Japanese War Loot Sought : Gold Diggers May Help Manila Pay Off Huge Debt

Charles McDougald looked every bit a real-life Indiana Jones one recent afternoon as he sat cross-legged outside the World War II-era Japanese torture chamber where he and half a dozen other American treasure hunters are convinced lie buried more than 400 tons of gold worth at least $7 billion.

As dozens of Filipino reporters crowded around, firing questions, the 47-year-old San Francisco author and academic casually adjusted his white Panama hat, shifted his bronze-hilted hunting knife and explained just how convinced he and his Nevada-based company are that they are digging in the right place for buried treasure that could help retire the Philippines’ $29-billion foreign debt.

“Let’s put it this way,” McDougald said. “I’ve already invested a lot of my time, my energy and money on this. I believe it’s here. I’m betting it’s here.”

And so is the Philippine government.

Since Feb. 12, with the full sanction and protection of President Corazon Aquino’s government, McDougald’s group has been tunneling more than 20 feet into the catacombs under Manila’s oldest structure, 16th-Century Ft. Santiago. During the war, the Japanese Imperial Army tortured hundreds of Filipino prisoners in the Spanish colonial-era fort.

For weeks, nearly a dozen members of Aquino’s elite presidential security guard cordoned off the entire fort to keep the treasure hunt a secret and to ensure that the government receives its rightful 75% cut of anything McDougald’s group finds.

But then, at 11 p.m. on Feb. 22, the tunnel caved in, killing two Filipino workers and focusing national attention on the depth of McDougald’s undertaking.

For the Ft. Santiago dig is just one of the many treasure hunts now being conducted in the Philippines, as the government increasingly hopes to save its moribund economy through archeology as well as increased productivity. Estimates of the total buried treasure start at $100 billion and soar to a high of $2 trillion in gold bullion, a figure cited by a respected Manila columnist, Hilarion Henares.

Aquino’s executive secretary, Catalino Macaraig, said last month that the government has granted more than 80 permits to foreign and local treasure seekers in the two years since Aquino took power, and that applications continue to arrive at the president’s office at the rate of one a day.

Searching on Land, Seabed

Holes are being dug in virtually every one of the 73 Philippine provinces by treasure hunters like McDougald’s group, all of whom believe that fleeing Japanese generals left behind billions of dollars in booty when Gen. Douglas MacArthur’s forces retook the islands in 1945.

In addition, American, French, Belgian, British and Australian divers are spending millions of dollars combing the bottom of the Philippine Sea in search of old Spanish galleons and other commercial ships that sank with thousands, perhaps millions, of dollars in treasure as long ago as the 1500s.

Emmanuel Soriano, Aquino’s national security director, offered a note of realism. Soriano, who has been quoted as estimating the buried wealth at $900 billion and is currently overseeing the Ft. Santiago dig, told The Times in a recent interview: “To my knowledge, nothing has been recovered yet. Maybe in two or three weeks we’ll have some news.”

Fort Called Promising

According to reliable intelligence sources in the government, the Ft. Santiago dig holds out the greatest promise for hitting pay dirt, and in an official press release March 1, Soriano announced that he expects the group to uncover enough bullion to help pay off the country’s foreign debt “in approximately 10 to 15 days.”

McDougald, who has lived here for more than a decade and secured his doctorate in business from the University of the Philippines in 1983, is not the moving force behind the dig.

The president of International Precious Metals Inc., a private, limited-liability company, is Nevada businessman Robert H. Curtis, a man whose name has been synonymous with the hunt for buried Philippine treasure for more than a decade.

Curtis, who is now in the Philippines but insists that McDougald act as his spokesman, says that he and 10 other Americans successfully conducted a similar treasure hunt under the regime of Ferdinand E. Marcos in 1975 but fled for their lives after locating a huge buried Japanese vault on the outskirts of Manila that McDougald said contained $8 billion in bullion.

Used World War II Maps

According to Curtis, who gave his exclusive story to Washington columnist Jack Anderson in 1978 and once offered it to adventure magazines for a fee of $50,000, he used World War II-era maps and testimony from survivors who helped to bury the treasure at the end of the war to identify 172 sites throughout the Philippines. Anderson reported that Curtis’ group supplied the maps, which marked an estimated $100 billion in treasure, to Marcos, who used the group to track and recover about $14 billion.

Fearing that Curtis and his colleagues would expose the find, Curtis later said, Marcos and his top military aide, Gen. Fabian C. Ver, threatened to kill them. The group fled the country in July, 1978, and did not return until late last year.

“Marcos was overthrown in February, 1986, and Mr. Curtis began making overtures to the new government soon after,” McDougald said last week, adding that he got involved in Curtis’ new venture while researching a book he plans to write on hidden wealth in the Philippines. When Curtis was finally convinced that the Aquino government was sincere about protecting and encouraging treasure hunters, he organized his company and moved in, McDougald said.

There are five Americans from the company working at the Ft. Santiago site, McDougald said, along with about 30 Filipino laborers who are digging the 3-foot-by-7-foot tunnel through the fort’s long-buried catacombs.

International Precious Metals already has spent $40,000 on its hunt, McDougald revealed. It has budgeted another $60,000 for the project and has an additional $300,000 to spend if needed. Most of it, he said, is Curtis’ own money.

Tried to Keep Secret

For weeks, the government deliberately tried to keep that digging a secret. When sharp protests came from Manila’s lovers, who lost the use of the historic tourist site as a traditional trysting place, the presidential guard put up a sign at the fort’s front gate declaring simply, “Closed for Renovations.”

But the picture changed with the deaths last month of the two Filipino workers, suffocated in a cave-in that McDougald’s engineers now attribute to a booby trap left behind by the Japanese. When the cave-in become public Feb. 29, McDougald and his group were forced to go public as well.

Explaining how the fatal cave-in happened, McDougald began to sound as if he was talking about the “Temple of Doom,” as well as looking the part.

“There is every indication that this cave-in was caused by a booby trap,” McDougald said, reporting the results of an investigation by his team’s geologist and resident mining engineers. “It’s akin to what was found in Egypt in the pyramids. They’re sand traps.

Layers of Clay and Sand

“When the Japanese were covering up the (treasure) chamber, they put in layers of clay, then sand, then clay, then sand. When we opened the tunnel, air hit the sand. It dried and fell out, leaving a cavity, and the dirt collapsed inside, causing the tunnel to cave in.”

McDougald was reluctant to discuss details of the group’s actual mining methods, but he stayed in character when describing what he expects to find at the end of the tunnel.

“We all like to imagine we’re going to knock a stone wall down and we’re going to find golden chests overflowing with emeralds and rubies and diamonds, all guarded by a big cobra snake,” he said. “But it never works out that way. It’s going to be dusty, dirty, and there are going to be rodents and spiders, and we’re probably going to find the gold bars lying on the floor down there somewhere.”

McDougald said he based his belief that treasure exists on the material that his group is using to locate the site--World War II-era Japanese maps and later engineering drawings and photographs supplied by Curtis. He described the odds as “5% more chance than highly probable, approaching absolute certainty.”

At a hearing Friday by the Philippine Senate into the treasure hunt, McDougald said that his group is using a sophisticated detection device that pinpoints the depth and density of buried metals. It is that machine, he said, that has made his group so certain of the amount of buried treasure that lies beneath Ft. Santiago.

Plundered Asian Lands

No one disputes that the Japanese did plunder most of the Southeast Asian countries they conquered and stored some of their loot in the Philippines, which was among the last of their subjugated territories to be liberated by the Allies.

Though the loot is generically referred to here as “Yamashita’s Treasure,” after Gen. Tomoyuki Yamashita, the last Japanese commanding general in the Philippines, McDougald said the treasure that his group is seeking was probably buried in the fort during 1943, 1944 and 1945 by various Japanese generals. They picked the fort, he said, because it was a high-security location, off-limits to all but military torturers and the unfortunate Filipino prisoners destined for death.

McDougald said the fatal accident may slow the treasure hunt. The intense publicity, he said, “attracts curiosity seekers, it attracts other treasure hunters, and quite frankly we don’t have the time to spare.”

What is worse, it triggered a political backlash. Within hours of the news becoming public, the Philippine Senate adopted a resolution urging Aquino to bar foreigners from hunting for treasure in the Philippines. So McDougald has dropped his previous secrecy and found the spare time to schedule daily press conferences on the lawn outside the torture chamber--at least until he hits pay dirt.

During Friday’s Senate hearing, several senators indicated that they plan to pursue criminal charges against the treasure hunters for violating an old law against desecrating national shrines, of which Ft. Santiago is one of the most famous. McDougald denied that the fort has been desecrated, except for a 4-by-2-foot hole in a wall, and contends his operation is legal.

Sen. Ernesto Maceda, one of the more skeptical critics of the hunt, asked McDougald whether he still plans to finish his book on hidden wealth.

When McDougald replied that he does, Maceda asked wryly, “Well, the publicity about all this is not going to hurt your book, is it?”

McDougald leaned forward, smiled and replied, “No sir, I don’t think so.”