Family of Secrets: The Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years (53 page)

The Seagraves cast the Pacific gold operation as an offshoot of a secret program that began in Europe after the war. The key figures will be familiar to readers of this book:

The idea for a global political action fund based on war loot actually originated during the Roosevelt administration, with Secretary of War Henry L. Stimson. During the war, Stimson had a brain trust thinking hard about Axis plunder and how it should be handled after the war. As the tide turned against the Axis, it was only a matter of time before treasure began to be recovered. Much of this war prize was in the form of gold looted by the Nazis from conquered countries and civilian victims . . . Stimson’s special assistants on this topic were his deputies John J. McCloy and Robert Lovett, and consultant Robert B. Anderson . . . (This was confirmed, in documents we obtained, by a number of high-level sources, including a CIA officer based in Manila, and former CIA Deputy Director Ray Cline . . . ) [The next target was Japanese gold.] After briefing President Truman and others in Washington including McCloy, Lovett and Stimson, [intelligence officer] Captain [Edward] Lansdale returned to Tokyo in November 1945 with Robert B. Anderson. General MacArthur then accompanied Anderson and Lansdale on a covert flight to Manila where they set out for a tour of the vaults [that] already had [been] opened.
³⁰

Probably the key figure in all this was Edward Lansdale, who, according to the Seagraves, was the point man for the gold operation. Lansdale was almost larger than life, a figure deeply involved with high-stakes covert operations for many presidents. He was said to be an inspiration for the popular novel
The Ugly American
.
New York Times
Pulitzer Prize–winner Tim Weiner writes of Lansdale: “His specialty was counterinsurgency, and his trademark was winning third-world hearts and minds with American ingenuity, greenback dollars, and snake oil.”
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This much is clear: Lansdale helped direct counterinsurgency operations in the Philippines in the 1950s. He was prominent in counterinsurgency meetings in the Kennedy White House, in which Averell Harriman, Prescott Bush’s friend and business partner, was an ardent advocate of such activities.
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Lansdale was also the titular head of Operation Mongoose, the part-CIA, part-Pentagon project to assassinate Cuban leaders, as well as a top figure in counterinsurgency operations in Vietnam.
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If indeed Lansdale was involved with gold operations in the Philippines, then the gold operations were of paramount importance in the larger cold war battle.

IN THE POSTWAR period, and especially the 1950s and ’60s, the United States was desperate for allies in East Asia. The deal, at least as U.S. officials saw it, was that Marcos would hold the fort against Communist incursions in the region as well as allow the continued operation of giant U.S. military bases, notably Clark Air Force Base and Subic Bay Naval Station, that would serve specific cold war strategic objectives.

In return, he would receive protection from the U.S. embassy and intelligence operations emanating from it, as well as from prominent local Americans acting as surrogates.

As part of the deal, Marcos would play a role in the international money machine through which vast undocumented sums sloshed, ostensibly to pay for covert operations. Implicit in this was a wink when he looted his own country—and maybe even an assist.
³⁴
Whether the wealth he amassed included the Yamashita gold is uncertain. After his death, his wife, Imelda, would claim that Marcos had indeed found some of the stash—which at least was justification for the couple’s ability to amass such a fortune.
³⁵
But even without the Japanese treasure, the Philippines certainly had a domestic supply—which had been mined steadily, including during the war years, when the Japanese occupiers oversaw continued production.
³⁶

In 1978, Marcos issued a decree mandating that all gold mined in the islands had to be sold directly to the government. As the Seagraves note: “This made it possible for him to sell some of his own gold to the Central Bank through a variety of intermediaries, and the bank could then send the gold to financial centers without attracting attention.” In effect, Marcos seems to have turned the Philippine government into a laundry for his own stash. From there, according to this analysis, the gold, its origins obscured, made its way into bank vaults abroad and into international markets.
³⁷

Poppy Bush and Ferdinand Marcos cultivated a relationship of mutual appreciation. “We love your adherence to democratic principles,” Poppy gushed during a visit to Manila in 1981.
³⁸
Marcos knew how to play the anti-Communist card, and like nearly all U.S. leaders, Poppy avidly helped prop up the dictator. A number of Poppy’s lieutenants, including Lee Atwater, Paul Manafort, and the notorious “dirty trickster” Roger Stone (no relation to Robert G. Stone Jr.) did political consulting for Marcos.
³⁹
Ed Rollins, the manager of the Reagan-Bush 1984 reelection campaign, admitted that a top Filipino politician illegally delivered ten million dollars in cash from Marcos to Reagan’s 1984 campaign, though he declined to name him.
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Poppy also is known to have personally urged Ferdinand Marcos to invest money in the United States.
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Imelda has claimed that Poppy urged her husband to put “his” funds into something that Imelda knew only as the Communist Takeover Fund. That suggests that gold in the Philippines has long been seen as a funding vehicle for off-the-books intelligence, covert operations, weapons trafficking, and even coups—plus protection money that Marcos felt he had to pay.
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To be sure, there
was
something of a Communist threat to the Marcos regime, albeit an exaggerated threat, and one Marcos himself used to good advantage. But the real threat to the dictator was a
democratic
takeover. By 1983 he was on rocky ground. His health was failing, and his regime’s corruption was increasingly apparent—and embarrassing for his allies, including the United States, which soon began distancing itself. When Benigno Aquino, Marcos’s political rival, returned in August 1983 from a self-imposed three-year exile in the United States, he was gunned down on the tarmac of the Manila airport. In 1986 Aquino’s widow, Corazon, challenged Marcos in an election; when Marcos-regime officials announced that Corazon had lost what was likely a rigged count, a military rebellion finally forced the Marcoses to flee the country.

Amid the upheaval, William Quasha issued a statement of support for Marcos. The disputed election, he declared, was “the least dishonest and least bloody” since the Philippines gained in dependence from the United States.
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On the Home Front

If all this gold was going somewhere, we have to ask: Was some of it going into Harken Energy, where George W. Bush was deeply involved? Certainly, Alan Quasha had a relationship with his father that somewhat paralleled that of W. and Poppy’s.

Having remained in the Philippines after the war, William Quasha eventually attained the rarefied status as the only American licensed to practice law there. He also picked up some intriguing clients, including the CIA-tied Nugan Hand Bank.
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Quasha and some American expat friends living in Manila also established a trail of disbursements outside the Philippines in the carefree manner of people who seemed to be spending someone else’s money. The peculiar approach that this group brought to investing was described, almost in passing, in a Portland
Oregonian
profile of a local developer who received funding from them. In 1972, according to the article, Homer Williams was fretting about his lack of funding for a desirable real estate purchase when out of the blue he received a call from halfway across the world. Soon, Bill Quasha himself was flying in, making an offer for the property on the back of an envelope. A few weeks later, as the option was about to expire, Quasha’s lawyer called Williams and flatly reported: “We just had $600,000 wired into your trust account.”
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After three years of facing various legal hurdles relating to the property, Quasha dispatched his partner Lou Sheff to Portland. What struck Williams— and apparently the
Oregonian
reporter—was the man’s slightly indelicate approach, perhaps the result of a few too many years living under Marcos.

“Homer,” Sheff asked, “who do we have to pay off?”

“Lou, this is Portland,” Williams replied. “You don’t pay anyone off. It’s not the way it works here.”

Two years later, Sheff passed through Portland again. He had a different question.

“Homer,” he asked. “Who do we kill?”
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This is not, one hopes, normal investment behavior.

Quasha senior himself was a far smoother operative. He was well-off and well connected with capital sources. In the final days of the Marcos reign, after nearly all the expatriates had abandoned him, Quasha continued to stick by his man, leading the American Chamber of Commerce to condemn his “partisan approach.”

He also may have been a Marcos money man, just as Phil Kendrick had heard. Philippine investigators seeking to track the billions Marcos had embezzled from the Philippine treasury or obtained as bribes found that most of the money had been moved overseas through intermediaries. In 1986, the
New York Times
reported that Marcos-connected transactions involving tens of millions of dollars went through U.S. institutions such as the Rockefellers’ Chase Manhattan Bank.
⁴⁷
During a federal racketeering trial against Imelda Marcos in New York in 1990, the
New York Times
reported that Imelda’s lawyer Gerald Spence said, “President Bush had urged Mr. Marcos to invest in United States real estate.”
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During the years William Quasha was living in Manila and conducting his law practice, his son Alan attended Harvard Law School and Harvard Business School—even studying in years that overlapped W.’s time there. Then Alan Quasha set up a law practice specializing in the alchemy of corporate restructuring. News reports have characterized his approach to acquiring companies on the cheap as bottom-feeding,
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and noted that the provenance of the funding was not always clear. Additionally, at the time of the Harken purchase, Poppy Bush, a former CIA director, was vice president, with the portfolio for managing covert operations—an empire that was undergirded by laundered intelligence funds.

When Alan Quasha took control of Harken in 1983, he was essentially an unknown and a small-timer. Several years later, he appeared to be on top of the world. Did gold and/or Marcos’s billions have anything to do with this? What about Harvard’s role? It is possibly a coincidence that Robert G. Stone of the Harvard Corporation also served on the board of the Gold Fund of the investment giant Scudder Investments. The Gold Fund was established in 1988, shortly after Stone brought Harvard’s money into Harken. Four years later, Harken chairman Alan Quasha joined the board of American Express’s AXP Precious Metals Fund.
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By 1994, the once little-known New York lawyer had advanced so far up the ladder that he became a governor of the American Stock Exchange. And in May 2002, he joined the board of American Express Funds, the mutual fund arm of Amex. And fittingly, Quasha joined the board of Harvard University’s foreign affairs center.

An Alpine Rescue

By joining the Harken board of directors in late 1986, George W. Bush was entering this dense financial web. The next year he took time out from his father’s presidential campaign to travel to Little Rock, Arkansas, where he met with Jackson Stephens, head of Stephens Inc., the largest private investment bank outside Wall Street. Stephens, as noted earlier, had a proclivity for befriending presidents and would-be presidents of both parties. He had previously established financial ties to Jimmy Carter—and would later do so with his fellow Arkansas native Bill Clinton, for whom he was a particularly crucial savior. The Stephens family rode to Clinton’s rescue both during his 1990 reelection bid for governor of Arkansas and in March 1992, when his presidential campaign was broke. Noted the investigative magazine
Mother Jones
: “It may not be too much to say that their Worthen Bank’s emergency $3.5 million line of credit saved the [Clinton] presidential campaign from extinction.”
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Following W.’s visit in 1987, Stephens brought in the Union Bank of Switzerland (UBS), the largest financial institution in that secretive Alpine enclave. According to Harken filings, the London branch of that Swiss bank underwrote Harken’s twenty-five-million-dollar stock offering. The bulk of the UBS shares, in turn, went to a Saudi operating through a Caribbean shell company.
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In the final analysis, George W. Bush, Stephens, and even UBS appear to have been midwives to create an arm’s-distance between Harken and its U.S. intelligence connections and some ultimate funders: the Saudis.