-Watchtower events and seeking illegal congressional funding for the origination of FEMA."
................................................................................................
"Operation Orwell’s mission was to carry out extensive surveillance of politicians, judicial figures, state law enforcement agencies and religious groups. The purpose was to provide the U.S. government and Army with advance warning of the discovery of Watchtower to enable them to prepare a defense. Cutolo revealed that he began surveillance of Ted Kennedy, John Kerry, Edward King, Michael Dukakis, Levin H. Campbell, Andrew A Caffrey, Fred Johnson, Kenneth A. Chandler and Thomas P. O’Neill. As the cover-up operation became more involved in criminality, Cutolo became uneasy, and attempted to protect himself by preparing an affidavit detailing his inside knowledge. In 1980, he was killed while on a military mission in England. Cutolo’s close friends allege that his investigation into the legality of these missions cost him his life. Other senior officers investigating Cutolo’s death or these operations have also died in mysterious circumstances."
................................................................................................
"Within two months of grabbing power in Chile, Pinochet directed Col. Manuel Contreras to establish the Directorate of National Intelligence (DINA) or secret police. CIA station chief Stuart Burton in Santiago established a close liaison with DINA. On Nov. 25, 1975, Chile signed the Interamerican Reunion on Military Intelligence with five other brutal right-wing regimes supported by the United States, setting up Operation Condor. Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay signed the agreement for Operation Condor, a terrorist plot to murder political opponents around the world.
"In the summer of 1976, Contreras launched an operation to assassinate exiled Chilean leader Orlando Letelier. Contreras made a secret visit to Washington, where he met with CIA officials and negotiated the purchase of illegal weapons and electronic spying equipment from a firm run by Edwin Wilson and Frank Terpil. That September, Letelier was killed by a car bomb on the streets of Washington, D.C. Documents show the CIA was aware the assassination was carried out by DINA. Moreover, the CIA was forewarned of the assassination. Nevertheless, the CIA, then directed by George H.W. Bush, leaked a false report clearing Chile and DINA of any involvement in the murder."
"In 1993, a huge cache of documents known as the archives of terror was discovered in Paraguay. The documents reveal the reign of terror during the 1970s unleashed by Paraguay’s dictator, Gen. Alfredo Stroessner. Besides verifying the murders of several South American leaders, the documents reveal the presence of Nazis throughout the southern cone and the assassination of Israeli agents pursuing them. They also detailed the connection of local intelligence services with drug traffickers and the CIA.
"Operation Condor was wide-ranging, with the Argentina and Chile military helping Nicaraguan dictator Anastasio Somoza hold power before his overthrow in a 1979 coup. Through Condor, Argentina also helped organize death squads in El Salvador in 1979-80."
................................................................................................
"It is a small step from mind control of an individual to mind control of the masses. The Nazis were masters at crowd control through propaganda. Recently, several unconfirmed stories have appeared suggesting the government may be using microwaves to control the masses.
"It has long been established in the scientific community that electrodes implanted in the brain can control emotions and behavior. There also is good evidence that electromagnetic radiation of the right frequency can affect mood. Reports indicate the CIA conducted a program named Pandora Project focused on the use of microwaves to control behavior in monkeys. Other reports suggest this project was successful and the TETRA system for crowd control was an end result. There are reports the British are spending 2.5 million pounds on implementing the TETRA system by installing the needed microwave towers. Dr. Ross Adey was the chief researcher of the Pandora Project. The system works by broadcasting pulsed signals at 17.6 Hz that cause zombification by massive release of calcium ions in the cerebral cortex and the nervous system. However, the activated calcium ions also cause massive hormonal disturbances, which lead to frenzied imbalances, and emotional and physical states.
"While these reports may be false, it is known with certainty that the government is funding crowd control research. This research is beginning to bear fruit from recent reports of nonlethal crowd control tools, such as the report of sound generators being shipped to New York during the Republican 2004 national convention. In 2005, New Scientist magazine reported on a new “non-lethal crowd control weapon,” a microwave beam that causes intense pain within 4 seconds."
................................................................................................
"The stay-behind networks also may have brought down Harold Wilson’s Labor government. Wilson’s surprise resignation was a result of a dirty tricks campaign operated by British intelligence at the behest of the United States. Known as operation Clockwork Orange, Army PsyOps personnel began fabricating evidence that showed senior members of the Wilson Cabinet, including the Prime Minister, were Soviet dupes. Waiting in the wings were senior military and other right-wing figures alleged to be planning a military-style coup d’état if the Labor government won the forthcoming election.
"U.S. policy shifted to covert methods rather than brute military force to overthrow governments after WWII, which had shown all-out modern warfare to be excessively destructive. The Korean War with the Chinese human wave attacks only reinforced the lesson. Throughout the 1950s and into the 1960s, former Nazis in the stay-behind networks often were used covertly by the United States to overthrow regimes.
"By 1950, U.S. foreign policy shifted far to the right, largely due to Nazi influence through the Gehlen network. Official U.S. policy called for containment of communism, while others called for rolling back the Iron Curtain. While it is wise and perhaps even honorable to oppose totalitarian regimes, U.S. policy after WWII only opposed leftist governments and often installed and supported brutal right-wing regimes, such as the fascist regime of Pinochet in Chile."
................................................................................................
"Coup in Iran
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"The dependence on an oil economy added new urgency to containing communism in the Mideast. The long Soviet border in the Mideast and its proximity to the rich Arabian oil fields prompted the United States to overthrow several governments in the region. The first U.S. intervention in the region came in Iran in 1953, precipitated by Mossadegh’s move to nationalize the oil fields. The plan to overthrow Mossadegh was a joint British-American operation called Operation Ajax. Kermit Roosevelt, grandson of Teddy Roosevelt and the CIA’s Mideast agent, headed the operation.
"On Aug. 18, 1953, in accordance with the plan, the Shah violated Iran’s Parliamentary Monarchy Constitution by dismissing Mossadegh and his nationalist cabinet without parliament’s approval, and appointing Gen. Fazlollah Zahedi as Prime Minister, who had been was imprisoned during WWII for collaborating with the Nazis. The coup d’état caused three days of riots and the Shah fled. On Aug. 19, 1953, the CIA and MI6 engineered the next phase of the coup when a group of tanks led by Zahedi moved through Tehran and surrounded Mossadegh’s residence. The forces behind the coup d’état also placed a large number of bribed hooligans in the streets to rally against Mossadegh. Finally, the army and police forces let the mob reach the Prime Minister’s residence. After a bloody battle, Mossadegh and his top cabinet leaders surrendered, and the Shah returned to power.
"With the Shah firmly in control, Iran completed a contract with an international consortium of oil companies which included Standard Oil of New Jersey, a client of Sullivan & Cromwell. Jack Anderson reported the Rockefeller family helped arrange the coup that brought the Shah to power. Anderson listed a number of ways the Shah demonstrated his appreciation. The CIA also provided training for the dreaded Savak or Iranian secret police. Unfortunately, all CIA records on the Iranian intervention have been destroyed. The only other sources are Kermit Roosevelt’s book and those published by the Iranians after they seized the U.S. embassy and, with it, 30 years or so of records.
"The resulting government was brutally repressive. The Shah’s regime suppressed any dissent. Dissenters were arrested and tortured by Savak, which maintained its own prisons. In 1979, the Shah was overthrown in a popular uprising and the U.S. embassy seized.
"With the successful removal of Mossadegh, the Iranian operation became a model for the CIA’s method of overthrowing governments. The pattern is always the same. First, a legally elected government proposes reforms or begins to lean to the left, threatening the profits of corporate America. The reform-minded government is then covertly overthrown and a hard-right government bordering on fascism installed. The new regime maintains power through brutality and murder with a U.S.-trained police force. This is the model the United States has followed since WWII. Often in the 1950s, ex-Nazis were employed as agents. U.S. media should be considered co-conspirators in that they cover up the bloodshed by ignoring the killing, as in Nicaragua. It is a model that has been repeated time after time in all corners of the globe. Noam Chomsky terms the resulting state subfascist."
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"Guatemala
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"Also in 1953, the CIA intervened in Guatemala, and regarded the action as a success. The bloody civil war to last 36 years. The legally elected government of Jacobo Arbenz Guzmán focused on land reform. In an overwhelmingly rural nation, only 2.2 percent of the population owned 70 percent of the land. Before the 1944 revolution and ousting of the dictatorship of Jorge Ubico, the army roped laborers together for delivery to lowland farms, where they were kept as debt slaves. Under the Arbenz government, the expropriation of large uncultivated tracts of land for landless peasants, the improvement in the rights of unions and other social reforms were hurting the bottom line of United Fruit. Arbenz even built a port on the Atlantic to compete against the one controlled by United Fruit; a public hydroelectric plant was constructed for the same reasons.
"United Fruit was essentially a country within a country. It owned the telephone and telegraph systems, managed the only Atlantic port, and monopolized banana exports. A subsidiary owned the rail system. In the U.S., United Fruit had close ties to the Dulles brothers, various State Department officials, congressmen and the U.S. Ambassador to the UN. Former CIA Director Walter Bedell Smith was seeking an executive position with United Fruit at the same time he planned the Guatemala coup. He was later named to United Fruit’s board of directors.
"The first plan to oust Arbenz came during the Truman administration after Guatemala received arms from Czechoslovakia. The plan was put into effect after Eisenhower’s election. International Armaments Corp. (formerly Interarmco, now known as Interarms) supplied weapons to the CIA rebels for the 1954 coup. Englishman Sam Cummings owned Interarmco. He got his start as the world’s largest private provider of arms by supplying the CIA in the 1954 coup. At one point, Interarmco had enough weapons in its warehouses to equip 40 U.S. divisions.
"James Atwood, a contract agent, worked closely with Cummings at times. Atwood smuggled guns into Guatemala and Nicaragua, and drugs into the United States. He also supplied arms to the IRA, as well as weapons and explosives to the Quebec Libre movement. The CIA’s head of the Canada Desk at the company actively encouraged Quebec secession. Atwood was connected with both Skorzeny and Barbie, and had several former Gestapo and SD people working for him.
"Atwood was involved in supplying arms to the Cuban insurgents for the Bay of Pigs. During that time, he learned the CIA was planning to use deadly toxins against the Cuban army. However, some of the toxins were accidentally released in southern Florida. Porter Goss, a CIA agent in Florida who was involved in planning the Cuban invasion, suddenly became “very ill.” George W. Bush appointed Goss as CIA Director in 2005.
"The Guatemala coup is an example of how the CIA manipulates American opinion. The CIA planted articles in the foreign press, which were then picked up by the news wires and newspapers in other countries. Besides the obvious multiplier effect on the potential audience, it had the appearance of independent world opinion. It was the same tactic that Bush tried to use against Clinton in the 1992 election."
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"The immediate effects of the coup were draconian. Within four months, 72,000 people were labeled communist, and many were tortured and murdered. U.S. Ambassador John Peurifoy had a long list of leaders the successor government was to assassinate. Agrarian reform stopped and land already expropriated was given back to United Fruit. Union leaders turned up dead. Three-quarters of the population was disenfranchised with the barring of illiterates from the polls, and all political parties, unions and peasant organizations were outlawed.
"Those Americans outraged at the seizing of the American Embassy in Tehran should consider John Foster Dulles’ actions. Concerned that some “communists” might escape by taking refuge in foreign embassies, Dulles insisted that Guatemala arrest the refugees and deny asylum to communists. On these points Dulles lost, perhaps because the coup plotters had also sought refuge in embassies in the past.
"The blood bath and carnage that followed for the next 36 years can only be described as horrific. A genocidal war was carried out against the native Indians. Murders, kidnappings and disappearances became widespread, everyday events as right-wing death squads roamed the countryside. The Guatemala Truth Commission report found the army guilty of more than 200,000 deaths and disappearances - and 93 percent of the 42,000 deaths investigated in the report. Three percent were the work of the leftist Guatemalan National Revolutionary Unit; 4 percent were unresolved. The long-delayed report found that 29,000 of the investigated deaths involved summary executions; most of the victims were civilians and Mayans. The report also noted that the U.S. government trained Guatemalan officers in counterinsurgency methods to be used against the natives.
"It was “clearly genocide and a planned strategy against the civilian population,” said Christian Tomuschat, a German citizen who heads the three-member commission. “Government forces ... blindly pursued the anti-communist fight, without respecting any legal principle or even the most elemental ethical or religious values.” In 626 massacres, the report found that government forces “completely exterminated Mayan communities, destroyed their dwellings, livestock and crops.” The guerrillas were blamed for 32 such massacres.
"Guatemala became the first example of the right-wing death squads that have become so much a part of South American politics. The death squads and the dictators who employ them are products of the CIA-military intelligence system of the United States. They lead directly to the School of the Americas at Fort Benning, Ga. Recently, seven training manuals were released under the Freedom of Information Act. The manuals detail the use of torture, assassination and other criminal practices.
"Throughout the manuals, refugees and displaced persons are highlighted as possible subversives who should be monitored. Universities are described as breeding grounds for terrorists, and priests and nuns are identified as involved in terrorist operations. Militaries are advised to infiltrate youth and student groups, labor unions, political parties and community organizations. Even electoral activity is suspect. The insurgents “can resort to subverting the government by means of elections in which the insurgents cause the replacement of an unfriendly government official to one favorable to their cause.” Insurgent activity can include funding campaigns and participating in political races as candidates."
................................................................................................
"In the 1980s, another aspect of these CIA interventions emerged: the association of the CIA with right-wing death squads and army leaders involved in the drug trade. The following quote illustrates the point:
""The killings peaked in the early 1980s, though massacres continued to occur. By 1990, however, the military was no longer just killing for politics. It began killing for greed too. A scramble for drug profits within the Guatemalan military was under way. Guatemala, like Mexico, with which it shares its northern border, was never a major drug transshipment route before the early 1990s, when Colombians established transit operations across the entire northern isthmus. First the Medellin and then the Cali cartel came to Guatemala “because it is near Mexico, which is an obvious entrance point to the U.S., and because the Mexicans have a long-established mafia,” said one Colombian drug enforcement official. “It is also a better transit and storage country than El Salvador because it offers more stability and was easier to control.”"
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"Guatemala’s stability and control were achieved through cruelty unmatched anywhere in the region. Its counter-insurgency campaign was far more severe than El Salvador’s. “The idea was to make the innocent pay for the guilty,” said a former Guatemalan army sergeant from Quiche. The difference was that in El Salvador, military intelligence units might target a handful of young men to ensure that they killed at least one guerrilla, while in Guatemala, military intelligence units frequently killed innocent people, including children or seniors, to punish an entire village for supporting the guerrillas.
"The intervention in Guatemala served as a template throughout the remaining decades of the 20th century, especially in both South and Central America. Legally elected governments leaning to the left or announcing reforms that threatened corporate America were branded as communist and soon overthrown by covert support of hard-right rebellions. Invariably, the new regime was a brutal right-wing dictatorship that murdered thousands to suppress dissent. The United States soon recognized the new regime and offered support for its military and police, all in the name of combating communism and supporting freedom.
"Support for right-wing guerrillas such as the Contras in Nicaragua was always sold to the American public as a fight against communist influence. The Reagan administration went so far as to question the patriotism of anyone not supporting the Contras. However, like the Conquistadors of earlier centuries, the real reason behind overthrowing reform-minded governments was to cheaply extract the natural resources and obtain cheap labor for corporate America.
"The model was repeated throughout South and Central America. By 1970, the CIA had helped overthrow governments or covertly distorted elections in almost every South American country. One of the more pivotal coups removed Salvador Allende in 1973 in Chile - a culmination of a decade of covert actions by the CIA against Allende."
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"Chile
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"The CIA began covert operations in Chile following the 1958 presidential election, in which Allende came within 3 percent of winning. The next presidential election was scheduled in 1964, and Washington was determined that an avowed socialist like Allende not win."
"One of the assets the CIA employed in the 1964 election was Roger Vekemans, a Belgian Jesuit who founded a network of social action organizations. Vekemans admits to receiving $5 million from the CIA, as well as a like amount of aid. The results of the 1964 election were gratifying for the CIA. Frei won the election with a commanding margin of victory. The continued operations of the CIA propaganda network kept Allende and the socialists at bay throughout the 1960s. However, no amount of propaganda can cover the lack of needed reforms and social progress."
"By 1970, Allende’s popularity was high and his chances in the upcoming presidential election were good. His rising popularity did not go unnoticed by the Nixon White House, which increased anti-Allende spending by $300,000. The CIA continued to use its networks in Chile against Allende. Despite all efforts by the CIA and the Nixon White House, Allende won the Sept. 4 election.
"On Oct. 24, the Chilean Congress was due to confirm the winner, assuring Allende of the presidential office. This left the Nixon White House and the CIA with seven weeks to prevent him from taking office. Nixon met with Kissinger, CIA Director Richard Helms and Attorney General John Mitchell. The Committee of 40 received authorized funds to bribe Chilean congressmen to vote against Allende, but soon abandoned the effort as unfeasible. The Nixon administration concentrated on fermenting a military coup, which would cancel the congressional vote. The White House also made it clear that an assassination was not unwelcome.
"The CIA and the Nixon administration launched a new propaganda campaign to impress on the military the danger of Allende taking office. Privately, military officers were threatened with a cut in aid if Allende were seated. During this seven-week period, the CIA produced more than 700 articles, broadcasts and editorials in Europe and Latin America. Journalists in the pay of the CIA from at least 10 countries traveled to Chile for on-the-spot coverage. The propaganda came with the usual communist scare tactics - fabricated stories that Allende would nationalize everything down to the small shops. The campaign was so intense that it affected the Chilean economy negatively, inducing a financial panic."
"Meanwhile, the CIA was consulting actively with several military officers receptive to a coup. It was difficult due to apolitical attitudes and support for the constitution. The prime obstacle to a military coup was the Commander and Chief of the Chilean Army, Rene Schneider, who insisted on following the constitution. The coup attempt was a direct result of a plea for action by Donald Kendall, chairman of PepsiCo, in two phone calls to the company’s former lawyer, President Richard Nixon.
"With time running out before Allende was seated, the CIA distributed sterilized machine guns and ammunition to some of the conspirators on the morning of Oct. 22. That same day, Schneider was mortally wounded in an attempted kidnapping. The CIA station in Santiago cabled headquarters that Schneider had been killed with CIA weapons. The assassination did not result in a coup; instead, military officers rallied around the flag and the constitution. Two days later, Allende was seated as president. The Nixon administration responded by cutting aid to Chile, including loans from Export-Import Bank and Inter-American Development Bank."
"In addition, holding what amounted to a veto, the United States denied all loans to Chile from the World Bank during 1971-73. The following U.S. banks canceled credit to Chile: Chase Manhattan, Chemical, First National City, Manufacturers Hanover and Morgan Guaranty. The CIA provided financial support to prolong strikes, and caused panic buying to further compound shortages. The CIA and the Nixon administration were determined to bring about a complete economic collapse and widespread public unrest to defeat the Allende government and prove socialism cannot work in the Western Hemisphere. The only assistance Chile received from the United States was military aid. The CIA kept in contact with its assets inside the military, relying heavily on its network to spread unrest and propaganda. Many of Chile’s professionals were graduates of the Free Labor Development in Front Royal, Va., another CIA front used to spread anti-communism propaganda.
"Large U.S. corporations also helped destabilize Chile in support of a coup to remove Allende. International Telephone and Telegraph (ITT) offered $1 million to Secretary of State Henry Kissinger. Officials denied the offer was accepted. However, former U.S. Ambassador to Chile Edward Korry has stated in recent interviews the offer was made by former CIA Director John McCone. McCone was a member of ITT’s board at that time. The Nixon White House was well aware that ITT was illegally channeling money to the Republican Party. Korry also stated that Anaconda Copper and other multinationals, under the aegis of David Rockefeller’s Business Group for Latin America, gave $350,000 to the CIA to bribe members of Congress.
"In attempting to nationalize some of ITT’s vast holdings, Chile was battling a financial giant larger than itself. In 1973, ITT’s revenue was $10 billion, compared to Chile’s GDP of less than $8.5 billion.
"On Sept. 11, 1973, Allende’s administration ended in a violent coup. Allende was killed after an assault on the presidential palace, where he and a group of dedicated followers made a last stand. Within twelve hours, most of the people with Allende who had survived the military assault were executed. Although there is no evidence that Americans took part in the actual assault on the presidential palace, there is plenty that the coup had ample American support. U.S. Navy ships were stationed just off the coast of Chile. There are many reports of members of the Chilean military and coup members taking part in discussions aboard the Navy ships shortly before the coup.
"The U.S. School of the Americas (SOA), then located in Panama, trained many of the coup members. Gen. Ernesto Baeza, who led the assault on the palace, was an SOA alumnus. SOA has trained more than 60,000 Latin American soldiers in counter-insurgency techniques, sniper training, commando and psychological warfare, military intelligence and interrogation tactics. SOA graduates are some of the worst human rights abusers in South America. Human rights activists have tried for decades to shut down this “Death Squad U.”
"The Nixon administration immediately recognized the new regime and granted it $24 million in credit for wheat previously denied the Allende government. The resulting fascist regime of Augusto Pinochet was brutally repressive. Only 19 days after the coup, a briefing paper for Kissinger showed the death toll was 1,500, including 320 summarily executed. By mid-November, U.S. intelligence estimated 13,500 people had been arrested. Others were executed, disappeared or tortured, including two Americans killed in the mass executions at the national stadium.
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"Two months after the September 1973 coup, Col. Manuel Contreras organized the Directorate of National Intelligence (DINA), the Chilean secret police. CIA station chief Stuart Burton established a close liaison with Contreras and DINA. John Tipton, the political officer of the U.S. Embassy in Chile who cabled protests of human rights abuses back to Washington, claims the CIA and DINA were working together.
"Throughout Pinochet’s reign of terror, DINA was responsible for torturing, murdering and disappearing thousands. Many of the darkest deeds conducted by DINA took place at Colonia Dignidad. It was founded in 1961 by Paul Schaefer, a fanatical Nazi émigré from a colony of German immigrants who settled in the mid-1950s in an area 220 miles south of Santiago. Schaefer was an unrepentant SS veteran and former German army medic. He fled Germany to avoid arrest on charges that he whipped and molested several children at an orphanage near Bonn. After WWII, he became a Baptist-style preacher. Enthralled by his apocalyptic sermons, a sizable contingent of true believers followed him to Chile. The colony was surrounded with barbed wire and patrolled by armed guards with dogs. Those who tried to leave the colony faced various forms of psychological and corporal punishment, including prolonged isolation in small cages, beatings and drug injections.
"Besides serving as a center for torturing and murdering DINA victims, Colonia Dignidad actively helped DINA locate its victims in Europe through its fascist national and international contacts, according to a recently declassified CIA document. It also functioned as a shelter for Nazi war criminals in South America. Jack Anderson gave a few details about Colonia Dignidad in an Aug. 3, 1979 column, “Operation Condor, An Unholy Alliance.”
""Assassination teams are centered in Chile. This international consortium is located in Colonia Dignidad, Chile. Founded by Nazis from Hitler’s SS, headed by Franz Pfeiffer Richter, Adolf Hitler’s 1,000-year Reich may not have perished. Children are cut up in front of their parents, suspects are asphyxiated in piles of excrement or rotated to death over barbecue pits.""
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"When Amnesty International disclosed the connection between Colonia Dignidad and DINA, several influential West German businessmen came to Schaefer’s aid. In 1978, they formed a “Circle of Friends” to counter the adverse publicity from reports of human rights violations. The leading member of this Nazi support group was Gerhard Mertens, an international arms merchant who ran the Bonn-based Merex Co., founded by Skorzeny. Mertens is a longtime paid asset of the U.S. Defense Intelligence Agency and the CIA, and a collaborator with West Germany’s BND spy agency, founded by Gehlen. The tentacles of Merex extend throughout South America in a network of ex-Nazi war criminals. Merex’s principal contact in South America was Klaus Barbie in Bolivia. U.S. Army Counter-Intelligence Corps recruited Barbie early in the Cold War and aided his escape to Bolivia, where he advised a succession of right-wing regimes on security, while providing the CIA with information on leftist groups.
"It was Merex that delivered 3 million rounds of ammunition to the Nicaraguan Contras while a ban on U.S. military aid was in effect. Lt. Col. Oliver North arranged the deal.
"SS Colonel Walter Rauff, another Nazi war criminal, served as an adviser to DINA. During WWII, Rauff ran the gas vans on the Eastern Front.
"In August 1975, two years after the coup, Contreras met in Washington with CIA Deputy Director Vernon Walters. The following month, Contreras asked Pinochet for another $600,000 for neutralizing the junta’s principal adversaries abroad, especially in Mexico, Argentina, Costa Rica, the U.S. and Italy. On Nov. 25, 1975, delegates from Argentina, Bolivia, Paraguay and Uruguay met in Chile and established Operation Condor by an act of the Interamerican Reunion on Military Intelligence. Operation Condor did not end with pursuing leftist terrorism; it was designed to eliminate the Left in South America. Thousands of students, clergy, nuns, teachers and union leaders were brutally tortured, murdered or disappeared. It is inconceivable that Vice President Nelson Rockefeller, Henry Kissinger and CIA Director George H. W. Bush were not aware of the operation.
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"One outgrowth of the CIA’s global intervention has been its involvement in the world drug trade. Thanks to San Jose Mercury investigative reporter Gary Webb, this issue has been placed before the American people. Webb’s article, “Dark Alliance,” detailed the CIA’s involvement with the drug trade in Los Angeles. CIA assets in other major papers attacked the article in an effort to discredit it and distance the agency’s long-rumored drug involvement. In 2004, Webb was murdered with two headshots from his own pistol.
"The CIA’s media assets were able to force the Mercury to retract the article and fire Webb, but they could not disprove his charges. There is a great deal more evidence beyond Webb’s “Dark Alliance” article detailing the connection between the CIA and drugs. The CIA would need to discredit congressional testimony as well. An inkling of the CIA drug connection came on March 18, 1982, when CIA Inspector General Fred Hitz admitted before a congressional committee that the CIA maintained relationships with companies and individuals known to be involved in the drug trade. Even more damaging, he informed the congressional committee that the CIA requested and received approval from Reagan’s Justice Department not to report knowledge of drug dealing by CIA assets. At least one other writer traces the CIA drug trade back to the 1940s, when Col. Paul Helliwell of the OSS brought heroin from Burma and sold it in U.S. ghettos.
"The entire cover-up of the Iran/Contra/Cocaine scandal finally has been fully and undeniably established by the release of Volume Two of the CIA Inspector General’s Drug Report on Oct. 8, 1998. To muffle congressional and public outrage, the report was released just one hour before Congress voted to hold impeachment proceedings against President Clinton. It is essentially a confession by the CIA that it engaged in a conspiracy to protect known narcotics traffickers throughout the Contra war years. The New York Times, in an apparent confirmation of the “Dark Alliance” article, picked a paragraph from the report that acknowledged the Contra leaders in California specifically planned to use drug money for the Contras. The LA Times, one of the most vicious critics of the “Dark Alliance” story, failed to print a single line on the new volume."
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"John Perkins in Confessions of an Economic Hit Man describes how multinational American corporations and the World Bank act as extended arms of the CIA. Perkins, who was employed by the American consulting firm, MAIN, lays out a model of deliberate economic sabotage of countries, conducted by the CIA, the IMF and the World Bank. The first step is to coerce a country to sign a plan for economic development, which may include construction of a dam, airport, factory or other infrastructure. The plan is deliberately oversized in such way that there is no hope the country can ever repay the loan.
"The country is deliberately misled by overly optimistic forecasts of the success and need for such projects. A few corrupt local politicians and rich families receive some funds to grease the way for the project. Once the economic forecasts fall short, the country slides into default on the loan. The World Bank then forces the country to accept austerity measures, which require the government to privatize property at fire sale prices, or grant other economic concessions to American corporations.
"To further the economic rape of the country, the construction of the project is contracted to American corporations like Bechtel and Halliburton. While the World Bank guarantees the loan, most of the money goes straight to American contractors. In short, it is corporate welfare at the expense of the American taxpayer. Both Bechtel and Halliburton are closely linked to the Republican Party and the Bush family. Both companies have been awarded huge contracts in Iraq by George W. Bush. The ability of the United States to issue huge loans to foreign countries, never expecting repayment, depends largely on the dollar’s acceptance as the world’s reserve currency."
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"One of the major reasons George W. Bush invaded Iraq was Saddam Hussein’s threat to begin pricing oil in euros, undermining the dollar’s reserve status and the fees of US bankers. Such a move by a major oil producer would have been greatly inflationary and wreaked havoc on the U.S. economy. It also is a major reason for the Bush regime’s support of the abortive coup to remove Hugo Chavez from Venezuela, and the current claims by Chavez that the Bush administration is trying to assassinate him. It is only when the country refuses to go along with the plans that assassination squads are sent to remove the offending politician. If that fails, guerrillas are financed to remove the government or, as a last resort, American troops go in."
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"Ecuador exemplifies the way American corporations and the CIA engage in empire building. In the late 1960s, serious oil exploration focused on the Ecuadorian basin. A few of the local elite who ran Ecuador saddled the country with immense debt in a buying spree backed by the promise of oil revenues. Dams, industrial parks, roads and transmission lines sprang up across the country.
"However, during the 1970s, protest candidate Jaime Roldos’ political fortunes rose. Roldos was a university professor who took exception to the political corruption and complicity of politicians who operated with the corporations. In 1978, Roldos campaigned for president, attracting the attention of his countrymen and every nation where foreign countries exploited oil. Roldos went beyond just attacking the oil companies to include the Summer Institute of Linguistics (SIL). SIL is an American evangelical missionary group with sinister connections to oil companies. The group entered Ecuador under the pretext of studying local indigenous languages. In the Amazon basin, whenever the oil companies found a region with high probability of oil, SIL missionaries encouraged the Huaorani people to move onto reservations, where they received food and medical care in exchange for deeding their lands to the oil companies.
"The mission also used an assortment of dirty tricks to encourage tribes to abandon their ancestral homeland. Often, they donated food laced with powerful laxatives, then offered medicines to cure the diarrhea epidemic. Other methods included dropping food baskets with false bottoms containing radio transmitters. U.S. military personnel monitored the radio broadcasts and whenever a tribe member was bitten by a poisonous snake or otherwise fell ill, missionaries miraculously showed up in oil company helicopters with the proper medicine."
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"Roldos based his oil policy on the premise that it should bring the greatest benefit to the largest percentage of people. He was the first democratically elected president of Ecuador, following a long line of dictators. After taking office, Roldos focused on Rockefeller-owned Texaco. Roldos was relentless in his attack on the oil companies and ordered SIL out of Ecuador. In 1981, Roldos formally presented his new hydrocarbon law, which would have significantly altered the relationship between oil companies and the government. It was considered revolutionary. Predictably, the oil companies reacted with anger, and soon their lobbyists were beseeching politicians in Quito and Washington. The oil companies portrayed Roldos as another Castro. Shortly after delivering a major policy speech warning all foreign interests to implement policies to help the Ecuadorian people, or else leave the country, Roldos was killed in a helicopter crash. He had been forewarned of an assassination attempt and was using two helicopters, but at the last minute, a security officer convinced him to take the decoy. Despite worldwide reaction, news of his death passed unnoticed in the United States. Osvaldo Hurtado took over as Ecuador’s president, reinstated SIL, and allowed Texaco to increase drilling."
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"At the end of the war, the OSS was badly divided between those committed to ridding the world of fascism and those sympathetic to it. Most of the OSS leadership came from Wall Street, with connections to firms that aided in building Hitler’s war machine, and were now in position to protect their clients. However, Donovan also recruited agents from the labor movement, and even known socialists and communists dedicated to removing the fascist menace. After a campaign led by the Chicago Tribune, the OSS was promptly disbanded. Within a year, the same corporate benefactors who aided Nazi Germany created a new intelligence agency under their own control.
"The Nuremberg Trials were sharply curtailed. Every trial ran the risk of exposing corporate America’s crimes in aiding the Nazis. For the most part, the trials were a travesty of justice. Only a few high-ranking Nazis and low-ranking concentration guards were ever hanged for crimes in which more than 4 million Jews perished.
"With the blessing of the CIA, other high-ranking Nazis had their records sanitized and were given positions of power. Thousands of Nazi war criminals were secretly recruited to work for the new agency, or for the CIA-controlled stay-behind networks. Even the most notorious war criminals were employed covertly by the agency, which helped many, such as Mengele and Barbie, escape through the Vatican ratlines to South America. Once safely in South America, the CIA employed these war criminals to overthrow popular, reform-minded governments and replace them with brutal dictatorships beholden to corporate America’s interests.
"This wedding of corporate interests with the new intelligence agency did not go unnoticed. While the Eisenhower administration was full of former Wall Street executives who aided the Nazi cause, the old general was not completely fooled. He had been tricked by Nazi sympathizers and beguiled with their Wall Street supporters. However, he was determined to caution the nation about the danger it faced. Shortly before leaving office, he left a rather cryptic warning:
""Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.
""Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, 3.5 million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.
""This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence - economic, political, even spiritual - is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.
""In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."
"Sadly, the nation paid little heed to the old general’s warning. The CIA was left to run amok. The information-gathering agency Truman envisioned when creating the CIA was hijacked into an agency engaged in covert operations by Frank Wisner, Allen Dulles, James Angleton, William Colby and others. It has illegally spied on Americans and suppressed dissent. It has taken over the nation’s free press and become the world’s largest drug importer. Even today, its budget remains secret."
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March 04, 2020 - March 14, 2020 -
April 29, 2020 - May 27, 2020.
ASIN: B008UAQPRO
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