The Secret Gold Treaty

I note a curiosity in regard to “Operation 40,” a secretive “wet ops” team formed in 1959 by then US Vice President Richard Nixon. Members of “Operation 40” are now believed to have been behind the assassination of John F. Kennedy. Another term for assassinations conducted by Operation 40 is “Room 222.” In this case, however, the “hit” is carried out “against members of one's own team who are no longer useful or have become an embarrassment to the ‘agency’ or have or will become a security risk.” This follows on from “Room 40,” which was a term for assassinations conducted by the British during World War II. [i]

On 18 November 1963, just four days before the assassination of President John F. Kennedy, the Argentine government issued a Special Order No. CF-S01365 O.J.P., which initiated the only period in Argentina’s recent history when Nazi fugitives were in jeopardy. This resulted in the formation of special Nazi-hunting squads of Argentine secret police.

Until then and, in fact, also soon after this brief and curious interlude, any and all Nazis on the run – including the so called “Gran Fugitivos” (Grand Fugitives) like Bormann, Mengele, Gestapo Heinrich Muller and others -- were more protected in Argentina than in any other country in the world. Is it possible that the government of Argentina, because of its deep and abiding connections with Nazis, learned of the forthcoming “hit” on JFK? Could the curious and dramatic (but not long lasting) anti-Nazi action have been little more than a PR exercise to exonerate themselves in advance of their closeness to certain Nazis associated with the Kennedy death, which members knew would result in a major worldwide news story of unparalleled proportions?

One individual knowledgeable about group “forty” is L. Fletcher Prouty, who was Chief of Special Operations (i.e., clandestine activities) for the US Joint Chiefs of Staff. His duties involved the military support of the clandestine activities of the CIA. Prouty was the real life representation of Mr. X, played by Donald Sutherland in Oliver Stone’s movie JFK. Prouty resigned his commission following the assassination of President John Kennedy and later wrote an enormously powerful book titled The Secret Team, which sheds a tremendous amount of light on the secret activities of the CIA and Pentagon during the early years of the Cold War. 

The 5412 Committee, which met in Room 40 at the CIA headquarters in Langley, Virginia, became the de facto parallel government of the United States, a fact that was later acknowledged by President Eisenhower in his speech regarding the dangers of the “military industrial complex.” At the heart of the US secret government lay a doctrine that was “driven by the twin goals of reinforcing the private interests that largely control the state and maintaining an international environment in which they can prosper.” [ii]  The broader interests of the people are not permitted to enter the equation, which is reserved entirely for men of wealth and power. The Dulles brothers fit into this subterranean power complex with considerable ease. 

Prouty says this of the 5412 Committee: 

“As time passed and as the DCI [of the CIA] exploited his position, it might have seemed to be rather reasonable to suggest the establishment of a small special group to take this 'burden' from these senior officials and to provide men who could more readily attend to such matters, minor as they were, in the place of the busy Council principals. Thus the establishment of the first Special Group. 

“As things progressed, the Special Group 5412/2 became not just the working group of the NSC but rather a select group that had assumed the responsibility for clandestine activity. Certainly, each designated Special Group member reported back to his principal but by that time it was not so much for direction as it was for 'informational approval;' in the language of bureaucracy this meant, ‘if he doesn't say a clear NO, it's O.K.’” 

“By that time in the course of events a new process had evolved and the DCI felt perfectly at liberty to prepare all the clandestine operations his intelligence sources would support and to present them to the Special Group for nothing more than approval. But even this was not enough. The next step was to have Agency-affiliated men in the Special Group itself, or at least to have them working with the Group as special advisers. This is why the President's appointee has always been so important to the DCI. Since the appointment of Maxwell Taylor in that position after the Bay of Pigs, the DCI has had men in that position whom he could count upon as a two-way conduit. When the DCI wanted to get information to the President he would use this man and when he wanted the President's approval on something, he would use him for that too. The same has been true with the representatives in State and Defense. During much of the crucial build-up years in Indochina, men such as Bill Bundy and Ed Lansdale have represented State and Defense on this committee. Of course, both of these men were CIA alumni and as a result the DCI could always count upon them to grease the way for any of his proposals to the NSC."
  

“This has been a significant evolution away from the language and the intent of the law. It has meant that the sole authority established as a final resort to oversee and control the CIA has become no more than a rubber stamp for all clandestine operations. And throughout all of this the ST [Secret Team] has been able to carry out its desires under a cloak of secrecy that has kept its moves shielded from the highest officials of this Government. For example, in those crucial early years of Vietnam, did McNamara and Rusk look upon Lansdale and Bill Bundy as Defense and State men under their command and control, or did they recognize them as CIA agents under the direction of the DCI? Or when the Special Assistant for Counterinsurgency and Special Activities from the Joint Staff was called to the White House, did President Kennedy and others look upon this man, General Krulak, as a member of the military establishment because he was wearing a uniform, or did they recognize him as a key spokesman for the interests and activities of the CIA?"

"This shift of command control over the Agency from under the direction of the NSC was undoubtedly as important a move as has occurred in any part of the Government since the passage of the National Security Act of 1947. It explains why the CIA has operated so free of effective and ironclad control during the past ten to twelve years." 

Fletcher Prouty also recounts in The Secret Team his personal encounters with then Major General Edward G. Lansdale, who became McNamara’s special assistant for all matters involving the CIA and special operations. Earlier in his career, Lansdale had been a key operative for the 5412 Committee and, as I outlined earlier, possessed absolute knowledge of the vast quantities of gold bullion buried in the Philippine islands by the Japanese treasure teams known as the Golden Lily. Under Lansdale’s direction, Severino Garcia Romano commenced recovery of gold bullion and other plundered loot beginning in 1945. 

Whether the true facts regarding the Secret Treaty are ever released for historians to review remains questionable. My own view is that from a Cold War perspective there is little on this subject that requires ongoing secrecy. However, from a financial perspective there is much that demands obscurity. The staggering amounts of funds then and now available to the national security powers of the United States as a consequence of secretive Philippine plunder recovery efforts remains as sensitive as ever. Who actually has control of these sums?  I doubt that the US government, per se, is in control of them, but believe rather that a network of private concerns holds the power. 

Likewise, the full story of the nature of gold has yet to be told, and my guess is that it will remain hermetically sealed amongst the few for a very long time to come. Two things are certain, however. The historical official mining figures for gold are patently false and have been knowingly fabricated and thrust on an unsuspecting public. Second, and leading on from this, it is, therefore, evident that gold is not at all rare. Current statistics show above- ground stocks of the metal to total about 140,000 metric tonnes. The reality is far, far higher and, in all probability, is well in excess of one million tonnes. I doubt anyone really knows for certain, owing to the fact that so much is still buried in the Philippines and elsewhere in Southeast Asia that tallying it all up is impossible – even to this day. 

A brief mention needs to be made of Carmel Offie, a State Department flunky and contemporary of the Dulles brothers, Frank Wisner and others intimately involved with the machinations of the Secret Team. Later believed to be a KGB “plant” by the FBI’s Edgar Hoover.[iii] Offie’s career began to follow a downward trajectory, but not before Hoover had raised serious questions concerning the source of his income. Employed on a mid-level government salary, Offie had dollars to burn around Washington.

The CIA’s first DCI, Beedel Smith, tried to placate Hoover by saying that Offie had received a “pay-off” of $10,000 for taking the blame when several people in Paris had almost been caught abusing their diplomatic pouch privileges. Hoover added that one of those involved in the pouch affair might have been General Lucius Clay, formerly the Governor of the US Zone in post-war Germany and a member of the Board of Directors of Newmont Mining, one of the leading gold mining companies. [iv]  According to Hoover, Offie was “either given or allowed to buy at a very favourable option price some stock in the Newmont holdings in North Africa, which gave a fabulous payoff…” thereby making Offie “semi-independent.” [v]

Is it possible that Newmont Mining might have acted with or on behalf of those members of the OSS/CIA/Secret Team engaged in recovering gold bullion from the Philippine treasure troves, by re-smelting (in effect, laundering) war loot?  The connection between Newmont Mining and Philippine gold stores is, of course, very tenuous. However, this story is all about tenuous connections that become increasingly firmer as more facts emerge from the shadows.

That being so, another fact that has emerged from the shadows is the location of one of Newmont’s offices up country in Thailand at Chang Mai. This city sits slap in the middle of the Golden Triangle  opium region and was chosen by the CIA-Mafia owned and Australian domiciled Nugan Hand Bank for a branch office because of this proximity. In addition to laundering drug money on behalf of its owners, the CIA, Nugan Hand Bank is believed to have been heavily involved in the transfer of large quantities of so-called "Marcos" gold flown by CIA pilots from Clark AFB in the Philippines to the secret US Pine Gap facility located at Alice Springs, Australia. It is, therefore, of some interest that Michael Hand, the joint founder of Nugan Hand Bank, was at one time one of five aids to General Edward Lansdale. [vi]

Historically suspicious of paper money, Southeast Asian warlords -- amongst other Asian peoples – have always preferred payment for goods and services in gold and silver. General Khun Sa, (but born Chiang Chi-Fu) was, as warlord of the Shan States of Burma, known as the “biggest heroin dealer in the world,” [vii] because, as leader of the Shan States, he was in control of most of the Golden Triangle.  A two-part feature article I wrote in 1997, titled "Deep Black" provides an insight to this subject.

The foregoing suggests the strong probability that plundered gold hidden in the Philippines by the Japanese Golden Lily teams later found its way to the Golden Triangle to be exchanged for opium, thanks to the efforts of the Nugan Hand Bank and the CIA. Such a gold laundering scenario would have made a great deal of sense, because sale of stores of this magnitude on the open market would have certainly forced the world price lower, thereby causing acute visibility. Exchanging gold in secrecy for Chinese heroin that would later be sold in Europe and the US at many thousands' percent profit over purchase cost can only have represented a most appealing financial strategy to those devoid of principles and ethics. 

The Cold War was not so cold as it was profitable and profits increasingly became the name of the game. This process received a considerable fillip when President Richard Nixon disconnected gold from the US currency in 1971. Eliminating the gold standard would soon lead to the long-planned global hegemony of the Almighty Dollar, which unofficially became a narcotics-backed currency. Along the way, oil shocks would be witnessed, odd goings-on at the Department of Treasury would come to light and Wall Street investment banks would learn ever more ingenious ways to engineer ever greater profits at their whim. As usual, the taxpayer generally picked up the tab. 

Footnotes

[i] I am grateful to Mr. J.P. Viken, who provided this information.

[ii] Cited by Noam Chomsky in his book Deterring Democracy – available free in electronic form on www.ZNET.com (Chapter One: “Cold War Fact and Fancy”).

[iii] See Hersh, Burton, The Old Boys, (New York: Scribners, 1992) at 448.

[iv] Clay was the predecessor of John McCloy and the man in charge when substantial quantities of Nazi gold went missing from the Reichsbank vaults. For a detailed telling of the Nazi Gold Robbery, see Sayer, Ian and Botting, Douglas, Nazi Gold (London: Mainstream Publishing, 1998).

[v] Hersh at 444-445. 

[vi] This interesting tidbit provided courtesy of Kris Millegan.

[vii] Kwitny, Jonathan, The Crimes of Patriots (New York: Simon and Schuster, 1987) at 228.

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