07 May 2013

GOLD - Marcos Gold Resurfaces...?

US/1; ATTN   

A report on

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when Congress had voted to cur offU.S. military aid ro rhe contra rebels in
Nicaragua, he'd been in charge of the Reagan administrations covert
campaign to keep the contra war alive. It seemed to swallow all the time
and money he could divert. From a third-floor suire in the Old Executive
OIIice Building, he and a handful of his fellow sraffers at the National
Securiry Council had cooked up a grand plan to underwrite the contra
war: an ingenious but illegal scheme to skim the profits from a series of
under-the-table arms sales to lran and channel them to Central America.
The implementation o[ North's dual-edged deal began in August 1985,
when Israel secretly shipped a planeload of arms ro Iran. S As North,s
newly uncovered confidential notes show, the arms-for-hostages deal with
the Ayatollah Khomeini wasn t his only Faustian compact.Just six monrhs
before Ferdinand Marcos was forcibly escorted from his homeland by U.S.
military forces, North was ready, willing, and apparently able to cut a deal
secretly for a share of the Philippine dictator's ill-goten assets. g North's
globe-trotting bagman, Richard Miller, had called from London to outline
the proposed transacrion, and as he spoke North dutifully scribbled in his

spiral notebook: "40 mt. $6 US commission. .. for Gold-Mtg romorrow
for addl 20 mt.-[code name] has agreed to $2.5M rwice for a total of $5M."
With a commission of $6.20 per ounce on 40 metric tons (4,1 U.S. tons)
of gold-the terms outlined in North's characrerisric shorthand-the total
take on the deal would have approached $8.7 million, and North,s operation
would have netred ar leasr $5 million.

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I//ustration by Sandra Hend/er

How the
pulled the
bank hclgt
ln hlrtory

1 16 OcroBER 1988


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Miller's telephone call to the White House
about the mysterious $465 million gold deal
is but a tantalizing nugget in an intricate
and as yet incomplete tale of international
intrigue-a tale replete with legends of buried
treasure, swaggering Arab sheiks, a pur-
Ioined golden Buddha, assassination plots,
a hanged Japanese war criminal, shady arms
dealers, and chartered flighs to Zurich.

Although the full story is still being pieced
together by government and private investigators
in Washington, Manila, and Bern,
this much is clear: during his 20 years as
the president of the Philippines, Marcos engineered
the wholesale looting of his own
country and made himself a billionaire in
the process. Documents uncovered after Marcos's
exit from the Philippines in February
1986 show that he and his cronies plundered
their nation by clamping a viselike
squeeze on almost every facet of its economy.
Marcos extracted kickbacks of 15 percent
on every imaginable commodity and
service, from sardines to construction, from
banking to immigration visas, from coconut
oil and sugar cane to government contracts
and loans. In addition, he secretly
owned controlling interests in some of the
country's largest corporations.

As Marcos got richer, the PhiLppine people
got poorer. During his regime the percentage
of Filipinos who were livingbelow the poverty
level increased from 27 percent to 70 percent,
according to the InternationalMonetary
Fund. Once the second-richest nation in Asia
(behindJapan), the Philippines that Marcos
left behind would have to struggle to stay
ahead of Bangladesh in per capita income.

Marcos is known to have accumulated at
Ieast $2.I billion in assets, and much of the
$1.5 billion in cash that he's believed to
have deposited in secret Swiss bank accounts
reportedly represents the proceeds from the
sale of tons of gold bullion. Marcos apparently
opened his first secret Swiss bank
account in 1968 with a deposit of $950,000.
But byJanuary 1970, in an effort to counter
charges that widespread corruptionwas mak-

William Scott Maloneis an award-winningtelevxion
producer baed inWashington. His worh
on "In Search of the Marcos Millions," which
aired on PBS's "l.rontline" seies, recently won an
Emmy for outstanding inv estigatlejournalism.

118 OcroBER 1988

ing him "the richest man in Asia," he called
the Malacanang press corps to the ninth
hole of the private golf course that he'd built
just behind the presidentialpalace. In a booming
baritone he announced that he'd discovered
the legendaryJapanese treasure that
had been buried during World War II by
General Tomoyuki Yamashita, the commander
of the occupation. "l admit that I am
rich," Marcos told the newsmen. "But you
know, boys, how I made my pile? I discov

ered the treasure of Yamashita."

With that pronouncement Marcos began
to fabricate an elaborate cover story that
would notonly explain his increasingwealth
but also hide its real source: the Philippine
Central Bank. In 1975 he hyped the buried-
treasure story by encouraging American
adventurers to search for yet more of Yamashitas
gold, butwhen they failed to find any
of it, Marcos managed to keep the rumors
in full swirl by ordering his Presidential
Security Command to take over the various
sites they had been exploring.

In 1978 Marcos decreed under martial
Iaw that all Philippine-mined gold be refined
and sold through the Central Bank. Almost
as if by magic, newly minted gold was made
to look old by melting it down and casting it
into odd-size bars with a mysterious hallmark.
In 1983 Marcos dispatched his mili
tary gold hunters to Hong Kong to sell large
quantities of "Yamashita'gold, none of which
had actua\ been dug up by its treasure-
hunting salesmen. Then, shortly after opposition
leader Benigno Aquino was gunned
down on the tarmac of Manila International
Airport in August 1983, Marcos secretly began
to ship huge quantities of Philippine
gold to London, Zurich, and Hong Kong.
Three years later, as Corazon Aquino's "People
Power" revolution began to loosen Marcos's
grip on his own government, the secret
shipmens of gold and silver bullion resurned.

According to still-classified government

documents, Marcojs I lth-hour machinations

to move gold out of the Philippines didnt

escape the attention of U.S. intelligence and

law-enforcement agencies. Yet the scope of

his efforts, and the extent to which Oliver

North, various CiA operatives, and others in

the Reagan administration may have been

drawn into them, still remains mostly a

mystery-a story whose final chapter has

been stamped "top secret" by the White

House on the grounds of "nati6nal securiry."

Earlier this year, in fact, the Reagan admin

istration effectively quashed a broad-based

racketeering indictment that was to be

brought against Marcos in Manhattan by

U.S. Attorney Rudolph Giuliani. Giuliani then
drafted and forwarded to theJustice Department
a new indictment against Marcos on
narrower charges: real estate fraud in New
York, depletion of assets against a court
order (selling gold bullion), and obstruction
ofjustice-all allegedly committed since he
entered the United States in 1986. "TheJustice
Department got Giuliani down to just
three counts," says a source close to the
negotiations. "None o[ the heary charges
can be brought now. They are trying to
make sure it dies a slow death."
Indeed, inJuly the White House even put
the brakes on Giuliani's drive to indict Marcos
on the three narrower couns. The delay
opened the door for Marcos's incredible,
behind-the-scenes offer to pay the Philippine
government $5 billion in exchange for
the right to return home free from any threat
of criminal prosecution.

Marcos's "$5 billion solution," as it came
to be known, was promptly rejected by the
Aquino government, whose top lawyer in
Washington called it "a last-ditch attempt
to forestall the NewYork indictments." Marcos,
who'd declined to reveal the nature or
whereabouts of his asses, then denied having
made the offer at all-despite a letter in
which he'd written that he "would provide
the government with $5 billion of my present

Yet the deal still isnt considered dead,
and it would buy Marcos something much
more valuable than a scot-free return to his
homeland: the United States, as it turns out,
doesnt have an extradition treaty with the

Chapter One

afrnity for all thrngs golden
had been well known
among the Philippine
people for many years.
Perhaps the most telling
and notorious evidence
of his lust came to light
during his second legal
term as president, in an
episode that could have
come right out of Raiders
of the Lost Arh.

The incident centered
around Rogelio Roxas, a
waly-haired locksmith u{q
by the age of27, had be

come a veteran treasure hunter. Beginning in
the spring of 1970 Roxas and a crew of 30
laborers, working with a Japanese map o[ a
jungle site some 50 miles north of the resort
town ofBaguio Ciry dug and hunted and dug
for more than seven months. Finally, just
aflter Christmas, Roxas hit the jackpot.

Roxas climbed out of a mountainside
tunnei, calmly dismissed his workers,
and sealed up the entrance. Two weeks
Iater he returned with a dozen trusted

climbing in more than 100 feet and then
straight down another 20 feet, they reached
Roxas's stunning find: a beautifully sculpted
solid-gold Buddha, which, at 30 inches
high and about 18 inches across at the
base, weighed more than a ton. It took the
men until four o'clock in the morning to lift
the Buddha from is hiding place.

Roxas again blasted the entrance to the
tunnel closed and stashed the Buddha in
his ramshackle house in Baguio City. Guessing
that the Buddha might be worth as
much as $5 million (a ton of I8-karat white
gold would be worth more than $10 million
today), he dispatched emissaries to locate
a buyer quietly. The proceeds, he figured,
would finance his recovery of other treasures
within the honeycombed caves.

The golden Buddha, Roxas claims, was
merely "standing guard" in front of an iron
gate that led to several much larger caverns
in the mountain. There wasJapanese writing
on the gate, on the cavern walls, and on
the stones that Roxas took out with him.
When he looked inside the first two caverns,
Roxas says, he saw dozens ofhuman
skeletons and I2 flatbed trucks that were
stacked with gold bars and other valuable
golden artifacts. Roxas says he also saw various
crates that boreJapanese characters.

Two months later Roxas was reportedly
approached by Takeshi Uehara, aJapanese
national who claimed to represent an unnamed
principal. After inspecting the Buddha
and taking several photographs and
metal samplings, Uehara offered Roxas a
down pal,rnent of I miilion pesos (then worth
about $500,000). Uehara said he would'
return in a few days with the cash.

Roxas was ecstatic, and he and his two
brothers celebrated for two days. When
they finally went to bed the evening before
Uehara was to return, Roxas had no idea
that he would instead awake to a real-life
nightmare.Just after 2:00 e.u. on rhe morning
of April 5, 1971, according to police
reports, 10 men armed with automatic



weapons banged loudly on his front door.

"What do you want?" Roxas asked.

"We're government agents with a war

rant to search your house," the men replied

as they cocked their guns.

Roxas had little choice. When he opened

the door, the agents barged in and flashed a

warrant that cited his possession of a gold

Buddha as a violation ofCentral Bank regu

lations. At the bottom of the search warrant

was the signature ofJudge Pio Marcos, Pres

ident Marcos's uncle. The agents herded the

family into the kitchen and ransacked the

house. It took eight ofthem and a pushcart

to remove the Buddha. Even more worri

some to Roxas, however, were the encoded

maps they confiscated; one of them, osten

sibly a Japanese flag painted with ancient

Chinese characters, revealed the location of

the remaining treasure.

At dawn Roxas approachedJudge Marcos,

who notonlywamed him to remain quietbut

advised him nor ro reporr rhe incident to the

police. Roxas, having already done so, decid

ed to flee to a neighboring province. More

than two weeks later the government agents

returned a "golden'Buddha to rhe Baguio

City courthouse. It was made of brass.

A few days after Roxas denied that the
brass Buddha was the one removed at gunpoint
from his house, he was approached
by two women from Manila. They offered
him 3 million pesos ($ 1.5 million) to accept
the bogus Buddha as his own and gave him
the telephone number of their anonyrnous
patron. The number, as it turned out, belonged
to Dona Josefa Edralin Marcos, the
president's mother. Roxas, more frightened

than ever, u/ent back into hiding.

Overnight the Roxas storywas transformed
into a national scandal. The Marcos regime
was accused of keeping key witnesses from
testifying before a commitree of the Philippine
Senate; these witnesses included the
sculptor who had made the brass replica,
the originalJapanese intermediary (who later
claimed that Roxas had stolen the Buddha
from him),Judge Marcos, and the agent
from the Presidential Security Command
who'd led the raid.

President Marcos, in turn, called a press
conference and vowed to carry on a "personal
vendetta" against those he considered
to be besmirching the good name of his

120 OcroBER 1988

mother. The unfolding Senate investigation,

he said, "should be regarded as a cheap

political stunt."

Marcos's threats and obstructions not

withstanding, the Senate committee issued
a stinging 3lO-page reporr on the Roxas
raid. It concluded that "the civil liberties of
Rogelio Roxas . . . were wanronly violated by
Judge Pio Marcos" and by the agens who
conducted the raid. Even the president's
cronies at the Central Bank hadn t been able
to come up with the regulation that Roxas

had been charged with violating.

Yet Roxas still didn r get his golden Bud

dha back. Instead, he was detained and tor

tured. His captors put him in a 55-ga11on

drum of water and shot a strong electric

current through it until every muscle in his

body rwisted in pain. Then they pur our

their cigarettes on his skin. Roxas signed a

retraction. When he was released later that

summer, leading members of the Liberal

party, Marcos's chief political adversaries,

quickly placed him under their prorecrion.

Roxas was to be the star witness at a rally
of some 10,000 Marcos opponents ar rhe
Plaza Miranda in downtown Manila on
August 21,1971. At 9:I5 eu.,just as Roxas
was about to speak, two fragmentation grenades
were hurled onto the stage; other
explosives were simultaneously detonated
underneath. Eight bystanders were killed,
and among the 100 persons wounded were
all eight of the Liberal party's Senate candidates.
Although Roxas himself was badly
shaken, he escaped serious injury.

Marcos blamed the violence on Communists,
suspended the writ of habeas corpus,
and ordered mass arrests. But according to

U.S. intelligence and diplomatic sources cited
by Ral.rnond Bonner, a former correspondent
for the New Yorh Times, the bombing "was
carried out by Marcos loyaliss within the
military-the grenades were traced to an army
arsenal." Marcos's press secretary at the time
later admitted that members of the Presidential
Security Command had told him
that "the instruction given to the grenade
throwers was to'get Rogelio Roxas killed."'
That fall Marcos and his party suffered a
humiliating defeat in the interim senatorial
elections; the Liberal party's candidates had
campaigned in wheelchairs and bandages.
In September 1972 Marcos, who was legally
barred by the Philippine constirution from
seeking a third term, declared martial law.

One of the firstFilipinos arrested rmder Marcos's
declaration of martial law was Rogelio
Roxas. Roxas was in prison for two years, dur

ing which time, he maintains, Marcos and his
men excavated the remaining treasure from
the Benquet mountain caverns. Following his
release from prison in 1974, Roxas spent
the next 12 years hiding out in the sparse
jungle provinces ofVisayan and Mindanao.

Yamashita. The legend
has persisted in the
mountain provinces of
Luzon, the main northern
island of the Philippines.
In the waning
days of World War II,
when General Douglas
MacArthur kept his
19,12 vow to return, the
commander of the Im

perial Japanese 14th
Area Army chose to
make a last defensive
stand in the mountain
provinces outside Ma

nila. Japanese trucks were driven in convoys,
mostly at night, deep into the mountains-
in some cases, never to be seen again.
Were they carrying munitions and mat6riel
or something else?

Legend has it that the convoys carried bil-
Iions of dollars in bullion and artifacs, including
seven solid-gold Buddhas that had been
pillaged by Imperial army troops from the
conquered territories of Siam, Burma, Singapore,
Indochina, Sumatra, Java, and Malaya.
During the final battle for the Philippines,
the Imperial forces were under the command
of General Tomoyuki Yamashita, whose
overpowering presence-he was six feet tall
and bullnecked-left an indelible impression
on those who crossed his path. Within
hours of the attack on Pearl Harbor, Yamashita,
a brilliant military tactician, had driven
the Japanese 25th Army down through
the Malayanpeninsula, earninghim the sobriquet
"the Tiger of Malaya." Then he had
boldly swooped in from behind onto the
island ofSingapore and surprised the heavily
fortified British garrison whose large guns

were uselessly pointed out to sea. With his
60,000 troops at the end of their supplies,
Yamashita had forced the surrender of
I30,000 British soldiers. It's considered a
classic engagement in the annals of modern
warfare-"the battle that changed the world,"
as one military historian put it.

What happened next also ranks in history.
Yamashita ordered the elimination of all
anti-Japanese, "undesirable elemen8" in the





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Chinese population; some 5,000 civilians
in Singapore were machine-gunned, bayoneted,
or beheaded.

Meanwhile, back in Tokyo, Yamashita's
daring and ferociousness were beginning to
trouble Premier Hideki Tojo, who felt politically
threatened by his growing popularity.
In July 1942 Tojo ordered Yamashita transferred
to Manchuria, where he couldnt be
further acclaimed as a hero. Yamashita
remained in virtual exile until Tojo's downfall
inJuly 19,1,1. Within 60 days Yamashita
was ordered to proceed to the Philippines.

During the final, frantic battle for Manila
in February 19'15 more than 40,000 civilians
were massacred. Hundreds of Allied
prisoners of war were murdered, including
l'15 Americans who were burned alive on
the island prison of Palawan. More than
500 rapes were recorded. All ofthe patiens
at the Red Cross hospital in Manila were
shot or bayoneted, and the building was
burned to the ground. A church full ofcowering
women and children was sealed and
set ablaze. Thousands more were simply
machine-gunned to death.

Yamashita, however, sat out the carnage by
issuing orders from his mountain command
post near Baguio City. When he finally surrendered
on the orders of his emperor-he
was never capnrred-in August 1945, he still
had 50,500 troops under his command. Mac-
Arthur had him arrested and ordered that he
be tried for the massacres. In a landmark case
Yamashita became the first war criminal to
be so judged at the conclusion ofWorld War

II. His conviction set the precedent for the
doctrine of "command responsibility."
Over the years Yamashita has been the
subject of at least seven books, not one of
which mentions so much as a rumor about
any treasure. Yamashita had arrived in the
Philippines less than Nvo weeks before MacArthur's
invasion, flying in from Manchuria
via Tokyo. Not only was there no treasure left
to pillage in Manchuria, which had been raped
by the Imperial army long before his arrival,
but the nvo rickerypropeller planes onwhich
he had flown could hardly have carried tons
of cargo. Any large amount of bullion would
have had to have been delivered by sea. But
the Americans controlled all shipping lanes
south of the Philippines, and most of the
Japanese ships that sailed in from the north
were sunk. And it strikes some historians as

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odd that the Imperial Japanese plunderers rend
would not have moved their booty to more
secure hiding places in Japan.

Richard Lael, the author of Th eYamashin


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RoEelio Rora3 had uneartheil Dlenty of buried treasure in hi3 day (above),
but it all paled ia conpari.soa to the solid-golit Bualilha be Youl'd fiod rleep rithia
a Dountainsiile cavern sone 50 niles north of Baguio city (lett).

Precedent, says the legend of a Yamashita
treasure isn t to be believed. "l spent a year
studying the U.S. Army Archives, and there
wasrlt so much as one single memo-no discussions,
nothing," he says. "I cant imagine
that if that much gold were floating around,
the U.S. Army wouldnt have looked for it."

Moreover, there's no historical record whatever
to suggest that Yamashita or officers
under his command plundered any national
gold reserves in Southeast Asia. (There is
substantial evidence, though, that theJapanese
conquerors plundered churches and
temples in their path, which may account
for the few golden Buddhas floating about.)
If Yamashita ever acquired or controlled an
incredible hoard ofgold, he was never to see
it again. He was hanged for his wartime crimes
shortly after 3:00 ,q.u. on February 23,1946.

Thus, as one legend died, ano*rer was born.


of Yamashita, the pur

ported wartime ex

ploits of Ferdinand

Marcos are more fic

tion than fact. His offi

c!al autobiography,

which was published

in 1979, blithely re

counts how Yamashita

personally surrendered

to Marcos's guerrilla

unit and turned over

the secret of his trea

sure. The book also

discloses that Marcos

then set up a "veterans

company" to distribute the proceeds to his
destitute comrades.

U.S. Army records, however, paint Marcos
as a collaborator, nota conqueror.WhileYamashita
was raping Singapore and administering
Manchuria from 1942 to 1944, the young
Marcos was apparently playing foosie with
the Japanese secret police. Marcos's father
was executed at the end of the war as a
Japanese collaborator and propagandist. Just
before his grisly death by clubbing in 1948,
the elder Marcos admitted without hesitation
that both he and his son had been infatuated
with the Imperial Empire. "When questioned,"
an affidavit by the local U.S. Army
commander noted, "he readily admitted his
activities and stated that he had been recomarea

mended to the Japanese
by his son." And in 1947, when Ferdinand
Marcos applied for miliury back pay (citing
his nonexistent guerrilla unit, Ang Mahar-
Iika), his claim was rejected as fraudulent.
Marcos apparently first claimed to have
discovered the treasure of Yamashita in his
January 1970 press conference (nearly a
year before Roxas's discovery of the golden
Buddha). Marcos had certainlynever claimed
the treasure on his tax returns. His 1961
return listed only $20,000 in asses; his
1966 return (the first he filed as president)
listed $60,000 in assets, chief among them
his law books.
Three years at'xr rhat press conference,
however, Marcos and his henchmen were
still chasing the Holy Grail of Yamashita.
His top treasure hunter, ColonelFlorentino
Villacrusis, had been enlisted as a presidential
soldier of fortune by General Fabian

. t","i

Recanote's 12J


Ver, Marcos's cousin and the chief of the

Presidential Security Command, following

his retirement from the army in 197 I. Soon

afterward Villacrusis came into possession

of a Japanese flag dotted with ancient Chi

nese characters (a virtual replica of the one

that had been confiscated from Roxas, who

was now languishing in prison). By I973,

after several trips toJapan, Villacrusis had

become the Philippines'leading experr on

the legend of Yamashita.

In March 1975 Marcos lured a crew of

American treasure hunters to join Villacrusis

hnd Ver. But during several long conversa

tions aboard the presidential yacht, it soon

became apparent to the Americans that Mar

cos and Ver were much more interested in

smelting, "laundering," and marketing than

in hunting and digging.

In a voice often drippingwith sinisterimplication,
Ver explained his plan to Robert
Curtis, a refining expert from Nevada: "The
laundering facility must become operational
as soon as possible because retrieval ofadditional
gold could create a serious problem of
safe storage and security unless it could be
laundered and sold as it was retrieved." Marcos
anointed another American, Norman
Kirst of Wisconsin, to arrange the sale of
the "re-refined" gold in Zurich and London.

The Americans were duly impressed by
the Filipino operation and its attendant security
apparatus. During one visit to Marcos's
summer palace at Miravelles, they were
shown a two-and-a-half-foot-tall, solid-gold
Buddha. They also met Romeo Amansec
and Major Marcelino Barba, the operarives
of the Presidential security Command who'd
raided Roxas's home four years earlier. Ida
Villacrusis, the colonel's wife, was told that
Barba, Marcos's brother-in-law, was in charge
of security for the gold that Marcos had
stashed at Miravelles. But it was Ver who
took one of the Americans for a tour through
a hidden tunnel under the presidential summer
palace. "l saw the bars stacked from
floor to ceiling," Curtis later recalled.

The American adventurers were soon
champing at rhe bit to do some treasure-
hunting themselves. Finally, inJune 1975,
they got the chance. Working closely with
Villacrusis, they began to excavate outside
the small town of Teresa, 35 miles south of
Manila. On July 6, at a depth of 108 feet,

1 24 OcrosEn 1 988

they found human bones, the fender of a

truck, and a 1,000-pound bomb that had

been booby-trapped to guard I 3 truck beds.

The Americans believed they had discov

ered Yamashitas mother lode; instead, they

discovered Marcos's wrath. Ver brought in

troops from the Presidential Security Com

mand, secured the site, and sent the Ameri

cans fleeing in fear. The Americans never

actually saw any gold, nor were they ever

allowed to return.

The Americans wererit happy with this
untoward turn of events. One wrote to
Villacrusis and threatened to have him "assassinated"
if he ever came to the United States.
In turn another American was threatened
with bodily harm if he refused ro rerurn
photographs of Marcos and Ver meering
with him and his fellow treasure hunters.
Curtis and the others had indeed garhered
quite a collection of photographs, lerrers,
and tape recordings, most of which soon
found their way to the U.S. State Department
and the ctA and intoJack Andersons
nationally syndicated newspaper column.

But the headlines in the United States and
Manila hardly seemed to perturb the Philippine
dictator. Despite glaring evidence to
the contrary-particularly the photographs-
Marcos coyly denied having anything to do
with this latest treasure-hunting expedition.
A spokesman for the Philippine embassy
called Anderson's stories a "concoction" and
denied that Marcos had ever planned "to
pick up any Japanese World War II treasures."

Marcos was apparently orchestrating a
two-sided cover story, trying on the one
hand to create the impression that he'd discovered
the legendary treasure of Yamashita
while desperately trying on the other hand
to keep it secret.

In the midst of iinfolding press expos6s
in 1978, Marcos suddenly decreed that all
Philippine gold was to be refined and sold
exclusively by the Central Bank, which was
run by Governor Gregorio Licaros, his longtime
friend. Marcos also decreed a seven-
year statute of limitations for claims of
treasure discovered in the Philippines. Not
coincidenu\ it had been almost sevenyears
to the day since the seizure of Roxas's Buddha.

The martial-law decree enabled Marcos to
take over the nation s lucrative gold-mining
industry and to pocket much of the national
treasure-the Central Bank's bulging gold
reserves-as well.

Everything was finally in place, his legends
all in order, should the day ever come
when Marcos himself might have to flee.

Chapter Two



sination of Benigno

Aquino on August 21,

1983 set offalarm bells

around the Pacific.

Gunned down while in

the hands of General

Ver's elite troops on the

ramp of a commercial

jet filled with foreign

journaliss, Aquino had

not gone quietly. For

the Marcos gang itwas

a clarion call-a singu-

Iar and dramatic indi

cation that it was finally

time to move, time to

take precautions for what they now knew

would become inevitable: the day when Fer

dinand Marcos would be forced to flee the


The shot that struck down Aquino was
perhaps heard loudest in the concrete canyons
of Hong Kong. Telex machines clartered
and telephone lines buzzed as word of
a huge gold deal that was said to be in the
offing spread rapidly through the trading network.
The mysterious sellers were representing
"old-time Philippine politicians," and
the gold bars themselves were "odd-size"
and stamped with an unknown hallmark.

Con men ofallstripes soon claimed to have
the inside track. The "heavy breathers," as
they're derisively called by more legitimate
commodities dealers, "were all over that one,"
recalls a broker. Both Marcos and Jaime
Laya, who'd recently been appointed to be
the governor ofthe Central Bank, denounced
the rumors as nothing less than a plot to
destabilize the Philippine governmenr.

It was a visit by Villacrusis in 1983, however,
that really sent tongues wagging in
Hong Kong. Brian Lendrum, who was then
the head of American Express Private Bank
in Hong Kong, had a brief but memorable
meeting with the colonel. "They had a very
large amount of gold for sale," Lendrum
says, adding that he took the offer seriously
when the names of JaimeLaya and several

other high-ranking Philippine bankingofficials
were invoked. Lendrum later received
a letter from Villacrusis, he says, "in very
flowery prose, stating that the deal was
approved by'the highest person in the land."'
Despite such high-powered connecrions,
however. the deal never materialized.

A Hong Kong gold dealer confirms the
names of the Philippine banking officials invoked
by Villacrusis and his parry. "l was not
involved directly, butsome people I have done
business with told me they paid for some

senior IPhilippine] officials to come up here
to Hong Kong in 1983," he says. "I was only
an observer. They were very secretive, shuffling
between various banks in Hong Kong. I
did see the name of Jaime Laya on one telex."
The bullion itsel! the Chinese gold dealer
recalls, was equally mysterious. "The goid
was supposed to be owned by'old politicians'
through nominee companies," he says.
"The amouns were huge-more than 50
tons, something like a billion dollars'worth.
The bullion was apparently painted a funny
color and had funny markings and strange-
size bars. It would have to be melted down
to tradable size and markings." But again
nothing came of the deal.
An expatriate British lawyer recalls that 80
unusually large-75-kilogram ( 160 pounds)gold
bars were offered for sale in Hong Kong
in 1983. He says he was told that half of
the bars were already in Hong Kong and
that the other half were still in the Philippines.
The bars were owned by "older generation
people," the lawyer says, and were
marked AAA and sramped SUMATRA. This
deal fell through when the sellers refused to
allow the bars to be inspected without a
letter of intent to purchase.
Was there ever really any gold?
If the strange story of an American soldier
offortune is true, there can be no question
that Marcos was trying to unload an
astonishing hoard ofgold. In the dark realm
of the world's mercenaries, Ron Lusk's reputation
as an expert facilitator had spread
far enough to have reached General Ver in
the Philippines. Lusk, who'd done an occasional
bugging job for Marcos's National
Intelligence and Security Agency, says that
in 1983 Ver asked him to engineer the transport
of gold from the Philippines to Zurich.
Lusk later told U.S. Iaw enforcement agents
that he'd made arrangements for two Boeing
747s to fly the bullion out. (Today, in connection
with an unrelated case, Lusk is in
the federal Witness Protection Program, and

U.S. officials have characterized his reliability
as "impeccable.")
On an inspection visit to the Philippines,
Lusk told investigators, he was shown the
gold by Ver's chief deputy. From Lusk's
description, he was apparently led through
the underground tunnel near Marcos's summer
palace in Miravelles. There he saw 50



1 'q6\'F'' ..\-l-q-c-(


oQ I rlr '



tons ofgold bullion in neatly stacked cop

per cases emblazoned with what appeared

to beJapanese or Chinese characters. Lusk

says that he carefully inspected each case.

But because ofa disagreement over how
to divide the proceeds, Lusk says, rhe Boeing
747s never carried any gold out of the Philippines-
at least under his direction. The bullion
apparently had been destined for Bankers
Tiust AG Zurich, which for years had
been secretly doing business with Marcos,
according to records later recovered from
his bedroom safe at Malacanang.

Any evidence of Marcos's gold actually
changing hands-shipping documents, airway
bills, bills of lading, canceled checks,
and the like-is exceedingly hard to come
by. Most transactions that involve large quantities
of gold are shrouded in secrecy and
further shielded by double-dealing. Bur anon).
rnous Iile clerks do occasionallypinch documents,
and even the best operators can
make mistakes.

One such mistake occurred in September
1983, just two weeks after Aquino's assassination,
as a hastily arranged shipment of
gold was loaded onto a Korean Airlines jetliner
for a commercial flight from Manila to
Zurich via Bahrain. The Boeing 747 failed ro
achieve lift-offand ran oflthe runway. Under
a pledge of confidentiality, is pilor Iarer told
Philippine investigators that the plane had
crashed because of "the weight of the gold."
Yet the airport tower's records, which had
been under the control of Ver's in"telligence
network, were nowhere to be found after
Marcos fled. The flight clearances, an investigator
says, were either "hidden or shredded."

The next attempt was apparently more
successful. In October 1983 Marcos's men
chartered a Boeing 707 passengerjet, according
to one of the parties involved in the
transaction. The flight's ostensible purpose
was to carry a shipment of flowers from
Manila to Zurich via Karachi. Another Philippine
investigator later found, however, that
the "flowers" had been shipped under a diplomatic
airway bill.

The plane actually carried gold bullion
from the Philippines to Switzerland. To avert
another disaster, the president's son, Bong
Bong, used the plane's seat bels to strap the
gold bars into individual seas and thus to
distribute the weight evenly around the cabin.

126 Ocroepn 1988

As with is predecessor, the chartered planes
flight clearances have since disappeared. In
1986, however, Ferdinand Marcos confided
to a lawyer who visited him in exile in Hono-
Iulu that the only person he trusted with
the gold shipmens was Bong Bong.

In the immediate wake of Aquino's assassination
there was yet another mysterious gold
shipment out of Manila. On September 9,
1983,247 goldbars were loaded onto Flight
86'1 of KLM Royal Dutch Airlines. After a
brief stop in Amsterdam, the bars arrived in
London. A suspicious Filipino employee of
KLM later yanked the airway bill, which listed
Morgan Guaranry Bank of New York as
both the shipper and the recipient. Morgan
Guaranty inexplicably stated on its customs
declaration that the gold-more than three
tons of it-had "no commercial value."

All told, three flights to London and Zurich
in late 1983 and early 1984 had carried an
estimated 14 to 17.5 tons of gold bullion-
worth between $168 million and $213
million-out of the Philippines.

hardlyhave amounted
to a slim paperback
novel if the Cn
hadn't materialized
from the shadows of
Marcos's deals. Several
reports ofcu interest
or involvement
have surfaced during
the last nvo years, and
Marcos himself has
claimed that the crA
wanted to use his gold
for its own purposes.
And yet another curious
incident-this one

involving an aging, little-known accountant
in suburban Washington-lends at least some
credence to his claim.

When Northwest Orient Flight 20 from
Manila touched down at Seattle-Thcoma
International Airport on November 21,1983,
Jose Cruz-Cruzal must have been slightly
anxious. Hidden under his belt was a tighrly
bound plastic bag that contained a veritable
gold mine of highly sensitive documents.
As far as inspectors for the U.S. Customs
Service were concerned, the documents were
a Thanksgiving Day glft-a little something
to brighten up a working holiday weekend.

Federal investigators identified Cruz-Cnsza,l
as an agent of Marcos's elite Presidential
Security Command, and a still-confidential

U.S. Customs invesrigarive file described the
contents of his plastic bag as follows: "voluminous
documents pertaining to Marcos
borrowing billions of dollars from a group
of unnamed and/or undetermined banks
*rrough an individualidentified only as Frank
B. Higdon." In addition to a laminated card
that identified him as a "secreC'agent of
Marcos's, Cruz-Crrzal also carried enough
blank tos to deputize the coconspirators he
would need to complete his secret mission.
One document outlined how Marcos
would secure loans by using "four floors of
gold stored beneath a bank in Manila. . . as
collateral." Another noted pointedly that
"banks associated with the International
Monetary Fund are not to be used in securing
these loans."

Both Cruz-Cruzal and his American-born
bodyguard refused to answer any questions,
however, and both asked to be allowed to
contact Higdon.

The Customs Service, which suspected
that Cruz-Cruzalwas involved in currency
laundering, gold smuggling, and possible
violations of the Foreign Corrupt Practices
Act, launched an investigation. A quick
check of its files revealed that Higdon was a
67 -year-old accountant in Alexandria, Virginia;
some federal investigators also suspected
him of having been a frequent Cm.
operative. His subsequent behavior would
do little to allay those suspicions.

Higdons gold operation had already come
to the attention of customs agents in Washington.
According to their investigative file,
they'd been advised by one source: "Higdon
contacted Wells Fargo to determine procedures
whereby Wells Fargo would trans,
port a large quantity of gold into the United
States. . . . Higdon[informed Wel]s Fargol that
he was a CPA who had been asked by a client
to arrange for the shipment of an undetermined
amount of gold from Manila. The
gold was estimated to weigh 75 kilograms
per bar. After Higdon was advised that Wells
Fargo would not deliver the gold to a private
residence or other nonfinancial business
establishment, he ended the conversation
and did not recontact Wells Fargo."

The customs agens called Higdon to set
up an interview. "Upon being advised of the
subject matter," their report says, "Higdon
immediately became hostile, saying only that

U.S. Customs should not interfere as CruzCruzal's
mission in the United States was
sanctioned by highly placed U.S. government
officials and that pursuing the matter
would prove detrimental to the U.S. gov

ernment (and to Ithe agenfs] career). Higdon
then abruptly hung up."

A few minutes later the agents got a call
from Higdons attorney, who reportedly told
them that they "would soon be contacted
by a'highly placed' U.S. government official
advising Ius] of the national securiry involved
and instructing U.S. Customs to discontlnue
its investigation."

While the Customs Service fiie contains
no record of a call from a highly placed

U.S. official, the investigation nonetheless
was dropped nine months later. Yet a check
by the Customs Service's Hong Kong office
of Higdons telephone calls to the Philippines,
completed six months after the
investigation had been officiaily closed,
was intriguing. It shou,ed trans-Pacific
calls to Villacrusis and to Jesus Capilli,
his close friend and longtime attorne).
The customs agents apparently never realized
the significance of the calls.
Villacrusis passed into the land of legend
on May 27, i984, after a heart attack.
Yet his reclusive widow, Ida, vividly recalls
Higdon and his Wells Fargo "option."
The way Higdon explained it, Wells Fargo
armored trucks would be loaded with the
gold bullion, driven onto transport aircra[t,
and flown out of the Philippines. It was also
Higdon, she says, who'd inspired her husband's
mysterious trip to Hong Kong.

A gloomy raln had accompanied Colonel
and Mrs. Villacrusis to the Shangri-La Hotel
in the Kowloon section of Hong Kong. "They
were supposed to be the connection of Marcos
to sell the gold," she says ofher husband and
his confederates. "Higdon had been rn'aiting
for that, [but] they were never able to sell that."

The gold. however. wasn't the fabled Yamashita
treasure. "It was something else," Villacrusis
says. "lt was a lot of gold [alreadl'] in a

Manila bank. [Marcos] played them along-
nothing to lose, everythlng to gain. It's real-
Iy something. My husband never made money
on all those things. A11 those expenses he
made, he didn't get anything."

So Villacrusis never found any Yamashita

gold? "There never was any," his widorv says

sadly. "It's not real."

Villacrusis's claim ls backed up by retired
general Augusto Feraren, her husband's
longtime fellou,treasure hunter. Feraren had
dug with Villacrusis at the same site in Teresa
from which the American adventurers
were rousted in 1975. Feraren says that he
became a believer because the entire operation
was under Ver's direct control. Yet he.

of mv life sav


Rr,c.\RDII's 127


ings," he sighs. "We never found any gold."

Only after the Hong Kong fiasco did
Villacrusis finally realize that her husband
had been used as a smoke screen to allow
Marcos and Ver to steal the Philippine national
gold reserves.

"I tell you where they should dig," says
her brother-in-law in a tone reeking of disgust.
"They should dig right behind the
Central Bank."

the dank vaults of the Philippine Central
Bank should hold the secret of Marcos's
gold. There certainly had been hints dropped
along the way: the nonexistent bank regu-
Iations that had been invoked to seize Roxas's
Buddha, the martial-law decrees that had
placed the gold industry under the bank's
control, the treasureless treasure hunters
who'd dropped the names of bank officials
in Hong Kong, and the secret documents
that came into the hands of the U.S. Customs
Service, which pointedly stated that
no banks affiliated with the nr,lr should be
approached for gold-secured loans.

The ttr,lr, which monirors the foreign debs
and gold reserves ofdeveloping nations, had
been watching the precipitous decline of the
Philippine economy; by the time of Aquino's
funeral in 1983, the Philippines had been
plunged into its worst financial crisis since
World War II. And auditors in the IME's
Far Eastern branch had discovered a discrepancy
in the Central Bank's foreign currency
figures for 1983. Hard as they tried,
the auditors couldn t match the figures supplied
by the Central Bank with the balances
reported by the various international banks
in which the funds were said to be on deposit. .The
numbers just didn t add up.

The ttr,lr's auditors soon reached the only
conclusion possible: the Philippine currency
figures had been inflated by some $600
million. The shortfall was particularly alarming
because over the past year the Central
Bank had sold some 55 tons of gold bullion
for $600 million in cash-otherwise known
as "foreign currency reserves." Marcos had
approved the shipments of gold from the
Central Bank to Hong Kong, New York, London,
and Zrrich, purportedly as part of a
unique "gold-leasing program."

Jaime Laya, the governor of the Central
Bank, had opened the door for such sales by
abandoning a standby credit agreement rhat
had required the direct monitoring of the
bank's gold deposis by the nar. Marcos him

L28 OcroBER 1988

self claimed in a 1987 interview that he had
"borrowed . . . from the people who were buying
the gold" and that the Central Bank had
"authorized" the deal. Moreover, he implied
that the gold had been Yamashita gold, even
though five years earlier both the Central
Bank and Malacanang Palace had flady denied
holding any Yamashita gold bars.

The fate of the "loaned" Central Bank gold
still isn t entirely clear. The gold reserves of
the Philippine government, according to the
tur, dropped from 65 tons in 1982 to about
10 tons in 1983. That 55 tons ofgold bullion,
whether it was loaned or sold, should
have increased the Central Bank's foreign
cash position by more than $600 million.
Instead, according to the bank's books for
1983, the $600 million vanished.

Even worse, three large shipments of
gold-$I26 million worth-left the Central
Bank virtually under the noses of the tur
auditors who were examining the bank's
self-proclaimed "cooked books." Later, one
of them-the shipment to Morgan Guaranty
in September l983-would only add to the
confusion. In 1986 it was belatedly described
as an "official transaction" by the Central
Bank, which disclosed in a statement that
Morgan Guaranty had wired $39.2 million
from London to its accounts in New York.
The gold sale had been consummated, the
statement said, "to beef up liquidity at a time
when the Central Bank was having difficulty
meeting is foreign exchange payments."

The Central Bank eventually attempted to
explain the matter h CB Reviay, is official
publication. An article called "Clearing the
Doubts,"however, achieved exactly the opposite.
It reported that the 247 gold bars had
been "sold" to Morgan Guaranty for cash,
but two pages later the same transaction
was listed as a "location swap" -an entirely
different animal that wouldn t have required
the wiring of $39 million to New York.

While the Philippine Commission on Good
Government, which has been charged with
recovering Marcos's "ill-gotten wealth," has
asked the Federal Reserve Bank in New York
for an accounting of these and other gold-
related transactions, it has yet to receive so
much as a reply. much less an accounting.

Trying to account for all the gold mined
in the Philippines and refined by is Central
Bank following Marcos's centralization decree
in 1978 is an equally unrewarding exercise.
The "input" figures of the Bureau of Mines
simply don t jibe with the "output" figures
of the Central Bank.

While some 62 tons of gold had been
sent to the Central Bank for refining from
1978 to 1984, the Los AngelesTimesreported
in 1986, the bank's annual reports accounted
for only 55 tons. Juanito Fernandez,
who was then the director of the Bureau
of Mines, told the newspaper: "Those two
figures should be the same. That big a difference
can only mean one thing: the gold
has somehow been diverted from the treasury."
Nine months later Fernandez attributed
the discrepancy to "incomplete
Central Bank data."

Even more suspicious are recent reports
from the Philippines about mysterious goings-
on at the government-controlled smelting
plant. According to a Philippine investigator,
a senior official of the Philippine
Associated Smelting & Refining Corporation
confided to him that standard-size gold
bars from the Central Bank had been smelted
into unusual,largebars. This mightexplain
the odd-size gold bars, weighing 75 kilograms
apiece, that Villacrusis had tried to
sell in Hong Kong in 1983 and that Higdon
had planned to load aboard Wells Fargo's
armored trucks.

By posing as a shady gold buyer, another
Philippine investigator says, he was allowed
to inspect one of the mysterious 75-kilogram
gold bars in the basement vault of "one of
the five largest banks" in Manila (he declines,
however, to reveal which one). The bar, he
says, measured 18 x 4 x 4 inches, was soft to
the touch, and had been stamped SUMATRA
in large lerters and AAA in one corner.

The Philippine Commission on GoodGovernment
later received documents that described
similar bars. According to a September
17, I98I "certificate"from thePhilippine
National Bank, the Central Bank's sister institution,
it was holding a substantial collection
of 75-kilogram gold bars ("all hallmark Sumatra.
. . but all serial numbers [were] removed
during and after theJapanese occupation').

Marcos and Ver had obviously listened
intently back in L97 5 as Curtis, the refining
expert from Nevada, described how to disguise
the origin of gold bullion. The Philippine
dictator, however, had apparently employed
Curtis's advice in reverse-he d made
Central Bank gold into Yamashita gold, Philippine
gold into Marcos gold. And Sumatra,
once a small island nation on the Indian
Ocean side of the Indonesian peninsula, was
a perfect choice as the mysterious source: it
had become part oflndonesia at the end of
World War IL

Chapter lhree

intelligence communiry must have been monitoring
Marcos and his amazing gold scheme,
if for no other reason than to glean a hint of
when he might flee the Philippines. There
are intelligence specialists ar rhe Tieasury,
State, andJustice departments. Then there
are the tea-leafreaders at the CIA and in the
Pentagons alphabet-soup agencies: DlA, NSA,
OSI, G-2, oNI. At the top of this unwieldy
pyramid is the Director of Central Intelligence,
who also heads the CIA. The nct, as
he's called, is in turn a member of the Narional
Security Council at the White House.

In August 1985 the intelligence reporrs
on Marcos were flowing primarily to the
Iate William Casey at the ctA and to North
at the NSC. Although the situation in the
Philippines wasn't within North's area of
responsibility, he was keeping close rabs on
a mysterious Marcos gold deal. He was apparently
motivated, however, by something
other than intelligence gathering.

The seeds of North's gold deal had been
planted by Kevin Kattke, the gregarious chief
maintenance engineer of a Macy's department
store who doubled as an intelligence
operative. Kattke had provided useful intel-
Iigence for North's Caribbean escapades in
Grenada and Haiti.

Thatwasnt all Kattke had provided. He'd

happened to meet a bearded lvliddle Eastern
businessman who was introduced to him
as Prince lbrahim Al-Masoudi, a member of
the Saudi royal family. By the spring of 1985
Kattke had convinced the Saudi prince to
donate $i4 million to the contras. Kattke
called North at the White House with the
good news. While the contribution couldn't
be accepted directly, North said, he would
put Kattke and Al-Masoudi in touch with
Richard Miller, who was handling the funds
for North's secret contra resupply operation.

In the meantime Kattke, who harbored
hopes of getting into the commodities business,
had been trying to put together a gold
deal with Al-Masoudi; the prince, he assumed,
would be buying on behalf of the Saudi
royal family. Through Solomon Schwartz,
an international arms dealer who was also
based in New York, Kattke had learned of a
large number of gold bars for sale in Israel.
"l asked for two tons," Kattke recalls, "and
he said'no problem'; they had a lot more
than two tons. The bars were huge-big,


heavy, and old-supposedly Japanese. But
the bars were coming from a Philippine
general named Ver. They were scared after
the Aquino assassination in'83. The general
had something like 40 tons and the
Israelis were smelting it to get it back into

the [international] system." But as the deal
dragged on and on, Kattke says, he lost
interest and left matters in the hands of
Schwartz and Miller.
Miller had been in charge of broadcast
services for the 1980 Reagan-Bush campaign,
and after the election he became the
director of public affairs of the Agency for
International Development. Later he'd left
the agency to set up his own public relations
company, and in 1983 he'd entered
North's mysterious web of secretive Swiss
bankers and international arms dealers.
As arms dealers go, Schwartz couldnt
have fit the bill better. During his years in
the business he'd developed valuable conucs
all over the globe. He'd only recently
made headlines for his role in a bizarre plot
to smuggle 500 Ruger machine guns and a
James Bond-style bulletproof Cadillac to
Poland, and he was under a federal criminal
indictment as the gold deal began to percolate.
(Undaunted, Schwarz would later argue
that his Iron Curtain arms deal had been
sanctioned by officials of both the CIA and
the DIA in an effort to secure two advanced
Soviet t-72 tanks in return.)
"The people in Washington were interested,"
Schwartz says, speaking from a pay
phone somewhere in Manhattan. "The amount
was so humongous and the resmelting was
a little strange, but when the gold was ofiered,
I had it checked out. They were large, pre-
World War II bars with peculiar markings.
It was through generals acting on behalf
of Marcos or his government." Moreover,
Schwartz impiies that Miller may have had
an even better source of information on
the Marcos gold. "He had good contacts
at the National Security Council," he says
in deliberate understatement.
As Miller sat in his spacious office near
the White House, he pondered the grand
potential of brokering the 44-ton gold
deal; the sales commission alone would
finance the contras for perhaps a year, and
there might even be some money left over
to compensate the patriotic facilitators for
their efforts. Tapping on his desktop calcu-
Iator, he no doubt found the numbers downright
inspiring: 44 tons equaled I.4 million
ounces, which, at a commission of $6.20

per ounce, would work out to the princely
sum of $8,729,600.

Miller flew to London to meet Schwartz's
intermediary. After the meeting he called
North at the White House. In his handwritten
notes of the conversation North listed
an agreed-upon commission of $6 per ounce
(with the possibility of an extra 20 cents per
ounce) and a total profit of $5 million. Some
$3.7 million seems to be unaccounted [or.
But like so many other faces of the Iran-
contra scandal, it still isnt clear where the
money would ultimately have gone.

"Miller kept North regularly apprised of
his dealings," the select lran-contra committee
later found, "includ[ing the] proposed
gold transaction. . . .Indeed, Miller
saw himself as'an agent working on [North's]
behalf."'While Northb notes make no reference
to the source of the gold, Miller's
meetings in London probably account for
North's cr)?tic description o[ the deal as
the "British gold transaction."

North and his merry band had apparently
caught a virulent case ofgold fever. "Rich
Miller went to London and met with the
contact," Schwartz says. "Miller told him
point-blank: 'We know the whole thing-
give it to us."'

But then, in a precursor to the brewing
Iranian arms deal, Miller and North decided
to cut out the Israelis and approach Ver
directly. That was a mistake. Ver promptly
complained to the Israelis, who in turn
remonstrated with North's operators. Secrecy,
after all, had been Ver's primary reason
for turning to his long-trusted Israeli cutouts.
"When Richard Miller called the general,"
Kattke recalls, "the general called the
Israelis and screamed,'What are you doing,
relling everybody?"'

Yet other complications were beginning
to threaten the deal. At one point North,
who'd become particularly worried about
Miller's growing legal liability, wrote in his
spiral notebook: "Check [with ru assistant
director Oliverl Revel whether Rich Miller
has any problems [with] any European law
enforcement agencies."

One of Miller's "problems" may have been
Al-Masoudi, the gold-buying Saudi prince.
While Miller may have had every reason to
believe that Al-Masoudi was on the level-
he later testified that the cre had even assured
North of Al-Masoudi's identity and "veracity"-
a prince he was not. When FBI agents
showed up at North's White House office
on July 18, 1985, the generous "prince"

Rsoenorrs 129


suddenly turned into a frog. Ibrahim A1Masoudi,
it turned out, was actually Ebrahim
Zadeh. And he wasn't even a Saudi but
an Iranian who, according to the rst agents,
was the target of an unrelated federal investigation
into bank fraud. Nonetheless,
North asked the agens to hold off interviewing
Zadeh because of a "possible but
remote large donation to the Nicaraguan
freedom fighters." The 44-ton gold deal
proceeded apace.

As the weeks turned into months, however,
the gold deal began to wither on the
operational vine. Despite the good word
from North, the phony prince was unable
to extricate himself from the grasp of a federal
grandjury. By the late fall of 1985 the
gold deal was apparently dead. "We pushed
it to the point of show," Schwartz says, "but
the sellers wanted a bank guarantee up
front." Ironically, the last act was only
months before Marcos and Ver were finally
forced to flee the Philippines.

Schwartz was subsequently indicted on
federal arms smuggling charges and was
convicted inJune 1988. Zadeh is serving
a five-year federal bank-fraud sentence in

And even North's best effors couldn t keep
Miller from an appointment with the jailer.
In 1986, at North's request, the n'u's Revel
delayed Miller's appearance before the grand
jury that indictedZadeh. But last year Miller
pleaded guilty to defrauding the government
by using tax-exempt charitable donations
to help bankroll the "Enterprise,"
North's secret operation to resupply the contras.
At his plea hearing, Miller named North
as his coconspirator.

in the 44-ton gold escapade lends a new
dimension to the Iran-contra scandal, particularly
in light of special prosecutor Lawrence
Walsh's chaiges that North derived
personal benefit from his White House operations.
How far was North willing to go?
Were the profis from the gold deal to go to
the contras or elsewhere? Was'North the
"highly placed" national-security contact
who'd been invoked by Frank Higdon back
in late 1983? North was about as high as
you could get. (Both North and Higdon have
declined to comment on their respective
roles in the Marcos gold affair.)

Nor was gold the only unexplored connection
between North and Ver to emerge
from the lran-contra mess. Ver had also

signed fake end-user certificates for Israeli
arms shipments thatwere destined for Iran.
In late 1986 the San Francisco Examiner
reported that the certificates, which indicated
that the weapons were bound for the
Philippines, were part of a secretWhite House
plan to keep Secretary ofState George Shulz
from learning that U.S.-made weapons were
being shipped to Iran.

While North was focusing on the Iran-
contra front, he must have missed the intelligence
traffic from the Far East, where an
equally spectacular development was about
to change the geopolitical landscape. A report
from U.S. Navy lntelligence (classified secret)
should have set the telex bells at the White
House clanging. As Miller's negotiations with
Yer for 4l tons of "old" Philippine gold continued,
direct bullion shipmens from the
Central Bank were suddenly resumed.

In October 1985 U.S. Nary Intelligence
agents in Manila contacted a Philippine informant
"who [had] reported reliably in the
past." The agens telexed the startling news
to Washington: "Source reported that the
Central Bank of the Philippines has made
three suspicious shipmens of gold and silver
to the United States. . . . The precious
metals, which according to subsource were
physically transported from the Central Bank
to an American President Lines Ishipj, were
escorted by Presidential Security Command
personnel. Source stated that those involved
with the shipment have speculated that the
shipments are being made by members of
the family of President Marcos, who are
illegally diverting the precious metals to Switzerland,
where the metals are held in personal

As it turned out, the navy's source was
right on the money. According to Central
Bank wire transfers that were obtained by
investigators, 8.4 tons of gold (nearly $90
million worth) and 8.2 tons of silver bullion
($2.6 million worth) were shipped from the
Philippines in the fall of 1985. But the bank's
published figures, in an increasingly familiar
pattern, didn't match the shipping documents
that had been acquired by navy
intelligence. One bill of lading listed 244
bars ofsilver shipped on October 1 1, 1985;
the Central Bank listed only 224 silver bars
as having been shipped on that date. With
each transaction, it seemed, more bullion
from the Central Bank managed to disappear.

The gold and silver bullion from the Central
Bank had been loaded aboard trucks
under the cover of darkness and the ever-

watchful eyes of the ubiquitous Presidential
Security Command, according to a private
security source who was involved in the
operation. The bullion had then been driven
to the docks of the American President
Lines in Manila,loaded onto ships, and transported
to New York, where it was sold. Drexel
Burnham Lambert, which handled the sale,
confirmed the shipments. Drexel Burnham
then transferred the proceeds of the sale to

the Central Bank's accounts at the U.S. Federal
Reserve Bank in New York.

On December 3, 1985 the money began
to move again. Over the next tlvo and a half
months-the final two and a half months of
Marcos's regime-the Central Bank, in 20
wire transfers from its Federal Reserve accounts,
shifted nearly $94 million to secret
accounts in Switzerland and Luxembourg.

Philippines on February 25, 1986, it became
apparent that he'd made a mistake of
Nixonian proportions: he hadnt burned all
the incriminating evidence.

While Cory Aquino's "People Power" revolution
took to the streets, the Marcoses sat
in Malacanang Palace eating caviar instead
of shredding documents. By the time a U.S.
helicopter lifted them offthe palace grounds,
it was too late.

Marcos, as documents that were later discovered
in his bedroom safe showed, controlled
an incredible fortune. Other documents
seized by the U.S. Customs Service
upon his arrival in Honolulu confirmed the
magnirude of his venality; at the end of 1983,
they showed, the Marcos family controlled
at least 18 secret Swiss accounts that held
neariy $400 million. Inasmuch as the Marcoses'legally
declared income during their
20-year rule amounted to less than $350,000,
the likelihood of larceny on a grand scale
seems to be an inescapable conclusion.

An unprecedented international legal battle
still rages over control ofthese accounts,
with the Aquino government pitted against
Marcos's battery of some 40 Swiss attorneys.
The secret of Marcos's billion-dollar
Swiss accounts may yet turn out to be gold
bullion. Some of the still-secret accounts,
Swiss sources say, contain the proceeds of
several huge gold sales. One source believes
that between one-third and one-half of the
estimated $ I.5 billion in deposits will prove
to have been derived from gold sales.

If the Aquino government actually recovered
any Marcos gold, it has yet to report it. >

Rrcennrp's I 3 3




In fact, the Philippine Commission on Good

Government has shown llttle interest in pur

suing Marcos's various hoards of go1d. The

commissioners, who no doubt were put off

by the early and unverifiable reports of the

"hearry breathers," have wiseI1, discounted

the legend of Yamashita. Unfortunatell,, horv

ever. they've also ss ept away man) serious

leads with the Yamashita broom.

In one case, for example, the commission

apparently allowed more than $96 million

worth of 75-kilogram gold bars to sit in an

apartment building in Quezon City, a sub

urb of Manila. According to a secret report

of the Philippine National Bureau of Inves

tigation, a confidential informant posing as

a potential buyer inspected 90 such gold

bars on August 28, 1986. TWo days later the

informant passed a polygraph test adminis

tered by the NBI.

The apartment building is owned by Jon

athan Dela Cruz. a notorious labor official in

the Marcos regime and a close personal foiend

of Bong Bong Marcos's. The building is heav

ily guarded by security men employed by a

company that's owned by Roque "Raquito"
Ablan, a former congressman from Marcos's
home province and another close associate
of Bong Bong's. (Ablan is also suspected
of having masterminded the Plaza Miranda
bombings that narrowly missed Rogelio
Roxas, the discoverer of the golden Buddha.)

The Central Bank, which unquestionably
remains the largest repository of Philippine
gold, also remains out of reach of the Philippine
Commission on Good Government.
While it's a criminal offense to export gold,
whatever its origins, without a license fron-r
the Central Bank, the commission s investigators
say they cant investigate unless the
bank requests them to do so. "We are once
again a democracy, and we must respect the
rule of larv," says Severina Rivera, the commissions
general counsel. "We need prima
facie evidence of a crime before we can barge
into the Central Bank and demand to see records,
which are covered by the bank secrecy
act." Yet without access to the Central Bank's
records, there can be no basis for a commission
investigation. A 22-karat Catch-Zl.

The current governor ofthe Central Bank,
Jose'Jobo" Fernandez (a holdover from the
Marcos era), refuses to open the bank's books
or to release its internal report on the $600
million that disappeared through "figure inflation"
in October 1983. Public outcries for
his resignation have fallen on deafears; he's
related to President Aquino.

1 31 OcroeEn 1 988


Chapter Four

to be a militar),tactician. His palace Iibrary
brimmed rvith books about military heroes
and history; his ideal rvas personified by
General George Patton. But byJanuary l9B7
all Nlarcos seemed to be thinking about was
General Douglas MacArthur and his famous
Philippine ra1l1,ing cri,, "I shal1 return."

As Imelda Nlarcos counted out crisp S I00
bills to buy combat boots and camouflage
f'atigues at an arm)-surplus store in Waikiki.
her husband held a series ofsecret meetings
at their new palace in Hawaii, a tropically
Iandscaped mansion overlooking Honolulu.
Sitting ready on the runrvay at Honolulu
lnternatlonal Airport rvas a custom-built
Boeing 707, on charter from a visiting Lebanese
arms dealer.

Thc telephones at thc mansion u ere ringing
as Marcos mapped out plans for an armed
invasion of his homeland. In Manila troops
loyal to him seized the government television
station. For three tenslon-filled da1's the
troops held the station and the 707 sat at the
ready. Finally, onJanuary 28. a delegation of
officials from the U.S. State Department visited
N{arcos and u,arned him that under no
circumstances rvould he be allowed to leave
for the Philippines. The coup in Manlla quick1y
collapsed as the demoralized mutineers
surrendered to government troops.

Marcos. horvever. was not yet ready to
give up. In his quest for weapons and financing,
he contacted fuchard Hirschfeld. They'd
met at a birthdai,partl, for Nlarcos in September
I 986 and soon discovered that the1,
had several Saudi Arabian contacts in cofiimon.
llirschfe1d, a rather spirited investment
lau1,er rvith a penchant for yellow porver
ties. had set up a practice in Charlottesville,
Virginia. Muhammad Ali, the former boxing
champ. was among his clients, as rvas Sheik
Nlohammed al-Fassi, a bona fide, if somervhat
bizarre, Saudi prince. The flamboyant
prince's notoriety owed more to his extravagant
entourage and garlsh Beverly Hills
mansion than to any of his financial deals.

While Hirschfeld was no stranger to the
grayer areas of international finance (on
one occasion he'd incurred the wrath of the
Securities and Exchange Commission), he
had no idea that his face-to-face meeting
with Marcos in Honolulu, just before the
attempted coup, would take an ominous
turn. As the tu,o men discussed the possi

bility of a $10 million loan from al-Fassi,
lvlarcos confided to Hirschfeld that he needed
the money to pay 10,000 soldiers a $500
"combat life insurance" fee and that the loan
u'ould be repaid when he "regained control
of the Philippines."

Marcos had unwittingll, placed Hirschfeld
and his client in a sticky legal position. By
aiding and abetting Marcos's evasion of a

U.S. federal court order and a State Department
directive, they might open themselves
to prosecution under the U.S. Neutraliry Act,
u,hich prohibits the planning on American
soil ol militarl operations against countries
uith which the United States is not at war.
Hirschfeld briefed Justice Department officials
for more than l0 hours, only to receive
a response approximately equivalent to "stick
it in your ear," as his attornel,later put it. So
he decided to secretly tape-record his next
meeting with the exiled dictator. On Nlay
2l . 1987. after stuffing a microcassette
recorder in the pocket ofhis suit jacket and
concealing another tape recorder in a specialIy
designed attach6 case, he went to meet
rvith N{arcos. He rvas accompanied by his
associate. Robert Chastain, who posed as
an international arms dealer.

Marcos didn't mince any words. His requirements:
four tanks, Stinger and Blowpipe
antiaircraft missiles, antitank missiles,
90mm recoilless rifles, 8,000 trt-tos (1,000
of rl,hich were to be equipped rvith tr't-22
rocket-propelled grenade launchers), 100
5O-caliber machine guns. mortars. and a
three-month suppl1, of ammunition. Each
\\.eapons purchase was to be discussed onl,v
b1, a designated number under the code
name Tiading Patterns.

Marcos then laid out his plan for a Mac-
Arthuresque, sea-launched invasion from
international $'aters. Weapons and troops
would be landed at two points in his former
home province on the north shore ofLuzon.
Marcos would fly in from the South Pacific
island of Tonga, whose venturesome '100pound
king was a longstanding friend. "Not
later than the end of June," Marcos emphatically
told the two Americans.

"I am going to land there," Marcos said. "I
dont care who opposes me. And if they
oppose the landing, that is rvhen we start
the battle. This is a go-for-broke deal." Before
their eyes, Marcos had turned into a battlefield
commander: "My priorlties are on the
ground. [We'll need] antiair in the hill coun

try, rvhere rve're up against the air Iattacks]."
As for President Aquino, Marcos said,



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"What I would like to see happen is we take
her hostage, without killing her."

The conversation then turned to finance, a
subject with which Marcos was even more
familiar. Marcos claimed that he'd already
shelled out $2 million to various arms dealers.
The $I0 million in financing the prince
had agreed to, he said, would now have to be
raised to between $ 18 million and $25 million.

"You tell him there is gold in the Philippines,"
Marcos told Hirschfeld. "We can eas

ily pay off those things [weapons]. My God,
that gold is worth a lot. But we must never
lose the gold. We can lose everything, but
not the gold.... I have to go back there to
get in, to get the secret cache.... That is
why l wanted my son to be in this, because
he knows part ofit.. . . Let Bong Bong handle
that part." Marcos then whispered that
he had as much as 1,000 tons of gold, "but
in separate places."

While the amount bordered on the preposterous,
Marcos apparently still had at
least 10 tons of gold bullion in the Philippines
at the time he fled-that, at least, was
the amount he'd requested Qantas Airlines
to fly out. (Qantas, however, declined his
request.) The l0-ton figure may have includ

ed the 7.5 tons in the Quezon City apartment.
And Philippine intelligence officials
recently reported that another 17 tons of
bullion may have been stashed with Marcos
loyaliss on Mindanao.
Hirschfeld's tapes captured the essence
of more than 30 hours of conversations
with Marcos over the course of I I different
meetings. They obviously reflect the earlier
confidences that had finally forced Hirschfeld
to resort to hidden tape recorders. He'd first
Iearned of Marcos's gold cache, in fact, during
a dinner in October I986 with the dictator's
diamond-bedecked wife, Imelda. "lt
was at that time," Hirschfeld says, "that she
first told me they had left vast amounts of
gold behind and they had to get back to
Manila to get the gold." Imelda's only concern,
he says, was that "Bong Bong should
not go back, because he is the last Marcos."
But it was Ferdinand who had the most
to say.
"He had various conversations with me

about the gold, one of them as far back as
January [1987]," Hirschfeld says. "He said
that Bong Bong had flown some gold out on
a chartered flight. That he didn t do it. He
said Bong Bong is responsible for the gold

and knows where most of it is. And his wife
doesn t know where all ofit is because, as he
said on the tape, she panics."

Where in the Philippines was the gold
stored? "Underneath a bank-several stories,
one floor after another of nothing but
gold," Hirschfeld says Marcos told him. "He
said he had more hidden in some sort of
residential area."

And the distinctive gold bars that Marcos
described to Hirschfeld would seem to confirm
repors from other sources: "It had his
own certain hallmark on it. It was a World
War ll-era type of marking, with the word
SUMATRA on it. It was in these huge bars of
75 kilograms which apparently would look
like this Yamashita treasure."

"l didnt know about all the Yamashita
stories," Hirschfeld says. "l didn t even know
how to pronounce Yamashita. That's why I
got the distinct impression, when we first
started talking about 'reminting,' that it
wasn t the treasure at all, that it was money
that had been diverted from the Central
Bank. He was very specific that it came from
the Central Bank-he made no bones about
it. Thals on the tapes. He said that was
gold from the Central Bank, but it was'my



gold,'and he had separate markings on it.

"It seemed to me that he had disseminated
the story about having found the treasure
in order to substantiate the existence
of the bars that he had apparently stolen
from the Central Bank. He deviated in his
story. At one point he said it was the treasure,
and then at another point he came
right out and said,'Look, I got it from the
Central Bank.'

"I could certainly testify under oath that
the man had made it clear to me that he
took the gold from the Central Bank to a
large extent, had it reminted, converted into
bars that appeared to be treasure bars, then
sold in the black market or otherwise. The
money ended up in the Swiss accounts. Very
clear, very concise, very specific."

Marcos has the most to lose if the Swiss
accounts turn out to contain proceeds from
the sale of Central Bank gold. "Everybody
is suspicious," Marcos whispers on one
Hirschfeld tape. "We should never admit
that we have the gold."

Particularly not on tape. Hirschfeld and al-
Fassi have signed a contract with the Philippine
Commission on Good Government that
grants them 5 percent of any Marcos gold

caches that might be recovered in exchange
for the original tapes and their future testimony,
if required. Hirschfeld says that he
and the prince will give all reward money to
a childrens foundation in the Philippines.

conspiratorial whispers into the tape recorder
seemed almost comical. But Marcos was
deadly serious, and he apparently had the
means to pull off an invasion of some sort.
Other U.S. officials took Marcos quite seriously.
His code words and telephone calls-
which, for security reasons, were secretly
routed through San Francisco, Mexico, and
other locations-had been picked up by the
supersecret National Security Agency and,
according to U.S. intelligence sources, had
been closely monitored.

What made U.S. officials even more nervous,
however, were Marcos's tape-recorded
claims of continuing influence over several
high-ranking U.S. officials at the
Pentagon, the State Department, and the
White House. Marcos, according to sources,
had even talked about having made illegal
campaign contributions to President Reagan
himsell Hirschfeld will only say that he

"would rather not discuss that at this time."

When Hirschfeld's tapes fell into the hands
of Congressman Stephen Solarz of New York,
the chairman ofa House foreign affairs subcommittee,
he was asked by Frank Carlucci,
who was then Reagans national security
adviser, to postpone a planned hearing for
reasons o[ "national security." After one
postponement Solarz decided to go ahead
with the hearings, but he agreed to delete
what he later characterized as "scurrilous
segments" about Reagan and other government
officials. In one of the deleted segments
Marcos referred to his friendship with
Reagan and talked about how the ctA had
heiped him to ship-and sell-the gold.

"lt was those kind of things that astonished
me," Hirschfeld says. "Marcos had told
me the CIAhad been involved. ThaCs on the
tape also, but they didnt play that excerpt
at the hearing. The cIA wanted to use the
gold or get the gold, and hewas going to have
them use the gold to borrow cash from banls.
He said the banks would have the gold as col-
Iateral if there was a default. [Marcos] men

tioned this cIA guy in Alexandria, Frank
Higdon.'The accountant,'he called him. This
guy was involved in that scheme."

andyour f

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Despite several calls on Capitol Hill for
thc revocation oIMercos's uniquc immigration
status (he's in the country as a personal
guest of the president), theJustice Depart-

Luruqt Door

ment has so far declined to act, even in the
face of prima facie evidence that Marcos


intended to vlolate the Neutrality Act. Such
inaction led Congressman Chester Atkins
of Massachusetts to question whether tl-re

As Baldwin's largest administration was "incredlbly naive about
distributor in the mid-Marcos or [whethcr] therc is sornc sinister
Atlantic states, we offer a hold he has over the U.S. government."
superb inventory of door

hardware forevery home, MARCOS APPARENTLY DOESN'T HAVE
Colonialto contem-to dig for gold an1,more. Last summe r, unbeporary.
Choose what you knou,nst to Capitol Hill larvmakers and top

offlcials in the executive branch, tl.re deposed
dictator was brewing gold deals right in
their backyard, here in North America.

As Ftst agents investigated the Marcoses'

like and walk out with

Nerv York property purchases last fa11, they
UNION HARDWARE''. Enablished in 1914

str-rmbled onto a bizarre gold-tradlng scl.reme

that involved several commodities dealers on

the \Vest Coast, including a lormer cte oifi

cer who operated out of Vancouver. Tlvo com

7810 }flISCONSIN AVE .BETH. 654-7810 puter disks lull o[ telexes and facsimile con

tracs liom the Marcoses in Hor-rolulu fell into

the hands of federal investigators. The docu

mens show that Constante Rubio. one ofMar-

cos's tou8,htst and most sinistcr operatives.
seems to have been placed in charge ofgoid
sales lbllorving Marcos's fall from porver.

Rubio's first foray into the ir-rternational gold

market came in 1986, when he showed up in


Hong Kong and sold $42,000 rvorth of gold
to an American real estate developer, according
to Philippine investigators. The dereloper
latcr turncd ovcr to the invcstigators six


cassette tapes ofhis conversations vn ith Rubio.

But Rubio's telexes to the East Trading
Company ol Anaheim, Califbrnia involved
much larger amounts of bullion. They show


drat Edu,ard Dewey, the proprietor ofthe corn-
CUST()M SUITS modities compan1,, had been diligently working
to unload (and disguise) a huge quantityA]{D ATTERATI()NS of Marcos's gold-all of it, apparently, located
in the United States. And Dewel,hadARE AUAITABLE HERE. been joined in the venture by "Mary Harper"

(not her real name), a Vancouver commodities
broker and onetime ct,q officer rvho'd
reportedl,v left the agency under a cloud.

Rethesda r

At one meeting in February 1987, according
to a participant, Dewey and Harper dis-

C Tailors cussed how to launder Marcos's gold bars,
which rvere large and irregular but eminent


Iy tradable (rvith a purity of between .9995

7836 Wisconsin Avenue Bethesda, Maryland 20814
and .9999). Harper asked whether anyone

Serving our distingrished clientele lor over 30 years.
knew ofa u,ay to obliterate gold-bar markings,

138 Ocr()BLR 1988


the source recalls, because she needed the
"Philippine hallmark erased completely."

Dewey then apparendy made arrangements
(complete with local police for security) to
launder up to five metric tons of Marcos's
gold a day by meticulously filing offthe hallmarks.
The builion, according to the documents,
was to be stored in the underground
vault oIa large bank in Southern California.

It isn't clear what became of this laundering
operation, or even whether it was actually
carried out. The computer disks from
the East Tiading Company's "gold bullion
affair" cover only the period from November
I7, I986 to May 17, I987-four days
before Marcos's rendezvous with Hirschfeld's
fateful tape recorder.

Like Marcos, Harper apparently couldn t
restrain her own braggadocio. She ominously
told an associate at the February I987 meeting
that "a lot of influential U.S. government
officials were involved" in the gold deal.

In speaking before a group ofhigh-school
studens last March, Robert Gates, the deputy
director of the Cte and a peripheral figure in
the Iran-conrra scandal, denied that the agency
had any evidence relating to Marcos's efforts
to sell gold, from the Central Bank or any
other source. Gates has since stated that the
cte had no knowledge of North's attempt to
swing a secret deal for Marcos's go1d.

ignorance, the family of Rogelio Roxas is
once again celebrating. After I2 years of
hiding in thejungle, the dark shadow that
Marcos had cast over their lives was swept
away with the whir of helicopter blades in
February 1986. After signing the papers

that formally incorporated his Golden Buddha
Corporation in the United States, Roxas
joined the legal fray to regain his piece of
Marcos's golden rock.

The company is still pretty much a one-
man show-ils run from Atlanta by Felix
Dacanay, a local business executive who's
been Roxas's friend since childhood-that
cranks out computer-generated form letters
to anyone who will listen, including
government officials, politicians, and reporters.
On Roxas's behalf, Dacanay's company
recently filed a lawsuit in Honolulu thals
aimed at recovering the golden Buddha from
Marcos. The suit, which also charges that
Marcos confiscated other artifacs that Roxas
left behind in his mountain tunnels, demands
$60 billion in damages for the loss of the

Thrs announcement appears as a matter ol record only

October. 19BB


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An odd assortment of witnesses has come

forward to confirm that the golden Buddha

indeed ended up as a Marcos family trophy.

Several members of the "Blue Ladies," Imeldas

former palace entourage, have reported seeing

the Buddha in a glass case at the Marcoses'

summer palace in Miravelles in early 1986.

One of Marcos's disenchanted relatives has

also affirmed that the Buddha was in Mar

cos's possession. Moreover, the once-skeptical

members of the Philippine Commission on

Good Government have all but agreed with

Roxas's claim.

Even Marcos himself, apparently, now

admits that he holds the golden Buddha.

After the indomitable Dacanay managed to

reach him by telephone, Marcos dispatched

an intermediary to open negotiations with

him in Atlanta. Roxas, who says he never

iost his faith in the golden Buddha, now

hopes that he'll soon be back "in the clouds"

instead of under one.

For now, however, Marcos is still a prisoner
of his own greed. He's locked away in
the ultimate prison, unable to be near that
which is dearest to his heart: his money. His
Swiss bank accounts are frozen and his latest
attempt to return to the Philippines is
still on hold, which leaves any gold in either
place out of his reach.

As Marcos maps his treasure-based defense
strategy from Honolulu, the legend of Yamashita
has nearly acquired the status of a
quasi-religious political movement back in
the Philippines. Some of President Aquino's
advisers have even tried to convince her
that the elusive Yamashita treasure is the
solution to the staggering $30 billion national
debt that Marcos left behind. Aquino has,
in fact, issued more than 80 treasure-hunting
permits, which entitle the government to a
75 percent share of any discoveries.

Various treasure hunters have been digging
at sites that range from an old Spanish
fortress in downtown Manila to the mountain
provinces of northern Luzon. They come
in all stripes; among several American adventurers
are a former Green Beret and even
Robert Curtis, the Nevada refining expert
who'd been run out by Marcos and Ver in
1975. Like compulsive gamblers, the treasure
hunters can't seem to shake the ever-
addictive hope that their next dig will hit
the mother lode.

To unearth some real answers-if not some
real gold-perhaps the new Philippine government
really should "dig right behind the
Central Bank." tr

140 OcroBER 1988


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