"We Ran It in a Different Way"

Chapter 12 (pages 116-121) of

Legacy of Ashes: The History of the CIA (Doubleday, 2007)

by Tim Weiner


One weapon the CIA used with surpassing skill was cold cash. The agency excelled at buying the services of foreign politicians. The first place where it picked the future leader of a world power was Japan.

Two of the most influential agents the United States ever recruited helped carry out the CIA's mission to control the government. They had been cell mates, charged as war criminals, and imprisoned for three years in Tokyo after the end of World War II under the American occupation. They walked free at the end of 1948, the day before many of their fellow inmates were taken to the prison gallows.

With the CIA's help, Nobusuke Kishi became Japan's prime minister and the chief of its ruling party. Yoshio Kodama secured his freedom and his position as the nation's number-one gangster by helping American intelligence. Together they shaped the politics of postwar Japan. In the war against fascism, they had represented everything America hated. In the war against communism, they were just what America needed.

In the 1930s, Kodama had led a right-wing youth group that attempted to assassinate the prime minister. He was sentenced to prison, but Japan's government put him to use as a procurer of spies and strategic metals for the coming battle. After five years spent running one of the war's biggest black markets in occupied China, Kodama held the rank of rear admiral and possessed a personal fortune worth roughly $175 million. Upon his release from prison, Kodama began to pour part of his fortune into the careers of Japan's most conservative politicians, and he became a key member of a CIA operation that helped bring them to power. He worked with American businessmen, OSS veterans, and ex-diplomats to pull off an audacious covert operation, bankrolled by the CIA, during the Korean War.

The American military needed tungsten, a scarce strategic metal used for hardening missiles. Kodama's network smuggled tons of it out of Japanese military caches into the United States. The Pentagon paid $10 million for it. The CIA provided $2.8 million in financing to underwrite the operation. The tungsten-smuggling network reaped more than $2 million. But the operation left Kodama in bad odor with the CIA's Toyko station. "He is a professional liar, gangster, charlatan, and outright thief", the station reported on September 10 1953. "Kodama is completely incapable of intelligence operations, and has no interest in anything but the profits". The relationship was severed, and the CIA turned its attention to the care and feeding of up-and-coming Japanese politicians - including Kishi - who won seats in the Diet, Japan's parliament, in the first elections after the end of the American occupation.


"We're All Democrats Now"

Kishi became the leader of the rising conservative movement in Japan. Within a year of his election to the Diet, using Kodama's money and his own considerable political skills, he controlled the largest faction among Japan's elected representives. Once in office, he built the ruling party that led the nation for nearly half a century.

He had signed the declaration of war against the United States in 1941 and led Japan's munitions ministry during World War II. Even while imprisoned after the war, Kishi had well-placed allies in the United States, among them Joseph Grew, the American ambassador in Tokyo when the Japanese attacked Pearl Harbor. Grew was under detention in Tokyo in 1942 when Kishi, as a member of the war cabinet, offered to let him out to play a round of golf. They became friends. Days after Kishi was freed from prison. Grew became the first chairman of the National Committee for a Free Europe, the CIA front created to support Radio Free Europe and other political-warfare programs.

Upon his release, Kishi went directly to the residence of the prime minister, where his brother, Eisaku Sato, the chief secretary of the cabinet under the occupation, handed him a business suit to replace his prisoner's uniform.

"Strange, isn't it?" Kishi said to his brother. "We're all democrats now".

Seven years of patient planning transformed Kishi from prisoner to prime minister. He took English lessons from Newsweek's Tokyo bureau chief and gained introductions to American politicians from Newsweek's foreign affairs editor, Harry Kern, a close friend to Allen Dulles and later in life a CIA conduit to Japan. Kishi cultivated American embassy officials like rare orchids. He moved cautiously at first. He was still a notorious man, routinely followed by the police.

In May 1954, he staged a political coming-out at the Kabuki Theater in Tokyo. He invited Bill Hutchinson, an OSS veteran who worked with the CIA in Japan as an information and propaganda officer at the American embassy, to attend the theater with him. He paraded Hutchinson around the ornate foyers of the Kabuki-za at intermission, showing him off to his friends among the Japanese elite. It was a highly unusual gesture at the time, but it was pure political theater, Kishi's way of announcing in public that he was back in the international arena - and in the good graces of the United States.

For a year, Kishi met in secret with CIA and State Department officials in Hutchinson's living room. "It was clear that he wanted at least the tacit backing of the United States government", Hutchinson remembered. The talks laid the groundwork for the next forty years of Japan's relations with the United States.

Kishi told the Americans that his strategy was to wreck the ruling Liberal Party, rename it, rebuild it, and run it. The new Liberal Democratic Party under his command would be neither liberal nor democratic, but a right-wing club of feudal leaders rising from the ashes of imperial Japan. He would first work behind the scenes while more senior statesmen preceded him as prime minister, and then take charge. He pledged to change the foreign policies of Japan to fit American desires. The United States could keep its military bases in Japan and store nuclear weapons there, a matter of some sensitivity in Japan. All he asked in return was secret political support from America.

Foster Dulles met with Kishi in August 1955, and the American secretary of state told him face-to-face that he could expect that support - if Japan's conservatives unified to help the United States fight communism.

Everyone understood what that American support would be.

Kishi told Sam Berger, the senior political officer at the American embassy, that it would be best for him to deal directly with a younger and lower-ranking man, unknown in Japan, as his primary contact with the United States. The assignment went to the CIA's Clyde McAvoy, a marine veteran who had survived the storming of Okinawa and joined the agency after a stint as a newspaper reporter. Shortly after McAvoy arrived in Japan, Sam Berger introduced him to Kishi, and one of the stronger relationships the CIA ever cultivated with a foreign political leader was born.


"A Great Coup"

The most crucial interaction between the CIA and the Liberal Democratic Party was the exchange of information for money. It was used to support the party and to recruit informers within it. The Americans established paid relationships with promising young men who became, a generation later, members of parliament, ministers, and elder statesmen. Together they promoted the LDP and subverted Japan's Socialist Party and labor unions. When it came to bankrolling foreign politicians, the agency had grown more sophisticated than it had been seven years earlier in Italy. Instead of passing suitcases filled, with cash in four-star hotels, the CIA used trusted American businessmen as go-betweens to deliver money to benefit its allies. Among these were executives from Lockheed, the aircraft company then building the U-2 and negotiating to sell warplanes to the new Japanese defense forces Kishi aimed to build.

In November 1955, Kishi unified Japan's conservatives under the banner of the Liberal Democratic Party. As the party's leader, he allowed the CIA to recruit and run his political followers on a seat-by-seat basis in the Japanese parliament. As he maneuvered his way to the top, he pledged to work with the agency in reshaping a new security treaty between the United States and Japan. As Kishi's case officer, the CIA's C1yde McAvoy was able to report on - and influence - the emerging foreign policy of postwar Japan.

In February 1957, on the day Kishi was to be installed as prime minister, a crucial procedural vote on the security treaty was scheduled in the Diet, where the LDP held the biggest block of votes. "He and I pulled off a great coup that day", McAvoy remembered. "The United States and Japan were moving toward this agreement. The Japan Communist Party found it especially threatening. On the day of this vote, the communists planned an uprising in the Diet. I found out about this through a left-wing Socialist member of the secretariat who was my agent. Kishi was to meet the Emperor that day. I called for an urgent meeting. He made it - he showed up at the door of our safe house in top hat, striped pants and a cutaway coat - and though I had no approval to do so, I told him of the communists' plans for a riot in the Diet. Now, the custom was for members to take a break and go to the eating and drinking stalls around the Diet at 10:30 or 11 am. Kishi told his own party: don't take a break. And after everyone but the LDP peeled off they ran to the Diet and passed the bill."

In June 1957, barely eight years after shedding his prison uniform, Kishi traveled to the United States for a triumphal visit. He went to Yankee Stadium and threw out the ceremonial first ball. He played a round of golf at an all-white country club with the president of the United States. Vice President Nixon introduced him to the Senate as a great and loyal friend of the American people. Kishi told the new American ambassador to Japan, Douglas MacArthur II, the general's nephew, that the new security treaty would be passed and a rising left-wing tide could be stemmed if America helped him consolidate his power. Kishi wanted a permanent source of financial support from the CIA rather than a series of surreptitious payments. He convinced the American envoy that "if Japan went Communist it was difficult to see how the rest of Asia would not follow suit", Ambassador MacArthur remembered. Poster Dulles agreed. He argued that the United States had to place a big bet on Japan, and that Kishi was the best bet the United States had.

President Eisenhower himself decided that Japanese political support for the security treaty and American financial support for Kishi were one and the same. He authorized a continuing series of CIA payoffs to key members of the LDP. Politicians unwitting of the CIA's role were told that the money came from the titans of corporate America. The money flowed for at least fifteen years, under four American presidents, and it helped consolidate one-party rule in Japan for the rest of the cold war.

Others followed in Kishi's path. Okinori Kaya had been the finance minister in Japan's wartime cabinet. Convicted as a war criminal, he was sentenced to life in prison. Paroled in 1955 and pardoned in 1957, he became one of Kishi's closest advisers and a key member of the LDP's internal security committee.

Kaya became a recruited agent of the CIA either immediately before or immediately after he was elected to the Diet in 1958. After his recruitment, he wanted to travel to the United States and meet Allen Dulles in person. The CIA, skittish about the appearance of a convicted war criminal meeting with the director of central intelligence, kept the meeting secret for nearly fifty years. But on February 6 1959, Kaya came to visit Dulles at CIA headquarters and asked the director to enter into a formal agreement to share intelligence with his internal security committee. "Everyone agreed that cooperation between CIA and the Japanese regarding countersubversion was most desirable and that the subject was one of major interest to CIA", say the minutes of their talk. Dulles regarded Kaya as his agent, and six months later he wrote him to say: "I am most interested in learning your views both in international affairs affecting relations between our countries and on the situation within Japan".

Kaya's on-and-off relationship with the CIA reached a peak in 1968, when he was the leading political adviser to Prime Minister Eisaku Sato. The biggest domestic political issue in Japan that year was the enormous American military base on Okinawa, a crucial staging ground for the bombing of Vietnam and a storehouse of American nuclear weapons. Okinawa was under American control, but regional elections were set for November 10, and opposition politicians threatened to force the United States off the island. Kaya played a key role in the CIA's covert actions aimed to swing the elections for the LDP, which narrowly failed. Okinawa itself returned to Japanese administration in 1972, but the American military remains there to this day.

The Japanese came to describe the political system created with the ClA's support as kozo oshoku - "structural corruption". The CIA's payoffs went on into the 1970s. The structural corruption of the political life of Japan continued long thereafter.

"We ran Japan during the occupation, and we ran it in a different way m these years after the occupation", said the CIA's Horace Feldman, who served as station chief in Tokyo. "General MacArthur had his ways. We had ours."


Notes:

The relationship between the CIA and the leaders of Japan in the 1950s was detailed in the author's interviews with Al Ulmer, CIA's Far East division chief from 1955 to 1958; Clyde McAvoy, Kishi's CIA case officer in the mid-1950s; Horace Feldman, a former CIA station chief in Tokyo; Roger Hilsman and U Alexis Johnson, senior State Department officials under Presidents Kennedy and Johnson; Jim Lilley and Don Gregg, formerly CIA station chiefs and US ambassadors in Beijing and Seoul, respectively; and Douglas MacArthur II, the US ambassador in Tokyo under Eisenhower.

The relationship was first limned in the author's New York Times article, "CIA Supported Japanese Right in '50s and '60s (October 09 1994). That article had its origins in a struggle then ongoing between the CIA and the State Department over the release of a volume of The Foreign Relations of the United States covering Japan in the 1960s. Twelve years later, in July 2006, the State Department belatedly acknowledged that "the US Government approved four covert programs to try to influence the direction of Japanese political life". The statement described three of the four programs. It said that the Eisenhower administration authorized the CIA before the May 1958 elections for the Japanese House of Representatives to provide "a few key pro-American and conservative politicians" with money. It said the Eisenhower administration also authorized the CIA "to institute a covert program to try to split off the moderate wing of the leftist opposition in the hope that a more pro-American and 'responsible' opposition party would emerge". In addition, "a broader covert program, divided almost equally between propaganda and social action", sought to encourage the Japanese people to embrace the ruling party and reject the influence of the left. The deep relationship with the rising politician and future prime minister Kishi was not acknowledged. FRUS 1964-1968, Vol. XXIX, Part 2.

After Japan fell, the American occupation led by General MacArthur purged and imprisoned right-wing militarists such as Kishi and his allies. But things changed after George Kennan was sent to Japan in 1948 by Secretary of State Marshall to try to persuade MacArthur to change his views. An example of MacArthur's policies could be seen on the docks of Osaka, where dismantled machinery from Japanese industries was being greased, crated, and shipped at great expense to China as part of a war reparations program. Americans were paying to take Japan apart and support China at the moment it was being overrun by the communists. Kennan argued that the United States should move as fast as possible from the reformation of Japan toward its economic recovery. This about-face required an end to MacArthur's purges. It meant that accused war criminals such as Kishi and Kodama would be released. It led to their recruitment by the CIA and the eventual restoration of powerful leaders, business cartels, internal security forces, and political parties.

"The US should do what it can to encourage effective conservative leadership in Japan", said the Operations Coordinating Board, in a report to the White House dated October 28 1954, and declassified fifty years later. If the conservatives were united, they could work together to control Japan's political life, the board said, and "to take legal measures against Communists, and to combat the neutralist, anti-American tendencies of many of the individuals in Japan's educated groups". This is precisely what the CIA did from 1954 onward.


Page 117 The CIA provided $2.8 million in financing: Japanese conservatives needed money. The American military needed tungsten. "Somebody had the idea: Let's kill two birds with one stone", said John Howley, a New York lawyer and OSS veteran who helped arrange the transaction. The Kodama-CIA operation smuggled tons of tungsten out from Japanese military caches into the United States and sold it to the Pentagon for $10 million. The smugglers included Kay Sugahara, a Japanese American recruited by the OSS from an internment camp in California during World War II. His files, researched by Howard Schonberger, a University of Maine professor writing a book nearly completed at his death in 1991, described the operation in detail. The proceeds were pumped into the campaigns of conservatives during Japan's first post-occupation elections in 1953. Howley said: "We had learned in OSS, to accomplish a purpose, you had to put the right money in the right hands".

Page 117 "He is a professional liar": "Background on JIS and Japanese Military Personalities", September 10 1953, National Archives, Record Group 263, CIA Name File, box 7, folder: Kodama, Yoshio.

Page 118 "Strange, isn't it?": Dan Kurzman, Kishi and Japan: The Search for the Sun (Obolensky, 1960), page 256.

Page 118 "It was clear that he wanted at least the tacit backing of the United States government": Hutchinson oral history, Foreign Affairs Oral History.

Page 120 "He and I pulled off a great coup that day": McAvoy interview with author.

Page 120 "if Japan went Communist": MacArthur interview with author.

Page 121 Kaya became a recruited agent: The records of Kaya's relationship with the CIA are in the National Archives, Record Group 263, CIA Name File, box 6, folder: Kaya, Okinori.

Page 121 "we ran it in a different way": Feldman interview with author.


Bill Totten http://www.ashisuto.co.jp/english/index.html