Cold Warriors, Gold Warriors: A look back at America’s Secret Recovery of Yamashita’s Gold

Introduction

Since the war in Ukraine began in February 2022, many have wondered why NATO and other American allies have gone along so devotedly with the war that for many years the US had wanted to provoke between Russia and Ukraine. Europe, Japan, and South Korea have a long-term interest in having good relations with Russia, but they have done nothing to moderate the US desire to escalate the war and isolate Russia. They have gone along with economic sanctions that have ended up being a spectacular own goal. The United States destroyed Germany’s energy infrastructure, the Nord Stream Pipeline, and the NATO countries just pretend they don’t know who did it. Why are they willing to humiliate themselves to this extent, accepting their status as vassals and client states, even when there is such obvious detriment to themselves?

The question belies a certain naivete within even people who consider themselves cynics. It is easy to be unaware or to forget just how depraved the rules-based international order is and how sordid its beginnings were. The history told in a book published in 2003, Gold Warriors, reminds us of the tremendous crimes committed by the US and its new allies in the aftermath of World War II. The allies don’t complain because they are in it up to their necks along with the hegemon.

Gold Warriors: America’s Secret Recovery of Yamashita’s Gold is a meticulously researched book that describes how the gold and treasures plundered from Asia by the Japanese Empire were confiscated by the US and used as slush funds in the following decades to build its rules-based international order. The book answers the question of why the allies go along and never forge an independent path that would be more in the interests of their people. The reason is that the US and its allies should be perceived as similar to the various organized crime families that exist in large urban areas like New York. There is one large family that controls most of it but many others in the region. They may compete for turf occasionally, but their basic interest is the status quo. Crime syndicates collaborate in evading the justice system. Governments collaborate in evading the will of their citizens. They have collaborated and conspired on too much in the past. Each knows what the others have done, so the mutual guilt creates the veil of secrecy and a tacit conspiracy to maintain a façade of good will.

The four excerpts that follow illustrate this point. The first three are from reviews of the book, and the last is the epilogue of the book. I am posting it here (3.7% of the content) with the intent of non-commercial fair use, not to deprive the author and publisher of income but to promote the work and perhaps inspire some readers to obtain it.

Reviews    

Roland Kelts, The Japan Times, July 11, 2004 (non-paywalled version here):

Though the Seagraves’ book may at times read like a political thriller of Joycean scope and detail, it is no less than their attempt to provide readers with the entire provenance of the stockpiled loot known as Yamashita’s Gold that is, in the end, the story’s central character.

The authors’ chief contention is that the vast riches gathered by the Japanese in Asia—and (yet more astonishingly) much of the Nazis’ European loot—were combined, hidden, disseminated, and exploited by some of the most famous names in history, mostly to finance anti-communist efforts, prop up key global banks and manipulate the value of currencies to suit U.S. strategy. Critics of the book and its authors cite “overheated” prose and periodic bouts of speculation. A reviewer for Publisher’s Weekly argues that the authors’ repeated references to suppressed evidence, however accurate, “make it impossible for the lay reader to judge the book’s credibility.” And Gilbert Taylor in Booklist, while applauding the Seagraves’ plethora of sources, points out the challenge posed by their occasional reliance on “the word of single individuals.” But in this reader’s opinion, the graphic, detailed evidence provided on the two CD-ROMs make the book’s central and most compelling claims hard to refute. Indeed, it’s hard not to sweat a little when confronted with such a well-documented narrative that implicitly locates real power so far from the people of so-called democratic states.

Douglas Valentine, Counterpunch, September 23, 2003:

Gold Warriors is more than a book about Japan’s “serious, sober and deliberate” plundering of Asia’s treasure from 1895 until 1945, and its collusion after the war with American officials to recover and use the loot as a secret political action slush fund to promote right wing regimes. Gold Warriors: America’s Secret Recovery of Yamashita’s Gold is a journey into the darkest recesses of history and the human soul. Authors Peggy and Sterling Seagrave not only unravel one of the greatest crimes and cover-ups ever, they reveal something new and startling about the depths of human depravity and barbarity, and the human capacity for deceit.

Chalmers Johnson, London Review of Books, Vol. 25 No. 22, November 20, 2003:

Almost as soon as the war was over, American forces began to discover stupendous caches of Japanese war treasure. General MacArthur, in charge of the occupation, reported finding “great hoards of gold, silver, precious stones, foreign postage stamps, engraving plates and . . . currency not legal in Japan”. His officials arrested the underworld boss Yoshio Kodama, who had worked in China during the war, selling opium and supervising the collection and shipment to Japan of industrial metals such as tungsten, titanium, and platinum. Japan was by far the largest opium producer in Asia throughout the first half of the 20th century, initially in its colony of Korea and then in Manchuria, which it seized in 1931. Kodama supplied heroin and liquor to occupied China in return for gold coins, jewelry, and objets d’art, which the Japanese melted down into ingots...

On orders from Washington, Lansdale supervised the recovery of several Golden Lily vaults, inventoried the bullion, and had it trucked to warehouses at the US Naval base at Subic Bay or the Air Force base at Clark Field. According to the Seagraves, two members of Stimson’s staff, together with financial experts from the newly formed CIA, instructed Santa Romana in how to deposit the gold in 176 reliable banks in 42 different countries. These deposits were made in his own name or in one of his numerous aliases in order to keep the identity of the true owners secret. Once the gold was in their vaults, the banks would issue certificates that are even more negotiable than money, being backed by gold itself. With this seemingly inexhaustible source of cash, the CIA set up slush funds to influence politics in Japan, Greece, Italy, Britain and many other places around the world. For example, money from what was called the “M-Fund” (named after Major-General William Marquat of MacArthur’s staff) was secretly employed to pay for Japan’s initial rearmament after the outbreak of the Korean War, since the Japanese Diet itself refused to appropriate money for the purpose. The various uses to which these funds were put over the years, among them helping to finance the Nicaraguan counterrevolutionaries in their attacks on the elected government in Managua (the Iran-Contra scandal of the Reagan Presidency), would require another volume. Suffice it to say that virtually everyone known to have been involved with the secret CIA slush funds derived from Yamashita’s gold has had their career ruined.

Epilogue from Sterling Seagrave and Peggy Seagrave’s

Gold Warriors: America’s Secret Recovery of Yamashita’s Gold

(Verso, 2003), Epilogue, pages 235-243          (other reviews of the book here)

Terms used in the epilogue:

M-Fund: A fund established during the occupation of Japan by General MacArthur. It was based on the gold and treasure looted by Japan from its Asian empire, which was seized by U.S. forces after Japan’s surrender. For obvious political and economic reasons, the gold had to be kept off the books of declared gold reserves. Among the fund’s various uses as slush funds for Japanese and American interests, MacArthur used the fund to create Japan’s Liberal Democratic Party.

57s: Various individuals involved in the confiscation and concealment of the plundered gold had been pressed into holding it in accounts in their name. It was implicitly understood that they couldn’t use the gold, as everyone knew it was being used for shady, covert geopolitical and financial interests. However, as years passed, a bond crisis emerged in Japan because of all the debt and favors that had been issued based on the M-Fund and the plundered treasure, the existence of which could not be officially acknowledged. Unable to let account holders redeem their assets, the LDP leadership created a special derivative bond. In the 57th year of the emperor’s reign (1982), they created certificates called “57s” and told bond holders they must accept these instead of cash. Some of them received interest but they could not sell the “57s”. They were issued completely outside the norms of the global bond market. Eventually, when faced with legal challenges from holders of the “57s”, American and Japanese officials argued that they were fraudulent, arising from a sort of urban legend perhaps—a crazy idea that there had been a secret stash of gold plundered by the Japanese Empire and there were these weird bonds that no official would confess to issuing. The Seagraves describe in the book how the scandal led to several “assisted suicides” of political figures who “knew where all the bodies were.”

Epilogue

In March 2001, only weeks into the new Bush Administration, two U.S. Navy ships arrived in the Philippines carrying teams of SEAL commandos. According to a source at the U.S. Embassy, they were sent to the Philippines to recover gold as part of a plan to enlarge America’s reserves. This gold, the embassy source said, would come from two places: New excavations of Yamashita Gold vaults, and the purchase (at a deep discount) of Japanese loot already recovered and held in private vaults by wealthy Filipinos. One of the two ships sailed on to Mindanao to take on a load of bullion the embassy source said was owned by the family of the new president, Gloria Macapagal Arroyo. President Bush, the source said, was “being aggressive”.

The buzz among gold hunters in Luzon was that associates of President Bush and his family were privately in the market to buy some of the bullion still being recovered from Golden Lily sites. One of the names being dropped by goldbugs in Manila was that of East Texas oil billionaire William Stamps Farish, an intimate friend and fishing companion of the Bush family. Will Farish, who raises horses in Kentucky and is board chairman of Churchill Downs where the Kentucky Derby is staged, had just been nominated by President Bush to be America’s new ambassador to the Court of St. James, where he was a personal friend of Queen Elizabeth. The buzz had special resonance because Will Farish is said to be the manager of President Bush’s blind trust.

It should come as no surprise that yet another U.S. president may be taking an interest in Japanese plunder, while shielding Japan’s biggest corporations from lawsuits by POWs and other victims. Every president since Harry Truman has been involved in covering up the looting and the slush funds. Even Jimmy Carter played a role, becoming a personal friend of the great fixer, Sasakawa, who was up to his knees in dog-tags.

Bluntly put, the terrible secret is that for over half a century some officials of the U.S. Government—not least of them Nixon—greatly advanced their careers by receiving stolen goods, made unscrupulous use of covert funds, and continue to collude with Tokyo. Justification always has been the Cold War and national security. As federal officials, this meant their security. In plain English, this is conflict of interest and double standards. Politicians, diplomats, bureaucrats, military officers, and businessmen have been involved in falsification and manipulation of facts and records. Whether cynical or misguided, they aided and abetted extraordinary and corruption.

A quote from Chalmers Johnson bears repeating: “The Cold War is over. Whatever the United States may have believed was necessary to prosecute the Cold War, the Cold War itself can no longer be used to justify ignorance about its costs and unintended consequences. The issue today is not whether Japan might veer toward socialism or neutralism but why the government that evolved from its long period of dependence on the United States is so corrupt, inept, and weak.”

The answer is that one thing leads to another. When Truman chose to keep secret the recoveries of Japanese war loot, he then had to endorse the cover-up, followed by a phony Peace Treaty based on fraudulent claims about Japan’s postwar poverty. As contrived by John Foster Dulles in total secrecy, this peace treaty blocked POWs, and civilian victims including Comfort Women, from any compensation for their suffering. Their suffering continues to this day because the Department of State and Justice Department still block all legal recourse by Japan’s victims in American courts. We may rightly wonder whether this really is what Truman had in mind.

President Eisenhower then authorized the use of war-gold to set up the LDP, interfering in the domestic political process in Japan, putting the Japanese people back under a one-party dictatorship, under a man—Kishi—who had been involved in armed robbery, narcotics, and slave labor since the 1930s.

How much did the LDP secretly contribute to Nixon’s presidential campaigns, in return for exclusive control of the M-Fund? What were aides of President Nixon and President Ford doing with President Marcos in 1975 during his shipboard discussions of war loot recoveries?

Was President Carter oblivious to Sasakawa’s participation with Marcos in recovering treasure vaults where hundreds of Allied POWs were buried alive?

How could Lansdale transfer Santy’s assets at UBS into his own name, while transferring other Santy assets from Citibank-Manila to Citibank-New York? Why did Citibank first deny having Santy’s accounts, later concede they had them, then move them offshore when his heirs fairly demanded access? What was Ray Cline really up to, trying to grab some or all of Santy’s $50 billion that Citibank moved to Nassau?

What happened to all the bullion that was removed from Malacanang Palace when President Reagan had CIA Director Bill Casey kidnap the Marcoses? Is it in Fort Knox, or has it vanished into a black hole?

Why was Reagan’s NSC advisor General Schweitzer using U.S. Army colonels, Navy Seals, and Navy deep-divers to recover war loot from the Philippines—is this normal, and if so, why be so evasive?

Was Clinton also playing games with black gold? Yes, according to the Gold Anti-Trust Action Committee. In September 2001, The Economist reported, “it has uncovered evidence that the American government, assisted by others, has somehow ‘lent’ thousands of tons [of gold bullion] to speculators and bullion banks, notably Citibank, J.P. Morgan Chase, to depress the gold price.”

Conflict of interest is evident in all these instances.

As E.L. Doctorow remarked not long ago, “I try to think of a President in my lifetime who has not lied to the American people.”

Those are not things that happened long ago, that can be swept under the rug. When Japan was exonerated by Dulles of its duty to pay reparations, it was allowed to keep the artworks, cultural artifacts, and other plunder stolen from its Asian neighbors since 1895. Little of this has been returned; the rest remains in Japanese vaults, enriching the ruling elite and continuing to impoverish those cultures, and individuals, from whom it was stolen. Thus the crime continues to be perpetrated to this day. Because justice has not been done, the victims continue to be victimized. There is no statute of limitations on guilt.

Washington’s role is all too clear, in the way the Peace Treaty was bullied through. Professor John Price sums up: “The U.S. monopolized and abused the treaty preparations.”

As we now know, Japan was not bankrupted by the war. By 1951, six years after the war, Japan’s economy was stronger than it had been during the best business years before the war. Carlos Romulo, head of the Philippine delegation to the peace conference, “demolished the U.S. argument that Japan lacked the ability to pay for economic reasons.” Japan’s industrial activity was 32 percent above pre-war levels, its fiscal position showed a surplus, and its balance of trade had moved into the black. In discussions between U.S. monetary experts and Japan’s Finance Minister, Ikeda Hayato, just before the peace conference, admitted to a budget surplus of over 100 billion yen and planned to use 40 billion of it as a tax-rebate to Japanese citizens. The governor of the Bank of Japan pleaded with U.S. authorities to take custody of $200 million worth of gold holdings because he feared “the Filipinos might try to attach the gold as reparations.”

Dulles allowed certain other nations such as the Netherlands to make secret deals with Japan on reparations. These agreements were so sensitive that Washington classified these documents as top secret for the next fifty years. The Dutch gambit only came to light in 2000.

The problem with the treaty terms laid down by Dulles, as the Dutch government expressed it, was that “it would appear the Dutch Government was, by the act of signing ... giving up without due process the rights held by Dutch subjects.” Dulles grudgingly agreed to give Dutch citizens the right to make separate claims against the Japanese government. Speaking of this secret deal, a U.S. Senator remarked, “Dulles classified it and kept it classified for 50 years to keep these [victims] from having the right to go to court. That is what he did. That is what the U.S. Government did. That is wrong and we need to correct it.” Then he added, “Our own government would not give these documents to our own soldiers. What an outrage that is.”

Subsequently, the Dutch government secretly negotiated a deal with Japan that resulted in Tokyo paying $10 million in 1956—a drop in the bucket. In 1952, the U.S. Senate Foreign Relations Committee admitted that claims of Asian nations alone could total “as much as $100 billion” (1952 values).

Washington has much to hide. It played an active role in covering up Nazi looting, until is feet were held to the fire in the mid-1990s by Senator Alfonso D’Amato, backed by the deep pockets of Seagram’s billionaire Edgar Bronfman, a leader of the World Jewish Congress. In an effort to redeem himself in the eyes of that important segment of the electorate—the Jewish community—President Clinton finally let the investigation proceed. But before then, Washington dragged its feet, and was neither conscientious, nor honest, with Holocaust victims. Much of the documentary evidence was hidden, lost, or destroyed. The deputy archivist of the United States told D’Amato that the Reichsbank gold records (once in possession of the U. S. Government) “have been lost.” Other records, the archivist admitted, were returned to the German government and, strangely, no copies were retained by the U.S.

There also is clear evidence of outright U.S. collusion with German business, bankers, and former Nazi leaders, in strong parallels to Japan.

In December 2000, President Clinton signed into law the Japanese Imperial Army Disclosure Act to declassify documents about World War II in Asia and the Pacific. This bill originally required the government to open all classified documents from World War II that have bearing on Japanese war crimes, which include looting. But before the bill was passed, a filter was added providing for an interagency task force to review all the records and remove any that the CIA director thinks are too sensitive and might compromise national security. For Nazi records, withholding any information was specifically disallowed. For Japanese records it was specifically allowed.

Remarked one observer, “It arouses suspicion when the U.S. Government has a double standard in treating such issues with the two countries.”

What could possibly be in Japanese war records to compromise American security sixty years or more after the fact? Who will be shamed by such disclosures? As it stands, the interagency task force was given three years to decide which records to declassify, which makes a joke of the whole process. A lot of outrage has been expressed about money laundering. This is history laundering.

By the time these archives finally are opened, those that reveal the true nature of U.S.-Japanese collusion will have been “lost” like the Nazi gold archives.

Destroying the evidence actually began before Japan’s surrender.

Before the Occupation began in 1945, Japan burnt great quantities of war records and documents. Skies all over the islands were filled with smoke and ashes. In 1946, millions of pages of Japanese government and military records that remained were transferred to Herbert Hoover—peculiar, as Hoover was not a government official. However, as we revealed in The Yamato Dynasty, he was a chief mover in whitewashing the emperor, suborning General Tojo, and putting the war criminals back in power. Hoover shipped these records to the Hoover Institute in California, but half a century later their location remains a mystery.

Another huge collection of Japanese documents was transferred to the CIA in the late 1940s. After sensitive documents were removed, the rest were turned over to the National Archives. The State Department then decided, amazingly, to return them all to Japan. Despite protests from scholars, only 10 percent were microfilmed first, and these were bleached of any evidence of looting and collusion.

When we did Freedom of Information queries on Yamashita’s Gold in 1987, the Treasury Department, the Defense Department, and the CIA, dodged all our requests, claiming these records were exempt from release. In other words, the records did exist, but could not be seen. Yet during the Schlei lawsuit in the 1990s, the government claimed it carried out a thorough search of all government agencies and archives for any records related to Japan’s looting of Asia and postwar slush-funds, declaring to the court that no such written evidence could be found. What had happened to it in the intervening years?

While Germany has paid more than $45 billion in compensation and reparations, Japan has paid only $3 billion. Even today, Germany continues this program of compensation and reparations, but Japan has dug in its heels and said it was all settled in 1951. Its position is backed adamantly by the State Department, which is determined to block compensation payments even to U.S. citizens, even to former POWs.

Britain, having parroted Washington by declaring that all this was “settled” in 1951, finally reversed itself. In 2001, the British government agreed to pay—from is own tax revenues—a £10,000 one-time settlement on former British POWs of Japan and their heirs. This may seem humane, but it sidesteps the real question of why Japan continues to be shielded from paying. It also does not satisfy the demands of British POWs and internees for an official apology from Japan.

Since the war, Tokyo has passed fifteen laws giving its own nationals compensation of $400 billion. Among those receiving compensation and pensions were indicted war criminals. Japanese sociologist Tanaka Hiroshi said, “We are generous with ourselves, stingy with others, [and] our policy on war compensation is manifestly unfair to foreigners, and unrepentant of the past.”

Washington has paid compensation to Japanese civilians interned unjustly in America during the war. Each internee, even babies born at the end of this period, was awarded $20,000. Most of them were complete innocents and their lives were, in many cases, damaged or destroyed by the internment. But not one was forced to perform slave labor.

Since 1999, more than thirty lawsuits have been filed in California courts by survivors of the Bataan Death March and other POWs who were forced to provide slave labor for Japanese companies. They were focused in California because the state legislature had extended the period when such claims could be filed. The U.S. Government then had the cases transferred to a federal court in San Francisco, where most of these suits then were rejected in September 2000 by Federal Judge Vaughn Walker. Judge Walker said they were barred by the terms of the 1951 Peace Treaty, the same stonewalling used by Tokyo and Washington.

Hard as it may be to believe, the State Department argued on the side of Japanese corporations in these cases. Walker summed up his decision by stating that the San Francisco Peace Treaty had “exchanged full compensation of plaintiffs for a future peace. History has vindicated the wisdom of that bargain.”

Chalmers Johnson reacted by pointing out that since the treaty was signed, at least ten million people and 55,00 Americans have died in Asian wars. By those facts alone, he rightly called Judge Walker’s statement “one of the more abysmal moments of denial.”

Some fought back. In March 2001, U.S. Congressman Mike Honda (D-San Jose) and Dana Rohrabacher (R-Huntington Beach) introduced a bill “Justice for Prisoners of War Act” before the US. Congress. The bill had strong bipartisan support and by August 2002 had 228 cosigners including House whips for both parties. Honda’s bill called for “clarification of the wording of the 1951 Peace Treaty between Japan and the United States” to keep the State Department from deviously interfering in victims’ lawsuits.

If this bill became law, it could open a window for compensation to POWs who were forced to perform slave labor for Japanese companies like Mitsui, Mitsubishi, and Sumitomo, which are among the richest on earth. The bill would remove a key legal barrier used in Judge Walker’s rejection of the slave labor lawsuits. Article 26 of the 1951 treaty reads: “Should Japan make a peace settlement or war claims settlement with any State granting that State greater advantages than those provided by the present Treaty, those same advantages shall be extended to the parties to the present Treaty.”

In other words, if Japan were ever to give another country greater advantages for war claims than those granted in the treaty, then it has to extend such terms to all forty-eight countries that signed the treaty. And as we now know, a secret deal was arranged by Dulles for the Dutch government to receive $10 million from Japan. Both Switzerland and Burma also negotiated compensation to their citizens that would today be worth about $50,000 each. While Burma was occupied by Japan, Switzerland was not even a belligerent during the war. When these settlements with Burma and Switzerland went through, the British government (confronted by demands from its own POWs) decided against reopening negotiations, although it was entitled to do so by the terms of the treaty. In fact, none of America’s closest allies deviated from Washington’s instructions not to meddle with Article 26.

Judge Walker, possibly under considerable pressure, sided with the State Department and ruled that Article 26 cannot be invoked by private citizens, but only by their government. The Honda-Rohrabacher bill would get around that bizarre ruling by having Congress act for the victims.

The State Department’s unelected bureaucrats, aghast at the temerity of America’s elected lawmakers, realized that Honda’s bill cannot be thrown out by the exercise of political pressure over federal judges. Instead, State took the high moral ground by claiming that passage of Honda’s bill “would be an act of extreme bad faith.”

Bad faith toward Japan’s biggest corporations and its extraordinarily corrupt and incompetent LDP bosses.

Since spring 2001, this bill has been stalled in committee. Once through the House of Representatives, the battle for the bill would have to be fought again in the Senate. Thereafter, the presidential veto could be (and probably would be) invoked. In which case, President George W. Bush would be honoring the tradition of cover-up by every American president since Truman.

Another Congressional effort to force State and Justice Departments to let justice take its course was an amendment to an appropriations bill. This made it illegal for the State and Justice to spend any of their 2002 budget “to file a motion in any court opposing a civil action against any Japanese person or corporation for compensation or reparations in which the plaintiff alleges that, as an American prisoner of war during World War II, he or she was used as a slave or forced labor.” This amendment was passed with overwhelming bipartisan support one day before the World Trade Center attack.

Of course, nothing prohibits State or Justice from advising’ courts against favorable settlements for POWs or putting pressure on judges in federal courts. The bill was only valid for twelve months, after which it would have to be reintroduced, so it is popular, patriotic but toothless.

Sadly, this judicial gridlock is like France before the Revolution, when a two-tiered system of justice was in place—one for nobility, one for ordinary people.

However, it may be too late for Washington to save Japan’s LDP from its own ineptitude and venality. Japan’s financial collapse has been predicted by scholars at Massachusetts Institute of Technology, on the premise that the LDP would refuse to undertake the serious reforms needed. In fact, all Japan’s top banks failed long ago, but—as in a silent movie—the edifice collapsed without the audience hearing any sound.

Japan’s banks had $1 trillion in bad loans on their books, in sweetheart deals for men like Prime Minister Tanaka, or zero-interest loans to the yakuza. Among the banks hit hardest were Sanwa Bank and Tokai Bank. Together with Dai-Ichi Kangyo Bank they are the three that were exempted by General MacArthur and General Marquat from reorganization in 1945.

Former prime minister and finance minister Miyazawa proposed a painless bailout—painless, that is, for the banks. They would be bailed out by Japanese taxpayers. After which the banks could resume their bad habits. Whether taxpayers would stand for it is questionable.

If anyone knew how to arrange such a magic trick, it was Miyazawa. Few other men have been so intimately and continually involved in the inner workings of the Ministry of Finance since the early 1940s. He began his career in the Finance Ministry in 1942 and was one of the three Japanese who negotiated the secret terms of the 1951 Peace Treaty with John Foster Dulles. Thanks to cachet he gained in those warped negotiations, Miyazawa entered politics where he remains to this day as a man of phenomenal leverage. He served as minister of finance in the Nakasone, Takeshita, Obuchi, and Mori cabinets. Over all those decades, Miyazawa was chief of accounting for the LDP, so he had intimate knowledge of all the slush funds. He held many other ministerial posts, such as chief cabinet secretary to Prime Minister Suzuki when the M-Fund “57s” first were issued. When minister of finance for Takeshita, Miyazawa had to resign along with Takeshita in the Recruit insider-trading scandal tied to the M-Fund. In 1991, thanks to his rescue by M-Fund controllers Kanemaru and Gotoda, Miyazawa became prime minister. He then named Gotoda as his deputy prime minister and made Kanemaru the LDP’s vice president, giving Kanemaru the informal role of “co-prime minister”.

At a celebration of this collaboration in a posh Tokyo restaurant, Miyazawa pledged to Kanemaru that, “I will not do anything that differs from your intentions. I will consult you on everything.” The honeymoon was brief. In 1992, Kanemaru became involved in the great scandal of the Sagawa Parcel company, which was delivering war-gold bribes to politically influential people. Before his trial was concluded, Kanemaru conveniently died.

If anyone knows the truth, Miyazawa does. But he is not talking, nor is his son-in-law, Christopher J. Lafleur, a career U.S. Foreign Service officer who for years has been the most powerful diplomat at the American Embassy in Tokyo, as deputy chief of mission, or DCM.

In 1986, the 38-year-old Lafleur was dispatched to Tokyo, ostensibly to negotiate sales of the FS-X fighter plane (the same year Schlei came to Tokyo to negotiate his client’s “57s”). Miyazawa, then minister of finance, was Japan’s FS-X negotiator, under a cloud in the Recruit scandal, linked to the “57s” and M-Fund moneys.

One unexpected outcome of the friendship that bloomed between Lafleur and Miyazawa was that Lafleur married Miyazawa’s daughter.

In September 1997, Lafleur was made Deputy Chief of Mission at the US. Embassy in Tokyo—called the “de facto boss of the embassy”. A few months later, in 1998, Miyazawa was back in the driver’s seat as finance minister in the Obuchi cabinet. Like his earlier appointments to this job, Miyazawa was returned to office to practice damage control. According to Professor Lausier, this time Miyazawa was put back in as minister of finance because a large number of “57s” were coming due—documents that the LDP and the government of Japan could ill afford to redeem, and therefore denounced as counterfeit.

Lausier believes that Miyazawa was there to decide which of these IOUs would be honored and which would not.

During the same period, the U.S. Embassy’s Lafleur was vocal in claiming that the “57s” were fraudulent, and arguing against victims’ rights to sue Japanese corporations, on the basis of the 1951 treaty negotiated by Lafleur’s father-in-law.

Not only Lafleur but a string of ambassadors he served also showed conspicuous conflict of interest.

Many people were troubled to learn that Ambassador Tom Foley’s wife was a paid consultant to Sumitomo Heavy Industries, one of the primary targets of the POW lawsuits for slave labor. The State Department declared that it saw no conflict of interest in Mrs. Foley’s job and the simultaneous appointment of her husband as ambassador to Japan. However, in that post Foley vigorously denied the right of American POWs to sue Japanese corporations including the one his wife worked for.

After retiring as ambassador and returning to Washington, Foley openly became a paid lobbyist for Mitsubishi Corporation as a member of its advisory panel on strategy. Mitsubishi was among the biggest employers of American slave labor during the war.

When he was appointed DCM under Foley, foreign correspondents in Tokyo joked that Lafleur was a member of Japan’s “dream team”.

In 2001, when news of Lafleur’s special status as Miyazawa’s son in-law became more widely known, making the issues of conflict of interest and double standards become too obvious to ignore further, Lafleur was recalled to Washington and made Deputy Assistant Director to the Bureau of East Asian and Pacific Affairs at the State Department. This removed him from potential embarrassment in Tokyo but put him in a prime position to monitor and guide Congress, as well as to oversee any legal actions in U.S. courts.

The low point of this farce came in late September 2001 when a letter appeared The Washington Post written by three former ambassadors to Tokyo—Thomas Foley, Michael Armacost, and Fritz Mondale. The letter linked the claims of American POWs against Japan to the terrorist attacks on the World Trade Center: “Why would Congress consider passing [the Rohrabacher Bill] which could abrogate a treaty so fundamental to our security at a time the president and his administration are trying so hard ... to combat terrorism?”

In other words, Honda and Rohrabacher, and America’s POWs, were no better than terrorists!

Even Japan’s government winced at the Foley-Armacost-Mondale attack. A Japanese Embassy spokesman in Washington told the media that the government of Japan regarded the claims of POWs and the problems of world terrorism to be “different issues”.

As a dissident State Department official quipped, “Sometimes it [seems] that Japan [has] two embassies working for them—ours and theirs.”