The Secret Gold Treaty

PART 2.1

BIG BANG CIRCA 1954 

And here, but for a number of curious coincidences, my involvement in this story may have also come to an end, too. However, in trying to understand the nature of the black gold market and to discover what was hidden behind the Secret Treaty, I began to uncover a welter of additional information. 

For some time I had been in contact with a BBC journalist about a story wholly unconnected to World War II plunder and black gold. [i]  This individual had, in the course of his own investigation, interviewed a former ONI and CIA officer following the latter’s release from custody by Austrian officials in late 1996. The meeting had occurred in a forest in Austria, for security reasons, I was told. The CIA man was Gunther Russbacher -- regarded by some as tricky and potentially deceitful but still others, including author Rodney Stich (Defrauding America) consider him very reliable and extremely knowledgeable in matters of a "black" nature. Russbacher, whose father was an Austrian officer in Nazi intelligence during the war, emigrated to the United States in, I understand, 1954 (although others have the date as 1950) and settled in Oklahoma City. Russbacher’s German connection fits the pattern. 

In any event, Russbacher told the BBC journalist that huge quantities of Nazi gold had been shipped to South America, via Spain, just prior to the close of World War II. The loot had sat in South America for a number of years, but as soon as its existence became known to Israeli intelligence the plunder was immediately transferred to the Philippines and hidden, Russbacher said. 

Over a year after my interview with Russbacher, I was put in contact with Ken Krohn, who I was told was a business associate of Russbacher's. I telephoned Krohn in California on 27 February 1998, telling him I was conducting research into black market gold deals. He immediately asked if I had been speaking to Russbacher. At that time, I had not, and I told him so. Krohn then stated that he was a member of "Gunther's Team" and had acted in the role of "Stateside Anchor." Krohn then asked me to call him back the following Tuesday so that he could, in the meantime, refresh his memory from his files. He had, he said "names, dates, files. It'll make your hair curl." 

On 3 March 1998, we had a further lengthy telephone conversation. Gunther's Team was, Krohn indicated, part of the ongoing Nippon Star outfit headed by General John Singlaub. [ii]  Russbacher's team consisted of five Americans and a handful of Filipinos, who between them had recovered in excess of 500 metric tonnes of gold stashed in the Philippines. The Philippine stash included bullion plundered by the Nazis as well as gold stolen from China during World War II. The gold recovered by Russbacher's team had, Krohn said, been sold to the Austrian National Bank at an 11.6% discount from the prevailing price of gold. Krohn added that the banker at the Austrian National Bank who handled the negotiations and transfer was Dr. Werner Metz. On the Philippine side, the deal was handled by Gabriel C. Singson, Chairman of the Philippine National Bank, acting on behalf of then- President Fidel Ramos. Krohn said that President Ramos's wife had travelled to Austria to get the "commission."

The intermediary who negotiated the deal between the two parties was, Krohn said, former U.N. Secretary General Kurt Waldheim – who, Krohn said, was a relative of Russbacher. The Austrians wanted the gold to "support the Eurodollar," according to Krohn. He said that when he, together with Russbacher, and other members of the team, travelled to Austria, they were met at the airport by Austrian security. Russbacher was arrested and taken away, but Krohn and the rest of the team were merely roughed up and then flown back to the US on the first available flight. Krohn contended that Russbacher had double-crossed them all and had disappeared with everyone's commission. 

Interestingly, Russbacher's former wife, Rayelan Russbacher, tells a tale that is identical to Krohn's account in all material respects, except as to the quantities of gold involved. In early May 2000, Rayelan Russbacher faxed me copies of about 30 documents relating to her former husband’s gold deal as described above. The code name for the transaction was “White Robe/150-920-458." The documents she faxed show that the intended transaction was, in fact, a series of between ten and 50 transactions, each involving a quantity of 2,500 metric tonnes of gold negotiated at a discount rate of 10% (rather than the 11.6% rate described by Krohn). Additionally, the commitments for these transactions could be “rolled over” and “extended” up to a total of 500,000 metric tonnes. A first “test” tranche of 2,500 tonnes with a face value of approximately US$30 billion was called for (giving a price of about $370 per ounce). This staggering deal, if consummated in full, had a price tag of US$6 trillion – equivalent to the current US national debt! 

Kurt Waldheim's apparent involvement in this deal raises an additional aspect worth exploring, if only briefly. Waldheim was appointed Secretary General of the United Nations in 1971, a position he held until 1981.   It is inconceivable that his background as a Nazi officer would not have been known to the US government, which would have thoroughly, albeit informally, vetted him at the time his name was thrown into the hat for the UN job. In all probability, details of his service in the Wermacht would have been available to US authorities -- and particularly the CIA -- and the Gehlen Org since at least 1955, when he took up his seat as the official Austrian delegate to the UN.

It, therefore, must have come as a shock to Waldheim to see his name in headline banners in the world's press, linked to Nazi war crimes. Details of these allegations were provided to the New York Times by the US Justice Department and appeared in that newspaper in an article published on 13th March 1994. Coincidentally -- if one believes in coincidence, Father Christmas and the tooth fairy -- it was at this precise point in time that the Russbacher bullion deal was about to be signed (much the same situation as the Times newspaper article that appears to have scuppered Johnston's deal with Credit Lyonnais that was outlined earlier). Interestingly, Russbacher's colleague, Michael Blinston, who was overseeing the deal, sent a fax to Russbacher in late February 1994 in which he voiced his concerns that a "Mr. Pruit," who represented the London office of Citibank, had arrived in Manila with an authorised "buy order" to purchase the gold on offer.

Suspicious, Blinston wondered whether their deal was "being delayed on purpose to allow Citibank to take the deal from us?"  He then adds that it "sounds familiar does it not???" (See the "Russbacher" Appendices) In any event, on 15th March 1994, two days after the Waldheim allegations hit the headlines, the Central Bank of the Philippines finally issued an authorised offer to sell the gold to the Austrian central bank. One can speculate that a CIA faction other than the one to which Russbacher belonged decided to try and scupper the deal and, perhaps, arrange to have its own team get awarded the contract instead. Such gamesmanship is not uncommon to large transactions, and, in this case, truly prodigious amounts of money were involved. 

It is also of interest that one of those involved in this transaction was referred to in documents as “Philippine Passport – L-506511” and now identified as Imelda Marcos. Her role was not as seller but as an intermediary who would accrue a fee of .25%.What is intriguing about this deal is the total quantity involved. Shown in the exhibits to this manuscript is a letter from the Knights of Malta entitled “Lansdale Project,” which states in the fifth paragraph: “Reference 500,000 MT: The reaction on the 500,000 MT will also be discussed during the meeting.” The meeting referred to was a “sit down” by the “Washington people” to discuss the “ramifications” of another Lansdale transaction. Significantly, this letter was part of Peter Johnston’s papers, although Peter had absolutely no knowledge of Gunther Russbacher and his involvement in a similar (or the same) transaction. The connection is, clearly, Imelda Marcos, who had a finger in both Peter Johnston’s and Russbacher’s deal. 

Some while after my discussions with Ken Krohn, I was able to make contact with Russbacher directly. On 30 August 1998, we spoke for the first time by telephone. This call was followed by two further telephone conversations. Russbacher listened as I repeated Ken Krohn's recollection of events. He asked what I knew of the background to the story. I repeated what I had learned from the BBC journalist -- that Nazi gold had been shipped to South America where it had been discovered by the Israelis, forcing its relocation to the Philippines in 1954 -- and that this led to a "Secret Agreement." [iii][iv]

Russbacher responded to my description with an emphatic "Boom!"  After a pause, he asked if Krohn had given me names. I said he had. Russbacher then asked if I knew "who the facilitator was"  I responded by asking him whom he meant. He evaded my question and seemed relieved that I didn't appear to know about Waldheim's role in the transaction. After confirming that he was aware of Singlaub and his role in Nippon Star gold recoveries, Russbacher said he preferred not to answer any more questions. This was a sensitive subject, he said. According to both Krohn and Rayelan Gunther Russbacher, (who, as you will see from the exhibits used his full, original Austrian name of Russbacher Erz Herzog von Esterhaszy) is a member of the Templar Knights. 

In an email message dated 15 August 1998, Rayelan told me that the 500 MT transaction arose following an approach to Russbacher by Sam Nicanor, a Filipino citizen who she believed was also a covert contract agent for one of the American intelligence agencies or groups. She added that at that time, “Sam was arranging a gold transfer that involved gold that was not the Austrian treasury…. It was gold that belonged to the founder of Krupp.”

Meanwhile, one fact that leapt out at me from all this was the date 1954. It could easily have been a coincidence, but then again it might have a distinct bearing on Peter Johnston's story. It is of interest, too, to learn that it was the year 1954 when Mossad boss, Isser Harel, travelled to Washington to meet with CIA Director, Allen Dulles. The result of the meeting was the beginning of an intelligence “partnership” between America and Israel that would soon benefit the smaller nation with a plethora of state-of-the-art technical spying equipment. What it did not do, obviously, was assign Israel any secrets of the American atomic weapons programme that was heavily protected by the Atomic Energy Act of 1954 as well as prevailing US espionage laws. [v]

The 1954 date also eventually led me to wonder if there were any trails leading to Martin Bormann and his huge hoard of Nazi plunder. At that time, Bormann was living in Argentina under the special protection of its dictator, Juan Peron. Peron was cast out of power in 1955 and fled to Spain to live in safety where he could count the $1.5 billion fortune he had amassed from corruption and “donations” made by the new Nazi paymaster, the former Reichsleiter, Martin Bormann. Was it conceivable that Bormann had learned of a forthcoming plot to oust Peron and so took action to secure his assets?  It is admittedly a fanciful idea that has no factual backing whatsoever. Still, it is often by such curious “brainstorms” that meaningful connections are unveiled. The Bormann connection would later prove of considerable importance to my investigation. 

Of significance too, was that Ken Krohn stated that the quantity of gold recovered by the Russbacher team was “nearly” 400 metric tonnes. This is a very interesting figure. In the international black market, quantities of “AU” (gold) are often used as an identifier to a given transaction. A wise seller will, if unsuccessful the first time around (as often is the case), re-offer the bullion in multiple smaller volumes -- or in tranches -- to camouflage the fact that the gold has been offered in a previous, failed, transaction. As an example of identification by quantity, a large block of gold originating from Thailand continues to re-appear periodically in the black market and is immediately identified by its quantity - marginally above 5,000 metric tonnes.

I will return to the Russbacher–Krohn and Bormann connections shortly. 

Footnotes

[i] Chemical and electromagnetic mind control technology.

[ii] For a background on Singlaub and Nippon Star, see Sterling Seagrave The Marcos Dynasty (London: Macmillan, 1988) at 395-396. I must also offer my thanks to Gunther Russbacher's former wife, Rayelan, who has assisted in my research and who donated a number of invaluable documents from Gunther Russbacher's files.

[iii] The implication I have drawn from this "Secret Agreement" is that the Israelis were given a percentage of profits. To some, this may sound a cynical interpretation on my part. To those who doubt,  I would recommend reading Loftus and Aarons, The Secret War Against the Jews (St. Martin's Press, 1994) to understand how Israel blackmailed Western nations in order to survive during the critical years of its existence. Of note in this regard is that one of the certificates Johnston had access to was issued by the Bank of America, dated November 1984, in the name of Chaim Herzog.

[iv] It is a fact that Israeli agents were in hot pursuit of Martin Bormann (and Mengele) at this time. Bormann had control of a vast fortune of Nazi assets and loot, including the "bulk of the treasure that had made up the financial reserves of the Deutsche Bank," according to Paul Manning, Martin Bormann - Nazi in Exile. Manning had access to an FBI surveillance report that stated "At the end of 1954, Martin Bormann was seen in Mina Clavera, Cordoba in the company of two men with Spanish surnames. He was calling himself Jose Perez. "Bormann's head of security, Heinrich Mueller, in order to put investigators off the scent, periodically would leak stories to the press that Bormann's body had been located. In one case, in 1955, the remains of an "Israeli agent who had gotten to close to his target" were exhumed. Manning at 213.

[v] See Gordon Thomas, Gideon’s Spies, (London: MacMillan, 1999) at 29,30 and 81.

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