“In every trouble spot I’ve carefully visited, there’s always been a watering hole where hackers, spies, aid workers and pickpockets converge, as if for a secret rite.
John and Carre
That observation from the British master of espionage fiction is one I wholeheartedly agree with. And for me, that particular watering hole was the Hong Kong Foreign Correspondents’ Club.
On a slightly wet Friday afternoon on November 9, 2012, I happened to be visiting Hong Kong and went to the main bar at FCC in Central. The ceiling fan slowly turned and the television was showing CNN’s report on President Barack Obama’s re-election. Sipping a beer at the counter, I struck up a conversation with an American sitting on a nearby bench.
He was in his late sixties, spoke softly and appeared to have lived in Asia for many years. When I introduced myself as from Japan, he casually said while holding the beer glass:
You remember the Lockheed scandal in your country, right? At the time, Deak & Company was the outfit that carried Lockheed’s money to Japan. And I was working for Deak, smuggling money to Tokyo.
This was my first meeting with Bruce Aitken, one of the world’s most successful money launderers, who transported bribes to former Prime Minister Kakuei Tanaka and other government officials in the Lockheed scandal.
In February 1976, the US Senate Subcommittee on Multinational Corporations, chaired by Senator Frank Church, under the Foreign Relations Committee, revealed that Lockheed Aircraft Corporation had funneled over three billion yen of secret funds to sell aircraft to Japan.
It was revealed that bribes were paid to senior Japanese government officials and right-wing fixer Yoshio Kodama to sell the Lockheed TriStar (L-1011) passenger jet to All Nippon Airways.
It was further discovered that Marubeni, a large trading company representing Lockheed sales, issued invoices for these illicit funds using the code name “Peanuts”. At a Church Committee meeting, Lockheed vice president A. Carl Kotchian testified that approximately 600 million yen had been transferred to several high-ranking government officials through Marubeni.
In July of the same year, the Tokyo District Public Prosecutor’s Office arrested Tanaka on suspicion of receiving payments. Lockheed’s cashier and Tanaka’s driver commit suicide.
Given its scale and diverse cast of characters, Lockheed truly warrants the title of Japan’s biggest postwar scandal. And in this case, the American foreign exchange dealer Deak & Co played the role of an underground bank.
The money sent from Lockheed’s headquarters in California was transferred to Deak & Co. through a subsidiary. Deak & Co. operated a branch in Hong Kong, where locally prepared Japanese yen were smuggled into Tokyo. The system used double and triple layers of damping to erase any connection to Lockheed.
Aitken, the American who transported the funds for this operation, was born in 1945 in New Jersey. He loved baseball from a young age and during his college years in Florida even aspired to become a professional player. However, a knee injury forced him to abandon that ambition.
In 1969, a despondent Aitken happened to read a newspaper article for an American Express subsidiary, advertising a position in Vietnam. He applied. At the time, the Vietnam War was in full swing, with the United States deploying over half a million troops. Aitken was sent to US military facilities in Saigon and elsewhere, where he handled deposit and foreign exchange operations.
In 1972, Aitken moved to Deak & Company. The founder and president, Nicholas Deak, was of Hungarian descent and had founded the company in New York in the 1930s. During World War II, he served in the US Army and was assigned to the OSS (Office of Strategic Services, a predecessor of the CIA). After the war, he returned to business and became one of the leading foreign exchange agents in the United States. He was called by some the “James Bond of the money world”.
Aitken’s first assignment for Deak was to Guam in the Western Pacific. The following year, in 1973, he received an urgent call from the branch manager in Hong Kong.
“He ordered me, ‘Come here at once,’ so I rushed over and was told, ‘Go to Japan. There’s a lot of urgent work with Japanese yen money orders piling up.'”
Aitken immediately returned to Guam and, at the branch in Agana, Guam’s capital, began filling a golf bag with cash late at night. Using a screwdriver, he removed the rivets at the bottom of the bag, revealing a compartment for bills. Here he would stuff 10,000 yen bills worth 100 million yen. He then headed straight to the airport and checked in for a Japan Airlines flight to Tokyo’s Haneda Airport.
Later, Aitken, reviewing company records, learned that the order came from Lockheed and the contact person was a senior official in Lockheed’s Tokyo office.
“One hundred million yen in cash is quite heavy,” he told me. “That was the maximum amount I could carry concealed in a golf bag. Also, while most golf bags can hold 10 or more clubs, ours only held three. To keep the weight down.”
And so, he repeatedly flew to Tokyo carrying this golf bag. Nowadays, he would almost certainly be intercepted by X-ray screening at the airport.
The smuggled money was not delivered directly to Lockheed representatives. When sending money to clients, Deak always used multiple local agents. One was a foreign priest who had lived in Japan for many years. Aitken met the priest in a Spanish restaurant in Tokyo and gave him a shoulder bag containing the money.
What is crucial here is the timing of the Hong Kong branch manager’s instruction to smuggle the money. In the summer of 1972, Lockheed’s Kotchian stayed in Tokyo for more than two months, taking the lead in promoting the TriStar aircraft. In October, All Nippon Airways (ANA) made the decision to buy them.
A year later, Lockheed received an international call from Marubeni’s managing director, Toshiharu Okubo. Kotchian later said this in his memoirs:
Lord Okubo suddenly said, “Now is the time to fulfill that pledge (promise).” For a moment I wondered what he meant. But then I realized that Mr. Okubo had used the English word “pledge” and realized that he was referring to the “500 million yen” for Prime Minister Tanaka’s office that was promised last August.”
About three days later, Mr. Okubo called again. “This matter is extremely important and I absolutely need you to fulfill your pledge.” Mr. Okubo’s tone was very serious and tense.
In the end, Kotchian adjusted the budget at headquarters and instructed the accounting department to transfer the money, which was money Aitken had kept in his golf bag. However, according to Aitken, Deak & Co. was not informed that the money would be used for bribes in Japan.
Another important question is why the cash was transported from Guam and how hundreds of millions of yen ended up on the island. When asked about this, Aitken responded as if it were perfectly natural.
“At the time, Guam was a popular Japanese honeymoon destination. Every day, planeloads of newlyweds came from Japan. They brought Japanese yen, which they exchanged at their hotel. We bought yen from the hotels, and as a result, we ended up with a lot of Japanese yen.”
So it appears that the bribes that lined the pockets of former Prime Minister Tanaka, right-wing fixers and other government officials ultimately came from money exchanged by Japanese newlyweds.
Eventually, in January 1978, Aitken became independent and founded First Financial Services. However, his work remained in the smuggling of cash and his clients were famous drug dealers. His business continued to grow steadily until his fortunes took a dark turn.
In 1989 he was arrested in Thailand by US authorities following drug trafficking links. Repatriated to the US, Aitken faced money laundering charges and could face up to life in prison. Desperate for a way out, he consulted with lawyers and prison investigators and offered prosecutors a plea deal, offering to share what he knew about the Lockheed scandal in exchange for a lighter sentence. The prosecution’s initial response was reportedly not favorable.
“They said it was ancient history,” Aitken said. “They just wanted to keep me in prison for a long time. But then they apparently contacted other departments in the US government, maybe the State Department and the intelligence agencies. Then, within a week or so, I got a response. My information must have hit a nerve. Negotiations began and my 20-year sentence was reduced to eight years and finally 10 months saved my life.”
It is unclear exactly what discussions took place within the US government at the time. However, according to Aitken, the information he provided included payments to Japan as well as large sums of US dollars to a senior South Korean military official. It is likely that these are related to the sale of military aircraft.
You can imagine the panic at the State Department and the CIA when they learned this. The man they thought was just part of a drug-trafficking ring was involved with Deak, and specifically, the Lockheed scandal. If he were to stand trial and confess to illegal activities in Japan and South Korea, there could be a disaster, perhaps even an international incident. Perhaps it was thought best to release Aitken and let him stay out of trouble.
Tanaka was arrested and convicted in the Lockheed scandal, but bribe-bag Bruce Aitken was released from prison thanks to the same scandal. It is nothing short of a historical irony.
Aitken still lives in Hong Kong with his family. This year marks exactly 50 years since the Lockheed scandal, and he tells me he wants to visit Japan again. I wonder if he’ll carry his golf bag this time.
Eiichiro Tokumoto is a writer living in Tokyo.
it ITEM it was originally published by Number 1 Shimbun, the magazine of the Foreign Correspondents’ Club of Japan. Reprinted with permission.
