Family of Secrets: The Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years (52 page)

Despite Stone’s efforts to distance himself from the Bushes and from Harvard’s entry into Harken, Stone himself turns out to have both oil and CIA connections—or, perhaps it can be said, CIA-oil connections. Most intriguingly, Stone turns out to have been in business with the “former” CIA officer Thomas J. Devine. That’s the same Thomas J. Devine who purportedly retired from the agency in order to help Poppy Bush start up Zapata Offshore.

In 1950, the same year that Dresser Industries relocated to Dallas and the whole Dallas intelligence complex was coming together, Stone started Stonetex Oil Corporation, a Dallas-based oil company. Some years later, Devine became Stonetex’s treasurer. (When I asked Devine about his association with the Stone family, he explained that the same ground rules applied as with the Bushes before he could speak to me: “That makes two families I need to get clearance from.” He apparently never did get that clearance.)

Part of the mystery of the Bush connection turns out to once again revolve around old relationships. Stone came from a powerful old Boston family and married the daughter of a Rockefeller. His in-laws, it turns out, were close personal friends of Prescott Bush and his wife, Dorothy, George W. Bush’s grandparents. And his father-in-law, Godfrey Rockefeller, had his own CIA ties.
¹⁷

But there was much more to Robert Stone and to Harvard’s decision to invest in Harken Energy. For one thing, Stone played a significant role in Harvard University’s decision to move into private equity investing—which made it possible to get deeply involved in a company like Harken. For another, Stone’s own business activities suggest that Stonetex and Harken were not anomalies, but rather that he was cobbling together some kind of empire with strategic objectives beyond profits at their heart.

Stone was a board member and sometime chairman of a whole range of companies involved with international shipping, the use of inland barges to move oil, and oil exploration. At one point he controlled one of the world’s largest cargo fleets. And he was intimately associated with a small circle of highly politicized oilmen whose names have appeared in previous chapters. He served as chairman of the board of the Houston-based Kirby Corporation, a shipping and oil concern substantially controlled by the family of the oil depletion allowance king, Clint Murchison.

Stone kept building the requisite connections and power base contacts in East Coast establishment circles. He served as commodore of the exclusive New York Yacht Club—the ultimate gathering place of the upper class. He was an apt bridge between the worlds of Wall Street and oil, and the type of “master of the universe” who would have been useful in the management and financing of covert intelligence entities. As an obituary in the
Boston
Globe
put it: “Robert G. Stone Jr., who served a record 27 years on Harvard University’s governing board, had unparalleled gusto and talent for fundraising, eagerly jetting off to woo potential donors wherever they could be found.”
¹⁸

In a 1985 interview with the
Harvard Crimson
, a decade after Stone had joined the university’s board, fellow board member Hugh D. Calkins called Stone “the world’s finest fundraiser,” noting that Stone “would hear about an Arabian sheik who had some remote connection to Harvard, and he would hop on the next plane there.” At the same time that Harvard was propping up Harken Energy, Stone was also executive committee chairman of Combustion Engineering, a large company that was deeply involved in Saudi Arabia.

And there was more, as intimated by Michael Eisenson, the president of the Harvard Management Company. Eisenson, somewhat cryptically, told the
Boston Globe
, “There were not too many degrees of separation between Stone and Quasha.”
¹⁹
The
Globe
’s reporters, pressed as daily newspaper reporters generally are, do not seem to have followed that intriguing revelation any further. But it is now possible to report the story of the relationship between the two men.

A Golden Opportunity

The importance of controlling natural resources is not something most of us discuss on a regular basis. But it is a principal motivation—and often
the
principal motivation—behind foreign policy decisions, wars, and coups.

As a young man, Robert Stone’s marriage into the Rockefeller clan would result in his joining the board of Freeport Mining, a huge Rockefeller-dominated company with gold, silver, copper, and other mineral-extraction operations throughout the world, including major mines in Indonesia and the Philippines. The partners of Freeport Mining were a powerful bunch with an appreciation for the strategic value of minerals. Among the board members over the years was Prescott Bush’s business partner Robert A. Lovett, who served in various administrations as undersecretary of state, assistant secretary of war, and secretary of defense, and is widely regarded as one of the architects of America’s cold war strategy.
²⁰

Freeport’s largest mine was and is in Indonesia—and Freeport is closely identified with the CIA-backed coup that brought the dictator Suharto to power in 1965. Efforts to topple his predecessor, the nationalist Sukarno, were the province of Alfred C. Ulmer, the Allen Dulles confidant who, as noted in chapter 4, visited Poppy Bush in Texas the week of the JFK assassination. Other Freeport board members have included Henry Kissinger and Admiral Arleigh Burke, chief of naval operations under Ike and JFK. Burke was an ardent advocate in National Security Council meetings for the assassination not just of Fidel Castro but also of others in the Cuban leadership as a “package deal.”
²¹
JFK, just prior to his death, was taking policy stances on Indonesia inimical to the interests of Freeport.

It is in this context—the control and extraction of precious resources— that we meet Robert G. Stone Jr. and William H. Quasha (Alan’s father), as young men doing their World War II service in the Philippine Islands.

The Philippines had been a gem in the American colonial empire since it, like Cuba, came under U.S. control after the Spanish-American War in 1898. The Philippines, even more than Cuba, was rich in resources, including gold, copper, sugar, and other strategic commodities.

And more than a few big names did their apprenticeship in the fertile islands. Before he became president of the United States, Bush family associate and Bonesman William Howard Taft was the civilian governor there. So was Henry L. Stimson, the Bonesman who would serve in five presidential administrations—and would address Poppy’s Andover graduating class.
²²
The family of future American general Douglas MacArthur was part of this same American cadre “managing” the Philippines. Douglas MacArthur’s father, Lieutenant General Arthur MacArthur Jr., was the military governor.

Two other Americans spent time in the Philippines—both in the company of General Douglas MacArthur: Robert G. Stone Jr. and William Quasha.

From a young age, even before marrying into the Rockefeller family, Stone was trusted at the highest levels. In World War II, he did intelligence work related to ports and oil in Iran for the acclaimed marine engineer Benjamin Casey Allin III.
²³
After working with Allin, Stone was then sent to the Pacific to serve General Douglas MacArthur, where, among other things, he took personal charge of the security of MacArthur’s yacht and oversaw the sensitive landing preparations for MacArthur’s retaking of the Philippines.

William Quasha, hailing from New York, obtained his law degree from St. John’s University, graduating a year ahead of William Casey, the future CIA director. During the war, Quasha was also sent to the Philippines, where he worked in General MacArthur’s legal department.

Allin, Stone, and Quasha all attained high status within the secrecy-prizing Freemasonry, with Allin and Stone becoming thirty-second-degree Masons and Quasha eventually attaining the coveted rank of Grand Master. One does not need to put too fine a point on this to recognize that such bonds of loyalty and discretion, seen elsewhere in Skull and Bones, do wonders for preserving secrecy over long periods of time, and are therefore enormously useful for maintaining discipline within vast covert operations networks.

Manila Poppy

Poppy Bush himself doesn’t talk much about the Philippines, but he too did service there. Among other things, he participated in numerous bombing runs over the islands when they were in Japanese hands—including Manila Harbor as part of MacArthur’s effort to retake the territory.
²⁴

And of course there was his intelligence work. As noted in chapter 2, on his way to the Pacific, Poppy stopped off at Pearl Harbor for some face time with officers assigned to the Joint Intelligence Center for the Pacific Ocean Areas (JICPOA). The early incarnation of JICPOA was headed by Admiral Roscoe Hillenkoeter, who would after the war become the director of the CIA. JICPOA remains little known and little discussed, but it was a crucial development in wartime intelligence, and played a key role in Admiral Chester Nimitz’s successful island-hopping campaign, of which Bush was a part.

Franklin Roosevelt created the Office of Strategic Services (OSS) in July 1942 to replace a previous intelligence system that was deemed ineffective. General MacArthur, however, barred the OSS from operating in the Philippines, so that battleground was pretty much his own show.

Thus Bush became part of a joint intelligence effort coordinated with MacArthur’s command. The association with the Bush circle would date back to the days when Douglas MacArthur was a young man and his mother contacted E. H. Harriman, father of Prescott’s future business partners, to ask the railroad tycoon to give her son a job.
²⁵
Years later, when Poppy Bush became U.N. ambassador, he took an apartment next to Mrs. Douglas MacArthur, and in 1978 the widow contributed to George W.’s Midland, Texas congressional campaign.
²⁶

Gold Busters!

Being in the Philippines at the close of World War II was a golden opportunity—literally as well as figuratively. The Philippines were chockfull of gold. There was gold in the mines, and rumor had it, there was gold being hoarded.

Even before Douglas MacArthur commanded U.S. troops in the country, he had major holdings in the largest Philippine gold mine. MacArthur’s staff officer, Major General Courtney Whitney, had been an executive of several gold mining companies before the war.
²⁷

Besides the indigenous gold, a great fortune in gold booty was rumored to be buried in the Philippines, seized by the Japanese as they plundered one East Asian country after another. Marcos’s widow, the famously extravagant Imelda, has claimed that her husband and his buddies got hold of this so-called Yamashita treasure. Several journalists, who have spent combined decades on the Philippines gold story, assert that the cache was actually seized by American forces under MacArthur and that its very existence is a sensitive secret. One reason is that knowledge of this gold could cause world gold prices to plunge and wreak havoc with currency markets. Estimates of the cache vary from forty-five billion dollars to hundreds of billions.

This may help to explain why so many of the companies mentioned in this book seem able to function in apparent defiance of economic logic. Entities such as Zapata Offshore, Stratford, Arbusto, and Harken appear to persist without profits for great stretches. To the trained eye, they look like classic money-laundering ventures, raising the question of where all that money originates. And that leads in turn to another explanation proffered about the Philippine gold: that it has been used—and perhaps is still being used—to fund unauthorized covert operations. This would not preclude a variety of funding sources, ranging from oil concessions to profits generated by the “legitimate” side of airlines and other enterprises. But it is hard to top gold as a negotiable mineral.

Rumors about MacArthur’s involvement with gold were so widespread that the general himself called a press conference to dispel such notions. In his statement, he sought to downplay his own gold investments, and did not mention the Japa nese gold at all.

At the end of the war, MacArthur appointed William Quasha as alien property administrator.
²⁸
“Alien property” would have included anything of value captured from the Japanese. If in fact the Japanese possessed gold, this would have been by far the top priority.

Authors Sterling Seagrave and Peggy Seagrave contend that former CIA deputy director Ray Cline told them that the United States did locate the Japanese gold and used it to fund anti-Communist operations the world over.
²⁹
Investigators in the Philippines have said that the gold was stashed in bank vaults in forty-two countries. Some of the money is believed to have been used in Japan, to quickly reestablish the ruling clique, and a pro-U.S. ruling party, the Liberal Democratic Party; MacArthur oversaw the postwar occupation of Japan. The administrator of the so-called M-2 slush fund that secretly channeled these monies to Tokyo was none other than Poppy Bush friend and CIA officer Alfred C. Ulmer.