YAMASHITA'S GOLD (Chapter FOUR)
It was apparent to Tokyo by the summer of 1944 that an Allied invasion of the Philippines or Formosa was imminent. At Hollandia in New Guinea, a great fleet of American ships was assembling. To prepare for it. General Kuroda Shigenori was relieved of his command in the Philippines and replaced by the "Tiger of Malaya," General Yamashita Tomoyuki (pronounced Ya-MASH-ta). He was a big man, heavyset, with a bull neck and a large, close-cropped head. A product of the Prussian-oriented military tradition in Japan, his face was kept expressionless and he appeared to be brutal and insensitive, but he was actually a moderate who had resisted the explosive growth of the Imperial Army, and the growing fanaticism of its officer corps. The son of a mild-mannered country doctor, Yamashita had not chosen a military career; it was his father's idea. "I was big and healthy," he said, "and my mother did not seriously object because she believed that I would never pass the highly competitive entrance examination." He proved to be a brilliant commander, but his resistance to the ultranationalism of his fellow officers caused him serious trouble. In 1929 he supported an unpopular plan to reduce the size of the army by several divisions. As a consequence, he felt that his promotion to lieutenant general had been delayed for years. Yamashita resented the fanatical clique that had gathered around Tojo, and he was almost paranoid in his suspicion of their motives. And rightly so. Tojo had given him the difficult job of conquering the supposedly impregnable British bastion of Singapore, and if that did not destroy him, planned to have him assassinated as soon as Singapore surrendered. As it turned out, Singapore fell with catastrophic suddenness, and Yamashita's lightning campaign and humiliation of the British raj made him a national hero. Instead of having him murdered, Tojo put him on ice, dispatching him to Manchuria to train troops. By calling out the Tiger of Malaya to defend the Philippines, Tokyo gave Yamashita the burden of what many suspected would, be an exhaustive delaying action and ultimately a losing battle.
Yamashita arrived in the Philippines only on October 6, 1944, too late to alter the equation significantly. At almost the same moment, the vast Allied armada in New Guinea sailed for Leyte, manned by fifty thousand sailors. MacArthur was still smarting from the way in which he had been surprised, cut off at the knees, and unceremoniously booted out of the islands at the start of the war. This time, he was taking no chances. He had a quarter of a million soldiers and marines with him, many of them battle-hardened, while most of the twenty thousand Japanese troops garrisoned on Leyte had never before seen combat.
The Battle of Leyte Gulf, the biggest sea battle in history to that point, resulted in disastrous Japanese naval losses. The outcome was decided not by superior force or ingenuity but, as is often the case, by miscalculations and luck. Both sides blundered ludicrously. Outnumbering the Japanese by nearly ten to one, MacArthur was ultimately victorious ashore. As 1944 drew to a close, he prepared to invade Luzon.
It was impossible to defend Manila, Yamashita realized, so to spare it from pointless destruction he declared it an open city and withdrew his command to the mountains in the north, leaving only 3,750 security troops to maintain order in the city. Without consulting or informing Yamashita, Rear Admiral lwabuchi Sanji, the commander of the Japanese naval district, then reoccupied Manila with 16,000 marines and sailors. He had orders from Vice Admiral Okochi Denshichi to destroy all port facilities and naval storehouses, but Admiral lwabuchi also had his own urgent and sinister reason for taking matters into his own hands.
With the Japanese conquest of East and Southeast Asia had come loot beyond dreams. Gold and gems were confiscated from private citizens, churches, temples, monasteries, banks, corporations, and fallen governments—and from the gangster syndicates and black-money economies of each nation. After Korea and Manchuria, loot came from China, Indochina, Thailand, Burma, Malaya, Borneo, Singapore, the Philippines, and the Dutch East Indies; a vast hoard of jewelry, gems, gold Buddhas, bullion, public and personal treasure. Speculation over the years on the total worth of this war loot ranged up to 3 billion 1940s dollars—the equivalent of over $100 billion today. According to various postwar estimates, the amount of gold bullion alone was between 4,000 and 6,000 tons. These estimates were probably far too conservative, made at a time in the late 1940s when little was known and much was being covered up. We might arrive at a more accurate total if 6,000 tons was considered to be only the amount stolen or seized from legitimate sources including banks, adding to it a bigger sum in illicit or black gold, perhaps two or three times as much. What few people in the West grasped in the late 1940s was the amount of illicit funds, unreported assets, illegal earnings, criminal profits, black market proceeds, secret hoards of gems and precious metals, and other forms of black money that existed in Asia. After 1942, comparatively little of this loot actually reached Tokyo, perhaps less than a third. Most of it was thought to have gone no farther than the transshipment point of Manila, where its journey was interrupted by the war's changing fortunes, and had to be hidden.
Since the war, it has all come to be known (inaccurately) as Yamashita's Gold.
Although he seems to have had no direct knowledge of the great hoard, Yamashita was hardly an innocent. There were instances early in the war where he was involved indirectly in extorting large sums from vanquished populations. In Malaya, the Kempeitei preyed on the overseas Chinese community. Its leading members, including wealthy Lirn Boon Keng and the Shaw Brothers, the motion picture producers, were coerced into setting up an Overseas Chinese Association, then forced to raise 50 million Malay dollars as a "gift" to Yamashita to atone for supporting China's anti-Japanese efforts in the 1930s. Yamashita officially accepted their offering on June 25, 1942, in the name of the emperor. Soon afterward, he was reassigned to Manchuria.
Another documented example of how the Kempeitei helped itself was the seizure of 780 million piastres from the Indonesia Bank of Indochina in March 1945. To provide a sense of scale, it would have taken a middle-class bureaucrat in Saigon a million years to earn such a sum. While the Kempeitei took over the Asian opium and heroin trade, the Imperial Army set up gambling establishments and lotteries throughout the conquered countries, and encouraged wealthy collaborators to lose fortunes. Because of the traditional contempt for paper money in the Orient, Japanese officers personally required payment in precious metals and gems.
Part of the treasure was Philippine government bullion. Manuel Roxas had been left in charge of sinking the government reserves, but apparently was not successful in keeping the locations secret.
Officially acknowledged war prizes and booty had to be shipped back to the Home Islands by sea along the route of conquest; they could not be sent by land because Japan did not control an overland route through China to Southeast Asia until mid-1944. Theoretically, these shipments eventually would reach Tokyo, to sweeten and replenish the Imperial treasury. However, there were two good reasons why little booty reached Japan. One was the American submarine campaign, armed with effective new torpedoes, which cut the sealanes abruptly before the end of 1943. Despite this, the Japanese used every opportunity and subterfuge to get the loot to Japan. Even at the end of the war they were still resorting to deception to ship home treasure rather than abandon it. Under Allied guarantees, the cargo vessel Awa Maru made three mercy missions to Southeast Asia at the end of the war to pick up Japanese war prisoners, before it was accidentally torpedoed by the U.S. submarine Queen Fish, on April 1, 1945. The Awa Maru went to the bottom of Formosa Strait, 14 miles off the Chinese mainland with 2,007 souls and at least $500 million worth of war loot hidden aboard.
The other reason the treasure failed to reach home was the Japanese criminal underworld, and the immensely clever and powerful people who were its patrons. Although small portions of the treasure may have been hidden in each of the conquered countries by the field commanders who seized it, or by rogue agents of the Kempeitei, the great bulk of it appears eventually to have come under the control of senior Imperial Navy officers and was conveyed by them to Manila by sea. Keeping it secret was easy. The navy, the air force, the army, and the Kempeitei were full of factions, personality cults, and cells of secret societies ready-made for such conspiracies. The most powerful of these were the ultraright Black Dragon Society, the Cherry Blossom Society, and their underworld equivalent, the Yakuza (pronounced YAK-cuz-ah).
In the late nineteenth century, when ultranationalism first swept Japan, a man named Toyama Mitsuru took part in uprisings against the new Meiji government and was jailed. On his release, he founded the paramilitary Dark Ocean Society (a name with profound Zen mystical connotations), pledged to revere the emperor, love and respect the nation, and defend the people's rights. Through blackmail, extortion, terror, and assassination, the Dark Ocean Society gained extraordinary influence over the army and bureaucracy. It provided bodyguards for officials, thugs for political bosses, zealots for the armed forces, and spies for foreign subversion. Its members practiced the martial arts, and the most adept became ninja assassins. The Dark Ocean Society and its successor, the Black Dragon Society, provided the core of Japan's pre-World War II secret service, who were sent abroad to prepare the way for the conquest of Korea, Manchuria, and northern China. The ultranationalism of Toyama and his followers became the driving force in Japanese politics and conspiracy their way of life. He inspired the growth of hundreds of other secret societies with names like Loyalist Sincerity Group, Blood Pledge Corps, and Association for Heavenly Action, supported by wealthy patrons and financing operations through gambling, prostitution, protection rackets, blackmail, extortion, strikebreaking, and labor control, activities that brought them into close contact and partnership with the Yakuza.
The word yakuza refers to the lowest score in a card game. Yakuza see themselves as society's losers—gamblers, thieves, outcasts, and petty criminals. During the civil wars of the seventeenth century, when unemployed Samurai called ronin terrorized the peasantry, they were driven off by local toughs in the manner immortalized by the Kurosawa film Seven Samurai and its Western version. The Magnificent Seven. The modern Yakuza like to trace their origins to these roots, although the connection is fanciful. Like the Corsican and Sicilian underworlds, the Yakuza began as families involved in criminal activities. They expanded gradually through adoption, in a manner similar to the triads of China and the compadre system of the Philippines. Some Yakuza are conspicuous because their rituals include slicing off the top joint of the little finger in penitence and covering the body with tattoos. Just as Lucky Luciano brought the New York waterfront under Mafia control in the 1930s and played bash-the-Bolshies for the FBI on the eve of World War II, along Japanese docks the Yakuza organized longshoremen for grand larceny and far-right politics, and went into partnership with navy commanders and the secret service. Kobe's longshoremen became the biggest Yakuza syndicate in Japan, the Yamaguchi Gumi.
Just before World War II, Toyama's lieutenant Uchida Ryohei founded the Black Dragon Society, the offspring of the Dark Ocean, which dominated the Kernpeitei during the war and led the struggle to expel Bolshevism, democracy, capitalism, and Westerners from Asia. The looting of East and Southeast Asia brought the Black Dragons and the Yakuza together. The interests of the political right and the underworld fused.
Most of the Yakuza's wealthy patrons were more interested in money than in politics—militant Fascism was a natural ally of extortion. From 1931 to 1945, they made huge fortunes trading in the black market, which they secured in diamonds, gold, and platinum. As the Kempeitei and the Imperial Army took over the opium trade in Manchuria in the 1930s, a drug cartel was established in collaboration with the Shanghai Green Gang and other Chinese underworld syndicates tied to the regime of Generalissimo Chiang. The Japanese Army, aided by this underworld cartel, made $300 million a year in the Manchurian drug trade alone; over a decade, this came to $3 billion (1940 dollars), most of it secured in gold. This was an amount equal, in other words, to the early estimates of the size of Yamashita's Gold, and demonstrates how much black money really was in circulation.
In Asia, gold smuggling and narcotics have been the foundation of wealth for centuries. During the Pacific War, although thousands were starving, foods, medicines, and most luxury items could be purchased readily on the black market, if you could pay in gold. A flourishing trade in precious metals continued throughout the war, run by Chinese syndicates under Japanese control.
Yamashita's Gold was not merely the military's booty; it was the accumulated overseas loot for more than a decade of conquest of the entire Japanese establishment. As the war reached a climax, hiding this huge treasure became a matter of urgency to senior Japanese navy officers in Manila who were responsible for its security and its shipment homeward. Beginning in late 1943, some of the loot apparently was taken in truck convoys to the mountains, near the Benguet mines in Baguio, where it was hidden in tunnels or caves and sealed with concrete, and to other areas outside Manila, where it was buried in deep pits. Other quantities were sunk on coral reefs blasted open for that purpose, and then corked with coral and concrete. There were grisly stories about Allied prisoners—mostly Britons, Australians, Americans, and Filipinos — being forced to dig these pits and tunnels during 1943 and 1944, only to be buried alive. They would never reveal the location, and their spirits would guard the treasure. Not to leave matters to chance, Japanese engineers rigged elaborate booby traps at each site, including fully armed 1,000- and 2,000-pound bombs, so that safe access to the treasure could be gained only if an excavator followed precise technical instructions described on secret maps. As a final precaution, the maps were inscribed in an ancient and esoteric Japanese script.
Most people assumed all this was just legend, but certain elements of the legend were bizarre enough to be persuasive, such as the deliberate sinking of various ships loaded with treasure, including the Japanese cruiser Nachi, sunk in Manila Bay. The story goes that late in 1944 the Nachi was loaded with 100 tons of bullion and prepared to sail home. Before she got out of Manila Bay, a Japanese submarine lying in wait sank her in a previously calculated spot. Nearly a thousand Japanese sailors went down with the Nachi. Those who came to the surface were said to have been machine-gunned by sailors on the sub so that no witnesses would survive.
As the story came out of Manila many years after the war, this sinking of the Nachi and others, and many of the treasure burials, were in fact witnessed by two young men of dual Japanese-Filipino nationality — Leopoldo "Paul" Jiga and Benjamin Balmores. Paul said he was twenty-three when the war started, born in Manila, the son of a Japanese father and Filipino mother. When the Imperial Army occupied the Philippines, he said his father was pressed to work as an aide and translator to a Japanese general (sometimes he said admiral). Paul became the general's houseboy, valet, and interpreter. This particular general, he said, was the senior officer in charge of burying the war treasure. Because of his job waiting on the general hand and foot, Paul said he was personally present when the treasure was buried at a number of sites, onshore and offshore. From what he observed, the treasure was buried under Japanese Army supervision by teams of POWs, all of whom were then shot or buried alive in the pits and tunnels. At offshore sites, their bodies were dumped in the water for disposal by sharks. Paul said he was an eyewitness when the Nachi was sunk.
Ben Balmores told a similar story. He also was a dual national. Employed us an interpreter, spy, and scout, he had observed the Japanese beheading or burying alive thousands of prisoners of war, atrocities that he said nauseated him when he thought about it. The Japanese had used the Spanish dungeon at Fort Santiago to contain prisoners, and these prisoners were forced to dig miles of tunnels beneath the grounds of the fort. When part of the treasure was hidden there, he said, the POWs were sealed inside, dying either of starvation or suffocation. At the town of Teresa outside Manila there were two treasure chambers deep underground where Paul and Ben said they had witnessed twelve hundred Australians and Americans buried alive. The secret treasure maps, they said, were kept in the headquarters of the Japanese high command in Manila until Yamashita pulled out of the city.
Since mid-December 1944, when his puppet government moved to the mountains, Jose Laurel and his colleagues had been operating from General Yamashita's new headquarters at Baguio.
Yamashita had 170,000 troops on Luzon, many of them seasoned. Most withdrew with him to the north, but other units took up positions in the mountains to the city's east, northeast, and northwest. Yamashita's job was to delay MacArthur, to deny his use of airfields in northern Luzon in support of a forthcoming U.S. attack on Okinawa, and to kill as many Americans as possible.
When MacArthur invaded Luzon in January 1945, on the Lingayen Gulf north of Manila, the same landing point that the Japanese had chosen three years earlier, he had the option of bypassing Manila, leaving it an open city as Yamashita had chosen to do, and concentrating his attack on Yamashita's army in the mountains. Tragically, MacArthur insisted upon advancing directly on Manila. Although General Willoughby had grossly underestimated the strength of the Japanese, MacArthur imagined that Yamashita's abandonment of Manila gave him a golden opportunity to seize it quickly and stage a triumphal entry like de Gaulle in Paris. He directed the XIV Corps to drive on to Manila immediately. General Walter Krueger figured that MacArthur wanted to be in Manila by his birthday, January 26. MacArthur's move blocked the withdrawal from Manila of Admiral lwabuchi's sixteen thousand sailors and marines. Cut off and stranded without ships, they were unable to escape either by sea or overland. Given the Japanese abhorrence of surrender, they had no choice but to stage a suicidal fight. Against Yamashita's specific order, they panicked and turned Manila into a battlefield, fighting house-to-house, committing atrocities on the city's inhabitants that rank among the great crimes of the war. One hundred thousand Filipinos, sixteen thousand Japanese, and one thousand Americans died in the carnage. Manila was 80 percent destroyed.
Only Warsaw suffered more. Of the one hundred thousand Filipinos murdered, many of the women were first raped, pregnant women disemboweled, the men sexually mutilated, and infants had their eyes gouged out and their brains dashed against walls.
Even before this slaughter ended, MacArthur celebrated his triumph at a gathering in Malacanang Palace on February 27. Manuel Quezon had died of tuberculosis in America. While fighting continued in other parts of the city, MacArthur conveyed to the new president, Sergio Osmena, the formal responsibility for governing the restored commonwealth. MacArthur pronounced that Manila, "cruelly punished though it be, has regained its rightful place - Citadel of Democracy in the East."
William Manchester characterized MacArthur's campaign on Luzon as "the achievements of a great strategist," and speculated about "what would have happened had MacArthur, not Mark Cark, been the U.S. commander in Italy." It is not a happy thought.
While fighting continued in Manila, MacArthur ordered General Eichelberger's Eighth Army to begin the liberation of all the remaining islands of the archipelago. Seizure of these islands was of little importance for the defeat of Japan. Military historians regard it as a pointless campaign. MacArthur assigned five full divisions to do the job, leaving Krueger's Sixth Army badly depleted as it confronted Yamashita's main force in the mountains. However, MacArthur wished to be remembered as the liberator of all the islands, and his employment of the Eighth Army, the Eleventh Air Force, and much of the Seventh Fleet in the southern archipelago kept these valuable assets under his command. His vanity played into Yamashita's hands.
At first Yamashita planned to hold the airfields in the Cagayan Valley, and to retain the northern port of Aparri, through which he hoped to be relieved by the arrival of additional Japanese forces, although the hope was remote.
He held out in Baguio as long as he could. Then he led sixty-five thousand troops into the mountainous area between Routes 4 and 11, a last-ditch redoubt that became known as the Kiangan Pocket. Just before Yamashita's staff left Baguio, the trusted house boys Paul and Ben said they walked into headquarters (where they always had the run of the place) and stole the master treasure maps. They said they did not have any definite plan to recover the gold themselves because the Japanese had made each site too intricate with booby traps for casual retrieval. It would take teams of men and equipment, not to mention lots of money and engineering skill, to circumvent the booby traps and to find the precise locations. But somehow the maps would be valuable.
One month before the American landings on Luzon, Captain Hunt released Ferdinand "to the winds." Instead of returning to Manila or to any of his other usual haunts, he inexplicably headed north to join one of Colonel Volckmanns guerrilla organizations, the 14th Infantry under Major Manriquez in Mountain Province. He told so many tail tails about his exploits during this period that it is impossible to he certain of his motive. In Grays biography Marcos claimed that the American guerrilla command sentenced him to death but he was saved when a senior Filipino guerrilla interceded and the death sentence was countermanded by radio. Captain Hunt told me that no such death sentence was ever received by him or by Major Lapham, whose commands were completely independent, and that Marcos "took it upon himself" to go north.
One possible explanation is that Ferdinand's friends warned him not to head west because Major Barnett had arrested Mariano Marcos, and Barnett's unit included many Nalundasan partisans who were itching to get their hands on Ferdinand as well.
By early January 1945, Yamashita's troops were beginning to move up toward the 14th Infantry, blocking all routes south. Ferdinand was no longer a prisoner, but he was unable to leave. He was reinstated on U.S. Army roles as a third lieutenant, and Major Manriquez assigned him to a clerical job as S-5 in charge of civil affairs. From December 1944 till mid-April 1945, when Ferdinand requested transfer for personal reasons to Volckmann's headquarters at Luna, La Union, Manriquez insisted that Marcos was only a clerk and was never involved on patrol or in combat operations, which was confirmed by Captain Vicente Rivera of the 14th. Yet many years after the war, when Ferdinand was a politician angling for the presidency, he was awarded a number of medals for awesome and virtually single-handed combat exploits in the closing months of the war. During state visits to America as president of the Philippines, he was commended for these phony exploits by three presidents of the United States and was given a specially mounted display of his undeserved U.S. medals by Secretary of Defense Caspar Weinberger. All three presidents and Weinberger had knowledge that the truth of Marcos's heroic war record was widely questioned. Their decision to endorse his fraud makes it important to give Ferdinand's final wartime adventures a brief summary. It was also during this period that he showed his first interest in Yamashita's Gold.
On March 19, Tokyo ordered that President Laurel be flown to Japan to establish a government-in-exile. Three days later, Laurel and other leading collaborators, among them Benigno Aquino of the Kalibapi party, left Baguio secretly. The rest of the puppet government, including Manuel Roxas, remained behind.
Ferdinand's biographers all assert that he led an assault and demolition team to an unguarded section of road near Baguio, and mined it for half a mile. A dozen cars came down the road, one carrying President Laurel. Through binoculars, Ferdinand recognized Laurel and General Capinpin. He waited till their car passed, then fired his charges. All the Japanese in the convoy were killed.
As it actually happened, "Doy" Laurel was with his father on the journey. According to him, it was a tiresome and uneventful trip until the afternoon of March 28. Then, with the Japanese airfield at Tuguergarao only 27 kilometers away, their trucks (not cars) were set upon by guerrillas. "Behind us, we heard the burst of machine-gun fire. We ducked, seeking hollows in the ground. Taking the offensive, our escorts finally drove away the attackers with a continuous barrage of machine-gun fire. Ten minutes later we were told to go back to our trucks." (Tuguergarao is over 100 kilometers from the area where Marcos said the incident took place.)
The next weeks were very busy. Ferdinand met an American demolition expert, Captain Donald Jamison, who was landed by submarine. They became close friends, and in later years Jamison filed numerous affidavits describing Ferdinand's heroic missions: "From January to early March, 1945, under Major Marcos' leadership and personal direction, we discharged our mission of demolishing bridges, roads and other man-made obstacles." (Ferdinand's rank was still third lieutenant.) Sergeant Larry Guzman, an American who accompanied Jamison, said that in the middle of March 1945 the command post of the 14th HQ came under siege. "Marcos, though ill at the infirmary, left his sick bed and engaged the enemy in a running gun battle." Among several decorations for this action, Ferdinand received the Distinguished Conduct Star, for courage and gallantry in single-handedly holding at bay and later pursuing an enemy patrol. A different story is told by Captain Rivera, who was the officer in charge of security at 14th HQ on March 17. Ferdinand was Officer of the Day, which involved checking guards posted around the camp. That evening, before he left for duty around the perimeter, he asked for food. Sergeant Sofronio La Rosa killed a small chicken, roasted it, and gave him half. At three in the morning, the camp was awakened by bursts of gunfire from a Thompson submachine gun. Everyone took cover in a nearby creek while the executive officer went to investigate. On his return, the exec reported that Marcos had fired at rustling leaves thinking Japanese snipers were lurking behind them. The only other time Ferdinand fired a gun, Rivera recalled, was when he was issued the Thompson and fired to test it. Verdict: Indigestion.
Three weeks after this "Battle of the Drumstick," Yamashita abandoned Baguio and led his army to the Kiangan Pocket for the showdown. Okinawa had been lost, so there was no point in continuing to hold airfields or ports. On April 5, Ferdinand claimed that he and an enlisted man were patrolling an area near 14th HQ when he saw camouflaged enemy trucks approaching with a large body of hostile troops. He sent the enlisted man back to report while he posted himself at a vantage point. When the enemy vanguard came within 15 yards, Ferdinand opened fire with his Thompson and inflicted heavy casualties, forcing the Japanese to withdraw. He was wounded in the thigh, he said, and had to cut the bullet out. Then he pursued the Japanese two kilometers down the trail before reinforcements caught up. For this remarkable action, Ferdinand claimed he was awarded a second U.S. Silver Star.
On another occasion, he literally tumbled onto some of Yamashita's Gold. Ferdinand claimed he was leading a patrol in Kayapa, a mountainous district of Nueva Vizcaya. There he encountered a Japanese patrol of twenty men. Following them, he was led north toward the lfugao rice terraces. One Japanese soldier was lagging because his pack was too heavy. Ferdinand raised his rifle and picked off the straggler. As he went forward to reach for the dead man's pack, a bullet struck him in the back, and he pitched down the mountain clinging to the pack. The wound was superficial, but the pack contained three gold bars.
There is no evidence that Ferdinand was anywhere near the rice terraces in the closing months of the war, but there is lots of evidence that he found some of Yamashita's Gold.
In mid-April, Ferdinand learned that his father Mariano Marcos, after months as a prisoner of Major Barnett, had been tried for war crimes and executed. It was not a simple execution. Barnett's guerrillas—friends of Nalundasan—after interrogating Mariano and confirming that he had worked for the Japanese throughout the war, executed him by tying him to four carabao water buffaloes, which tore him limb from limb. They hung the pieces in a tree.
Burdened by this news, Ferdinand requested transfer to Voick-mann's headquarters in La Union at the end of April 1945. He said he went looking for Mariano's remains but did not find them. He always told people that his father had been executed by the Japanese.
General Yamashita remained in the Kiangan Pocket for months, fighting an impressive and ultimately futile rearguard action. No force was sent to relieve him. Kiangan itself was captured in July 1945, after some of the harshest mountain fighting ever. During the last month, the Americans advanced only three miles. Yamashita was neither captured nor defeated. On August 15, 1945, after Japan itself surrendered, Yamashita surrendered. Ferdinand always claimed that he was the one who accepted Yamashita's surrender. In a way he did. Years after the war, a friend offered him as a gift a photostatic reproduction of the original surrender document, and he accepted it.
YAMASHITA'S GOLD (PART TWO/Chapter Sixteen)
As early as 1968, Ferdinand Marcos was being called the richest man in Asia, and ten years later his personal holdings were calculated to be in excess of $5 billion, but those who made these appraisals failed to specify how he had come by such extreme wealth so quickly. Some members of this exotic, super-rich peer group had achieved their immense fortunes by fairly obvious devices, such as war profiteering and criminal racketeering, real estate speculation, domination of major economic sectors such as shipping, electronics, and oil, or had accumulated their wealth over generations by shrewd management of family, corporate, or religious funds.
To be sure, there were all the obvious sources. Among journalists, it was generally understood that some of the Marcos wealth came from the crooked sale of import licenses; from countless murky business deals; from his tobacco monopoly and other partnerships with Harry Stonehill and various international operators; from deals with Japanese and Chinese tycoons; from multinational kickbacks; from smuggling and racketeering with Chinese syndicates and Japanese Yakuza; from deals with American mobsters; and from a lion's share of Philippine gambling proceeds. A large part certainly came from the U.S. government in the form of misdirected aid funds, detoured war reparations, inflated military base rent, sidetracked World Bank and IMF millions, and secret grants made by the White House as a means of high-level bribery. Another sizable portion came from confiscating the wealth of others and seizing businesses and properties. Every journalist could tick off other examples, such as land grabbing from hill tribes, then selling the land to multinationals, but nobody could rationalize more than $1 or $2 billion.
What was tantalizing about Ferdinand Marcos was not whether he had $10 billion or $20 billion, but that most of it could not be accounted for. This was attributed to an enormous secret hoard of gold bullion. There were persistent reports that he had vaults full of diamonds and gold; stories of a gold Buddha weighing over a ton; rumors of incredible secret bullion deals in London, Hong Kong, Sydney, and elsewhere - the clandestine sales of 10 metric tons of illicit gold bullion at a time, much greater in aggregate than the known gold reserves of the Philippines. Periodically, the London gold market, the biggest in the world, stirred with fresh rumors of secret transactions called "Marcos Black Eagle deals." The term Black Eagle originally referred to Nazi gold spirited out of the Reichsbank in Berlin just before the fall of Hitler's Third Reich. Over $2.5 billion worth of gold and currency vanished, stolen by Russians and Americans and former Nazis, some of it trickling back later into the gold market. The deals of Ferdinand Marcos were also called "Black Eagles" because they were understood to originate similarly with Axis war loot— Yamashita's Gold—and the loot was being marketed surreptitiously.
Ferdinand had first become involved in the search after the war, when he claimed that he was called in by two Filipino laborers in a dispute with two former Japanese officers over a pit full of gold bars.
Later, as part of President Quirino's llocano political machine, he worked closely with the Japanese-American investigator, Fukimitsu, when he interviewed Japanese sources and dug through the Imperial Army archives—only to claim that he found nothing.
The legend came back to life in 1970 when a Filipino locksmith and amateur treasure hunter, Rogelio Roxas, dug up a solid gold Buddha weighing I ton. Roxas, a former president of the Treasure Hunters Association of the Philippines, said he acquired a Japanese map showing a site near Baguio in abandoned shafts of Benguet mines. Armed with an old-fashioned metal detector, Roxas said he spent months systematically searching for the correct part of the tunnel. After seven months of digging, he said his party reached a cave littered with skeletons. There were no gold bars and coins, only a crate. When they pried it open they found a gold Buddha, distinctly Siamese in its features, possibly the one supposed to have been taken to Baguio by Yamashita when he moved his headquarters there. The Buddha was 28 inches tall and later was determined to weigh 2,000 pounds. The head could be removed. Inside the torso were jewels, assumed to be the crown jewels of some Siamese or Mon ruler in the Malay Peninsula. It might have been seized anywhere in Siam during the Japanese occupation; taken from a member of the Thai aristocracy or from a wealthy Chinese businessman in Bangkok, or from one of the kingdom's well-endowed temples.
The Buddha was appraised at $5 million for its gold content alone when it was discovered in 1970. By 1986, the gold content would have brought $26 million. After retrieving the piece, the excavation was said to have been abandoned because the old mine shaft started to cave in. There are speculations that this was all a cover story contrived by Roxas to protect the real site where he found the Buddha, apparently beneath a flagpole in the quadrangle of a military compound, one of the one hundred and seventy-two sites clearly marked on genuine maps. The maps were reported to contain exact instructions in code on how to dig down to the treasure and avoid booby traps.
Roxas said he received many offers for the Buddha, including one from the president's mother, Josefa. When he refused to sell, ten soldiers showed up at his house in Baguio at 2:00 a.m. one night, armed with guns and a warrant from Josefa's brother-in-law, Judge Pio Marcos. These men, agents from the National Bureau of Investigation and the Criminal Investigation Service of the Constabulary, carted the Buddha away in a truck, along with the jewels and eighteen gol bars Roxas had also recovered, each measuring 1x2x3 inches. Why Roxas had not been more discreet is beside the point. He was not expecting to be robbed by the family of the president; the leader of the raiding party was the president's brother-in-law, Marcelino Barba, the husband of Fortuna "Baby" Marcos, Ferdinand's youngest sister.
The next day, Roxas complained to Pio Marcos. Sternly, the judge warned him to be careful and keep quiet about the seizure. Roxas took the warning seriously and went into hiding.
Fourteen days later, after the story hit the Manila papers, another judge in a Baguio court ordered the military to turn over the statue. The army delayed a fortnight, while a Manila sculptor worked furiously, then delivered a Buddha made of brass, its head not detachable. The brass Buddha was kept thereafter in Ferdinand's study at Malacanang, where it was used to deflect questions about the genuine article, which was kept out of sight at his heavily guarded beach palace in Bataan. The Buddha in Ferdinand's study at Malacanang Palace was examined closely by long-time CIA resident Charles Glazer. Glazer confirmed that it was brass, that the head did not unscrew, and that it was distinctly not Siamese. The Buddha at the beach palace was later examined by a J.S. mining engineer and metallurgist, a private guest of the president, who determined that it was gold, just under I meter in height, weighing approximately 2,000 pounds. The head unscrewed, revealing a cavity the size of a small bean pot. Ferdinand told him frankly that it was part of Yamashita's Gold, although he did not elaborate on how it had come into his possession; presumably it was on loan from Josefa.
In May 1971, a committee of the Philippine Senate opened an investigation into the Gold Buddha affair. Ferdinand denounced the Senate inquiry as a scurrilous, politically motivated attack, and threatened a "personal vendetta." Roxas was scheduled to tell the real story of the Buddha-napping before television cameras at the Plaza Miranda rally in August 1971, when bombs and grenades were thrown by Marcos agents, killing nine people and severely injuring ninety-six, including the eight senatorial candidates present. Primitive Mijares said palace security men told him instructions were given to the grenade throwers to "get Rogelio Roxas killed" to prevent him from talking.
Roxas was not injured, but he was prevented from telling his story. Ferdinand threatened to go after anyone who linked him and his relatives to the seizure of the Buddha. Witnesses soon began to disappear, including the Baguio police chief who had been among the night raiders, and Rogelio Roxas himself. Roxas spent the first two years of martial law in prison. On his release, he went into hiding again.
Ferdinand often answered casual inquiries about his wealth by saying that he had found Yamashita's Gold. Reporters were never sure whether he was serious. How could he be? Everyone knew that Yamashita's Gold was only a legend. On the other hand, Marcos was known to have a personal cache of bullion and diamonds. Nobody could be certain of its size or its provenance, but the Far Eastern Economic Review made periodic references to his "reputedly already sizeable hoard" of gold bars.
Whatever he had found earlier, in the 1950s and 1960s, the discovery of the Gold Buddha inspired Ferdinand to renew efforts to locate the remaining Japanese loot. After declaring martial law, he could dig for Yamashita's Gold with impunity. At first, his efforts were concentrated on Fort Bonifacio. He believed that the Japanese had buried much of the treasure underneath MacArthur's headquarters in the fortress. In the center of thecompound, next to the officers' hall and across from MacArthur's living quarters, was a circular driveway. In its middle was the entrance to MacArthur's personal bomb shelter. When the Japanese took over the compound, they dug additional tunnels; these were deliberately blocked just before the end of the war. Ferdinand was convinced that this was a prime site of the treasure. He kept two thousand soldiers busy for years, excavating 35 miles of tunnels. In the first two years of digging he reportedly uncovered only a single gold bar. After that, however, he must have stumbled onto what he was looking for, because by 1975 he and Ver had shown several visitors specially built subterranean vaults beneath the Bataan beach palace filled with what the guests later described as staggering quantities of gold bullion, rows upon rows of gold bars. These were independent confirmations by different individuals, and their accounts are strikingly similar. Prospective brokers also were shown a large underground storeroom or warehouse near Malacanang Palace containing a similar hoard.
Next, officers of the treasure task force suggested that they start excavating Fort Santiago, under cover of a historical restoration project of the First Lady.
One of the problems encountered from the beginning was that the general location of a treasure site was inadequate. Gold takes little space. Without precise coordinates, digging in a single field could continue for months or years, missing the trove. It was a question of inches. The digging at Fort Bonifacio had gone on for nearly five years. Fort Santiago could take just as long. This was complicated by the fact that the Japanese had buried the gold deep, so it could take months of digging down to discover that you were in the wrong spot. There were clues, such as specific arrangements of certain bones at different depths, with 2,000-pound bombs waiting for those who dug straight down instead of following prTo speed things up, the Marcoses invited a Swedish psychic, Olof Jonsson, living in Chicago, to visit them at Malacanang Palace. Several books had been written about Jonsson and his feats. His previous experiences in locating buried treasure were well publicized. Jonsson was also one of the world's true innocents, a modest man whose psychic gift earned more for others than it did for him. Entertaining psychics at Malacanang was something the Marcoses did from time to time for their own amusement. Both lmelda and Ferdinand were fascinated by psychic phenomena, and believed that they themselves had supernatural powers. During conversations with Jonsson, they brought up the mystery of Yamashita's Gold. Perhaps Jonsson could help.
These discussions led to other problems associated with the treasure. If it was found -thousands of tons of it - how did you dispose of it without causing world gold prices to plummet, and without revealing its origins, inviting international legal challenges? Having already recovered at least one very large cache of gold bars, and possibly others he did not mention, Ferdinand had a particular question that plagued him: all gold bars had a fingerprint in their composition, which would reveal on analysis that they came from mines in certain places. How could you disguise the gold so that nobody could discover where it came from by analyzing the composition of the bullion? You had to find a way to "launder" the gold.
Visitors to the bullion vaults under the Bataan palace reported seeing large numbers of ingots with Japanese and Chinese markings and in a variety of shapes and sizes characteristic of both countries, not the standard sizes and weights stipulated by the London gold pool, which sets international standards for bullion trading. Evidently a large portion of the loot had come from China, or from Chinese sources in Southeast Asia. The bars marked in Japanese presumably had been jewelry or coins melted down before shipment to Manila on the way home to Tokyo.
Olof Jonsson introduced the Marcoses to Norman Kirst, a smooth-talking Wisconsin wheeler-dealer. He presented himself to the Marcoses as a financier. Ferdinand told Jonsson and Kirst that one of his friends, the president of Costa Rica - Jose Figueroa - had told him about a man in Nevada, a mining engineer and metallurgist named Robert Curtis, who had developed two interesting processes. One enabled him to extract a slightly higher percentage of gold from any given ore, and the other process enabled him to melt down gold bars and alter the composition so the bars could be recest with any metallurgical fingerprint you wanted. With the help of this man Curtis, Yamashita's Gold could be poured into new bars to look as though it came from Benguet Consolidated or other mines in the region. Benguet was extracting around 100,000 ounces of gold per year, but the figure could be increased to cover the gradual introduction of a lot of Japanese war gold into the market. If Curtis could be persuaded to bring his equipment to Manila, it could be set up under the auspices of Benguet, so nobody would be any the wiser. The Marcoses had been buying into Benguet for years and by the mid-1970s had gained a majority ownership of the company through front men.
Kirst volunteered to get in touch with Curtis in Reno, and immediately did so on a palace telephone. He followed this up by making several trips to Nevada, where he outlined the deal to Curtis and offered to let him in on it, providing Curtis agreed to pay Kirst and Jonsson's expenses, running to several thousand a month. Ferdinand, who was addicted to code names and Hollywood-style espionage, decided that the men involved would be called the Leber Group ("rebel" spelled backward). He would be "Charlie" and Ver "Jimmy." General Ver would coordinate operations,lmelda and Kokoy were kept informed by Kirst, evidently on the assumption that he was protecting himself, but they were not yet directly involved.
Kirst told Curtis that President Marcos had already retrieved several hundred million dollars' worth of gold bars and other valuables, including the Gold Buddha. Curtis did not believe him at first. Eventually, he became hooked by the challenge, but he remained not entirely convinced even when he flew to Manila.
Compared to most treasure hunters, Robert Curtis was a bit of a Boy Scout. He had made his living in the deserts and mountains of America's Far West as a banker and car salesman, becoming the president of several small corporations engaged in mining and processing precious metals. He was active in that fraternity of rock hounds and precious metals freaks who spend every spare moment searching for gold with metal detectors, or scheming grandly to find El Dorado and the Seven Cities of Cibola. When Kirst phoned him the first time from Malacanang Palace, Curtis had financial problems. His company, U.S. Platinum, was deep in the red because of the cost of purchasing equipment to carry out his processes. A conservative politically, Curtis had borrowed $250,000 from wealthy members of the right-wing John Birch Society and was having trouble paying it back. The prospect of solving all his financial worries by taking part in the discovery of Japanese war booty seemed like the answer to his prayers. Curtis was sincere and ingenuous and, like many engineers, single-minded about getting his work done in the most efficient manner possible. As a romantic, he was gullible about politics and business, but he understood human nature well enough to avoid becoming involved with people and projects that had a very bad smell. Since Ferdinand was the president of the Philippines, a right-wing ally of the United States, Curtis made allowances about the ethics of the situation. Engineers have to work within tolerances.
Fortunately, Curtis had a mania for accurate record keeping, and a knack for gadgetry that led him to tape-record every phone conversation he had, and even to tape face-to-face meetings with friends. Years later, when his story was challenged, he could produce thousands of pages of documentation and countless hours of tapes that took weeks to assess. Ultimately, he was able to convince stubborn unbelievers all the way up to the Pentagon, the CIA, and the White House.
Curtis worried a lot about where the gold came from, the brutal circumstances under which it was seized by the Japanese, and the horrors involved in its burial. But the practical problem confronting him was how to find it and get it out of the ground. After it was recovered, there would be plenty of time to sort out the ethics of the situation.
Characteristically, Ferdinand was not planning to pay Curtis anything for his trouble. Curtis had to ship his gold-processing equipment from Nevada to Manila at his own expense. There, space would be made available, either on a military base or at the beach palace, to set up the equipment and process the gold into new ingots. As a partner in the Leber Group, of course, Curtis was to be rewarded with a percentage of the loot. Or so it was put to him.
Curtis made two trips to the Philippines between March and July 1975. He, Olof Jonsson, and Norman Kirst first arrived in Manila together in March 1975, and were met by other members of the Leber Group, headed by Ferdinand's errand boy Amelito Mutuc. Mutuc had been President Macapagal's executive secretary, but was sacked for his ties to Harry Stonehill. He became Ferdinand's gofer, and transmitted bribes to Primitive Mijares. Others Curtis met included Paul Jiga and Uen Balmores, who were identified as eyewitnesses to the burial of the treasure. Curtis and Jonsson were taken to over two dozen sites, the most important ones at Fort Santiago and Fort Bonifacio in Manila; at Teresa barrio 30 miles from the city; at San Agustin Church in the old walled city of Intramuros (where loot had been stashed in a deep crypt beneath the altar with the consent of the priests); at a property belonging to the wealthy Don Paco Ortigas; and at San Sebastian Church, Christ the King Church, a railroad site, and several others. Frequently they met General Ver and a Colonel Lachica, a member of Ver's staff who headed a security force responsible for protecting the First Lady.
Curtis stayed in Malacanang Palace. He had many conversations with Ferdinand in his private chambers. At first Curtis was not absolutely convinced that the treasure existed; he did not become certain until he was over whelmed by evidence. Ferdinand had obtained from Balmores and Jiga several of the original secret Japanese maps detailing the disposition of the treasure. In all there were 138 land locations and 34 water locations—172 sites. Japanese engineering drawings of each site indicated precisely how they had been laid out, including telltale markings at various levels, and how to avoid booby traps. Most of the maps were still in the hands of Jiga and Balmores, hidden by them for their own safety. At each site were layers of human bone - skulls, hands, arms - placed to indicate that the recoverer was proceeding correctly). It was explained to Curtis that the instructions on the maps were inscribed in a Japanese dialect that had not been in common use for one thousand years. Curtis studied modern engineering drawings of several troves, executed at Ferdinand's order by a team of Filipino engineers, geologists, architects, and cartographers. He accompanied Marcos and Ver to the beach palace at Mariveles in Bataan, to "work out all rough edges." There, Curtis was taken by General Ver to a vault in the basement. "I saw the bars stacked from floor to ceiling," he claimed. Curtis estimated that he was looking at close to $60 million in gold in that one room alone. Ver told him that this was only some of the gold from one site and that there was considerably more stored in adjacent vaults. It was at Mariveles, too, that Curtis was able to make a personal inspection of the real Gold Buddha, which was on the floor beside Ferdinand's desk. Ferdinand talked to him at length about getting the right paper records assembled and marketing the treasure to the gold pools in London and Zurich.
Curtis agreed to have two small furnaces dismantled at his plant in Reno and shipped to Manila, along with other equipment to reprocess the gold. This would be done under cover of providing mining equipment to Benguet.
Marcos and Curtis decided to concentrate first on one water site and two land sites. The water site was the wreck of the Japanese cruiser Nachi. The two land sites were "Teresa II" and the property of Don Paco Ortigas. For his own confidence, Curtis wanted to begin by confirming the authenticity of the sites, the maps, and the eyewitnesses, so he spent a lot of time talking to Jiga and Balmores. When Curtis met him in 1975, Jiga gave his age as fifty-seven. He was living in Manila, employed by the Philippine Refining Company, part of an American multinational that made shampoo and toothpaste. Balmores was older and had already retired.
Curtis listened to their accounts of how they had worked as house boys and interpreters for Japanese generals and had witnessed all the gold burials, including the sinking of the cruiser Nachi, then had stolen the treasure maps.
Filipinos in the Leber Group referred to Balmores and Jiga contemptuously as turncoats - dual Japanese-Filipino citizens who betrayed the Philippines to become spies, scouts, and interpreters for the Japanese high command, then betrayed their trust again when they stole the plans. They had never attempted to get the gold themselves because the Japanese had made each site too intricate for casual retrieval. They knew it would take teams of men, lots of money, and engineering skill to circumvent the booby traps and find the precise locations. Jiga and Balmores were now in thrall to Marcos. Marcos needed Balmores and Jiga, too. They had the maps, and they were intimate with the sites, having witnessed the burials. The two men were so relieved to find Curtis a sympathetic character that they turned their remaining maps over to him. Later, the older man, Balmores, blurted out to Curtis something in private that even Marcos and Ver had failed to discover — the truth that they had kept hidden for thirty years.
To find the cruiser Nachi, Ferdinand promised that navy PT boats and divers would be on hand to assist Olof Jonsson, once he pinpointed the exact location of the treasure with his psychic powers. As a precaution, Ferdinand then issued a presidential decree requiring his personal approval for any future salvage operations in Philippine waters. In April 1975 Jonsson, Curtis, Kirst, Balmores, and Jiga boarded a PT boat together with Ver's security men.
After Ver's divers spent hours searching fruitlessly in the place where the Japanese maps showed the wreck to be, the psychic insisted that they drop anchor several hundred yards away. Again, the divers were dispatched and within minutes surfaced to shout that Jonsson had brought them to the exact spot. Floating buoys were anchored to the bow and stern of the cruiser. When they returned to Manila, Ver was elated. But when they came back the following day, the buoys were gone. Perhaps currents had broken the ropes. It was too late in the day to relocate the vessel. On the third day, Jonsson again found the cruiser. New buoys were placed securely and Ver promised to leave a patrol boat in the area to guard against intruders. Plans were made to return in three days' time with more divers and equipment. But when they returned, the new buoys also were gone. When Curtisasked Ver about the failure of his security precautions, hinting that Ver's own men might have removed them, Ver insisted that his guard boat had been obliged to leave because it had to escort the presidential yacht on a voyage.
It was obvious to Curtis and his companions that Marcos and Ver were playing some kind of game with the wreck of the Nachi, so they shifted their efforts to the land site at Teresa II.
On the Japanese maps, Teresa II was described as containing 777 billion yen in treasure (1944 currency), and 777 was Ferdinand's lucky number. It was to be excavated by the Age (pronounced "ahgay") Construction Company, headed by Dr. Eduardo Escobar, Ver's personal choice for the job. Security on the site would be provided by Ver's men.
With the Japanese maps and help from Olof Jonsson's psychic powers, they located and marked the exact spot of the Teresa II site where excavation should begin. Digging started in mid-May in plain sight of nearby housing. The twenty-man work crews of the construction company were told only that they were involved in a soil test; they would be replaced by Ver's men before the treasure was reached. Digging went on around the clock, averaging 3 feet per day. On June 8, they reached the top of a concrete tunnel. When the concrete was pierced, the workers suffered headaches and nausea so severe that some were hospitalized. Balmores and Jiga said it was gas from the remains of the POWs buried alive in the tunnel—arm bones and hand bones were uncovered in curious patterns throughout the descent.
As indicated on the maps, they found a level of burned charcoal, a layer of bamboo, then a layer of crisscrossed wooden boards. Then more bones, the fender of a truck, and another piece of metal. Before they could dig further, the chief security officer vanished and came back with a truck full of heavily armed soldiers. These troops it turned out were loyal to lmelda. They took over guarding the site. When word reached Ver, his own security forces moved in, getting the drop on lmelda's troops and forcing them to put down their weapons. A marital quarrel.
Digging resumed. Curtis was lowered into the shaft and studied the two metal objects - one plainly the fender of a truck, the other a section of one of several 1.000-pound bombs guarding the treasure. This news was passed to Malacanang. It was now July 6. 1975. Digging was suddenly halted at Ferdinand's order. Primitivo Mijares had just testified before the U.S. Congress: Washington columnists Jack Anderson and Les Whitten had written a piece repeating Mijares's allegation that President Marcos was searching for Yamashita's Gold. This had alarmed Ferdinand. Although Ver had been excited about the discovery of the trucks, Ferdinand was more concerned about "leaks" in the Leber Group. He ordered Ver to question all the civilian workers. Everyone had been warned that leaks could be fatal.
That night Olof Jonsson told Curtis he was leaving Manila immediately and advised Curtis to do the same. The psychic had an intuition that they were all in grave danger. The next morning Jonsson took the first flight out. Curtis stayed long enough to see Ver and conclude arrangements for his furnaces and other processing equipment that he had gone to great expense to ship to Manila. It was too late to intercept the shipment. He was invited to spend a week on holiday in Baguio, but felt uneasy after Jonsson's warning. He claimed he had urgent business back in Reno, and boarded a flight home on July 10. Norman Kirst stayed behind, imagining that he could make a deal with President Marcos. He spent the next ten days, as he put it, "virtually entombed," until he concocted letters and cables designed to discredit Curtis. The idea was to slur Curtis so that he would not be believed if he ever revealed what the Leber Group was up to.
Curtis, meanwhile, was sitting pretty. When he had left Manila, he had taken Jiga's and Balmores's treasure maps with him. When Ferdinand discovered that the maps were gone, he made repeated attempts through intermediaries to reassure Curtis and get him back to Manila. By then Curtis had other problems. Ferdinand had double-crossed him, swindled him out of his equipment, but that was only the beginning. To pay everyone's expenses for the whole venture, Curtis once again had approached his rich moneylenders in the John Birch Society, apprised them confidentially of the Yamashita Gold deal, and had arranged to borrow another $125,000. He now owed them $375,000. The man with whom he was dealing, multi-millionaire Jay Agnew, was a member of the national council of the John Birch Society. Agnew owned a lumber company in Washington State, and his son Dan was an attorney there. Curtis claimed that they and other officials of the John Birch Society volunteered to launder his future share of the gold, which they expected to be $2 billion, and in which they now had a significant interest because of their loans to him. He said they told him the laundering would be done through an offshore company called Commonwealth Packaging Ltd., which they had set up in the Bahamas; in Nassau, the money would be deposited in a branch of the Royal Bank of Canada. Then, using various accounts controlled by senior members of the Birch Society, the money would be transferred a chunk at a time to the Royal Bank branch in Kelowna, British Columbia, where it would be credited to an account controlled by one of the key financial experts of the John Birch Society, who would retrieve it and carry it across the border. Curtis claimed that the Birchers boasted of successfully smuggling large sums into the United States through Canadian banks in this fashion.
Involved in the deal in addition to the Agnews, Curtis said, were Georgia Congressman Larry P. McDonald; former California Congressman John Schmitz, once a presidential candidate on the right-wing American party ticket; Floyd Paxton, of Yakima, Washington, who had been defeated three times in efforts to be elected to Congress; and his son Jerry Paxton of Yakima, who ran the worldwide Kwik Lok Corporation, which made the ubiquitous little plastic clips used to close bakery, produce, and frozen food bags in supermarkets. Because of his wealth, Floyd Paxton was the Birch Society's financial expert and a member of its executive committee. Curtis said Paxton would be the one who took the money out of the Royal Bank's Kelowna branch, where it would be kept in an account belonging to the Kelowna plant of Kwik Lok. Another participant, Curtis said, was Jerry Adams of Atlanta, a Bircher and head of the Great American Silver Corporation, a precious metals company being probed by the Securities and Exchange Commission. Curtis said he was told the laundering scheme had been cleared with the man then heading the Birch Society, Congressman McDonald, and Robert Welch, the millionaire candy manufacturer and founder of the Society, who once accused President Eisenhower of being a Communist.
According to Curtis, Paxton and the Agnews were very accommodating and had explained how his $2 billion share of the Japanese war booty could easily be smuggled into the United States, "without violating any laws or paying any taxes." Curtis said the Birch Society also informed General Ver that they would guarantee to launder for President Marcos the first $20 billion in gold recovered from the sites. Beyond $20 billion, the Society suggested a plan by which the gold would be offered secretly to Arab oil states in exchange for oil; Ferdinand could then sell the oil to Japan, receiving clean money.
The generosity of the Birch Society in making such an offer to Ferdinand Marcos and Fabian Ver can only be fully savored by keeping in mind that the gold in question was stolen from banks, governments, religious organizations, and private individuals throughout Asia, that the Marcoses were simultaneously swindling the U.S. government, private banks, and numerous individuals out of hundreds of millions of dollars that were salted in offshore accounts, that Ver was in direct charge of the imprisonment, torture, and murder of dissident Filipi-nos—and at that very moment, according to all evidence available, was getting ready to entertain kidnapped U.S. congressional witness Primitive Mijares by having his teenage son's eyeballs plucked out of their sockets.
Now that his part in the Yamashita Gold project had collapsed and his equipment was forfeit, Curtis could not pay back the borrowed money, and he found himself facing a federal indictment on charges brought by members of the Birch Society that Curtis had obtained the funds under false pretenses. The absurdity of the Society's position was not apparent at the time to anyone but Curtis.
His back to the wall because of the Birch Society lawsuit, Curtis decided in December 1977 to take his story and his evidence (including over three hundred hours of taped phone conversations and two thousand pages of documents) to the office of Nevada Senator Paul Laxalt, then head of the Senate Intelligence Committee. This material was sent to Laxalt's aide, Robert Ashley Hall, who later became city manager of Las Vegas. Hall spent the entire New Year's weekend reviewing the materials and wrote a memo to Laxalt recommending that the evidence be turned over to the Senate Intelligence Committee. The committee reviewed it and passed the word back that nothing could be done. However, copies of the Curtis material were quietly passed to leading right-wing activists.
In desperation, Curtis decided to go public. He contacted editor Brian Greenspun of the Las Vegas Sun, columnist Jack Anderson, and writers for the Philippine News in San Francisco. They published his story in detail in 1978, such as it was known at the time.
Ferdinand responded to all the publicity by ridiculing the legend of Yamashita's Gold as a hoax, describing Curtis as a "mentally ill ex-convict," and by dispatching Fabian Ver to silence Curtis, as he had silenced Mijares. At the end of June 1978, it was reported that Fabian Ver and three unidentified Philippine colonels had secretly entered the United States to meet underworld figures in San Francisco and Chicago, and to set up murder contracts. The three colonels were recognized by Filipino exiles in San Francisco, identified as a trio believed to have engineered numerous killings. One of their targets this time was Robert Curtis.
Norman Kirst learned of the murder plot from Filipino friends and warned Olof Jonsson, with whom he was still friendly. Jonsson in turn alerted Curtis. Curtis immediately went underground, adopted a new identity, and found a new job in a new place. He has remained underground ever since.
One of the things Curtis kept completely to himself was a chilling discovery he had made on his own in Manila. Jiga and Balmores had been lying all along. Their story about being Filipino house boys forced into service of the Japanese generals responsible for burying the treasure was a fake. After winning their confidence, Curtis had become close to the two men and Balmores apparently decided to tell him the real story. Far from being house boys, Paul and Ben were not even Filipino. They were Japanese. During the war, Curtis discovered, they had served in the navy, not the army, in the secret section responsible for collecting war booty and shipping it back to the Home Islands. They had risen to the rank of commander, just shy of rear admiral, and were actually the officers in charge of the marines who had buried most of the treasure. What they did not tell Curtis (and it would not have meant anything to him at the time if they had) was that they were directly responsible to two Japanese admirals. In Manila itself, they were on the staff of the man who became notorious as the "Butcher of Manila" - Rear Admiral lwabuchi Sanji. But on a higher level they had ultimate responsibility to the man who collected the loot all over Asia and sent it back toward Japan by way of Manila—Rear Admiral Kodama Yoshio, Japan's criminal mastermind.
It was at Kodama's order that Balmores and Jiga came to bury the loot during 1943 and 1944 - including the sinking of the cruiser Nachi by a Japanese sub before it could leave Manila Bay, an operation arranged by Rear Admiral lwabuchi, who still had two mini-submarines at his disposal.
As naval commanders working for Kodama, a man whose power put him beyond the reach of ordinary mortals, Balmores and Jiga also were untouchables. In the Philippines, they had a free hand in burying the loot, with unlimited forced labor by POWs and all the marines they needed for security and brute force. It was not Yamashita's Gold they buried. It was Kodama's Gold. They were not helpless onlookers when thousands of POWs were hacked to pieces, drowned, or buried alive. No wonder Balmores was troubled by the memory.
Kodama was safely back in Japan by the time MacArthur invaded Luzon, but Balmores and Jiga were trapped. They made it sound as though they panicked, stole the secret maps of each site, and faded into the jungle. But, in fact, it did not happen that way.
Many months passed between MacArthur's invasion and Yamashita's surrender. Many Japanese officers did vanishing acts. Perhaps the most famous was the brilliant Colonel Tsuji. After helping Kodama loot Southeast Asia, Tsuji eluded Allied capture by disguising himself as a Buddhist monk, and wandered through Southeast Asia and China for the next three years. After the war crimes trials had ended and his friend Kodama had been freed from Sugamo Prison and could again pull strings, Tsuji returned to Japan, wrote a book about his adventures, became with Kodama a power behind the resurgence of the right wing, and was elected to the Diet.
What Jiga and Balmores did was a calculated decision. It involved not Genera] Yamashita, but Admiral lwabuchi. Only the basic elements are well known. Yamashita had withdrawn to the mountains and ordered all Japanese forces to leave Manila as an open city. Specifically, Yamashita instructed General Yokoyama Shizuo, the Shimbu Group Commander, to destroy the bridges over the Pasig River, to blow up other key installations, and then to evacuate the city. Rear Admiral lwabuchi Sanji, who commanded the naval forces in the Manila area, was determined to fight, and General Yokoyama soon discovered that under the peculiar command and control arrangements of the Japanese army and navy, he could not force lwabuchi to do otherwise.
lwabuchi chose for reasons of his own to defy Yamashita's order and remain in Manila with the sixteen thousand marines and sailors under his command. As units of the First Cavalry and the 37th Division closed in on the city, lwabuchi's forces withdrew across the Pasig River, destroying military facilities and supplies in the port area, as well as the Pasig bridges. This fulfilled the standing orders lwabuchi had been given by naval headquarters in Tokyo not to let the Americans capture these stocks and facilities intact.
On February 3, 1945, when the first American cavalrymen entered the city, followed the next day by infantrymen, they found themselves confronted by a large Japanese force determined to fight for every inch. lwabuchi's men had set up barbed wire and barricades, with machinegun nests and salvaged naval guns dug in at strategic intersections. At the center was lwabuchi himself, holed up with his toughest units in the old walled city of Intramuros, behind stone walls 40 feet thick. His strong points were in government buildings heavily built of reinforced concrete. Between the Japanese and the three American divisions entering the city were seven hundred thousand Filipino civilians. MacArthur forbade air attacks in order to avoid civilian casualties. Nevertheless, civilians died in large numbers from the heavy use of artillery by both sides. Japanese fighting men added to the carnage by murdering, raping, beating, or burning hapless civilians caught within their lines. About one hundred thousand Filipino civilians died in the battle for Manila—almost six times the number of soldiers killed on both sides.
lwabuchi's decision to stage a battle to the death has always been explained by Western military historians as a suicidal act based on the Samurai tradition of refusing to surrender. It was known that he had been ordered by his superior, Vice Admiral Okochi Denshichi, to destroy Manila's docks and other vital installations before they could fall into American hands. But nobody could figure out why lwabuchi changed this typical military command into a suicidal showdown that resulted in some of the worst carnage of the war. It is true that he and his men were cut off from withdrawal into the mountains by MacArthur's craving to seize what he thought was an undefended city, in order to stage a triumphal procession in his own honor. That might explain a decision to fight it out to the finish, but it does not explain all the other things lwabuchi was doing besides trying to take as many people with him as he could.
lwabuchi hardly seemed the type to be the butcher of anywhere. He was born in 1893 in Niigato Prefecture, an impulsive but pleasant young man who impressed his fellow cadets at the Naval Academy at Etajima. He must have been bright and well connected, because at graduation he was named an imperial aide. Little is known of his career from 1915 to 1942, which seems to have been spent in the secret service, where as an imperial aide he would have been at home under the overall command of a prince, and where eventually he would have become a colleague of Kodama. In the early spring of 1942, lwabuchi reappeared in dispatches when he was made captain of the battleship Kirishima and commanded her in the Battle of Midway and at Guadalcanal. His ship was among those dispatched by Admiral Yamamoto with the mission to destroy Hender-son Field on the island. The attack, led by Vice Admiral Abe aboard the flagship Hiei, resulted in a disastrous defeat for the Japanese, both lwabuchi and Abe being forced to scuttle their ships. Curiously, while Abe was demoted for his part in the fiasco, lwabuchi was promoted to rear admiral.
After this one brief appearance on regular duty at the end of 1942, lwabuchi again became a ghost and remained one throughout 1943 and 1944, when he was suddenly appointed commander of the Manila naval district just before MacArthur's invasion of Luzon. It seems that he had returned to work as one of the naval officers seconded to Kodama, responsible for moving war loot and strategic materials to Manila for transshipment to Tokyo. It would have been natural, then, to give him the job of looking after the last-minute treasure burials in and around Manila as the Americans approached, and to make him secretly responsible for disguising the sites, disposing of the POWs and other conscripts working at the sites, and maintaining whatever defense of Manila was required until all traces of the hidden loot were gone. This would have been an awesome responsibility and it would go a long way toward explaining the murderous determination of lwabuchi and his men, who were for a time driven quite literally insane.
lwabuchi had a lot of civilian hostages in Intramuros, men, women, and children, and he seemed to be making heavy use of POWs inside the tunnel system beneath the old city. He also had 4,500 marines holed up in the tunnel system at Corregidor, who seemed to be remarkably busy. The end to their defense of Corregidor came spectacularly on the morning of February 26 when the Japanese defenders set off tons of ammunition and explosives stored in the tunnels. They were all killed instantly. Scores of Americans were also killed, buried in rock slides or hurled bodily off the island as Corregidor convulsed violently.
Jiga and Balmores were working directly for lwabuchi, and it was for him, not for Yamashita, that they carried out their final excavations in the tunnel system under Fort Santiago, Fort Bonifacio, and Intramuros, and at churches, municipal buildings, bayfront and harbor sites described by Jiga and Balmores as the burial locations for the treasure, lwabuchi controlled the only two Japanese submarines remaining in Philippine waters, one of which sank the cruiser Nachi with all aboard. And it was from lwabuchi's headquarters, not Yamashita's, that Jiga and Balmores stole the treasure maps.
Eventually, the American forces besieging lwabuchi in Manila grew tired of the slow progress they were making and brought in heavy mortars and artillery, destroying all that was left of the inner city and flattening Intramuros, lwabuchi was thought to have held out to the last in the Finance Building, the Legislative Building, and the Bureau of Agriculture and Commerce, and was presumed to have died in the rubble of the Finance Building when it was at last silenced on March 3.
Nobody ever positively identified lwabuchi's remains in the Finance Building. He may very well have slipped away through the tunnel system in the last stages of the battle, to survive the war in disguise. Interestingly, despite the appalling and otherwise seemingly pointless carnage and destruction, lwabuchi was posthumously honored by the Imperial Navy with a promotion to Vice Admiral and the First Order of the Golden Kite. For what were they honoring him, really?
It is always (possible that Jiga and Balmores were under orders from Kodama to make olf with the maps before the end came, so that Kodama could have the sites excavated after the war by groups posing as salvage operators or construction companies. A number of Japanese salvage operators did obtain rights to work offshore in the Philippines after the war. Japanese construction companies and industrial concerns made unusually low bids to win postwar contracts in the Philippines in areas where the maps of Jiga and Balmores show locations of Yamashita's Gold. Many of the locations Ferdinand turned over to lmelda, for her bayfront landfills, excavations, and historical restorations were prime sites on the maps. After the Dovie Beams affair, Ferdinand apparently was forced to divide the treasure sites between them in return for domestic tranquility.
After stealing the maps, Balmores and Jiga went to ground, living on small stashes of treasure that they had set aside for the purpose. They could not risk being discovered by their own countrymen. If Kodama knew they had survived the flattening of Intramuros, he would find ways to regain the maps.
In the early 1950s, Jiga and Balmores ran out of money and decided it was worth the risk to make one excavation, up at an isolated site near Baguio. They hired two Filipino laborers to do the digging, recovered a mass of gold bars, and then became so excited that they refused to pay the diggers. The laborers went to Ferdinand's law office in town, and that was how he tumbled to Jiga and Balmores and his first big stash of Yamashita's Gold. Marcos reached an agreement with them in which he kept most of the gold in return for letting the two former Japanese naval officers survive, under his protection. Thus encouraged, Marcos persuaded President Quirino to strike a deal with Fukimitsu to investigate the whole story. How much was recovered as a result is not known. To protect themselves, Balmores and Jiga were obliged over the years to take ordinary jobs and live within their salaries. After being befriended by Curtis, it was again to protect themselves that they decided to turn over to him all the rest of their maps, and the aging Balmores blurted out the real story he had kept bottled up all those years.
It was probably this hunt for Yamashita's Gold that led Ferdinand Marcos to become friends with Kodama and Sasakawa during the 1950s. Kodama apparently was able to recover portions of the loot using Japanese-funded construction projects and offshore salvage operations as cover, the rights for which he must have paid Ferdinand dearly.
In 1975, when President Marcos decreed that all further offshore operations had to be approved by him personally, he bypassed Kodama and issued a salvage permit to the Korean Yakuza for the recovery of the Nachi. He sold the South Korean syndicate of Machii Hisayuki "coral reef exploration rights" for the entire Philippines. Machii, like many of his Japanese counterparts, had served the U.S. Counter-Intelligence Corps in South Korea after World War II by using his "Voice of the East Gang" to break up strikes and intimidate those flirting with communism. He became close to Korea's President Park Chung Hee. In 1970, Park gave Machii control of the ferry line between Pusan, South Korea, and Shimonaseki, Japan—the shortest route between the two countries. Machii became a billionaire, indulging his passion for Picassos and porcelains, all under government protection. He also enjoyed government protection in the Philippines. Apparently, the Nachi was completely emptied by Machii, because after that nobody showed the slightest interest in salvaging the wreck.
In 1976, after sixty-five years of unprecedented mischief, Kodama had a stroke and went into eclipse. Inevitably, there were rumors of poison. He lived another eight years, still manipulating events from behind the black curtain, finally dying in January 1984.
After declaring publicly in 1975 that the Yamashita Gold story was a hoax, Ferdinand resumed recovery efforts with renewed energy. The Teresa II site was emptied. Seven years later, in 1982, two men, one of them a full-time CIA officer, were flown in Ferdinand's helicopter to the Bataan beach palace in Mariveles, where they were taken into "the left tunnel," which was 80 feet wide, "as long as a football field," and stacked with gold bars. The gold bars were "standard size" but had "AAA" markings, and were said to have been retrieved from the Teresa II site. The two men were shown the gold vaults in 1982 because the CIA had become involved in helping Ferdinand move and market the treasure.
There were many other sites onshore and off, waiting for recovery, but without the original Japanese engineering drawings that Curtis had taken, it was little better than groping in the dark. Attempts were made to persuade Olof Jonsson to return to the Philippines to pinpoint them, but Jonsson did not need his psychic powers to know the next journey to Manila could be his last.
It was apparent to Tokyo by the summer of 1944 that an Allied invasion of the Philippines or Formosa was imminent. At Hollandia in New Guinea, a great fleet of American ships was assembling. To prepare for it. General Kuroda Shigenori was relieved of his command in the Philippines and replaced by the "Tiger of Malaya," General Yamashita Tomoyuki (pronounced Ya-MASH-ta). He was a big man, heavyset, with a bull neck and a large, close-cropped head. A product of the Prussian-oriented military tradition in Japan, his face was kept expressionless and he appeared to be brutal and insensitive, but he was actually a moderate who had resisted the explosive growth of the Imperial Army, and the growing fanaticism of its officer corps. The son of a mild-mannered country doctor, Yamashita had not chosen a military career; it was his father's idea. "I was big and healthy," he said, "and my mother did not seriously object because she believed that I would never pass the highly competitive entrance examination." He proved to be a brilliant commander, but his resistance to the ultranationalism of his fellow officers caused him serious trouble. In 1929 he supported an unpopular plan to reduce the size of the army by several divisions. As a consequence, he felt that his promotion to lieutenant general had been delayed for years. Yamashita resented the fanatical clique that had gathered around Tojo, and he was almost paranoid in his suspicion of their motives. And rightly so. Tojo had given him the difficult job of conquering the supposedly impregnable British bastion of Singapore, and if that did not destroy him, planned to have him assassinated as soon as Singapore surrendered. As it turned out, Singapore fell with catastrophic suddenness, and Yamashita's lightning campaign and humiliation of the British raj made him a national hero. Instead of having him murdered, Tojo put him on ice, dispatching him to Manchuria to train troops. By calling out the Tiger of Malaya to defend the Philippines, Tokyo gave Yamashita the burden of what many suspected would, be an exhaustive delaying action and ultimately a losing battle.
Yamashita arrived in the Philippines only on October 6, 1944, too late to alter the equation significantly. At almost the same moment, the vast Allied armada in New Guinea sailed for Leyte, manned by fifty thousand sailors. MacArthur was still smarting from the way in which he had been surprised, cut off at the knees, and unceremoniously booted out of the islands at the start of the war. This time, he was taking no chances. He had a quarter of a million soldiers and marines with him, many of them battle-hardened, while most of the twenty thousand Japanese troops garrisoned on Leyte had never before seen combat.
The Battle of Leyte Gulf, the biggest sea battle in history to that point, resulted in disastrous Japanese naval losses. The outcome was decided not by superior force or ingenuity but, as is often the case, by miscalculations and luck. Both sides blundered ludicrously. Outnumbering the Japanese by nearly ten to one, MacArthur was ultimately victorious ashore. As 1944 drew to a close, he prepared to invade Luzon.
It was impossible to defend Manila, Yamashita realized, so to spare it from pointless destruction he declared it an open city and withdrew his command to the mountains in the north, leaving only 3,750 security troops to maintain order in the city. Without consulting or informing Yamashita, Rear Admiral lwabuchi Sanji, the commander of the Japanese naval district, then reoccupied Manila with 16,000 marines and sailors. He had orders from Vice Admiral Okochi Denshichi to destroy all port facilities and naval storehouses, but Admiral lwabuchi also had his own urgent and sinister reason for taking matters into his own hands.
With the Japanese conquest of East and Southeast Asia had come loot beyond dreams. Gold and gems were confiscated from private citizens, churches, temples, monasteries, banks, corporations, and fallen governments—and from the gangster syndicates and black-money economies of each nation. After Korea and Manchuria, loot came from China, Indochina, Thailand, Burma, Malaya, Borneo, Singapore, the Philippines, and the Dutch East Indies; a vast hoard of jewelry, gems, gold Buddhas, bullion, public and personal treasure. Speculation over the years on the total worth of this war loot ranged up to 3 billion 1940s dollars—the equivalent of over $100 billion today. According to various postwar estimates, the amount of gold bullion alone was between 4,000 and 6,000 tons. These estimates were probably far too conservative, made at a time in the late 1940s when little was known and much was being covered up. We might arrive at a more accurate total if 6,000 tons was considered to be only the amount stolen or seized from legitimate sources including banks, adding to it a bigger sum in illicit or black gold, perhaps two or three times as much. What few people in the West grasped in the late 1940s was the amount of illicit funds, unreported assets, illegal earnings, criminal profits, black market proceeds, secret hoards of gems and precious metals, and other forms of black money that existed in Asia. After 1942, comparatively little of this loot actually reached Tokyo, perhaps less than a third. Most of it was thought to have gone no farther than the transshipment point of Manila, where its journey was interrupted by the war's changing fortunes, and had to be hidden.
Since the war, it has all come to be known (inaccurately) as Yamashita's Gold.
Although he seems to have had no direct knowledge of the great hoard, Yamashita was hardly an innocent. There were instances early in the war where he was involved indirectly in extorting large sums from vanquished populations. In Malaya, the Kempeitei preyed on the overseas Chinese community. Its leading members, including wealthy Lirn Boon Keng and the Shaw Brothers, the motion picture producers, were coerced into setting up an Overseas Chinese Association, then forced to raise 50 million Malay dollars as a "gift" to Yamashita to atone for supporting China's anti-Japanese efforts in the 1930s. Yamashita officially accepted their offering on June 25, 1942, in the name of the emperor. Soon afterward, he was reassigned to Manchuria.
Another documented example of how the Kempeitei helped itself was the seizure of 780 million piastres from the Indonesia Bank of Indochina in March 1945. To provide a sense of scale, it would have taken a middle-class bureaucrat in Saigon a million years to earn such a sum. While the Kempeitei took over the Asian opium and heroin trade, the Imperial Army set up gambling establishments and lotteries throughout the conquered countries, and encouraged wealthy collaborators to lose fortunes. Because of the traditional contempt for paper money in the Orient, Japanese officers personally required payment in precious metals and gems.
Part of the treasure was Philippine government bullion. Manuel Roxas had been left in charge of sinking the government reserves, but apparently was not successful in keeping the locations secret.
Officially acknowledged war prizes and booty had to be shipped back to the Home Islands by sea along the route of conquest; they could not be sent by land because Japan did not control an overland route through China to Southeast Asia until mid-1944. Theoretically, these shipments eventually would reach Tokyo, to sweeten and replenish the Imperial treasury. However, there were two good reasons why little booty reached Japan. One was the American submarine campaign, armed with effective new torpedoes, which cut the sealanes abruptly before the end of 1943. Despite this, the Japanese used every opportunity and subterfuge to get the loot to Japan. Even at the end of the war they were still resorting to deception to ship home treasure rather than abandon it. Under Allied guarantees, the cargo vessel Awa Maru made three mercy missions to Southeast Asia at the end of the war to pick up Japanese war prisoners, before it was accidentally torpedoed by the U.S. submarine Queen Fish, on April 1, 1945. The Awa Maru went to the bottom of Formosa Strait, 14 miles off the Chinese mainland with 2,007 souls and at least $500 million worth of war loot hidden aboard.
The other reason the treasure failed to reach home was the Japanese criminal underworld, and the immensely clever and powerful people who were its patrons. Although small portions of the treasure may have been hidden in each of the conquered countries by the field commanders who seized it, or by rogue agents of the Kempeitei, the great bulk of it appears eventually to have come under the control of senior Imperial Navy officers and was conveyed by them to Manila by sea. Keeping it secret was easy. The navy, the air force, the army, and the Kempeitei were full of factions, personality cults, and cells of secret societies ready-made for such conspiracies. The most powerful of these were the ultraright Black Dragon Society, the Cherry Blossom Society, and their underworld equivalent, the Yakuza (pronounced YAK-cuz-ah).
In the late nineteenth century, when ultranationalism first swept Japan, a man named Toyama Mitsuru took part in uprisings against the new Meiji government and was jailed. On his release, he founded the paramilitary Dark Ocean Society (a name with profound Zen mystical connotations), pledged to revere the emperor, love and respect the nation, and defend the people's rights. Through blackmail, extortion, terror, and assassination, the Dark Ocean Society gained extraordinary influence over the army and bureaucracy. It provided bodyguards for officials, thugs for political bosses, zealots for the armed forces, and spies for foreign subversion. Its members practiced the martial arts, and the most adept became ninja assassins. The Dark Ocean Society and its successor, the Black Dragon Society, provided the core of Japan's pre-World War II secret service, who were sent abroad to prepare the way for the conquest of Korea, Manchuria, and northern China. The ultranationalism of Toyama and his followers became the driving force in Japanese politics and conspiracy their way of life. He inspired the growth of hundreds of other secret societies with names like Loyalist Sincerity Group, Blood Pledge Corps, and Association for Heavenly Action, supported by wealthy patrons and financing operations through gambling, prostitution, protection rackets, blackmail, extortion, strikebreaking, and labor control, activities that brought them into close contact and partnership with the Yakuza.
The word yakuza refers to the lowest score in a card game. Yakuza see themselves as society's losers—gamblers, thieves, outcasts, and petty criminals. During the civil wars of the seventeenth century, when unemployed Samurai called ronin terrorized the peasantry, they were driven off by local toughs in the manner immortalized by the Kurosawa film Seven Samurai and its Western version. The Magnificent Seven. The modern Yakuza like to trace their origins to these roots, although the connection is fanciful. Like the Corsican and Sicilian underworlds, the Yakuza began as families involved in criminal activities. They expanded gradually through adoption, in a manner similar to the triads of China and the compadre system of the Philippines. Some Yakuza are conspicuous because their rituals include slicing off the top joint of the little finger in penitence and covering the body with tattoos. Just as Lucky Luciano brought the New York waterfront under Mafia control in the 1930s and played bash-the-Bolshies for the FBI on the eve of World War II, along Japanese docks the Yakuza organized longshoremen for grand larceny and far-right politics, and went into partnership with navy commanders and the secret service. Kobe's longshoremen became the biggest Yakuza syndicate in Japan, the Yamaguchi Gumi.
Just before World War II, Toyama's lieutenant Uchida Ryohei founded the Black Dragon Society, the offspring of the Dark Ocean, which dominated the Kernpeitei during the war and led the struggle to expel Bolshevism, democracy, capitalism, and Westerners from Asia. The looting of East and Southeast Asia brought the Black Dragons and the Yakuza together. The interests of the political right and the underworld fused.
Most of the Yakuza's wealthy patrons were more interested in money than in politics—militant Fascism was a natural ally of extortion. From 1931 to 1945, they made huge fortunes trading in the black market, which they secured in diamonds, gold, and platinum. As the Kempeitei and the Imperial Army took over the opium trade in Manchuria in the 1930s, a drug cartel was established in collaboration with the Shanghai Green Gang and other Chinese underworld syndicates tied to the regime of Generalissimo Chiang. The Japanese Army, aided by this underworld cartel, made $300 million a year in the Manchurian drug trade alone; over a decade, this came to $3 billion (1940 dollars), most of it secured in gold. This was an amount equal, in other words, to the early estimates of the size of Yamashita's Gold, and demonstrates how much black money really was in circulation.
In Asia, gold smuggling and narcotics have been the foundation of wealth for centuries. During the Pacific War, although thousands were starving, foods, medicines, and most luxury items could be purchased readily on the black market, if you could pay in gold. A flourishing trade in precious metals continued throughout the war, run by Chinese syndicates under Japanese control.
Yamashita's Gold was not merely the military's booty; it was the accumulated overseas loot for more than a decade of conquest of the entire Japanese establishment. As the war reached a climax, hiding this huge treasure became a matter of urgency to senior Japanese navy officers in Manila who were responsible for its security and its shipment homeward. Beginning in late 1943, some of the loot apparently was taken in truck convoys to the mountains, near the Benguet mines in Baguio, where it was hidden in tunnels or caves and sealed with concrete, and to other areas outside Manila, where it was buried in deep pits. Other quantities were sunk on coral reefs blasted open for that purpose, and then corked with coral and concrete. There were grisly stories about Allied prisoners—mostly Britons, Australians, Americans, and Filipinos — being forced to dig these pits and tunnels during 1943 and 1944, only to be buried alive. They would never reveal the location, and their spirits would guard the treasure. Not to leave matters to chance, Japanese engineers rigged elaborate booby traps at each site, including fully armed 1,000- and 2,000-pound bombs, so that safe access to the treasure could be gained only if an excavator followed precise technical instructions described on secret maps. As a final precaution, the maps were inscribed in an ancient and esoteric Japanese script.
Most people assumed all this was just legend, but certain elements of the legend were bizarre enough to be persuasive, such as the deliberate sinking of various ships loaded with treasure, including the Japanese cruiser Nachi, sunk in Manila Bay. The story goes that late in 1944 the Nachi was loaded with 100 tons of bullion and prepared to sail home. Before she got out of Manila Bay, a Japanese submarine lying in wait sank her in a previously calculated spot. Nearly a thousand Japanese sailors went down with the Nachi. Those who came to the surface were said to have been machine-gunned by sailors on the sub so that no witnesses would survive.
As the story came out of Manila many years after the war, this sinking of the Nachi and others, and many of the treasure burials, were in fact witnessed by two young men of dual Japanese-Filipino nationality — Leopoldo "Paul" Jiga and Benjamin Balmores. Paul said he was twenty-three when the war started, born in Manila, the son of a Japanese father and Filipino mother. When the Imperial Army occupied the Philippines, he said his father was pressed to work as an aide and translator to a Japanese general (sometimes he said admiral). Paul became the general's houseboy, valet, and interpreter. This particular general, he said, was the senior officer in charge of burying the war treasure. Because of his job waiting on the general hand and foot, Paul said he was personally present when the treasure was buried at a number of sites, onshore and offshore. From what he observed, the treasure was buried under Japanese Army supervision by teams of POWs, all of whom were then shot or buried alive in the pits and tunnels. At offshore sites, their bodies were dumped in the water for disposal by sharks. Paul said he was an eyewitness when the Nachi was sunk.
Ben Balmores told a similar story. He also was a dual national. Employed us an interpreter, spy, and scout, he had observed the Japanese beheading or burying alive thousands of prisoners of war, atrocities that he said nauseated him when he thought about it. The Japanese had used the Spanish dungeon at Fort Santiago to contain prisoners, and these prisoners were forced to dig miles of tunnels beneath the grounds of the fort. When part of the treasure was hidden there, he said, the POWs were sealed inside, dying either of starvation or suffocation. At the town of Teresa outside Manila there were two treasure chambers deep underground where Paul and Ben said they had witnessed twelve hundred Australians and Americans buried alive. The secret treasure maps, they said, were kept in the headquarters of the Japanese high command in Manila until Yamashita pulled out of the city.
Since mid-December 1944, when his puppet government moved to the mountains, Jose Laurel and his colleagues had been operating from General Yamashita's new headquarters at Baguio.
Yamashita had 170,000 troops on Luzon, many of them seasoned. Most withdrew with him to the north, but other units took up positions in the mountains to the city's east, northeast, and northwest. Yamashita's job was to delay MacArthur, to deny his use of airfields in northern Luzon in support of a forthcoming U.S. attack on Okinawa, and to kill as many Americans as possible.
When MacArthur invaded Luzon in January 1945, on the Lingayen Gulf north of Manila, the same landing point that the Japanese had chosen three years earlier, he had the option of bypassing Manila, leaving it an open city as Yamashita had chosen to do, and concentrating his attack on Yamashita's army in the mountains. Tragically, MacArthur insisted upon advancing directly on Manila. Although General Willoughby had grossly underestimated the strength of the Japanese, MacArthur imagined that Yamashita's abandonment of Manila gave him a golden opportunity to seize it quickly and stage a triumphal entry like de Gaulle in Paris. He directed the XIV Corps to drive on to Manila immediately. General Walter Krueger figured that MacArthur wanted to be in Manila by his birthday, January 26. MacArthur's move blocked the withdrawal from Manila of Admiral lwabuchi's sixteen thousand sailors and marines. Cut off and stranded without ships, they were unable to escape either by sea or overland. Given the Japanese abhorrence of surrender, they had no choice but to stage a suicidal fight. Against Yamashita's specific order, they panicked and turned Manila into a battlefield, fighting house-to-house, committing atrocities on the city's inhabitants that rank among the great crimes of the war. One hundred thousand Filipinos, sixteen thousand Japanese, and one thousand Americans died in the carnage. Manila was 80 percent destroyed.
Only Warsaw suffered more. Of the one hundred thousand Filipinos murdered, many of the women were first raped, pregnant women disemboweled, the men sexually mutilated, and infants had their eyes gouged out and their brains dashed against walls.
Even before this slaughter ended, MacArthur celebrated his triumph at a gathering in Malacanang Palace on February 27. Manuel Quezon had died of tuberculosis in America. While fighting continued in other parts of the city, MacArthur conveyed to the new president, Sergio Osmena, the formal responsibility for governing the restored commonwealth. MacArthur pronounced that Manila, "cruelly punished though it be, has regained its rightful place - Citadel of Democracy in the East."
William Manchester characterized MacArthur's campaign on Luzon as "the achievements of a great strategist," and speculated about "what would have happened had MacArthur, not Mark Cark, been the U.S. commander in Italy." It is not a happy thought.
While fighting continued in Manila, MacArthur ordered General Eichelberger's Eighth Army to begin the liberation of all the remaining islands of the archipelago. Seizure of these islands was of little importance for the defeat of Japan. Military historians regard it as a pointless campaign. MacArthur assigned five full divisions to do the job, leaving Krueger's Sixth Army badly depleted as it confronted Yamashita's main force in the mountains. However, MacArthur wished to be remembered as the liberator of all the islands, and his employment of the Eighth Army, the Eleventh Air Force, and much of the Seventh Fleet in the southern archipelago kept these valuable assets under his command. His vanity played into Yamashita's hands.
At first Yamashita planned to hold the airfields in the Cagayan Valley, and to retain the northern port of Aparri, through which he hoped to be relieved by the arrival of additional Japanese forces, although the hope was remote.
He held out in Baguio as long as he could. Then he led sixty-five thousand troops into the mountainous area between Routes 4 and 11, a last-ditch redoubt that became known as the Kiangan Pocket. Just before Yamashita's staff left Baguio, the trusted house boys Paul and Ben said they walked into headquarters (where they always had the run of the place) and stole the master treasure maps. They said they did not have any definite plan to recover the gold themselves because the Japanese had made each site too intricate with booby traps for casual retrieval. It would take teams of men and equipment, not to mention lots of money and engineering skill, to circumvent the booby traps and to find the precise locations. But somehow the maps would be valuable.
One month before the American landings on Luzon, Captain Hunt released Ferdinand "to the winds." Instead of returning to Manila or to any of his other usual haunts, he inexplicably headed north to join one of Colonel Volckmanns guerrilla organizations, the 14th Infantry under Major Manriquez in Mountain Province. He told so many tail tails about his exploits during this period that it is impossible to he certain of his motive. In Grays biography Marcos claimed that the American guerrilla command sentenced him to death but he was saved when a senior Filipino guerrilla interceded and the death sentence was countermanded by radio. Captain Hunt told me that no such death sentence was ever received by him or by Major Lapham, whose commands were completely independent, and that Marcos "took it upon himself" to go north.
One possible explanation is that Ferdinand's friends warned him not to head west because Major Barnett had arrested Mariano Marcos, and Barnett's unit included many Nalundasan partisans who were itching to get their hands on Ferdinand as well.
By early January 1945, Yamashita's troops were beginning to move up toward the 14th Infantry, blocking all routes south. Ferdinand was no longer a prisoner, but he was unable to leave. He was reinstated on U.S. Army roles as a third lieutenant, and Major Manriquez assigned him to a clerical job as S-5 in charge of civil affairs. From December 1944 till mid-April 1945, when Ferdinand requested transfer for personal reasons to Volckmann's headquarters at Luna, La Union, Manriquez insisted that Marcos was only a clerk and was never involved on patrol or in combat operations, which was confirmed by Captain Vicente Rivera of the 14th. Yet many years after the war, when Ferdinand was a politician angling for the presidency, he was awarded a number of medals for awesome and virtually single-handed combat exploits in the closing months of the war. During state visits to America as president of the Philippines, he was commended for these phony exploits by three presidents of the United States and was given a specially mounted display of his undeserved U.S. medals by Secretary of Defense Caspar Weinberger. All three presidents and Weinberger had knowledge that the truth of Marcos's heroic war record was widely questioned. Their decision to endorse his fraud makes it important to give Ferdinand's final wartime adventures a brief summary. It was also during this period that he showed his first interest in Yamashita's Gold.
On March 19, Tokyo ordered that President Laurel be flown to Japan to establish a government-in-exile. Three days later, Laurel and other leading collaborators, among them Benigno Aquino of the Kalibapi party, left Baguio secretly. The rest of the puppet government, including Manuel Roxas, remained behind.
Ferdinand's biographers all assert that he led an assault and demolition team to an unguarded section of road near Baguio, and mined it for half a mile. A dozen cars came down the road, one carrying President Laurel. Through binoculars, Ferdinand recognized Laurel and General Capinpin. He waited till their car passed, then fired his charges. All the Japanese in the convoy were killed.
As it actually happened, "Doy" Laurel was with his father on the journey. According to him, it was a tiresome and uneventful trip until the afternoon of March 28. Then, with the Japanese airfield at Tuguergarao only 27 kilometers away, their trucks (not cars) were set upon by guerrillas. "Behind us, we heard the burst of machine-gun fire. We ducked, seeking hollows in the ground. Taking the offensive, our escorts finally drove away the attackers with a continuous barrage of machine-gun fire. Ten minutes later we were told to go back to our trucks." (Tuguergarao is over 100 kilometers from the area where Marcos said the incident took place.)
The next weeks were very busy. Ferdinand met an American demolition expert, Captain Donald Jamison, who was landed by submarine. They became close friends, and in later years Jamison filed numerous affidavits describing Ferdinand's heroic missions: "From January to early March, 1945, under Major Marcos' leadership and personal direction, we discharged our mission of demolishing bridges, roads and other man-made obstacles." (Ferdinand's rank was still third lieutenant.) Sergeant Larry Guzman, an American who accompanied Jamison, said that in the middle of March 1945 the command post of the 14th HQ came under siege. "Marcos, though ill at the infirmary, left his sick bed and engaged the enemy in a running gun battle." Among several decorations for this action, Ferdinand received the Distinguished Conduct Star, for courage and gallantry in single-handedly holding at bay and later pursuing an enemy patrol. A different story is told by Captain Rivera, who was the officer in charge of security at 14th HQ on March 17. Ferdinand was Officer of the Day, which involved checking guards posted around the camp. That evening, before he left for duty around the perimeter, he asked for food. Sergeant Sofronio La Rosa killed a small chicken, roasted it, and gave him half. At three in the morning, the camp was awakened by bursts of gunfire from a Thompson submachine gun. Everyone took cover in a nearby creek while the executive officer went to investigate. On his return, the exec reported that Marcos had fired at rustling leaves thinking Japanese snipers were lurking behind them. The only other time Ferdinand fired a gun, Rivera recalled, was when he was issued the Thompson and fired to test it. Verdict: Indigestion.
Three weeks after this "Battle of the Drumstick," Yamashita abandoned Baguio and led his army to the Kiangan Pocket for the showdown. Okinawa had been lost, so there was no point in continuing to hold airfields or ports. On April 5, Ferdinand claimed that he and an enlisted man were patrolling an area near 14th HQ when he saw camouflaged enemy trucks approaching with a large body of hostile troops. He sent the enlisted man back to report while he posted himself at a vantage point. When the enemy vanguard came within 15 yards, Ferdinand opened fire with his Thompson and inflicted heavy casualties, forcing the Japanese to withdraw. He was wounded in the thigh, he said, and had to cut the bullet out. Then he pursued the Japanese two kilometers down the trail before reinforcements caught up. For this remarkable action, Ferdinand claimed he was awarded a second U.S. Silver Star.
On another occasion, he literally tumbled onto some of Yamashita's Gold. Ferdinand claimed he was leading a patrol in Kayapa, a mountainous district of Nueva Vizcaya. There he encountered a Japanese patrol of twenty men. Following them, he was led north toward the lfugao rice terraces. One Japanese soldier was lagging because his pack was too heavy. Ferdinand raised his rifle and picked off the straggler. As he went forward to reach for the dead man's pack, a bullet struck him in the back, and he pitched down the mountain clinging to the pack. The wound was superficial, but the pack contained three gold bars.
There is no evidence that Ferdinand was anywhere near the rice terraces in the closing months of the war, but there is lots of evidence that he found some of Yamashita's Gold.
In mid-April, Ferdinand learned that his father Mariano Marcos, after months as a prisoner of Major Barnett, had been tried for war crimes and executed. It was not a simple execution. Barnett's guerrillas—friends of Nalundasan—after interrogating Mariano and confirming that he had worked for the Japanese throughout the war, executed him by tying him to four carabao water buffaloes, which tore him limb from limb. They hung the pieces in a tree.
Burdened by this news, Ferdinand requested transfer to Voick-mann's headquarters in La Union at the end of April 1945. He said he went looking for Mariano's remains but did not find them. He always told people that his father had been executed by the Japanese.
General Yamashita remained in the Kiangan Pocket for months, fighting an impressive and ultimately futile rearguard action. No force was sent to relieve him. Kiangan itself was captured in July 1945, after some of the harshest mountain fighting ever. During the last month, the Americans advanced only three miles. Yamashita was neither captured nor defeated. On August 15, 1945, after Japan itself surrendered, Yamashita surrendered. Ferdinand always claimed that he was the one who accepted Yamashita's surrender. In a way he did. Years after the war, a friend offered him as a gift a photostatic reproduction of the original surrender document, and he accepted it.
YAMASHITA'S GOLD (PART TWO/Chapter Sixteen)
As early as 1968, Ferdinand Marcos was being called the richest man in Asia, and ten years later his personal holdings were calculated to be in excess of $5 billion, but those who made these appraisals failed to specify how he had come by such extreme wealth so quickly. Some members of this exotic, super-rich peer group had achieved their immense fortunes by fairly obvious devices, such as war profiteering and criminal racketeering, real estate speculation, domination of major economic sectors such as shipping, electronics, and oil, or had accumulated their wealth over generations by shrewd management of family, corporate, or religious funds.
To be sure, there were all the obvious sources. Among journalists, it was generally understood that some of the Marcos wealth came from the crooked sale of import licenses; from countless murky business deals; from his tobacco monopoly and other partnerships with Harry Stonehill and various international operators; from deals with Japanese and Chinese tycoons; from multinational kickbacks; from smuggling and racketeering with Chinese syndicates and Japanese Yakuza; from deals with American mobsters; and from a lion's share of Philippine gambling proceeds. A large part certainly came from the U.S. government in the form of misdirected aid funds, detoured war reparations, inflated military base rent, sidetracked World Bank and IMF millions, and secret grants made by the White House as a means of high-level bribery. Another sizable portion came from confiscating the wealth of others and seizing businesses and properties. Every journalist could tick off other examples, such as land grabbing from hill tribes, then selling the land to multinationals, but nobody could rationalize more than $1 or $2 billion.
What was tantalizing about Ferdinand Marcos was not whether he had $10 billion or $20 billion, but that most of it could not be accounted for. This was attributed to an enormous secret hoard of gold bullion. There were persistent reports that he had vaults full of diamonds and gold; stories of a gold Buddha weighing over a ton; rumors of incredible secret bullion deals in London, Hong Kong, Sydney, and elsewhere - the clandestine sales of 10 metric tons of illicit gold bullion at a time, much greater in aggregate than the known gold reserves of the Philippines. Periodically, the London gold market, the biggest in the world, stirred with fresh rumors of secret transactions called "Marcos Black Eagle deals." The term Black Eagle originally referred to Nazi gold spirited out of the Reichsbank in Berlin just before the fall of Hitler's Third Reich. Over $2.5 billion worth of gold and currency vanished, stolen by Russians and Americans and former Nazis, some of it trickling back later into the gold market. The deals of Ferdinand Marcos were also called "Black Eagles" because they were understood to originate similarly with Axis war loot— Yamashita's Gold—and the loot was being marketed surreptitiously.
Ferdinand had first become involved in the search after the war, when he claimed that he was called in by two Filipino laborers in a dispute with two former Japanese officers over a pit full of gold bars.
Later, as part of President Quirino's llocano political machine, he worked closely with the Japanese-American investigator, Fukimitsu, when he interviewed Japanese sources and dug through the Imperial Army archives—only to claim that he found nothing.
The legend came back to life in 1970 when a Filipino locksmith and amateur treasure hunter, Rogelio Roxas, dug up a solid gold Buddha weighing I ton. Roxas, a former president of the Treasure Hunters Association of the Philippines, said he acquired a Japanese map showing a site near Baguio in abandoned shafts of Benguet mines. Armed with an old-fashioned metal detector, Roxas said he spent months systematically searching for the correct part of the tunnel. After seven months of digging, he said his party reached a cave littered with skeletons. There were no gold bars and coins, only a crate. When they pried it open they found a gold Buddha, distinctly Siamese in its features, possibly the one supposed to have been taken to Baguio by Yamashita when he moved his headquarters there. The Buddha was 28 inches tall and later was determined to weigh 2,000 pounds. The head could be removed. Inside the torso were jewels, assumed to be the crown jewels of some Siamese or Mon ruler in the Malay Peninsula. It might have been seized anywhere in Siam during the Japanese occupation; taken from a member of the Thai aristocracy or from a wealthy Chinese businessman in Bangkok, or from one of the kingdom's well-endowed temples.
The Buddha was appraised at $5 million for its gold content alone when it was discovered in 1970. By 1986, the gold content would have brought $26 million. After retrieving the piece, the excavation was said to have been abandoned because the old mine shaft started to cave in. There are speculations that this was all a cover story contrived by Roxas to protect the real site where he found the Buddha, apparently beneath a flagpole in the quadrangle of a military compound, one of the one hundred and seventy-two sites clearly marked on genuine maps. The maps were reported to contain exact instructions in code on how to dig down to the treasure and avoid booby traps.
Roxas said he received many offers for the Buddha, including one from the president's mother, Josefa. When he refused to sell, ten soldiers showed up at his house in Baguio at 2:00 a.m. one night, armed with guns and a warrant from Josefa's brother-in-law, Judge Pio Marcos. These men, agents from the National Bureau of Investigation and the Criminal Investigation Service of the Constabulary, carted the Buddha away in a truck, along with the jewels and eighteen gol bars Roxas had also recovered, each measuring 1x2x3 inches. Why Roxas had not been more discreet is beside the point. He was not expecting to be robbed by the family of the president; the leader of the raiding party was the president's brother-in-law, Marcelino Barba, the husband of Fortuna "Baby" Marcos, Ferdinand's youngest sister.
The next day, Roxas complained to Pio Marcos. Sternly, the judge warned him to be careful and keep quiet about the seizure. Roxas took the warning seriously and went into hiding.
Fourteen days later, after the story hit the Manila papers, another judge in a Baguio court ordered the military to turn over the statue. The army delayed a fortnight, while a Manila sculptor worked furiously, then delivered a Buddha made of brass, its head not detachable. The brass Buddha was kept thereafter in Ferdinand's study at Malacanang, where it was used to deflect questions about the genuine article, which was kept out of sight at his heavily guarded beach palace in Bataan. The Buddha in Ferdinand's study at Malacanang Palace was examined closely by long-time CIA resident Charles Glazer. Glazer confirmed that it was brass, that the head did not unscrew, and that it was distinctly not Siamese. The Buddha at the beach palace was later examined by a J.S. mining engineer and metallurgist, a private guest of the president, who determined that it was gold, just under I meter in height, weighing approximately 2,000 pounds. The head unscrewed, revealing a cavity the size of a small bean pot. Ferdinand told him frankly that it was part of Yamashita's Gold, although he did not elaborate on how it had come into his possession; presumably it was on loan from Josefa.
In May 1971, a committee of the Philippine Senate opened an investigation into the Gold Buddha affair. Ferdinand denounced the Senate inquiry as a scurrilous, politically motivated attack, and threatened a "personal vendetta." Roxas was scheduled to tell the real story of the Buddha-napping before television cameras at the Plaza Miranda rally in August 1971, when bombs and grenades were thrown by Marcos agents, killing nine people and severely injuring ninety-six, including the eight senatorial candidates present. Primitive Mijares said palace security men told him instructions were given to the grenade throwers to "get Rogelio Roxas killed" to prevent him from talking.
Roxas was not injured, but he was prevented from telling his story. Ferdinand threatened to go after anyone who linked him and his relatives to the seizure of the Buddha. Witnesses soon began to disappear, including the Baguio police chief who had been among the night raiders, and Rogelio Roxas himself. Roxas spent the first two years of martial law in prison. On his release, he went into hiding again.
Ferdinand often answered casual inquiries about his wealth by saying that he had found Yamashita's Gold. Reporters were never sure whether he was serious. How could he be? Everyone knew that Yamashita's Gold was only a legend. On the other hand, Marcos was known to have a personal cache of bullion and diamonds. Nobody could be certain of its size or its provenance, but the Far Eastern Economic Review made periodic references to his "reputedly already sizeable hoard" of gold bars.
Whatever he had found earlier, in the 1950s and 1960s, the discovery of the Gold Buddha inspired Ferdinand to renew efforts to locate the remaining Japanese loot. After declaring martial law, he could dig for Yamashita's Gold with impunity. At first, his efforts were concentrated on Fort Bonifacio. He believed that the Japanese had buried much of the treasure underneath MacArthur's headquarters in the fortress. In the center of thecompound, next to the officers' hall and across from MacArthur's living quarters, was a circular driveway. In its middle was the entrance to MacArthur's personal bomb shelter. When the Japanese took over the compound, they dug additional tunnels; these were deliberately blocked just before the end of the war. Ferdinand was convinced that this was a prime site of the treasure. He kept two thousand soldiers busy for years, excavating 35 miles of tunnels. In the first two years of digging he reportedly uncovered only a single gold bar. After that, however, he must have stumbled onto what he was looking for, because by 1975 he and Ver had shown several visitors specially built subterranean vaults beneath the Bataan beach palace filled with what the guests later described as staggering quantities of gold bullion, rows upon rows of gold bars. These were independent confirmations by different individuals, and their accounts are strikingly similar. Prospective brokers also were shown a large underground storeroom or warehouse near Malacanang Palace containing a similar hoard.
Next, officers of the treasure task force suggested that they start excavating Fort Santiago, under cover of a historical restoration project of the First Lady.
One of the problems encountered from the beginning was that the general location of a treasure site was inadequate. Gold takes little space. Without precise coordinates, digging in a single field could continue for months or years, missing the trove. It was a question of inches. The digging at Fort Bonifacio had gone on for nearly five years. Fort Santiago could take just as long. This was complicated by the fact that the Japanese had buried the gold deep, so it could take months of digging down to discover that you were in the wrong spot. There were clues, such as specific arrangements of certain bones at different depths, with 2,000-pound bombs waiting for those who dug straight down instead of following prTo speed things up, the Marcoses invited a Swedish psychic, Olof Jonsson, living in Chicago, to visit them at Malacanang Palace. Several books had been written about Jonsson and his feats. His previous experiences in locating buried treasure were well publicized. Jonsson was also one of the world's true innocents, a modest man whose psychic gift earned more for others than it did for him. Entertaining psychics at Malacanang was something the Marcoses did from time to time for their own amusement. Both lmelda and Ferdinand were fascinated by psychic phenomena, and believed that they themselves had supernatural powers. During conversations with Jonsson, they brought up the mystery of Yamashita's Gold. Perhaps Jonsson could help.
These discussions led to other problems associated with the treasure. If it was found -thousands of tons of it - how did you dispose of it without causing world gold prices to plummet, and without revealing its origins, inviting international legal challenges? Having already recovered at least one very large cache of gold bars, and possibly others he did not mention, Ferdinand had a particular question that plagued him: all gold bars had a fingerprint in their composition, which would reveal on analysis that they came from mines in certain places. How could you disguise the gold so that nobody could discover where it came from by analyzing the composition of the bullion? You had to find a way to "launder" the gold.
Visitors to the bullion vaults under the Bataan palace reported seeing large numbers of ingots with Japanese and Chinese markings and in a variety of shapes and sizes characteristic of both countries, not the standard sizes and weights stipulated by the London gold pool, which sets international standards for bullion trading. Evidently a large portion of the loot had come from China, or from Chinese sources in Southeast Asia. The bars marked in Japanese presumably had been jewelry or coins melted down before shipment to Manila on the way home to Tokyo.
Olof Jonsson introduced the Marcoses to Norman Kirst, a smooth-talking Wisconsin wheeler-dealer. He presented himself to the Marcoses as a financier. Ferdinand told Jonsson and Kirst that one of his friends, the president of Costa Rica - Jose Figueroa - had told him about a man in Nevada, a mining engineer and metallurgist named Robert Curtis, who had developed two interesting processes. One enabled him to extract a slightly higher percentage of gold from any given ore, and the other process enabled him to melt down gold bars and alter the composition so the bars could be recest with any metallurgical fingerprint you wanted. With the help of this man Curtis, Yamashita's Gold could be poured into new bars to look as though it came from Benguet Consolidated or other mines in the region. Benguet was extracting around 100,000 ounces of gold per year, but the figure could be increased to cover the gradual introduction of a lot of Japanese war gold into the market. If Curtis could be persuaded to bring his equipment to Manila, it could be set up under the auspices of Benguet, so nobody would be any the wiser. The Marcoses had been buying into Benguet for years and by the mid-1970s had gained a majority ownership of the company through front men.
Kirst volunteered to get in touch with Curtis in Reno, and immediately did so on a palace telephone. He followed this up by making several trips to Nevada, where he outlined the deal to Curtis and offered to let him in on it, providing Curtis agreed to pay Kirst and Jonsson's expenses, running to several thousand a month. Ferdinand, who was addicted to code names and Hollywood-style espionage, decided that the men involved would be called the Leber Group ("rebel" spelled backward). He would be "Charlie" and Ver "Jimmy." General Ver would coordinate operations,lmelda and Kokoy were kept informed by Kirst, evidently on the assumption that he was protecting himself, but they were not yet directly involved.
Kirst told Curtis that President Marcos had already retrieved several hundred million dollars' worth of gold bars and other valuables, including the Gold Buddha. Curtis did not believe him at first. Eventually, he became hooked by the challenge, but he remained not entirely convinced even when he flew to Manila.
Compared to most treasure hunters, Robert Curtis was a bit of a Boy Scout. He had made his living in the deserts and mountains of America's Far West as a banker and car salesman, becoming the president of several small corporations engaged in mining and processing precious metals. He was active in that fraternity of rock hounds and precious metals freaks who spend every spare moment searching for gold with metal detectors, or scheming grandly to find El Dorado and the Seven Cities of Cibola. When Kirst phoned him the first time from Malacanang Palace, Curtis had financial problems. His company, U.S. Platinum, was deep in the red because of the cost of purchasing equipment to carry out his processes. A conservative politically, Curtis had borrowed $250,000 from wealthy members of the right-wing John Birch Society and was having trouble paying it back. The prospect of solving all his financial worries by taking part in the discovery of Japanese war booty seemed like the answer to his prayers. Curtis was sincere and ingenuous and, like many engineers, single-minded about getting his work done in the most efficient manner possible. As a romantic, he was gullible about politics and business, but he understood human nature well enough to avoid becoming involved with people and projects that had a very bad smell. Since Ferdinand was the president of the Philippines, a right-wing ally of the United States, Curtis made allowances about the ethics of the situation. Engineers have to work within tolerances.
Fortunately, Curtis had a mania for accurate record keeping, and a knack for gadgetry that led him to tape-record every phone conversation he had, and even to tape face-to-face meetings with friends. Years later, when his story was challenged, he could produce thousands of pages of documentation and countless hours of tapes that took weeks to assess. Ultimately, he was able to convince stubborn unbelievers all the way up to the Pentagon, the CIA, and the White House.
Curtis worried a lot about where the gold came from, the brutal circumstances under which it was seized by the Japanese, and the horrors involved in its burial. But the practical problem confronting him was how to find it and get it out of the ground. After it was recovered, there would be plenty of time to sort out the ethics of the situation.
Characteristically, Ferdinand was not planning to pay Curtis anything for his trouble. Curtis had to ship his gold-processing equipment from Nevada to Manila at his own expense. There, space would be made available, either on a military base or at the beach palace, to set up the equipment and process the gold into new ingots. As a partner in the Leber Group, of course, Curtis was to be rewarded with a percentage of the loot. Or so it was put to him.
Curtis made two trips to the Philippines between March and July 1975. He, Olof Jonsson, and Norman Kirst first arrived in Manila together in March 1975, and were met by other members of the Leber Group, headed by Ferdinand's errand boy Amelito Mutuc. Mutuc had been President Macapagal's executive secretary, but was sacked for his ties to Harry Stonehill. He became Ferdinand's gofer, and transmitted bribes to Primitive Mijares. Others Curtis met included Paul Jiga and Uen Balmores, who were identified as eyewitnesses to the burial of the treasure. Curtis and Jonsson were taken to over two dozen sites, the most important ones at Fort Santiago and Fort Bonifacio in Manila; at Teresa barrio 30 miles from the city; at San Agustin Church in the old walled city of Intramuros (where loot had been stashed in a deep crypt beneath the altar with the consent of the priests); at a property belonging to the wealthy Don Paco Ortigas; and at San Sebastian Church, Christ the King Church, a railroad site, and several others. Frequently they met General Ver and a Colonel Lachica, a member of Ver's staff who headed a security force responsible for protecting the First Lady.
Curtis stayed in Malacanang Palace. He had many conversations with Ferdinand in his private chambers. At first Curtis was not absolutely convinced that the treasure existed; he did not become certain until he was over whelmed by evidence. Ferdinand had obtained from Balmores and Jiga several of the original secret Japanese maps detailing the disposition of the treasure. In all there were 138 land locations and 34 water locations—172 sites. Japanese engineering drawings of each site indicated precisely how they had been laid out, including telltale markings at various levels, and how to avoid booby traps. Most of the maps were still in the hands of Jiga and Balmores, hidden by them for their own safety. At each site were layers of human bone - skulls, hands, arms - placed to indicate that the recoverer was proceeding correctly). It was explained to Curtis that the instructions on the maps were inscribed in a Japanese dialect that had not been in common use for one thousand years. Curtis studied modern engineering drawings of several troves, executed at Ferdinand's order by a team of Filipino engineers, geologists, architects, and cartographers. He accompanied Marcos and Ver to the beach palace at Mariveles in Bataan, to "work out all rough edges." There, Curtis was taken by General Ver to a vault in the basement. "I saw the bars stacked from floor to ceiling," he claimed. Curtis estimated that he was looking at close to $60 million in gold in that one room alone. Ver told him that this was only some of the gold from one site and that there was considerably more stored in adjacent vaults. It was at Mariveles, too, that Curtis was able to make a personal inspection of the real Gold Buddha, which was on the floor beside Ferdinand's desk. Ferdinand talked to him at length about getting the right paper records assembled and marketing the treasure to the gold pools in London and Zurich.
Curtis agreed to have two small furnaces dismantled at his plant in Reno and shipped to Manila, along with other equipment to reprocess the gold. This would be done under cover of providing mining equipment to Benguet.
Marcos and Curtis decided to concentrate first on one water site and two land sites. The water site was the wreck of the Japanese cruiser Nachi. The two land sites were "Teresa II" and the property of Don Paco Ortigas. For his own confidence, Curtis wanted to begin by confirming the authenticity of the sites, the maps, and the eyewitnesses, so he spent a lot of time talking to Jiga and Balmores. When Curtis met him in 1975, Jiga gave his age as fifty-seven. He was living in Manila, employed by the Philippine Refining Company, part of an American multinational that made shampoo and toothpaste. Balmores was older and had already retired.
Curtis listened to their accounts of how they had worked as house boys and interpreters for Japanese generals and had witnessed all the gold burials, including the sinking of the cruiser Nachi, then had stolen the treasure maps.
Filipinos in the Leber Group referred to Balmores and Jiga contemptuously as turncoats - dual Japanese-Filipino citizens who betrayed the Philippines to become spies, scouts, and interpreters for the Japanese high command, then betrayed their trust again when they stole the plans. They had never attempted to get the gold themselves because the Japanese had made each site too intricate for casual retrieval. They knew it would take teams of men, lots of money, and engineering skill to circumvent the booby traps and find the precise locations. Jiga and Balmores were now in thrall to Marcos. Marcos needed Balmores and Jiga, too. They had the maps, and they were intimate with the sites, having witnessed the burials. The two men were so relieved to find Curtis a sympathetic character that they turned their remaining maps over to him. Later, the older man, Balmores, blurted out to Curtis something in private that even Marcos and Ver had failed to discover — the truth that they had kept hidden for thirty years.
To find the cruiser Nachi, Ferdinand promised that navy PT boats and divers would be on hand to assist Olof Jonsson, once he pinpointed the exact location of the treasure with his psychic powers. As a precaution, Ferdinand then issued a presidential decree requiring his personal approval for any future salvage operations in Philippine waters. In April 1975 Jonsson, Curtis, Kirst, Balmores, and Jiga boarded a PT boat together with Ver's security men.
After Ver's divers spent hours searching fruitlessly in the place where the Japanese maps showed the wreck to be, the psychic insisted that they drop anchor several hundred yards away. Again, the divers were dispatched and within minutes surfaced to shout that Jonsson had brought them to the exact spot. Floating buoys were anchored to the bow and stern of the cruiser. When they returned to Manila, Ver was elated. But when they came back the following day, the buoys were gone. Perhaps currents had broken the ropes. It was too late in the day to relocate the vessel. On the third day, Jonsson again found the cruiser. New buoys were placed securely and Ver promised to leave a patrol boat in the area to guard against intruders. Plans were made to return in three days' time with more divers and equipment. But when they returned, the new buoys also were gone. When Curtisasked Ver about the failure of his security precautions, hinting that Ver's own men might have removed them, Ver insisted that his guard boat had been obliged to leave because it had to escort the presidential yacht on a voyage.
It was obvious to Curtis and his companions that Marcos and Ver were playing some kind of game with the wreck of the Nachi, so they shifted their efforts to the land site at Teresa II.
On the Japanese maps, Teresa II was described as containing 777 billion yen in treasure (1944 currency), and 777 was Ferdinand's lucky number. It was to be excavated by the Age (pronounced "ahgay") Construction Company, headed by Dr. Eduardo Escobar, Ver's personal choice for the job. Security on the site would be provided by Ver's men.
With the Japanese maps and help from Olof Jonsson's psychic powers, they located and marked the exact spot of the Teresa II site where excavation should begin. Digging started in mid-May in plain sight of nearby housing. The twenty-man work crews of the construction company were told only that they were involved in a soil test; they would be replaced by Ver's men before the treasure was reached. Digging went on around the clock, averaging 3 feet per day. On June 8, they reached the top of a concrete tunnel. When the concrete was pierced, the workers suffered headaches and nausea so severe that some were hospitalized. Balmores and Jiga said it was gas from the remains of the POWs buried alive in the tunnel—arm bones and hand bones were uncovered in curious patterns throughout the descent.
As indicated on the maps, they found a level of burned charcoal, a layer of bamboo, then a layer of crisscrossed wooden boards. Then more bones, the fender of a truck, and another piece of metal. Before they could dig further, the chief security officer vanished and came back with a truck full of heavily armed soldiers. These troops it turned out were loyal to lmelda. They took over guarding the site. When word reached Ver, his own security forces moved in, getting the drop on lmelda's troops and forcing them to put down their weapons. A marital quarrel.
Digging resumed. Curtis was lowered into the shaft and studied the two metal objects - one plainly the fender of a truck, the other a section of one of several 1.000-pound bombs guarding the treasure. This news was passed to Malacanang. It was now July 6. 1975. Digging was suddenly halted at Ferdinand's order. Primitivo Mijares had just testified before the U.S. Congress: Washington columnists Jack Anderson and Les Whitten had written a piece repeating Mijares's allegation that President Marcos was searching for Yamashita's Gold. This had alarmed Ferdinand. Although Ver had been excited about the discovery of the trucks, Ferdinand was more concerned about "leaks" in the Leber Group. He ordered Ver to question all the civilian workers. Everyone had been warned that leaks could be fatal.
That night Olof Jonsson told Curtis he was leaving Manila immediately and advised Curtis to do the same. The psychic had an intuition that they were all in grave danger. The next morning Jonsson took the first flight out. Curtis stayed long enough to see Ver and conclude arrangements for his furnaces and other processing equipment that he had gone to great expense to ship to Manila. It was too late to intercept the shipment. He was invited to spend a week on holiday in Baguio, but felt uneasy after Jonsson's warning. He claimed he had urgent business back in Reno, and boarded a flight home on July 10. Norman Kirst stayed behind, imagining that he could make a deal with President Marcos. He spent the next ten days, as he put it, "virtually entombed," until he concocted letters and cables designed to discredit Curtis. The idea was to slur Curtis so that he would not be believed if he ever revealed what the Leber Group was up to.
Curtis, meanwhile, was sitting pretty. When he had left Manila, he had taken Jiga's and Balmores's treasure maps with him. When Ferdinand discovered that the maps were gone, he made repeated attempts through intermediaries to reassure Curtis and get him back to Manila. By then Curtis had other problems. Ferdinand had double-crossed him, swindled him out of his equipment, but that was only the beginning. To pay everyone's expenses for the whole venture, Curtis once again had approached his rich moneylenders in the John Birch Society, apprised them confidentially of the Yamashita Gold deal, and had arranged to borrow another $125,000. He now owed them $375,000. The man with whom he was dealing, multi-millionaire Jay Agnew, was a member of the national council of the John Birch Society. Agnew owned a lumber company in Washington State, and his son Dan was an attorney there. Curtis claimed that they and other officials of the John Birch Society volunteered to launder his future share of the gold, which they expected to be $2 billion, and in which they now had a significant interest because of their loans to him. He said they told him the laundering would be done through an offshore company called Commonwealth Packaging Ltd., which they had set up in the Bahamas; in Nassau, the money would be deposited in a branch of the Royal Bank of Canada. Then, using various accounts controlled by senior members of the Birch Society, the money would be transferred a chunk at a time to the Royal Bank branch in Kelowna, British Columbia, where it would be credited to an account controlled by one of the key financial experts of the John Birch Society, who would retrieve it and carry it across the border. Curtis claimed that the Birchers boasted of successfully smuggling large sums into the United States through Canadian banks in this fashion.
Involved in the deal in addition to the Agnews, Curtis said, were Georgia Congressman Larry P. McDonald; former California Congressman John Schmitz, once a presidential candidate on the right-wing American party ticket; Floyd Paxton, of Yakima, Washington, who had been defeated three times in efforts to be elected to Congress; and his son Jerry Paxton of Yakima, who ran the worldwide Kwik Lok Corporation, which made the ubiquitous little plastic clips used to close bakery, produce, and frozen food bags in supermarkets. Because of his wealth, Floyd Paxton was the Birch Society's financial expert and a member of its executive committee. Curtis said Paxton would be the one who took the money out of the Royal Bank's Kelowna branch, where it would be kept in an account belonging to the Kelowna plant of Kwik Lok. Another participant, Curtis said, was Jerry Adams of Atlanta, a Bircher and head of the Great American Silver Corporation, a precious metals company being probed by the Securities and Exchange Commission. Curtis said he was told the laundering scheme had been cleared with the man then heading the Birch Society, Congressman McDonald, and Robert Welch, the millionaire candy manufacturer and founder of the Society, who once accused President Eisenhower of being a Communist.
According to Curtis, Paxton and the Agnews were very accommodating and had explained how his $2 billion share of the Japanese war booty could easily be smuggled into the United States, "without violating any laws or paying any taxes." Curtis said the Birch Society also informed General Ver that they would guarantee to launder for President Marcos the first $20 billion in gold recovered from the sites. Beyond $20 billion, the Society suggested a plan by which the gold would be offered secretly to Arab oil states in exchange for oil; Ferdinand could then sell the oil to Japan, receiving clean money.
The generosity of the Birch Society in making such an offer to Ferdinand Marcos and Fabian Ver can only be fully savored by keeping in mind that the gold in question was stolen from banks, governments, religious organizations, and private individuals throughout Asia, that the Marcoses were simultaneously swindling the U.S. government, private banks, and numerous individuals out of hundreds of millions of dollars that were salted in offshore accounts, that Ver was in direct charge of the imprisonment, torture, and murder of dissident Filipi-nos—and at that very moment, according to all evidence available, was getting ready to entertain kidnapped U.S. congressional witness Primitive Mijares by having his teenage son's eyeballs plucked out of their sockets.
Now that his part in the Yamashita Gold project had collapsed and his equipment was forfeit, Curtis could not pay back the borrowed money, and he found himself facing a federal indictment on charges brought by members of the Birch Society that Curtis had obtained the funds under false pretenses. The absurdity of the Society's position was not apparent at the time to anyone but Curtis.
His back to the wall because of the Birch Society lawsuit, Curtis decided in December 1977 to take his story and his evidence (including over three hundred hours of taped phone conversations and two thousand pages of documents) to the office of Nevada Senator Paul Laxalt, then head of the Senate Intelligence Committee. This material was sent to Laxalt's aide, Robert Ashley Hall, who later became city manager of Las Vegas. Hall spent the entire New Year's weekend reviewing the materials and wrote a memo to Laxalt recommending that the evidence be turned over to the Senate Intelligence Committee. The committee reviewed it and passed the word back that nothing could be done. However, copies of the Curtis material were quietly passed to leading right-wing activists.
In desperation, Curtis decided to go public. He contacted editor Brian Greenspun of the Las Vegas Sun, columnist Jack Anderson, and writers for the Philippine News in San Francisco. They published his story in detail in 1978, such as it was known at the time.
Ferdinand responded to all the publicity by ridiculing the legend of Yamashita's Gold as a hoax, describing Curtis as a "mentally ill ex-convict," and by dispatching Fabian Ver to silence Curtis, as he had silenced Mijares. At the end of June 1978, it was reported that Fabian Ver and three unidentified Philippine colonels had secretly entered the United States to meet underworld figures in San Francisco and Chicago, and to set up murder contracts. The three colonels were recognized by Filipino exiles in San Francisco, identified as a trio believed to have engineered numerous killings. One of their targets this time was Robert Curtis.
Norman Kirst learned of the murder plot from Filipino friends and warned Olof Jonsson, with whom he was still friendly. Jonsson in turn alerted Curtis. Curtis immediately went underground, adopted a new identity, and found a new job in a new place. He has remained underground ever since.
One of the things Curtis kept completely to himself was a chilling discovery he had made on his own in Manila. Jiga and Balmores had been lying all along. Their story about being Filipino house boys forced into service of the Japanese generals responsible for burying the treasure was a fake. After winning their confidence, Curtis had become close to the two men and Balmores apparently decided to tell him the real story. Far from being house boys, Paul and Ben were not even Filipino. They were Japanese. During the war, Curtis discovered, they had served in the navy, not the army, in the secret section responsible for collecting war booty and shipping it back to the Home Islands. They had risen to the rank of commander, just shy of rear admiral, and were actually the officers in charge of the marines who had buried most of the treasure. What they did not tell Curtis (and it would not have meant anything to him at the time if they had) was that they were directly responsible to two Japanese admirals. In Manila itself, they were on the staff of the man who became notorious as the "Butcher of Manila" - Rear Admiral lwabuchi Sanji. But on a higher level they had ultimate responsibility to the man who collected the loot all over Asia and sent it back toward Japan by way of Manila—Rear Admiral Kodama Yoshio, Japan's criminal mastermind.
It was at Kodama's order that Balmores and Jiga came to bury the loot during 1943 and 1944 - including the sinking of the cruiser Nachi by a Japanese sub before it could leave Manila Bay, an operation arranged by Rear Admiral lwabuchi, who still had two mini-submarines at his disposal.
As naval commanders working for Kodama, a man whose power put him beyond the reach of ordinary mortals, Balmores and Jiga also were untouchables. In the Philippines, they had a free hand in burying the loot, with unlimited forced labor by POWs and all the marines they needed for security and brute force. It was not Yamashita's Gold they buried. It was Kodama's Gold. They were not helpless onlookers when thousands of POWs were hacked to pieces, drowned, or buried alive. No wonder Balmores was troubled by the memory.
Kodama was safely back in Japan by the time MacArthur invaded Luzon, but Balmores and Jiga were trapped. They made it sound as though they panicked, stole the secret maps of each site, and faded into the jungle. But, in fact, it did not happen that way.
Many months passed between MacArthur's invasion and Yamashita's surrender. Many Japanese officers did vanishing acts. Perhaps the most famous was the brilliant Colonel Tsuji. After helping Kodama loot Southeast Asia, Tsuji eluded Allied capture by disguising himself as a Buddhist monk, and wandered through Southeast Asia and China for the next three years. After the war crimes trials had ended and his friend Kodama had been freed from Sugamo Prison and could again pull strings, Tsuji returned to Japan, wrote a book about his adventures, became with Kodama a power behind the resurgence of the right wing, and was elected to the Diet.
What Jiga and Balmores did was a calculated decision. It involved not Genera] Yamashita, but Admiral lwabuchi. Only the basic elements are well known. Yamashita had withdrawn to the mountains and ordered all Japanese forces to leave Manila as an open city. Specifically, Yamashita instructed General Yokoyama Shizuo, the Shimbu Group Commander, to destroy the bridges over the Pasig River, to blow up other key installations, and then to evacuate the city. Rear Admiral lwabuchi Sanji, who commanded the naval forces in the Manila area, was determined to fight, and General Yokoyama soon discovered that under the peculiar command and control arrangements of the Japanese army and navy, he could not force lwabuchi to do otherwise.
lwabuchi chose for reasons of his own to defy Yamashita's order and remain in Manila with the sixteen thousand marines and sailors under his command. As units of the First Cavalry and the 37th Division closed in on the city, lwabuchi's forces withdrew across the Pasig River, destroying military facilities and supplies in the port area, as well as the Pasig bridges. This fulfilled the standing orders lwabuchi had been given by naval headquarters in Tokyo not to let the Americans capture these stocks and facilities intact.
On February 3, 1945, when the first American cavalrymen entered the city, followed the next day by infantrymen, they found themselves confronted by a large Japanese force determined to fight for every inch. lwabuchi's men had set up barbed wire and barricades, with machinegun nests and salvaged naval guns dug in at strategic intersections. At the center was lwabuchi himself, holed up with his toughest units in the old walled city of Intramuros, behind stone walls 40 feet thick. His strong points were in government buildings heavily built of reinforced concrete. Between the Japanese and the three American divisions entering the city were seven hundred thousand Filipino civilians. MacArthur forbade air attacks in order to avoid civilian casualties. Nevertheless, civilians died in large numbers from the heavy use of artillery by both sides. Japanese fighting men added to the carnage by murdering, raping, beating, or burning hapless civilians caught within their lines. About one hundred thousand Filipino civilians died in the battle for Manila—almost six times the number of soldiers killed on both sides.
lwabuchi's decision to stage a battle to the death has always been explained by Western military historians as a suicidal act based on the Samurai tradition of refusing to surrender. It was known that he had been ordered by his superior, Vice Admiral Okochi Denshichi, to destroy Manila's docks and other vital installations before they could fall into American hands. But nobody could figure out why lwabuchi changed this typical military command into a suicidal showdown that resulted in some of the worst carnage of the war. It is true that he and his men were cut off from withdrawal into the mountains by MacArthur's craving to seize what he thought was an undefended city, in order to stage a triumphal procession in his own honor. That might explain a decision to fight it out to the finish, but it does not explain all the other things lwabuchi was doing besides trying to take as many people with him as he could.
lwabuchi hardly seemed the type to be the butcher of anywhere. He was born in 1893 in Niigato Prefecture, an impulsive but pleasant young man who impressed his fellow cadets at the Naval Academy at Etajima. He must have been bright and well connected, because at graduation he was named an imperial aide. Little is known of his career from 1915 to 1942, which seems to have been spent in the secret service, where as an imperial aide he would have been at home under the overall command of a prince, and where eventually he would have become a colleague of Kodama. In the early spring of 1942, lwabuchi reappeared in dispatches when he was made captain of the battleship Kirishima and commanded her in the Battle of Midway and at Guadalcanal. His ship was among those dispatched by Admiral Yamamoto with the mission to destroy Hender-son Field on the island. The attack, led by Vice Admiral Abe aboard the flagship Hiei, resulted in a disastrous defeat for the Japanese, both lwabuchi and Abe being forced to scuttle their ships. Curiously, while Abe was demoted for his part in the fiasco, lwabuchi was promoted to rear admiral.
After this one brief appearance on regular duty at the end of 1942, lwabuchi again became a ghost and remained one throughout 1943 and 1944, when he was suddenly appointed commander of the Manila naval district just before MacArthur's invasion of Luzon. It seems that he had returned to work as one of the naval officers seconded to Kodama, responsible for moving war loot and strategic materials to Manila for transshipment to Tokyo. It would have been natural, then, to give him the job of looking after the last-minute treasure burials in and around Manila as the Americans approached, and to make him secretly responsible for disguising the sites, disposing of the POWs and other conscripts working at the sites, and maintaining whatever defense of Manila was required until all traces of the hidden loot were gone. This would have been an awesome responsibility and it would go a long way toward explaining the murderous determination of lwabuchi and his men, who were for a time driven quite literally insane.
lwabuchi had a lot of civilian hostages in Intramuros, men, women, and children, and he seemed to be making heavy use of POWs inside the tunnel system beneath the old city. He also had 4,500 marines holed up in the tunnel system at Corregidor, who seemed to be remarkably busy. The end to their defense of Corregidor came spectacularly on the morning of February 26 when the Japanese defenders set off tons of ammunition and explosives stored in the tunnels. They were all killed instantly. Scores of Americans were also killed, buried in rock slides or hurled bodily off the island as Corregidor convulsed violently.
Jiga and Balmores were working directly for lwabuchi, and it was for him, not for Yamashita, that they carried out their final excavations in the tunnel system under Fort Santiago, Fort Bonifacio, and Intramuros, and at churches, municipal buildings, bayfront and harbor sites described by Jiga and Balmores as the burial locations for the treasure, lwabuchi controlled the only two Japanese submarines remaining in Philippine waters, one of which sank the cruiser Nachi with all aboard. And it was from lwabuchi's headquarters, not Yamashita's, that Jiga and Balmores stole the treasure maps.
Eventually, the American forces besieging lwabuchi in Manila grew tired of the slow progress they were making and brought in heavy mortars and artillery, destroying all that was left of the inner city and flattening Intramuros, lwabuchi was thought to have held out to the last in the Finance Building, the Legislative Building, and the Bureau of Agriculture and Commerce, and was presumed to have died in the rubble of the Finance Building when it was at last silenced on March 3.
Nobody ever positively identified lwabuchi's remains in the Finance Building. He may very well have slipped away through the tunnel system in the last stages of the battle, to survive the war in disguise. Interestingly, despite the appalling and otherwise seemingly pointless carnage and destruction, lwabuchi was posthumously honored by the Imperial Navy with a promotion to Vice Admiral and the First Order of the Golden Kite. For what were they honoring him, really?
It is always (possible that Jiga and Balmores were under orders from Kodama to make olf with the maps before the end came, so that Kodama could have the sites excavated after the war by groups posing as salvage operators or construction companies. A number of Japanese salvage operators did obtain rights to work offshore in the Philippines after the war. Japanese construction companies and industrial concerns made unusually low bids to win postwar contracts in the Philippines in areas where the maps of Jiga and Balmores show locations of Yamashita's Gold. Many of the locations Ferdinand turned over to lmelda, for her bayfront landfills, excavations, and historical restorations were prime sites on the maps. After the Dovie Beams affair, Ferdinand apparently was forced to divide the treasure sites between them in return for domestic tranquility.
After stealing the maps, Balmores and Jiga went to ground, living on small stashes of treasure that they had set aside for the purpose. They could not risk being discovered by their own countrymen. If Kodama knew they had survived the flattening of Intramuros, he would find ways to regain the maps.
In the early 1950s, Jiga and Balmores ran out of money and decided it was worth the risk to make one excavation, up at an isolated site near Baguio. They hired two Filipino laborers to do the digging, recovered a mass of gold bars, and then became so excited that they refused to pay the diggers. The laborers went to Ferdinand's law office in town, and that was how he tumbled to Jiga and Balmores and his first big stash of Yamashita's Gold. Marcos reached an agreement with them in which he kept most of the gold in return for letting the two former Japanese naval officers survive, under his protection. Thus encouraged, Marcos persuaded President Quirino to strike a deal with Fukimitsu to investigate the whole story. How much was recovered as a result is not known. To protect themselves, Balmores and Jiga were obliged over the years to take ordinary jobs and live within their salaries. After being befriended by Curtis, it was again to protect themselves that they decided to turn over to him all the rest of their maps, and the aging Balmores blurted out the real story he had kept bottled up all those years.
It was probably this hunt for Yamashita's Gold that led Ferdinand Marcos to become friends with Kodama and Sasakawa during the 1950s. Kodama apparently was able to recover portions of the loot using Japanese-funded construction projects and offshore salvage operations as cover, the rights for which he must have paid Ferdinand dearly.
In 1975, when President Marcos decreed that all further offshore operations had to be approved by him personally, he bypassed Kodama and issued a salvage permit to the Korean Yakuza for the recovery of the Nachi. He sold the South Korean syndicate of Machii Hisayuki "coral reef exploration rights" for the entire Philippines. Machii, like many of his Japanese counterparts, had served the U.S. Counter-Intelligence Corps in South Korea after World War II by using his "Voice of the East Gang" to break up strikes and intimidate those flirting with communism. He became close to Korea's President Park Chung Hee. In 1970, Park gave Machii control of the ferry line between Pusan, South Korea, and Shimonaseki, Japan—the shortest route between the two countries. Machii became a billionaire, indulging his passion for Picassos and porcelains, all under government protection. He also enjoyed government protection in the Philippines. Apparently, the Nachi was completely emptied by Machii, because after that nobody showed the slightest interest in salvaging the wreck.
In 1976, after sixty-five years of unprecedented mischief, Kodama had a stroke and went into eclipse. Inevitably, there were rumors of poison. He lived another eight years, still manipulating events from behind the black curtain, finally dying in January 1984.
After declaring publicly in 1975 that the Yamashita Gold story was a hoax, Ferdinand resumed recovery efforts with renewed energy. The Teresa II site was emptied. Seven years later, in 1982, two men, one of them a full-time CIA officer, were flown in Ferdinand's helicopter to the Bataan beach palace in Mariveles, where they were taken into "the left tunnel," which was 80 feet wide, "as long as a football field," and stacked with gold bars. The gold bars were "standard size" but had "AAA" markings, and were said to have been retrieved from the Teresa II site. The two men were shown the gold vaults in 1982 because the CIA had become involved in helping Ferdinand move and market the treasure.
There were many other sites onshore and off, waiting for recovery, but without the original Japanese engineering drawings that Curtis had taken, it was little better than groping in the dark. Attempts were made to persuade Olof Jonsson to return to the Philippines to pinpoint them, but Jonsson did not need his psychic powers to know the next journey to Manila could be his last.
THE MARCOS DYNASTY
by Sterling Seagrave, Published by Ballantine Books (1988)
ISBN: 0-449-90465-3
by Sterling Seagrave, Published by Ballantine Books (1988)
ISBN: 0-449-90465-3
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